How the Rig Count Could Affect Halliburton in 2017
Halliburton’s North American revenue
In 4Q16, Halliburton’s (HAL) North American revenue share rose to 45%, compared to 43% in 3Q16. Weatherford International’s (WFT) North American revenue share was ~37% in 4Q16, and Schlumberger’s (SLB) North American revenue share was 25% in the quarter. Baker Hughes’s (BHI) North American revenue share was 32% in 4Q16.
In 4Q16, Halliburton generated most of its revenue—55%—from its international operations. HAL makes up just 0.18% of the iShares Russell 3000 ETF (IWV). The energy sector makes up 5.9% of IWV.
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US rig count
In 4Q16, the US rig count fell 6% compared to 4Q15. The US rig count reached a multiyear high in September 2014. Since then, it’s fallen 61% as of March 10, 2017.
From December 30, 2016, until the week ended March 10, 2017, the US rig count rose ~17% to close at 768. In February 2017, the international rig count also rose 1% compared to December 30, 2016. A higher rig count could increase HAL’s revenue and earnings in 2017.