Halliburton (HAL) announced that it won an oil field redevelopment contract from Italian oil company Eni SpA (E). Although the financial terms of the contract were not disclosed, the deal is said to be worth a multimillion dollar.
Under the terms of the deal, Halliburton will be engaged in increasing oil production from 20 wells in the Zubair field of southern Iraq. The company will use methods such as wire-line logging, perforating and acidizing to enhance production of the existing wells.
Following the footsteps of its peer Schlumberger Ltd (SLB), Halliburton is making its presence in Iraq prominent through various deals involving operational work in the country.
Recently, Halliburton received a letter of intent (“LOI”) from Shell Iraq Petroleum Development BV to develop the Majnoon field in southern Iraq. Halliburton will serve as project manager for the development and will work in association with rig contractor Nabors Industries Ltd. (NBR) and Iraq Drilling Company (“IDC”).
(Read our full coverage on HAL-Shell deal: Halliburton Shell Tango in Majnoon)
As per Halliburton’s management, the company will carry out this contract with full dedication and ensure that production improves at Eni in the coming years.
With a strong competitive position as well as a broad and technologically-bind product and service offering, we expect Halliburton to deliver solid oil field operating performance in Iraq. The company’s widespread geographical presence along with the success in international arenas will expand its market share, going forward. Halliburton’s robust balance sheet and secure cash flow from large international and North American contracts will further enhance the value proposition of the company.
However, new environmental regulations for hydraulic fracturing in the shale plays, the intensely competitive nature of the market, depressed natural gas prices and the expected curtailment in incremental drilling projects over the next few months continue to dampen the positive sentiment for the stock.
Halliburton currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.
ENI SPA-ADR (E): Free Stock Analysis Report
HALLIBURTON CO (HAL): Free Stock Analysis Report
NABORS IND (NBR): Free Stock Analysis Report
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
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