Global Expansion and Growth Opportunities in Saudi Arabia and Middle East
Helmerich & Payne (H&P) is actively pursuing growth opportunities in Saudi Arabia and the broader Middle East, despite rig suspensions affecting the region.
The company expects the upcoming tender in Saudi Arabia to be a significant growth driver, with potential opportunities emerging in 2026.
The firm has a strong foundation of rigs, relationships, and operational capabilities in the Middle East, which they believe will lead to incremental activity gains.
Progress on the phased integration of KCA's operations in Saudi Arabia has already unlocked cost synergies and operational gains.
H&P is leveraging its broader operational footprint and expanded customer base to differentiate itself on the global stage, aiming for further international growth.
Impact of India-Russia Tariff and Trade Shifts on VLCC Market
Management noted a 20% reduction in Russian oil exports to India in July, roughly 400,000 barrels per day, with some of this volume shifting to Middle Eastern sources.
The trend suggests a move towards larger ships for sourcing feedstock, which could benefit the VLCC market.
Management sees the ongoing trade adjustments, including potential U.S.-India deals, as early indicators of a possible positive impact on VLCC demand and chartering activity.
The shift in sourcing and trade routes is viewed as a structural change that could support higher utilization of larger tankers in the future.
Resilience of Offshore and International Markets Amid Geopolitical Instability
Oil States highlighted the resilience of offshore and international markets despite geopolitical instability, lower crude oil prices, and fluctuating U.S. trade policies.
The company achieved the midpoint of its EBITDA guidance due to strong product and service mix, driven by offshore activity and backlog growth.
Management emphasized that offshore project visibility is high, with projects being multi-year and multi-decade developments, less impacted by short-term macroeconomic issues.
Permian Basin's Long-Term Resource Outlook and Innovation
Despite a slowdown in activity due to lower oil prices, management emphasizes that Permian's resource remains abundant, with over 60,000 locations breakeven below $60 oil and $3 gas, representing over 30 billion barrels of oil.
Permian production has grown from less than 2 million barrels per day a decade ago to approximately 6.5 million barrels today, accounting for about half of U.S. oil and more than every OPEC nation except Saudi Arabia.
Industry innovations such as increased lateral length, proppant loading, water recycling, and new well designs like horseshoe wells are extending the basin's resource life and improving well economics, even with fewer rigs.
The company highlights ongoing boundary extensions and new formation developments, supported by increased leasing activity, indicating a vibrant and expanding industry despite recent activity reductions.
Dafinchi