Unfettered drilling for oil will more than offset any slowdown in natural gas drilling in North America, helping improve Halliburton Co.'s (HAL) business despite a bleak outlook for natural gas prices, Chief Executive Dave Lesar said Monday.
Unfettered drilling for oil will more than offset any slowdown in
natural gas drilling in North America, helping improve Halliburton Co.'s (HAL)
business despite a bleak outlook for natural gas prices, Chief Executive Dave
Lesar said Monday.
"We believe there will be an overall increase in rig count in 2012,"
Lesar said in a conference call with analysts. "A more pessimistic
scenario is priced into our stock, and we do not see that happening." Shares
for Halliburton and other oilfield service providers have suffered in recent
weeks due to a dramatic fall in natural gas prices due to oversupply combined
with an unseasonably mild winter.
Lesar said that the ongoing shift towards oil drilling requires producers to
purchase more expensive materials and services from oilfield services
providers, providing growth opportunities for Halliburton. "The idea that
North American margins will collapse is a ridiculous one."
Lesar said he expects revenues and operating income to increase in
North
America
in 2012. He added that the drop in natural gas drilling activity would
eventually remove the overhang in natural gas supply Halliburton is going to
spend between $3.5 billion and $4 billion in capital expenditures in 2012,
Lesar said.
Lesar said that oil production in
Libya
has
resumed, but it is still awaiting "well-defined plans" from its
customers there.
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