The first fiscal quarter of 2020 resulted in a $1 billion loss in value for oil titan Halliburton. The company, which has maintained Texas operations since the 1930s, has decided to close facilities in Kilgore and San Antonio.
When compared with the first quarter of 2019, the company’s North American revenue decreased by 25 percent.
Over 200 employees have lost their jobs just at the Kilgore location, and layoffs have occurred throughout other states.
Like the oil industry as a whole, Halliburton’s been hurt by the drastic demand plunge as coronavirus drove transportation to trough over the last month. To make the problem even worse, OPEC has been involved in an intra-organization fight over oil production while the price per barrel falls.
These market forces have created such disarray among producers that some in Texas have called on the Railroad Commission (RRC) to prorate, or limit, production. The first hearing on the issue was attended virtually in large numbers by people across the world.
Jeff Miller, president and CEO of the company, said in their first-quarter analysis, “Our industry is facing the dual shock of a massive drop in global oil demand coupled with a resulting oversupply. Consequently, we expect activity in North America land to sharply decline during the second quarter and remain depressed through year-end, impacting all basins.”
“We are taking swift actions to reduce overhead and other costs by approximately $1 billion, lower capital expenditures to $800 million, and improve working capital. We will take further actions as necessary to adjust to evolving market conditions,” he continued.
Texas unemployment surged by 232,000 in March.
In late March, congressional lawmakers requested from the Trump administration financial aid — in the form of reducing or eliminating royalties — for energy companies struggling to stay afloat. The group says the administration already has the authority to do that.
The Texas Representatives who signed it were Dan Crenshaw (R-TX-02), Lizzie Fletcher (D-TX-07), Randy Wever (R-TX-14), Bill Flores (R-TX-17), Chip Roy (R-TX-21), Michael Burgess (R-TX-26), Michael Cloud (R-TX-27), and Brian Babin (R-TX-36).
The president said on April 9 that he opposed the proposal.
Halliburton shuttering two facilities is just another example of the havoc coronavirus has wreaked upon Texas.
Disclosure: Unlike almost every other media outlet, The Texan is not beholden to any special interests, does not apply for any type of state or federal funding, and relies exclusively on its readers for financial support. If you’d like to become one of the people we’re financially accountable to, click here to subscribe.
Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.