Halliburton reported yesterday that lower natural gas prices and less drilling in North America due to a late winter affected their first-quarter profits. In fact, Halliburton shares took their steepest dive in 8 months, dropping nearly 10%. The company is the “world’s second-largest oilfield services company” and issues affecting them often herald industry-wide trends.
The slump in profits was caused, analyst James Halloran told Bloomberg, by a late winter (quite possibly global warming related). A late winter meant that the ground froze later, so heavy drilling rigs could not move across Canadian and northern US oilfields until later in the season. That translated into fewer completed drilling projects. Not to mention, with the warmest winter on record this year, people may be using less gas and oil to heat their homes.
“Last fall, there’s no question there was a weather issue,” Halloran said. “And prices have not been exactly booming for people. My guess is there’s been some ongoing reluctance to get large drilling projects going again.”
One of Halliburton’s “large drilling projects” affected by the weather is in Alaska’s North Slope, a place heralded by National Geographic as “largest remaining piece of US wilderness” Drilling in valuable wilderness areas is just one of the reasons Halliburton shareholder meetings are regularly protested. No wonder they moved their HQ to Dubai.