North America scenario
According to Halliburton’s (HAL) management, the rig count in North America bottomed in 2Q16. The lower rig count was led by low energy prices. This also resulted in pricing pressure on oilfield service companies like Halliburton. Since June 30, the US rig count has recovered 22%. In a recent presentation made on September 6, Halliburton’s management expressed optimism that the US rig count is set to stage a comeback.
Halliburton’s geographical segment
The Middle East is still the most resilient. In 2Q16, Halliburton’s revenues from the Middle East/Asia fell 24% compared to a year ago—the lowest among its geographical breakup
Russia is expected to see its activity fall in 3Q16.
In Venezuela, Halliburton’s activities reduced substantially. However, the company plans to remain in Venezuela because it has the largest reserve base in the Western Hemisphere. Halliburton’s revenues from Latin America fell 38% in 2Q16—compared to the previous year. However, Halliburton thinks that Brazil is slowly coming out of the drilling activity slowdown.
Halliburton’s views on the Eastern Hemisphere
Oilfield services companies’ pricing in the Eastern Hemisphere fell slowly because the projects are under contract. Halliburton noted that the Eastern Hemisphere (which refers to Europe, Asia, Africa, and Australia) lags North America’s drilling activity by six to nine months. So, it could take some more time for the drilling activity in the Eastern Hemisphere to spring back into action after the activity in North America recovers. Halliburton’s current focus is on providing services in the mature fields in the Eastern Hemisphere.
In the next part, we’ll discuss Halliburton’s positioning in various fields.