PARIS -Thursday, April 26th 2018 [
AETOS Wire ]
- Revenue of $7.8 billion decreased 4% sequentially
- Pretax operating income of $974 million decreased 16% sequentially
- EPS was $0.38
- Cash flow from operations was $568 million
(BUSINESS WIRE)-- Schlumberger
Limited (NYSE:SLB) today reported results for the first quarter of 2018
Schlumberger Chairman and CEO
Paal Kibsgaard commented, “As forecast, our results in the first quarter of
2018 largely reflected transitory factors, with seasonal reductions in activity
in the Northern Hemisphere and planned project startup costs including the
equipment mobilization, reactivation, and redeployment associated with recent
contract wins.
“The underlying international
businesses started the year well, as business units in the Middle East, the
North Sea, and Russia were all in line with our first-quarter activity
expectations, while activity upsides in Asia were offset by continued weakness
in Latin America and Africa.
“On land in North America, our
Drilling services business continued to grow, driven by strong demand for
horizontal drilling technologies. Revenue also increased due to the ramp-up of
activity in Canada. The US land pressure pumping business, however, was
impacted by weaker than expected activity as well as by softer pricing,
inefficiency, rising supply chain costs, and rail logistical challenges. In
spite of this, we continued to deploy available fracturing assets, including
equipment from our newly acquired capacity. We expect the US land hydraulic
fracturing market to improve during the second quarter, both in terms of
pricing and in operational efficiency and, therefore, we are continuing with
our aggressive fleet reactivation and recommissioning program.
“Overall, the first-quarter
sequential revenue decline was led by the Cameron Group, which fell 7%, driven
by seasonally lower project volumes and reduced product sales. Reservoir
Characterization Group revenue decreased 5% sequentially due to the seasonal
reduction in sales of SIS software and WesternGeco multiclient seismic
licenses. Drilling Group and Production Group revenues were respectively 2% and
4% lower sequentially, also as a result of the seasonal reductions in activity
in the Northern Hemisphere.
“Looking at the global oil market,
the absence of global stock builds in the first quarter, supported by the OPEC-
and Russia-led production cuts, confirm that the oil market is in balance. More
importantly, after three consecutive years of dramatic underinvestment in
global E&P spending, the worldwide production base has started to show the
anticipated signs of weakness with noticeable year-over-year production
declines appearing in several countries such as Angola, Norway, Mexico, Malaysia,
China, and Indonesia. With Libya and Nigeria producing at near-full capacity,
Venezuelan production in free fall, the potential of new sanctions against
Iran, and rising geopolitical risks, the only major sources of short-term
supply growth to address global production decline and strong worldwide demand
are Saudi Arabia, Kuwait, the UAE, Russia, and the US shale oil industry.
However, production challenges in US shale are emerging that are linked to
infill drilling well-to-well interference, the potential lower production of
step-out drilling from Tier 1 acreage, and significant infrastructure
constraints. It is, therefore, becoming increasingly likely that the industry
will face growing supply challenges over the coming year and a significant
increase in global E&P investment will be required to minimize the
impending deficit.
“We remain optimistic about the
outlook for sustainable activity growth in our global business over the course
of 2018 and into 2019. This is driven by higher customer activity and our
ability to capture a major share of the emerging opportunities as
performance-based contracts and integrated projects continue to gain traction
as the preferred business models for many of our customers. Recent contract
awards, which include the major lump-sum turnkey (LSTK) contracts in Saudi
Arabia, additional wins elsewhere in the Middle East and Latin America, and new
projects in the US Delaware Basin, are examples of this market trend. Our
increased R&E focus in recent years on systems innovation and design is now
enabling us to create additional value for both our customers and Schlumberger
on these projects. This is achieved by integrating a new generation of
purpose-built hardware and software with our deep domain expertise and the
latest advances in digital technologies.
“Therefore, we are excited about the
outlook for Schlumberger. We are ready and primed to deliver superior growth,
financial returns, and free cash flow in the coming years by building on the
broadest technology offering and expertise in the industry, our unmatched scale
and operational efficiency, strong capital discipline, and a clear desire to
provide industry-leading cash returns to our shareholders.”
Other Events
During the quarter, Schlumberger
repurchased 1.4 million shares of its common stock at an average price of
$69.79 per share, for a total purchase price of $97 million.
On February 23, 2018, Schlumberger
and Subsea 7 S.A. announced that they entered into exclusive negotiations to
form a joint venture that builds on the success of Subsea Integration Alliance,
which was established in 2015. The joint venture will be owned 50% by Subsea 7
and 50% by Schlumberger.
On April 18, 2018, the Company’s
Board of Directors approved a quarterly cash dividend of $0.50 per share of
outstanding common stock, payable on July 13, 2018 to stockholders of record on
June 6, 2018.
View source version on
businesswire.com: https://www.businesswire.com/news/home/20180420005288/en/
Contacts
Schlumberger Limited
Simon Farrant – Vice President of
Investor Relations, Schlumberger Limited
Joy V. Domingo – Manager of Investor
Relations, Schlumberger Limited
Office +1 (713) 375-3535
investor-relations@slb.com