Houston (Platts)--22Apr2013/530 pm EDT/2130 GMT

US oilfield services giant Halliburton posted Monday an $18 million net loss for the first quarter of 2013, compared to a profit of $627 million in the year-ago period, after taking a further $1 billion in pre-tax provisions to cover a potential settlement over its involvement in the 2010 Gulf of Mexico oil spill.

The company said the quarterly charge, which increases its "contingency for Macondo well incident" litigation, compares to a $300 million pre-tax Macondo charge in the year-earlier period.

"With respect to the ongoing Multi-District Litigation trial regarding the Macondo well incident, we have recently participated in court-facilitated settlement discussions with the goal of resolving a substantial portion of private claims," Halliburton said in its earnings statement.

"Our most recent offer includes both stock and cash, with the cash components payable over an extended period of time. Discussions are at an advanced stage but have not yet resulted in a settlement," the company said.

US federal investigators concluded in 2011, following a 17-month probe, that a series of failures by BP and contractors Transocean and Halliburton caused the Deepwater Horizon disaster. BP's subcontractor, Halliburton was deemed responsible for the runaway well's faulty cement job.

The US has not charged Halliburton, but the Justice Department has said its investigation is ongoing.

Halliburton denies it played a significant role in the accident and has said it is confident that the work it did on the Macondo well was in accordance with BP's specifications.

The $1 billion pre-tax charge for Macondo, following a $300 million charge in 1Q12, "may take some investors by surprise," since Halliburton's role in the oil spill has been "less prevalent in recent headlines about the case," Barclays analyst Harry Mateer said in a Monday note.

Nonetheless, "the company's comment that discussions are at an advanced stage and that a cash component could be paid out over an extended period should support our view that Halliburton's potential liability is manageable within the context of its ratings profile," Mateer said.

At March 31, 2013, the company had $2 billion of cash, he said.

Excluding the charge, Halliburton said its adjusted earnings for the first quarter of 2013 were $624 million, down from $826 million in the year ago period.

Halliburton said falling US drilling activity was more than offset by growing income from its work outside North America, with operating income from its completion and production division shrinking to $615 million in the quarter from $1.04 billion a year before.

Total revenues, however, rose slightly to $6.97 billion from $6.87 billion in the first quarter of 2012.

"The rig count decline and pricing headwinds in North America were more than offset by our expanding international business," CEO Dave Lesar said in a statement.

In North America, revenue was down 1% and operating income increased 30%, compared to a 3% decline in the US rig count, the company said. Its international revenue grew by 21% compared to the first quarter of 2012.

For the full year, the company said it expects total international revenue growth in the "low teens" relative to 2012, and expects full-year international margins to average in the "upper teens."

--Starr Spencer, starr_spencer@platts.com
--Robert Perkins, robert_perkins@platts.com
--Edited by Katharine Fraser, katharine_fraser@platts.com

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