Halliburton Company HAL, a U.S.-based oilfield services company, was recently hit by a cyberattack that seemingly affected business operations at its north Houston campus. The company stated that it was aware of an issue affecting certain systems, and was diligently working to determine the cause and impact of the problem. Halliburton also mentioned working with leading external agents to resolve the issues.
The attack also caused some issues in its global connectivity network. The company urged its staff to refrain from connecting to internal networks. Halliburton has not yet disclosed details about the extent of the attack or the potential impact on its operations.
Cyberattacks have become a significant issue for the energy sector in recent times. In 2021, a ransomware attack on the Colonial Pipeline caused an array of disruptions, leading to a shutdown of the major supply line that lasted several days. The shutdown of the crucial fuel supply line caused a surge in gasoline prices. It also resulted in panic buying and localized fuel shortages.
The breach was traced back to a gang named DarkSide by the FBI. The attack also created political problems for the Biden government as the U.S. economy was only beginning to recover from the COVID-19 pandemic.
Ransomware typically works by encrypting the victim’s data. The hackers later demand ransom in the form of cryptocurrency payments or others, in exchange for providing the victim with a decryption key. The payment demanded by the hackers may run from thousands to millions of dollars. Moreover, if the victim is unwilling to comply, the attackers also threaten to release confidential or sensitive information against them.
The alleged DarkSide gang behind the Colonial Pipeline attack claimed that its motive was to make a financial gain. Management of Colonial Pipeline mentioned that the company has paid $4.4 million in ransom as it was uncertain about the extent of the data breach or how long it could take to resume operations.
As one of the largest U.S.-based oilfield services companies, Halliburton works with some of the leading energy companies across the globe. Some other companies have also faced disruption from ransomware attacks in recent times, including the UnitedHealth Group and Clorox.
Zacks Rank and Key Picks
Currently, HAL carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the energy sector are SM Energy SM, TechnipFMC plc FTI and MPLX LP MPLX. SM Energy presently sports a Zacks Rank #1 (Strong Buy), while TechnipFMC and MPLX carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a record high of $13.9 million in the second quarter of 2024, indicating a year-over-year increase of 4.51%. This growing backlog ensures strong revenue growth for the company in the future.
MPLX LP owns and operates a wide range of midstream assets. The partnership's midstream assets include oil and natural gas gathering systems and transportation pipelines for crude, natural gas and refined petroleum products. MPLX is least exposed to commodity price fluctuations as it generates stable fee-based revenues. Furthermore, it surpasses its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its unitholders.
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