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We reiterate our 2024 North America and international drilling and completion spending outlooks as we see potential offsets to higher oil prices. In North America, our outlook remains for a year-over-year decline in the low to mid-single-digit range.
oil proces
Transcript
2024 Q1
26 Apr 24
I want to circle back to the LNG approval discussion just given that it's a hot topic. Lorenzo, so if there is a slowdown in U.S. approvals, do you think that would pull forward some international projects to fill the gap. It seems that buyers would pivot their focus. But is the international slate of projects ready from a timing perspective to offsetting the U.S. slowdown?
Lorenzo Simonelli
So Scott, as you saw also in 2023, we actually had bookable orders that were on projects that we had in FID. We wouldn't obviously put that in any guidance, and we think that the 65 MTPA FIDs will happen this year. But as you look at any slowdown in the U.S., there's clearly projects internationally that can take the opportunity and offset what was anticipated from U.S. LNG over time. Again, it's not something that we factored into the guidance, but again, it's something that could happen and we'll continue to monitor the situation.
I think the benefit for us is that we play globally.
We play with a total gamut of solutions around LNG and so when it comes to small modular onshore, offshore stick or floating, you come to us. And again, there's international opportunities.
LNG again
Transcript
2023 Q4
4 Feb 24
es, very topical at the moment, Arun. And again, if you look at the aspect of LNG, no impact for us this year. And again, as you know, the project landscape and also the cycle of projects is multiyear. But I'd say that, again, there is some uncertainty, in particular, on North America.
Given some of the discussions that are taking place and some of the delays in the permitting. I'd also say I'm disappointed that this is coming about right now. U.S. LNG is enormously beneficial to the U.S. economy. It's had a large impact, beneficial impact on global energy markets, especially when you look at everything that's happened in -- there's been commitments made to providing LNG supply to many other countries.
lng permits slowed
Transcript
2023 Q4
4 Feb 24
n addition, we expect total company New Energy orders of $800 million to $1 billion, which would amount to more than tripling of New Energy orders since 2021.
new energy orders very stromg
Transcript
2023 Q4
4 Feb 24
ver the course of the past 18 months, the business has undertaken significant structural changes that delivered over $150 million of annualized cost synergies, providing sustainable benefits across the organization.
150m in cisr syrnergies in 2023
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2023 Q4
4 Feb 24
IET orders were $3 billion, included more than $800 million of LNG equipment, bringing full year LNG equipment orders to approximately $5.6 billion.
strong lng equipment orders
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2023 Q4
4 Feb 24
Despite the recent weakness in LNG prices, we believe the long-term outlook for the global LNG market remains solid.
recent weakndess in lng prices
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2023 Q4
4 Feb 24
In North America, activity continues to lag, and we are now anticipating no meaningful recovery in activity during the first half of the year.
On our last quarterly call, we expected 2024 North American D&C spend to be flattish, but now expect spending down in low to mid-single digits driven by mid-single-digit declines in U.S. land. The combination of a volatile commodity price environment, sector consolidation and the inherent elasticity of shale versus conventional developments are all factors contributing to the slower ramp-up in activity.
n americsa outlook not good
Transcript
2023 Q4
4 Feb 24
On the supply side, the biggest risk factor is non-OPEC supply outpacing demand, possibly requiring OPEC+ to maintain the current level of cuts through the end of 2024. The volatility in commodity prices experienced during the fourth quarter and so far in 2024, will likely have some influence on upstream development plans. Accordingly, we now see international D&C spend growth decelerating into the high single-digit range this year, which is down slightly from our prior expectations for low double-digit growth.
lowrred expectations for growth
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2023 Q4
4 Feb 24
Oil prices have weakened considerably since peaking in late September. Ultimately, weaker-than-anticipated oil demand coupled with robust production growth led to an unexpected inventory build into year-end.
However, prices still remain at levels that are favorable for growth across our core OFSE markets.
weakening oil price with demand weaker led to an unexpected inventory build
Transcript
2023 Q4
4 Feb 24
astly, horizon 3 looks to 2030 and beyond where our execution over the coming years will position Baker Hughes to compete across many new industrial and energy frontiers, including CCUS, hydrogen, clean power and geothermal. By this time, we expect decarbonization solutions to be a fundamental component and, in most cases, a prerequisite for energy projects, regardless of the end market. The need for smarter, more efficient energy solutions and emissions management will have firmly extended into the industrial sector. Considering this backdrop, we expect our new energy orders to reach $6 billion to $7 billion in 2030 and across a much broader customer base.
horizon 3
Transcript
2023 Q3
27 Oct 23
Gas Tech Equipment achieved $1.6 billion in orders, driven by multiple areas, including almost $900 million of LNG awards in the quarter.
900m of lng orders
Transcript
2023 Q2
20 Jul 23
With approximately 70% of our OFSE business internationally focused, and around 40% exposed to offshore, we remain well positioned to benefit from these market dynamics.
ofse revenue breakout
Transcript
2023 Q2
20 Jul 23
he IET has been a nice surprise here, particularly this quarter, but also the big $1 BILLION increase in the range of orders for this year. Could you perhaps go through what you're seeing there? Is that just an acceleration in the business? Is it some of the acquisitions coming together? I mean, what's the key driver to this -- the better performance that we're seeing and expected better performance with better orders?
Lorenzo Simonelli
Yes, sure, James. And as you correctly stated, we did raise the guidance from an IET order perspective this quarter by $1 billion. And if you look at what we've consistently said this year, we've seen a large pipeline of opportunities for IET. And that's been robust and the visibility is improving both for this year and also the next few years.
So whereas at the start of the year, we had some conservatism based on project timing that can move around. We've now seen that solidify. And as we see the year play out, we see higher opportunities across several areas.
And let's start off with LNG, which obviously we were announcing some FID activity in the quarter, but also continue to see a number of projects that can come to FID through the rest of this year, but also going into next year as well. And I was just up at Vancouver with LNG 2023, and I can say that the customer discussions are very robust and there's a clear understanding that natural gas and LNG is going to play a key role as a base load for the energy mix going forward.
But also on the offshore/onshore production and we've seen strength in the offshore activity.
You've seen some of the announcements there on the FPSO sites, and then on the new energy orders, and we've already met our full-year guidance in the second quarter. We're starting to see some opportunities in the back half as well.
So overall confident not only on the order momentum for this year, but also going into 2024.
iet strength
Transcript
2023 Q2
20 Jul 23
Turning to slide 14, as Lorenzo mentioned, we have executed all actions necessary to achieve our $150 million cost-out target by the end of 2023 and believe there are additional opportunities for further cost reduction in 2024 and beyond. We view this initial round of cost actions as the first step in a much larger operational and margin optimization process, which we expect to unfold over the next couple of years.
150m cost out actions taken
Transcript
2023 Q2
20 Jul 23
On the New Energy front, we booked over $100 million of orders in the quarter in IET, including multiple orders for Air Products to support its Louisiana Clean Energy Complex. These awards included vertical centrifugal pumps for ammonia loading, compression trains for CO2 storage, and a subsurface study undertaken by OFSE to assess the capacity of the reservoir.
In addition to the Louisiana project, we also received an award for hydrogen compression equipment for Air Products’ New York Green Hydrogen facility.
new energy colour
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2023 Q2
20 Jul 23
booked almost $150 million of New Energy orders and generated approximately $620 million of free cash flow.
new energy orders
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2023 Q2
20 Jul 23
We continue to see the potential for this LNG cycle to extend for several years with a pipeline of new international opportunities expanding project visibility out to 2026 and beyond.
As we have stated consistently, we fully expect natural gas and LNG to play a key role in the energy transition as a baseload fuel to help balance against intermittent renewable energy sources
good LNG outlook
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2023 Q2
20 Jul 23
As we have said previously, we expect this spending cycle to be more durable and less sensitive to commodity price swings relative to prior cycles. This is due to strong balance sheets across the industry, disciplined capital spending that is based on low asset break evens and a focus on returns versus growth.
durable cycle
Transcript
2023 Q2
20 Jul 23
So Nancy, you alluded to some processes that you've put in place to improve free cash flow conversion? Can you provide the market with a little more detail on what those are? And what are the other low-hanging fruits to drive that number higher?
Nancy Buese
Yes.
I think I would simplify it to say there's really three things we're focused on. We're focused on revenue, which is obviously going quite well. We're really focused on EBITDA margins, and we've still got work to do there and we're focused on free cash flow and the conversion rate, which you are starting to see.
So a lot of that also is centered around our working capital and our cycle.
So we're really thinking about our billing and collection cycle, our inventory turns and management and all of the bits and pieces.
So it starts with transparency of the reporting.
So we've been working a lot on that front and then a lot of good discussion with our teams about where do we need to focus on sort of that relentless pursuit of operational excellence.
So that's what you're really seeing come to roost. And there's still quite a lot for us to do.
I think we can improve our systems, just the history of the company, created a lot of bits and pieces that weren't necessarily talking to each other as well as they could. And we've started to really focus on how to improve those systems, integrations, and interfaces to get information and data that our teams and leaders can use to manage more effectively.
impr9vinf cf conversion?
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2023 Q2
20 Jul 23