Halliburton 4Q Earnings Call Nuggets: Increasing Demand and Pricing

Halliburton Inc. (NYSE:HAL) reported its fourth quarter earnings on Monday and discussed the following topics in its analyst conference call.

Product lines and frac spreads

Jim Crandell – Dahlman Rose asked: David, it seems like one of the reasons for your success in North America is that you’ve been able to get your customers to take at least four other product lines for new frac spreads when you contact with them for frac equipment. Your competition says this will change when things come back into balance. Do you see it changing or do you think this can be somewhat permanent feature of the business?

David J. Lesar – Chairman, President and CEO responded: No, I think it’s more of a permanent feature of where we see the market.

We were able to use the leverage of the frac fleet. Don’t get us wrong that we have lost it, it’s still there. To bring some of our other product lines along, what we’ve been able to do is prove to our customers that by integrating those products together with their frac either through an integrated completion or integrated drilling, that there is actually a benefit to doing that.

Therefore our customer gets a well down faster, cheaper, more efficiently or more quickly. I don’t see the world going back to that because I think we’ve been at this long enough to prove the benefit of that strategy out …

Increased demand and pricingĀ 

Crandell asked: My follow-up is an international question. In your opinion, will increased demand alone start to be the catalyst that gets pricing to improve on large tenders or will it take a change in mindset by at least one of the major companies in the business?

Mark A. McCollum – EVP and CFO responded: I guess our planning assumption at this point is going to take an increase in demand overall. I think that clearly there are situations where service quality and technology can come to bear that might help us in pricing, but our planning assumption is that the competition–our competition–is continued priced very, very aggressively to pop up their share positions.

We’re continuing to battle hard on that front. That means it’s our responsibility to execute well and to continue to rollout technologies to make sure that we can improve our margins and improve our return over time, at least for the foreseeable future.

Wait times for frac crews

Angie Sedita – UBS asked: In the liquid basins on pressure pumping, can you give an idea today of what you’re in seeing in wait time for frac crews today versus three months ago versus six months ago?

David J. Lesar – Chairman, President and CEO responded: We’re dealing specifically with our liquids-rich basins hedges to sort of — dry gas is difference. I think that based on the reports of my field guys, we’re still very heavily booked through the first quarter, which is pretty much as sized as we ever look out, so that to us is a good indication.