Halliburton CEO: Unsure When Activity Decline Will Bottom Out
April 20 2009 - 10:19AM
Dow Jones News
Oil and gas drilling activity is still falling, and it's unclear
when it will rebound, Halliburton Co. (HAL) Chief Executive David
Lesar said Monday.
"There can be no certainty about when the decline in activity
will bottom out," Lesar said in an earnings conference call with
investors.
The rapid decline in activity, a result of low oil and gas
prices and tightening credit markets, is "worse than previous
cycles in terms of the speed of the decline," he said.
Most of the decline has occurred in North America, as
international operations tend to react more slowly to economic
cycles. Latin America will continue to be a "bright spot," with
operations in Brazil and Mexico maintaining high levels of
activity, Lesar said.
The largest decline came in the Permian Basin, Rockies and the
mid-continental U.S.; but the fall-off was "less severe" in complex
shale plays and the Gulf of Mexico, which includes deepwater
operations, Lesar said. Those areas have helped in "moderating the
effect" of the current environment, he said.
Oil and gas producers are "focusing their efforts in reducing
service cost inflation" by renegotiating contracts, Lesar said.
The company aims to maintain its $1.8 billion capital budget
program, the same amount it spent last year. "We continue to
believe in the long-term prospects of this business," he said.
-By Angel Gonzalez, Dow Jones Newswires,
713-547-9214;angel.gonzalez@dowjones.com