Global oil drilling increases, Haliburton’s profit doubles

Filed under: Uncategorized | Tags:,

Halliburton Co. said Monday its fourth-quarter income more than doubled as the oil services company benefited from an increase in drilling activity around the globe.

The Houston company reported net income of $605 million, or 66 cents per share, for the three-month period that ended Dec. 31. That compares with $243 million, or 27 cents per share, a year ago. Revenue increased 40 percent to $5.2 billion.

Excluding a charge, earnings were 68 cents per share. Analysts surveyed by FactSet had expected earnings of 63 cents per share on revenue of $4.9 billion.

Halliburton provides a variety of equipment and services for the petroleum industry. Those services were in high demand in 2010 as crude prices increased. Oil prices crossed the $90-per-barrel mark and hit a two-year high in December.

CEO Dave Lesar said increased drilling activity in North American shale deposits more than offset a loss in Halliburton’s Gulf of Mexico operations. The U.S. shut down Gulf exploration for several months following the BP oil spill and drilling activity remains limited.

The number of rigs working in the U.S. increased 4 percent from the third to fourth quarters. Halliburton was able to raise rates for its services, driving up operating income 10 percent and producing its highest-ever revenue in the U.S.

Global drilling activity is expected to rise another 11 percent this year, according to a survey by Barclays Capital. Demand for oil services will allow companies like Halliburton to raise rates between 5 and 10 percent, JP Morgan said.

During the fourth quarter, Halliburton said income from completion and production operations increased three fold to $688 million. Income from drilling and evaluation operations increased 13 percent to $354 million.

The results included a charge of 2 cents per share related to an indemnity payment on behalf of KBR for a settlement Halliburton reached with Nigeria. KBR, which was spun off from Halliburton in 2007, pleaded guilty in federal court two years ago to authorizing and paying bribes from 1995 to 2004 for contracts in Nigeria.

For the full year, Halliburton earned $1.84 billion, or $2.01 per share, compared with $1.15 billion, or, $1.27 per share, in 2009. Revenue for 2010 rose 22 percent to $18 billion.