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$40.13 -1.20 (-2.90%)
9/4/2008 4:02 PM

Halliburton Company (HAL)

CAPS Rating:
****

The Company provides a variety of services, products, maintenance, engineering, and construction to energy, industrial, and governmental customers.

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Avatar NtscrbEnergy (99.00) Submitted: 11/28/06 6:24 AM : Outperform Start Price: $31.63 HAL Score: 37.15

Halliburton is one of the largest diversified energy services and engineering and construction services company. It has businesses in over 100 countries worldwide with major focus in the U.S., Iraq, and the U.K.

The future of Halliburton is primarily dependent on the capital spending by the oil and gas exploration and production sector, which is likely to be positive in the years to come. Considering the high oil prices and the depleting easy oil, the need for the company’s services will see a surge in future.

The company owns a large number of patents and has substantial number of pending patent applications for its products and services. Further, it maintains an active research and development program to improve existing products and processes, and to develop new products and processes. Halliburton’s strategy of continually developing new products has placed it at a leadership position in the sector. Additionally, about one third of the company revenues are driven from new products, which will be favorable as reservoirs become more complex.

Halliburton has a strong presence in the North American market where the reserves have reached maturity and productions have started declining. Further, it faces huge risks from its operations in Iraq, which can affect its performance. However, the company is constantly diversifying its operations and venturing into new areas. The company’s technologically advanced products will demand a substantial premium placing, as it is well ahead of its peers. Considering these factors, the stock price will perform well in the days to come.

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Avatar NtscrbEnergy (99.00) Submitted: 6/05/07 5:14 AM

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The North America market has been acted as nemesis for Halliburton with its previous two quarters displaying declined activity, particularly the well stimulation market in Canada and the U.S. Rocky Mountains. Some of the activity decline was attributable to poor weather. In addition, the unusually warm start to the U.S. winter season caused concern about natural gas storage levels, which negatively impacted the price of natural gas. This uncertainty made many of its customers more cautious about their completion and stimulation plans in the early part of 2007.

However, outside of North America, outlook remains positive. Worldwide demand for hydrocarbons continues to grow, and the reservoirs are becoming more complex. Therefore, Halliburton’s investment in infrastructure, capital, and technology predominantly in the eastern hemisphere seems to be a more prudent approach. Further, the company would continue with its expansion plan in the Middle East, Africa, Russia, the North Sea, and Asia.

In a strategic move to expand its portfolio in key geographic areas, the company has acquired Ultraline Services, a provider of wireline services in Canada, in January 2007. Moreover, the company has recently entered into a definitive agreement to purchase the U.K. based PSL Energy a leading eastern hemisphere provider of process, pipeline, and well intervention services. Expansion of manufacturing capability along with new manufacturing plant should ease off some of the production constraints faced by the company. Halliburton’s efforts to increase price and reduce discounts should provide a boost to its bottom-line, thereby enhancing shareholder’s value.

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