The U.S. land market helped Weatherford International Ltd.'s earnings soar in 2Q2010, lifted by increased oilfield services work in unconventional natural gas and oil plays, the company reported Tuesday.
North American revenue jump 61% in 2Q2010 versus the year-ago period and 3% sequentially. Stronger performance in the U.S. onshore "more than offset Canada's traditional seasonal decline and one month of severely reduced activity in the Gulf of Mexico," said CEO Bernard J. Duroc-Danner. U.S. onshore activity also helped Halliburton to outperform in the quarter (see Daily GPI, July 20).
In a conference call Duroc-Danner singled out the United States and Russia as the firm's highest performers for the latest quarter.
"The outlook for North America appears constructive," he said. Because of the U.S. offshore drilling moratorium, "client feedback leads us to believe that operators are planning to accelerate activity in international markets."
Weatherford reported 2Q2010 net income of $80 million (11 cents/share), up 10% from 2Q2010 before costs. Revenues were $2.44 billion, or 22% higher than in the same period a year ago and 4% higher sequentially. Operating income of $308 million improved 14% year/year and 16% sequentially.
In North America revenues rose to $921 million, up 61% from 2Q2009 and 3% higher than in the first three months of this year. It was Weatherford's first sequential increase for the second quarter in North America since 2005. Operating income was $129 million, about break-even from the year-ago period and up $17 million from 1Q2010.
However, U.S. offshore operator Noble Corp., based in Switzerland, saw its quarterly profits plummet 44% on lower contract and drilling services revenue. Results sharply missed Wall Street's forecasts.
Late Monday Noble reported a net profit of $217.9 million (85 cents/share), down from $391.8 million ($1.49) a year ago. Revenue plunged 21% to $709.9 million. Wall Street had pegged profits to average around $1.04/share on revenue of $767 million.
"Noble's second quarter revenues declined due to a combination of factors, not the least of which was the government-ordered drilling limitations in the U.S. Gulf of Mexico," said CEO David W. Williams. "However, we have moved quickly on a variety of fronts to protect our backlog and shareholder value."
Last month Noble agreed to buy privately held FDR Holdings Ltd., also known as Frontier, in a transaction worth an estimated $2.16 billion (see Daily GPI, June 29). In turn, Frontier customer Royal Dutch Shell plc signed new deepwater drilling contracts with Noble.
In a conference call from the Sugar Land, TX, offices, Williams said the "acquisition of Frontier and separate agreements with Shell...will add seven drilling units and an FPSO [floating production storage and offloading unit] to the fleet, double our contract backlog and provide further backlog protection for units operating in the Gulf."
At the end of 2Q2010, about 61% of Noble's available rig operating days were committed for the remainder of 2010 and 35% were committed for 2011. The company's total backlog at the end of June was estimated at $6.7 billion.
"Despite an uncertain environment in the U.S. Gulf, drilling continues around the world both in shallow and deepwater," said Williams. "We intend to maintain our focus on safety as we plan for the rapid integration of Frontier's operations, and we are generally optimistic about opportunities during the remainder of the year."
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