It just keeps getting worse for Halliburton. On Monday the second-largest oil field services company in the United States announced that it had cut another 4,000 workers while losing money on oil field drilling and services in the last quarter of 2015.
At this point, this means Halliburton has laid off about 22,000 workers. That constitutes roughly 25 percent of the company's global workforce, as Halliburton has grappled with the worst oil bust we've seen since the 1980s. More troubling, it looks as if the situation won't be turning around anytime soon, since crude oil is hovering around $30 per barrel and will probably continue hanging around those bargain-basement prices as we roll through 2016.
That's certainly what the heads of Halliburton are expecting, a fair guess based on what they experienced in 2015. In North America, which is Halliburton’s largest region, sales skidded to 54 percent lower in the fourth quarter compared with that period the year prior, dropping to $2.16 billion, according to the Wall Street Journal. Customers here and in Canada have continued to cut back on their drilling activity while also asking Halliburton to give them lower prices, another reason sales tanked in 2015, according to the company's quarterly report.
Meanwhile, Halliburton and Baker Hughes officials are still talking in aggressively positive tones about the proposed merger between the oil field service giants, despite the various impediments that have popped up to stop this union. Antitrust regulators with the U.S. Department of Justice haven't exactly issued a ringing endorsement of the proposed $34.6 billion deal, which has been languishing in regulatory purgatory since it was first announced in November 2014; the deal would combine the second- and third-largest oil field service companies in the United States into one very large company.
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In the face of Justice's indecisiveness, the two companies casually moved their self-imposed closing deadline to April 30, but, as we've previously reported, they've hit another roadblock with the European Union. Even if the Justice Department signs off on this thing before that April deadline, the European Union is conducting an in-depth antitrust review that likely won't be completed before the end of May.
Despite these setbacks, company officials remained confident (or at least did a passable job of faking it) in the quarterly report, issuing sanguine statements that the whole thing would come off according to plan. “We remain fully committed to closing the pending acquisition of Baker Hughes. We are continuing our discussions with competition authorities, and recently offered an enhanced set of divestitures in an effort to resolve competition-related concerns as soon as possible. We are diligently focused on pending regulatory reviews, the divestiture process, and planning for integration activities after the closing of the deal,” Dave Lesar, Chairman and CEO, stated.
The problem is, to take care of those "competition-related concerns," the parties have to actually manage to sell off the assets that make the companies overlap too much, and so far they haven't found a buyer.
It's a tricky situation. The only thing we know for certain, thanks to those quarterly reports, is that this isn't a Beatles song because it can definitely still get worse, and there's no use believing it'll be getting better anytime soon.