HAL Halliburton Co

By Christopher M. Matthews and Austen Hufford 

Halliburton Co. is taking a tough new line with its customers in the oil patch: pay us more or we will take our equipment elsewhere.

Chief Executive Dave Lesar on Monday said the oil-field-services company has begun negotiating prices with customers after offering them steep discounts during a two-year oil downturn.

"If a customer agreed to better pricing, we continued to work for them," Mr. Lesar said during the company's fourth-quarter earnings call. "If not, we took that equipment and used it to fill the incremental demand with a customer that shared our view on how to work together and make better wells."

Those conversations "were sometimes hard, but they needed to happen," he added.

The tough talk came as Halliburton posted a fourth-quarter loss of $149 million, or 17 cents a share, compared with a year-earlier loss of $28 million, or 3 cents a share. While revenue also fell, the company said the market in North America was on the upswing.

Echoing remarks Friday by Paal Kibsgaard , the chief executive of rival Schlumberger Ltd., Mr. Lesar said the energy market was in a "tale of two cycles". North America was largely positive, he said, but in the rest of the world, he doesn't expect to see improvements until the second half of 2017.

U.S. oil producers, particularly shale drillers, have increased budgets for 2017 by an average of 60%, according to preliminary capital-spending plans released by more than a dozen U.S. shale drillers

"The North America market appears to have rounded the corner, but the international downward cycle is still playing out," he said.

In the North America region, the company's largest, revenue increased from the third quarter, and the company swung to an operating profit as better pricing and utilization combined with cost management boosted results.

Mr. Lesar said customers should count on Halliburton's service prices increasing by more than the 10% rise some analysts have predicted over the next year. "I would be using something higher... I don't see how there is going to be the ability for the customers to hold prices down," he said.

Still, total revenue fell 21% to $4.02 billion. During the latest quarter, Halliburton took a $53 million loss on the devaluation of the Egyptian pound and a separate $54 million charge to settle a 14-year-old securities fraud class action lawsuit that had gone to the U.S. Supreme Court.

On an adjusted basis, which excludes the lawsuit and currency fluctuations, the company posted a 4 cent profit per share.

Analysts polled by Thomson Reuters had projected a loss of 2 cents a share on $4.09 billion in revenue.

Shares in the company, which have risen 17% in the past three months, fell 2.7% to $54.91 in recent trading.

Write to Christopher M. Matthews at christopher.matthews@wsj.com and Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

January 24, 2017 02:47 ET (07:47 GMT)

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