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Baker Hughes sees profits rise in Q2 and highlights successful projects and technologies

17th July 2014

Baker Hughes has announced record revenue of USD 5.9bn for the quarter, up 8 per cent year-over-year, with adjusted profit before tax from operations at USD 778m

Baker Hughes sees profits rise in Q2 and highlights successful projects and technologies
Baker Hughes highlighted some of its most successful projects and technologies during this quarter

"This quarter we delivered record revenue and a 15 per cent sequential increase in adjusted profit from operations," said Martin Craighead, Baker Hughes Chairman and chief executive officer. "Our results reflect improved execution and the rapid deployment of innovative new products and services around the world.

"In North America, newly introduced well construction and production technologies, such as the Kymera hybrid drill bit and ProductionWave production solution, are seeing unprecedented demand resulting in record revenue in our drilling services, drill bits, upstream chemicals, and artificial lift product lines. The rising sales of these products, along with an increase in onshore and offshore activity in the United States, more than offset the seasonal decline in our Canadian business.

"Internationally, we are leveraging new logging-while-drilling and wireline technologies to gain share within several critical offshore markets, including the United Kingdom, West Africa, and Australia. In the onshore markets, we are entering the early stages of global shale development. Products and services we recently introduced to improve the economics of North America shale production, are now finding new homes in the Middle East, Argentina, North Africa, Russia, and China.

"Around the world, the fundamentals of our business continue to strengthen. We anticipate increased activity for the remainder of the year in the form of higher international rig counts, and increased North American well counts. As a result, we project strong earnings growth as we fulfil the industry's growing need for innovative new technologies."

 

Baker Hughes highlighted some of its most successful projects and technologies during this quarter.

It continued to see a strong demand for FASTrak logging-while-drilling (LWD) fluid analysis and testing service, the industry's first commercial service capable of retrieving fluid samples during the drilling process.  Since its introduction to the market, the FASTrak LWD service has been deployed in more than 50 critical deepwater projects.  During the second quarter, the FASTrak service was used in one project in Nigeria to take more than 100 pressure tests and 10 fluid samples in a single run for an independent operator.  The service was also successfully deployed in the United Arab Emirates, Trinidad, North Sea, and the Gulf of Mexico.

The AutoTrak Curve rotary steerable system drills more than one mile on a well in a single day.  A service value combination of the AutoTrak Curve system with the NEXT-DRILL drilling fluid system and HCC AT505 drill bit technology safely drilled more than 5,870 ft (1789 m) in one day while maintaining 100% reservoir contact.  During the quarter, the AutoTrak Curve system also surpassed 12.5 million cumulative feet drilled in the United States, and is now being deployed in Canada, Egypt, Kuwait, Saudi Arabia, and China.

Baker Hughes increases deepwater market share in West Africa.  In Angola and Nigeria, Baker Hughes was awarded several, multiyear contracts to provide directional drilling, measurement-while-drilling, LWD, drill bits, and under reamers to deepwater operators.

Baker Hughes stimulation service grews in deepwater Brazil.  During the quarter, Baker Hughes was awarded a two-year contract to provide gravel pack and acidizing services using a new, modular stimulation unit installed on a platform supply vessel.  Also in Brazil during the quarter, Baker Hughes delivered its first 2⅛-in. TeleCoil intelligent coiled tubing services in the world.  The technology is designed to efficiently service wells with small-diameter completions and was used to deliver zonal isolation, well stimulation, and production logging services simultaneously.

 

Baker Hughes took the next step in redefining production potential from shale. During the quarter, the FLEXPump Curve was successfully field tested.  This product is the world's first artificial lift system engineered to be deployed below the tight bend angles that are common in shale wells, and set in the horizontal section at the maximum depth possible.  By placing the pump deeper in the well, maximum drawdown rates are achieved, resulting in higher production rates. FLEXPump Curve is scheduled for launch in the third quarter.

Baker Hughes reshaped the possibilities of well construction with SHADOW series frac plugs.  On one project last quarter, a customer used the SHADOW plug technology to completely redesign their wellbore.  Several SHADOW plugs were deployed, with the deepest plug set at more than 25,000 ft (7620 m) measured depth, on a horizontal well stepping out nearly 15,000 ft (4572 m).  This trajectory surpasses the range of coil tubing.  The SHADOW plug technology enables our customers to construct wellbores and access reserves that would not have been possible with conventional completions technology.  Based on growing sales across every United States geomarket, we have expanded the commercialization of the SHADOW plug internationally, with our first deliveries scheduled for Russia and China.

In China, Baker Hughes successfully installed an advanced downhole, oil/water separation solution in an offshore, high water-cut oilfield scenario.  Following a study by our Reservoir Development Services (RDS) group to identify an injection zone, a multidiscipline engineering team designed an integrated system that combines completions tools, electrical submersible pumping systems, and upstream chemicals.  Within five days of installation, the well was producing 4,000 barrels of oil per day on the surface and injecting 14,000 barrels of water per day downhole.

Rapid adoption of the ProductionWave production solution is exceeding expectations and continues to drive North America results.  The ProductionWave solution sales have surpassed 1,000 installations since its commercial launch late last year including working systems now producing in virtually every North American oil basin.  During the quarter, several significant enhancements have been added to the ProductionWave platform.  The FLEXPump-ER was launched during the quarter and is capable of handling production rates from 3,000 barrels per day down to a level as low as 50 barrels per day with a single pump.  This innovation prevents the need to install different pump types over the life of a typical shale well.

Baker Hughes secured a pilot project in the legendary Bazhenov basin in Russia.  Baker Hughes has extended its unconventional reach internationally with an integrated work award in the Bazhenov shale basin in Western Siberia.  On this project, Baker Hughes will deliver completions, wireline logging, plug and perf operations, geoscience, petrophysics, and RDS as the operator evaluates the potential of this play.

 

In Saudi Arabia, Baker Hughes delivered a game changing, all-electric intelligent well system, enabling controlled production of eight different zones simultaneously.  The completions design includes three cased-hole laterals isolated by feed-through packers, and an open-hole main-bore, segregated into five zones by swelling-elastomer feed-through packers.  Numerous downhole sensors were deployed throughout the tubing and the annulus to allow real-time monitoring of production performance.  Active flow control devices installed in each zone are actuated remotely to restrict production in high-water cut zones, increasing production from hydrocarbon rich zones and enabling greater recovery over the life of the well.  The entire network of flow control devices is deployed and operated using one single electric control line, as opposed to traditional systems requiring multiple hydraulic control lines.  This significantly simplifies the installation process, improves system reliability, and enables highly accurate remote control, not possible before.

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