Halliburton’s total revenue was $28.5 billion for the full year 2012. This represents an increase of $3.7 billion, or 15 percent, from 2011. This was a record year for the Company. Concerning their revenue, Halliburton set new records in 2012 in all of their regions and both of their divisions.
Of note for investors is this strong revenue growth, and also that the company is innovating its technology. Halliburton, Apache Corporation (NYSE:APA), and Caterpillar Inc. (NYSE:CAT) have developed cutting-edge dual-fuel technology. This technology has the capability to power, safely and efficiently, the pumping equipment used for fracturing treatments with a mixture of natural gas and diesel.
Halliburton recently received recognition at the 11th Annual World Oil Awards with a “Best” award for their Frac of the Future equipment suite in the Best Health, Safety, Environment/Sustainable Development Onshore category. They also received a “Best” award for their DecisionSpace® well planning software in the Best Visualization and Collaboration category.
In February, Apache, an oil and gas exploration and production company, reported record overall production for their fourth consecutive year, and record oil and liquids production. Average daily production during 2012 increased to 779,000 barrels of oil equivalent (boe) per day, up 5.4 percent in comparison the prior year’s production, adjusted for dispositions. Oil and gas revenues were a record $16.9 billion, up from $16.8 billion in the prior year. Their North American oil production increased 12 percent during the year.
It’s important for investors to consider is that Apache invested $9.0 billion on exploration and development during the year. This sets the stage for future production, revenue, and profit growth. Concerning the aforementioned dual-fuel technology, they’ve teamed with service providers to power hydraulic fracturing using natural gas. The companies faced the challenge of finding a way to get the engines to run on natural gas as a fuel.
Caterpillar, an engine manufacturer, was their solution to the problem. Mr. Brian Erickson, Apache senior production engineer, E&P Technology, said, “Caterpillar was able to develop dual-fuel kits that would allow the engines to run on diesel while idling and natural gas when they are throttled up for pumping.”
Investors need to be aware of corporate innovation initiatives and the combined power of corporations working together. Consider Caterpillar’sstrength in 2012. In late January 2013, they reported record 2012 sales and revenues of $65.875 billion, an increase of 10 percent from $60.138 billion in 2011. Profit per share of $8.48 was an all-time record. The 2012 profit per share of $8.48 was up 15 percent from $7.40 in 2011. Profit was $5.681 billion, an increase of 15 percent from $4.928 billion in 2011.
Continuing my focus on technology developments concerning these companies, note that Caterpillar’s powering of the company’s R&D is by through their engineering community of over 8,000 highly skilled technical experts. The company’s work with Halliburton, Apache, and others is a win-win situation for these companies, and by extension their stakeholders, who should reap the benefits of these initiatives.
Additionally, in December 2012, Caterpillar and Ariel Corporation announced the formation of a 50-50 joint venture that will provide well service pressure pumping products for customers in the international oil and gas industry. The combined venture, Black Horse LLC, also announced the acquisition of pump manufacturer ProSource of Houston, Texas. This teaming up and attendant acquisition is building a strong foundation. It may portend more growth for Caterpillar and potential shareholder ROI.
So it’s the good and not so good in the industry – room for growth and profits – with the downside of currency troubles and being at the mercy of foreign government dictates as concerns levies, taxes, and stipulations on corporations operating in their environs.
The article Often Traversing an Oily Slope originally appeared on Fool.com and is written by Michael Ugulini.
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