By April 24, 2017 Read More →

Halliburton Q1: Better than expected profit from boost in well completion


Halliburton says increased costs associated with rehiring staff and getting idle equipment running again will continue into the second quarter of this year. Bloomberg file photo.

Halliburton shares up in morning trading

Halliburton is reporting a slightly better than expected quarterly profit and revenue thanks to more oil producers completing nearly as many wells as they drill, a major reversal from recent times when companies would leave wells unfinished and wait for higher oil prices.

During the first quarter of 2017, the company’s North American revenue rose 24.4 per cent.

Shares in the world’s number two oilfield services company were trading up more than 1 per cent to $47.72 on Monday.

“There’s no doubt that the pace of completions activity is catching up with the rig count, and we expect to see that relationship continue into next quarter, most certainly,” interim Chief Financial Officer Robb Voyles told reporters during a post-earnings call.

With oil prices recovering after a long slump in the industry, US shale producers are putting more rigs to work.  As well, since 2016 Q4, producers are returning to complete wells left unfinished during the downturn, cashing in on increased oil prices.

On Monday, Halliburton said it expects Q2 revenue in its completion and production unit to increase to the upper teens in percentage terms, with margins expected to increase by 275-325 basis points.

Dave Lesar, Halliburton’s Chief Executive said in a press release “North America activity increased rapidly during the first quarter, which was highlighted by our U.S. land revenue growth of nearly 30 per cent, outperforming the sequential average U.S. land rig count growth of 27 per cent.”

Despite the upbeat news, Halliburton and Schlumberger acknowledge the companies are struggling with costs associated with reactivating equipment that had been idle to meet increased demand.

President Jeffrey Miller said Halliburton’s reactivation costs are expected to continue into Q2.

Halliburton posted an adjusted profit of 4 cents per share on Monday, beating analysts’ average estimate of 3 cents according to Thomson Reuters.

Analysts had lowered their estimates after the company warned of a sharp drop in demand in markets outside North America.

Finally, revenue rose 1.9 per cent to $4.28 billion, beyond analysts’ average estimate of $4.26 billion, according to Thomson Reuters.



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