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The 5-Minute Guide to Halliburton Company Stock
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Halliburton 101Halliburton was founded in 1919 and is one of the largest oil-field services company in the world. It currently operates in over 80 countries. It serves the industry throughout the lifecycle of the reservoir in the following four areas:• Locates hydrocarbons and manages geological data.• Drilling and formation evaluation• Well construction and completion• Optimizing production through the life of the field
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Halliburton 101Halliburton is the second largest oil-field service company as
measured by revenue:
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Halliburton 101Halliburton is made up of 13 product services lines, which are operated within two business divisions:• Drilling and Evaluation Division
• Baroid, Sperry Drilling, Drill Bits & Services, Testing & Subsea, Landmark, and Wireline & Perforating
• Completion and Production Division• Artificial Lift, Multi-Chem, Cementing, Production
Enhancement, Completion Tools, Production Solutions• Supporting Both Divisions
• Consulting & Project Management
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Halliburton 101While both of Halliburton’s segments have been under
pressure due to the current oil market downturn, Drilling and Evaluation has held up much better than Completion and
Production:
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Halliburton 101Halliburton is very North American centric, with the largest
portion of its revenue coming from that region:
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Halliburton 101Halliburton’s future is built upon three pillars:1. A rebound in North American oil and gas activities
• Shale is short-cycle, meaning activity ramps down quickly when prices fall, but also ramps up quickly when conditions improve
2. The continued shift towards Frac of the Future• It is a step change improvement in fracking operations • The Q10 pump, which is a key component of Frac of
the Future, requires 25% less capital on location, 30% less labor on site, and up to 50% less maintenance cost
• At the end of 2015, 60% of its fleet was Q10s, with the aim to get that up to 75% by the end of 2016
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Halliburton 1013. Closing the Halliburton/Baker Hughes merger:
• Halliburton reached an agreement to acquire Baker Hughes in November of 2014• It’s a cash-and-stock deal valuing Baker Hughes at
$34.6 billion• The deal includes a $3.5 billion break-up fee payable
to Baker Hughes if the transaction falls apart• The merger will solidify Halliburton’s position as the
second largest oil-field service company• It is expected to be accretive to Halliburton’s cash flow
by the end of year one, with nearly $2 billion in future synergies
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Halliburton 101Halliburton/Baker Hughes Merger (cont.):
• The transaction is currently under review by regulators around the world• Regulators are taking a close look at the transaction
because it would widen the competitive gap between the Halliburton/Baker Hughes combination and the next tier down
• Halliburton has proposed a number of divestitures in order to alleviate these competitive concerns, but has yet to find a package of divestitures that regulators support
• If approved, the transaction could close by mid-2016
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