Baker Hughes 2Q13 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.

“the most meaningful issue we faced in the quarter was timing associated with the ramp-down of our drilling contract in Brazil.”

“Also during the quarter, we faced the well-publicized shutdown across northern Mexico.”

“Unfortunately, these issues overshadowed growth and improved performance in other regions during the quarter.”

“In the U.S., despite a flat onshore rig count, our Pressure Pumping product line delivered improved revenue, operating profit and operating profit margin for the second consecutive quarter. Improved fleet utilization and record stages per day, resulting from increased 24-hour operations, market share gains and growing well count, contributed favorably. These gains were partially offset by continued pricing declines.”

“In the Gulf of Mexico, we experienced a strong sequential rebound in revenues and profits due to higher activity”

“In the U.S., we are reducing our onshore rig projections from our last guidance. However, activity is still projected to improve. In the second quarter, we exited with 1,692 rigs. We anticipate that the rig count will rise modestly to an average of 1,720 rigs by the fourth quarter”

“We currently forecast the U.S. onshore well count for 2013 to be approximately 35,000 wells, which is a reduction of about 4% year-on-year.”

“Looking internationally, the rig count is anticipated to continue recent growth trends in the second half of the year, yielding an average 2013 rig count of 1,360 rigs, with increases in every region. Excluding Iraq, this represents a 7% increase in the annual international rig count. ”

“Last night, we announced the launch of the Baker Hughes Well Count. This new index captures the number of wells which were spudded in each major U.S. basin”

“drilling efficiencies vary by basin. In the Williston, the Marcellus and the Eagle Ford, we’re seeing about 20% more wells per rig compared to this time last year, whereas in the Permian, wells per rig have hardly changed.”

“the Baker Hughes Well Count shows seasonality that wasn’t evident in the rig count alone. During the winter months, the wells per rig slows due to poor weather conditions.”

“The ongoing trend to continue increasing wells per rig is a fantastic opportunity for a technology-driven service company such as Baker Hughes.”

[analyst comment] “we have relatively range-bound commodity prices and a continued positive delta between kind of well count and rig count and E&P capital spending moving methodically higher”

“being closer to the customer, having a single point of contact, getting out of the organizational barriers that can hinder a divisionally-oriented company like we were, I think that’s probably — and that’s from a — that’s a thing that just kind of just keeps growing in terms of getting better.”

“We estimate — I don’t want to tell you how many billions we estimate the artificial lift market for unconventionals to be, but we have well over half of it for ESPs. But we could only play in about 15% of that spend. [our FleX pump product] takes us to about 75% of that spend.”

“we have about 1,300 different products in North America.”