Halliburton says oil industry in early stages of a multi-year up-cycle

Halliburton workers offshore

Oilfield company Halliburton Co on Tuesday said the industry was in the early stages of a multi-year up-cycle, as activity has rebounded from pandemic lows and pricing for some of its services has inched higher.

The Houston, Texas-based company reported a 33.5% jump in second-quarter profit from the previous three months, as higher crude prices buoys demand for oilfield services.

Global benchmark Brent futures rose to over $77 a barrel in early July – the highest since late 2018 – but were trading around $68.54 a barrel on Tuesday amid concerns that a spike in COVID-19 infections could dampen demand just as OPEC+ producers increase supply.

Halliburton Chief Executive Jeff Miller delivered a relatively bullish outlook for the global oil market, anticipating that drilling and completions spending in North America would grow by double digits over the next two years.

He also estimated double-digit growth in international oil activity for the second half of this year compared with the same period in 2020.

“We believe that we are in the early innings of a multi-year up-cycle. For the first time in seven years, we anticipate simultaneous growth in international and North America markets,” Miller told investors.

Halliburton said it expected revenue growth in the mid-teens over the next two years.

Shares were up about 2.5% in early trading at $19.85.

Halliburton said net income attributable to company rose to $227 million, or 26 cents per share, in the three months ended June 30, from $170 million, or 19 cents per share, in the first quarter. Wall Street analysts had anticipated earnings of 23 cents per share during the quarter.

The Houston-based company reported $3.707 billion in revenue for the second quarter, slightly missing revenue estimates of $3.735 billion, according to data from Refinitiv IBES data.

Still, analysts said the results were positive, pointing to the earnings beat and improved margins.

“The margin performance that buoyed results should be enough to drive relative outperformance for HAL (Halliburton) today,” analysts for investment firm Tudor Pickering & Holt Co wrote on Tuesday.

Rivals Baker Hughes Co and Schlumberger NV are also scheduled to report their quarterly earnings this week. 

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