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PHOTO FEATURE: Pending oil production equipment is being sighted at a Halliburton shipyard in Williston, North Dakota on April 30, 2016. REUTERS / Andrew Cullen / File Photo
April 22, 2019
By Debroop Roy and Arathy S Nair
(Reuters) – Halliburton Co. tried on Monday to convince investors that low prices, which had plagued oil service providers for four years, were poised to take a turning point.
Higher North American Revenues, as well as the company's claim that prices have bottomed out, pushed the oilfield services giant's shares to increase by almost 5% after the publication of the first quarter results.
Analysts and investors, however, were not convinced by a conference call after the results were released, which gave little concrete evidence and left doubts about future prices at a time when oil producers cut back on investment .
Halliburton's actions were flat in the noon exchanges.
"I do not think there's anything in there to get people away," said Edward Jones analyst Jennifer Rowland, pointing out that the company's comments were not enough to change the climate of the sector.
"We are still in the hope phase that the second half will look better," she said.
Halliburton and its larger rival, Schlumberger NV, had to contend with a tightening of spending by US oil producers because of shareholder pressure to get better returns after a period of significant investment in shale.
The Houston-based company, known around the world for its investments in post-war Iraq, recorded an 11% increase in its international revenues thanks to gains made in Mexico, Argentina and Mexico. Middle East, areas in which Schlumberger also posted gains last week.
However, unlike his big rival, Halliburton said that activity on his largest market in North America was slightly higher, adding that demand for his services would grow modestly over the next two quarters.
"We think the worst in the price deterioration is behind us," said Jeff Miller, President and CEO of Halliburton.
Last week, Schlumberger reported a 3% decline in sales in North America due to lower prices and lower activity related to its hydraulic fracturing and drilling activities.
Halliburton's revenues in the region fell 7 percent to $ 3.3 billion in the three months ended March 31, but exceeded the $ 3.13 billion estimated by an average of five analysts, according to the data. IBES of Refinitiv.
As expected, Miller also forecast further declines – a 6% to 10% decline in North American oil producer spending in 2019 – less than Schlumberger's expected 10% fall.
The company said it expects second-quarter margins to increase by 50 to 150 basis points from the first, both in its drilling and appraisal units, as well as in its operations. of completion and production.
Drilling and evaluation revenues are expected to increase sequentially to less than 10%, while completion and production revenues are expected to grow by more than 5%.
The company also reiterated its expectations for high single-digit growth for 2019 in international markets.
On an adjusted basis, it gained 23 cents per share, exceeding the average estimate of 22 cents. Revenues of $ 5.74 billion also exceeded a consensus of $ 5.53 billion.
(Report by Arathy S Nair and Debroop Roy in Bengaluru, edited by Shounak Dasgupta)
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