Halliburton buys Oil Fire Fighting company on April 12th for $240 Million

Vatic Note:  Solution:   Maybe this is the time to begin our citizen grand juries if we are not going to get investigations into these types of actions and stock buying or shorts,  and let the people bring justice back into the equation once again.

Halliburton buys Oil Fire Fighting company on April 12th for $240 Million
http://snardfarker.ning.com/profiles/blogs/halliburton-buys-oil-fire...

by KLC provided by Dick Eastman

Halliburton Inc. says it finished a cementing operation 20 hours before a Gulf of Mexico rig went up in flames.

Although no cause has been determined, oil services contractor Halliburton Inc. says it finished a cementing operation 20 hours before a Gulf of Mexico rig went up in flames.

Halliburton is named as a defendant in most of the more than two dozen lawsuits filed by Gulf Coast people and businesses claiming the oil spill could ruin them financially. In one lawsuit, two Louisiana shrimpers claim cementing contributed to the explosion.

Halliburton said Friday it had four workers stationed on the rig, performing several tasks, including cementing — a process of applying cement and water to a pipe used to prevent the wall of the hole from caving in during drilling.

According to a 2007 study by Minerals Management Service, cementing was a factor 18 of 39 rig blowouts in the gulf between 1992 and 2006.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/04/30/financi...

Halliburton buys Oil Fire Fighting company on April 12th for $240 Million

In 1978, Edward "Coots" Matthews and Asger "Boots" Hansen founded Boots & Coots (WEL). Both were veteran oil-well firefighters. In fact, they provided inspiration for a 1968 film called Hellfighters, starring John Wayne.

But the days of independence have come to an end for Boots & Coots as the company has agreed to sell out to Halliburton (HAL) for $240.4 million. Shareholders will get $1.73 in cash and $1.27 in Halliburton stock for every share of Boots & Coots.

The company certainly has a distinguished history. It has been critical in dealing with many well fires, including those from Iraq's 1990 invasion of Kuwait. But given its relatively small size, Boots & Coots has been at a disadvantage. As a result, the stock price has been mostly lackluster over the years.

A Perilous Business

Boots & Coots has two core businesses. First, there is Pressure Control, which involves prevention and risk-control services for oil- and gas-well fires and blowouts. A key to this area was the acquisition of John Wright, which developed sophisticated technologies to measure well integrity.

Next, Boots & Coots has a Well Intervention division, which helps enhance production for oil and gas operators. This business is likely to benefit nicely from the trend toward unconventional resource plays (such as extracting energy from shale). Boots & Coots greatly expanded this division with the acquisitions of Oil States International and StassCo.

Despite all this, the company is still at the whim of volatile energy markets, as well as unpredictable government-owned oil companies. For example, last year Boots & Coots saw a 7% fall in revenues to $195.1 million, with net income down from $21.8 million to $6 million. Keep in mind that during this period, there was nearly a 50% drop in domestic rig counts.

But as part of Halliburton, Boots & Coots will have more leverage to expand its platform, especially in areas like Africa and even Southeast Asia, which should provide significant growth opportunities.

Feeling Left Out?

According to its latest earnings report, Halliburton is upbeat about the prospects for 2010. Actually, it looks like there will be a rebound in North America because of increased demand and rig counts. At the same time, it appears that Halliburton is gaining more market share from its struggling rivals.

But when it comes to M&A, Halliburton has been timid. Just look at Schlumberger (SLB), which recently agreed to shell out $11 billion for Smith International (SII) and $1.07 billion for Geoservices. Of course, there is also the $5.5 billion merger of Baker Hughes (BHI) and BJ Services (BJ).

So, will Halliburton try for a major deal, too? Perhaps. The company has $3.4 billion in the bank and easy access to financing. Yet, the oil services industry has undergone lots of consolidation, and few major targets are left. And a deal could ultimately suffer from antitrust pressure.

In other words, Halliburton may focus its dealmaking on small companies that fill out niches, like
http://www.dailyfinance.com/story/investing/halliburton-snaps-up-bo...

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According to Transocean Ltd., the operator of the drilling rig, Halliburton had finished cementing the 18,000-foot well shortly before the explosion.

James wrote:

An oil-drilling procedure called cementing is coming under scrutiny as a possible cause of the explosion on the Deepwater Horizon rig in the Gulf of Mexico that has led to one of the biggest oil spills in U.S. history, drilling experts said Thursday.

The process is supposed to prevent oil and natural gas from escaping by filling gaps between the outside of the well pipe and the inside of the hole bored into the ocean floor. Cement, pumped down the well from the drilling rig, is also used to plug wells after they have been abandoned or when drilling has finished but production hasn't begun.

In the case of the Deepwater Horizon, workers had finished pumping cement to fill the space between the pipe and the sides of the hole and had begun temporarily plugging the well with cement; it isn't known whether they had completed the plugging process before the blast.

Regulators have previously identified problems in the cementing process as a leading cause of well blowouts, in which oil and natural gas surge out of a well with explosive force. When cement develops cracks or doesn't set properly, oil and gas can escape, ultimately flowing out of control. The gas is highly combustible and prone to ignite, as it appears to have done aboard the Deepwater Horizon, which was leased by BP PLC, the British oil giant.

Concerns about the cementing process—and about whether rigs have enough safeguards to prevent blowouts—raise questions about whether the industry can safely drill in deep water and whether regulators are up to the task of monitoring them.

The scrutiny on cementing will focus attention on Halliburton Co., the oilfield-services firm that was handling the cementing process on the rig, which burned and sank last week. The disaster, which killed 11, has left a gusher of oil streaming into the Gulf from a mile under the surface.

Federal officials declined to comment on their investigation, and Halliburton didn't respond to questions from The Wall Street Journal.

According to Transocean Ltd., the operator of the drilling rig, Halliburton had finished cementing the 18,000-foot well shortly before the explosion. Houston-based Halliburton is the largest company in the global cementing business, which accounted for $1.7 billion, or about 11%, of the company's revenue in 2009, according to consultant Spears & Associates.

Growing worries about potential lawsuits and other costs of the oil spill in the wake of its rapid spread led investors to clobber stocks of companies involved in the Deepwater Horizon well Thursday.

Halliburton fell 5.3% to $31.60 and Cameron International Corp., which built the blowout-prevention equipment that didn't stop the explosion, dropped 13% to $38.70, both at 4 p.m. in New York Stock Exchange composite trading.

The timing of the cementing in relation to the blast—and the procedure's history of causing problems—point to it as a possible culprit in the Deepwater Horizon disaster, experts said.

"The initial likely cause of gas coming to the surface had something to do with the cement," said Robert MacKenzie, managing director of energy and natural resources at FBR Capital Markets and a former cementing engineer in the oil industry.

Several other drilling experts agreed, though they cautioned that the investigation into what went wrong at the Deepwater Horizon site is still in its preliminary stages.

The problem could have been a faulty cement plug at the bottom of the well, he said. Another possibility would be that cement between the pipe and well walls didn't harden properly and allowed gas to pass through it.

A 2007 study by three U.S. Minerals Management Service officials found that cementing was a factor in 18 of 39 well blowouts in the Gulf of Mexico over a 14-year period. That was the single largest factor, ahead of equipment failure and pipe failure.

The Halliburton cementers would have sought approval for their plans—the type of cement and how much would be used—from a BP official on board the rig before carrying out their job. Scott Dean, a BP spokesman, said it was premature to speculate on the role cement might have played in the disaster.

Halliburton also was the cementer on a well that suffered a big blowout last August in the Timor Sea, off Australia. The rig there caught fire and a well leaked tens of thousands of barrels of oil over 10 weeks before it was shut down. The investigation is continuing; Halliburton declined to comment on it.

Elmer P. Danenberger, who had recently retired as head of regulatory affairs for the U.S. Minerals Management Service, told the Australian commission looking into the blowout that a poor cement job was probably the reason oil and natural gas gushed out of control.

http://online.wsj.com/article/SB10001424052748703572504575214593564769072.html

Write to Russell Gold at russell.gold@wsj.com  and Ben Casselman at ben.casselman@wsj.com

First victims (apart from the men on the rig) of Gulf of Mexico Oil Disaster are sea life

Comment by KLC on May 1, 2010

I agree diana..something is definately fishy about this whole story!!!! Last night someone posted an article that North Korea may be to blame for this latest oil rig explosion because of South Koreas involvement with it (and their friendship with USA) so who knows what the heck is going on anymore.

and....I can also totally see Obama's team false flagging this oil explosion...just to create that "destructive to the environment" propaganda!   thanks for replying!

Comment by Diana on May 1, 2010

I remember about a month ago when Obama announced he would approve offshore drilling and wondering what the back story was to that seemingly incongruent statement. Now it all makes sense. With the great oil spill in the Gulf, he can now say, “Gee, I really wanted to, but you can see that such a thing is just too dangerous, too destructive to the environment.”

It took me a long, long, long, long time to come to the conclusion that the global bankers were behind 911. I did not want to think such a thing was possible. But after I faced facts and came to see that this was indeed the case, I have had to reexamine many events that have transpired in the past and look skeptically at any new events. This one smells very fishy. Thank you for this story and I look forward to any new information that comes forward to explain what really happened. We must expose them for the evil criminals they are!

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