Sunday, November 27, 2022

Halliburton sees drilling demand lasting “multiple years” despite lower earnings in Q2

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Oilfield services provider Halliburton on Tuesday said it remains confident of years of increased drilling activity globally despite recording lower earnings in the second quarter of 2022.

The company’s net income fell to US$102 million from US$263 million mainly due to the pre-tax charge from exiting Russia. Its total revenue for Q2 was US$5.1 billion compared to US$4.3 billion in Q1. Reported operating income dropped to US$374 million in Q2 compared to US$511 million in Q1. Excluding impairments and other charges, the company said its adjusted operating income was US$718 million in Q2 compared to US$533 million for the first quarter of 2022.

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Haliburton’s Chairman, President, and Chief Executive Officer (CEO), Jeff Miller, said during a Q2 earnings call, “Our strong second quarter performance demonstrates that our strategy is working well, and Halliburton’s strategic priorities are driving value. Total company revenue grew 18% sequentially, as activity increased simultaneously in North America and international markets, and adjusted operating income grew 35% with strong margin performance in both divisions.”

Miller shared that Haliburton’s North America revenue grew 26% as both drilling and completions activity marched higher throughout the second quarter. Its international revenue also grew 12% sequentially with activity accelerating in all international regions, particularly Latin America and the Middle East.

“I expect the international markets will experience multiple years of growth, and I am confident that Halliburton is positioned to benefit more from this multi-year upcycle than ever before,” he added. “We have a leading technology portfolio, the right geographic presence, and new service line opportunities that align perfectly with our strategy to deliver profitable international growth.”

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Looking ahead, the Haliburton CEO said the company’s customer spend remains on track to increase, with the Middle East and Latin America expected to grow the most.

“Longer term, we believe the international markets will experience multiple years of growth. Halliburton’s international business is better prepared to benefit from the upcycle than ever before,” he told investors.

Haliburton is a prime contractor of ExxonMobil Guyana, operator of the South American nation’s largest and most lucrative offshore block.

Since 2015, the oilfield service company has steadily expanded its activities in Guyana, which has seen the establishment of state-of-the-art facilities, including one of the largest mud plants in the hemisphere, and expansion of its local workforce. It has also moved close to 100% of its services to Guyana.

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