New York: Halliburton Co, the world’s No. 2 oilfield services provider, said oil prices would have to stabilise at above $50 per barrel for producers to meaningfully increase oilfield activity.
The company posted a surprise quarterly profit on Wednesday by “relentlessly managing costs” and taking advantage of a rise in the number of rigs operating in North America.
Halliburton shares rose as much as 6 per cent to $49.81 (Dh182.95) in morning trading, their highest in nearly 18 months.
Oil prices have nearly doubled since touching a low of $26.05 in February, prompting oil producers to put rigs back to work.
US oil was trading at $51.80 at 1534 GMT, the tenth day in a row it has traded above $50.
The US onshore rig count rose by about a quarter in the three months ended September, according to a closely watched report from Baker Hughes Inc, which competes with Halliburton.
The rise in US rig count is being driven by smaller operators, Halliburton Chief Executive Dave Lesar said on a post-earnings call.
“We saw a trend of less service-intensive wells, which is not activity typically worth chasing at today’s pricing,” he said.
Halliburton said it expected pricing pressure to continue globally and activity in the current quarter to be weak due to holiday and seasonal weather-related downtime.
This “does not change our view that things are getting better,” Lesar said.
Halliburton’s revenue from North America, which accounts for more than 40 per cent of its total business, rose 9 per cent from the second quarter — its first increase in seven quarters.
But sluggish demand from international markets pulled down total revenue by 31.3 per cent to $3.83 billion. Analysts on average were expecting $3.90 billion, according to Thomson Reuters.
Cost cuts helped offset the fall in revenue. Halliburton plans to cut “structural costs” by about 25 per cent, or $1 billion, on an annual run-rate basis by the end of 2016.
Profit attributable to Halliburton was $6 million, or 1 cent per share, in the third quarter, compared with a loss of $54 million, or 6 cents per share, a year earlier.
Analysts on average were expecting a loss of 6 cents per share.
Market leader Schlumberger is scheduled to report on Thursday and Baker Hughes is scheduled to report on Tuesday.
