Halliburton Co. (NYSE:HAL) (1.3%) (HAL – $45.29 – NYSE), based in Houston, Texas, is one of the leading providers of services and products to the energy industry related to the exploration, development, and production of oil and natural gas. With its merger with Baker Hughes blocked by the Department of Justice in May 2016, HAL is now refocusing its attention on cost savings and preparing for the eventual upturn in global exploration and production (E&P) capital budget spending. The company has targeted to reduce $1B in costs globally by the end of 2016. As the market leader in pressure pumping as well as completion equipment and services, HAL is well positioned to benefit from the recovery from higher oil prices and a pickup in drilling activity, first in North American land and followed by international land. With WTI crude prices near $50 per barrel, we expect E&P operators to begin to complete their inventory of drilled but uncompleted wells, followed by new drilling activity in the second half of 2016. Our Private Market Value for Halliburton is $55 per share.
From the Gabelli Dividend Growth Fund second quarter 2016 commentary.
