Baker Hughes

Baker Hughes | Energy Services | Industrywide Issues | Research

August US Rig Counts Go Up Again, but Marcellus Continues to Drop
September 8, 2015September 8, 2015

Oilfield service giant Baker Hughes released their venerable monthly rotary rig count report today for August 2015. The numbers worldwide improved–the international rig count for August was 1,137, up 19 from the 1,118 counted in July. Looking specifically at the U.S., onshore (mostly shale) rig counts climbed from 835 in July to 849 in August, up 14. It does indeed seem as if we’ve turned a corner. This is the second month in a row that U.S. land-based rigs increased month over month (see Baker Hughes July Rig Counts – U.S. May have Bottomed, but Not NE). However, the rig count in the Marcellus/Utica did not improve. It got worse…
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Baker Hughes | Energy Services | Halliburton | Schlumberger

Tiny Balls & Instant Credit – Oilfield Services Cos. Get Creative
August 17, 2015August 17, 2015

For some time we’ve told you that drillers in the Marcellus/Utica, as well as other shale plays, have been hammering oilfield services companies on price. Oilfield services companies are companies like Sclumberger (largest such company in the world) and Halliburton (second largest in the world) and Baker Hughes (fifth largest in the world, being gobbled up by Halliburton later this year). Oilfield services companies provide much of the equipment, personnel, chemicals and other supplies to do the actual drilling and fracking of shale wells. They’re the contract workers, hired to do a job. Last December MDN was hearing that oilfield services companies were being forced to discount prices by as much as 20% (see Marcellus Oilfield Services Cos Being Forced to Discount). By February, when it was obvious the price downturn would last for an extended period of time, MDN picked up on Magnum Hunter’s comments that they were getting prices discounted by as much as 40% (see Magnum Hunter Slashes Drilling Budget by 75% for 2015). In addition to slashing prices, oilfield services companies, in an attempt to stay in business, are innovating in two other ways: (1) they’ve become bankers, allowing drillers to buy their services on credit, and (2) refracking existing wells with “tiny rubber-coated balls”…
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Baker Hughes | Energy Services | Industrywide Issues | Ohio | Pennsylvania | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

Baker Hughes July Rig Counts – U.S. May have Bottomed, but Not NE
August 10, 2015August 10, 2015

On Friday Baker Hughes, which is being forced into a merger with Halliburton by the end of this year/early next year, issued a summary of rig counts last Friday. At first blush it appears to be good news, but when you dig under the surface, it’s not–at least for the Marcellus/Utica. The international rig count was 1,118, down 28 from the 1,146 counted in June 2015. However, the average U.S. rig count for July 2015 was 866, up 5 from the 861 counted in June 2015. It appears we’ve turned the corner on how low rig counts will go–we’ve bottomed and are either holding steady (in the U.S.), or perhaps every so slightly gaining ground again. But then we ran the numbers for the Marcellus/Utica and found rig counts continue to decline month over month…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Update on Halliburton/Baker Hughes Wedding Plans
August 5, 2015August 5, 2015

Whatever happened to the Halliburton merger/buyout (i.e. shotgun wedding) with Baker Hughes? As we told you in July, the two “love birds” have set a December 1st wedding date (see Halliburton & Baker Hughes Announce a December Wedding Date). In the meantime there’s a lot to do: caterers have to be contracted, a DJ, wedding photographer–you know the drill. Oh! And let’s not forget the Dept. of Justice. They have to be consulted too. It appears that (so far) everything is on track with both the DOJ here at home, and with the European Commission overseas. Both groups have to grant their permission for the two companies to wed. There may be one slight wrinkle (last minute nerves?): Notice in the latest Halliburton update below that the two love birds may decide to push off the wedding date until early 2016–but only if absolutely necessary (they’re just so in love)…
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Baker Hughes | Energy Services

Tough Times: Baker Hughes Net Income Drops 153% in 1 Year
July 22, 2015July 22, 2015

Yesterday MDN told you about the tough times in the oil patch for Halliburton, the second largest oilfield services company in the world (see Tough Times: Halliburton’s Net Income Drops 93% in 1 Year). Today, the “other shoe” drops. Halliburton, you may recall, is buying out the fifth largest oilfield services company in the world (and the third largest in the U.S.)–Baker Hughes (see Halliburton & Baker Hughes Announce a December Wedding Date). Baker Hughes released their second quarter financial and operating results yesterday and the picture is even bleaker than it was for Halliburton. Baker Hughes’ revenue for 2Q14 (a year ago) was $5.935 billion. Revenue for 2Q15 was $3.968 billion–a drop of 33% year over year. When you add in expenses of all types, the picture is apocalyptic: In 2Q14 Baker Hughes’ net income was $359 million. In 2Q15 it was minus $190 million, or $190M in the hole–which is a 153% drop year over year. Not pretty! The company predicts “unfavorable market conditions to continue across all segments” for the balance of 2015…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Halliburton & Baker Hughes Announce a December Wedding Date
July 13, 2015July 13, 2015

Whatever happened to the shotgun wedding between Halliburton and Baker Hughes–two of the largest oilfield services companies in the United States? After all, the boards for both companies approved the “blissful union” back in March (see Halliburton & Baker Hughes Vote to Approve Shotgun Wedding). What happened is, it’s complicated. Such large buyouts between competitors–when it removes competition from the marketplace–involve approvals from the federal government as well as from governments in other countries where the two companies operate. In the U.S. it is the Dept. of Justice that must approve the merger and the DOJ is a) taking it’s sweet time, and b) forcing Halliburton to sell off some of its assets before they will approve the merger (see Halliburton Shotgun Divorce – Forced to Sell Certain Divisions). In a brief update last week, Halliburton and Baker Hughes announced they’re still mired in getting approvals but hope to officially tie the knot on December 1st…
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Baker Hughes | Energy Services | Industrywide Issues | Ohio | Pennsylvania | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

Rig Counts Take Another Hit in May, Rapid Decline Continues
June 8, 2015June 8, 2015

We had thought/hoped that the we were near the end of a decline in drilling rig counts. But such is not the case. Baker Hughes released their May rig count report on Friday and it shows a continued slide in the numbers. In April there were 943 active rigs drilling on land in the U.S., down from 1,067 rigs in March (see Rig Counts Continue Big Decline in April, NE May Have Bottomed). In May, the number slide again–to 857 land-based rigs (a loss of another 86 rigs going idle). Double ouch. What about the Marcellus/Utica region? Did those rigs decline in May?…
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Baker Hughes | Energy Services | Industrywide Issues | Jobs

Baker Hughes Follows Schlumberger, Ups Layoffs to 17% of Workforce
April 21, 2015April 21, 2015

It seems that unfortunately, Schlumberger’s second round of layoffs was an omen and indeed a predictor of things to come (see Schlumberger Cuts Another 11K Jobs, 15% of Workforce Gone in 4 Mos). After Schlumberger announced their new massive layoff, Baker Hughes followed suit and today added another 3,500 layoffs to the 7,000 previously announced (see Baker Hughes Announces 7,000 Layoffs Due to Low Oil Price). The new 10,500 number represents 17% of Baker Hughes’ workforce. Of course mixed up in this mess is the shotgun marriage–Baker Hughes is being forced to sell to Halliburton (see Halliburton & Baker Hughes Vote to Approve Shotgun Wedding). This morning Baker Hughes released their first quarter 2015 results, and the new layoffs news was embedded in that announcement…
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Baker Hughes | Energy Services | Industrywide Issues | Research

Baker Hughes Axes their Quarterly Well Count Report :-(
April 10, 2015April 10, 2015

In July 2013 Baker Hughes, the third largest oilfield services company in the U.S. that’s being forced to merge with Halliburton, the second largest oilfield services company, started a useful new quarterly report called the well count report (see BH Launches Well Count Report, Perfect Compliment to Rig Count). You know Baker Hughes as the company that releases weekly and monthly rig count data. Just yesterday our lead story was the latest rig count stats from BH (see BIG Decrease in BH Rig Counts, Including Marcellus/Utica). BH has counted and reported the number of active rigs drilling for the past 70+ years. With rigs becoming more efficient–fewer of them drilling more wells–it made sense to add a report that would track the number of new wells spud, or new wells started, in a given period of time. That was the quarterly well report. Unfortunately BH has just announced they are immediately discontinuing the well report, less than two years after they launched it…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Halliburton Shotgun Divorce – Forced to Sell Certain Divisions
April 8, 2015April 8, 2015

Some interesting news from Halliburton concerning their takeover of Baker Hughes (see Halliburton & Baker Hughes Vote to Approve Shotgun Wedding). It seems the table has been turned on Halliburton. In order to avoid anti-trust violations, Halliburton will, grudgingly, sell off several profitable divisions: Fixed Cutter and Roller Cone Drill Bits, Directional Drilling and Logging-While-Drilling (LWD)/Measurement-While-Drilling (MWD). Yesterday Halliburton said they will likely have the merger with Baker Hughes done before selling off those divisions. They stressed it will be business as usual for customers while the divorce, er, sale proceeds…
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Baker Hughes | Energy Services | Halliburton

Halliburton & Baker Hughes Vote to Approve Shotgun Wedding
March 30, 2015March 30, 2015

Looks like the Hatfields and the McCoys are heading down the isle after all. In November MDN told you that the U.S.’s second largest oilfield services company, Halliburton, had pointed the gun of replacing the entire board to the head of Baker Hughes, the third largest oilfield services company, to force Baker Hughes into selling itself to Halliburton (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell). It took a while, but the management team and investors of Baker Hughes finally warmed up to the idea and last Friday the stockholders for both companies voted to proceed with the merger. About 75% of the shares/shareholders in Baker Hughes voted on the plan, and of those 75%, some 98% voted to get hitched to Halliburton…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | Jobs

Halliburton Laying Off Up to 6,400, Says Baker Hughes Not a Factor
February 13, 2015February 13, 2015

Halliburton, the county’s second largest oilfield services company, announced earlier this week they’re laying off some 6.5% to 8% of their 80,000 employees, which translates to 5,000 to 6,500 jobs. The company Halliburton is buying, Baker Hughes, announced in January they are laying off 11% of their workforce (see Baker Hughes Announces 7,000 Layoffs Due to Low Oil Price). Also in January, the country’s (and world’s) largest oilfield services company, Schlumberger, laid of 9,000 workers (see Schlumberger Firing 9,000 to Reduce Head Count, “Low Oil Prices”). To which we say, it’s getting ugly out there…
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Baker Hughes | Energy Services | Industrywide Issues | Jobs

Baker Hughes Announces 7,000 Layoffs Due to Low Oil Price
January 21, 2015January 21, 2015

Although Baker Hughes, one of the largest oilfield services companies in the United States, had “record high” revenue in 2014 ($24.6 billion for the year), the company announced yesterday that they will lay off 7,000 employees in the first three months of 2015. This comes on the heals of Sclumberger’s announcement that they will lay off 9,000 (see Schlumberger Firing 9,000 to Reduce Head Count, “Low Oil Prices”). Both companies have a major presence in the Marcellus/Utica and both blame low oil prices for the layoffs. Their customers (exploration and production companies) are scaling back and not drilling as much, and for what drilling they do they are now squeezing oilfield services companies like crazy to lower costs. It certainly makes sense, on paper, for these companies to take drastic actions like this. But that’s not much comfort for the 7,000 families who are losing the jobs. Baker Hughes employs 62,000 people. The 7,000 jobs cut represent 11% of their workforce. Baker Hughes CEO Martin Craighead called the coming layoffs the “crappy part” of his job and the thing he really “hates” about the drilling industry…
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Baker Hughes | Energy Services | Industrywide Issues | Research

Baker Hughes: Well & Rig Counts Go Up, Not Down, in 4Q14!
January 9, 2015January 9, 2015

Very interesting. You would think that the oil and gas price apocalypse, which began in the late third/early fourth quarter of 2014, would mean that drilling rigs would be idled by the dozens and new well starts would plummet. According to numbers just released by Baker Hughes, you would be wrong. The average rig count for 4Q14 was 1,856 onshore rigs, up 14 rigs (1%) from 3Q14. Huh. The number of rigs in 4Q14 was up 159 rigs (9%) from 4Q13! Wow. And then there are well counts–the number of new wells spud or drilled. In 4Q14 there were 9,544 new wells were spud–virtually unchanged from 3Q14. Compared to 4Q13, new wells drilled were up 461 (5%). Double wow! We’re not saying the numbers won’t head south in 1Q15–we are saying that it’s helpful to mind the objective numbers and not the subjective hype you hear in the press when it comes to “slow downs” and such…
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Baker Hughes | Energy Services | Halliburton | Schlumberger

Marcellus Oilfield Services Cos Being Forced to Discount
December 12, 2014December 12, 2014

MDN editor Jim Willis attended the Platts Global Energy Outlook Forum yesterday in New York City. (New York at Christmas time is truly a sight to behold.) One of the more interesting things Jim learned was from a purely off-the-cuff remark made by John Hill, vice chairman and managing director of First Reserve, one of the world’s largest energy-focused private equity and infrastructure investment firms. John was talking about the downward pressure energy companies are making on oilfield services companies–like Schulmberger and Halliburton and Baker Hughes–forcing them to discount their prices. In the case of Halliburton, which is buying Baker Hughes (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell), Hill said energy companies are telling Halliburton they WILL lower their prices (by 20%) or else. Or else the energy companies will squawk to regulators in Washington that the proposed buyout is creating an unfair monopoly. The energy companies kind of have Halliburton over the proverbial barrel…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Shotgun Wedding: Halliburton Forces Baker Hughes to Sell
November 18, 2014November 18, 2014

That was fast. Last week MDN told you the scuttlebutt that the second largest oilfield services company in the U.S., Halliburton, was “in talks” to buy the third largest oilfield services company in the U.S., Baker Hughes (see Big News: Halliburton in Talks to Buy Baker Hughes). The “talks” advanced quickly. Yesterday the two companies announced they will tie the knot in something of a shotgun wedding (which we explain below). Halliburton is paying a dowry of $34.6 BILLION in stock and cash to buy out Baker Hughes, lock, stock and barrel…
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