Halliburton adds to oil field optimism

Houston energy services company Halliburton on Monday joined its larger rival, Schlumberger, in projecting continued growth in U.S. oil and gas production and a rebound in slower growing international markets.

The two oil field services leaders touted growing revenues and improving profit margins, even though they both posted net quarterly losses because of onetime charges related to the new U.S. tax law and declining business in economically and politically tumultuous Venezuela.

The U.S. onshore oil business is again booming, especially in West Texas. Halliburton leads the U.S. services market in completing oil wells, especially through hydraulic fracturing, called fracking.

“I am very excited about the way 2018 is shaping up,” Halliburton chief executive Jeff Miller said. “North American unconventional activity should be very busy, and international markets are starting to show signs of life.”

Halliburton’s stock shot up more than 6 percent Monday, while Schlumberger jumped nearly 5 percent. Schlumberger posted its earnings on Friday. The other top industry player, Baker Hughes, a GE company, will report earnings Wednesday.

Schlumberger has a bigger international presence than Halliburton, but executives from both companies are predicting that the oil recovery will broaden this year, said Bill Herbert, a senior energy analyst at Piper Jaffray & Co.

“Both articulated very optimistic outlooks for 2018,” Herbert said. “Not only is it optimistic, it’s plausible.”

Miller said that Halliburton recently built a “handful” of new fracking fleets to help meet the growing demand, but he argued that the company will remain disciplined and will not overbuild.

Miller emphasized that the company is growing in most of its business segments. In fact, Halliburton’s strongest earnings surprisingly were in drilling services and tools, not its main strength in fracking, said Byron Pope, energy analyst for Tudor, Pickering, Holt & Co.

Halliburton’s fourth-quarter revenue surged by almost 50 percent to $5.9 billion from $4 billion in 2016.

But Halliburton lost $824 million in the fourth quarter, compared with a loss of $149 million during the same period a year earlier. Without the one-time charges, Halliburton said, it would have earned more than $460 million.

Halliburton took a fourthquarter charge of $385 million after writing down the value of its business in Venezuela, where turmoil has lowered oil production.

The company also took an $882 million loss from one-time taxation charges related to the recent change in U.S. tax law. That includes charges from the repatriation of some earnings in the U.S.

Halliburton’s stock rose by $3.39 per share Monday to $56.40. The company has a stock market value of $49.2 billion.

jordan.blum@chron.com twitter.com/jdblum23