• Halliburton posts 1Q loss on litigation charges
    By
     | April 23,2013
     
    AP Photo

    Halliburton employees receive training in Fargo, N.D. The company reported a first-quarter loss.

    DALLAS — Halliburton Co. said Monday that it lost money in the first quarter after adding $637 million to the reserve it has to cover litigation over the 2010 Gulf of Mexico oil spill. It’s also in talks to settle most claims related to the spill.

    The Houston company lost $18 million in the first quarter, or 2 cents per share. Excluding the money set aside, Halliburton would have posted a profit of 67 cents, beating Wall Street expectations. Shares rose $2.06, or 5.6 percent, to $39.28 in afternoon trading.

    Quarterly revenue rose slightly to $6.97 billion from $6.87 billion.

    Halliburton’s revenue in North America, its biggest region, slipped compared to the last three months of 2012, but profit margins increased because of the lower cost of guar, a plant used in hydraulic fracturing fluids, and a pickup in customer activity. The company said margins should continue to grow during 2013 and pricing might also rise.

    Meanwhile, Halliburton executives said that they are in advanced stages of negotiations to settle most claims arising from the Gulf oil spill.

    The company has offered cash payments “over an extended period of time” and stock to settle many of the claims.

    Halliburton was BP’s cement contractor on the drilling rig that exploded in April 2010.

    Chief financial officer Mark McCollum said during a conference call with analysts that settlement talks have been going on for about a month and that “an early and reasonably valued resolution” would be best for Halliburton shareholders.

    “However, a settlement of this magnitude is complex and requires the other settling parties to be reasonable on their part too,” McCollum said. He said that the company still believes that well operator BP PLC is required to reimburse Halliburton for costs, and that Halliburton can defend itself against liability in court if the settlement talks fail.

    McCollum said the potential settlement wouldn’t resolve all claims, and that there could be additional costs that the company can’t yet estimate.

    Halliburton was hired to provide the cement to seal the undersea well that BP was drilling off the coast of Louisiana in April 2010. The Macondo well exploded, killing 11 workers and triggering a massive oil spill that blackened shoreline and killed wildlife.

    The two companies have sparred over responsibility. BP has acknowledged mistakes that led to the blowout but denied it was grossly negligent and argued that Halliburton and rig owner Transocean Ltd. must share blame for the disaster.

    Testimony in the first phase of a civil trial over the oil spill ended last week in federal court in New Orleans. The testimony was designed to determine the cause of the blowout and assign fault among BP and its contractors. A second phase, scheduled to begin in September, will focus on the amount of oil spilled and BP’s efforts to contain the spill.

    The judge, who is hearing the case without a jury, could decide how much more BP and its contractors must pay for the disaster.

    BP has pleaded guilty to criminal charges including manslaughter and agreed to pay $4 billion in penalties.

    Halliburton provides a variety of services to oil and gas companies and it is benefiting from a boom in U.S. oil production, which is at the highest level in more than two decades.

    However, Halliburton’s natural gas business has weakened as drillers slowed production due to falling gas prices. Halliburton is the biggest provider of oil-field services in North America, including hydraulic fracturing, a technology that has helped unlock large supplies of oil and natural gas from shale rock formations.

    In the first quarter, Halliburton’s international revenue rose 21 percent on strength in Australia, China, and Saudi Arabia.

    Rival Schlumberger Ltd., which has a larger international business than Halliburton, said Friday that its quarterly revenue rose in the Middle East, Europe and Africa but declined in North America. Its forecast for North America is still uncertain because of low prices.

    Halliburton’s results topped the expectations of analysts surveyed by FactSet, who forecast adjusted earnings of 57 cents per share on revenue of $6.88 billion.

    MORE IN World/National Business
    NEW YORK — Procter & Gamble is canceling an on-field breast cancer awareness promotion it had... Full Story
    Procter & Gamble cancels on-field NFL promotion
    NEW YORK — Alibaba debuted as a publicly traded company Friday and swiftly climbed more than 40... Full Story
    Alibaba stock soars in jubilant trading debut
    WASHINGTON — Strong stock market gains and higher home prices boosted Americans’ net worth in the... Full Story
    Stock gains lift US household wealth to a record
    More Articles
  •  
     
    • MEDIA GALLERY 
    • VIDEOS
    • PHOTOS