Halliburton Co. said it plans to take a $35 million pretaxcharge this quarter to lay off an additional 2,750 employees fromits Energy Services Group. Job cuts are a response to low oilprices and oil company customers’ plans to sharply reduce spendingin 1999.

A number of customers, for whom the company is working onprojects in the North Sea, North Africa and Latin America, havebeen hurt by low oil prices. These customers have restricted theircapital spending and have recently placed extraordinary pressure onthe project claims resolution process and are now rejecting some ofthe Halliburton’s claims for additional costs incurred.

This is in stark contrast to more favorable negotiatingstrategies employed by such customers only months ago which mighthave resulted in more equitable resolution to these types ofclaims. The same economic pressures have more dramatically impactedsome of the company’s joint venture partners and majorsubcontractors. Their inability to maintain their share of thecontractual cost, schedule and financial obligations of suchprojects has placed additional financial burdens on Halliburton.These pressures have become more acute in the 1998 fourth quarterand particularly affect contracts in the Brown & Root EnergyServices business unit. Consequently, the company determined itwill provide $60 million pretax for project losses in the 1998fourth quarter.

Although the quarter is not completed yet, after taking intoaccount the personnel reduction special charges and recognizingcosts relating to the project losses, Halliburton now expects toearn about 14 to 16 cents per diluted share in the 1998 fourthquarter.

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