Halliburton 1Q14 Earnings Call Notes

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A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

Eastern Hemisphere as expected

” Eastern Hemisphere activity continues to expand at a steady rate and is playing out about as expected. Our forecast for the full year remains unchanged. We see customer spending levels increasing by the upper single digits and our revenue growth to be in the low double digits”

Transitional year for Latin America

“we continue to believe that 2014 will be a transitional year. For the full year, we expect Latin America revenue and profit to be in line with 2013 levels. ”

Very excited about North America

” I’m more excited about North America now than I have been since late 2011. Now I could be off by a quarter or so, but I do not believe I am wrong about this turn happening.”

Customers are confident in their businesses

“First, the sense of confidence I get when I talk to customers and the sense of confidence they have in their own business prospects. Supportive commodity prices today are translating into stronger cash flow than OpEx budgets for our customers and despite the logistical issues we saw in the first quarter, during March we saw record levels of revenues.”

Service intensity continues to increase

“Completions intensity is rising, lateral links are increasing, stage counts are rising and the average well volume pumped has increased over 30% just since last year and due to natural attrition, demand growth in the Permian, we believe that excess frac capacity has tightened much faster than expected.”

Longer lengths, more stages, more horizontal

“Lateral lengths have grown to over 10,000 feet in the market. Stage density has increased by 20% to 25% year-over-year in basins like the Eagle Ford and the Marcellus. And in the Permian basin, the horizontal rig count has crossed over the 50% mark and you know, this is great for us.”

Dave Lesar thinks this is a sustainable gas market

” If we look at LNG export clearly a positive and its moving the right way, if we look at sort of the uptake on gas and its positioning in the market as long-term, fuel for electricity and then we look at sort of the economy and the upside in this economy, all of those conspire to in my view a sustainable gas market.”

This cycle has legs because right now we’re not even seeing gas activity

“I mean, its clearly in my view more than a two-year cycle, because as I indicated earlier, we are not getting any help from gas essentially at this point in time. And I have a view on gas, I happen to believe that over the next five to 10 years, the gas market is going to be there and potentially be there in a big way.”

March was a great month

“looking at March exit rates, they were very strong, very solid and that gives us high confidence for not only just Q2 but the rest of the year.”

Tightness in oil labor markets

“No. I mean, this is really where we’ve build the machine. It’s able to hire people. We know how to do that. We’ve seen this sort of tightness in labor before. So, we may see some increased costs but the ability to execute and deliver the people, I’m quite confident that we will do that.”