Schlumberger Releases First-Quarter 2011 Results (France)

Schlumberger Limited  reported first-quarter 2011 revenue of $8.72 billion versus $9.07 billion in the fourth quarter of 2010 and $5.60 billion in the first quarter of 2010.

Net income attributable to Schlumberger, excluding charges, was $972 million—a decrease of 16% sequentially but an increase of 30% year-on-year. Diluted earnings-per-share, excluding charges, was $0.71 versus $0.85 in the previous quarter, and $0.62 in the first quarter of 2010.

Schlumberger recorded charges of $0.02 per share in the first quarter of 2011, $0.09 in the fourth quarter of 2010, and $0.06 in the first quarter of 2010.

Oilfield Services revenue of $8.12 billion decreased 4% sequentially but increased 45% year-on-year. Pretax segment operating income of $1.46 billion was down 14% sequentially but increased 40% year-on-year.

Distribution revenue of $601 million increased 4% sequentially. Pretax segment operating income of $22 million improved 7% sequentially.

Schlumberger Chairman and CEO Andrew Gould commented, “First-quarter results compounded the normal sequential drop in product, software and multiclient sales with exceptional weather conditions in the US and Australia and multiple activity disruptions from political unrest.

Reservoir Characterization saw this decline in sales of multiclient seismic and software. Wireline was adversely affected by weather in Australia and political unrest in North Africa and the Middle East but the underlying trends were positive and absent exceptional items, Wireline growth was encouraging—particularly for higher technology services.

The recent completion of various licensing rounds around the world will ensure sustained marine seismic activity for the rest of the year. The anticipated increases in exploration budgets and the advent of additional development activity, especially in the Middle East and North America, will rapidly improve business conditions for Wireline and Testing Services. The continued success of new Petrel releases, particularly for exploration, will ensure further strong performance from SIS.

Despite the seasonal drop in Russia and at M-I SWACO, Drilling Group revenue increased through excellent performance at IPM Well Construction, particularly in Iraq. In addition, growth in revenue synergies with Smith and Geoservices products and services was very strong. For Drilling & Measurements, service pricing remains extremely competitive internationally but excellent service quality and advanced technology allows this effect to be offset to some degree. Activity increases later in the year should lead to considerable tightening of capacity in this market with consequent effects on price.

Reservoir Production continued to make strong gains in North America in both activity and pricing, which more than compensated for the absence of the gain share project that was recognized in the fourth quarter. The first quarter also saw continued strong sales of new technology with HiWAY stimulation and ACTive coiled-tubing services being in particular demand. There was also significant success in international unconventional gas activity.

The absence of oil production from Libya, combined with continued recovery in demand, has reduced the world’s spare capacity significantly. The call on both fuel oil and natural gas will increase as Japan recovers. The exploration and production industry has begun to respond and, absent a further leg to the recession, will have to substantially increase investment to maintain a comfortable supply cushion in an era of political uncertainty. We anticipate that high oil prices will continue to support additional drilling in the liquid-rich plays in North America. The upturn in deepwater activity more generally is becoming increasingly visible, and the rate of permitting in the US Gulf of Mexico is accelerating. Middle East activity is increasing substantially, led by Saudi Arabia and Iraq.

These activities will progressively mobilize over the next six months and the projected increases will reach levels where resources will become constrained. Schlumberger is ready for this scenario with new technology, equipment and people. Our Excellence in Execution initiative, which started in 2007, is already paying dividends, and will continue to do so.”

More info: Schlumberger

[mappress]
Source: slb, April 21, 2011;