by Paula Dittrick, OGJ, Jan 25, 2011
Halliburton Co. said higher drilling activity in oil and natural gas shale plays boosted its fourth-quarter earnings, more than offsetting declines in revenue from restrained international markets and suspended deepwater activity in the Gulf of Mexico.
During a Jan. 24 conference call, Halliburton reported fourth-quarter net income of $605 million, or 66¢/share, compared with $243 million, or 27¢/share, for the same period the previous year.
“Our United States land operations experienced continued improved profitability,” said David Lesar, Halliburton chairman, president, and chief executive officer. “The increase in horizontal drilling and activity in liquids-rich plays continued to drive service intensity.”
Meanwhile, Halliburton reported a decline in its Gulf of Mexico revenue and income following the April 2010 blowout of BP PLC’s deepwater Macondo well off Louisiana and the subsequent oil spill in the gulf.
“We continue to believe that prospects for a recovery in the Gulf of Mexico will remain uncertain through the first half of 2011 and perhaps the full year,” Lesar said. “However, I believe it is prudent to maintain all of our infrastructure and most of our headcount in anticipation of a rebound in the gulf.”
Halliburton’s gulf strategy could resulting in continuing losses there until the rig count recovers, Lesar noted. For 2011, he expects US and Canadian operators will continue investing in unconventional oil and gas.
“Development of these resources requires expansive well programs resulting in longer-term contracting arrangements for some services,” he said. “We continue to expect that we can improve prices in select basins where the demand for our integrated services is robust.”
For instance, one customer plans to increase the length of its laterals in the south Texas Eagle Ford play to 10,000 ft compared with 6,000-ft laterals that it is currently drilling, Lesar said.
Halliburton reported improved results in Norway, West Africa, Iraq, and Algeria, Lesar said. He expects activity increases to continue in those markets despite a traditional first-quarter decline for international earnings.
“We continue to win significant additional awards in Iraq,” he said. Halliburton plans to double the number of workers it has in Iraq to 1,200 this year.
“The improving oil consumption demand levels combined with the industry’s declining spare capacity provides a more favorable outlook for oil services and technologies in 2011 and beyond,” he said. Halliburton plans to invest in technology and to expand its manufacturing capacities as a result. [Full story]
(Halliburton, once run by former US vice-president Dick Cheney, is the second largest oil services company following Schlumberger. Earlier this month the US presidential commission investigating the BP disaster slammed Halliburton, along with BP and rig owner Transocean. -- See my post here. Halliburton’s revenue was $18.0 billion for the full year 2010, an increase of 22% from the full year 2009. -- See the company’s website at http://www.halliburton.com/, press release Jan 24, 2011, here. In August 2010, e.g., Halliburton announced it had been awarded a contract by Italian oil company Eni to provide a range of integrated energy services to help redevelop the Zubair field in southern Iraq. For Zubair, please read my blog posts under the category/label "Iraq." -- D.R.)