Chairman, President and CEO at Halliburton
Thank you, David, and good morning, everyone. Our outlook today is strong. Oil and gas supply remains tight for the foreseeable future, International market activity is accelerating, and North America service capacity continues to further tighten. As a result, pricing is moving up in both markets. Halliburton's strong third-quarter results demonstrate the power of our strategy. Here are some highlights. Total company revenue increased 6% sequentially as both North America and International activity continued to expand. Operating income grew 18% compared to adjusted operating income from the second quarter with improved margin performance in both divisions. Our overall operating income margin was 16%, representing 45% incremental margins over last quarter's adjusted operating income.
Our Completion and Production division revenue increased 8% over last quarter, driven by completions activity and pricing in North America and International markets. C&P delivered operating margin of 19% in the third quarter. The Drilling and Evaluation division revenue grew 3%. Operating margin of 15% increased 140 basis points sequentially and 380 basis points above the same period, last year, demonstrating the earnings power and global competitiveness of our D&E business.
North America revenue grew almost 9% sequentially as both drilling and completions activity improved throughout the third quarter. Pricing gains and activity increases across both divisions drove these results. International revenue grew 3% sequentially, with improved activity in the Middle East and Latin America that more than offset the revenue decline related to exiting our Russia business. Importantly, during the third quarter, we generated similar incremental margins in both International and North America markets.
Finally, we generated free cash flow of $543 million and retired $600 million of debt during the quarter. I am pleased with the third-quarter results. I want to express my appreciation to the men and women of Halliburton whose hard work and dedication made these results possible. Your commitment to collaboration, safety, and service quality every day make Halliburton successful.
Turning to our macro outlook. Oil and gas supply remains fundamentally tight due to multiple years of underinvestment. This tightness is apparent in historically low inventory levels, production levels well below expectations, and temporary actions such as the largest-ever SBR release. Against tight supply, demand for oil and gas is strong and we believe it will remain so. While broader market volatility is clear, what we see in our business is strong and growing demand for equipment and services. There is no immediate solution to balance the world's demand for secure and reliable oil and gas against its limited supply. I believe that only multiple years of increased investment in existing and new sources of production will solve the short supply. The effective solutions in short supply is conventional and unconventional, deepwater and shallow water, new and existing developments, and short and long-cycle barrels, all of it. I expect progress towards increased supply will be measured in years, not months, as behavior of both operators and service companies have changed. Operators remain disciplined. Their commitments to investor returns require a measured approach to growth and investment. Service companies follow the same discipline delivering on their commitments to investor returns and taking a measured approach to growth and investment. What I think is under-appreciated is how this results in more sustainable growth and returns over a longer period of time.
Let's turn now to Halliburton's performance starting with the International markets. Our third-quarter performance demonstrates the strength of our strategy to deliver profitable international growth through improved pricing, selective contract wins, and the competitiveness of our technology offerings.
International revenue in the third quarter for the C&P and D&E divisions grew year-over-year from a percentage standpoint in the high-teens and mid-20s, respectively, which outpaced International rig count growth and reflects our competitiveness in all markets. Our year-over-year growth and the margin expansion, demonstrated by both divisions, give me confidence in the earnings power of our International business.
Looking forward, I see activity increasing around the world, from the smallest to the largest countries and producers. I expect the areas of strongest growth will be the Middle East led by Saudi Arabia, but with meaningful activity increases in the UAE, Qatar, Iraq, and Kuwait. Elsewhere, Brazil, Guyana, and many others have also signaled a commitment to increased activity.
Throughout these markets, I am pleased with the broad adoption of our new directional drilling platforms such as iCruise and EarthStar. Importantly, these broad-based activity increases served to tighten equipment availability and drive price increases in our International business.
Shifting to North America, we had a fantastic quarter. Our solid performance demonstrates our strategy to maximize value in North America. We achieved this through improved pricing, partnering with high-quality customers, and differentiated technology. Our revenue grew 9% sequentially and is up 63% over the third quarter, last year. Pricing continues to improve across all product lines and completions equipment remains extremely tight across the market.
Interest in E-Fleets is strong and customers are pleased with the superior efficiencies, operational uptime, and reduced carbon footprint of our market-leading solution. Looking into 2023, I see continued growth. The inbounds for calendar slots are stronger than I've ever seen at this point in the year. More importantly, I see increased demand for a limited set of equipment and an environment where technology and performance are increasingly valued. All perfectly setup for Halliburton to maximize value in North America.
Market consolidation, competitors that answer to public investors, disciplined customers, and supply chain constraints, all drive the services market that I expect to remain tight for the foreseeable future. Halliburton will continue to outperform in this market. Our best-in-class ZEUS E-Fleets have pumped over 20,000 hours for customers. Our E-Fleet customers know that they have a field-proven technology, which carries the full weight of Halliburton's expertise to build, run, and optimize this next-generation equipment.
Additionally, our SmartFleet Intelligent Fracturing System continues to gain traction and we expect an almost eight-fold increase in stages completed this year. SmartFleet gives customers unparalleled access to data about where and how their fractures permeate, the potential for frac hits on adjacent wells, and the real-time data necessary to improve completion designs.
In all markets, Halliburton's strong financial performance demonstrates its strategy in action. Profitable International growth, maximizing value in North America, and improved asset velocity deliver value for our shareholders today. These strategies equip us to outperform under any market conditions, but especially to maximize returns through this up-cycle.
Execution is at the heart of Halliburton's identity. We collaborate and engineer solutions to maximize asset value for our customers. You've seen that in action in today's results. You can hear how excited I am about Halliburton's future all around the world. The structural demand for more oil and gas supply, provides strong tailwinds for our business, and Halliburton is ideally positioned to deliver improved profitability and increased returns for shareholders.
Now, I will turn the call over to Eric to provide more details on our third-quarter financial results. Eric?