HAL
#Look, that's something that is closing, I'd say, sort of every day as we work it.
It's ---+ but let's go back to why there is a spread there.
And it's because we're aligned with very good customers.
They're very efficient, and so we want to be part of their business.
And we believe we can do a lot to help drive down sort of their overall cost and lower their cost per BOE.
And so that's why we never had a ---+ we abandoned half the market to go move somewhere else.
We absolutely want to support all of our customers.
So I'm not going to give you that spread.
But I will tell you it's something that I think I'd said in Q1 that we would be closing in on that over 4 quarters, so look for some time early in '18 to have that done.
Yes.
So I mean, I would say we're probably in the 60% range or so for the following reactivation.
The important thing about that equipment is that it is built for total cost of ownership.
I mean, we don't sell this equipment in the market.
Our guys at Duncan are absolutely motivated by one thing: what is the most resilient, efficient piece of equipment.
And I go out and check to make sure that it's competitively priced, which it is.
But more important than its cost is what it does for our guys in the field and the way that it's integrated.
So it runs at higher rates.
It uses all available horsepower.
It's more efficient by still about a 20% efficiency compared to what we see in the market.
So when I think about how do we make the best returns in the marketplace, we always think about how do we drive capital off of a location.
And the first thing to do is have more efficient pumps on location.
Look, I think it really is part of the science of frac, and that is ---+ it\
Well, again, I'm not going to get our strategy around price anywhere.
But what I would say, Latin America is not too different in terms of the contract cycle in terms of ---+ the length of contracts typically have a muting impact.
There's plenty of ---+ quite a bit of equipment in the world today.
And so certainly, look forward to that, but I would not ---+ it's not enough to change the overall trajectory.
Dave, congratulations again, and you'll certainly be missed.
Your comments and ---+ would be missed greatly on the calls.
My question relates to the Permian sand that's been recently ---+ a lot of new capacity additions have been announced.
And there's a good chance that prices are going to fall quite sharply in the Permian for E&P companies there.
What impact does that have for pressure pumping companies as sand prices fall in the Permian.
Is it neutral.
Or is it negative or positive.
And then also, how do you think about your own investments in transloading and rail transportation.
Would that change if most of the sand is recently sourced.
Look, that's great for us.
It's good for our customers.
It's good for us in terms of lowering cost per BOE.
I've been fairly vocal about why we don't own mines, and that's ---+ this is an example of why not and from Halliburton's standpoint, why we wouldn't want to be invested and tied with sump costs to a place as technology moves a different direction.
The transload infrastructure that we have is valuable.
I would say the ---+ probably the toughest spot to get to realistically is the Permian Basin.
And local sand, in my view, opens up a whole new avenue of what is lower cost.
And some of the things that we're doing around delivering sand, we're always looking at how do we get sand delivered at a lower cost point.
And I think our containerized solutions that we're implementing are right in the sweet spot of that kind of development.
Okay.
And you don't see ---+ are there any long-term negative implications, or cost implications for rail cars or other things that you may have leased or the industry may have leased.
No.
I mean, the stuff works all over the country, and that's a fairly localized solution.
So I like what we're invested in, and we've always been careful.
Again, to ---+ we target about 50% of our capacity is managed internally, and we do that so that we can flex with the market.
And that's how I see this.
Well, look, I ---+ we're in large part agnostic to the type of sand.
The reality is we study sand closely to understand how to better design chemistry to make better fracs.
Cost is always a component of that, but we've seen other media sort of go into vogue and out of vogue.
And we've got MicroScout, which is a nano-style solution ---+ a micro-style solution.
So I think that, obviously, what's being talked about today is consistent with what I hear from customers and what is being consumed today.
But again, the drive for better science is always going on, and that's one of the reasons our labs are constantly looking at how to take what's available and make it better and how to either ---+ or to substitute with things that are better.
So I think that's the answer and hoping it's appropriate.
Well, it's one data point, and so I will clearly be watching that.
The sense that I get is more around design and what is the most ---+ I mean, our clients are dead focused on lowest cost per BOE, making more barrels and at a lower cost.
And so designing things that can consume less sand but deliver more barrels or as many barrels is clearly what they want to do.
Thank you, Candace.
Before we close, there are a couple of points I'd like to highlight.
First, our second quarter performance demonstrates the strength of our North American franchise and our ability to adapt to a rapidly changing environment.
Second, Halliburton's relative performance for the balance of this year will remain strong as a result of our ability to grow North America margins and maintain revenue and margins internationally.
Look forward to talking with you next quarter.
Candace, you may now close out the call.
