Here's a story from Investor's Business Daily detailing how positive the things are looking for oilfield service sales. Oilfield services is Double Crown's primary business, of course. ---------------------------------------------------------
Halliburton Sees Oilfield Sales Staying Robust By JAMES DETAR, INVESTOR'S BUSINESS DAILY Posted 10/20/2014 11:57 AM ET
Halliburton (NYSE:HAL) expects the unprecedented levels of oilfield service sales it saw last quarter to continue despite an industry slump, according to CEO Dave Lesar.
The oilfield services and equipment provider early Monday reported better-than-expected third-quarter earnings and revenue amid strong activity globally including North America, and raised its dividend 20% to 18 cents.
Lesar said that in North America in Q3, revenue grew 9% and operating income was up 15% compared to the prior quarter, beating a 3% increase in U.S. land-rig count.
Perhaps more importantly, "Service intensity levels surged to unprecedented levels," Lesar said, "as completion volumes per well were up more than 50% compared to the third quarter of last year, and we expect this level of activity to continue."
He was also bullish on other regions.
"In the Eastern Hemisphere, activity continues to steadily expand," and in Latin America, "revenue increased 16% sequentially, while operating income more than doubled compared to the second quarter, primarily as a result of increased project management, consulting and software revenue in Mexico," Lesar said.
Halliburton's Q3 earnings per share jumped 43% to $1.19 and revenue climbed 16.4% to $8.7 billion. Wall Street expected $1.10 EPS on $8.53 billion revenue.
The unexpected beat came even though oil prices continued to fall, which has dampened demand for oilfield services and gear. The Oil & Gas Field Services Group is ranked a near-worst 183 on IBD's list of 197 industries.
Lower costs also helped Halliburton. Sterne Agee analyst Stephen Gengaro said in a report Monday: "A lower-than-expected tax rate and lower 'other' expenses bumped operating EPS to $1.19 versus our $1.12 forecast and the $1.10 consensus."
Sterne Agee maintained a buy rating and has Halliburton in its favorites list.
During Q3, Halliburton reduced its existing loss contingency for the Macondo well explosion and fire that led to the 2010 Gulf of Mexico spill by $100 million and recorded $95 million for an expected insurance recovery related to the settlement, for a total $195 million positive adjustment to operating income.
Halliburton shares were down about 0.6% to 52.26 in late morning trading in the stock market today, Monday.
Halliburton stock lost 33% of its value from a 2014 peak close at 74.02 on July 23 to 49.63 on Oct. 14 when it bottomed before turning up. If it closes higher Monday it would be the fourth day in a row of higher closes.
Elsewhere in the group, Sterne Agee's Gengaro said in a client note Monday that Schlumberger's (NYSE:SLB) strong quarterly results last Thursday "highlight the company's sharp focus on execution and the benefits of its global diversification."
Gengaro raised his price target on Schlumberger to 123 from 121 with a buy rating. He kept his EPS estimate for 2014 unchanged but raised his estimates for 2015 and 2016 to $6.60 and $7.60, respectively, from $6.55 and $7.50 earlier. Schlumberger rose fractionally.
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