This past week there were a couple of fracking and drilling service companies who just reported their 3rd quarter 2022 earnings and gave guidance for their 4th quarter 2022 earnings and their outlook for 2023. The fracking and drilling service companies are a good indicator of what production will look like a year from now because they have long term lease contracts with producers, and they will be the first to know when the macro-outlook is changing with producers. The fracking and drilling service companies are usually the first to get hit in a downturn in fracking and drilling and they are sometimes the first to benefit in an upswing in fracking and drilling. As fracking and drilling goes, so eventually goes production.
The fracking and drilling service companies report earnings first before the producers. They typically report about a week before the producers begin reporting their earnings per share and guidance from the previous quarter. This week saw Baker Hughes, Liberty Energy, and Schlumberger report earnings. Halliburton is the largest fracking company in the world, and they will report their earnings on October 25th before the opening bell.
Baker Hughes performed well in all 3 of their divisions. The earnings hit that they took from the Russian divestiture is now mostly gone and was mostly written off from their 2nd quarter 2022 earnings. Although the macro-outlook has grown more uncertain with much higher interest rates and inflation, they are still constructive on the outlook for oil and natural gas. They are forecasting year on year double digit spending growth for 2023 in overall upstream investment in oil and natural gas, led mostly by overseas investment. They are also seeing a large upswing in offshore upstream spending. They expect North American upstream spending growth of 8-10% for 2023. One of the interesting items that Baker Hughes said was that they are now seeing the chip supply chain shortage significantly abate and expect it to improve in 2023.
Liberty also had an outstanding 3rd quarter 2022 across all divisions. Their revenue was up 26% sequentially from the 2nd quarter and was up 82% year on year from 2021. Their customer well economics remain strong even with the recent downturn in oil and natural gas prices. The fracking market is still near full utilization. Most of the additional capital being spent on fracking is for newer more efficient fracking technology such as their new Digifrac product. More and more fracking fleets are using natural gas as a fuel for fracking instead of diesel and are seeing significant cost savings. This is especially the case now since natural gas prices have dropped significantly, while the distillate market remains much tighter. Liberty also stated that US private producers are now the majority in both fracking and drilling rigs. This has changed significantly over the last year and a half when public producers used to be the majority of fracking and drilling rigs. Liberty believes that the active fracking count fleet will only be slightly higher a year from now. This is due to the tightness in the fracking market and the labor market. Fracking gains in the US will now mostly come from improvements in technology and efficiencies.
Schlumberger had an extremely strong 3rd quarter 2022, outperforming their guidance across all divisions in both the US and the international markets. Revenue growth accelerated and is now the highest since 2011. The international and the offshore markets for upstream investment spending are now especially strong. Schlumberger expects this strength to continue well into 2023. Schlumberger still believes that we are in the early stages of a multi-year bull market in energy prices and in upstream investment spending.
The overall outlook for the 4th quarter 2022 and 2023 remains strong for more upstream investment spending. Drilling should remain strong and continue to grow by double digits overseas and even in the US Lower 48 for 2023. Fracking fleet growth will slow down in the US Lower 48 due to the near full utilization of the fracking fleet. Fracking fleet gains in the US Lower 48 will come from new technology and efficiency gains. The strong outlook for the 4thquarter 2022 and 2023 has not changed despite the significant recent price drops in natural gas and oil.
Rig counts remain strong and trending upward in the US Lower 48 despite the recent drop in oil and natural gas prices. There is still plenty of room for growth in rig counts according to the fracking and drilling service companies.