Idle oil production equipment at Halliburton's yard in Williston, North Dakota, the US. Picture: REUTERS/ANDREW CULLEN
Idle oil production equipment at Halliburton's yard in Williston, North Dakota, the US. Picture: REUTERS/ANDREW CULLEN

Bengaluru  — Halliburton said on Monday a pricing downturn that has plagued the oilfield services sector was bottoming out, as it reported modestly higher activity levels in North America in the first quarter from a year earlier.

Oilfield services providers have been struggling with a tightening of spending by US oil producers as they rein in new drilling in response to shareholder pressure for greater returns after a period of heavy investment.

The company’s shares were up 2.8% at $32 before the bell.

In contrast to comments from top oilfield services provider Schlumberger last week, Halliburton said activity in its largest market North America was modestly higher, adding that it expects demand for its services to progress modestly for the next couple of quarters.

“We believe the worst in the pricing deterioration is now behind us,” Halliburton CEO Jeff Miller said, adding that it experienced pricing headwinds throughout the quarter.

Schlumberger last week blamed a 3% decline in quarterly North America revenue on softer pricing and lower activity for its hydraulic fracking and drilling businesses.

The company had also forecast a 10% decline in investments by oil producers onshore North America in 2019, adding that overall production growth outlook for the region could likely be lowered.

The number of rigs in operation in North America fell for the past four months and production growth in the Permian and other key shale basins have slowed as oil prices fell in the fourth quarter.

Constraints in pipeline carrying capacity have also forced oil producers to slow down drilling and production.

Halliburton’s revenue from North America fell 7% to $3.3bn in the three months ended March 31 but came in above the $3.13bn  that five analysts had estimated on average, according to IBES data from Refinitiv.

International revenue rose 11%, and the company reiterated its expectation of high single-digit growth for 2019. Total revenue was largely flat at $5.74bn.

Net income attributable to Halliburton rose to $152m, or 17c per share, in the first quarter, from $46m, or 5c per share, a year earlier.

On an adjusted basis, the Houston-based company earned 23c per share, edging past analysts’ average estimate of 22c.

Reuters