Oilfield Services Update - June 30

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Note from Susquehanna Financial Group, LLLP

2Q22 OILFIELD SERVICES QUARTERLY PREVIEW 6-29-2022

As we head into 2Q earnings season for the oilfield services sector, US and international
drilling and completion trends remain quite favorable. Throughout the quarter, we have
heard anecdotal evidence of strong demand for rigs, frac equipment, and well construction
services and equipment. Compared to previous cycles, energy security is top of mind
following the invasion of Ukraine, which has countries seeking additional sources of oil and
natural gas that can last for the long term. In our view, this underlying theme will support
long-term activity in US and abroad, where demand is already outpacing available supply.
These trends are helping drive improvement in revenues, which is ushering in greater
operating leverage to improve margins and free cash flow across the sector.

Capital discipline remains a mantra among both customers and services companies, while
supply chain challenges limit the pace of growth in a crude-constrained environment.
Growing economic risks have caused a near-term pullback in the stocks, contrary to our belief
that industry fundamentals support a prolonged oilfield services upcycle.
We maintain our Positive rating on SLB, HAL, BKR, NOV, FTI, HP, PTEN and MRC.