Despite $3B loss, Halliburton eyes 2021

Halliburton on Tuesday said it lost almost $3 billion in 2020, a year in which demand for drilling work dried up during the worst oil bust in a generation caused by the coronavirus pandemic.

The Houston-based oil-field services company lost $2.9 billion last year, compared with a $1.1 billion loss in 2019, just two years after it made $1.7 billion. Revenue fell by 33 percent to $14.4 billion in from $22.4 billion in 2019.

For the fourth quarter, Halliburton lost $235 million compared with a $1.7 billion loss in the same period in 2019. Fourthquarter revenue declined 38 percent to $3.2 billion from $5.2 billion a year ago, but was 9 percent more than in the third quarter. It marked the first quarterly revenue increase since the pandemic began in March.

The fourth quarter included a $450 million write-down of its North American real estate assets, which have declined in value as the company has closed offices and moved some operations to smaller facilities during the downturn. Halliburton said it reduced its North American real estate portfolio by half in 2020 by closing, selling and consolidating its work facilities.

Despite the company’s fifthstraight quarterly loss, Halliburton’s chief executive struck an optimistic tone during a call with analysts, pointing to crude prices that have climbed above $50 a barrel, allowing many U.S. oil companies to break even on shale production. Companies are hiring Halliburton to drill and complete wells again, buoying revenues.

“As we start the new year, we believe that the worst is behind us and look to the future with optimism,” CEO Jeff Miller told analysts in a conference call Tuesday.

“However, some caution is appropriate due to the surge in COVID-19 infections globally and the expected gradual return of spare production capacity.”

Miller said he expects drilling activity to bottom out during the first quarter and rebound over the coming years, particularly in North and South America. Although the pace of recovery is still uncertain, Miller said, oil and gas demand is riding “good momentum” for a recovery this year.

Exploration and production companies, which contract with oil-field services companies like Halliburton, will remain financially disciplined and cautious,

Miller said, as crude demand recovers. As a result, he said, Halliburton will keep its capital budget nearly flat at $750 million in 2021, reflecting its belief that production will remain flat this year.

The company will continue to seek out new automation technologies, Miller said, that will make drilling more efficient and cost effective.

“Digital is gaining traction, growing our revenue and helping us and our customers increase operational efficiency and reduce costs,” Miller said.