HAL and most oilfield service firms will report strong Q2

[dan_s]

The Gulf of Mexico makes up only a small percentage of Halliburton's revenues. The same can be said for most of the major oilfield service firms. IMO they are oversold. There are several smaller firms that are highly dependent on the GOM and they should be avoided. - Dan

NEW YORK/SAN FRANCISCO (Reuters) - Strong U.S. onshore drilling helped oilfield services company Halliburton Co (NYSE:HAL - News) report a better-than-expected 83 percent jump in quarterly profit, and its shares jumped 3.6 percent.

Halliburton expects land-drilling growth to offset the impact of a U.S. deepwater drilling ban that followed a disastrous blow-out at a BP Plc (LSE:BP.L - News) well in the Gulf of Mexico on which Halliburton did the cement work.

The world's second-largest oilfield services company plans to maintain its overall infrastructure in the Gulf in expectation of activity picking up again, though it is moving some equipment and staff out of the region for now.

"I do not believe that the deepwater offshore rigs that were mobilized to international locations during this suspension will return to the Gulf for some time, if at all," Chief Executive David Lesar said on a conference call.

Second-quarter revenue jumped across all regions, with market share gains internationally and North American operations boosted by increased drilling. Operating margins jumped to 17 percent from 12 percent the previous quarter.

Simmons Co analyst Bill Herbert called it an "incandescent" quarter for the company, especially given the strength overseas in the face of tepid rig count growth.

Kurt Hallead, co-head of energy research at RBC Capital Markets, said the North American growth was "exceptional." "Clearly it was better than most of us had tended to factor in," he said.

Halliburton expects the six-month deepwater moratorium to trim 2010 earnings per share by 5 to 8 cents per quarter. Analysts had been expecting a profit of $1.44 per share this year, up from $1.27 in 2009, though many now expect estimates to rise due to the unexpectedly strong North American performance.