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Halliburton Gains as Expensive Crude Fuels Demand for Drilling Gear

Published 2022-01-24, 09:20 a/m
Updated 2022-01-24, 09:20 a/m
© Reuters.

© Reuters.

By Dhirendra Tripathi

Investing.com – Halliburton stock (NYSE:HAL) traded 1.6% higher in Monday’s premarket as higher crude prices drove up demand for its oilfield services and equipment, helping the company beat fourth-quarter estimates.

The company's decision to raise dividend to 12 cents per share was also boosting the stock price. Rival Schlumberger, by contrast, had taken a more conservative approach last week, preferring to rebuild its cash reserves and keeping its payout unchanged.

Booming economies, supply chain issues, cold weather and geopolitical tension in Europe and Central Asia have all combined to keep supplies tight and energy prices high. Oil cartel OPEC+ has been slow to expand production and that has also kept the prices firm. Crude prices are currently trading near a seven-year high after running up more than 50% last year.

After rig counts plummeted to historic lows in late 2020, global oil drilling is recovering, boosting demand for equipment and services offered by companies like Halliburton and Schlumberger (NYSE:SLB).

Exploration companies around the globe are expected to almost triple the pace of spending hikes this year compared to 2021, Bloomberg quoted Evercore ISI as saying.

The worldwide rig count was 1,563 at the end of the fourth quarter, compared with 1,104 in 2020, Reuters said, citing Baker Hughes data. The U.S. rig count jumped 68% year-over-year to 586.

Halliburton's total revenue for the fourth quarter was $4.3 billion compared to revenue, rising more than 10% year-on-year. Adjusted profit per share was 36 cents, rising 29% and boosted by lower interest outgo. The company had done early redemption of $1.5 billion in the year ended December 2020.  

 

 

 

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