Halliburton Co.'s profit jumped 26 percent in the third-quarter as oil and gas drillers expanded their operations in North America.
The company, which provides drilling and other services to oil producers, is the first big company in the industry to report quarterly results. They show an industry undeterred by a 12.5 percent drop in oil prices from the second to third quarter.
The drop may have unsettled oil investors, but the industry is pressing forward, CEO Dave Lesar said.
"I continue to believe in the long-term prospects for our business," Lesar said.
Halliburton said the industry is aggressively tapping for oil and natural gas in the U.S., particularly the rich underground shale deposits such as the Eagle Ford region of Texas, the Bakken region in North Dakota and Montana.
With more money flowing in internationally, banks appear onboard as well, Lesar said. That ensures the industry has plenty of cash to carry out new projects.
Three big acquisitions over the past day show high expectations for the energy industry.
Norwegian oil company Statoil ASA announced Monday that it would buy Brigham Exploration Co. of Austin, Texas for $4.4 billion in cash, giving it control of fields in North Dakota. Less than three hours later AmeriGas said it would pay $2.9 billion for the propane operations of Energy Transfer Partners.
Kinder Morgan plans to buy El Paso Corp. for $20.7 billion in a deal that would create America's largest natural gas pipeline operator.
Exploration and production companies are active as well. Halliburton said that rig activity grew 6 percent in North America, leading to a 13 percent growth in revenue in the period. Internationally, rig activity increased 2 percent, and revenue grew 7 percent in the quarter.
Still, Halliburton's prospects were clouded by troubling legal news for investors.
The company may be forced to pay millions or billions of dollars as part of its role in last year's Gulf of Mexico oil spill. Halliburton, which was hired to do cement work on the well, has shared the blame for the disaster with well owner BP and rig owner Transocean. Halliburton has denied that it is at fault, but analysts say it may pay BP anyway to clear itself from any future legal claims.
A stake holder in the well, Anadarko Petroleum Corp., on Monday agreed to pay BP $4 billion.
BP already has accepted a $75 million settlement from contractor Weatherford International Inc. and a $1 billion settlement with MOEX Offshore 2007 LLC, which owned 10 percent of the well.
Shares of Halliburton fell 7 percent, or $2.66 a share, $34.77, in late morning trade on Monday.
The Houston oil services company reported earnings of $683 million, or 74 cents per share, for the three months ended Sept. 30. That compared with $544 million, or 60 cents per share, for the same period in 2010.
Income from continuing operations was 94 cents per share. Revenue grew 40 percent to $6.55 billion in the period.
Analysts, who tend to base estimates on continuing operations, were expecting earnings of 91 cents per share on revenue of $6.35 billion, according to FactSet.
The company said costs rose for materials, logistics and labor in North America, and project delays in Iraq and Libya slowed down its international business.
Profit at Halliburton's completion and production business increased 75 percent to $1.07 billion. The company's drilling and evaluation business saw profit increase 36 percent to $369 million.
Schlumberger Ltd. is expected to release its financial results on Friday while Baker Hughes Inc. will post its results on Nov. 1.