Oil prices have collapsed more than 60% since January to levels well below the costs necessary for many shale drillers to break-even, leading to drilling halts and drastic spending cuts by producers that has hurt demand for services offered by Halliburton and rivals Schlumberger (N:SLB) and Baker Hughes (N:BKR).
“We expect activity in North America land to sharply decline during the second quarter and remain depressed through year-end, impacting all basins,” Halliburton’s Chief Executive Officer Jeff Miller said in a statement.
Halliburton, which generates most of its business in North America, posted a 25% drop in revenue from the region to $2.46 billion, while international revenue rose 5% to $2.58 billion in the quarter.
The company said it would cut its capital expenditure for the year to $800 million and reduce overhead and other costs by about $1 billion after announcing in March that it would ‘significantly’ reduce capital expenditure.
Last week bigger rival Schlumberger cut its dividend and recorded an $8.5 billion charge in the first quarter from writing down assets, while Baker Hughes said it will take a $1.5 billion charge, write down the value of its oilfield business and slash spending by 20% in 2020.
Halliburton reported a net loss of $1.02 billion, or $1.16 per share, in the first quarter ended March 31, compared with a profit of $152 million, or 17 cents per share, a year earlier.
Excluding charges, Halliburton earned 31 cents per share, beating Wall Street estimates of 24 cents per share, according to I/B/E/S data from Refinitiv.