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How Did the US Rig Count Affect SLB, HAL, and BHI in 3Q16?

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Revenues from North America

In the past year, Baker Hughes’s (BHI) North America revenue share has fallen 51%—the steepest drop among the four major OFS (oilfield services) companies we’re reviewing in this series.

In 3Q16, BHI’s revenue from North America fell to 32% of its total revenues, as compared to 40% in 3Q15. By comparison, Schlumberger’s (SLB) 3Q16 revenues from North America fell to 24% of its total revenues, as compared to 27% one year ago. Its revenues from North America have fallen 25% in the past year.

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In 3Q16, Halliburton’s (HAL) revenue from North America fell to 43% of total revenues, as compared to 45% in 3Q15. Its revenues from North America fell 33% in the past year. Notably, HAL makes up 0.45 of the iShares S&P 500 Value ETF (IVE). The energy sector makes up 13.1% of IVE. FMC Technologies’ (FTI) geographic revenue breakdown is not available.

US rig count

By September 30, the US rig count fell 35% YoY (year-over-year). Since July, the US rig count has risen. From September 30 until November 3, the US rig count trend has risen 7%. Remember, higher rig counts can increase OFS companies’ revenues and earnings going forward.

In the next part, we’ll discuss how the international rig count change affected these companies’ revenues from international geographies.

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