The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.



) --Oilfield services major


(HAL) - Get Report

delivered a 50% year-over-year growth in its fourth-quarter earnings to cap what has been an extremely good year for exploration and production services globally in general and in the U.S. in particular.

Halliburton, the largest provider of hydraulic fracturing services in North America, has benefited from the shale gas boom in the U.S., which has resulted in the country becoming the top producer of natural gas in the world.

Halliburton now plans to realign its services in North America to cater to the push towards liquids exploration. The company also saw a jump in its revenues in Latin America and in the Middle East in the last quarter. Competitor


(SLB) - Get Report

also delivered strong fourth-quarter results last week.

We have a $53 price estimate for Halliburton , which is at a 40% premium to its current stock price.


here for our full analysis of Halliburton.

North American Growth

An increase in North American revenues constitutes a major portion of the overall growth of the company.

The company maintained an optimistic outlook for the market, holding that the overall number of rigs would increase as higher liquids directed drilling efforts would offset a decline in the number of gas rigs.

Gas prices in the U.S. have declined to approximately $3 /MMBtu from $5 /MMBtu in June 2011. The supply glut is pushing operators such as Chesapeake to cut gas output, which is expected to ease the pressure on pricing. While the realignment is expected to weigh on margins over the next quarter, the shift to liquids exploration will benefit the company over the long run as it is more service intensive.

Halliburton also benefited from a surge in activity in the U.S. Gulf of Mexico. With the federal government looking to ease the restrictions on deepwater drilling in the Gulf, we expect E&P activity in the region to be a major source of revenues for Halliburton going forward.

Halliburton also delivered strong revenues growth in Latin America in the fourth quarter. Deepwater activity in Brazil and Mexico and increased drilling in the region contributed to the higher revenues. The company also witnessed growth in the Middle East and Asia because of demand for its services from Iraq Australia. Revenues from Europe, Africa and the CIS remained almost flat over the same period last year.



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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.