Baker Hughes announced net income for the Q1 2011 of US$381mn compared to US$129mn for the first quarter 2010 and US$335mn share for the fourth quarter 2010.
Revenue for the first quarter 2011 was US$4.5 billion, up 78 per cent compared to US$2.5 billion for the Q1 2010 and up 2 per cent compared to US$4.4 billion for the Q4 2010.
Chad Deaton, Baker Hughes chairman and chief executive officer, said, "International margins continued to improve in the first quarter, despite weather and geopolitical disruptions, as we made steady progress towards our goal of exiting 2011 with international operating margins in the mid-teens. As we move towards the second half of 2011, activity growth becomes a more important driver of future improvement. "
Deaton went on to comment on how geopolitical disruptions to supply had focused attention on the limits of spare oil production capacity and resulted in higher oil prices. "High oil prices have spurred both IOCs and NOCs to accelerate their spending plans. Assuming oil prices do not increase to levels high enough to destroy demand, we expect oil-driven spending growth to be sustained for multiple years."
Baker Huges discussed its operational highlights in the Middle East. Deaton said that: "Recent announcements by the Kingdom of Saudi Arabia and Abu Dhabi regarding increased rig activity in the Middle East give us confidence that the volume growth supporting our margin plans will occur."
"In Saudi Arabia, Baker Huges enhanced production from existing gas wells using under-balanced coil tubing drilling on two hybrid rigs for a national oil company. Laterals of several thousand feet were drilled using our CoilTrak™ bottom-hole-assembly and custom PDC bits.Year-over-year, the monthly footage drilled has more than doubled, and we have reduced non-productive time (NPT) to five per cent compared to the 17.5 per cent average of the five wells drilled prior to the beginning of our contract."
Baker Huges also strengthed their supply chain in the Middle East by opening the newest drill bit manufacturing plant in Dhahran, Saudi Arabia, in the first quarter 2011. The facility is fully operational and delivering industry-leading polycrystalline diamond compact (PDC) bits to the Saudi Arabian and Middle East markets.
In Iraq, Baker Huges focus on completions and production enhancement is paying dividends. All product lines are engaged with workover rigs and rigless operations on multiple projects that include cementing, coiled tubing clean-out, and open-hole and closed-hole wireline services. Recently awarded projects include work with Lukoil, BP and ENI further strengthening our position in Iraq.
"We expect demand for hydrocarbons to continue to increase as the global economy grows. Following the tragic earthquake and tsunami in Japan, we expect oil and LNG to experience higher incremental demand, supporting high oil prices. With shrinking spare capacity, we believe that exploration, development and production spending will increase, raising our confidence that the second half of 2011 will set the stage for a strong 2012," said Deaton.
