Oil bonanza boosts Halliburton’s profit 85%

Oilfield services firm Halliburton posted an 85% rise in first-quarter adjusted profit on Tuesday as a rally in crude prices boosted demand for its services and equipment.

Crude futures climbed to their highest level in more than a decade during the quarter after a slew of Western sanctions against Russia disrupted oil sales from the world’s second-largest exporter. US West Texas Intermediate is about $106.95 a barrel while Brent futures are at $111.76 a barrel.

The price increase has encouraged oil and gas producers to boost drilling activity, sending the US rig count to 673 at the end of the first quarter, up almost 15% from the fourth quarter of 2021, according to Baker Hughes data.

Halliburton said margins in its drilling and evaluation division eclipsed 15% in the first quarter for the first time since 2010, despite weather and supply chain disruptions. The company anticipates the supply chain issues that have plagued the industry since demand rebounded from coronavirus-related lockdowns to continue.

“We see significant tightness across the entire oil and gas value chain in North America,” CEO Jeff Miller said in a statement.

“Supportive commodity prices and strengthening customer demand against an almost sold-out equipment market are expected to drive expansion in the completion and production division margins,” he said, adding that he anticipates the company’s international business will grow throughout the remainder of the year.

Halliburton also recorded a pre-tax charge of $22m in the quarter for the write-down of its assets in Ukraine.

The Texas-based company’s adjusted net income was $314m, or 35c a share, for the quarter to March 31, compared with $170m, or 19c a share, a year ago. Analysts had anticipated earnings of 34c a share for the first quarter, according to Refinitiv IBES.

Halliburton shares were down about 2.3% in pre-market trading to $40.84. That outpaced a decline of roughly 1.5% in US oil futures on Tuesday morning.

Reuters