22 July 2015, News Wires – Oilfield services provider Baker Hughes Inc’s quarterly revenue fell less than expected as more and more North American shale oil producers returned to complete wells they had abandoned as crude oil prices slumped.
These producers had built up a heavy backlog of drilled but uncompleted wells, but with oil steadying at about $50 per barrel, some producers are now coming back to these wells.
Rising stage intensity – the practice of fracking more stages per well to increase production – also helped Baker Hughes stem revenue losses, said Societe Generale analyst Edward Muztafago.
Baker Hughes’s second-quarter revenue from North America, which accounts for over a third of total revenue, decline 25 percent from the first quarter.
UBS analyst Angeline Sedita was expecting a 40 percent decline. Halliburton Inc, which is acquiring Baker Hughes, said on Monday that while its second-quarter revenue from North America fell 25 percent from the first, stage count declined less than 10 percent.
Baker Hughes shares rose 3 percent to $61.32 in morning trading, while Halliburton shares rose 4 percent to $42.46. Industry leader Schlumberger Ltd and No.2 Halliburton have also reported better-than-expected revenue and said they expect an uptick in demand in North America this year.
Baker Hughes, however, said on Tuesday that it expects unfavorable market conditions to persist for the rest of the year.
– Reuters
