Texas-based oil and gas service provider Halliburton Company (NYSE:HAL), had earlier declared a union with Baker Hughes Incorporated (NYSE:BHI). However, there was uncertainty surrounding the merger, as both parties were unable to reach an agreement on the purchase price offered by Halliburton. Halliburton later tried to attain Baker Hughes through a hostile takeover but faced criticism. Finally the two companies reached a consensus and a deal worth $34.6 billion was made between the two. The price of crude oil had been declining since June 2014 and overall a 50% decrease was seen it’s pricing. By the end of Friday’s trading the price of West Texas Intermediate was $48.36 per barrel while the price of Brent Crude was $50.11 per barrel.
However, according to Barclay’s the merger of Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) will not only help Halliburton (NYSE:HAL) survive the low oil prices but will also make its position stronger in North America.
Halliburton makes its money by helping oil and gas companies drill new oil wells. With the price of oil now in the $50 per barrel range, oil companies are slashing capital expenses, which will impact Halliburton’s growth and margins in 2015, and likely beyond. Halliburton’s business also faces being squeezed by cost reductions demanded by oil companies. Several oil producers have said they suppose service costs to come down as a result of falling oil prices.
Halliburton Company (NYSE:HAL), declined -1.02% and close at $39.80. The company attained the market capitalization of $33.73B, and has an outstanding shares of $847.46M. Its beta value is $1.59 and has 52-week range of $37.21 - 74.33.
The analysts are optimistic about the future of Halliburton (NYSE:HAL) because the company had been able to survive previous hurdles as well. The company had seen a 46% fall in margin in 2013 and in 2009 a 60% fall in margin was also faced but both times it managed to survive and regain the market shares.
