Halliburton Co is in talks to settle private claims against it in a trial to determine how blame should be shared for the 2010 Gulf of Mexico spill, the company said on Monday, and it took a $1 billion pretax charge for a possible deal.
The disclosure of the talks helped push Halliburton shares up 3.5 percent. It came just days after the conclusion of court proceedings for the first phase of the trial to settle claims brought by the U.S. government and Gulf Coast states, as well as private parties affected by the worst U.S. offshore oil spill.
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BP Plc has sought to offload as much blame as possible on to rig owner Transocean Ltd and Halliburton, which performed the cement work on the well.
Halliburton Chief Executive Officer David Lesar said the company believed an "early and reasonably valued" resolution was in the best interests of shareholders, and its most recent offer included cash components payable over time as well as stock.
"Discussions are at an advanced stage but have not yet resulted in a settlement," Lesar said, explaining what amounts to an after-tax charge of $637 million that pushed the oilfield services company to a loss for the first quarter.
The charge is based on where Halliburton is in the negotiations, Lesar said. It is on top of a first-quarter 2012 charge of $191 million after taxes, or $300 million before taxes.
The total $1.3 billion reserve estimate does not include any potential insurance recovery, Lesar said.
Shares of Halliburton, the world's second-largest oilfield services company, rose 3.5 percent to $38.50 in premarket trading.
"A Macondo settlement would be a significant positive for the stock," said UBS analyst Angie Sedita, adding that Halliburton also got a lift in the first quarter from higher-than-expected earnings in North America.
The company reported a loss of $13 million, or 1 cent per share, compared with year-earlier earnings of $635 million, or 69 cents per share. Excluding the charge and other items, it made a profit of 62 cents per share, ahead of the 57 cents that analysts expected, according to Thomson Reuters I/B/E/S.
Revenue rose 1.5 percent to $6.97 billion.
Revenue from outside North America grew 21 percent, and Halliburton said it had delivered better growth internationally than its two primary competitors over the past four quarters.
On Friday, industry leader Schlumberger Ltd and third-ranked Baker Hughes Inc both reported higher-than-expected earnings.
Oilfield companies' pricing power, especially for pressure pumping fleets used in hydraulic fracturing, has collapsed in North America as the number of U.S. rigs targeting natural gas edges away from 14-year lows. But Baker Hughes said on Friday that the declines in frack pricing were starting to taper off.
Halliburton weighed in on Monday, saying pricing might increase modestly this year as customers adopt new technology to improve well production.
(Reporting by Braden Reddall in San Francisco; Editing by Lisa Von Ahn)