North American revenue for Halliburton Co soared 24 percent, sequentially, over the first three months of the year on the heels of US land outperforming domestic rigs at a rate of nearly 30 percent. More specifically, Halliburton revenue in North America climbed from $1.79 billion last year to $2.23 billion this year. In addition, Halliburton posted its US land revenue growth, alone, was already up 30 percent since the Q4, higher than the average domestic land rig count of 27 percent.
Accordingly, Halliburton president Jeff Miller comments, “The quarter wrapped in line with what we expected,” in a continuing “tale of two cycles. North America activity increased rapidly, but not without growing pains, while activity in the rest of the world declined due to typical seasonal pressures that were exacerbated by current cyclical headwinds.”
Indeed, the first quarter of 2017 has brought a lot of change in Halliburton’s North American business, both in terms of strategy as well as how the customers view the current market.
Miller goes on to say, “I love the way the market is shaping up. I’m excited because customers are investing to meet production targets, pricing is moving, supply-versus-demand dynamics are tight, our reactivated equipment is going to work at leading-edge pricing, and we are working to manage our input costs.”
Now this activity pace could regulate as we reach the second half of the year, particularly if North American oil continues to accelerate and gas production continues to escalate to pressure pricing. Miller then advises that the management team still sees that the market has “sufficient demand” for Halliburton’s equipment.
It is this factor that lets Halliburton kind of revel, a bit, in this unsteady market. As a maker of equipment, the company has the luxury to wait longer than its competitros before making any new decisions about building. For example, Miller also notes that the pumping equipment currently active is now “fully utilized, and we know from our own experience, as we get near the bottom of the stacked equipment pile, it will be progressively harder and more expensive for the industry to reactivate equipment.”
Of course, quick shifts in the market continue to complicate forecasting in the market but the company says they still look to see higher revenue growth in the second