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How Could the US Rig Count Affect Halliburton in 4Q16?

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Nov. 20 2020, Updated 4:52 p.m. ET

US rig count

In 3Q16, the US rig count fell 38% compared to 3Q15. The US rig count reached its multiyear high in September 2014 and since then, it has dropped 66% through December 30, 2016.

From September 30 until the week ended December 30, 2016, the US rig count rose ~26% to close at 658. A higher US rig count could increase Halliburton’s (HAL) revenues and earnings in 4Q16.

Crude oil prices have recovered 11% since September 30. Higher crude oil prices have driven the higher US rig count. Please read the latest on crude oil prices in Market Realist’s Crude Oil: Analyzing Bearish and Bullish Drivers.

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Revenue by geography

Halliburton’s (HAL) revenue share from North America fell to 43% compared to 45% in 3Q15. During the same period, HAL’s aggregate revenues fell 31%.

In comparison, Weatherford International’s (WFT) 3Q16 revenues fell 39% over its 3Q15 revenues. FMC Technologies’s (FTI) revenues fell 29%, while Superior Energy Services’s (SPN) revenues fell 46% from 3Q15 to 3Q16. For more information on FTI, please read Market Realist’s Is FMC Technologies’ Merger with Technip Almost Complete?

Halliburton (HAL) makes up only 0.20% of the iShares Russell 3000 ETF (IWV). The energy sector makes up ~7% of IWV.

Next, we’ll discuss HAL’s revenues from international operations and its international rig count.

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