Similar to our prior analysis, the second quarter of 2025 brought no shortage of talking points across both oilfield services (“OFS”) providers and exploration and production (“E&P”) companies.

Management teams faced questions on market softness, capital discipline, and whether the long-awaited offshore and international upcycle has truly taken hold. Some leaned into shareholder returns and consolidation, others stressed patience in a choppy pricing environment, and nearly all pointed to selective opportunities abroad as a counterweight to domestic headwinds.

Taken together, the calls paint a picture of an industry balancing caution at home with opportunities abroad, and reminding investors that capital discipline remains the motto even as growth opportunities knock at the door.

Show Me the Money: Buybacks, Dividends, and the M&A Shuffle

Capital allocation strategies remained front and center as companies balanced shareholder returns with long-term positioning.

OFS providers discussed dividends, buybacks, and balance sheet improvement, while E&Ps weighed debt reduction, share repurchases, and consolidation opportunities.

For some, acquisitions remain a strategic lever, while others stressed patience, caution, and the strength of organic inventories.

Across the board, management underscored a disciplined approach to capital, reinforcing that returns, not volumes, drive decision-making.

• “We repurchased 10.9 million shares for $150 million during the first half of 2025 and paid our base dividend of $0.075 per share and a supplemental dividend of $0.21 per share in the second quarter. Year-to-date, we have paid $135 million in dividends, and our combined capital returns total $602 million since the second quarter of 2024. At the same time, we increased our cash balance by $612 million. Together this means NOV has generated over $1.2 billion in free cash flow over the last five quarters.”
  – Clay Williams, Chairman, President, and CEO, NOV, Inc.
• “During the second quarter, we repurchased 278,100 shares of our Class A common stock for $3.3 million and continued to repurchase shares into the third quarter. We also paid a quarterly dividend of $0.06 per share in May, and the Board has approved a dividend of $0.06 per share for the third quarter. Altogether, we returned more than $5 million to shareholders through June 30, consistent with our policy of returning at least 25% of annual free cash flow. We remain committed to creating long-term shareholder value through both smart growth, organically and through selective M&A, and capital returns.”
  – Stuart Bodden, President and CEO, Ranger Energy Services, Inc.
• “When we find opportunities to do small bolt-on acquisitions, or a large scale as we have done now with Encino, we’ll be active to do that. And it’s one of the reasons that we keep such a pristine balance sheet so that we can be countercyclical and strategic, whether it’s bolt-ons, acquisitions, leasing and new organic plays, starting to fund some of these international opportunities or leveraging that into stronger marketing agreements. So I think you should look for us if we see a weaker market to continue to be thoughtful and countercyclical on how we invest in the company to improve shareholder value long term.”
  – Ezra Yacob, Chairman & CEO, EOG Resources, Inc.

International Growth & Offshore Strength

While U.S. activity has remained relatively steady, both oilfield services and upstream operators emphasized the growing importance of international opportunities.

Offshore developments and expansion into new international basins were talking points, highlighting where capital and technology are being deployed for long-cycle growth.

From the Middle East to Latin America and even frontier offshore regions, management teams described strong order books and growing demand beyond North America.

• “In Brazil, we began operations on our largest integrated well intervention contract… Halliburton secured its largest international ESP contract to date from a Middle East NOC. Middle East/Asia remains our largest and fastest-growing international lift region, with strong year-over-year growth also achieved in Latin America and Europe/Africa.”
  – Jeff Miller, Chairman, President & CEO, Halliburton Company
• “We continue to see a growing number of opportunities for sales of completion equipment into international markets particularly for the growing unconventional plays in the Middle East and Latin America. Our businesses are executing exceptionally well on our healthy backlog of offshore production-related projects, driving a 9% sequential and 6% year-over-year increase in revenues from offshore markets.”
  – Clay Williams, Chairman, President, and CEO, NOV, Inc.
• “On the international front, in the second quarter, we were awarded an onshore concession to explore and appraise an approximately 900,000-acre unconventional oil exploration prospect in the UAE. We are very excited about this new opportunity that will allow us to leverage our technical expertise and extensive data set from drilling thousands of unconventional wells across a wide variety of plays. The UAE and our BAPCO joint venture in Bahrain form an exciting long-term business opportunity for EOG in the Gulf States.”
  – Ezra Yacob, Chairman & CEO, EOG Resources, Inc.

The Price Isn’t Right

Despite optimism around long-term fundamentals, Q2 commentary carried a cautious tone on near-term market conditions.

Executives across both OFS and E&P acknowledged pricing headwinds, fiscal austerity from customers, and commodity price volatility.

Management teams repeatedly stressed discipline in spending and capital deployment, with many choosing to prioritize balance sheet strength and shareholder returns over aggressive growth in the current environment.

• “In North America, multiple operators, even large and established customers, are now planning meaningful schedule gaps in the second half of 2025…we continue to see reductions in activity and lower discretionary spend, typical of much lower commodity price environments. And finally, we’ve seen several well-publicized reorganizations and cost reduction efforts by large independent operators and IOCs. To put it plainly, what I see tells me the oilfield services market will be softer than I previously expected over the short to medium term. We will, of course, take action to address this near-term softness. That said, I believe the demand fundamentals remain strong for both oil and gas.”
  – Jeff Miller, Chairman, President & CEO, Halliburton Company
• “Today, uncertainty is driving extreme fiscal austerity and a greater emphasis on operational efficiencies. Customers are pushing their procurement teams to negotiate better pricing, but are also looking to and willing to invest in solutions that improve recovery rates, lower costs, improve safety and reduce environmental footprint.”
  – Clay Williams, Chairman, President, and CEO, NOV, Inc.
• “You can’t really refute the fact that at current pricing at $65 or $70, the rig count has fallen off pretty hard. And some of that has increased efficiencies, but I think the data is showing that the U.S. doesn’t seem to have a lot of incentive to grow at this pricing. Now I think what you’re left with is … you’re turning into groups of have and have-nots. You’re turning into companies that have invested in infrastructure and scale and data collection to continue to drive down their breakevens. And there are a handful of companies out there that can continue to grow and be very, very profitable at pricing well below $65.”
  – Ezra Yacob, Chairman & CEO, EOG Resources, Inc.

Conclusion

Q2 2025 earnings calls reflected an industry still guided by discipline but open to opportunity. OFS providers and E&P companies alike reiterated their focus on returning capital to shareholders and preserving balance sheet strength, while also pointing to selective international and offshore growth initiatives. The result is a sector cautious about near-term pricing and activity levels in North America, yet strategically positioning for selective long-term expansion.

About Mercer Capital

Mercer Capital has its finger on the pulse of both the upstream market and the oilfield service space. As the oil and gas industry evolves through these pivotal times, we take a holistic perspective to bring you thoughtful analysis and commentary regarding the full hydrocarbon stream. This includes E&P operators, mineral aggregators, and ancillary service companies crucial to starting and maintaining the stream’s flow. For more targeted energy sector analysis to meet your valuation needs, please contact the Mercer Capital Oil & Gas Team for further assistance.