Nov. 14, 2014, 12:48 PM
- Oil services companies are mostly higher as Halliburton (HAL +1.7%) is indeed in talks to buy Baker Hughes (BHI +0.5%), a deal that would provide a jolt to oilfield services companies contending with falling oil prices: SLB +0.4%, OIS +1.2%, SPN +2.3%, CAM +0.2%, FTI -0.3%, NOV -0.6%.
- Sterne Agee analyst Stephen Gengaro calls a potential HAL-BHI combo a “HAL of a Frac-ing Deal," seeing several positives for HAL including strengthening its relatively weak position in artificial lift and production chemicals which are critical to enhancing HAL’s mature field strategy, enabling it to leverage its unparalleled U.S. pressure pumping logistics chain to enhance the efficiency of BHI’s operations, and providing the opportunity for significant cost savings which likely would total $600M-$750M or more.
- While antitrust concerns could force some divestitures, Gengaro does not believe it would prevent a deal from happening.
- Other potentially attractive M&A targets among oil services companies could include Dril-Quip (DRQ +0.7%), Frank’s International (FI +2.6%) and Oceaneering (OII -0.2%), Simmons & Co. says.
Nov. 13, 2014, 6:56 PM
- Baker Hughes (NYSE:BHI) confirms it has engaged in preliminary talks with Halliburton (NYSE:HAL) about a potential business combination and will offer no further comment.
- A merger could provide HAL with a "significant advantage in gaining global share, expanding margins and competing" against Schlumberger (NYSE:SLB), UBS analysts say, but digesting such a large acquisition could take two years or more and be a distraction to HAL.
- A combination of the second and third largest listed oil services groups by market cap likely would draw scrutiny from U.S. regulators, but the biggest obstacle to a deal might come from its E&P customers worried about the potential for higher prices at a time of falling crude oil prices.
- Also, doing a deal as oil continues to slide should make it a tough sell to BHI shareholders: Why sell amid such turmoil?
- BHI +16.3%, HAL +1.3% AH.
Nov. 13, 2014, 5:39 PM
- Anadarko Petroleum (NYSE:APC) has suspended some operations in Colorado after a Halliburton (NYSE:HAL) worker was killed and two others were seriously injured at an APC well site in the Wattenberg oil and gas field.
- The workers were trying to heat a high-pressure water line that had frozen in record-breaking cold conditions, when it ruptured.
Nov. 13, 2014, 3:50 PM
- Baker Hughes (BHI +17.9%) resumes trading after a volatility trading halt following a WSJ report that Halliburton (HAL +4.8%) is in talks to buy the oilfield services company.
- Talks are moving quickly, and an agreement could be reached soon, according to the report.
- The price being discussed is not known, but a deal would be one of the largest in the energy sector in recent years.
Nov. 13, 2014, 3:20 PM
- U.S. crude oil prices break below $75/bbl for the first time in more than three years, brushing aside an IEA report showing a surprise 1.735M barrel inventory drawdown as well as remarks by the Saudi oil minister dismissing talk of an oil price war among producers.
- West Texas crude settled today at $74.21/bbl, -3.9% and breaking below an important support level; during the past three years, futures have tested but not broken through that level three times.
- Brent crude recently was trading below $78, -3%.
- Global oil majors are all lower: COP -1.9%, BP -1.4%, CVX -1.4%, XOM -1.1%, TOT -0.9%, RDS.A -0.7%.
- Oil services companies and offshore drillers suffer even sharper drops: SDRL -4.4%, SLB -4.2%, HAL -3.9%, BHI -3.9%, RIG -3.8%, DO -3.5%, NBL -2.9%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, XOP, ERY, DIG, BNO, UGA, DTO, DBO, DUG, XES, IYE, IEO, CRUD, IXC, IEZ, PXE, USL, UWTI, IPW, FENY, PXJ, UHN, DWTI, DNO, RYE, FXN, SZO, GNAT, OLO, DDG, FILL, OLEM, TWTI
Nov. 10, 2014, 11:45 AM
- A new research report from Jefferies discusses four oil services stocks which it sees having huge potential upside, even as oil prices have taken a beating.
- Jefferies believes Schlumberger (NYSE:SLB) could be poised for years of solid growth despite the recent trend in oil pricing, and thinks the company will continue to drive margins on execution, technologies and efficiencies.
- Halliburton (NYSE:HAL) leads industry peers with North American margins of 18.2% and a plan to increase its allocation for its operations in North America.
- Baker Hughes (NYSE:BHI), which reported solid numbers for the quarter although some analysts were disappointed by margin guidance, while C&J Energy (NYSE:CJES) reported a very impressive earnings beat last week.
- The firm expects stock price increases of more than 40% for each of its selections.
Nov. 4, 2014, 2:10 PM
- Halliburton (HAL -4.8%) CEO Dave Lesar is the latest oil executive to say he is not particularly worried about falling oil prices, expecting them to climb next year.
- Lesar says the downward pressure on prices is mostly due to an oversupply, and he believes that will quickly prove self-correcting, especially when it comes to U.S. shale production.
- Unlike with conventional oil, shale wells peter out quickly and companies depend on constant new drilling to maintain production levels; lower prices will discourage new drilling, quickly removing the glut in crude supplies, Lesar says.
Oct. 28, 2014, 11:32 AM
- U.S. energy company CEOs remain confident they can still make money in a world of $80 crude oil prices, according to a Bloomberg report.
- The industry is used to price swings, Halliburton (NYSE:HAL) CEO David Lesar tells Bloomberg; if crude floats at $80-$100, "that’s a range that the service industry and our customers can easily live within."
- “We think there’s a lot of economic oil at $75... meaning we earn 15%, 16%, 17% returns,” Occidental (NYSE:OXY) CEO Stephen Chazen said during OXY's earnings conference call last week.
- Harold Hamm of Continental Resources (NYSE:CLR) even says prices could fall to $50/bbl before he would start worrying, and tells CNBC that his company has not yet altered any drilling schedules in response to the drop in crude prices.
- Some of the best operators can profit at low prices because they’re learning how to drill wells more efficiently and getting more production at lower costs; SM Energy (NYSE:SM) is getting 40% more production for a 10% increase in the cost of each well, and Carrizo Oil & Gas (NASDAQ:CRZO) has nearly doubled its cash flow/bbl from two years ago.
Oct. 27, 2014, 8:55 AM
- Goldman Sachs lowers its ratings on the oil services sector (NYSEARCA:OIH) to Cautious from Attractive and downgrades several specific stocks as it cuts its 2015 oil price forecast.
- U.S. land activity will suffer the biggest impact of the lower price deck, Goldman says, with customer capital spending expected to decline 6% next year vs. its prior outlook for a 9% increase; as a result, the firm now forecasts the horizontal U.S. rig count to fall 7%, or ~200 rigs, over the next 12 months.
- Goldman downgrades Parsley Energy (PE -3.8% premarket), Diamond Offshore (DO -1.5%), Laredo Petroleum (LPI -9%) and Basic Energy Services (BAS -6.2%) to Sell with sharply lower price targets; Patterson-UTI (NASDAQ:PTEN), Pioneer Energy (NYSE:PES) and Emerge Energy (NYSE:EMES) are cut to Neutral.
- The firm adds Oceaneering (OII -0.3%) to its Conviction Buy list; it also removes Halliburton (HAL -1.5%) from the list but maintains its Buy rating on the stock.
Oct. 24, 2014, 8:28 AM
- Upgrading the stock to a Buy from Neutral, Citi says HAL's opportunity for share gains in North America is not reflected in the stock price.
- The stock's bounced nearly 10% over the past few sessions, but remains lower by about 25% over the last three months. Alongside an earnings beat earlier this week, Halliburton chief Dave Lesar said the company has seen no drilling slowdown despite what he expects will be a short-lived fall in oil prices.
- Shares +1% premarket
Oct. 20, 2014, 3:23 PM
- Halliburton (HAL +0.9%) says it sees no signs of a slowdown in drilling activity despite the recent plunge in oil prices, echoing comments made last week (I, II) by rivals Schlumberger (SLB +0.5%) and Baker Hughes (BHI -0.9%).
- "Industry fundamentals suggest that these lower prices are not sustainable," HAL CEO Dave Lesar said on today's earnings conference call, noting that North American customers and national oil companies have not indicated a slowdown in activity levels.
- HAL says North America activity levels continue to surge higher month over month due to an unprecedented level of service intensity, noting it called the turnaround two quarters ago; this quarter, activity clearly is accelerating since the turnaround, it says, and does not see momentum slowing any time soon.
Oct. 20, 2014, 8:54 AM
- Halliburton (NYSE:HAL) +3.8% premarket after Q3 earnings and revenues beat Wall Street estimates and its board approves a 20% increase to its quarterly dividend.
- Q3 revenues rose 16.5% Y/Y to $8.7B, led by a 10% gain in its completion and production segment to $5.4B, primarily driven by higher activity in North America and strong growth across most product lines in Latin America and other regions.
- Drilling and evaluation revenue also rose 10%, to $3.28B, boosted by growth across most product lines in Latin America and more consulting and fluid services in the Eastern Hemisphere.
- North America posted the sharpest increase in revenue among all regions, jumping 22% to $4.7B on higher completion volumes, followed by the Middle East/Asia region with an 18% increase to $1.47B and the Europe/Africa/CIS region with a 9% rise to $1.46B.
- HAL also says it lowered its loss contingency for the Macondo well blowout by $100M and recorded $95M for an expected insurance recovery related to the settlement.
Oct. 20, 2014, 7:01 AM
Oct. 19, 2014, 5:30 PM
Oct. 17, 2014, 10:17 AM
- Oil services (OIH +4%) stocks rip higher at the open following a strong earnings report from Schlumberger (SLB +7.4%) and as oil prices stabilize.
- Tumbling crude prices haven’t shaken the faith of at least two of the top providers of drilling and production services: SLB CEO Paal Kibsgaard describes the drop as “fear of short-term oversupply” and says the company is not changing a long-term view that its earnings will almost double from last year’s level by 2017, while Baker Hughes (BHI +4.7%) CEO Martin Craighead says his company's customers don't believe crude prices will stay low.
- HAL +5.5%, SPN +5.2%, WFT +5.1%, CAM +2.1%, NOV +2%, FTI +1.8%, DRQ +1.4%.
Oct. 16, 2014, 7:55 AM
- Baker Hughes (NYSE:BHI) -10.8% premarket after Q3 earnings rose 10% Y/Y but missed estimates, as political tensions in Libya and Iraq plus a sharp fall in drilling activity in the Gulf of Mexico weighed on margins.
- Q3 pre-tax profit margins in its operations in Europe, Africa and the Russia Caspian region fell to 8% from 17% in the year-ago quarter.
- Revenue of the North American segment, BHI's largest geographic business by revenue, rose 11% to $3.2B, and climbed 6% in the Middle East and Asia Pacific region, 8% in the Europe, Africa and Russia Caspian segment, and 3% in Latin America.
- Oil services stocks (NYSEARCA:OIH) to watch: HAL, SLB. SPN, NOV, CAM, FTI, DRQ.
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