Okay, guys, we'll keep moving on. We're saving the best for the last, and we got perhaps one of the most unique companies in oilfield services. We got NESR with us. We got Sherif Foda Foda, who's the Chairman and CEO of the company. For those of you who might not know NESR, Sherif Foda founded the company in 2017 as a SPAC. The company has since grown to around $1.3 billion in revenue run rate, with a clear path to $2 billion and more. Beyond that, I'm hoping we'll discuss that in our discussion. Sherif Foda, thanks a lot for coming.
Thank you.
Sherif Foda, while we get settled, I think the first question I have in mind for investors is, as a US-listed, NASDAQ-listed OFS company, you are also the MENA national champion. How do you thread the needle between the two?
I mean, that was the whole purpose of forming the company, is a lot of people wanted to invest in the, if you like, in the OPEC or the GCC, but there is nothing public there, right?
Right.
The idea came in mind, why don't we form the first company that is really focused on the Middle East with the growth that is very stable? There are no cycles, really, but they can still buy the stock of that company on the U.S. exchange. That is why I formed the SPAC and then got a lot of very high net worth in the Middle East, the all together, and then fused two companies, then bought another two companies. Today we are the largest OFS national company after the big three.
Right, right.
Yeah. The big three are the international, and we are the largest national company.
Right. So anybody looking for a pure-play way to invest in the Middle East, right, from an oilfield service perspective, maybe NESR is your only option. Sherif Foda, just talking about the Middle East, like you said, it's been a region that's big, it's stable, it's relatively steady, but now it's also growing a lot, right? A lot of countries are expanding. Their oil production capacity and conventionals are coming up. Gas is a big part of the story. Maybe just walk us through what's going on in the Middle East right now.
Look, I mean, the Middle East is, for people who do not know, it's a national oil company that controls most of the basin and the resource, right?
Right.
Their target and their agenda is usually very aligned to the country itself. It is very different than the U.S. independent or shale, where there is a cash flow and short term. This is very long term. That is why the national oil companies plan for very long. What changed, obviously, as well is the gas story, right? The gas story was not a big story, let's say, a decade ago. Now it is a very big story because internal consumption is increasing dramatically, and they want to have their own gas and renewable. If you look at the agenda, UAE, Saudi, they all want to be 50% renewable, 50% gas. The oil is really spared to export. If you understand that macro, then you can see the behavior of most of them.
Saudi obviously has the capacity, which nobody has a tap except them. They want to maintain always the MSC, which is 12 million barrel. The definition of it is 12 million barrel for six months, stable without any excess if they do not have to. Everybody else now is trying to have capacity. That is why you have a lot of activity increasing with that mindset that energy is there for long. You need to make sure that all of them have capacity. If you look at that, Saudi Arabia had a lot of cuts in 2025, rig releases, because they had, again, they had the 12 million barrel. They were producing at eight, nine, so they do not need to drill more. If you are in the U.S., they would have half of the rigs they would have released, but they released them modestly.
The jackup was released first because they did not need to go to 13. Again, for people who do not know, that was they wanted to add 30 rigs for that increment. They released it. A lot of land for oil, they did not have to, and some of the gas. Now they decided to pick up to ensure that they maintain the capacity, the sustainable capacity. They are going to add a lot of rigs in Q1 and over the year. This is confirmed. Obviously, the way you do it, they do it as all of the clients in the Middle East, they do what we call a tender. The tender is everybody is invited. If they are qualified, they put the price and they check the rigs. To Saudi, 2026 over 2025 would be an increase of rig.
Kuwait is going on a very steady 4 million barrel capacity by 2035 or 2040. Therefore, they added a lot of rigs over the last couple of years. Now people will be like surprised, but today Kuwait passed the 200 rigs. This was only like 70- 80 rigs just 40 years ago.
Right.
Kuwait will be as well a positive 2026 over 2025 . 2025 was a lot, but 2026 over 2025 would be positive. 2027 would be another increase so that they will keep increasing like this. UAE is very steady and they keep increasing because they are going to their 5 million barrel target. They just brought it forward from 2030 to 2027. They have a huge as well aspiration on gas because they want to stop importing gas by 2030, which means they are going to develop a lot of gas. Obviously, they are as well on the unconventional. Everybody else is nicely steady, growing. I would say you can have as well a positive because you have Iraq that moved back to American companies. You know they were very close to majority Chinese. The latest acreage, they were all won by Chinese.
Lately, they gave Exxon signed Majnoon Oilfield, which is huge, the one that was with Shell before, which means again, that's very positive. It's very positive for us because usually Chinese operators work with Chinese service companies. When it goes to the international IOC, that means that we will have as well a capacity. Iraq will be a positive. North Africa is positive. Libya is getting very good, actually. The leadership was here. We met them as well in ADIPEC, and they were in Washington. Same, they are signing MoU with Chevron, with Exxon. If these guys start as well to come, you know you're going to have as well an increase. Algeria is the same. Algeria actually has capacity and has access to Europe because they have a pipe.
If they can put more gas, they can actually replace some of the Russian gas to Europe. If you look at the whole ecosystem, it is something that is going to grow and keep growing for the next at least decade.
Right, right. Combining all of that, it seems like when Saudi comes back on the growth trajectory next year, every other country is flat to operate. Middle East as a whole, Middle East, North Africa as a whole is something that should be growing nicely next year.
Yeah, it would be at least 7%-10% year-on-year growth.
Right.
Middle East will grow, yeah.
Right.
I mean, I think the activity in some places will be higher and some places will be a bit lower, but overall, it will be that much.
Right.
Obviously, the growth that is going to be very significant is the unconventional, especially Jafurah.
Right, right. From an oilfield service perspective, Sherif Foda, all the countries in the region are trying to promote more in-country value add, right? Saudi has [Ikhssass] in-country total value add program. All the other countries are coming up with similar programs. How does that fit into what NESR is doing? How does that put you at an advantage?
Obviously, NESR is, that's why we call it national champion, right? Whatever we have to do, others have to do double, basically, right? It is very important that we are local, perceived very strongly local. We obviously have to qualify on all these programs. Some of these programs are very different from one another. Some of it is the spend. Some of it is very based on hiring. It is a very clear, audited, if you like, parameters that you have to comply with. Today, if you are not in the Middle East, it is almost impossible to set in the Middle East.
Right.
Almost, right?
Right.
Because you'll have to, first of all, know how to operate there, and you have to comply with all the stuff. For example, if you never work there and you are manufacturing, you'll have to manufacture there. Your initial costs will be so prohibitive that it becomes tough for you to set up. That is why it used to be always a place for only the big guys and the local, because the local were good, but not in everything. Now if you have someone that can do everything and local, it's the best, right? That is why our position is very strong everywhere. It's exactly like ADNOC Drilling position in Abu Dhabi, right? They are the national champion of Abu Dhabi. Obviously, they belong as well to the same owner, but they are very strong and they can do everything.
They are owned by the same people, right?
Right.
Definitely the growth in Abu Dhabi will always be captured. Majority of it will be with ADNOC Drilling.
Right, right, right. As part of that, you have been investing into the local oil and gas ecosystem, right? You started your Nori R&D facility in 2023. Earlier this year, I think you are investing in Kuwait's Ahmadi Innovation Valley, right? All of that is making you even more tightly.
For sure.
Right? Be a part of the local ecosystem. How is all of that going to lead to growth?
I mean, if you look at, for example, Nori, which is a good example, right? I mean, this Dhahran Techno Valley was obviously started by KFUPM, the University and Aramco back in 2006. And they built, and all the huge companies built the facility there. When we put ours, and people were shocked, right? Like a local company or a national company or a small company, and we build a facility that is better than anyone. Then we integrate it with some new stuff that they do not have. First of all, it elevates the company to the same level. The client sees, wow, okay, so I have again national company, but they are at the same spend and same level of the big guys.
On top of it as well, you will be able to do a lot of the exchange with the R&D of the client, which is very important. Again, because there is a perception always that local company are like small, cheap, not very good. Now if you do an R&D project jointly with the client, for example, we did one with ExpoCar for the zero liquid discharge, it was presented to the board of director of Saudi Aramco, right?
Right.
As the unique project. Who did this? NESR. He said, what, really? Okay. You know, that is why you get to a totally different level of prestige, acceptance, and you get qualified on all the big tenders.
Right.
Kuwait, we are doing the same thing with the leadership there. We decided we took them actually to Dhahran Techno Valley. We went together to some places here, and we discussed together that why don't we do something similar, which they call it AIV, Ahmadi Innovation Valley. We were the first to sign. The other guys came and signed, right? Now four of us are there or five now. We will build that as the first innovation and research center, right? Again, it's part of what you work in the country, you cannot just do some work and run away. You have to give back to the community. Part of it is research and technology. Part of it is manufacturing. We did the manufacturing as we first put the company in 2019 in Oman. We manufactured KSIC hardware. We did the machine shop.
Now you find everybody, for example, is manufacturing there, right?
Right.
Technologies, you have Schlumberger, everybody has a wellhead center. Everybody has bits. They're manufacturing there. It's part of the local content, right?
Right.
No secret. It started in the olden days in Norway. Brazil had a huge event on that, Malaysia. Everybody has to do that. It is part of the sustainability of your business.
Right, right. Now look, nobody wants to see a foreign company just come in and make the dollars and go away, right? You got to invest in the country, invest in the people, and you're doing that.
Yeah.
Right? Just continuing down that path on the technology side of things, Sherif Foda, how should investors think of you from a technology suite, right? Like you said, a lot of people think those small companies, they would not be doing the best of things from a technology standpoint. How would you position NESR's technology portfolio?
Obviously now we are not small anymore, so that's easy because we grew quite well. But look, the technology has been in the OFS space over 20, 25 years, where I used to always call it the biggest issue would be the availability for people to buy the technology off the shelf, right?
Right.
That is exactly what happened. We knew that it is going to happen. I mean, people have been around in the industry, right? Now the stuff that is very unique, that is without the branding part, that is like someone can do that, nobody else can do, is very limited, right? Now it becomes a lot of it is you have the technology, can you execute properly, and you do not have service quality issue. That is the biggest part, you know, like the frac, like the cement, like the coil, and all the stuff. You have some little technology part where we decided that there is no available good technology, so we are going to do our own.
Right.
That was on the ROIA, which is basically what I call the advanced drilling, or that's RSS, MWD, LWD, and a lot on the decarbonization arm of the company, right? We decided that we're going to team up with Innovator, like a venture capital style, and give them money. We have the infrastructure, but we bring that technology and get it approved and then be able to commercialize it. Our journey now has been going on four, five years on the ROIA platform. We have already tools that are in three countries. We are testing what we call extensive testing in Oman and Saudi for our RSS, MWD, LWD. We should be able to commercialize our MWD tool this year. In a couple of months, we will announce the commercialization. The tool works very well. It passed all the parameters of the client.
We make sure that the client approves it and signs off, right? The RSS, we are going to keep running to get more jobs and more footage because we understand very well, obviously, again, from my previous life, how the RSS could be, you know, you think it's good, but reliability is a key, right? You know, even from our peers, some of them deployed tools, then they pulled them and had to do another one. The journey is long. We are patient. We know that. We put ourselves five to seven years for these tools to be commercial and strong and reliable. I think next year we will have some breakthrough in both LWD and RSS. The tools, hopefully, fully commercial and making revenue, like good revenue from the year after.
Right.
That will be a very success because it's a $2 billion market that is really run by three players.
Right.
There is nothing off the shelf that you can buy and make it happen, right?
Right.
That is why we decided that is the only thing we are going to deploy. The rest is the same, right? It is again, it is the execution that makes a difference. Today, we are top three in the Middle East in the majority of the segment. We are top three in slickline, top three in surface well testing, top three in cementing, top three in coiled tubing, number one in frac. You know, it is basically you get the equipment, you know how to run it well, you have a non-productive time that gets to minimum. Today we do this quarterly meeting with our clients, like Aramco, like PDO, like ADNOC. We give ourselves that we need to be scoring top three in every service from their metrics. For example, Aramco calculates your MPT, right? And then the efficiency and the number between jobs, et cetera.
We score 99.8, 99.7, 98.6, you know?
Right.
We make this public and we tell the people, okay, guys, great, we need you to be number one next month, next quarter. That is how you really become what you call a technology and service delivery leadership. By the way, it is exactly like North America. Nothing changed, right?
Right.
If you look back in North America 30 years ago, we used to, like the big guys, Schlumberger, Halliburton, used to have like 70% market share. Now they have what, 10% market share?
Yeah.
Right? Because again, it depends on how the quality is, the execution of that basin, for example, with the service company that exists.
Right.
The stuff that we cannot do and we know it's going to cost us, for example, a fortune to deploy, but the market is very small, we do not even touch. Like intelligent completion. Thank you very much. Thank you. We are not going to go there. I'm not going to spend $100 million for a market that is, you know, half of that.
Right.
We say this publicly and we tell our customer that we are not good in that or somebody else is better in that or, you know, reservoir monitoring downhole tool at high temperature. Why? I'm not going to spend with MIT this, and I know what it takes to build tools like that.
Right. The size of the price is not big enough, right?
Exactly.
Why spend that?
It's $20 million. All this is $1 billion.
Right.
Okay, I'll focus on the $19.
Right, right, right. And like Sherif Foda, you said, in your prior life, you spent a lot of time in the Middle East, but you also spent a lot of time in the U.S., right?
Yes.
You said you're the number one company in frac now, but I remember, I think this was pre-COVID, 2019, I think, right? You partnered with NexTier. You took the first fleet to the Middle East, but frac in 2019 was very different in the Middle East versus what you're doing now.
Exactly.
From an operational execution lessons learned perspective, maybe talk to that a little bit over the last eight, ten years, what has changed?
Obviously, the Jafurah is very unique because that's the only basin today in the Middle East that is equivalent to the Permian, Eagle Ford, etc , right? This is multi-pad, horizontal wells, multi-stage, huge jobs, right?
Right.
The rest of the frac in the Middle East is conventional frac, what we call. We do a stage per well, and you flow it back for two weeks. It is totally different. It will not change. Even if your efficiency, this is the way they do these wells, right? The unconventional journey, obviously, by Aramco is, they call it a blueprint or a state of the art because they started as an exploration. They spent a lot of money. They wanted to put science and technology and data to ensure that they can develop that field in a very professional manner, right? Obviously, in every step of the way, they change the strategy on tendering, right, because of the size.
Right.
Once the size becomes bigger and becomes more of a factory, they make a bigger tender. This one, the last one, was obviously huge, right? Because now they know exactly where they're going to drill the wells. There is no more logging to see where. They know exactly delineation. They're going to put the first gas before the end of the year. The efficiency now of Saudi Arabia is exactly equivalent to the Permian. Five years ago, as you said, when I took Aramco and we went around here, the infrastructure was not there. We were still pumping propant, ceramic. The pads were majority two well pad and sometimes single wells. The efficiency was different. When we broke, when we came to that project, our peers were maximum, the maximum they can do was three, four stages a day.
When we did nine, they were shocked, right?
Right.
Aramco was like, what? How did you guys do nine, right? Obviously, at that time, I did with my friend Robert Drummond, and we brought the team and we told them, you know, we need to do what we do in the Permian from the efficiency, from discipline, from the work scope. Over those years, we developed the infrastructure. Obviously, again, as I know the place inside out, I know what works in the U.S. and what does not work in Saudi. We developed supply chain to make that happen. I am not going to go and make mining, but I got like a very big family with a lot of money in these places to build mining, right?
Right.
Then they built sand. Then I have access to sand. Then we did with Aramco, the water stories. How can we compensate with the seawater and make sure that we can have access so we do not wait on water? Then we developed as well a lot of companies to get the plugs, to get everything. I think part of the success is that we were agnostic from, I do not need to use my own.
Right.
If there is another plug provider that is better, let's test them. The Aramco setup that they had was very smart because they made a unit that is doing that with us.
Right.
Then Aramco became so agile and they don't have to go through, you know, like an Exxon or Chevron, which is a huge company. And Aramco is huge.
Right.
They made that unit to be agile and to approve things fast. If you approve it, that you say this, for example, this plug works in the Permian and we have 20,000 runs with it, why do I need to run 500 in Saudi? I need to run like 10.
Right.
It is approved.
Right.
That gap, I think, as we again understand the system very well, we knew how to do it and that we broke the code, then we got the cost efficiency.
Right.
To a fraction of what it was.
Right.
I mean, I quote my dear friend, the CEO of Aramco, he said, "Completion cost of Jafurah is 90% down from the initial phase.
Right.
It is, right?
90% is shocking, right?
Yeah. Which is very smart because obviously, again, we used to plan everything at two, three stages a day. Now we do 32 stages a day, right?
Right.
The volume, the efficiency, again, similar to the U.S., but they made it at a much shorter period because they said, "Let's start from where people ended. Let's not go and reinvent the wheel.
No, that makes sense, right? We saw how in the early stages of U.S. shale development, a lot of European majors came in, conglomerates came in, and they are nowhere in the field now, right? They have all sold out and went away. The ones who were winning were the independent E&Ps.
Yes.
Right? I am glad Aramco learned that early. You are benefiting out of that. They are benefiting out of that. Again, Jafurah, let's come back to Jafurah. You had that big press release, multi-billion dollar tender that you won, right? That is massive. Just put that into context from a NESR perspective, how much does it move the needle?
It moves it a lot. I mean, basically, this contract now, as we have 100%, meaning that we are going to deploy at least three to four times what we have. We have a commitment to do with for our clients. We're going to have to deploy and work, as we call it, flawlessly to make sure that we perform as they want with all the pads that they have. They have the backlog now of wells, which is great because that's the biggest, usually that's the biggest obstacle for you to grow is, are there enough inventory of wells and pads? Now, as the rigs are so efficient, they drill these wells in 14-15 days, which means that, you know, with the amount of rigs they have, you know, around 40 rigs over the three play, we will be able to do that.
Overall, NESR, easy grow 30%-40% year-on-year, right?
Wow.
If, you know, the market overall is only 5%, I mean, then we're really going to be something different, right?
Right.
It is committed on both sides, which is great because you know exactly what you need to do. We are doing the same thing with our partners and suppliers.
Right.
We're making sure that they are beefing up the resources to be able to deliver on that, right? For example, like Caterpillar in Saudi, we told them it doesn't work, the structure you have. We need double the structure. You need another line because we're going to have a lot of engine.
Right.
You know, all this Gardner Denver, you know, all these people, now we are actually giving them heads up to get ready for the scale. And us, as we are always, as they call it, countercyclically investing, we invested before. That is why when Aramco said, "When can you start?" I said, "Tomorrow, we start tomorrow. I have the fleet." We bought the fleet, we shipped it, we prepared it. Now we have another one going as well in December. We prepared ahead of time and that is why we started the project already.
Right. And this is a five-year contract, right?
Five-year contract.
Is there a ramp-up period, Sherif Foda, we should think of, or can you pretty quickly get to that plateau?
Aramco will ramp-up, right? Because, you know, as you know, their target 200, one BCF and two BCF.
Right.
How they're going to make it with the year yet to be seen, but I think 2027, 2028 will be their peak in terms of stages. We are preparing, as I said, ahead of the game, right? We bought equipment already for a third fleet, right? It's there. It's going to be, I mean, it's going to be there on 27th of November. We are always going to be ready. Obviously, we're very close. We are, you know, every day there. We have a full team now embedded with them because if you are the only one, you have to be really working very, very close together to ensure that you can deliver that and you don't have any delay.
Right.
In addition to that, there is a lot of what you call additional work that you have to do because this is an integrated frac project. This is not a frac that I'm going to frac. No.
Right.
I prepare the site, I get the sand, I perforate, explosives, coiled tubing, plugs, flow back, testing the wells, all the stuff. Sometimes they tell you, "Oh, we need to test, for example, for extended well test for three months, for six months. We need an additional 10 flow back and testing equipment.
Right.
We do that. And sometimes we manage even some work for others, right?
Right.
That is how you have to think about it. It is going to be a huge, huge project, but we want to make sure that we make this as a, you know, iconic project as well from even everything from sustainability. Now we are doing some research with them to pump the sand next door from the Jafurah sand, not even from Riyadh sand, like we did here in Wisconsin and then you went to the Permian. We are looking even in some delivery method that is different. We are embedding AI in all this to predictive maintenance because now we know there will be so many pumps running.
Right.
What's the best rate? We're getting some new trees, graceless, that can be like faster rig up or rig down. Can you mobilize faster so you can finish even? The best example of that, if you look at the original project when, again, my previous life, and we looked at that, this was supposed to be 18 fleets to be able to do the same number of stages. Now we think it's four- six.
Wow.
That's how efficient the project is.
Right.
Same number of rigs. They thought it was 100 rigs. Now they are 40 because the rigs are so good, so efficient. They go drill the kickoff to 3D with one run. You know, even our friends and the big guys, they modified their RSS to be able to do that. I mean, it's a lot of work around that project.
Right, right, right. The one other topic that comes up, Sherif Foda, is broadly on the pricing situation next year in the Middle East, broader Middle East market, Saudi, right? Whatever you want to touch on. How should investors think about the margins you would be making on this revenue, right? 30%-40% growth that you talked about for next year.
What we're planning to do is to maintain the same margin.
Okay.
As a company, right? We want to do whatever we did in 2025, we want to maintain margin with that growth. We are not targeting more margin, but we are targeting to maintain margin, right?
Okay.
We're on 20%-22%, that range. We want to do the same. That range should be the same. The first quarter, for example, you drop a couple of hundred basis points because you're investing and then you pick it up again after that, right? Overall, when people look at the year, it should be the same margin. The pricing in the Middle East has always been on big tenders, very competitive. Some, like the drilling LSTK, it becomes very competitive, right? The risk on the rigs is a bit worse because you have to eat all the standby of the rig. The rig is 70% of the project, right?
Right.
On the, but again, you have risks if they shut down, for example, right?
Right.
That is the Middle East old margins, 40%-50% with the scale now, it will not happen, right?
Right.
The new healthy number is this 20%-25%, right?
Right.
And that's our target is to maintain within that window of our profitability. If you look at the company when we first formed it, it was 35%.
Right, right.
When we took this company together, but they were very small. I could have stayed 35%, but I would have stayed small.
Yeah.
So.
Focus on that.
$400 million at 30% or $2 billion, 22% is okay.
Right. Now, it's got to be a win-win for you. It's got to be a win-win for the customer, right?
Yes.
It can't be just one winning and the other not winning.
No way. They are not naive and they are not, they know everything.
Right.
They know the pricing. They know how much you pay in the U.S., so they make the math, right?
Right.
No, I think we are very happy with the project and we are extremely confident that we are going to maintain our margins.
Right. From a CapEx standpoint, do you have to deploy any significant amount of capital and does it do anything to your go forward, call it base level of maintenance CapEx, whatever you want to call it?
What we said, we are going to increase our CapEx from previous, but modestly, right? As we announced in our earning call last time, we said we're going to be $120.
Right.
If we win the big, big portion, we might go to $150 million, right?
Right.
We are going to maintain that $150 million. That is what we believe we will be. If you are $150 million, but you are $2 billion instead of $1.3 billion, it is actually as a percentage, it is much lower, right? We are planning to invest that much because we take the advantage of the U.S. weakness, right?
Right.
It's the best part. I mean, we are lucky in a way, right? It's not we are not smart. We're just lucky basically because the U.S. is doing so bad, which is the best thing for us because now we can buy all this equipment here at a fraction of the cost and send it over there and operate with it. All these units anyway, you need to upgrade them all the time because no engine and no fluid end and no power end last for eight years, right?
Right.
You will always have to overhaul and all the stuff. We, again, we perfected that very, very well. That is why when we get that scale, again, as the largest frac company in the Middle East, we will be able to do that very professionally and take that to the other places.
Right, right. So that $2 billion revenue target that I was talking about, it sounds like this contract would take you very close to that target.
Absolutely.
Right? And then where do we go from here? Because you continue to grow. We discussed Ahmadi Innovation Valley in Kuwait, right? And those markets are growing. What's the path beyond that $2 billion?
If we win what we want to win and make sure that we can execute on them, we will be on the path to $3 billion. That is basically when we become number three in the Middle East, right? That is basically our target, our ambition. After that, there is a lot of things to do, but we need to make sure that we can deliver on that and deliver consistently and again, with the same margin and cash flow. There will be some more strategic stuff to do later and yet to be seen.
Right, right. You've talked about opportunities outside of your core Middle East region, right? North Africa looks like there are opportunities. You've talked about Indonesia, right? First thing, maybe just talk to how big those markets can get.
North Africa for us is Middle East, right? That's why we call it MENA. We are very, very good in North Africa. We put a very good strategy to grow a lot in Libya, but we need to make sure that we collect. So that strategy is working. We do not jump until we get the proper collection. Libya is very promising, as I said at the beginning. Algeria as well, Egypt. We are in all the countries. We are in a very strong position in the three countries. Each one should be, you know, north of $100 million very soon. We made, as I call it, a risk or a gamble outside, outside our comfort zone, right? We are in Indonesia, India, Malaysia, in Asia. We are in Chad, Gabon, Congo. We're going to maintain that, you know, to see.
We do not want to, you know, thread ourselves too thin, but we want to keep that and see the progress. If we crack and get to a certain scale, good. If we do not, we shut it down, it does not hurt.
Right.
I mean, those countries together do not even make all of them, not North Africa, all this Asia, not even 1%-2%, nothing, right?
Right.
We're going to keep going. If we do not become a differentiator or we are not getting any value, then we will not continue, right? Some of the projects were very good. I mean, Indonesia, for example, we did the geothermal, we did the carbon sequestration, we injected. It actually gave us as well a flavor of knowledge and technology.
Right.
That part is important for people that do not know the... You cannot be a service company in two countries. Does not work. First of all, you will not be able to keep the people. You will not get the knowledge sharing. You need to have that kind of excitement as well for your team.
Right, right, right. No, I mean, again, the scale point is so critical, right? You're going to make money, not just revenue, but profit and cash, right? You've got to identify which countries can scale up and which countries cannot scale up.
Yes, absolutely.
Right?
We will have a lot of cash, right?
Right.
Yeah, there will be a lot of strategic thinking.
Right.
I mean, we had a lot of M&A. Now we do not because we grew so well without any M&A organically, which is the best. Now we spend on technology. We have this venture capital arm that we use. I mean, it is basically two guys to do that. We are investing in 12 startups or 12 companies. We need to see how this would work, right?
Right.
You know, some of it will crack, some of it will not work. You know, it's a bit similar to what we... some other company, Halliburton does this, Halliburton Lab.
Right.
You know, that's what we do. I think we like our decarbonization arm. I know now it's not the flavor of the word, but it's going to come back. I mean, sustainability, sensor, injecting water, lithium, all these things. One of them scale becomes very nice.
Right.
The investment is small.
Right, right, right. You talked about cash. That is a key topic for investors, right? Maybe let's just talk about your free cash flow power, either from a conversion angle or however you want to touch on that, right? And then what do you do with that cash?
We should be able to more or less average 40% conversion in beta cash.
Okay.
Obviously we are less than one time debt. We will be 0.7, 0.6 soon. After that, depending on what we want to do, we will, like second half of 2026, we'll decide M&A opportunity is not there because we're growing very well. I mean, giving a little dividend, who cares, right?
Right.
You go buy the big dividend company.
Yeah.
We are a growth story that is very clear. If there is no clear M&A or something, then we will think about returning some versus, you know, dividend or stock buyback. At that time, we'll decide. We'll be able to have easy and very soon, you know, $150-$200 million of cash.
Right, right. So that gives you a lot of flexibility, right?
Yeah.
If you see the growth opportunities, that's what you're going to do.
Yeah. We go into new stuff. Yeah.
Right, right, right. No, that makes a lot of sense. Sherif Foda, I'm looking at the clock. We are out of time. Is there any one last thing, Sherif Foda, you'd like to leave investors with who don't know in one line?
Still cheap. Go buy it.
No, that's true. Okay, Sherif Foda, thank you. Thanks a lot.
Thanks.