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Oilfield Services Giants Optimistic About Drilling Recovery

Two of the world’s largest oilfield services providers, Baker Hughes and Halliburton, reported on Wednesday profits beating expectations and expressed optimism that oil demand and oil drilling activity will grow through the rest of the year and into 2022.

Baker Hughes (NYSE: BKR) booked adjusted earnings per share of $0.12 for the first quarter of 2021, up from $0.11 for Q1 2020 and from a loss of $0.07 for the fourth quarter of 2020, and beating the analyst estimate of $0.11 per share earnings.

Free cash flow at Baker Hughes nearly doubled to $498 million for Q1 from $250 million for the previous quarter as international and North American activity both rose at the start of this year with the increase in oil prices.

“As we look ahead to the rest of 2021, we remain cautiously optimistic that the global economy and oil demand will recover from the impact of the global pandemic. We expect spending and activity levels to gain momentum through the year as the macro environment improves, likely setting up the industry for stronger growth in 2022,” Baker Hughes chairman and CEO Lorenzo Simonelli said.  

Halliburton Company (NYSE: HAL) also beat analyst estimates, reporting net income of $170 million, or $0.19 per diluted share, for the first quarter of 2021, ahead of the $0.17 per share consensus estimate.

Halliburton’s North America revenue rose by 13 percent sequentially to $1.4 billion for Q1, driven by higher drilling-related services, stimulation, and artificial lift activity onshore, as well as higher wireline activity and software sales for clients drilling onshore and in the Gulf of Mexico.

“The first quarter marked an activity inflection for the international markets, while North America continued to stage a healthy recovery. I expect international activity growth to accelerate, and the early positive momentum in North America gives me confidence in the activity cadence for the rest of the year,” Halliburton’s chairman, president and CEO Jeff Miller said.

By Tsvetana Paraskova for Oilprice.com

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