Halliburton posts first operating profit in North America in a year

BENGALURU: Halliburton Co, the world’s No. 2 oilfield services provider, reported its first quarterly operating profit in North America in a year as oil producers put more rigs back to work in North American shale fields.

The company, however, warned of weakness in markets outside North America, echoing comments made by larger rival Schlumberger last week.

Halliburton’s shares were down 0.8% at US$56 in pre-market trading yesterday.

“Despite the positive sentiment surrounding the North American land market, it is important to remember that our world is still a tale of two cycles,” chief executive Dave Lesar said in a statement.

“The North America market appears to have rounded the corner, but the international downward cycle is still playing out.” The strong performance in North America, mainly due to increased pricing and utilisation onshore US, helped the company beat profit estimates for the quarter.

Shale producers, encouraged by a rise in crude oil prices after a slump of more than two years, have been drilling and completing more wells in North America.

US crude prices have more than doubled since hitting a multi-year low of US$26.05 in February.

Revenue from North America rose 8.7% to US$1.8bil in the fourth quarter from the third quarter, accounting for 44.8% of the total revenue.

The average US rig count, which hit a multi-year low in May, rose by more than a-fifth in the period.

In contrast, international markets are yet to recover with most oil companies reluctant to increase spending on expensive deepwater and mature oilfields.

Schlumberger NV, which reported a more than 8% drop in fourth quarter revenue last Friday, said it does not expect a “dramatic” short-term recovery in international markets.

Schlumberger is far more reliant on markets outside North America than Halliburton or Baker Hughes Inc.

Net loss attributable to Halliburton widened to US$149mil, or 17 US cents per share, in the fourth quarter ended Dec

31, from US$28mil, or three US cents per share, a year earlier.

Excluding charges of US$169mil, the company earned four US cents per share, beating the average analyst estimate of two US cents, according to Thomson Reuters I/B/E/S.

Revenue fell 20.9% to US$4.02bil, missing analysts’ estimate of US$4.09bil.

Halliburton shares have risen more than 58% in 2016.