SLB N.V. (SLB) Earnings Call Transcript & Summary

All right. Hello, everyone, and welcome to the final panel of EnterCom 2026 Denver. Thanks for being here. We are AI and energy intersect. I'm Noah Pollak, I'm a partner at Willkie Farr & Gallagher, it's a law firm. I've been helping people buy, build and finance power and infrastructure for the past 20 years, mostly power gen than about 7 years ago, started getting into data centers. So really kind of getting where the rubber hits the road, where the technology hits the dirt and where the electrons flow into the system. We have a great panel here today from across 3 different areas of the industry. We have Brian Demet. He is one of our -- he's a key developer. We have Richard who's going to give the power, and we have Amy who's going to bring some prefab fantastic this to each data center that she works on. So Brian, we're going to start with you. We're going to start building for the ground up. Why don't you tell us a little bit about yourself and your company.

Excellent. Thank you. My name is Brian Demet. I represent VERO 3 is a single site developer in Wyoming. We are making the transition from rural and to power land, basically, with the intention of hosting a data center that has a pathway to decarbonize power as well as integrations of our lithium brine resource such that the data center anchor is a critical mineral supply. So a big part of our offering that makes us unique, and we feel is truly exceptional is that our site has basically all of the nuts and bolts infrastructure that you need for a data center, abundant natural gas supply, excellent fiber connectivity, almost unlimited flat developable land. But what really sets us apart is that we have a very well studied subsurface resource that can allow for large-scale geologic carbon storage. And those reservoirs are also saturated with lithium rich brine. So we can tie our data center development to national security incentives like domestic critical mineral supply and also channel that message to address some of the social license issues that are occurring with data centers on a local level. So we will be a data center facility that actually demonstrates tangible industrial development and jobs. And through that, we are sort of the living, single-site representation of the promises of the AI infrastructure build-out.

Super. Richard, why don't you tell us about you're bringing the power to these sites? So tell us what you do and how you got involved in that.

Sure. Thanks for having me. Ron Gusek, our CEO, had the pleasure of addressing the crowd yesterday and talking a bit about Liberty. I'm here, obviously, to talk more about the power side of what we're seeking to do. But it's built on the foundation that created Liberty 15 years ago, and that is we need to create an entity or a company, an institution that has a culture that grabs the best people and keeps them. We think that doing that will demonstrate and develop a differential service offering and a differential financial performing company. And I think we've shown over the last 15 years, we've done that. We're now second in market share in North America to -- in terms of pressure pumping, completions and frac however you choose to define it -- and we're also now in Australia. But the foundation besides our culture and the 6,000 people who deliver that differential performance is also technology. Liberty has been on the front end of technological developments in fracking and completion services from pump efficiency, moving from 12-hour operations to 24-hour operations. introducing quiet fleets, introducing a transition from diesel to natural gas to electricity. We developed our own electric frac pump. And to do so, we developed our own power generation capability. That led to the license to enter this new space of permanent power facilities. In addition to what we've done inside the oil field, we also have that capability in commercial and industrial applications, including the facility that is driving the Pittsburgh International Airport came from the legacy of companies that now make up Liberty. So we're bringing that technological mindset to the power space to lead it from the front and look to the future.

Super. And last but not least, Amy, who also SLB identified greatness 29 years ago and has also promoted heavily from within. Can you tell us about SLB and how it fits into the AI puzzle. .

Thank you, Noah. Good afternoon, everyone. My name is Amy. So as Noah was introducing I've been with SLB for 29 years, all those glorious 29 years in oil and gas. This year marks the 100-year anniversary for SLB. So we've been around oil and gas a really long time. And it's only more recently that we started participating in the data center builds, right, infrastructure to be more specific. It started for us because hyperscaler was looking for partners and looking to qualify suppliers who could help them build multi-gigawatt data center campuses, right? And we were invited to support them in terms of this build-out and unbeknown to us. We have some really nice foundational capabilities in terms of our manufacturing, our supply chain network. It's a global one. We've been able to tap into that -- and then also our engineering and design capabilities, right? A lot of the expertise that we bring into the oil and gas industry, packaging, in the modular form that is optimal because their footprint on a rig in an offshore platform is limited. So you don't have the luxury of the biggest largest design, right? So a combination of this expertise that were transferable over the past 3 years, we have gotten quite a lot of validation and encouragement from multi hyperscalers now in terms of utilizing this discipline from oil and gas, including helping them to establish certain standards, which does not quite exist, like in oil and gas, you may have API, ISO, certain metallurgy standards. It doesn't quite exist yet because it's evolving so fast in data centers, right? So we find ourselves in a position where actually we could bring a lot of value in terms of bringing speed to market in the bills. Time compression is important. And hopefully, we will discuss some of the challenges in the industry today, power availability, just a shortage of skill set as well. in the marketplace for licensed electricians, mechanical fitters and what we do, which is essentially now we are system integrators for hyperscale and we do it at a multi-gigawatt level. So it's been big. Actually, it's been a very pleasant experience for us to be able to tap into our existing capabilities and expertise and to bring value -- real tangible value for hyperscaler clients?

Super. Well, thanks for the introductions. So when we're building a data center, we need land, we need permits, we need equipment, we need capital, we need people and probably a few other things that I didn't mention. One of those things is kind of the biggest constraint right now in data center development.

I think Richard should speak first because he's trying to address the single largest constraint at the moment, which is power origination?

Yes. The simple answer is define power need. There's a process that many of you may have been following in ERCOT called batch 0. And batch 0 was a process to request large loads off of the Texas grid off of AerCap and over 65 gigawatts went through that batch 0 process, but that process is now suspended. It was suspended because the transformation through that, right? It's a process. December. Yes. Theoretically, December. Theoretically after the election. That's one of the questions. That's one of the answers, I should say, of what is the critical issue, certainty. There's very little certainty from the grid -- there's a lot of certainty in what we're bringing to the table to provide on-site power generation that derisks the arrival. It provides certainty for the price and we engineer and provide a bespoke solution for the on-site needs for that power facility. . Over time, that will become complementary to the grid depending on the customer and the situation with the utility or co-op. -- you're providing behind the meter. So you're profiting a behind-the-meter service, right? So if you're getting power from the grid, that's grid provided and if you're getting it off grid, generating on your own site, that's behind the meter. So you're behind the meter solution. Yes. So I describe our solution is -- there's 2 ways to look at it. Being the meter islanded completely behind the meter, where we're not connected to the grid or will not be connected to the grid. On-site is a way that I describe it quite frequently because we'll be on location, potentially isolated, but potentially interconnected. Over the life cycle of these facilities, most of our hyperscale customers will desire at least some interaction with the grid. So what we're doing that I believe is differential and unique for Liberty is bringing the ability for a vertically integrated solution, we facilitate the gas supply will build and operate the gen for the facility and then ultimately manage and control various sources of power, whether it's just us or other complementary sources and then interact with the grid -- and the last kind of leg of that stool is to manage the wholesale relationship with the grid and optimize for the original sponsoring user of the power to optimize any excess or balance the needs across the utility and the facility. So originally behind the meter, probably connected. .

Brian, you mentioned that you have gas supplies and you were touting that as part of the call on your property. How does that dovetail with what Richard was talking about here?

Well, it's certainly not a bottleneck. And I think that's the mindset that we try to take is eliminate any potential bottlenecks, including, not limited to social license bottlenecks in the future. So I would say Richard is spot on. In our case, we'll almost certainly have to begin as behind the meter, whether interconnect would be required, I think, is to be decided, but it would not occur right away. So we would have to start behind the meter, which we're totally okay with. And you're going to start behind the meter, having a pipeline to tie into on-site with day 1 capacity is a major advantage. And so yes, I guess, going forward, we see that access to that molecule, the hydrocarbon molecules is just simply not a bottleneck for us.

Richard, what kind of technology are you -- what are the different technology types behind the meter. Let's stick with behind the meter because I think that's what we're really focused on here today rather than trying to interconnect. We'll talk a little bit about that. It has to be part of the story. But what are the different types of behind-the-meter technologies out there? And which of those do you focus on and why?

Sure. I'll start with what we focus on and why our reciprocating engine natural gas fuel generators. There are several reasons. They're advantaged for especially this first stage of AI development. A reciprocating engine will follow load fluctuations. The load fluctuations in AI learning are actually quite wild. I can't claim that the engine itself will do this. But the engine in combination with a battery energy storage solution at best, will manage very wide swings. An example might say it this way. We have a 100-megawatt load trying to keep the math simple. That AI center will have what's called a PUE or a power what is the useful effectiveness efficiency, yes, usage efficiency. Call that 1.5. So that means the data center needs 150 megawatts of load that it could call upon. At any time, that load fluctuation for the chip, a certain variety of chip can swing by 70% in milliseconds. An engine can't do that at all. That's where the battery comes into play. But as the PUE moves up and down, the engine has to respond quickly. This is where a reciprocating engine has quite a bit of an advantage over a turbine, which cannot follow load nearly as quickly. The reciprocating engine also has a heat rate of roughly, say, 9,000 BTUs per kilowatt. The turbine is closer to 11,000, 12,000. It has quite a bit more fuel consumption until that's converted to a combined cycle where steam is powering a turbine as well. So the fuel efficiency of the reciprocating engine, the ability to follow load -- the other benefit is the way we install or design a facility, the amount of N plus number of additional engines to achieve super high reliability is not as intense as a turbine. The other -- so turbines are also a viable option and are being used for behind-the-meter solutions. They do consume more fuel, and fuel cells are also a part of the mix and likely in places that have severe ozone attainment issues that will participate, I believe they'll be part of the mix of what we will do down the road as well.

And so what's the fuel you guys are using? How are you getting it there?

Yes. Our fuel source is.

Stock molecules for everyone in the audience.

Yes, it's just completely natural gas. Our sources will be primarily off of major interstate pipelines. And as many locations as we can to provide diversity and reliability for the data center. When we're talking about the needs of 99.9% or higher, the single most likely disruption to that facility will be fueled.

Yes. And for folks who aren't aware, if you're going for critical data center infrastructure, they look for a 2N scenario. So you're literally having double your generation capacity. -- there can be basically 0 tolerance for any disruption for critical infrastructure, which is what the big dollars are being paid for. If you're looking for some smaller ones, it's a very different story and the economics are just very, very different. I mean I want to get you into this conversation. Can you -- how do you think about power? How does your business interact with the energy that's coming in.

Thanks for the question. Before that, let me just provide a little bit of grounding because it was a big learning for me when I first came into the industry, right, to build 1 gigawatt of a data center, right? How big do you think that is, right? That's a pretty big number, try 44 football fields, right? So not too long ago, all these data centers and still quite a majority of these data centers are being stick build. So that's kind of the terminology. As you would build a house, you would bring pieces of material, your brakes and your cement or whatever and you will build it brick by break or in this instance, we will say stick by stick, right? So think about 44 football fields, think about the number of people, electricians, mechanical fitters, that you'll have to bring on board to site to build this data center is tremendous. So it's not a surprise. If you look at states like Texas or Virginia or where quite a number of the data centers are being built that there is a massive shortage of about 2x, right, in terms of the demand versus the availability of these trade spend, right? So what the SLB does is to take that building that infrastructure build off-site. So now think imagine you have a center, a center of excellence, as we would like to call it. Out in Shreveport, Louisiana, it is 3 million square feet. And then we do the fabrication as the industry referred to it off-site assembly, off-site from the campus, right? So we build it in our facility is air condition. We do the quality control. We do the system integration, and we test it. Now think about a 1 gigawatt data center and the amount of transportation and logistics that's involved in a single day, how many trips or trucks do you think goes in and out that location? 1,000 going in and out delivering equipment. So we are talking about operation of massive scale, right? So the second challenge and -- so Richard kind of talked about power availability and the long time to interconnect to the grid, right? The other real challenge is just the availability of these people. How do you find 3,000 electricians to stick build a data center and think about how many data centers that are being built. So the hyperscalers now are moving to this modular off-site assemblies, they call it. And the amount of time compression that it gives to do that off-line, right? As -- and you do some parallel activities, right? The developers come in, they lay the site, they build a shell and then when we are ready with the modules, we ship it, and then it's in well pulled out modular form, and we are able to compress time line by about 40% for all the server hall infrastructure, for example. Now once it gets onto the campus, we are able to also accelerate the installation and commissioning by another, I would say, 30%, 40% as well, right? So the amount of value by shifting to this way of bill is tremendous. Now when we bring it to the site, it doesn't have power and hence our alliance with Liberty Power because ideally, we want to be able to streamline this building process of a data center. We don't build the shell or the slab and shell as we call it. But we can go to a customer and we can say we will help you design it in a way that is most efficient, effective, and it will come powered, right? So I think it's a fantastic value proposition for a customer who's trying to look for speed, but not just beat of any clients, speed with reliability, speed with quality, speed with track record, which we both bring to the table.

You talked about efficiency of design, what are some elements to an efficient so that you guys put together.

This is very interesting. When you think about building a house on site, the first one of our clients, right, took it off-site. So they're doing the same thing, but they're doing it offsite, which doesn't actually solve the problem because then you still have to bring it on site. And it's a big problem because you're not thinking about modularity from a standpoint of sourcing. So the supply chain element of it, the transportability, some of these early designs when we built it, we had to get a 2-flat bed truck. So your cost of logistics actually increases, right? So this particular client was saying, I didn't see the time compression and it didn't see the cost savings. Why is that? So we looked into the design and said, well, it's because it's not modular, just because you do it off-site, it does not automatically give you the benefits you actually have to think through, can I lift it? Can I put it on an automation line? Can I lift it? If you have a data center like in Virginia for invoice, it's quite common to have a 2-story data center. Can you lift it? There are no cranes on site, no overhead cranes, right? So it's about designing for this whole value chain and being able to bring it on site and to connect and have those interfaces done in an efficient and effective manner as well.

Thank you. So we've talked about 2 constraints. We started listing out kind of what are some of the main elements to a data center that's land, there's power, there's equipment, there's permitting, there's money people. So we've really hit on the power bit. We've hit on the people a bit. Let's talk -- and Richard, you actually hit on the permitting and the kind of the permitting regulatory and government risk a little bit when you brought up batch 0. So batch 0 was supposed to be a way for Texas to prioritize and allocate grid power to data centers. And applications were due and there were decisions that were supposed to come out on August 8 and just -- there was a ton of activity I closed 5 deals in that week, trying to maximize that. And then all of a sudden, the governor put a pause on it and we still don't know technically when the answer is going to be, but the rumblings are sometime after the election. So that's Red State Republican governor is pausing data center development effectively in the state, not fully, but putting a pretty strong break on it. And that's -- so that's in a state that had been very open to it. So Brian, you've been talking about how you have a great setup up in Wyoming. Can you talk to us about what's so great about Wyoming and permitting and government regulatory relationships and just that whole kind of nugget for people to think about.

Sure. Yes. No, it's a great question. I mean the way we see it at VERO3, all the activity going on in other states, while you haven't had really any major headlines coming out of Wyoming during that same period of time, I think just goes to show and provide the signal of stability for the and perhaps maybe pushes interest towards Wyoming away from other states that are now placing barriers. We definitely see at every level that we interface with an immense amount of support on the permitting entities here a willingness to work with us, speak with us, go through the technical details even going above and beyond in many cases, to make time to see us face to face when we're in -- so that's been really special. You definitely feel welcome. Obviously, there's the tax structures in the state of Wyoming that are very pro data center. And then I think finally, Wyoming is very clear about what they want to emphasize how they want to generate tax revenue, what types of industries they want to be in. And I think that's where VERO 3 is -- can really accelerate within the state incentive process because our project is aligned with Wyoming State goals of establishing a strong critical mineral industry and Qualy, Wyoming is extremely supportive of carbon initiatives. Actually, on our property, we have a pre-permitted CO2 pipeline corridor, which is very -- so any CO2 pipeline operations won't require that permitting step that we can just begin building. So we just feel an immense amount of support at every level and what we plan to address going forward is really making a compelling argument to the local community that look, yes, there will be a data center facility here. It's also going to come with an abundant job opportunities that build on existing local skill set like drilling and rig work. There's several different industrial sites in the area that are going -- that are similar plans to what we intend to build for that will be required to desalinate our brine resource and process the lithium out. So I would say we just have a top-to-bottom approach. And at every level so far, it's been incredible. And just the final note, on the local level, we did just receive written consent from local landowners for advancement of our poor space lease state blocks. So we do actually have documented local support now.