Halliburton, the second largest oilfield services company in the world, gave its quarterly results on Monday before the opening bell. The company’s North American revenue was up by 24% sequentially in the first quarter of 2017 backed by U.S. land outperforming the domestic rig count. It was expected earlier that the profits might be under some pressure in Q1, but the turnaround story will continue.
Jeff Miller, the President of the company during a conference call on Monday morning said that the company, which is No. 1 pressure pumper in the North America, has delivered. The company has given indications of a strong performance last month only when the pressure pumping capacity in the US has doubled of what was anticipated and the crew was added onshore in haste.
Miller said, “In North America, the momentum is building, and we only see it getting better.” Dave Lesar, the CEO of the company was not available for comments due to prior business commitments.
The company’s North American revenue was up to $2.23 billion from $1.79 billion a year back and from $1.80 billion in Q4 of 2016. Its land revenue growth was also better than the average. It reported a 30% increase in it from the last quarter while the average domestic land rig count growth was 27%. This increase is attributed to the increase in the activity in well construction product service lines and pressure pumping.
Miller further added that the quarter was in sync with their expectations. He said, “North America activity increased rapidly, but not without growing pains, while activity in the rest of the world declined due to typical seasonal pressures that were exacerbated by current cyclical headwinds.”
He was of the opinion that the first three months of the year brought about a lot of changes both to the strategy applied and also the customers’ views. The customers now are keen to invest so that the production targets are met. The supply-demand matrix is perfectly balanced leading to moving price.
The company strategy was to outgrow the US land market and it has worked. The reactivated equipment of the company is going to work at leading-edge pricing, and they are working to manage the input costs. With their reactivation program in continuation, the company is expecting to command higher rates for its services – probably 25% more than what they were getting before.
Robb Voyles, the CFO of the company feels that it is really difficult to forecast anything given that the market dynamics are volatile. The company, however, expects that its drilling and evaluation division will be in for a rebound in the second quarter.