Services 'Upcycle' May Not Add Much Supply

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The Big Three oil services companies — Halliburton, Schlumberger and Baker Hughes — all reported sequential jumps in revenue in the second quarter and struck a decidedly bullish tone looking ahead, predicting their boomtime will last for years. Halliburton executives used the word "upcycle" no fewer than 15 times on the Houston-based company’s earnings call. Their counterparts at rival Schlumberger used the same phrase on their own investor call, while Baker Hughes — despite posting a $839 million net loss due to Russia-related write-downs in April-June — was still optimistic enough to talk of a “multiyear upstream spending cycle” in its earnings release. Explaining that the world was facing a “structural oil undersupply problem” that no economic slowdown would solve, Halliburton CEO Jeff Miller even suggested the current upturn would be more lucrative for his firm than any that had come before, since operators were currently drilling more wells by focusing on "known resources" rather than long-term exploration programs.

Oil-Field Services, Exploration, Upstream Projects, Conventional Oil and Gas, Offshore Oil and Gas
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