Halliburton eyes slimmer shale industry but more profitable future

In this news, we discuss the Halliburton eyes slimmer shale industry but more profitable future.

(Reuters) – The U.S. shale industry will continue to contract, but energy companies will emerge stronger from the COVID-19 pandemic crisis, Halliburton chief executive Jeff Miller told investors on Monday.

Halliburton, the largest provider of hydraulic fracturing services in the United States, beat Wall Street estimates, gaining 11 cents per share against expectations of 8 cents per share while posting its fourth consecutive quarterly loss on Monday.

The next decade would be more profitable for the company, Miller said, noting that the consolidation of its competitors has been “great” for Halliburton. About 30% of hydraulic fracturing equipment has been permanently withdrawn, he estimated.

Oil prices have recovered some of their losses after historic spring lows, but new travel lockdowns following a resurgence in COVID-19 infections threaten this recovery. US CLc1 oil futures were trading around $ 40.75 early Monday.

“The pace of the decline in activity in international markets is slowing, as the structure of North American industry continues to improve and activity stabilizes,” Miller said in a statement.

“We’re seeing a gradual improvement in 2021,” Miller said, noting an increase in activity around unfinished wells. It estimated that revenues from its finishing and drilling business would increase 10% this quarter, while margins would remain stable.

Miller warned that a resurgence of COVID-19 cases remained a near-term risk, echoing its biggest rival Schlumberger NV SLB.N, which recorded a loss on Friday and warned that the recent economic recovery remains “fragile “.

Halliburton has cut costs sharply, reducing its North American workforce and real estate footprint by 50% from last year, Miller said.

Its North American revenues fell 67% to $ 984 million in the third quarter. In the past two quarters, Miller said two-thirds of its revenue came from international markets as the Houston-based company shied away from U.S. operations.

Revenue from its completion and production activities was $ 1.57 billion for the quarter, down from $ 3.51 billion a year ago, a decline of about 55% . Total revenues fell 46.4% to $ 2.98 billion.

Shares rose about 3.4% early in trading to $ 12.67.

The net loss attributable to the company was $ 17 million, or 2 cents per share, in the quarter ended Sept. 30, compared with earnings of $ 295 million, or 34 cents per share, a year earlier.

The company took $ 133 million in severance pay and other charges.

Reporting by Shariq Khan in Bengaluru and Liz Hampton in Denver; Editing by Shinjini Ganguli and Marguerita Choy

Original © Thomson Reuters

Originally posted 2020-10-19 21:16:10.

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