Edgar Filing: BAKER HUGHES INC

425

Barclays CEO Energy Power

Conference

Jeff Miller

President, Halliburton

September 8, 2015

Filing pursuant to Rule 425 under the

Securities Act of 1933, as amended

Deemed filed under Rule 14a-12 under the

Securities Exchange Act of 1934, as amended

Filer: Halliburton Company

Subject Company: Baker Hughes Incorporated

Commission File No.: 001-09397

Safe Harbor

The statements in this presentation that are not historical statements, including statements regarding future financial performance,

macroeconomic trends, estimated demand by well type, the upside of the North American oil and gas industry, the expected

closing of the pending Baker Hughes transaction, and the growth potential and other expected benefits and synergies of the Baker

Hughes transaction, are forward-looking statements within the meaning of the federal securities laws. These statements are

subject

numerous

risks

and

uncertainties,

many

which

are

beyond

the

company's

control,

which

could

cause

actual

results

differ

materially

from

the

results

expressed

implied

the

statements.

These

risks

and

uncertainties

include,

but

are

not

limited

to: with respect to the pending acquisition of Baker Hughes, the terms and timing of any divestitures undertaken in order to obtain

required regulatory approvals, the conditions to closing of the proposed transaction may not be satisfied or the closing of the

proposed transaction otherwise does not occur, the risk that a regulatory approval that may be required for the proposed

transaction is not obtained or is obtained subject to conditions that are not anticipated, the diversion of management time on

transaction-related issues, the ultimate timing, outcome and results of integrating the operations of Halliburton and Baker Hughes

and the ultimate outcome of Halliburton’s operating efficiencies applied to Baker Hughes’ products and services, the effects of the

business combination of Halliburton and Baker Hughes, including the combined company’s future financial condition, results of

operations, strategy and plans, expected synergies and other benefits from the proposed transaction and the ability of Halliburton

to realize such synergies and other benefits, and expectations regarding regulatory approval of the transaction; changes in the

demand for or price of oil and/or natural gas can be significantly impacted by weakness in the worldwide economy; changes in

capital spending by customers; and structural changes in the oil and natural gas industry. Halliburton's Form 10-K for the year

ended December 31, 2014, Halliburton’s Form 10-Q for the quarter ended June 30, 2015, recent Current Reports on Form 8-K,

and other Securities and Exchange Commission filings discuss some of the important risk factors identified that may affect

Halliburton's business, results of operations, and financial condition. Halliburton undertakes no obligation to revise or update

publicly any forward-looking statements for any reason.

This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities or a solicitation of any

vote or approval. This communication relates to a proposed business combination between Halliburton and Baker Hughes. In connection with

this

proposed

business

combination,

Halliburton

has

filed

with

the

Securities

and

Exchange

Commission

(the

“SEC”)

registration

statement

Form S-4, including Amendments No. 1 and 2 thereto, and a definitive joint proxy statement/prospectus of Halliburton and Baker Hughes and

other documents related to the proposed transaction. The registration statement was declared effective by the SEC on February 17, 2015 and

the definitive proxy statement/prospectus has been mailed to stockholders of Halliburton and Baker Hughes. INVESTORS AND SECURITY

HOLDERS OF HALLIBURTON AND BAKER HUGHES ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS,

REGISTRATION STATEMENT AND OTHER DOCUMENTS FILED OR THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR

ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain free

copies of these documents and other documents filed with the SEC by Halliburton and/or Baker Hughes through the website maintained by the

SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Halliburton are available free of charge on Halliburton’s internet

website at http://www.halliburton.com or by contacting Halliburton’s Investor Relations Department by email at investors@Halliburton.com or by

phone at +1-281-871-2688. Copies of the documents filed with the SEC by Baker Hughes are available free of charge on Baker Hughes’ internet

website at http://www.bakerhughes.com or by contacting Baker Hughes’ Investor Relations Department by email at

alondra.oteyza@bakerhughes.com or by phone at +1-713-439-8822.

Halliburton, Baker Hughes, their respective directors and certain of their respective executive officers may be considered participants in the

solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of Halliburton is set

forth

its

Annual

Report

Form

10-K

for

the

year

ended

December

31,

2014,

which

was

filed

with

the

SEC

February

24,

2015,

its

proxy

statement for its 2015 annual meeting of stockholders, which was filed with the SEC on April 7, 2015, and its Quarterly Report on Form 10-Q for

the quarter ended June 30, 2015, which was filed with the SEC on July 24, 2015. Information about the directors and executive officers of Baker

Hughes is set forth in its Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on February 26,

2015, its proxy statement for its 2015 annual meeting of stockholders, which was filed with the SEC on March 27, 2015, and its Quarterly Report

on Form 10-Q for the quarter ended June 30, 2015, which was filed with the SEC on July 24, 2015. These documents can be obtained free of

charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their

direct and indirect interests, by security holdings or otherwise, are contained in the proxy statement/prospectus and other relevant materials filed

with the SEC.

Participants in Solicitation

Additional information

Safe Harbor

Source: Baker Hughes US Rig Count –

through 9/4/15

Index of the US Rig Count

Comparing the Cycles

-53%

-43%

-57%

0.40

0.60

0.80

1.00

103

109

115

121

127

133

139

145

151

Weeks

1997-2001

2001-2008

2008-2011

2014-Curr

Macro Outlook –

Customer Capital Allocation

Flexibility

Less Flexible

Lower Decline

Long Cycle

More Flexible

Higher Decline

Short Cycle

North America

Unconventionals

North America Gas

North America

Conventional Oil

Deepwater

Oil Sands

LNG

International

Oil & Gas

Lowest Cost of Supply

Source of Flexible Growth

Challenged Cost of Supply

Portfolio Diversification

Highest Cost of Supply

Robust Cash Flows once

Producing

Lower Average Cost of Supply

Higher Average Cost of Supply

OPEC

Source: ConocoPhillips, Internal Estimates

Why North America is Attractive

Unconventionals are the Highest Service Opportunity Per Capex Dollar

Source: internal Estimates, Spears Oilfield Logix, Quest Offshore

<10%

Up to 50

Oil Sands

Deepwater

Exploration

Russia

Deepwater

Development

NAM

Conventional

Int'l Land

Conventional

OPEC

NAM

Unconventional

Service Opportunity % of Total Spend Per Well

Lowest Cost per BOE

Lowest Cost per Foot

Reservoir Delivery

Incremental Barrels and

Maximum Recovery

We collaborate, execute and

innovate to create value for our customers.

Deep Water

Unconventionals

Mature Fields

Strategic Markets

Challenges in Deepwater

Demand by Well Type

(2010-2014)

Demand by Well Type

(2015E-2019E)

Development

Exploration Activity

Development Activity

Exploration Success Rate (Right-Axis)

Source: Quest Offshore

10%

20%

30%

40%

50%

60%

70%

80%

100

200

300

400

2010

2011

2012

2013

2014

2015E

Resiliency in Mature Fields

Decline Rate (per Annum) of Mature Fields

(2013-2016)

Consulting-Led Projects

Improved Recovery Rates

Customer 1

Customer 2

Customer 3

Customer 4

Customer 5

Sector Average

Customer 6

Customer 7

Customer 8

Customer 9

Customer 10

Source: Wood MacKenzie

-5.8%

-7.1%

-7.3%

-7.8%

-7.9%

-8.2%

-8.3%

-9.6%

-10.1%

-10.7%

-11.7%

COST PER BOE

(PRODUCTION UNIT COST)

Improving Unconventional Economics

CUSTOM

CHEMISTRY

SUBSURFACE

INSIGHT

DRILLING

OPTIMIZATION

SUPPLY

CHAIN

FRAC OF THE

FUTURE

EARLY

ADOPTERS

EARLY

MAJORITY

LATE

MAJORITY

LAGGING

ADOPTERS

CUSTOMER ADOPTION

TIME

CUSTOM

CHEMISTRY

SUBSURFACE

INSIGHT

Improving Unconventional Economics

DRILLING

OPTIMIZATION

SUPPLY

CHAIN

FRAC OF THE

FUTURE

Planned

Reservoir Recovery

Equidistant well spacing

Geometric stage placement

Planned

Realized

BYPASSED

RESERVES

BYPASSED

RESERVES

Reservoir Recovery

2/3 of Stages Underperform

Less than 8% Oil Recovery Factor

EARLY

ADOPTERS

EARLY

MAJORITY

LATE

MAJORITY

LAGGING

ADOPTERS

CUSTOMER ADOPTION

TIME

CUSTOM

CHEMISTRY

SUBSURFACE

INSIGHT

Improving Unconventional Economics

DRILLING

OPTIMIZATION

SUPPLY

CHAIN

FRAC OF THE

FUTURE

PRODUCTION

INFILL PADS

Maximizing Recovery

NEW WELLS

Increasing

Reserves

REFRAC PADS

Lowest Cost Per

Barrel

Portfolio Approach to Technology

Current Wells

Barclays CEO Energy Power

Conference

Christian Garcia

Acting CFO

Source:

EIA,

Baker

Hughes

Rig

Count

–

through

8/28/15

Unfavorable Activity Mix

Commodity Price Weakness

Pricing Pressure

North America Outlook

WTI Oil Price

Rig count appears to be bottoming

since the end of the second quarter…

…but currently has unfavorable

mix toward vertical rigs.

3Q15 vs 2Q15

-6%

0.40

0.60

0.80

1.00

$30

$40

$50

$60

10-Apr

22-May

3-Jul

14-Aug

Horizontal/Directional

Vertical

International Outlook

Middle East

International Rig Count

is Down

Year-to-Date

13%

Offshore vs

Land

Activity and Pricing

Currency Headwinds

Offshore

19%

Land

11%

Source: Baker Hughes International Rig Count

Halliburton and Baker Hughes

Creating a Leading Oilfield Services Company

Next Steps

Complete the Requirements for the EU Filing

Receive

Round

Bids

for

Drilling

Services

and

Drill Bits

Announce Any Additional Divestitures

Complete the Divestiture Process

Receive Feedback from Regulatory Authorities

Compelling Strategic Combination

Significant Cost Synergies

Deal

Announced

Drilling Services and Drill

Bits Marketed For Sale

Received Indications

of Interest

Substantial

Compliance

with

DOJ

Request

Timing Agreement

With DOJ

Shareholder

Approval

Targeted Closing

In Late 2015

Next Steps

Summary

Looking through the Cycle

North America offers the greatest upside in the recovery

Making progress towards the Baker Hughes acquisition

Barclays CEO Energy Power

Conference

Jeff Miller

President, Halliburton