Halliburton announces 4Q17 results

This compares to income from continuing operations for 3Q17 of US$365 million, or US$0.42 per diluted share. Halliburton's total revenue in 4Q17 was US$5.9 billion, a 9% increase from revenue of US$5.4 billion in 3Q17. Reported operating income was US$379 million during 4Q17, compared to operating income of US$634 million in 3Q17. Excluding special items, adjusted operating income for 4Q17 was US$764 million.

Total revenue for the full year of 2017 was US$20.6 billion, an increase of US$4.7 billion, or 30%, from 2016. Reported operating income for 2017 was US$1.4 billion, compared to a reported operating loss of US$6.8 billion for 2016. Excluding special items, adjusted operating income for 2017 was US$2.0 billion, a three-fold improvement from adjusted operating income of US$690 million for 2016.

“Outstanding execution resulted in an excellent fourth quarter and we are well positioned to take advantage of opportunities presented by a growing North America market and improving international outlook. I continue to believe we are on the path to normalised margins in North America in 2018,” remarked Jeff Miller, President and CEO.

“2017 was a dynamic year for the oil and gas sector that marked another step on the road to recovery for our industry. I am pleased with the way our team executed on our value proposition, maintained strong service quality, and generated superior results and industry leading returns.

“Our drilling and evaluation division delivered an impressive performance over the second half of 2017, achieving nearly 50% incrementals in the fourth quarter. These results demonstrate the strength and diversity of our portfolio.

“Our completion and production division revenue grew 8% sequentially, outperforming the change in average US land rig count. The North America completions market is tight, and demand for our completions equipment and our service quality remains strong.

“I am optimistic about what I see in 2018. Commodity prices support increasing activity in North America and I am encouraged by the increase in tender activity and the positive discussions we are having with our international customers,” concluded Miller.

Operating segments

Completion and production

Completion and production revenue in 4Q17 was US$3.8 billion, an increase of US$267 million, or 8%, from 3Q17, while operating income was US$552 million, a sequential increase of US$27 million, or 5%. In the US land sector, higher pressure pumping activity and pricing led to increased revenue while higher costs and seasonality hindered profitability. Additionally, results improved due to year-end completion tool sales in the Gulf of Mexico, higher software sales in Latin America and increased stimulation activity in the Eastern Hemisphere.

Drilling and evaluation

Drilling and evaluation revenue in 4Q17 was US$2.1 billion, an increase of US$229 million, or 12%, from 3Q17, while operating income was US$291million, an increase of US$111 million, or 62%. These increases were primarily due to increased drilling activity in the Middle East and North America and higher software sales and services in Latin America.

Corporate and other events

On 22 December 2017, the Tax Cuts and Jobs Act of 2017 was signed into law, effective 1 January 2018. Halliburton recorded an aggregate US$882 million of non-cash discrete tax charges in 4Q17, primarily as a result of preliminary tax provisions for the net impact of this tax law. Halliburton is continuing its analysis of tax reform impact on the company, and this provisional amount is subject to change.

Regarding Venezuela, Halliburton continues to experience delays in collecting payments on receivables from our primary customer. These delayed payments, combined with recent credit rating downgrades and deteriorating market conditions in Venezuela, required Halliburton to record an aggregate charge of US$385 million during 4Q17 under GAAP.

Geographic regions

North America

North America revenue in 4Q17 was US$3.4 billion, a 7% increase sequentially. This improvement was driven primarily by increased utilisation and pricing throughout the US land sector in the majority of Halliburton’s product service lines, primarily pressure pumping, as well as higher drilling activity and completion tool sales in the Gulf of Mexico.

International

International revenue in 4Q17 was US$2.5 billion, an 11% increase sequentially, resulting primarily from increased activity across multiple product services lines in Latin America, and increases in drilling and stimulation activity in the Eastern Hemisphere.

Latin America revenue in 4Q17 was US$615 million, a 16% increase sequentially, driven by increased drilling activity and higher software sales in Brazil, higher software sales in Mexico and increased stimulation activity in Argentina. These results were partially offset by reduced drilling activity in Venezuela.

Europe/Africa/CIS revenue in 4Q17 was US$776 million, a 7% increase sequentially, primarily due to higher drilling activity in the North Sea, coupled with increased activity in Algeria and Egypt. These results were partially offset by a reduction in completion tool sales in Nigeria.

Middle East/Asia revenue in 4Q17 was US$1.1 billion, a 12% increase sequentially, primarily resulting from increased drilling and stimulation activity in the Middle East and year-end sales in China.

Selective technology and highlights

• Halliburton announced the release of Geometrix™ 4D Shaped Cutters, a line of four distinct geometric profiles to help improve cutting efficiency and increase control to reduce drilling costs.
• Sperry Drilling announced the release of JetPulse™ high-speed telemetry service, which provides consistent, high-data rate transmission of drilling and formation evaluation measurements.
• In October 2017, Halliburton announced the release of Marine Sentry™ 3000, a rotating control device that provides a pressure control solution by creating a seal around the drill string and tool joints for safer containment of fluids during conventional or controlled pressure drilling operations. The device is mounted on a rig’s surface blowout preventer and monitors key functions to help reduce cost and environmental impact while improving overall well safety in pressure critical locations.
• Halliburton announced the release of BaraShale™ Lite Fluid System, a high performance water-based fluid designed to maintain full salt saturation with reduced density, help prevent lost circulation and minimise waste disposal costs.
• Halliburton announced the release of the Electromagnetic Pipe Xaminer® V (EPX™V) service – allowing operators to pinpoint casing defects and metal corrosion in up to five tubular strings within the well.
• In November 2017, Halliburton announced that it had worked with the Akwa Ibom state government to inaugurate and open Nigeria's first oil and gas training centre fully equipped with oilfield operations tools. The training and research centre will provide courses in field development, drilling and completions engineering, well intervention solutions and digital technologies to local energy employees and students.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/24012018/halliburton-announces-4q17-results/