Baker Hughes 2015 Annual Report Download - page 5

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One of the drivers of our free cash flow performance
resulted from our reduction in capital spending from
$1.8 billion in 2014 to $1 billion in 2015, a 46%
reduction, as we scrutinized investments to ensure
the best possible return and alignment with market
opportunities, while continuing to make sure we are
competitively well-positioned for the long term. This
diligent focus on spending will continue in 2016.
The outcome we achieved on cash performance
is the result of our cost reduction initiatives,
commitment to capital discipline and solid progress
on initiatives to improve working capital, and these
efforts will remain priorities in the year ahead.
Even with this disciplined approach to spending, our
product pipeline remained robust in 2015. We introduced
more than 200 new products last year, with revenue
generated from these products exceeding $900 million
in comparison to 2014’s record-setting $1 billion. When
you consider that operators have reduced spending
industry-wide by about 50% compared to 2014, the
magnitude of this accomplishment becomes apparent.
Being the technology enthusiast that I am, I could
probably spend an entire letter talking about our
products. But, for the sake of brevity, I will highlight
four from 2015.
The LEAP™ adaptive production system was installed
in December 2015 and is delivering 300% greater oil
production and 200% greater natural gas production
at the first field trial compared to the previous artificial
lift solution. The downhole system consists of a
positive displacement pump, which can be installed
to sit deeper in a well than traditional rod pumps, a
submersible linear electromagnetically actuated motor,
which drives the pump and eliminates the need for
the long rod string (a primary source of failure in rod
lift systems), and a sensor, which provides pressure
and temperature data to help ensure the highest level
of production optimization and system longevity.
CENesis PHASE™ multiphase encapsulated production
solution helps operators avoid production interruptions
in unconventional wells. Designed to separate natural
gas from the oil stream before it can enter an electrical
submersible pumping (ESP) system, the solution
mitigates production downtime and potential ESP
performance issues, which can ultimately improve
reserve recovery.
FATHOM™ XT SUBSEA 525 inhibitor helps control
asphaltene deposition in deepwater wells, providing
better flow assurance and reducing remediation costs
by minimizing the risk of blockages in production
lines and equipment. This product can help prevent
deposits inside pumps and pipes that create serious
production issues such as plugged flow lines and
clogged equipment, reducing the need to stop
operations and perform costly procedures to get
production back online at acceptable levels.
SPECTRE™ disintegrating frac plug is the first in the
industry to completely disintegrate downhole after
fracturing, enabling increased efficiency and maximized
flexibility in plug-and-perf completions. The plug offers
the same flexible stage placement as traditional plugs,
but its ability to completely disintegrate downhole
results in accelerated completion times, and lower costs
and risks. It also leaves behind an unobstructed fullbore
production inside diameter for maximum flow area and
simplified access.
These commercial advancements demonstrate our
capabilities in helping our customers solve their
most complex challenges. As you would expect, with
market conditions being what they are, our customers