uploads///NA Rig count and Revenue

How Did US Rig Count Affect SLB, HAL, and WFT in 2Q17?


Nov. 20 2020, Updated 10:42 a.m. ET

SLB’s revenues from North America

Schlumberger (SLB), Weatherford International (WFT), and Halliburton (HAL), three of the four oilfield equipment and service (or OFS) companies we are discussing in this series, saw higher revenues from North America in 2Q17 compared to a year earlier. Schlumberger’s North America revenue rose 27% in the past one year. In 2Q17, SLB’s revenue from North America was 30% of its total revenues.

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HAL’s and WFT’s revenues from North America

By comparison, Halliburton’s (HAL) 2Q17 revenues from North America rose 83% from a year ago. Weatherford International’s (WFT) revenue from North America rose 18% in 2Q17 over 2Q16. The energy sector makes up 6.0% of SPX-INDEX. The SPX-INDEX increased 14% in the past one year versus a 6% fall in HAL’s stock price.

Halliburton’s North America revenue share rose significantly in 2Q17 over 2Q16. HAL generated ~56% of its total revenues from North America in 2Q17. Weatherford’s revenue share from North America was 38% in 2Q17. National Oilwell Varco’s quarterly geographic revenue break-up is not available. HAL makes up 0.16% of the iShares S&P 500 Value ETF (IVE). IVE rose 11% in the past year versus a 6% decline in HAL’s stock price during the same period. Read Market Realist’s Weatherford International’s 2Q17 Earnings Beat Estimates to know what’s happening to WFT.

US rig count

By June 30, 2017, the US rig count had risen 118% compared to a year ago. From June 30, 2017, to the week ending August 4, 2017, the US rig count trend has moderated, increasing ~2%. A higher rig count can boost OFS companies’ revenues and earnings going forward.

Next, we’ll discuss how the international rig count affected these companies’ revenues.


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