Leading oilfield service provider Halliburton Co. (HAL) reported the closure of an investigation by the United States Department of Justice (:DOJ) on the company’s role in the Gulf of Mexico’s Macondo well disaster. The incident claimed 11 lives and spewed more than 4 million gallons of crude -- the worst oil spill ever. Halliburton was in charge of the cementing job at the well.
Moreover, the U.S. district judge has accepted the guilty plea from Halliburton of intentionally removing computer records after the disaster. The court imposed a fine of $200,000 and also forced Halliburton into a probationary period of three years.
Halliburton inked a cooperation plea deal with the DOJ earlier. Additionally, the DOJ disclosed that the company has cooperated extremely well with the court proceedings.
Halliburton believes that the investigation closure will remove an overhang from the stock and benefit its shareholders.
Houston-based Halliburton is one of the largest oilfield service providers in the world. The company operates under two main segments: Completion and Production, and Drilling and Evaluation.
Going forward, Halliburton expects to benefit from its leading position in the North American oilfield services market, improving its international margins, and expanding market penetration in deepwater and underserved international regions. We expect these trends to result in a strong operating environment leading to positive earnings surprises.
Halliburton currently holds a Zacks Rank #2 (Buy), implying that it is expected to significantly outperform the broader U.S. equity market over the next one to three months.
Apart from Halliburton, one can look at other oil field service providers like Oceaneering International Inc. (OII), Core Laboratories NV (CLB) and Subsea 7 SA (SUBCY) that offer value. All the stocks sport a Zacks Rank #2 (Buy).