Clean Print, Bullish on ‘27 Upcycle, Especially Deepwater

Research evidence excerpt

Clean Print, Bullish on ‘27 Upcycle, Especially Deepwater

Barclays | SLB

Middle East impact was a bit less than expected, at the low end of the $0.06-0.08 q/q EPS

headwind on temporary cost actions and 3Q assumes activity levels to gradually improve. In the

downside Middle East scenario, management indicated approximately $75mm of downside

EBITDA risk in 3Q, roughly 1% of FY26.

#2. Middle East production will take longer to come back than the market is pricing in. CEO

Le Peuch said would “not be prudent” to assume production in the Middle East would be able

to restore in weeks, grading the mix from untouched Oman, through the UAE and Saudi, to

severely damaged Iraq and Kuwait, with recovery playing out over weeks, months or quarters.

As we understand it, ~95% of the 4Q25 guide assumes the UAE fully back, Saudi with room to go

(land back, offshore improving), Qatar nearly back to pre-war levels as customers drill and

complete LNG wells while holding gas in the ground, a slow Iraq recovery, and Kuwait only

modestly better than Iraq. Three areas for recovery: intervention and coiled tubing to restore

shut-in wells, digital as a crisis-driven catalyst, and eventually rig mobilization to expand

capacity. One subtext of the quarter is that ChampionX looks more important than we had

appreciated - the acquired businesses contributed $870mm of revenue and $207mm of EBITDA

with a third consecutive quarter of margin expansion, and its production chemicals and

artificial lift franchises sit at the center of both the US land rebound and the coming Middle East

workover cycle. We view a slower, longer rebuild as ultimately better for service intensity than a

v-shaped restart.

#3. Exploration is back, and the FID deepwater pipeline puts a date on the offshore

inflection. Mr.