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The low oil price and devastation demand due to the COVID-19 pandemic and Saudi Arabia and Russia's oil price fight, has crippled oilfield service providers, with Halliburton, Schlumberger, and Baker Hughes all drastically cutting spending and announcing big hits to financials.
Halliburton told shareholders last night it made a US$1 billion loss for the first quarter of 2020, and things wouldn't get much better over the next three quarters due to bleak conditions in the US shale patch.
The billion-dollar loss compares to a net profit in the first quarter of last year of $152 million.
The oilfield services giant has cut its 2020 spending by 50% and will reduce other expenses by US$1 billion.
It comes just a week after rival Schlumberger cut dividends and posted a US$8.5 billion charge from asset writedowns, while fellow service provider Baker Hughes also took a US$1.5 billion hit to earnings.
Halliburton and Schlumberger are feeling the brunt of the oil price crash hardest, as the majority of the companies' business is in North America. Halliburton revealed it has already lost 25% of expected revenue from North America.
"We expect activity in North America to sharply decline during the second quarter and remain depressed through year-end, impacting all basins," Halliburton chair, president and CEO Jeff Miller said.
Over the three months ending March 31, Halliburton's total revenue was approximately US$5 billion, a 12% decrease compared to this time last year.
More than half of its losses came from operating costs of $571 million.
Halliburton's chief said the company's prospects are not clear at this stage, with OPEC+'s recent decision to cut production by around 10 million barrels a day and the pandemic-related demand issues yet to be felt.
However, Miller said the company was optimistic it would "take advantage of the market's eventual recovery."
"We have been through downturns before," he said. "We know what to do and will execute based on that experience."
Halliburton recognised $1.1 billion of pre-tax impairments and other charges to further adjust its cost structure to current market conditions.
One of the only highlights Halliburton was able to present shareholders in its announcement overnight, was its award from Inpex for work on the Ichthys project in the Browse Basin offshore northern Australia.
Halliburton scored seven contracts for drilling and completion services for the next phase development of Ichthys over the quarter. The well development campaign will continue for an estimated three-year term.