Press Release

DALLAS, July 26 /PRNewswire/ -- Halliburton Company (NYSE: HAL) reported today that the company's 2000 second quarter net income was $75 million ($0.17 per share diluted) compared to $83 million ($0.19 per share diluted) in the 1999 second quarter.

Revenues from continuing operations were $2.9 billion in the 2000 second quarter, about the same as the 2000 first quarter. Compared to the year-ago quarter, a 13 percent increase in the Energy Services Group's revenues substantially offset a 29 percent decrease in the Engineering and Construction Group's revenues.

2000 Second Quarter Segment Results

The Energy Services Group business segment's 2000 second quarter revenues were $1.9 billion, a 13 percent increase over the year-ago quarter and a 10 percent increase sequentially. The Halliburton Energy Services business unit led the business segment with a 24 percent year-over-year quarterly revenue increase and a sequential quarterly improvement of 12 percent. The year-over-year quarterly revenue improvement for the business segment was primarily driven by a 36 percent increase in the U.S. which was complemented by a four percent increase internationally. On a sequential basis, U.S. revenues increased 13 percent, while international revenues were up nine percent. International revenues represented approximately two-thirds of the Energy Service Group's total revenues during the quarter.

The Energy Services Group's operating income of $107 million in the 2000 second quarter increased 118 percent over the 1999 second quarter and 73 percent sequentially. The improvements are primarily due to higher capacity utilization and price improvements in Halliburton Energy Services' North American operations where incremental margins were 34 percent compared to the 1999 second quarter and 40 percent sequentially. Increased sales and profitability on software at Landmark Graphics also contributed to the segment's improved operating income. Brown & Root Energy Services' operating income remained slightly above breakeven sequentially due to continued low utilization of manufacturing and fabrication capacities as well as delayed customer projects.

The Engineering and Construction Group business segment's revenues were $971 million in the 2000 second quarter, a 29 percent decline from the 1999 quarter and a 14 percent decline sequentially. Most of the decline was attributable to reduced customer spending levels associated with Kellogg Brown & Root's downstream petroleum industry business. Operating income from the Engineering and Construction Group in the 2000 second quarter was $36 million, flat sequentially and down from $64 million in the 1999 second quarter primarily due to the decline in revenues.

Discontinued Operations

Earlier this year Halliburton announced plans to sell the company's Dresser Equipment Group's business units to sharpen focus on the company's core business activities. Therefore, such businesses are now accounted for as discontinued operations.

Net income from discontinued operations in the 2000 second quarter was $23 million ($0.05 per share diluted) compared to $28 million ($0.06 per share diluted) in the 1999 second quarter. The decrease is due to the sale of Ingersoll-Dresser Pump and Dresser-Rand in late 1999 and early 2000.

The sales of the remaining Dresser Equipment Group business units are expected during the fourth quarter of 2000 and the first quarter of 2001.

Technology and Business Successes

During the last three months, Halliburton achieved a number of technology and business successes, including:

• Halliburton and Petrobras signed contracts totaling more than $2.5 billion for the development of both the Barracuda and Caratinga deepwater oil fields in Brazil. Work totaling $1.7 billion will be performed by Halliburton's Brown & Root Energy Services and Halliburton Energy Services business units, and the balance will be performed by Petrobras under a subcontract.

• Halliburton Energy Services announced that the initial trials of its revolutionary new technology, the Anaconda Advanced Well Construction System, have been successfully completed. Halliburton, along with Statoil of Norway, developed the first phase of this unique technology to economically enhance drainage and recovery of reserves in Statoil's mature North Sea fields.

• Brown & Root Energy Services completed the installation of the 91,000 ton Malampaya concrete gravity sub-structure offshore Palawan Island in the Philippines. The installation was achieved three months ahead of schedule and marks the first such installation in the South China Sea.

• Halliburton Energy Services entered into a strategic partnership with GeoMechanics International, Inc. (GMI), bringing together Halliburton's global leadership in logging-while-drilling and directional drilling services and GMI's leadership in providing wellbore stability software and consulting services to the worldwide energy industry. -- Halliburton Energy Services launched "Stim Star II" -- its latest dynamically-positioned stimulation vessel for the deepwater Gulf of Mexico.

• Brown & Root Services has been awarded a logistical support contract by the U.S. Department of the Navy which is similar to the company's contract with the U.S. Army. The contract provides for personnel, equipment, materials, labor, and travel for immediate response to emergencies caused by natural disasters, military conflict, and/or support of humanitarian assistance.

Dick Cheney Comments

Dick Cheney, Halliburton's chairman of the board and chief executive officer, said, "I am pleased with the strong financial performance of our oil field services related businesses in the 2000 second quarter, particularly their performance in North America. With continued high demand for natural gas and relatively high depletion rates constraining production, we expect future business opportunities to increase. International business is just beginning to recover as the world crude oil supply/demand balance has tightened significantly. Our customers now indicate upward revisions to their exploration, development and production spending budgets to capitalize on the improved oil and gas outlook. Downstream petroleum industry spending, that significantly impacts Halliburton's engineering and construction business, will lag improvements in the upstream marketplace and will likely begin expansion in 2001."

Cheney continued, "As you know, I have announced that I will be resigning from Halliburton effective August 16 to be George W. Bush's vice presidential running mate. I am proud to have had the opportunity to serve Halliburton's shareholders over the past five years, and I have every confidence that Dave Lesar, my successor, will provide excellent future leadership of the company."

Halliburton Company, founded in 1919, is the world's largest provider of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services Group and Engineering and Construction Group business segments. The company's World Wide Web site can be accessed at http://www.halliburton.com.

                             HALLIBURTON COMPANY
                      Consolidated Statements of Income
                                 (Unaudited)

                                      Quarter Ended       Six Months Ended
                                         June 30               June 30
                                     2000      1999       2000        1999
                                  Millions of dollars except per share data
    Revenues
    Energy Services Group          $1,897     $1,681     $3,620      $3,434
    Engineering and
     Construction Group               971      1,372      2,107       2,880
      Total revenues               $2,868     $3,053     $5,727      $6,314

    Operating income
    Energy Services Group            $107        $49       $169        $106
    Engineering and
     Construction Group                36         64         72         122
    General corporate                 (17)       (17)       (34)        (34)
    Special charges and credits       ---         47        ---          47
      Total operating income          126        143        207         241

    Interest expense                  (33)       (33)       (66)        (68)
    Interest income                     3          6         10          37
    Foreign currency losses, net       (3)         3         (7)          2
    Other nonoperating, net           ---        (26)       ---         (24)
    Income from continuing operations
     before income taxes, minority
     interests, and change in
     accounting method                 93         93        144         188
    Provision for income taxes        (36)       (33)       (56)        (71)
    Minority interest in net
     income of subsidiaries            (5)        (5)        (9)         (9)
    Income from continuing
     operations before change
     in accounting method              52         55         79         108
    Discontinued operations:
    Income from discontinued
     operations                        23         28         45          56
    Gain on disposal of
     discontinued operations          ---        ---        215         ---
    Total discontinued operations      23         28        260          56
    Cumulative effect of change in
     accounting method, net           ---        ---        ---         (19)
    Net income                        $75        $83       $339        $145

    Basic income per share:
    Continuing operations before
     change in accounting method    $0.12      $0.13      $0.18       $0.25
    Income from discontinued
     operations                      0.05       0.06       0.10        0.12
                                     0.17       0.19       0.28        0.37
    Gain on disposal of
     discontinued operations          ---        ---       0.49         ---
    Change in accounting method       ---        ---        ---       (0.04)
    Net income                      $0.17      $0.19      $0.77       $0.33

    Diluted income per share:
    Continuing operations before
     change in accounting method    $0.12      $0.13      $0.18       $0.25
    Income from discontinued
     operations                      0.05       0.06       0.10        0.12
                                     0.17       0.19       0.28        0.37
    Gain on disposal of
     discontinued operations          ---        ---       0.48         ---
    Change in accounting method       ---        ---        ---       (0.04)
    Net income                      $0.17      $0.19      $0.76       $0.33

    Basic average common
     shares outstanding               444        440        443         440

    Diluted average common
     shares outstanding               449        444        447         443


                             HALLIBURTON COMPANY
                        Pro Forma Statements of Income
                                 (Unaudited)

                                     Quarter Ended        Six Months Ended
                                        June 30                June 30
                                    2000       1999       2000        1999
                                  Millions of dollars except per share data
    Revenues
    Energy Services Group          $1,897     $1,681     $3,620      $3,434
    Engineering and
     Construction Group               971      1,372      2,107       2,880
    Dresser Equipment Group           354        617        691       1,280
      Total revenues               $3,222     $3,670     $6,418      $7,594

    Operating income
    Energy Services Group            $107        $49       $169        $106
    Engineering and
     Construction Group                36         64         72         122
    Dresser Equipment Group            37         53         73         107
    General corporate                 (17)       (17)       (34)        (34)
    Special charges and credits       ---         47        ---          47
      Total operating income          163        196        280         348

    Interest expense                  (34)       (34)       (68)        (70)
    Interest income                     4          6         12          38
    Foreign currency gains, net        (2)         4         (6)          3
    Other nonoperating, net           ---        (26)       ---         (24)
    Pro forma income before
     income taxes, minority
     interests, and change
     in accounting method             131        146        218         295
    Provision for income taxes        (51)       (53)       (85)       (113)
    Minority interest in net income
     of subsidiaries                   (5)       (10)        (9)        (18)
    Pro forma income before
     change in accounting method       75         83        124         164
    Cumulative effect of change in
     accounting method, net           ---        ---        ---         (19)
    Pro forma net income              $75        $83       $124        $145

    Basic pro forma income per share:
    Before change in
     accounting method              $0.17      $0.19      $0.28       $0.37
    Change in accounting method       ---        ---        ---       (0.04)
    Pro forma net income            $0.17      $0.19      $0.28       $0.33

    Diluted pro forma income per share:
    Before change in
     accounting method              $0.17      $0.19      $0.28       $0.37
    Change in accounting method       ---        ---        ---       (0.04)
    Pro forma net income            $0.17      $0.19      $0.28       $0.33

    Basic average common
     shares outstanding               444        440        443         440

    Diluted average common
     shares outstanding               449        444        447         443