SLB N.V. (NYSE:SLB)

The Digital segment experienced fluctuating financial performance between 2021 and 2025. While revenue and pretax income initially increased, both metrics subsequently declined before showing signs of recovery. The segment profit margin mirrored this pattern, exhibiting volatility over the five-year period.

Pretax Income

Pretax income rose from US$1,141 million in 2021 to US$1,357 million in 2022, representing a growth of approximately 18.9%. A significant decrease followed in 2023, with pretax income falling to US$366 million. A partial recovery was observed in 2024, reaching US$612 million, and continued into 2025 with a further increase to US$745 million. This indicates a period of substantial disruption followed by a return towards previous levels, though not fully reaching the 2022 peak.

Revenue

Revenue followed a similar trajectory to pretax income. It increased from US$3,290 million in 2021 to US$3,725 million in 2022, a rise of approximately 13.2%. Revenue then decreased sharply in 2023 to US$2,034 million. Subsequent years showed recovery, with revenue reaching US$2,439 million in 2024 and US$2,660 million in 2025. The 2023 decline was more pronounced than the subsequent recovery, suggesting ongoing challenges in revenue generation.

Segment Profit Margin

The segment profit margin initially improved from 34.68% in 2021 to 36.43% in 2022, coinciding with the increase in pretax income and revenue. However, the margin experienced a substantial decline in 2023, falling to 17.99%. A recovery began in 2024, with the margin increasing to 25.09%, and continued into 2025, reaching 28.01%. The margin’s volatility suggests that profitability is sensitive to changes in revenue and/or cost structure. While the margin is recovering, it has not yet returned to the levels observed in 2021 and 2022.

The correlation between revenue, pretax income, and segment profit margin suggests that the segment’s profitability is directly linked to its revenue generation capabilities. The significant drop in 2023 warrants further investigation to understand the underlying causes, while the recovery in 2024 and 2025 indicates positive momentum, though sustained performance remains to be seen.

The Reservoir Performance segment demonstrated a consistent pattern of growth in both pretax income and revenue from 2021 through 2024, followed by a slight decline in 2025. This performance is reflected in a corresponding increase in segment profit margin over the same period.

Pretax Income

Pretax income increased from US$648 million in 2021 to US$1,452 million in 2024, representing a substantial rise over the four-year period. However, 2025 saw a decrease to US$1,250 million, indicating a potential moderation in profitability. The growth rate decelerated between 2023 and 2024, and the decline in 2025 suggests a possible shift in segment dynamics.

Revenue

Revenue followed a similar trajectory to pretax income, increasing from US$4,599 million in 2021 to US$7,177 million in 2024. A decrease to US$6,820 million was observed in 2025. The consistent revenue growth from 2021 to 2024 suggests strong demand for the segment’s offerings during that period.

Segment Profit Margin

The segment profit margin exhibited a clear upward trend, rising from 14.09% in 2021 to a peak of 20.23% in 2024. This indicates increasing efficiency in managing costs relative to revenue. The margin experienced a slight decrease to 18.33% in 2025, coinciding with the decline in both pretax income and revenue. While still robust, the 2025 margin represents a step back from the prior year’s high.

Overall, the Reservoir Performance segment experienced positive financial performance between 2021 and 2024, characterized by growth in both revenue and profitability. The 2025 results suggest a potential stabilization or slight downturn, warranting further investigation into the underlying factors contributing to the changes observed.

The Well Construction segment demonstrated a generally positive trajectory in financial performance from 2021 through 2023, followed by a moderation in 2024 and a decline in 2025. Pretax income and revenue both exhibited growth over the initial three-year period, contributing to expanding profitability. However, the rate of increase slowed in later years, and revenue ultimately decreased in 2025.

Pretax Income

Pretax income increased substantially from US$1,195 million in 2021 to US$2,932 million in 2023, representing a significant improvement in segment profitability. A slight decrease to US$2,826 million was observed in 2024, followed by a more pronounced decline to US$2,248 million in 2025. This suggests potential pressures on earnings in the most recent year.

Revenue

Revenue mirrored the trend in pretax income, growing from US$8,706 million in 2021 to US$13,478 million in 2023. Revenue remained relatively stable in 2024 at US$13,357 million, before decreasing to US$11,856 million in 2025. The decline in revenue in 2025 is a notable shift from the prior growth pattern.

Segment Profit Margin

The segment profit margin increased consistently from 13.73% in 2021 to a peak of 21.75% in 2023, indicating improved operational efficiency and pricing power. While remaining high at 21.16% in 2024, the margin decreased to 18.96% in 2025. This decrease, coupled with the revenue decline, suggests that the segment faced increased cost pressures or reduced pricing flexibility in the latest reporting period.

Overall, the Well Construction segment experienced strong growth in both revenue and profitability between 2021 and 2023. However, the performance in 2024 and 2025 indicates a potential shift in the segment’s dynamics, with both revenue and profit margins experiencing declines. Further investigation would be required to determine the underlying causes of these recent trends.

The Production Systems segment demonstrated a consistent pattern of growth in both pretax income and revenue from 2021 through 2025. Simultaneously, the segment profit margin exhibited a notable upward trend over the same period.

Pretax Income

Pretax income increased from US$634 million in 2021 to US$2,184 million in 2025. The growth was not linear, with a more substantial increase occurring between 2022 and 2023 (US$497 million) and a continued, though smaller, increase between 2023 and 2024 (US$655 million). The increase from 2024 to 2025 was US$284 million, indicating a slowing rate of growth.

Revenue

Revenue followed a similar trajectory, rising from US$6,710 million in 2021 to US$13,325 million in 2025. The largest absolute increase in revenue occurred between 2023 and 2024, adding US$2,104 million. The increase from 2024 to 2025 was US$1,390 million, again suggesting a deceleration in the growth rate.

Segment Profit Margin

The segment profit margin experienced a steady improvement throughout the period. Starting at 9.45% in 2021, it increased to 9.51% in 2022, then accelerated to 12.66% in 2023. This upward trend continued, reaching 15.92% in 2024 and culminating at 16.39% in 2025. The consistent increase in margin suggests improved operational efficiency, pricing power, or a shift towards higher-margin products and services within the Production Systems segment.

The concurrent increases in pretax income, revenue, and segment profit margin indicate strong performance within the Production Systems segment. While growth rates in both revenue and pretax income appear to be moderating towards the end of the analyzed period, the segment continues to demonstrate improving profitability.

The financial performance of the 'All Other' segment demonstrates a clear pattern of declining profitability between 2023 and 2025. While initial figures indicate a strong profit margin in 2023, subsequent years reveal a consistent decrease. This analysis details the observed trends in pretax income, revenue, and segment profit margin.

Pretax Income

Pretax income for the 'All Other' segment was reported at US$892 million in 2023. This figure decreased to US$775 million in 2024, representing a decline of approximately 13.1%. The downward trend continued into 2025, with pretax income falling further to US$498 million, a decrease of roughly 36% from the prior year. This indicates a substantial erosion of profitability over the observed period.

Revenue

Revenue for the segment increased from US$1,844 million in 2023 to US$2,117 million in 2024, representing a growth of approximately 14.8%. However, this growth was not sustained, as revenue decreased to US$1,987 million in 2025, a decline of approximately 6.6% from 2024. The revenue trend suggests initial expansion followed by a contraction.

Segment Profit Margin

The segment profit margin began at a high of 48.37% in 2023. In 2024, the margin decreased significantly to 36.61%, representing a reduction of approximately 24.2%. This decline accelerated in 2025, with the profit margin falling to 25.06%, a further decrease of approximately 31.6% from the previous year. The consistent and accelerating decline in segment profit margin suggests increasing cost pressures or decreasing pricing power within this segment.

The combination of decreasing pretax income and a declining segment profit margin, despite an initial revenue increase, suggests that the 'All Other' segment is facing increasing challenges in maintaining profitability. Further investigation into the cost structure and revenue drivers within this segment is warranted to understand the underlying causes of these trends.

The Digital segment demonstrates a notable evolution in financial performance between 2021 and 2025. Initially, the segment exhibited strong profitability, which underwent a period of fluctuation before achieving substantial improvement. Asset levels experienced an initial period of stability followed by a significant decrease and subsequent recovery.

Pretax Income

Pretax income increased from US$1,141 million in 2021 to US$1,357 million in 2022, representing a growth of approximately 18.9%. A substantial decline was then observed in 2023, with pretax income falling to US$366 million. This was followed by a recovery in 2024 to US$612 million and further growth to US$745 million in 2025. The 2025 value represents an increase of approximately 21.7% compared to 2024.

Assets

The segment’s asset base remained relatively stable between 2021 and 2022, fluctuating only slightly from US$3,134 million to US$3,132 million. A significant reduction in assets occurred in 2023, decreasing to US$652 million. Assets then began to rebuild, reaching US$768 million in 2024 and US$925 million in 2025. The 2025 asset level is approximately 41.8% higher than the 2024 value.

Segment ROA

Segment Return on Assets (ROA) exhibited a consistent upward trend throughout the period. Starting at 36.41% in 2021, ROA increased to 43.33% in 2022. The most dramatic increase occurred between 2022 and 2023, rising to 56.13%. This upward trajectory continued with ROA reaching 79.69% in 2024 and 80.54% in 2025. The stabilization of ROA between 2024 and 2025 suggests potential operating leverage benefits are being realized.

The combination of declining assets in 2023 alongside a decrease in pretax income initially lowered the ROA, but the subsequent recovery in both metrics, particularly the substantial increase in pretax income relative to the asset base, drove the significant improvement in ROA observed in 2024 and 2025. The segment’s ability to generate returns on a smaller asset base indicates increasing efficiency.

The Reservoir Performance segment demonstrated a positive trajectory in both pretax income and asset base between 2021 and 2024, followed by a slight decline in 2025. Pretax income increased consistently from US$648 million in 2021 to US$1,452 million in 2024 before decreasing to US$1,250 million in 2025. Similarly, assets grew from US$2,923 million in 2021 to US$3,947 million in 2025, with consistent annual increases.

Segment Return on Assets (ROA)

Segment ROA exhibited a strong upward trend from 2021 to 2024. It rose from 22.17% in 2021 to a peak of 38.19% in 2024. This indicates increasing efficiency in utilizing assets to generate pretax income within the Reservoir Performance segment. However, 2025 saw a decrease in ROA to 31.67%, despite continued asset growth. This suggests that while the asset base expanded, the corresponding increase in pretax income was insufficient to maintain the prior year’s ROA level.

The consistent growth in pretax income and assets from 2021 to 2024 suggests successful operational performance and strategic asset allocation within the Reservoir Performance segment. The decline in pretax income and subsequent ROA in 2025 warrants further investigation to determine the underlying causes, such as increased costs, decreased revenue, or shifts in market conditions. The segment continues to generate a substantial return on assets, even with the 2025 decrease, indicating continued profitability.

Pretax Income Trend

The growth in pretax income slowed considerably in 2025, increasing by only approximately 41% from 2021 to 2024, then decreasing by approximately 14% from 2024 to 2025. This deceleration could be attributed to various factors, including increased competition, changes in project mix, or macroeconomic headwinds.

The segment’s asset base continued to expand in 2025, even as pretax income declined. This suggests continued investment in the segment, potentially for future growth opportunities. Monitoring the relationship between asset growth and pretax income in subsequent periods will be crucial to assess the effectiveness of these investments.

The Well Construction segment demonstrated a positive trajectory in financial performance from 2021 through 2023, followed by a stabilization and slight decline in subsequent years. Pretax income and assets both increased substantially over the initial three-year period, contributing to a significant improvement in Segment Return on Assets (ROA). While pretax income experienced a moderate decrease in the final two years, assets also decreased, partially mitigating the impact on ROA.

Pretax Income

Pretax income increased from US$1,195 million in 2021 to US$2,932 million in 2023, representing a compound annual growth rate of approximately 28.6%. A subsequent decrease to US$2,248 million was observed by 2025. This suggests a peak in profitability in 2023, followed by a moderation in earnings.

Assets

Assets exhibited a similar growth pattern to pretax income, rising from US$4,714 million in 2021 to US$7,126 million in 2023, a compound annual growth rate of approximately 22.8%. Assets then decreased to US$6,167 million by 2025, indicating a potential strategic shift in capital allocation or a reduction in investment within the segment.

Segment ROA

Segment ROA increased consistently from 25.35% in 2021 to a peak of 41.93% in 2024. This indicates improving efficiency in generating profit from the segment’s asset base. A slight decrease to 36.45% was recorded in 2025, aligning with the decline in both pretax income and assets. Despite this decrease, the ROA remained substantially higher than the 2021 level, suggesting continued strong, though moderating, profitability.

The correlation between pretax income, assets, and Segment ROA suggests that the segment’s profitability is closely tied to its asset base and operational efficiency. The recent decline in both income and assets warrants further investigation to determine the underlying drivers and potential implications for future performance.

The Production Systems segment demonstrates a consistent pattern of growth in both pretax income and assets over the five-year period. This growth is reflected in a strengthening return on assets (ROA). However, the rate of ROA improvement appears to be moderating in the most recent year.

Pretax Income

Pretax income for the Production Systems segment increased from US$634 million in 2021 to US$2,184 million in 2025. The growth was particularly strong between 2022 and 2024, with a substantial increase of US$652 million and US$735 million respectively. The increase from 2024 to 2025 was more modest, at US$284 million.

Assets

Assets within the Production Systems segment also exhibited a consistent upward trend, rising from US$4,684 million in 2021 to US$9,373 million in 2025. Similar to pretax income, the largest asset increases occurred between 2022 and 2024, with increases of US$919 million and US$446 million respectively. Asset growth slowed between 2024 and 2025, increasing by US$2,324 million.

Segment ROA

The segment ROA increased from 13.54% in 2021 to 23.30% in 2025. The most significant improvement in ROA occurred between 2022 and 2024, increasing from 13.35% to 26.95%. While still positive, the ROA experienced a decrease in the rate of growth between 2024 and 2025, declining to 23.30%. This suggests that while the segment continues to generate strong returns, the efficiency with which assets are being used to generate profit may be leveling off.

The concurrent increases in both pretax income and assets suggest effective capital deployment within the Production Systems segment. The deceleration in ROA growth in the latest year warrants further investigation to determine if it represents a temporary fluctuation or a more sustained trend.

The segment experienced increasing pretax income from 2023 to 2024, followed by a decline through 2025. Simultaneously, assets exhibited an initial increase before decreasing in the final period presented. Consequently, the segment’s Return on Assets (ROA) demonstrated a corresponding pattern of rise and subsequent fall.

Pretax Income

Pretax income was 892 million US dollars in 2023, increasing to 775 million US dollars in 2024. A further decrease resulted in pretax income of 498 million US dollars in 2025. This indicates diminishing profitability within the segment over the latter part of the analyzed period.

Assets

Assets totaled 2,455 million US dollars in 2023, growing to 2,512 million US dollars in 2024. By 2025, assets had decreased to 2,249 million US dollars. This suggests a potential shift in resource allocation or asset utilization within the segment.

Segment ROA

Segment ROA began at 36.33% in 2023, representing a strong return on invested capital. It rose to 30.85% in 2024, before declining to 22.14% in 2025. The decrease in ROA aligns with the combined effect of declining pretax income and decreasing assets, indicating a reduced efficiency in generating profit from the segment’s asset base.

The observed trend suggests that while the segment initially demonstrated strong profitability and asset utilization, its performance deteriorated in the most recent period. Further investigation into the drivers behind the declining pretax income and asset base is warranted to understand the underlying causes and potential corrective actions.

The Digital segment demonstrated significant fluctuations in both revenue and assets between 2021 and 2025. These shifts are reflected in a notable trend in the segment asset turnover ratio.

Revenue

Revenue for the Digital segment increased from US$3,290 million in 2021 to US$3,725 million in 2022, representing a growth of approximately 13.2%. However, a substantial decrease occurred in 2023, with revenue falling to US$2,034 million. Revenue partially recovered in 2024 to US$2,439 million and continued to rise to US$2,660 million in 2025, though it did not reach the levels observed in 2021 or 2022.

Assets

The value of assets within the Digital segment remained relatively stable between 2021 and 2022, at approximately US$3,134 million. A significant reduction in assets was observed in 2023, decreasing to US$652 million. Assets then increased in both 2024 and 2025, reaching US$768 million and US$925 million respectively, but remained below the levels recorded in 2021 and 2022.

Segment Asset Turnover

The segment asset turnover ratio exhibited a clear upward trend from 2021 to 2024. It increased from 1.05 in 2021 to 1.19 in 2022. A substantial increase was then observed in 2023, rising to 3.12, and further increasing to 3.18 in 2024. In 2025, the ratio decreased to 2.88, indicating a slight reduction in efficiency, although it remained significantly higher than the levels seen in 2021 and 2022. The increase in the ratio from 2022 to 2024 suggests improved efficiency in utilizing assets to generate revenue, while the decrease in 2025 warrants further investigation.

The substantial changes in both assets and revenue, coupled with the corresponding fluctuations in the asset turnover ratio, suggest a period of restructuring or strategic shifts within the Digital segment. The high asset turnover ratios in 2023 and 2024, despite lower revenue in 2023, indicate a more efficient use of a reduced asset base. The slight decline in the ratio in 2025, alongside increasing revenue, suggests a potential need to monitor asset deployment strategies.

The Reservoir Performance segment demonstrated consistent revenue growth from 2021 through 2023, followed by a slight decline in 2024 and a more pronounced decrease in 2025. Simultaneously, segment assets increased steadily over the five-year period. Analysis of the segment asset turnover reveals a generally positive trend, albeit with recent moderation.

Revenue Trend

Revenue within the Reservoir Performance segment increased from US$4,599 million in 2021 to US$6,561 million in 2023, representing a compound annual growth rate of approximately 19.7%. Revenue peaked in 2023 before decreasing to US$7,177 million in 2024 and further to US$6,820 million in 2025. The 2024 increase, while present, was smaller than previous gains, and the 2025 figure represents a decrease from both 2023 and 2024 levels.

Asset Trend

Segment assets exhibited a consistent upward trend throughout the observed period, increasing from US$2,923 million in 2021 to US$3,947 million in 2025. This represents a cumulative increase of approximately 35% over the five years. The rate of asset growth appeared relatively stable year-over-year.

Segment Asset Turnover

The segment asset turnover ratio increased from 1.57 in 2021 to 1.88 in 2023, indicating improving efficiency in asset utilization to generate revenue. The ratio remained relatively stable at 1.89 in 2024. However, a decrease to 1.73 was observed in 2025. This decline in asset turnover in 2025 coincides with the revenue decrease, suggesting a potential weakening in the segment’s ability to generate sales from its asset base.

Overall, the Reservoir Performance segment experienced growth in both revenue and assets. While asset turnover initially improved, the most recent year shows a decline, warranting further investigation into the factors contributing to this trend. The combination of decreasing revenue and decreasing asset turnover in 2025 suggests potential challenges in maintaining operational efficiency.

The Well Construction segment demonstrated increasing revenue and assets between 2021 and 2023, followed by a slight decline in both metrics in subsequent years. Despite these fluctuations, the segment asset turnover ratio exhibited a generally positive trend over the five-year period.

Revenue

Revenue increased from US$8,706 million in 2021 to US$13,478 million in 2023, representing a substantial growth period. However, revenue decreased to US$13,357 million in 2024 and further to US$11,856 million in 2025. This suggests a potential stabilization or moderate contraction in recent performance.

Assets

Assets mirrored the revenue trend, increasing from US$4,714 million in 2021 to US$7,126 million in 2023. Similar to revenue, assets decreased to US$6,740 million in 2024 and US$6,167 million in 2025. The decrease in assets in the later years may reflect strategic divestitures, reduced capital expenditure, or asset depreciation.

Segment Asset Turnover

The segment asset turnover ratio, a measure of efficiency in utilizing assets to generate revenue, began at 1.85 in 2021. It experienced a slight decrease to 1.76 in 2022 before recovering to 1.89 in 2023. The ratio peaked at 1.98 in 2024, indicating improved asset utilization, and then slightly decreased to 1.92 in 2025. Overall, the ratio demonstrates a generally improving trend, suggesting the segment is becoming more efficient in converting its assets into sales, despite the revenue and asset fluctuations.

The observed increase in asset turnover, particularly in 2024, warrants further investigation to understand the drivers behind this improvement. The slight decline in both revenue and assets in 2024 and 2025, coupled with a maintained high asset turnover, suggests potential cost optimization or a shift in the revenue mix towards higher-margin products or services.

The Production Systems segment demonstrated consistent revenue growth over the five-year period, increasing from US$6,710 million in 2021 to US$13,325 million in 2025. Correspondingly, segment assets also increased throughout the period, though at a somewhat slower pace, rising from US$4,684 million in 2021 to US$9,373 million in 2025. The segment asset turnover ratio exhibited fluctuations during this time, indicating varying levels of efficiency in asset utilization.

Segment Asset Turnover Trend

The segment asset turnover ratio began at 1.43 in 2021, decreased slightly to 1.40 in 2022, and then increased to 1.48 in 2023. A notable increase was observed in 2024, with the ratio reaching 1.69, representing the highest value within the observed period. However, the ratio decreased in 2025 to 1.42.

The increase in the segment asset turnover ratio in 2024 suggests improved efficiency in generating revenue from the segment’s assets. This could be attributed to factors such as enhanced operational performance, more effective asset management, or increased demand for the segment’s products and services. The subsequent decrease in 2025, despite continued revenue growth, indicates that asset growth outpaced revenue growth during that year, potentially due to investments in new assets or a shift in the asset base.

Revenue and Asset Correlation

While both revenue and assets increased consistently, the asset turnover ratio’s fluctuations suggest a dynamic relationship between the two. The period of strongest revenue growth (2023-2024) did not perfectly align with the highest asset turnover, indicating that asset investment decisions and revenue generation strategies are not always directly proportional.

Overall, the Production Systems segment demonstrates a positive trend in revenue generation, accompanied by increasing asset investment. The segment asset turnover ratio provides valuable insight into the efficiency of asset utilization, highlighting periods of strong performance and potential areas for further optimization.

Analysis of the "All Other" segment reveals a generally positive trend in asset turnover from 2023 to 2025, accompanied by fluctuating revenue and asset levels. Revenue initially increased before experiencing a slight decline, while assets demonstrated a similar pattern of growth followed by a reduction.

Revenue

Revenue for the "All Other" segment was reported as US$1,844 million in 2023, increasing to US$2,117 million in 2024. A subsequent decrease to US$1,987 million was observed in 2025. This indicates a period of growth followed by a modest contraction in segment sales.

Assets

The segment’s asset base grew from US$2,455 million in 2023 to US$2,512 million in 2024. Assets then decreased to US$2,249 million in 2025. This suggests a period of investment followed by a potential asset reduction strategy or depreciation.

Segment Asset Turnover

Segment asset turnover, a measure of how efficiently assets are used to generate revenue, increased from 0.75 in 2023 to 0.84 in 2024. This improvement continued into 2025, reaching 0.88. The consistent increase in this ratio suggests improving efficiency in asset utilization within the segment, despite the revenue fluctuation. The increase in turnover, coupled with the decrease in assets in 2025, indicates a more effective use of the remaining asset base.

Overall, the "All Other" segment demonstrates improving operational efficiency as indicated by the rising asset turnover ratio. While revenue experienced a slight decline in the most recent period, the segment continues to generate a substantial amount of revenue relative to its asset base.

The segment experienced fluctuating capital investments between 2021 and 2025. Depreciation and amortization exhibited a more consistent, albeit moderate, increase over the same period. The relationship between these two metrics, as indicated by the segment capital expenditures to depreciation ratio, reveals a dynamic investment cycle.

Capital Investments

Capital investments peaked in 2022 at US$689 million, representing a substantial increase from US$516 million in 2021. A significant decline followed in 2023, with investments falling to US$162 million. Investments then showed a modest recovery in 2024 and 2025, reaching US$199 million and US$257 million respectively. This pattern suggests potential project-based investment cycles or shifts in strategic priorities.

Depreciation and Amortization

Depreciation and amortization increased steadily from US$446 million in 2021 to US$504 million in 2022. The rate of increase slowed in subsequent years, reaching US$167 million in 2023, US$173 million in 2024, and US$183 million in 2025. This suggests a consistent realization of value from prior investments, with a gradual increase reflecting the asset base.

Segment Capital Expenditures to Depreciation Ratio

The segment capital expenditures to depreciation ratio initially increased from 1.16 in 2021 to 1.37 in 2022, coinciding with the peak in capital investments. A decrease to 0.97 in 2023 indicates that depreciation and amortization outpaced capital investments during that year. The ratio recovered to 1.15 in 2024 and further increased to 1.40 in 2025, suggesting a renewed focus on capital investment relative to the existing asset base. The ratio’s fluctuations indicate varying levels of investment in new assets compared to the depreciation of existing assets.

Overall, the segment’s investment strategy appears to be cyclical, with periods of significant capital expenditure followed by periods of consolidation and a return to growth. The capital expenditures to depreciation ratio provides a useful metric for tracking the balance between investment in new assets and the utilization of the existing asset base.

The Reservoir Performance segment experienced fluctuating capital investments between 2021 and 2025. Depreciation and amortization remained relatively stable over the same period, with a slight increase towards the end of the forecast. The relationship between capital investments and depreciation, as measured by the segment capital expenditures to depreciation ratio, demonstrates a clear trend of increasing capital intensity followed by a moderation.

Capital Investments

Capital investments began at US$348 million in 2021, increasing to US$478 million in 2022 and US$514 million in 2023. Further growth was observed in 2024, reaching US$624 million, before declining to US$467 million in 2025. This suggests a period of significant investment followed by a potential pullback or shift in investment strategy.

Depreciation and Amortization

Depreciation and amortization were US$415 million in 2021, decreasing to US$386 million in 2022. It remained relatively consistent at US$387 million in 2023, then increased to US$404 million in 2024 and US$435 million in 2025. The increase in later years likely reflects the depreciation of assets acquired during the earlier investment period.

Segment Capital Expenditures to Depreciation Ratio

The segment capital expenditures to depreciation ratio increased from 0.84 in 2021 to 1.24 in 2022, and continued to rise to 1.33 in 2023 and 1.54 in 2024. This indicates that capital investments were outpacing depreciation, suggesting a growing asset base relative to the expense recognized for asset consumption. However, the ratio decreased to 1.07 in 2025, as the decline in capital investments began to offset the continued, albeit slower, growth in depreciation. This suggests a stabilization of the asset base relative to depreciation expense.

The increasing ratio from 2021 to 2024 implies a period of expansion and modernization within the Reservoir Performance segment. The subsequent decrease in 2025 suggests a potential shift towards utilizing existing assets more efficiently or a change in investment priorities. Continued monitoring of this ratio will be important to assess the long-term capital allocation strategy of the segment.

The Well Construction segment experienced fluctuating capital expenditure levels relative to depreciation and amortization between 2021 and 2025. Capital investments initially increased significantly before declining, while depreciation and amortization demonstrated a more consistent upward trajectory. This resulted in a dynamic segment capital expenditures to depreciation ratio over the period.

Capital Investments

Capital investments began at US$424 million in 2021, increasing substantially to US$687 million in 2022. Further growth was observed in 2023, reaching US$908 million. However, investments then decreased to US$745 million in 2024 and continued to decline to US$514 million in 2025.

Depreciation and Amortization

Depreciation and amortization remained relatively stable between 2021 and 2023, at US$537 million, US$524 million, and US$587 million respectively. A noticeable increase occurred in 2024, reaching US$649 million, and continued into 2025, with a value of US$672 million. This indicates a growing asset base subject to depreciation.

Segment Capital Expenditures to Depreciation Ratio

The segment capital expenditures to depreciation ratio was 0.79 in 2021. This ratio increased to 1.31 in 2022 and peaked at 1.55 in 2023, suggesting that capital investments were outpacing depreciation. The ratio then decreased to 1.15 in 2024, and further declined to 0.76 in 2025. The 2025 ratio indicates that depreciation and amortization were greater than capital investments, potentially signaling a period of harvesting existing assets rather than significant expansion.

The trend suggests a shift in investment strategy within the Well Construction segment. The initial period of increased capital expenditure may have been focused on growth or modernization, followed by a period of reduced investment and increased depreciation, potentially reflecting a stabilization or optimization phase.

Analysis of capital investments and depreciation within the Production Systems segment reveals a dynamic relationship over the five-year period. Capital investments have generally increased, while depreciation and amortization have also risen, though at differing rates, resulting in a fluctuating capital expenditures to depreciation ratio.

Capital Investments

Capital investments demonstrate a consistent upward trajectory, increasing from US$267 million in 2021 to US$466 million in 2025. The largest single-year increase occurred between 2021 and 2022, with a rise of US$79 million. Growth moderated in subsequent years, but remained positive throughout the period.

Depreciation and Amortization

Depreciation and amortization also exhibit an increasing trend, moving from US$302 million in 2021 to US$463 million in 2025. The rate of increase was most pronounced between 2022 and 2023, and again between 2024 and 2025. While consistently positive, the growth in depreciation and amortization did not always align with the growth in capital investments.

Segment Capital Expenditures to Depreciation Ratio

The segment capital expenditures to depreciation ratio initially decreased from 0.88 in 2021 to 1.11 in 2022, indicating that capital investments exceeded depreciation. This ratio continued to rise, reaching 1.18 in 2023 and remaining relatively stable at 1.17 in 2024. A slight decrease to 1.01 is observed in 2025, suggesting a closer balance between capital investments and depreciation. The ratio generally indicates that investments in the Production Systems segment are outpacing the depreciation of existing assets, suggesting a renewal or expansion of the asset base. The 2025 value suggests this trend is moderating.

Overall, the Production Systems segment has experienced increasing investment alongside rising depreciation. The capital expenditures to depreciation ratio suggests a period of asset growth, with a potential stabilization occurring in the final year of the observed period.

Analysis of segment capital expenditures to depreciation reveals a fluctuating pattern over the observed period. Capital investments and depreciation & amortization figures are initially unavailable but become available starting in 2023. The ratio of segment capital expenditures to depreciation demonstrates variability, indicating changes in the relationship between investment in assets and the accounting recognition of their cost over time.

Capital Investments & Depreciation

Capital investments decreased from US$513 million in 2023 to US$441 million in 2025. Depreciation and amortization increased from US$411 million in 2023 to US$482 million in 2024, then decreased to US$375 million in 2025.

Segment Capital Expenditures to Depreciation Ratio

The ratio began at 1.25 in 2023, suggesting that capital investments exceeded depreciation and amortization in that year. In 2024, the ratio decreased to 1.04, indicating a narrowing gap between capital investments and depreciation. The ratio increased again in 2025 to 1.18, suggesting a renewed increase in capital investments relative to depreciation. This fluctuation suggests potential shifts in the segment’s investment strategy or asset base.

The observed trend suggests that the segment’s investment in capital assets is not consistently aligned with the depreciation of existing assets. The increase in the ratio in 2025, despite lower capital investments overall, could be due to a decrease in depreciation expense, potentially reflecting changes in the asset mix or useful lives assigned to assets.