Halliburton raises dividend for first time in seven years, oil and gas news

Oil squeezing has proven to be a boon for the world’s top hydraulic fracturing service providers.

Shale companies are using nearly all available fracking equipment and crews as exploration expands, accelerating cost inflation and pointing to worsening supply chain disruptions across the industry.

North American oil drillers appear likely to spend more than 25% this year, while overseas explorers are on track for a 10-year increase, a Halliburton Co. executive said Monday after reporting its biggest quarterly profit in seven years. Moderate growth around.

The world’s largest hydraulic fracturing service provider has seen tight labor, trucking and raw material supplies, with as much as 80 percent of workers in some regions transplanted from other regions. Even something as mundane as Halliburton sand blasting into a well to help fract oil-soaked rock is making it increasingly difficult to access resources, Chief Executive Jeff Miller said on a conference call with analysts.

The squeeze has been a boon for Halliburton, which raised its dividend for the first time since 2014 and said orders for pumping units more than doubled. The company’s fracking operations are running at full capacity, and oil companies are paying higher prices for so-called well completions. Peers such as ConocoPhillips and Devon Energy have warned since last year that oilfield inflation is a rapidly growing threat.

“It’s an excellent set of conditions for Halliburton,” Miller said. “Our current orderbook for completions has more than doubled from a year ago, pointing to another strong growth and profitability in 2022.”

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Oil and gas explorers are paying record costs as economic growth that underpins energy demand rebounds from a pandemic-driven collapse, the Federal Reserve Bank of Dallas said in recent weeks. Supply chain disruptions in the Permian Basin, the largest U.S. oil field, have made drilling projects more complex, time-consuming and expensive.

Miller said there’s no reason to expect things to change anytime soon.

“In any case, I don’t see 2023 as an end point,” Miller said. “I think the road goes way beyond that.”

expansion cycle

Halliburton joins bigger rivals Schlumberger and Baker Hughes in forecasting a new multi-year expansion cycle for oilfield contractors, though Halliburton is the only one of the three to raise shareholder payouts. The stock was down 1.4% at $27.15 at 11:03 a.m. in New York as geopolitical tensions in Eastern Europe led to a broader slide in stocks.

Schlumberger said last week that it would increase spending 18% to $2 billion in response to its growth expectations for customers around the world over the next few years.

Halliburton, the largest oilfield contractor in the U.S. and Canada, will gain the most from a spending recovery led by North America, which larger rival Schlumberger said last week should grow by at least 20%.

Baker Hughes is also seeing a surge in growth thanks to a resurgence in U.S. shale drilling. The Houston-based company posted a 28% increase in orders last week, largely helped by a business line that makes large turbines for liquefied natural gas exports.

Excluding one-time items, Halliburton reported fourth-quarter earnings of 36 cents a share, beating analysts’ average estimate in a Bloomberg survey by 2 cents.

The dividend hike to 12 cents a share is the company’s first increase since late 2014, when crude oil prices tumbled from more than $100 a barrel earlier this year.

On a sequential basis, sales in North America and overseas grew by double digits in the final three months of 2021. The biggest revenue surprise came from the Middle East and Asia, where sales beat expectations by 8%.



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