HOUSTON – Top U.S. oilfield service firms SLB and Halliburton posted higher quarterly profits on Friday helped by strong global demand, but they warned of softer activity in North America for the second half of this year.
Oilfield service providers have in recent quarters bet on growth overseas, particularly in the Middle East and Asia, as well as on deepwater projects, to offset weak demand in North America, which has seen a wave of asset consolidations and lukewarm gas demand.
Halliburton said it now expects its full year North American revenues to decline by 6% to 8%, due to lower activity.
“I expect that the second half of 2024 will be near the low point of activity levels (in North America) this cycle,” Halliburton’s chief executive officer Jeff Miller said.
He expects an increase in drilling and completions demand in 2025 after a major wave of consolidations among top U.S. producers and a recovery in natural gas activity. Delays with liquefied natural gas projects have hurt gas demand and drilling for the fuel, he added.
Halliburton’s North America second-quarter revenue eased 8%, while SLB reported a 6% drop in revenue from the region.
SLB shares were up 1%, while Halliburton shares were down 5.7% in early trading after it cautioned of weakness in North America.
Meanwhile, Halliburton’s international revenue grew about 8%, while SLB’s quarterly revenue from its international segment rose 18%, from a year earlier.
“Investor focus on Halliburton will remain on its North American business, which still accounts for 43% of total,” said Peter McNally, Global Sector Lead for Industrials Materials and Energy at Third Bridge.
Lead image (Credit: Reuters)
