Leading oilfield service provider Halliburton ( “>HAL) received a contract from Norwegian oil group Statoil ASA ( “>STO ) to extend integrated drilling and well services in the offshore region of Norway. The deal comes with a duration option of up to eight years with extendable scope and activity.
In phase one, Halliburton will provide directional drilling and logging-while-drilling services, surface data logging, drill bits, hole enlargement and coring services, cementing and pumping services as well as drilling and completion fluids. Halliburton would also offer completion services, including multilateral junctions, SmartWell® completion systems and VersaFlex® expandable liner hangers, along with project management assistance.
This contract forms a part of Statoil’s Fast Track Field Development strategy intended to make projects cost effective by reducing the discovery-to-production time. Both companies would operate as an integrated team to derive higher efficiency levels from rig employment.
Although this happens to be the first integrated well services contract awarded by Statoil to Halliburton in Norway, the business ties between the companies dates back a long way. In recent times, Halliburton won several contracts, worth $200 million, from the former to provide services to two high-pressure/high-temperature Gudrun and Brynhild fields in Norway.
Houston, Texas-based Halliburton tenders a variety of equipment, maintenance, and engineering and construction services to the energy, industrial, and government sectors. The company operates under two main segments: Completion and Production, and Drilling and Evaluation.
We believe that Halliburton enjoys a strong competitive edge within the global oilfield services market, owing to its solid presence in the highest profile plays (like Haynesville, Eagle Ford shale and Bakken), healthy financial profile and technological expertise.
However, we maintain our long-term Neutral recommendation on the company, reflecting commodity price fluctuations, a bearish oil and gas price outlook and operational hindrances. Halliburton currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
HALLIBURTON CO (HAL): Free Stock Analysis Report
STATOIL ASA-ADR (STO): Free Stock Analysis Report
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