Halliburton’s 2022 Annual & Sustainability Report demonstrates the many ways we execute on our strategic priorities, sustainability commitments, and our value proposition. We delivered profitable international growth, maximized value in North America, increased capital efficiency, and advanced cleaner, affordable energy. We did this safely, efficiently, and ethically while striving to minimize Halliburton’s collective environmental impact.
Halliburton’s strong financial performance in 2022 demonstrates the earnings power of our well-executed strategy. Our success belongs to the hard work and dedication of the nearly 45,000 Halliburton employees who live and work around the world. Their commitment to Halliburton’s strategic priorities led to strong business results across all our regions and product service lines, despite geopolitical conflicts, inflation, and supply chain constraints. They accomplished this through a relentless focus on safety, operational excellence, customer collaboration, and service quality performance. We delivered more than $1.4 billion of free cash flow for the full year and retired $1.2 billion in debt, demonstrating our ability to generate free cash flow throughout different business environments. We also returned about $685 million back to shareholders in the form of dividends and share repurchases. In 2023, we committed to return at least 50% of free cash flow back to shareholders and raised our first quarter dividend to $0.16 per share effective March 2023.
As the multi-year oil and gas industry upcycle accelerates, we will continue to execute on our strategic priorities and drive free cash flow and returns for our shareholders. We will remain focused on meeting the demand for secure, affordable, and reliable energy and provide our customers with products and services that help reduce their emissions. In 2022, we found opportunities to reduce our own emissions and progressed on our goals to reduce Scope 1 and 2 emissions by 40% by 2035 from our 2018 baseline year. We will build on the progress made and utilize our technology leadership to provide the products and services our customers require.
Deliver Profitable International Growth
We served customers in more than 70 countries in 2022, delivered strong revenue growth, and improved returns. We exercised capital discipline by deploying capital to the highest returning opportunities and delivered competitive technologies that fundamentally improved our margin profile. This increased revenue and margins every quarter in 2022.
For example, our iCruise® directional drilling system is a key contributor to our increased international profitability and now constitutes about half of our rotary steerable fleet. Our new chemical reaction plant in Saudi Arabia, the first of its kind in the region, mixed the first batch of chemicals and is well on its way to supplying chemicals for Halliburton and our customers. These and many other accomplishments last year give us great confidence in our continued profitable international growth in 2023.
Maximize Value in North America
Halliburton remains the only fully integrated oilfield services company in North America. Our strategy in the world’s largest oil and gas services market in the world has not changed — we intend to maximize value in North America. Last year, our performance in North America demonstrated our strategy in action — to maximize value through capital efficiency and differentiated technology. Our strong product and services portfolio and strong performance make us the service provider of choice. We are the leaders in high-demand, low-emissions equipment solutions. We provide industry-leading electric frac and Tier 4 dual-fuel fleets that meet our customers’ goals, operate safely, and minimize emissions. Our field-proven and best-in-class Zeus™ electric fleets provide customers with the performance, reliability, and lower emissions they expect from Halliburton. Zeus™ is a proven design with a strong operational track record. Additionally, technologies such as SmartFleet provide customers with data about where and how their fractures permeate and the real-time ability to improve completion performance.
Accelerate Digital and Automation
In every part of our business, Halliburton is a leading innovator in technology, automation, and digital solutions that benefit our own business and our customers. Our strategy to drive digital and automation creates technological differentiation, contributes to higher margins, and drives internal efficiencies and cost savings.
For example, the HalVue® real-time data monitoring service gives customers a consistent view of data from the rig to help maximize asset value. We have successfully deployed Well Construction 4.0 digital transformation technology for several customers with improved drilling performance and reduction in rig site personnel. And our LOGIX® automated drilling platform integrates and automates drilling with subsurface insight through the iCruise® intelligent rotary steerable system and the iStar™ platform. With more than seven million feet drilled in 20 plus countries, the LOGIX® platform reduces operational risks and delivers wells reliably.
We also deploy our digital solutions to advance a sustainable energy future. Our DecisionSpace® 365 solution suite offers optimal development plan proposals for a specific field based on such factors as economics, technical capabilities, and CO2 emissions. These examples illustrate Halliburton’s progress to advance digitalization and automation in all aspects of our business.
Increase Capital Efficiency
Our focus remains to drive capital efficiency across the balance sheet as we deliver significant free cash flow to our shareholders. Through our research and development process, we build tools at less cost, lengthen their run life, and move assets to where they make the best returns. We used this approach to successfully deploy several technologies, including iCruise®, iStar™, Zeus™, and others. Each delivers better margins by reducing capital cost, increasing capital velocity, or — in many cases — both.
Advance Cleaner, Affordable Energy
Our strategy to advance a sustainable energy future centers on technology that helps our oil and gas customers decarbonize their production base, reduce water consumption, produce less waste, and enhance efficiencies to improve project economies. Our global resources, engineering leadership, and scientific and technical expertise gives our customers the efficient and innovative tools to minimize the environmental impact of their oil and gas operations. These products and services extend beyond traditional oil and gas and include technologies to advance carbon capture and storage (CCS), as well as geothermal. This report highlights how Halliburton employs those solutions in adjacent markets.
Halliburton Labs, our clean energy accelerator, completed its second full year in 2022. The collaborative environment where entrepreneurs, academics, investors, and industrial labs come together to advance cleaner, affordable energy started with just one participant. As of the end of 2022, we now have 21 participating companies and alumni. By supporting these organizations with our expertise and infrastructure, we deploy a mutually beneficial, capital-light accelerator that helps achieve the participants’ strategic goals and allows Halliburton to gain new insights about the prospects that exist in these emerging energy markets and as future value chains develop.
Into the Future
We see great opportunity as activity accelerates throughout this unfolding multi-year upcycle. The events of 2022 demonstrated the importance of a balanced approach to meeting the world's energy needs, including securing access to oil and gas far into the future. As energy evolves, so will Halliburton — just as we have done for the past century. Our core competencies, innovative technology, and service excellence have an important role to play whether in emerging or established economies. We have the global footprint and vast knowledge to help our customers provide secure, reliable, affordable energy to the world.
We are excited about 2023 and beyond, and we are grateful for the roles our employees, Board of Directors, and shareholders play in our success. We look forward for the opportunity to deliver profitable international growth, maximize value in North America, increase capital efficiency, develop and deploy digital and automation solutions, and advance cleaner, affordable energy. We remain focused on our value proposition: to collaborate and engineer solutions that maximize asset value for our customers.
