Tuesday, May 13, 2008

Zack's Bullish On Halliburton

Zacks: Keep Halliburton a Core Holding

Halliburton Company's (HAL) first-quarter 2008 results were on the weaker side, reflecting continued pricing pressure in the U.S. market. However, the company's income rose nearly 6%, driven by growing business in the Middle East, Asia and Latin America.

The company's overseas revenues were up 24% year-over-year and look set to achieve the targeted growth rate of 20% for the full year. Our Buy recommendation remains unchanged as we continue to view Halliburton as a core oilfield service holding.

We believe that the company will continue to reap the rewards of several strategic moves during the past year, resulting in further margin gains and a strengthened competitive position in its space. Despite some recent gains, Halliburton shares continue to trade at a significant valuation discount to its peer group. While the company no doubt has substantial exposure to North American natural gas through its market leading pressure-pumping business, its international leverage and presence appears to be under-appreciated.

The award of a major multi-year Saudi Aramco project highlights the strength of its international relationships, which we believe will get greater attention. With the KBR separation issue behind it, the new-look Halliburton is now a pure-play energy services provider; well positioned to capitalize on growth opportunities in its global energy services business.

Management is targeting industry leading revenue, earnings and returns performance metrics over the next few years, highlighting the breadth and depth of the company's oilfield franchise. Our new $55 price objective, raised from $44 before, is based on 2008 P/E and EV/EBITDA multiples of 14.8x and 19.2x, still below most of its large-cap peers.


Anaconda said...


Please see post, Scientists Prove Hydrocarbons Are Abiogenic, February 2, 2008, Comment #5, Diamondoids..., 4/02/08.


Scientists have discovered crude oil has a diamond fingerprint, or diamond signature, if you will.

More properly called diamondoids, diamonds on a molecular level.

All crude oil has at least traces of diamondoids, although deep oil has a higher concentration, and with diamonoids of increasing complex molecular structure.

Diamondoids have the same physical properties and characteristics as their larger brethren diamonds. Diamondoids can be created only in the laboroatory with ultra high temperature and ultra high pressure.

All authorities agree that diamonds can be created only in nature by the ultra high temperature and ultra high pressure present, some 100 miles deep in the Earth's mantel, or created in the laboratory by mimicking those same conditions.

In a similar vein, laboratory experiments using ultra high temperature and pressure, consistent with conditions in the mantel, have created the alkane series of hydrocarbons from marble, ironoxide, and distilled water, in distribution charactersitic of natural petroleum: methane, ethane, propane, butane, pentane, hexane, and n-alkanes through C10H22.

Together, these facts suggest that these microscopic, diamond fragments, diamondoids, are the non-biogenic fingerprints that show oil originates in the mantel where both petroleum and diamondoids are created in tandum, and then migrate up to the crustal, sedimentary, oil trapping structures and accumulate.


"For that claim to be meaningful, you'd need to show that diamondoids (assuming this is real science and not science fiction) don't crop up everywhere else in the crust at the same depths that oil is found..."


Your objection is reasonable. I can't report there has been a search for diamondoids at "everywhere else in the crust at the same depths that oil is found."

But your objection would have to assume some unknown process for diamondoid creation, which scientist were not able to discover (with much determination and resources), while these same scientists were able to create diamondoids by mimicking the deep mantel environment.

And, you have to assign no value to the scientific fact that diamondoids share the same properties, such as molecular structure, stability, and hardness, as diamonds. Because they are diamonds, just reduced in size to a molecular level, and that diamonds are only created in the mantel.

It's a scientific improbability for diamondoids to "look like a duck, act like a duck, be a duck," but not be formed in the same way, in the same environment as a duck.

With the above in mind, the scientific burden of proof would be on you to demonstrate how diamondoids would form where you postulate their presence in the crust, or to find them in the crust in the absence of crude oil.

Anaconda said...


"I have gone to the best geologists and the best petroleum researchers, and I can give you the authoritative answer: No one knows. Edward Teller on how living matter is converted into petroleum (Teller 1979).

-- Edward Teller is known as "The father of the hydrogen bomb."

Anaconda said...


Petroleum: To Be Or Not To Be Abiogenic,
M.R. Mello and J.M. Moldowan,
(available by direct link at left-hand column under Abiomarkers, listed as, Biogenic Cult Says Diamonds Formed From Fossils)

Dismissal of Claims of a Biological Connection for Natural Petroleum,
J.F. Kenney, et al.
(available by direct link at left-hand column under Technical Papers)

An objection to the claim that diamondoids prove abiotic oil theory has been lodged in the above paper by Mr. Mello and Mr. Moldowan.

A response is required as great weight has been placed in this space that diamondoids do, indeed, prove crude oil is abiogenic and forms deep in the primordial mantel of the Earth.

The nature of the objection by Mello and Moldowan is that diamondoids have a biogenic origin and it is proven by carbon isotopic composition. While admitting diamonds are abiogenic (formed in the Earth's mantel), they state:

"However, the structurally related diamondoids in oil show high levels of isotopic fractionation in the range of -20 to -30 per mil, the same as most true biomarkers, indicating diamondoid derivation from enzymatic ally-created lipids with subsequent structural rearrangement during the process of source rock maturation and oil generation."

Case closed for "fossil" advocates.

J.F. Kenney, et al. analyses this argument in relation to hydrocarbons and, in particular, to carbon compounds. Reporting that two sets of scientists, one in Italy and one in Russia proved experimentally that carbon isotopic composition can't be relied on to prove carbon origins.

"Both sets of workers established that the carbon isotope ratios can not be used reliably to determine the origin of the carbon compound tested."

"[The scientists] demonstrated conclusively, by a simple experiment the results of which admitted no ambiguity, that carbon isotope ratios of methane change continuously along the transport path, becoming progressively lighter with distance traveled. Colombo et al. took a sample of natural gas and passed it through a column of crushed rock, chosen to resemble as closely as possible the terrestial environment. Their results were definitive: The greater the distance of rock through which the sample of methane passes, the lighter becomes its carbon isotopic ratio..."

"The results is not surprising; contrarily, such is entirely consistent with the fundamental requirements of quantum mechanics and kinetic theory."

"The 13C carbon isotope ratio can not be considered to determine reliably the origin of a sample of methane, - or ANY OTHER COMPOUND (emphasis added)."

What is notable about Kenney's presentation is his reference to actual experiments, which he describes and explains the results, therefrom.

Mello and Moldowan do not list specific experiments and results, therefrom. Actually, they have no explanation for how diamondoids are formed, biogenically, other than the unproved assumption, "...diamondoid derivation from enzymatic ally-created lipids with subsequent structural rearrangement during the process of source rock maturation and oil generation."

The same unproven assumption underlying the whole "fossil" theory argument.

Since both propositions for each side of the argument can be directly linked at the left-hand column, the reader is invited to consider the entire arguments in context and draw their own conclusions.

May this discussion/comparison help the reader understand the relative merits of each side.

Anaconda said...


Follow up comments are needed in regards to the scientific method.

When a scientific assertion is made, it is incumbent to acknowledge the known objections and physical limitations to the assertion, and if possible explain why those objections and physical limitations are invalid or don't apply.

Here, Mr. Mello and Mr. Moldowan presented their paper in 2005. J.F. Kenney, et al. published their paper in 2001. Presumably careful and conscientious research on the subject would make Mello and Moldowan aware of Mr. Kenney's scientific paper explaining why carbon isotopic ratios are not determinative of the carbon compounds origins.

Yet, no reference is made to Kenney's paper or the published experiments reported by Kenney.

This being a controversial issue, and a turning scientific proof, and, Mr. Kenney being in the same scientific field, and industry, if holding an opposing view, it is presumed Mello and Moldowan did know about the J.F. Kenney paper, but chose to ignore it and not bring it to their audience's attention.

This is tantamount to making their work suspect.

Also, research on diamondoids would reveal that Chevron scientists, after much effort and determination, were only able to create diamondoids in the laboratory by mimicking the ultra high pressure and heat consistent with the conditions in the Earth's mantel.

Chevron's scientists were not able to create diamondoids in anyway consistent with Mello and Moldowan's hypothesis.

Yet, Mr. Mello and Mr. Moldowan failed to mention the Chevron scientists work. Again it is presumed Mello and Moldowan, after researching the subject would know about the Chevron scientist's work.

But, again Mello and Moldowan failed to bring this work to their audience's attention.

It being highly relevant that scientists were only about to create diamondoids in the laboratory in conditions consistent with the Earth's mantel.

Mr. Mello and Mr. Moldowan fail to mention that the shallower the oil deposit, the less diamondoids (only trace amounts) are present, and the less complex the molecular structure (fewer cages stuck together).

This, again, raises questions about the quality of their work.

Contrast, that with Mr. Kenney's work, where he meets the one objection raised by Mello and Moldowan, namely the issue of carbon isotopic ratios.

Mr. Mello and Mr. Moldowan did not exercise the scientific method in any way that leads to taking their work seriously.

Anaconda said...


"Mr. Mello and Mr. Moldowan fail to mention that the shallower the oil deposit, the less diamondoids (only trace amounts) are present, and the less complex the molecular structure (fewer cages stuck together)."

Ojection: In what way was Mr. Mello's and Mr. Moldowan's failure to mention or discuss the above facts relevant or detracting from their presentation?

Response: Because the above facts are entirely consistent with abiotic oil theory, that petroleum rises from great depth, and over the distance traveled, passing through the terrestrial environment, diamondoids would be progressively stripped out, leaving a stratographic profile consistent with reports of the Chevron scientists: Only trace amounts of the simplest "single cage" diamondoids were detected in shallow oil deposits, while at great depth (found in the deepest oil deposits in the Gulf of Mexico), the highest concentrations of diamondoids were detected with the most complex molecular structure with multiple cages stuck together in multiple molecular shapes.

All this would be relevant in weighing the evidence of abiotic oil theory and in particular, relevant in consideration of their assertion.

Clearly, it is an inconvenient fact that contradicts their claims.

It is reminded that the obligation of the scientific method is to bring attention to physical observations that are contradictory to your assertion.

Mello and Moldowan failed to do that.

A fact that Mr. Mello and Mr. Moldowan most probably knew or should have known through careful research.

But ignored.

unknown said...

answer is very simple that originally hydrocarbons has been formed at deep origins of earth without any involvement of fossils and has been seeped up on the surface of earth ,heavy hydrocarbons has been reburied after mixing with the organic matter from the surface.and finally has been accumulated as commercial viable hydrocarbons for us .sureshbansal342@gmail.com