HOUSTON – Halliburton cleared a 21 percent profit boost in the second quarter as demand for oil production equipment climbed in North America and drills kept spinning in the eastern hemisphere, the company said Monday.
The Houston oil field services company banked a profit of $776 million, or 92 cents a share, in the April-June period, compared to $642 million, or 69 cents a share, in the same period last year.
Revenue grew 10 percent to a record $8.1 billion over the same period as North American oil companies spent more on post-drilling processes that gear up wells to pump oil and gas, known as completions.
In the Middle East and Asia, drilling activity continued to grow, especially in Saudi Arabia, bolstering sales in the region 12 percent to $841 million in the second quarter, Halliburton said.
Halliburton’s North American revenue grew to $4.3 billion, up 14 percent over last year, when U.S. drilling and production spending slowed.
“In our last call, some might have been skeptical when I said I was beginning to feel us turn the corner in North America,” Halliburton Chief Executive Dave Lesar said in a call with investors early Monday. “That feeling was dead on. Today, we are not feeling the turn, we are in the turn.”
In North America, demand for oil field services grew as completion volumes for every well increased more than 35 percent over the second quarter 2013, the firm said. Profit margins in the region could reach 20 percent in the third quarter, Halliburton said.
That’s why it’s the right time for Halliburton to bolster its hydraulic fracturing fleet and logistics capabilities, with fleets of its newly designed Q10 Pumps expected to arrive in the fourth quarter and throughout 2015, Lesar said.
Profits for hydraulic fracturing services had fallen across the U.S. market in the past few years after private equity firms and other players flooded the market with horsepower used to shoot water, chemicals and sand two miles underground to fracture shale rock to release oil and gas. But recent months have given fracture firms hope.
“We believe excess horsepower is below 10 percent now, and the market will require new horsepower to meet demand,” Lesar said. “We’ll be accelerating our Q10 build to meet customer demand.”
The firm is expecting North American margins to outpace the increase in the continent’s rig count because of its sizable foothold in the market, said Mark McCollum, Halliburton’s chief financial officer.
Halliburton also announced it had promoted its chief operating officer, Jeffrey Miller, to president, effective next month. Lesar had held the role of president prior to the appointment, and said after knowing Miller for more than two decades, he had great confidence in Miller’s abilities to manage Halliburton’s leadership team.
Halliburton shares jumped by $1.70 in pre-market trading Monday to $72.05 on the New York Stock Exchange.