Despite a $312 million writedown on Halliburton Co assets in Venezuela, the company reported a 34 per cent jump in first quarter revenue, mostly due to strong North American demand. Reuters photo by Richard Carson.

Halliburton adding 2,000 jobs in Q1

Halliburton, one of the world’s largest oilfield service companies, reported a 34 per cent bump in first-quarter revenue on Monday mostly due to strong North American oil and gas production and higher oil prices.

The Houston-based company reports the revenue increase despite a $312 million writedown on Halliburton’s remaining assets in Venezuela, as well as a cold winter which impacted earnings earlier in the quarter.

“We achieved total company revenue of $5.7 billion, representing a 34 per cent increase compared to the first quarter of 2017.” said Jeff Miller, President and CEO.

The company’s North American revenue was up nearly 58 per cent to $3.52 billion in the first quarter.  International operations revenue rose by 9 per cent.

According to Miller, Halliburton expects normalized margins of about 20 per cent in North America by the end of 2018, which will be supported by a strong fracturing market.

“We believe the pressure pumping market is undersupplied and will remain tight,” Miller said.  He added high rates of utilization for fracking equipment and service intensity are degrading existing equipment.

Rystad Energy says about 3.3 million hydraulic horsepower is expected to be added to the US pressure pumping fleet this year.  The consultancy firm says such an increase boosts investors’ concerns about companies overbuilding equipment.

Despite the boost in earnings, Halliburton share prices were down almost 1 per cent on Monday morning to $51.49.  The decline is attributed to a broader drop in energy stocks after Iran’s oil minister said the OPEC supply cut agreement does not need to be extended past the December 2018 deadline now that oil prices are higher.

According to Thomson Reuters, adjusting for items, Halliburton posted a profit of 41 cents per share in Q1.  In February, the company warned it expected a 10 cents per share hit to first quarter earnings due to delivery delays of fracking sand.

In the first quarter of 2017, the company posted a loss of $32 million.

According to Miller, higher prices may be needed to counteract wage increases as the US labour market tightens and costs for rail and trucking rise.  In late March, Halliburton reported it would hire 2,000 new employees in the United States to handle surging US demand.

The company will continue its presence in Venezuela, however, it will carefully manage its exposure in the South American country plagued by political and economic upheaval.