Halliburton keeps chipping away its debt, CEO expects a strong 2022

By Devika Patel

Knoxville, Tenn., Jan. 24 – Halliburton Co. plans to keep reducing debt despite increasing the cash it returns to stockholders.

The industry is in an “accelerating upcycle,” management reported, and this is expected through 2022, with high cash and free cash flow generation.

“Today, we announced our decision to redeem $600 million of the 2025 senior notes using cash on hand,” executive vice president and chief financial officer Lance Loeffler said on the company’s fourth quarter and year ended Dec. 31, 2021 earnings conference call on Monday.

“This action will reduce future cash interest expense and reflects our desire to continue reducing debt balances.

“As a result of the debt retirement in late February, our net interest expense should remain roughly flat in the first quarter.

“I’ve spoken before about our ability to concurrently reduce debt and increase the return of cash to shareholders, and today we put that into action,” Loeffler said.

The oil and gas industry is experiencing increased demand and Halliburton’s top executive expects this accelerating upcycle will continue both within the industry and for Haliburton through 2022.

“2021 finished strong for Halliburton, and I’m excited about the accelerating upcycle as we enter 2022,” chairman, president and chief executive officer Jeff Miller said on the call.

“We have an effective value proposition and benefit from increasing activity both in North America and international markets.

“At the same time, we see improving service pricing in both markets.

“Throughout this upcycle I expect Halliburton to grow profitably, accelerate free cash flow generation, strengthen our balance sheet and increase cash returns to shareholders.

“I believe 2022 will be a strong year for our industry and especially for Halliburton,” Miller said.

Cash and cash equivalents were $3,044,000,000 as of Dec. 31, 2021, compared to $2,563,000,000 as of Dec. 31, 2020.

“We generated nearly $700 million of cash from operations during the fourth quarter and delivered approximately $1.4 billion of free cash flow for the full year,” Loeffler said.

Long-term debt was $9,127,000,000 as of Dec. 31, 2021, compared to $9,132,000,000 as of Dec. 31, 2020.

Current maturities of long-term debt were $7 million as of Dec. 31, 2021, compared to $695 million as of Dec. 31, 2020.

On Monday, Halliburton reported that it will redeem $600 million of its approximately $1 billion outstanding 3.8% notes due 2025 on Feb. 23 using cash on hand.

The redemption price will be calculated with a make-whole premium based on Treasuries plus 25 basis points. Accrued interest to the redemption date will also be paid.

Bank of New York Mellon Trust Co. NA is the trustee.

Halliburton is an oil field services company based in Houston.

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