Baker Hughes Laid Off 3K in 2Q16, No Drilling Recovery in 2016
Once the Obama Dept. of Justice burst the dream of merging with Halliburton (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”), Baker Hughes set out to right the ship and deal with the most serious down market in a generation. BH issued their second quarter 2016 update yesterday and held a conference call with analysts. Among the measure BH took in 2Q16 to righ the ship was laying off another 3,000 workers (always a sad thing). BH used $1.5 billion of a $3.5 billion break-up fee they collected from Halliburton to buy back outstanding debt. Perhaps the most ominous news coming from yesterday’s update is that BH believes drilling in North America is unlikely to rebound for the rest of the year. We had hoped the corner has already been turned (see Crack of Light – OH Sand Producer Says Market Turning Around). According to BH, such is not the case…
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The news is now months old that Halliburton and Baker Hughes ended their attempt to merge. The reason they called it off was because of opposition from the Obama Department of Justice (see 
Ever hear the phrase, “Better to try and fail than never to try at all.” That’s actually the name of a poem from William O’Brien (dead poet, read his famous poem 
The rig count–both internationally and domestically here in the U.S.–continues its historic slide. Last Friday Baker Hughes announced the average rig count numbers for April. Rigs operating outside the U.S. slide another 39, from 985 in March to 946 in April. In the U.S., the count slide 41 from 478 in March to 437 in April. In the Marcellus/Utica, the count was down another 2–both rigs lost came in Pennsylvania, which now has the lowest count in decades: just 16 rigs operating in the state. Ohio and West Virginia held constant month over month with 11 rigs operating in the Buckeye State and 12 rigs operating in the Mountain State. Here’s the sad news of the continuing decline in rig counts…
It’s a sad day for Halliburton and Baker Hughes. The two companies intended to get married, with Halliburton buying out BH and merging it in a deal worth $35 billion (see 
Yesterday Baker Hughes released its first quarter 2016 update. According to BH CEO Martin Craighead, “the industry faced another precipitous decline in activity” in 1Q16, which means it wasn’t good for BH. The company reported that revenues were down 42% year over year during the first quarter. Ouch. The company list $981 million for the quarter, nearly $1 billion! Double ouch. The company, which maintains THE rig count everyone watches, said rig counts will stabilize in the second half of the year, but the company expects 2Q16 rig count numbers to slide another 30%, to all-time historic lows. Triple ouch. What about the Halliburton buyout of BH? The deal expires in two days on April 30. BH says beyond that date the merger agreement does not automatically terminate–they may decide to continue riding the merger horse. Time will tell. Here’s the BH update from yesterday…
Last Thursday MDN brought you the news that the Dept. of Justice has decided to try to block the merger/buyout of oilfield services company Baker Hughes by bigger oilfield services company Halliburton (see