NEW YORK – The rapid growth of land-based drilling projects in the U.S. appears to be helping the oil industry to shrug off a slowdown in both the Gulf of Mexico and Libya.
Halliburton Co., the first major energy company to report first-quarter results, said Monday that earnings more than doubled thanks to drilling in North America. Halliburton’s earnings appear much as they did in 2008, the first time crude hit $100 per barrel and before the recession hit global demand for energy.
«We continue to believe that the industry is on the verge of the next major up-cycle,» President and CEO Dave Lesar said.
Halliburton, which provides a variety of services for oil and natural gas drillers, saw increasing demand for its services as oil prices jumped 17 percent from January to March. Benchmark crude is currently trading at about $107 per barrel.
With Gulf drilling hampered by a new permitting process and North Africa and the Middle East embroiled in a wave of uprisings, the industry has focused on developing underground fields in the U.S. with a process known as hydraulic fracturing to reach more oil and gas.
The Houston company reported first-quarter earnings of $511 million, or 56 cents per share, compared with $206 million, or 23 cents per share, in the same period last year. Revenue rose 40 percent to $5.28 billion.
After adjusting for a $46 million charge related to international sanctions on oil operations in Libya, Halliburton said it earned 61 cents per share.
Analysts expected earnings of 58 cents per share on revenue of $4.87 billion, according to FactSet.
Revenue in North America surged 75 percent in the quarter while revenue from international operations increased 11 percent, according to the company. Completion and production revenue jumped 62 percent to $3.2 billion due to increased drilling activity in the U.S. Drilling and evaluation revenue increased 17 percent to $2.1 billion as activity picked up in the western hemisphere and Iraq.
The rebellion in Libya will continue to hinder oil operations there, but Lesar expects projects will eventually return to normal.
«We remain very optimistic about this market and expect to be profitable in 2011,» he said.
Meanwhile, Halliburton will remain busy with projects in other parts of the world. Lesar estimates that there were roughly 3,500 uncompleted wells in North America at the end of the first quarter. And one of Halliburton’s customers in Saudi Arabia said it plans to increase drilling activity by 30 percent next year.
Halliburton shares rose 77 cents to $47.59 in afternoon trading.
AP