Here's a classic energy industry move: taking old, tired oil fields and trying to squeeze a little more life out of them. That's exactly what Halliburton Company (HAL) is planning to do in Indonesia after announcing a new partnership on Sunday.
The oilfield services giant signed a memorandum of understanding with Indonesia's state-owned energy company, PT Pertamina. The goal? To deploy what Halliburton calls "advanced well construction and stimulation technologies" to revitalize mature fields across the archipelago. Think of it as a high-tech makeover for aging oil assets.
For Pertamina, this is about more than just getting a few extra barrels. "The cooperation forms an integral part of Pertamina's sustainable transformation of upstream production, increasing national lifting and ensuring reliable energy supply," said Simon A. Mantiri, President Director of PT Pertamina. He added that with the right technology and expertise, these mature fields could "once again, be productive and contribute to national energy production."
Halliburton's approach, according to Martin White, the company's senior vice president for Asia Pacific, involves blending "proven unconventional methodologies with localized reservoir insights." In simpler terms: take what works globally and apply it specifically to Indonesia's geology, all while trying to build up local capabilities along the way.
The announcement comes at an interesting time for Halliburton. Just last month, the company reported fourth-quarter earnings that pleasantly surprised Wall Street. Profit came in at $589 million, or 70 cents per share. Adjusted earnings of 69 cents per share handily beat analysts' expectations of 55 cents, and revenue of $5.657 billion also topped forecasts.
Analysts took notice. Stifel's Stephen Gengaro maintained a Buy rating and nudged his price target up to $36 from $35. Over at Susquehanna, Charles Minervino was even more bullish, raising his forecast from $36 to $40. Both moves signal confidence in the company's strategic direction—which apparently now includes giving Indonesia's old oil fields a second act.
As for the stock, Halliburton shares were down slightly in premarket trading on Monday, but they're hovering near their 52-week high of $35.85. It seems investors are already pricing in both the solid earnings and the potential of deals like this one in Indonesia.
