Baker Hughes 1Q13 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“North America took a step in the right direction, with growth in both revenue and margins. The results were driven by strong activity in Canada, along with improved utilization in our Pressure Pumping business. And we’re starting to see the U.S. market settle down. The declines in spot pricing for well stimulation are showing signs of tapering off, and the onshore rig count is projected to begin climbing after more than a year of consecutive quarterly declines.

Offshore, our customers experienced significant delays as the industry continues to adapt to changing regulations, and this is having an impact on our Gulf of Mexico business. Although these headwinds will probably persist for the short term, the long-term outlook remains bright. The number of ultra-deepwater projects continues to grow, and Baker Hughes is very well positioned to capitalize on these opportunities.”

“We anticipate that the rig count will rise to an average of 1,800 rigs for the second quarter. This would be the first increase in U.S. rig count following sequential declines over 5 consecutive quarters.”

“internationally. The average rig count is anticipated to grow steadily throughout 2013 to 1,316 rigs, with increases in every region. ”

“if $4.00 natural gas prices hold, the increase should generate improved cash flows for our customers. And while we don’t believe that $4 gas is enough to prompt the race back to the dry gas basins, these higher prices should help support, if not stimulate, additional investment in oil-directed drilling. We believe the North American market is on the road to recovery.”

[analyst comment] “I’d have to say the tone of your commentary as it relates to the international market in general, I think, are the most, I think, optimistic or positive that I’ve heard from any service company probably going back to the 2007, 2008”

[on the difficulties in the offshore business] “in the past, I think, if you had redundancy, if one didn’t — one pod didn’t check out, you were okay. Today, nobody’s going to run in the hole unless everything checks out perfectly.”

“I’m not going to try to guess when our government and our customers are going to get on the same page. And right now, it’s affecting us.”

“I think the industry is exceptionally tight on your subsurface expertise. There’s a war on talent in that area, geoscientists, LWD, MWD, directional drillers.”

“I think Iraq has got quite a journey from a service company perspective to be — it’s going to contribute earnings…it needs to start with our customers being more successful in terms of their own economics”