Baker Hughes

Baker Hughes | Energy Services | Halliburton | Industrywide Issues | Litigation | M&A | Regulation

Obama DOJ Sues to Block Halliburton/Baker Hughes Merger
April 7, 2016April 7, 2016

That didn’t take long. Yesterday MDN told you that sources in the Obama Dept. of Justice (DOJ) were leaking to the press that they would soon file a lawsuit against the Halliburton/Baker Hughes merger, in order to block it (see DOJ “Preparing Lawsuit” Against Halliburton/BH – Deal Looks Dead). They did. Yesterday the DOJ filed to block the merger saying the “merger would eliminate significant head-to-head competition in oilfield services industry.” Halliburton and Baker Hughes were quick to respond saying they will “vigorously contest the U.S. Department of Justice’s (DOJ) effort to block [the] pending merger.” Bring on the lawyers! Halliburton/BH say the DOJ has “reached the wrong conclusion in its assessment of the transaction and that its action is counterproductive, especially in the context of the challenges the U.S. and global energy industry are currently experiencing.” Here’s the dueling press releases issued yesterday…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | Litigation | M&A | Regulation

DOJ “Preparing Lawsuit” Against Halliburton/BH – Deal Looks Dead
April 6, 2016April 6, 2016

Yesterday MDN told you that the U.S. Dept. of Justice has sued investment firm ValueAct Capital with an accusation that ValueAct has inappropriately pulled strings with both Halliburton and Baker Hughes in their planned merger (see DOJ Sues ValueAct Capital for Meddling in Halliburton/BH Merger). It seems that’s not the only lawsuit the DOJ is going to lodge. According to the Wall Street Journal and other national media sources, the Obama DOJ has let leak they plan to sue Halliburton/Baker Hughes to stop the merger. It appears as if it’s all but dead. The Europeans are not fans of the plan (see Europe Puts Halliburton/BH Merger Under a Microscope). Brazil is also against the deal (see Is the Halliburton Buyout of Baker Hughes in Trouble?). If the DOJ turns against it–there’s no way the deal will happen, in our humble opinion. Here’s the latest in the shotgun wedding that may turn out to be a couple at the alter with no one willing to marry them…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | Litigation | M&A

DOJ Sues ValueAct Capital for Meddling in Halliburton/BH Merger
April 5, 2016July 14, 2016

So what’s happening with Halliburton’s $34.6 billion buyout of Baker Hughes? At last check the deal was at best a 50/50 proposition as to whether or not it would happen. Europe currently has the deal under a microscope (see Europe Puts Halliburton/BH Merger Under a Microscope). The European Commission launched a “second phase” of their investigation into the deal, which is problematic for Halliburton. The European Commission says they see “serious potential competition concerns” with the deal. Not good. But that was in January. Since then we’d not heard anything about the deal’s progress–until now. Yesterday the U.S. Dept. of Justice sued ValueAct Capital, accusing the company of purchasing $2.6 billion worth of stock in Halliburton and BH with “the intent to influence the companies’ business decisions as the merger unfolded.” The company has been charged with violating the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act…
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Baker Hughes | Clinton County | Energy Services | Industrywide Issues | Jobs | Pennsylvania

Baker Hughes Closes $40M Facility in Clinton County, PA
March 15, 2016March 15, 2016

The slowdown in Marcellus drilling continues–and it continues to take a big bite out of local jobs and local economies. The latest victim comes in Clinton County. Baker Hughes has closed its pressure pumping facility in Lamar Township in Clinton County. That $40 million facility was only opened in 2012. The company, which has laid off thousands of people over the past year or so, says those who worked at the Clinton facility “may be eligible for redeployment.” Here’s the sad news…
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Baker Hughes | Energy Services | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Rig Counts for World, US & Marcellus/Utica Continue to Tumble
February 8, 2016February 8, 2016

The number of active drilling rigs worldwide, in North America and in the Marcellus/Utica continued to tumble in January. Baker Hughes released their average rig count data for January last Friday. The news, as we expected (but nevertheless hoped wouldn’t be the case) was not good. Worldwide the number of active oil and gas rigs fell by 78. In North America the rig count went down by 28 rigs, but that’s not the full story. Rig counts in the United States fell by a whopping 60 while the rig count in Canada went up by 32. So here at home the story was bloodier than the top level numbers indicate. What about in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. Region-wide rigs went down another by seven in the Marcellus/Utica. All three states that we track–PA, OH, WV–had rig count losses in January…
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Baker Hughes | Energy Services

Baker Hughes 4Q & Full 2015 Update: Blood Everywhere
January 29, 2016January 29, 2016

Yesterday oilfield services giant Baker Hughes (with a big presence in the Marcellus/Utica) released fourth quarter and full year 2015 results. There’s blood everywhere. Revenue for the year was $15.7 billion, down $8.8 billion compared to $24.6 billion for 2014, a 36% drop. Of course, average rig counts dropped 34% in 2015, so it’s no wonder revenues tanked–the service Baker Hughes provides was more than one-third less in demand. Looking at 4Q15 only, revenue for the quarter was $3.4 billion, down $3.2 billion (or 49%) compared to the fourth quarter of 2014. Ouch, there goes another arterial wound with blood pumping out on the floor. The good news, if there is any, is that the company kept expenses in check. According to Baker Hughes CEO Martin Craighead, “Despite this challenging environment, we generated $1.2 billion of free cash flow during the year, after more than $446 million of restructuring payments. This achievement was the result of our ongoing commitment to maintain capital discipline, as well as solid progress on initiatives to improve working capital.” As for the Halliburton shotgun wedding, Craighead said, “With regard to the merger, I continue to be extremely pleased with the efforts of our team supporting the regulatory review process and developing plans for a successful integration. We are fully dedicated to closing the merger as early as possible.” What’s ahead for 2016? “Looking ahead, we are forecasting rig activity worldwide to continue to decline throughout 2016. At current commodity prices, the global rig count could decline as much as 30% in 2016, as our customers’ challenges of maximizing production, lowering their overall costs, and protecting cash flows are now more acute.” Eeks, another bleeder. Below are select portions of yesterday’s bloody update…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A | Regulation

Europe Puts Halliburton/BH Merger Under a Microscope
January 14, 2016January 14, 2016

The Halliburton buyout/merger with Baker Hughes continues to be in trouble. In November 2014 MDN first reported on the deal, really Halliburton forcing Baker Hughes, to merge, with Haliburton paying an expected $34.6 billion (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell). Both companies have major operations in the Marcellus/Utica, so this merger is of keen interest for those of us in the northeast. Along the way both companies have had to sell off certain assets to please government regulators (see Halliburton/Baker Hughes Hold a Pre-Merger Garage Sale). The “marriage” was supposed to happen by the end of last year, but the U.S. Dept. of Justice isn’t satisfied. They have anti-trust concerns that, so far, Halliburton has not been able to address to DOJ’s satisfaction (see DOJ Tells Halliburton/Baker Hughes “No Deal Yet” – What’s Next?). What was a few whispers has become a chorus that the deal may be in trouble (see Whispers Turning in Chorus, Halliburton/BH Deal in Trouble). Add one more worry to the list: The European Commission has launched a “second phase” of their investigation into the deal, which is problematic for Halliburton. The European Commission says they see “serious potential competition concerns” with the deal. Halliburton/BH says, no big deal…
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Baker Hughes | Energy Services

Baker Hughes Dec Rig Counts Down Everywhere – Global, US, NE
January 11, 2016January 11, 2016

The number of active drilling rigs worldwide was down by 14 rigs according to the December Baker Hughes rig count report. The worldwide rig count in November was down just 2 from October, which shows the trend of idling rigs is once again picking up steam. Bummer. Active rigs in the U.S. fell by a whopping 46 month over month. There were 760 active drilling rigs operating in the U.S. in November, and 714 rigs operating during the month of December. Ouch. What about active rigs in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. This month’s chart is disheartening. The region lost another 5 active rigs in December over those operating in November. Which states lost rigs?…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

DOJ Tells Halliburton/Baker Hughes “No Deal Yet” – What’s Next?
December 17, 2015December 17, 2015

As we told you yesterday, the Halliburton buyout of Baker Hughes continues to be in trouble due to regulators (see Whispers Turning in Chorus, Halliburton/BH Deal in Trouble). Regulators in Australia and Brazil are balking at the deal, and there’s grumbling in the European Untion. But that’s all inconsequential compared to the main obstacle–the U.S. Dept. of Justice (DOJ). Earlier this week Halliburton/BH announced the timing agreement to reach a deal with the DOJ will expire with no deal worked out with the feds. However, they will keep working on a deal with the DOJ–they haven’t given up. What it means is that the new marriage date, which had slipped from December 1st to “early 2016,” will now be April 30, 2016–more than a year after announcing their nuptials. That is, IF they can hammer out a deal that pleases the bureaucrats at the Obama DOJ. Here’s the statement from Halliburton/BH issued earlier this week…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Whispers Turning in Chorus, Halliburton/BH Deal in Trouble
December 16, 2015December 16, 2015

Just one week ago MDN alerted you to what were (then) whispers that the Halliburton buyout of Baker Hughes not be the done deal they portrayed it as (see Is the Halliburton Buyout of Baker Hughes in Trouble?). The whispers that there’s trouble in regulatory paradise around this deal are quickly becoming a chorus. Here are a couple of more articles, from reliable and respected news services, questioning whether or not the merger will happen…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Is the Halliburton Buyout of Baker Hughes in Trouble?
December 9, 2015December 9, 2015

Is the Halliburton/Baker Hughes wedding in trouble? Last time we checked in (in September) both companies were holding garage sales to dump business units to comply with regulators’ concerns over anti-competitiveness (see Halliburton/Baker Hughes Hold a Pre-Merger Garage Sale). Halliburton is attempting to buy Baker Hughes in a deal worth $34.6 billion (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell). The shotgun wedding was supposed to happen by the end of this year, then got pushed into early next year. Halliburton has experienced a series of “headaches” with their proposed buyout of Baker Hughes. Now the headaches are, according to one source, turning into a migraine. Yesterday the country of Brazil lodged complaints and concerns over the proposed merger. Brazil’s opposition alone would not be enough to sink the deal–but Brazil’s opposition combined with opposition coming from other sources just may be enough…
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Baker Hughes | Energy Services | Industrywide Issues | Research

Baker Hughes Nov. Rig Count Decline Slows; Marc/Utica Lose Just 2
December 8, 2015December 8, 2015

The number of active drilling rigs worldwide was down by just 2 rigs according to the November Baker Hughes rig count report. But active rigs in the U.S. fell by 31 month over month in the U.S. There were 791 active drilling rigs operating in the U.S. in October, and 760 rigs operating during the month of November. Ouch. What about active rigs in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. This month’s chart is heartening. Although the count declined by another 2 rigs from October, the it appears like we may be hitting bottom with respect to the number of active rigs. Both rigs lost in November were from one state. Which one?…
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Baker Hughes | Energy Services

Baker Hughes – October Rig Counts Continue to Fall
November 10, 2015November 10, 2015

Oilfield services giant Baker Hughes released the latest rig count numbers last Friday. It’s not pretty. Worldwide the number of active drilling rigs for oil and gas plunged yet again–down to an average 1,111 active drilling rigs worldwide in October (down 29 from September). In the U.S., October’s average rig count was 791, down 57 from the 848 counted in September 2015, and down 1,134 from the 1,925 counted in October 2014. Rigs in Ohio went up by one in October, stayed the same in West Virginia, but tumbled in Pennsylvania, giving us a new low rig count for the northeast…
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Baker Hughes | Energy Services

Baker Hughes 3Q15: $156M Loss, Revenue Down 39% from 3Q14
October 22, 2015October 22, 2015

Halliburton is in the process of buying its smaller competitor Baker Hughes. Although the plan was to have the merger complete by December 1st, it’s almost certain the date will slip into early 2016 (see Update on Halliburton/Baker Hughes Wedding Plans). Both companies are contract drillers with big operations in the Marcellus/Utica (i.e. oilfield services companies). We wonder if Halliburton had known just how bloody the oil and gas market would get, if they would have embarked on a merger in the first place. Two days ago we told you that Halliburton’s third quarter 2015 was awful with the company losing $54 million (see Halliburton 3Q15: $54M Loss, Cut 18,000 Jobs Over Past Year). Yesterday Baker Hughes released their 3Q15 update and reports they lost a whopping $156 million in 3Q15. Ouch! Both Halliburton and Baker Hughes predict an even *worse* fourth quarter. Doesn’t bode well for the honeymoon. Here’s the update from Baker Hughes for 3Q15…
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Baker Hughes | Energy Services | Industrywide Issues | Ohio | Pennsylvania | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

Baker Hughes Rig Counts for Sept Continue to Drop Across US & in NE
October 8, 2015October 8, 2015

Oilfield service giant Baker Hughes released their venerable monthly rotary rig count report yesterday for September 2015. After posting gains in the overall land-based U.S. rig count number for two straight months in July and August, the September numbers dropped like a rock. September U.S. active land-based rigs averaged 848, down 35 from the average of 883 in August and down 18 from July’s average of 866. Rig counts for the Marcellus/Utica also continued to drop, showing another four rigs were idled during September across the combined PA/OH/WV. It’s getting bloody out there…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A | Regulation

Halliburton/Baker Hughes Hold a Pre-Merger Garage Sale
September 29, 2015September 29, 2015

Halliburton and Baker Hughes are having a pre-merger garage sale. In order for Halliburton to buy Baker Hughes, a deal worth $34.6 billion (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell), regulators are requiring both companies to shed more of their divisions and subsidiaries. Halliburton’s expandable liner hangers business is on the table. So too is Baker Hughes’ “core completions business,” which includes: packers, flow control tools, subsurface safety systems, intelligent well systems, permanent monitoring, sand control tools and sand control screens. And there’s more on the table, marked down for a quick sale. Because of the additional businesses that must be sold, the wedding/merger date for the two companies may get pushed back to early 2016. Halliburton and BH hope some of their competitors will stop by and pick something up at the pre-merger garage sale…
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