Halliburton sees bigger North America second quarter cost hit |
| CNBC.com - Jun 6, 2012 |
Halliburton Co , the world's second-largest oil services company, said higher costs would have twice as big an impact on its North American profit margins this quarter than it expected, and its shares fell 4 percent to an 8-month low.
The cause of the cost escalation is pricier guar gum, an agricultural commodity used in hydraulic fracturing fluids and in high demand because of the surge in U.S. well development. Halliburton has said the guar system can now account for as much as 30 percent of the overall fracking price.
"They've been passing along the cost incrementally, but because there's been such a burst in pricing, it's been hard to keep up with," said Grant Fox, analyst at Sterne, Agee & Leach.
Farmers in dominant guar producer India are scrambling to meet the demand for their crop from the other side of the world, and prices are expected to ease by 2013.
Read Full Article from CNBC.com
- Posted: 2012-06-06 14:29:58
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