Halliburton Co on Wednesday reported a 6% rise in first-quarter adjusted profit from the previous three months, as a rebound in oil prices from pandemic lows fueled drilling activity and demand for oilfield services.
Higher oil prices during the quarter boosted drilling, completion and production, which led to the rebound in demand for oilfield equipment and services from 2020 lows.
Worldwide, rig count rose about 11.5% to 1,231 rigs in the quarter, according to Baker Hughes data.
"The first quarter marked an activity inflection for the international markets, while North America continued to stage a healthy recovery," Chief Executive Office Jeff Miller said.
"I expect international activity growth to accelerate, and the early positive momentum in North America gives me confidence in the activity cadence for the rest of the year."
Adjusted net income attributable to company rose to $170 million, or 19 cents per share, in the quarter ended March 31, from the $160 million, or 18 cents per share, in the fourth quarter.
Total revenue rose 6.6% to $3.45 billion from the fourth quarter. Analysts' on average had estimated revenue of $3.36 billion, according to Refinitiv IBES data.
Operating Segments
Completion and Production
Completion and Production revenue in the first quarter of 2021 was$1.9 billion, an increase of$60 million, or 3%, when compared to the fourth quarter of 2020, while operating income was$252 million, a decrease of$30 million, or 11%. The increase in revenue was driven by higher stimulation and artificial lift activity inNorth America, higher cementing activity in theNorth Sea, improved stimulation activity inArgentinaandMexico, and higher completion tools sales inLatin America. This increase was partially offset by lower cementing services inRussia, lower pressure pumping activity in theMiddle East, reduced seasonal completion tools sales, and lower well intervention services in the Eastern Hemisphere. Operating income was negatively impacted primarily by decreased completion tools sales, as well as reduced pressure pumping activity in the Eastern Hemisphere.
Drilling and Evaluation
Drilling and Evaluation revenue in the first quarter of 2021 was$1.6 billion, an increase of$154 million, or 11%, when compared to the fourth quarter of 2020, while operating income was$171 million, an increase of$54 million, or 46%. These increases were primarily due to higher software sales globally, improved drilling-related services and wireline activity in the Western Hemisphere andNorway, and increased project management activity internationally, which were partially offset by lower drilling-related services inAsia.
Geographic Regions
North America
North Americarevenue in the first quarter of 2021 was$1.4 billion, a 13% increase when compared to the fourth quarter of 2020. This increase was driven by higher drilling-related services, stimulation, and artificial lift activity inNorth Americaland, as well as higher wireline activity and software sales inNorth Americaland and theGulf of Mexico. Partially offsetting these increases were reduced completion tools sales and lower cementing and fluids activity in theGulf of Mexico.
International
International revenue in the first quarter of 2021 was$2 billion, a 2% increase when compared to the fourth quarter of 2020. This improvement was driven by higher activity across multiple product service lines inLatin Americaand theNorth Sea, coupled with increased software sales and project management activity internationally. Partially offsetting these increases were lower completion tools sales, reduced well intervention services in the Eastern Hemisphere, lower stimulation activity in theMiddle East, reduced cementing activity inRussia, and lower drilling-related services inAsia.
Latin Americarevenue in the first quarter of 2021 was$535 million, a 26% increase sequentially, resulting primarily from increased activity in multiple product service lines inArgentinaandMexico, as well as higher fluid services in theCaribbean. Partially offsetting these improvements was reduced activity across multiple product service lines inColombia.
Europe/Africa/CIS revenue in the first quarter of 2021 was$634 million, a 1% decrease sequentially, resulting primarily from reduced completion tools sales and well intervention services across the region, coupled with lower activity inRussiaand lower fluid services inKazakhstan. These decreases were partially offset by higher well construction activity in theNorth Seaand increased software sales across the region.
Middle East/Asiarevenue in the first quarter of 2021 was$878 million, a 6% decrease sequentially, largely resulting from lower stimulation and well intervention services in theMiddle East, reduced drilling-related activity inIndonesiaandChina, and lower completion tools sales across the region. These decreases were partially offset by improved project management activity inIraqandSaudi Arabia, and higher wireline activity inAsia.
Selective Technology & Highlights
- Halliburton successfully delivered real-time control of fracture placement while pumping on a multi-well pad using the SmartFleet™ intelligent fracturing system in thePermian Basin. An industry first, SmartFleet applies automation enabled by subsurface measurements and real-time visualization to intelligently adapt and respond to reservoir behavior, driving real-time improvement in completion execution and fracture outcomes.
- Halliburton introduced the Ovidius™ isolation system, a new packer that transforms from an engineered metal alloy into a rock-like material when it reacts with downhole fluids, creating a long-lasting seal for improved well integrity. Operators can deploy Ovidius in wellbore isolation applications, where it will provide the traditional benefits of expanding elastomers with new capabilities to withstand differential pressures and extreme temperatures found in the most challenging high-pressure/high-temperature environments while providing unparalleled anchoring forces.
- Kuwait Oil Company(KOC) awarded Halliburton a contract to collaborate on their digital transformation journey through the maintenance and expansion of digital solutions for theirNorth Kuwaitasset. It will allow KOC to accelerate their data-to-decisions cycle by designing and operating digital twins of the field to automate work processes, supported by DecisionSpace® 365, a cloud-based subscription service for E&P applications.
- Halliburton signed an eight-year contract with theNorwegian Petroleum Directorate(NPD) to deploy and operate Diskos, the national repository of seismic, well, and production data for the Norwegian oil and gas industry.Halliburton Landmarkwill deliver Diskos 2.0 using DecisionSpace® 365 cloud services in iEnergy® – the industry’s first E&P hybrid cloud. The cloud-native services are Open Subsurface Data Universe™ compliant and provide high-quality data, security, and governance, so users can easily access, visualize, and interpret data from the Norwegian Continental Shelf.
- Halliburton and Optime Subsea formed a global strategic alliance to apply Optime’s innovative Remotely Operated Controls System (ROCS) to Halliburton’s completion landing string services. The companies will also collaborate and offer intervention and workover control system services leveraging Optime’s Subsea Controls and Intervention Light System (SCILS) technology, a remote digital enabled system that complements Halliburton’s subsea intervention expertise. The alliance will provide umbilical-less operations and subsea controls for deepwater completions and interventions delivering increased operational efficiencies while minimizing safety risk through a smaller offshore footprint. Halliburton will offer Optime’s innovative technologies as a service across its global portfolio.
- Bhavesh V. (Bob) Pateljoined Halliburton’s board of directors effectiveFebruary 17, 2021. He will stand for election by shareholders at the Company’s annual meeting onMay 19,2021.Mr. Patelserves as chief executive officer of LyondellBasell, one of the largest plastics, chemicals, and refining companies in the world. Prior to becoming CEO, he served in senior executive leadership roles for LyondellBasell’s largest business segment.
- Halliburton Labsannounced the inaugural group of companies selected to participate in its collaborative environment where entrepreneurs, academics, and investors come together to advance cleaner, affordable energy. Enexor BioEnergy,Momentum Technologies and OCO Inc.will have access to Halliburton’s deep business and technical expertise, facilities, and network to accelerate their respective offerings.
About Halliburton
Founded in 1919, Halliburton is one of the world's largest providers of products and services to the energy industry. With more than 40,000 employees, representing 130 nationalities in more than 70 countries, the company helps its customers maximize value throughout the lifecycle of the reservoir – from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production throughout the life of the asset. Visit the Company’s website atwww.halliburton.com. Connect with Halliburton onFacebook,Twitter,LinkedIn,InstagramandYouTube.
Shares of Halliburton Co. surged 2.6% in premarket trading Wednesday, after the oil services company swung to a first-quarter profit that beat expectations and revenue that topped forecasts.
