Halliburton CEO: North American headwinds have passed
BY ALISON SIDER
HOUSTON -- Halliburton CEO Dave Lesar said that the company's customers are ramping up spending and adding rigs in North America, even as the overall recovery in drilling activity has been tepid so far this year.
"Our customers are increasing rig counts, increasing budgets. We know what their plans are for the rest of the year, that's what gives us confidence" Mr. Lesar said during a conference call following the company's 1Q earnings announcement.
Mr. Lesar said Halliburton's margins improved during the quarter partly because the company was able to cut expenses, including seeing lower costs for guar, which is used in hydraulic fracturing fluids. Halliburton suffered last year after buying too much guar at high prices, and is still working through its expensive inventory, but began to benefit from lower prices this quarter.
Mr. Lesar also said much of the increase in margins came from stronger than anticipated activity in North America, especially in pressure pumping in order to help release oil or natural gas.
"We got our crews back to work must faster than we thought on pressure pumping" Mr. Lesar said.
Despite an uptick in natural gas prices in recent weeks, Mr. Lesar said he does not expect to see exploration and production companies flock back to natural gas reservoirs until next year.
"You need sustained pricing improvement before gas activity will meaningfully increase" he said. "Our view is natural gas drilling will not be a major activity driver in 2013."
Dow Jones Newswires