Oil & Gas News

Oil Field Service Companies Report Mixed Results

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Oil-field service contractors bore the brunt of the three-year oil price downturn starting back in 2014, accounting for the bulk of an estimated 450,000 layoffs while accepting cut-rate prices from producers for their work and equipment – sacrifices that allowed their clients to survive the commodity collapse.

Slowly but surely, the leverage in contract negotiations is increasingly shifting to the oil-services companies, which are now well positioned to request higher fees and are reporting higher revenues and improved earnings.

Baker Hughes

Baker Hughes service company reported EPS of 10 cents, under analyst estimates for 13 cents. Revenue rose 2% to $5.548 billion, in line with Zacks analyst estimates. However, Thomson Reuters analysts were expecting $5.57 billion in revenue.

Oilfield equipment unit revenue fell 9.4% to $617 million, below analyst views, according to Reuters.

But Baker Hughes is bullish on North American production and rig counts growing and said the company’s drilling services cut the average number of drilling days for an unnamed shale customer by nearly 20% and set drilling records in the Delaware Basin.


Oilfield service giant Schlumberger raked in $8.3 billion in revenue in the second quarter, up 6% from the previous quarter, but earnings declined from $525 million in the first three months to $430 million in the latest quarter. Schlumberger got a boost from rising North American well completions and increased international demand.

Schlumberger Chairman and CEO Paal Kibsgaard cited new project startup costs and some operational delays for putting a dent in the company’s quarterly profits. But he touted a strong quarter overall.

While North American growth is continuing, especially in U.S. shale, he also pointed to growing international business as the industry continues to rebound from the recent oil bust. He said Schlumberger launched nearly 30 new rigs internationally, including its first “Land Rig of the Future” in Saudi Arabia that uses more automation and digital technology.

The biggest overall growth in the second quarter was in North American well completions, especially hydraulic fracturing, or fracking, as companies start producing wells that were drilled last year or in recent months.


Halliburton service company reported early Monday its second-quarter 2018 earnings from continuing operations totaled $511 million or 58 cents a share.

It’s nearly eleven times more than the $1 million reported in the first quarter of the year. Operating income for the second quarter was $789 million compared to $354 million in the first quarter.

“We executed on our plan and delivered strong results. We achieved total company revenue of $6.1 billion, representing a 7% increase, while operating income was $789 million, a 27% increase over adjusted operating income for the first quarter of 2018. Our overall strategy is working well and we plan to stay the course,” commented Jeff Miller, President and CEO.

He said the Completion and Production division’s operating income grew by 34%, driven largely because of U.S. land operations. The division’s revenue was $4.2 billion or a $357 million increase over the first quarter.

“North America had a strong performance this quarter. This is the largest and fastest growing energy market in the world. On a year-to-date basis, we have grown revenues 47% year over year, while the U.S. land rig count has increased 16%. U.S. land achieved margins that are closing in on what we achieved during the previous peak in 2014,” added Miller.

Second quarter revenue for Halliburton’s Drilling and Evaluation division came to $2 billion which was a $50 million increase over the first quarter of the year.

North America revenue for the quarter was $3.8 billion or 9% higher than the first quarter. International revenue was $2.3 billion or 4% more than revenue from the first quarter 2018.


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