HOUSTON-Tuesday 28 July 2020 [ AETOS Wire ]
- Worldwide revenue of $5.4 billion decreased 28% sequentially
- International revenue of $4.1 billion decreased 19% sequentially
- North America revenue of $1.2 billion decreased 48% sequentially
- GAAP loss per share, including charges and credits of $2.52 per share, was $2.47
- EPS, excluding charges and credits, was $0.05
- Cash flow from operations was $803 million and free cash flow was $465 million
- Board approved quarterly cash dividend of $0.125 per share
(BUSINESS WIRE)-- Schlumberger Limited (NYSE: SLB) today reported results for the second quarter of 2020.
Second-Quarter Results
|
(Stated in millions, except per share amounts)
| ||||||||
Three Months Ended
|
Change
| ||||||||
Jun. 30, 2020
|
Mar. 31, 2020
|
Jun. 30, 2019
|
Sequential
|
Year-on-year
| |||||
Revenue
|
$5,356
|
$7,455
|
$8,269
|
-28%
|
-35%
| ||||
Income (loss) before taxes - GAAP basis
|
$(3,627)
|
$(8,089)
|
$593
|
n/m
|
n/m
| ||||
Pretax segment operating income*
|
$396
|
$776
|
$968
|
-49%
|
-59%
| ||||
Pretax segment operating margin*
|
7.4%
|
10.4%
|
11.7%
|
-303 bps
|
-431 bps
| ||||
Net income (loss) - GAAP basis
|
$(3,434)
|
$(7,376)
|
$492
|
n/m
|
n/m
| ||||
Net income, excluding charges & credits*
|
$69
|
$351
|
$492
|
-80%
|
-86%
| ||||
Diluted EPS (loss per share) - GAAP basis
|
$(2.47)
|
$(5.32)
|
$0.35
|
n/m
|
n/m
| ||||
Diluted EPS, excluding charges & credits*
|
$0.05
|
$0.25
|
$0.35
|
-80%
|
-86%
| ||||
North America revenue
|
$1,183
|
$2,279
|
$2,801
|
-48%
|
-58%
| ||||
International revenue
|
$4,138
|
$5,121
|
$5,463
|
-19%
|
-24%
| ||||
North America revenue, excluding Cameron
|
$842
|
$1,773
|
$2,201
|
-53%
|
-62%
| ||||
International revenue, excluding Cameron
|
$3,463
|
$4,395
|
$4,708
|
-21%
|
-26%
| ||||
*These are non-GAAP financial measures. See sections titled "Charges & Credits" and "Segments" for details.
| |||||||||
n/m = not meaningful
| |||||||||
Schlumberger
CEO Olivier Le Peuch commented, “Before addressing our results, I would
like to pay tribute to our employees and contractors for their
remarkable resilience in the face of the historic COVID-19 pandemic that
confronts us all.
“Our
employees and contractors have shown outstanding adaptability to the
new working environment with up to 55,000 of our people working remotely
to maintain business continuity. They have embraced digital remote
operations, adjusted work practices to mitigate contamination risks, and
delivered benchmark safety and service quality performance for our
customers. I would like to extend my heartfelt appreciation for their
dedication and sacrifices while working in a difficult operating
environment, and for their leadership in helping the communities where
we live and work. As the pandemic lingers, we will remain cautious in
our global operations. The safety of our people remains paramount.
“This
has probably been the most challenging quarter in past decades.
Schlumberger second-quarter revenue declined 28% sequentially, caused by
the unprecedented fall in North America activity, and international
activity drop due to downward revisions to customer budgets accentuated
by COVID-19 disruptions. This speaks volumes about an industry
confronted with historic oil demand and supply imbalances caused by
demand destruction from the global COVID-19 containment effort.
“North
America revenue declined 48% sequentially with land revenue falling 60%
as customers dramatically cut back spending. International revenue
declined 19% sequentially with Latin America and Africa experiencing the
largest revenue declines due to COVID-19-related restrictions and the
drop in deepwater activity. In addition, there was a production
interruption in our Asset Performance Solutions (APS) projects in
Ecuador caused by a major land slide that led to the rupture of the main
pipeline. Revenue in the Middle East, Russia, Europe, and Asia proved
more resilient as these regions, when combined, declined 10%
sequentially.
Second-Quarter Revenue by Segment
|
(Stated in millions)
| |||||||||||
Three Months Ended
|
Change
| |||||||||||
Jun. 30, 2020
|
Mar. 31, 2020
|
Jun. 30, 2019
|
Sequential
|
Year-on-year
| ||||||||
Reservoir Characterization
|
$1,052
|
$1,311
|
$1,558
|
-20%
|
-32%
| |||||||
Drilling
|
1,731
|
2,289
|
2,420
|
-24%
|
-28%
| |||||||
Production
|
1,615
|
2,703
|
3,077
|
-40%
|
-48%
| |||||||
Cameron
|
1,015
|
1,254
|
1,328
|
-19%
|
-24%
| |||||||
Other
|
(57
|
)
|
($102
|
)
|
(114
|
)
|
n/m
|
n/m
| ||||
$5,356
|
$7,455
|
$8,269
|
-28%
|
-35%
| ||||||||
n/m = not meaningful
| ||||||||||||
Certain prior period amounts have been reclassified to conform to the current period presentation.
| ||||||||||||
“By
business segment sequentially, second-quarter revenue for Reservoir
Characterization and Drilling fell 20% and 24%, respectively. This was
due to the North America land activity decline and COVID-19 disruptions
in several international GeoMarkets. Production revenue declined 40%
sequentially, driven by the precipitous drop in OneStim® pressure-pumping
activity. Cameron revenue declined 19% sequentially, mostly due to
North America land activity decline in Surface Systems and Valves &
Process Systems.
“In
the face of such adversity, Schlumberger has demonstrated resilience.
Through our decisive actions, we protected our liquidity and cash
positions, and sustained resilient international margins while
navigating the trough of this downcycle. The results of our actions and
continued success with technology—particularly digital—can be seen from
our decremental margins and our strong free cash flow generation.
“First,
our cash flow from operations was $803 million and we generated $465
million of free cash flow despite significant severance payments during
the quarter. We continue to be opportunistic in accessing the financial
markets, systematically refinancing and spacing out future debt
maturities, and taking proactive measures to enhance our liquidity
position.
“Second,
despite the severe drop in international revenue and the significant
effect of the APS production interruption in Ecuador, international
margin was extraordinarily resilient, as it was essentially flat
compared to the previous quarter. Three out of our four business
segments and more than half of our 13 international GeoMarkets either
expanded or maintained their international margins on a sequential
basis. This was due to our swift and decisive actions to reduce
operating costs, restructure, and rationalize our asset base. We are
permanently removing $1.5 billion of structural costs annually by
reorganizing Schlumberger into a leaner and more responsive company that
is better aligned with our customers’ workflows. We are combining our
17 product lines into four divisions, structuring our geographic
organization around five key basins of activity, and streamlining our
management structure. In addition, significant progress was also made in
improving the results of previously underperforming business units and
digital technology adoption has increased. Overall this quarter, we
posted a decremental operating margin of 18% sequentially.
“In
response to market conditions, we recorded $3.7 billion of pretax
restructuring and asset impairment charges, including $1 billion of
severance costs, as of the end of the quarter. The remaining portion of
the charge largely relates to the non-cash impairment of certain assets.
“Altogether,
I am extremely proud of our operational and financial performance
during the quarter as we continue to build the foundation for our future
success while we navigate the trough of this downcycle.
“Looking
at the macro view in the near-term, oil demand is slowly starting to
normalize and is expected to improve as government measures support
consumption. However, subsequent waves of potential COVID-19 resurgence
pose a negative risk to this outlook.
“The
conditions are set in the third quarter for a modest frac completion
activity increase in North America, though from a very low base.
Internationally, markets may continue to be disrupted by the pandemic
and will continue to adjust to budget levels set during the second
quarter, but this would be mostly offset by the seasonal return of
activity in the Northern Hemisphere and the rebound of Latin America
from its second-quarter weakness. However, any further material COVID-19
disruption or significant setback in oil demand arising from a slower
economic recovery could present downside risks to this outlook. Absent
these risks, we anticipate flat sequential revenue on a global basis and
our pretax segment operating income and margin should expand as a
result of our restructuring efforts, improved activity mix, and
sustained benefits from technology adoption, including digital.
“We
believe the decisive and comprehensive measures we have taken to face
the industry reality will continue to protect our liquidity and cash
positions and allow us to expand our margins. We have taken the
long-term view in restructuring our company—aligning with our customers’
workflows, empowering a lean and responsive organization, and
accelerating the execution of our performance strategy, with capital
stewardship, fit-for-basin, and digital as key attributes of success. I
am extremely optimistic about the future of Schlumberger, building on
the strength of our international franchise and positioning the company
as the performance partner of choice for our customers in the new
industry landscape.”
Other Events
During
the second quarter, Schlumberger issued EUR 1 billion of 1.375% Notes
due 2026, $900 million of 2.650% Notes due 2030, and EUR 1 billion of
2.000% Notes due 2032.
In
June, Schlumberger repurchased $1.5 billion of its outstanding notes,
consisting of $935 million of its 3.300% Notes due 2021 and all $600
million of its 4.200% Notes due 2021.
On
July 23, 2020, Schlumberger’s Board of Directors approved a quarterly
cash dividend of $0.125 per share of outstanding common stock, payable
on October 8, 2020 to stockholders of record on September 2, 2020.
Consolidated Revenue by Area
(Stated in millions)
| |||||||||
Three Months Ended
|
Change
| ||||||||
Jun. 30, 2020
|
Mar. 31, 2020
|
Jun. 30, 2019
|
Sequential
|
Year-on-year
| |||||
North America
|
$1,183
|
$2,279
|
$2,801
|
-48%
|
-58%
| ||||
Latin America
|
543
|
$945
|
1,115
|
-42%
|
-51%
| ||||
Europe/CIS/Africa
|
1,449
|
$1,751
|
1,896
|
-17%
|
-24%
| ||||
Middle East & Asia
|
2,146
|
$2,426
|
2,452
|
-12%
|
-12%
| ||||
Other
|
35
|
$54
|
5
|
n/m
|
n/m
| ||||
$5,356
|
$7,455
|
$8,269
|
-28%
|
-35%
| |||||
North America revenue
|
$1,183
|
$2,279
|
$2,801
|
-48%
|
-58%
| ||||
International revenue
|
$4,138
|
$5,121
|
$5,463
|
-19%
|
-24%
| ||||
North America revenue, excluding Cameron
|
$842
|
$1,773
|
$2,201
|
-52%
|
-62%
| ||||
International revenue, excluding Cameron
|
$3,463
|
$4,395
|
$4,708
|
-21%
|
-26%
| ||||
n/m = not meaningful
| |||||||||
Certain prior period amounts have been reclassified to conform to the current period presentation.
| |||||||||
North America
North America area
consolidated revenue of $1.2 billion was 48% lower sequentially with
North America land revenue falling 60%, in line with the decline in rig
and hydraulic fracturing stage counts, as customers dramatically cut
back spending. OneStim fracturing and land drilling activity fell as
customers revised budgets downward, challenged by low oil prices,
take-away constraints, and storage overflow. In addition, sales in North
America land of Surface Systems, Artificial Lift Solutions, and Valves
& Process Systems decreased sequentially. North America offshore
revenue decreased less severely, 12% sequentially.
International
Consolidated revenue in the Latin America area
of $543 million decreased 42% sequentially, primarily due to a
production interruption in our APS projects in Ecuador. In addition,
COVID-19 disruptions affected drilling activities in Argentina, Bolivia,
Colombia, and Peru. In contrast, Mexico and Brazil declined less
severely as reduced land activity was partially offset by offshore
exploration operations, where work continued with COVID-19
risk-mitigation protocols.
Europe/CIS/Africa area
consolidated revenue of $1.4 billion decreased 17% sequentially due to a
significant drop in activity in the Sub-Sahara Africa and North Africa
GeoMarkets from COVID-19 disruptions, project cancellations, and work
stoppages. The Russia & Central Asia GeoMarket was resilient as
COVID-19 activity disruption was offset by the pickup of seasonal land
activity in Russia, in preparation for the summer drilling campaigns.
Revenue also declined less in the North Sea and Continental Europe,
following the winter slowdown and as activity resumed later in the
quarter after COVID-19 lockdowns were relaxed.
Consolidated revenue in the Middle East & Asia area
of $2.1 billion decreased 12% sequentially, primarily due to a
significant drop in activity in the Eastern Middle East and South East
Asia GeoMarkets from work delays, project suspensions, and completed
contracts. Revenue in the North Middle East and Saudi Arabia &
Bahrain GeoMarkets declined less due to new projects. Revenue in the Far
East Asia GeoMarket was essentially flat as project delays were offset
by the seasonal rebound and resumption of activity after the lifting of
COVID-19 lockdowns in China.
Reservoir Characterization
(Stated in millions)
| |||||||||
Three Months Ended
|
Change
| ||||||||
Jun. 30, 2020
|
Mar. 31, 2020
|
Jun. 30, 2019
|
Sequential
|
Year-on-year
| |||||
Revenue
|
$1,052
|
$1,311
|
$1,558
|
-20%
|
-32%
| ||||
Pretax operating income
|
$185
|
$184
|
$317
|
1%
|
-42%
| ||||
Pretax operating margin
|
17.6%
|
14.0%
|
20.3%
|
357 bps
|
-273 bps
| ||||
Certain prior period amounts have been reclassified to conform to the current period presentation.
| |||||||||
Reservoir
Characterization revenue of $1.1 billion, 84% of which came from the
international markets, decreased 20% sequentially. North America and
international revenues declined 17% and 20%, respectively. This was
mainly due to lower Wireline activity in North America land and the
Eastern Middle East and Sub-Sahara Africa GeoMarkets. Testing Services
revenue was also lower mainly in the Sub-Sahara Africa GeoMarket as a
result of completed projects and delayed and cancelled activities due to
COVID-19. WesternGeco® revenue
declined as a project was completed in the Middle East, while Software
Integrated Solutions (SIS) revenue declined slightly as well.
Reservoir
Characterization pretax operating margin of 18% rebounded 357 bps
sequentially despite the significant revenue decline. This margin
expansion was evident both in North America and internationally.
Outperformance was delivered by prompt cost reduction measures in
compensation through headcount rationalization and furloughs,
particularly in SIS, WesternGeco, and Wireline.
Drilling
(Stated in millions)
| |||||||||
Three Months Ended
|
Change
| ||||||||
Jun. 30, 2020
|
Mar. 31, 2020
|
Jun. 30, 2019
|
Sequential
|
Year-on-year
| |||||
Revenue
|
$1,731
|
$2,289
|
$2,420
|
-24%
|
-28%
| ||||
Pretax operating income
|
$165
|
$285
|
$301
|
-42%
|
-45%
| ||||
Pretax operating margin
|
9.6%
|
12.4%
|
12.4%
|
-289 bps
|
-288 bps
| ||||
Drilling
revenue of $1.7 billion, 82% of which came from the international
markets, decreased 24% sequentially. North America and international
revenues declined 48% and 18%, respectively. This was primarily due to
the activity decline in US land as rig count dropped more than 50% while
COVID-19 disruptions caused drilling activities to be cancelled or
suspended in several international GeoMarkets. Drilling activity in
Russia & Central Asia, however, was resilient as COVID-19 disruption
was offset by seasonal pickup in Russia land activity in preparation
for the summer drilling campaigns.
Drilling
pretax operating margin of 10% contracted by 289 bps sequentially,
posting a 21% decremental operating margin. The margin contraction was
primarily in North America, while international margin was resilient and
flat sequentially. Drilling & Measurements and M-I SWACO accounted
for most of the margin decline and experienced the largest drop in
activity due to their sizeable footprint in North America land.
Production
(Stated in millions)
| |||||||||
Three Months Ended
|
Change
| ||||||||
Jun. 30, 2020
|
Mar. 31, 2020
|
Jun. 30, 2019
|
Sequential
|
Year-on-year
| |||||
Revenue
|
$1,615
|
$2,703
|
$3,077
|
-40%
|
-48%
| ||||
Pretax operating income
|
$25
|
$212
|
$235
|
-88%
|
-89%
| ||||
Pretax operating margin
|
1.5%
|
7.8%
|
7.6%
|
-630 bps
|
-612 bps
| ||||
Production
revenue of $1.6 billion, 75% of which came from the international
markets, declined 40% sequentially. North America and international
revenues declined 62% and 26%, respectively. This was driven by the
precipitous drop in OneStim pressure-pumping activity in North America
land. APS revenue was also down by nearly 50% due primarily to a
significant production interruption in Ecuador. International revenue
decreased due mostly to COVID-19 disruptions—mainly in the Latin America
South, Sub-Sahara Africa, Saudi Arabia & Bahrain, and Eastern
Middle East GeoMarkets.
Production
pretax operating margin of 2% contracted by 630 bps sequentially,
posting a 17% decremental operating margin. The margin decline was due
to reduced profitability in North America land from the dramatic fall in
activity, which mostly impacted the OneStim margin. International
margin declined also, albeit less severely, driven by the drop in APS
revenue in Ecuador and the reduction of Well Services activity.
Cameron
(Stated in millions)
| |||||||||
Three Months Ended
|
Change
| ||||||||
Jun. 30, 2020
|
Mar. 31, 2020
|
Jun. 30, 2019
|
Sequential
|
Year-on-year
| |||||
Revenue
|
$1,015
|
$1,254
|
$1,328
|
-19%
|
-24%
| ||||
Pretax operating income
|
$80
|
$121
|
$165
|
-34%
|
-51%
| ||||
Pretax operating margin
|
7.9%
|
9.7%
|
12.4%
|
-180 bps
|
-453 bps
| ||||
Certain prior period amounts have been reclassified to conform to the current period presentation.
| |||||||||
Cameron
revenue of $1.0 billion, 67% of which came from the international
markets, decreased 19% sequentially. North America and international
revenues declined 33% and 7%, respectively. The North America decline
was driven by lower Surface Systems and Valves & Process Systems
revenues while international activity decline was mainly due to lower
Drilling Systems sales. Meanwhile, OneSubsea® revenue
was resilient, only declining slightly with international revenue
growing sequentially, but offset by a decline in North America.
Cameron
pretax operating margin of 8% declined by 180 bps sequentially, posting
a 17% decremental operating margin. The margin contraction was
primarily due to reduced profitability in North America, impacting
Surface Systems and Valves & Process Systems margins, while
international margin expanded sequentially due to OneSubsea and Drilling
Systems. Prompt cost reduction measures through headcount
rationalization, furloughs, and lower manufacturing costs contributed to
the international margin expansion.
Quarterly Highlights
Schlumberger
is leading the industry in the development of Digital solutions to
increase performance in drilling and reservoir characterization.
Deploying these solutions in the current challenging industry
environment can help customers maintain business continuity and improve
their teams' performance worldwide. Examples of this during the quarter
included:
- As announced last quarter, Schlumberger and ExxonMobil are jointly working on the deployment of digital drilling solutions around planning, execution, and continuous improvement through learning. As a next step, ExxonMobil and Schlumberger have finalized an enabling agreement for the deployment of DrillOps* on-target well delivery solution in ExxonMobil’s unconventional operations. The technology is expected to enable faster, lower-cost wells through drilling automation and orchestration of the digital well plan generated by DrillPlan* coherent well construction planning solution.
- Schlumberger and Honghua Electric Co., Ltd. entered into a memorandum of understanding (MOU) for the seamless integration of the DrillOps on-target well delivery solution with all new Honghua rigs. Under the MOU, Honghua will manufacture and sell rigs that have plug-and-play capability with the DrillOps solution, which integrates planning and operations while automating well construction tasks in order for the rig to operate at peak performance throughout the execution of the drilling plan.
- In the United Arab Emirates, Dragon Oil plc awarded Schlumberger a contract for deployment of agile reservoir modeling through the DELFI* cognitive E&P environment, the first implementation of this kind in the Middle East and North Africa region. A joint Dragon Oil and Schlumberger team will use this approach to enhance productivity of Dragon Oil’s Lam Main and Lam West Fields in Turkmenistan. The approach will use a combination of automated, traditional domain workflows and workflows driven by machine learning and AI to rapidly provide insights into development strategies for optimizing production across the life cycle of the assets.
- The Nigerian Department of Petroleum Resources (DPR) signed an agreement for the provision of a Schlumberger virtual data room in support of the first-ever virtual marginal fields bid round to be held this year. DPR is adopting Schlumberger digital technologies in alignment with its commitment to promoting Nigeria’s oil and gas assets online to a global audience in a secure digital environment. The agreement includes an online digital solution to support the bid round delivered by Schlumberger via software as a service (SaaS). The solution uses the Petrel* E&P software platform to improve subsurface insight and to identify bypassed reserves.
- GAIA Xchange* data marketplace, the world’s first digital E&P data marketplace, was launched in the first Schlumberger Online Conference. GAIA Xchange marketplace brings together global content providers and consumers on a single, open platform. The GAIA* digital subsurface platform enables customers to securely and instantly access multidomain, evergreen E&P data as a subscription from a growing number of content providers. GAIA Xchange marketplace has multiple E&P content providers who can showcase, manage, and deliver their data immediately to prospective buyers.
- In the Gulf of Mexico, Schlumberger used the Ora* intelligent wireline formation testing platform to characterize a complex reservoir in a deepwater exploration well for Repsol. Remote collaboration between the Repsol and Schlumberger teams in town and at the wellsite enabled the efficient deployment of the Ora platform, which secured pure fluid samples at multiple depths in the unconsolidated formation. The Ora platform’s technology helped the operator investigate reservoir fluid viscosity variations and conduct a high-quality deep transient testing on wireline—without flaring—to prove economic producibility. Repsol announced a significant discovery just days after the survey.
The
deployment of evolving, differentiated business models, fit-for-basin
technologies, and technology access with regional partners further
differentiate Schlumberger within the industry. A few examples of this
included:
- In the Gulf of Mexico, secure remote capabilities delivered by OneSubsea helped BP keep the Mad Dog 2 project on schedule. Using a suite of remote solutions, including remote customer-witness factory integration testing (FIT), a remote master control station, and integrated control and safety systems, OneSubsea was able to provide overviews of system functionality without requiring onsite witnessing. BP is now considering conducting all future FITs remotely, which would result in significant cost savings related to travel and further reduce operational risk.
- In West Texas, OneStim deployed fit-for-basin fracturing technology services to protect production from parent-child well interference effects for MDC Texas Energy. The service—comprised of BroadBand Shield* fracture-geometry control technology and the equipment required—was deployed in conjunction with a pumping and wellsite equipment services provider. After 60 days, the infill well treated with BroadBand Shield technology, located closest to the parent well, achieved approximately 10% higher production performance compared to an adjacent infill well farther from the parent well. The parent well experienced no detrimental production impact following the infill well’s stimulation treatments, indicating no negative fracture interference.
- Schlumberger entered into a collaboration agreement with China Petroleum Logging Co., Ltd (CPL), a subsidiary of China National Petroleum Corporation (CNPC), to jointly manufacture fit-for-basin wireline downhole technology in China. As part of this technology access agreement, Schlumberger will support CPL on the manufacturing and sustaining activities for ThruBit* through-the-bit logging services technology at the CPL technology center in Xi’an, Shaanxi province. The increasing number of horizontal wells undertaken by CNPC each year has made the differentiated technology of the ThruBit services platform essential to their reservoir evaluation strategy. This technology collaboration will enable CPL to significantly improve their logging capabilities in horizontal and vertical wells across China while increasing Schlumberger’s participation in this market.
- In Malaysia, the SpectraSphere* fluid mapping-while-drilling technology has helped add value to PETRONAS brownfield assets. The technology developed by Schlumberger Drilling & Measurements eliminated fluid uncertainty in untapped fault blocks while mitigating operational risks. SpectraSphere technology was successfully deployed in two field rejuvenation campaigns in the Temana and Dulang Fields, offshore Malaysia. It involved wellbores with up to 80° of inclination and large overbalance, resulting in approximately USD 2 million in operating cost savings. Fluid identification was performed in real-time, in multiple reservoir horizons. The data provided by SpectraSphere assisted PETRONAS petrotechnical experts to firm up and accelerate perforation and completion design, in addition to understanding the reservoir and improving reserve estimation.
This
quarter’s contract awards reflect the diversity of our business models
in different basins around the globe, including alignment with
in-country value, offshore processing, and subsea integration.
- Kuwait Oil Company awarded Schlumberger a five-year contract with an optional one-year extension valued at USD 320 million for the provision of coiled tubing and stimulation services. Some of the technologies include ACTive* real-time downhole coiled tubing services, OpenPath Reach* extended-contact stimulation service, and OpenPath Sequence* diversion stimulation service.
- In Oman, OQ—the company regrouping Oman Oil and Orpic Group's nine business units—awarded Schlumberger a contract valued at more than USD 125 million for the design, engineering, procurement, and construction of a production facility in the Bisat Field. The contract includes four years of operations and maintenance support with an optional one-year extension. First oil is scheduled for delivery in late 2021.
- SBM Offshore awarded Schlumberger five contracts for the provision of a comprehensive portfolio of processing technologies to be used on a floating production, storage, and offloading (FPSO) vessel. The packages will be delivered in 2022 and include NATCO DUAL FREQUENCY* electrostatic treaters, CYNARA* acid gas removal membrane systems, VORTOIL* deoiling hydrocyclones, and EPCON Dual* compact flotation units.
- China National Offshore Oil Corporation (CNOOC) awarded OneSubsea an engineering, procurement, and construction (EPC) contract for the supply of an integrated subsea production and processing system for the Lufeng 22-1 oil field in the South China Sea. The contract, valued at USD 143 million, includes subsea trees, an integrated boosting and manifold system, a unified control system, an integrated power-control umbilical, a virtual flow metering solution, and estimated services. The project consists of four deepwater wells and a 19-km tieback system to a newly built platform—the Lufeng 15-1—which will act as a central production and processing facility for the Lufeng development project.
Financial Tables
| |||||||||||
Condensed Consolidated Statement of Income (Loss)
| |||||||||||
(Stated in millions, except per share amounts)
| |||||||||||
Second Quarter
|
Six Months
| ||||||||||
Periods Ended June 30,
|
2020
|
2019
|
2020
|
2019
| |||||||
Revenue
|
$5,356
|
$8,269
|
$12,811
|
$16,149
| |||||||
Interest and other income
|
33
|
25
|
72
|
39
| |||||||
Expenses
| |||||||||||
Cost of revenue
|
4,925
|
7,252
|
11,548
|
14,209
| |||||||
Research & engineering
|
142
|
179
|
315
|
351
| |||||||
General & administrative
|
81
|
114
|
208
|
225
| |||||||
Impairments & other (1)
|
3,724
|
-
|
12,247
|
-
| |||||||
Interest
|
144
|
156
|
281
|
302
| |||||||
Income (loss) before taxes (1)
|
$(3,627
|
)
|
$593
|
$(11,716
|
)
|
$1,101
| |||||
Tax (benefit) expense (1)
|
(199
|
)
|
99
|
(920
|
)
|
178
| |||||
Net income (loss) (1)
|
$(3,428
|
)
|
$494
|
$(10,796
|
)
|
$923
| |||||
Net income attributable to noncontrolling interests
|
6
|
2
|
14
|
10
| |||||||
Net income (loss) attributable to Schlumberger (1)
|
$(3,434
|
)
|
$492
|
$(10,810
|
)
|
$913
| |||||
Diluted earnings (loss) per share of Schlumberger (1)
|
$(2.47
|
)
|
$0.35
|
$(7.79
|
)
|
$0.65
| |||||
Average shares outstanding
|
1,388
|
1,384
|
1,388
|
1,385
| |||||||
Average shares outstanding assuming dilution
|
1,388
|
1,395
|
1,388
|
1,396
| |||||||
Depreciation & amortization included in expenses (2)
|
$604
|
$938
|
$1,396
|
$1,841
| |||||||
(1)
|
See section entitled “Charges & Credits” for details.
| |
(2)
|
Includes
depreciation of property, plant and equipment and amortization of
intangible assets, multiclient seismic data costs, and APS investments.
|
Condensed Consolidated Balance Sheet
| |||||
(Stated in millions)
| |||||
Jun. 30,
|
Dec. 31,
| ||||
Assets
|
2020
|
2019
| |||
Current Assets
| |||||
Cash and short-term investments
|
$3,589
|
$2,167
| |||
Receivables
|
5,808
|
7,747
| |||
Other current assets
|
4,982
|
5,616
| |||
14,379
|
15,530
| ||||
Fixed assets
|
7,729
|
9,270
| |||
Multiclient seismic data
|
356
|
568
| |||
Goodwill
|
12,954
|
16,042
| |||
Intangible assets
|
3,622
|
7,089
| |||
Other assets
|
5,627
|
7,813
| |||
$44,667
|
$56,312
| ||||
Liabilities and Equity
| |||||
Current Liabilities
| |||||
Accounts payable and accrued liabilities
|
$9,824
|
$10,663
| |||
Estimated liability for taxes on income
|
1,054
|
1,209
| |||
Short-term borrowings and current portion of long-term debt
|
603
|
524
| |||
Dividends payable
|
184
|
702
| |||
11,665
|
13,098
| ||||
Long-term debt
|
16,763
|
14,770
| |||
Deferred taxes
|
42
|
491
| |||
Postretirement benefits
|
905
|
967
| |||
Other liabilities
|
2,836
|
2,810
| |||
32,211
|
32,136
| ||||
Equity
|
12,456
|
24,176
| |||
$44,667
|
$56,312
| ||||
Liquidity
| |||||||||||||
(Stated in millions)
| |||||||||||||
Components of Liquidity
|
Jun. 30,
2020 |
Mar. 31,
2020 |
Dec. 31,
2019 |
Jun. 30,
2019 | |||||||||
Cash and short-term investments
|
$3,589
|
$3,344
|
$2,167
|
$2,348
| |||||||||
Short-term borrowings and current portion of long-term debt
|
(603
|
)
|
(1,233
|
)
|
(524
|
)
|
(98
|
)
| |||||
Long-term debt
|
(16,763
|
)
|
(15,409
|
)
|
(14,770
|
)
|
(16,978
|
)
| |||||
Net Debt (1)
|
$(13,777
|
)
|
$(13,298
|
)
|
$(13,127
|
)
|
$(14,728
|
)
| |||||
Details of changes in liquidity follow:
| |||||||||||||
Six
|
Second
|
Six
| |||||||||||
Months
|
Quarter
|
Months
| |||||||||||
Periods Ended June 30,
|
2020
|
2020
|
2019
| ||||||||||
Net income (loss) before noncontrolling interests
|
$(10,796
|
)
|
$(3,428
|
)
|
$923
| ||||||||
Impairment and other charges, net of tax
|
11,230
|
3,503
|
-
| ||||||||||
$434
|
$75
|
$923
| |||||||||||
Depreciation and amortization (2)
|
1,396
|
604
|
1,841
| ||||||||||
Stock-based compensation expense
|
213
|
105
|
194
| ||||||||||
Change in working capital
|
(423
|
)
|
42
|
(1,460
|
)
| ||||||||
Other
|
(33
|
)
|
(23
|
)
|
(64
|
)
| |||||||
Cash flow from operations (3)
|
$1,587
|
$803
|
$1,434
| ||||||||||
Capital expenditures
|
(658
|
)
|
(251
|
)
|
(817
|
)
| |||||||
APS investments
|
(224
|
)
|
(61
|
)
|
(332
|
)
| |||||||
Multiclient seismic data capitalized
|
(61
|
)
|
(26
|
)
|
(109
|
)
| |||||||
Free cash flow (4)
|
$644
|
465
|
176
| ||||||||||
Dividends paid
|
(1,386
|
)
|
(694
|
)
|
(1,385
|
)
| |||||||
Stock repurchase program
|
(26
|
)
|
-
|
(199
|
)
| ||||||||
Business acquisitions and investments, net of cash acquired plus debt assumed
|
(20
|
)
|
(20
|
)
|
(17
|
)
| |||||||
Net proceeds from asset divestitures
|
298
|
-
|
-
| ||||||||||
Other
|
(160
|
)
|
(230
|
)
|
(29
|
)
| |||||||
Increase in Net Debt
|
(650
|
)
|
(479
|
)
|
(1,454
|
)
| |||||||
Net Debt, beginning of period
|
(13,127
|
)
|
(13,298
|
)
|
(13,274
|
)
| |||||||
Net Debt, end of period
|
$(13,777
|
)
|
$(13,777
|
)
|
$(14,728
|
)
| |||||||
(1)
|
“Net
Debt” represents gross debt less cash, short-term investments, and
fixed income investments, held to maturity. Management believes that Net
Debt provides useful information regarding the level of Schlumberger’s
indebtedness by reflecting cash and investments that could be used to
repay debt. Net Debt is a non-GAAP financial measure that should be
considered in addition to, not as a substitute for or superior to, total
debt.
| |
(2)
|
Includes
depreciation of property, plant and equipment and amortization of
intangible assets, multiclient seismic data costs, and APS investments.
| |
(3)
|
Includes
severance payments of $426 million and $370 million during the six
months and second quarter ended June 30, 2020, respectively; and $71
million and $23 million during the six months and second quarter ended
June 30, 2019, respectively.
| |
(4)
|
“Free
cash flow” represents cash flow from operations less capital
expenditures, APS investments, and multiclient seismic data costs
capitalized. Management believes that free cash flow is an important
liquidity measure for the company and that it is useful to investors and
management as a measure of Schlumberger’s ability to generate cash.
Once business needs and obligations are met, this cash can be used to
reinvest in the company for future growth or to return to shareholders
through dividend payments or share repurchases. Free cash flow does not
represent the residual cash flow available for discretionary
expenditures. Free cash flow is a non-GAAP financial measure that should
be considered in addition to, not as substitute for or superior to,
cash flow from operations.
|
Charges & Credits
In
addition to financial results determined in accordance with US
generally accepted accounting principles (GAAP), this second-quarter
2020 earnings release also includes non-GAAP financial measures (as
defined under the SEC’s Regulation G). In addition to the non-GAAP
financial measures discussed under “Liquidity”, net income (loss),
excluding charges & credits, as well as measures derived from it
(including diluted EPS, excluding charges & credits; Schlumberger
net income (loss), excluding charges & credits; and effective tax
rate, excluding charges & credits) are non-GAAP financial measures.
Management believes that the exclusion of charges & credits from
these financial measures enables it to more effectively evaluate
Schlumberger’s operations period over period and to identify operating
trends that could otherwise be masked by the excluded items. These
measures are also used by management as performance measures in
determining certain incentive compensation. The foregoing non-GAAP
financial measures should be considered in addition to, not as a
substitute for or superior to, other measures of financial performance
prepared in accordance with GAAP. The following is a reconciliation of
these non-GAAP measures to the comparable GAAP measures.
(Stated in millions, except per share amounts)
| |||||||||||||||
Second Quarter 2020
| |||||||||||||||
Pretax
|
Tax
|
Noncont.
Interests |
Net
|
Diluted
EPS* | |||||||||||
Schlumberger net loss (GAAP basis)
|
$(3,627
|
)
|
$(199
|
)
|
$6
|
$(3,434
|
)
|
$(2.47
|
)
| ||||||
Workforce reductions
|
1,021
|
71
|
-
|
950
|
0.68
| ||||||||||
Asset performance solutions investments
|
730
|
15
|
-
|
715
|
0.52
| ||||||||||
Fixed asset impairments
|
666
|
52
|
-
|
614
|
0.44
| ||||||||||
Inventory write-downs
|
603
|
49
|
-
|
554
|
0.40
| ||||||||||
Right-of-use asset impairments
|
311
|
67
|
-
|
244
|
0.18
| ||||||||||
Costs associated with exiting certain activities
|
205
|
(25
|
)
|
-
|
230
|
0.17
| |||||||||
Multiclient seismic data impairment
|
156
|
2
|
-
|
154
|
0.11
| ||||||||||
Repurchase of bonds
|
40
|
2
|
-
|
38
|
0.03
| ||||||||||
Postretirement benefits curtailment gain
|
(69
|
)
|
(16
|
)
|
-
|
(53
|
)
|
(0.04
|
)
| ||||||
Other
|
61
|
4
|
-
|
57
|
0.04
| ||||||||||
Schlumberger net income, excluding charges & credits
|
$97
|
$22
|
$6
|
$69
|
$0.05
| ||||||||||
Six Months 2020
| |||||||||||||||
Pretax
|
Tax
|
Noncont.
Interests |
Net
|
Diluted
EPS* | |||||||||||
Schlumberger net loss (GAAP basis)
|
$(11,716
|
)
|
$(920
|
)
|
$14
|
$(10,810
|
)
|
$(7.79
|
)
| ||||||
Goodwill
|
3,070
|
-
|
-
|
3,070
|
2.21
| ||||||||||
Intangible assets
|
3,321
|
815
|
-
|
2,506
|
1.81
| ||||||||||
Asset performance solutions investments
|
1,994
|
11
|
-
|
1,983
|
1.43
| ||||||||||
Workforce reductions
|
1,223
|
78
|
-
|
1,145
|
0.82
| ||||||||||
Fixed asset impairments
|
666
|
52
|
-
|
614
|
0.44
| ||||||||||
Inventory write-downs
|
603
|
49
|
-
|
554
|
0.40
| ||||||||||
North America pressure pumping impairment
|
587
|
133
|
-
|
454
|
0.33
| ||||||||||
Right-of-use asset impairments
|
311
|
67
|
-
|
244
|
0.18
| ||||||||||
Costs associated with exiting certain activities
|
205
|
(25
|
)
|
-
|
230
|
0.17
| |||||||||
Multiclient seismic data impairment
|
156
|
2
|
-
|
154
|
0.11
| ||||||||||
Repurchase of bonds
|
40
|
2
|
-
|
38
|
0.03
| ||||||||||
Postretirement benefits curtailment gain
|
(69
|
)
|
(16
|
)
|
-
|
(53
|
)
|
(0.04
|
)
| ||||||
Other
|
140
|
13
|
-
|
127
|
0.09
| ||||||||||
Valuation allowance
|
-
|
(164
|
)
|
-
|
164
|
0.12
| |||||||||
Schlumberger net income, excluding charges & credits
|
$531
|
$97
|
$14
|
$420
|
$0.30
| ||||||||||
* Does not add due to rounding.
| |||||||||||||||
(Stated in millions, except per share amounts)
| |||||||||||||||
First Quarter 2020
| |||||||||||||||
Pretax
|
Tax
|
Noncont.
Interests |
Net
|
Diluted
EPS | |||||||||||
Schlumberger net loss (GAAP basis)
|
$(8,089
|
)
|
$(721
|
)
|
$8
|
$(7,376
|
)
|
$(5.32
|
)
| ||||||
Goodwill
|
3,070
|
-
|
-
|
3,070
|
2.21
| ||||||||||
Intangible assets impairments
|
3,321
|
815
|
-
|
2,506
|
1.81
| ||||||||||
Asset performance solutions investments
|
1,264
|
(4
|
)
|
-
|
1,268
|
0.91
| |||||||||
North America pressure pumping impairment
|
587
|
133
|
-
|
454
|
0.33
| ||||||||||
Workforce reductions
|
202
|
7
|
-
|
195
|
0.14
| ||||||||||
Other
|
79
|
9
|
-
|
70
|
0.05
| ||||||||||
Valuation allowance
|
-
|
(164
|
)
|
-
|
164
|
0.12
| |||||||||
Schlumberger net income, excluding charges & credits
|
$434
|
$75
|
$8
|
$351
|
$0.25
| ||||||||||
There were no charges or credits during the first six months of 2019.
Segments
(Stated in millions)
| |||||||||||||||||
Three Months Ended
| |||||||||||||||||
Jun. 30, 2020
|
Mar. 31, 2020
|
Jun. 30, 2019
| |||||||||||||||
Revenue
|
Income
(Loss) Before
Taxes
|
Revenue
|
Income
(Loss) Before Taxes |
Revenue
|
Income
Before Taxes | ||||||||||||
Reservoir Characterization
|
$1,052
|
$185
|
$1,311
|
$184
|
$1,558
|
$317
| |||||||||||
Drilling
|
1,731
|
165
|
2,289
|
285
|
2,420
|
301
| |||||||||||
Production
|
1,615
|
25
|
2,703
|
212
|
3,077
|
235
| |||||||||||
Cameron
|
1,015
|
80
|
1,254
|
121
|
1,328
|
165
| |||||||||||
Eliminations & other
|
(57
|
)
|
(59
|
)
|
(102
|
)
|
(26
|
)
|
(114
|
)
|
(50
|
)
| |||||
Pretax segment operating income
|
396
|
776
|
968
| ||||||||||||||
Corporate & other
|
(169
|
)
|
(228
|
)
|
(238
|
)
| |||||||||||
Interest income(1)
|
7
|
15
|
9
| ||||||||||||||
Interest expense(1)
|
(137
|
)
|
(129
|
)
|
(146
|
)
| |||||||||||
Charges & credits(2)
|
(3,724
|
)
|
(8,523
|
)
|
-
| ||||||||||||
$5,356
|
$(3,627
|
)
|
$7,455
|
$(8,089
|
)
|
$8,269
|
$593
| ||||||||||
(Stated in millions)
| |||||||||||
Six Months Ended
| |||||||||||
Jun. 30, 2020
|
Jun. 30, 2019
| ||||||||||
Revenue
|
Income
(Loss) Before Taxes |
Revenue
|
Income
Before
Taxes
| ||||||||
Reservoir Characterization
|
$2,363
|
$369
|
$3,017
|
$598
| |||||||
Drilling
|
4,020
|
450
|
4,806
|
608
| |||||||
Production
|
4,318
|
237
|
5,967
|
453
| |||||||
Cameron
|
2,270
|
201
|
2,586
|
313
| |||||||
Eliminations & other
|
(160
|
)
|
(85
|
)
|
(227
|
)
|
(96
|
)
| |||
Pretax operating income
|
1,172
|
1,876
| |||||||||
Corporate & other
|
(397
|
)
|
(511
|
)
| |||||||
Interest income(1)
|
22
|
18
| |||||||||
Interest expense(1)
|
(266
|
)
|
(282
|
)
| |||||||
Charges & credits(2)
|
(12,247
|
)
|
-
| ||||||||
$12,811
|
$(11,716
|
)
|
$16,149
|
$1,101
| |||||||
(1)
|
Excludes interest included in the segment results.
| |
(2)
|
See section entitled “Charges & Credits” for details.
|
Prior period amounts have been reclassified to the current period presentation.
Supplemental Information
1)
|
What is the capital investment guidance for the full year 2020?
| |
Capital
investment (comprised of capex, multiclient, and APS investments) for
the full year 2020 is expected to be approximately $1.5 billion, which
is approximately 45% lower than 2019. Capex is expected to be
approximately $1.1 billion in 2020 as compared to $1.7 billion in 2019.
APS investments will be about $300 million in 2020 as compared to $781
million in 2019.
| ||
2)
|
What were the cash flow from operations and free cash flow for the second quarter of 2020?
| |
Cash
flow from operations for the second quarter of 2020 was $803 million.
Free cash flow for the second quarter of 2020 was $465 million, despite
making $370 million of severance payments during the quarter.
| ||
3)
|
What was included in “Interest and other income” for the second quarter of 2020?
| |
“Interest
and other income” for the second quarter of 2020 was $33 million. This
amount consisted of earnings of equity method investments of $26 million
and interest income of $7 million.
| ||
4)
|
How did interest income and interest expense change during the second quarter of 2020?
| |
Interest
income of $7 million for the second quarter of 2020 decreased $8
million sequentially. Interest expense of $144 million increased $8
million sequentially.
| ||
5)
|
What is the difference between Schlumberger’s consolidated income (loss) before taxes and pretax segment operating income?
| |
The
difference principally consists of corporate items, charges and
credits, and interest income and interest expense not allocated to the
segments as well as stock-based compensation expense, amortization
expense associated with certain intangible assets, certain centrally
managed initiatives, and other nonoperating items.
| ||
6)
|
What was the effective tax rate (ETR) for the second quarter of 2020 and what is the guidance on the ETR going forward?
| |
The
ETR for the second quarter of 2020, calculated in accordance with GAAP,
was 5.5% as compared to 8.9% for the first quarter of 2020. Excluding
charges and credits, the ETR for the second quarter of 2020 was 22.6% as
compared to 17.2% for the first quarter of 2020. The ETR, excluding
charges and credits, is expected to remain in the low twenties for the
rest of 2020.
| ||
7)
|
How
many shares of common stock were outstanding as of June 30, 2020 and
how did this change from the end of the previous quarter?
| |
There were 1.388 billion shares of common stock outstanding as of June 30, 2020 and March 31, 2020.
|
(Stated in millions)
| ||
Shares outstanding at March 31, 2020
|
1,388
| |
Shares issued under employee stock purchase plan
|
-
| |
Vesting of restricted stock
|
-
| |
Stock repurchase program
|
-
| |
Shares outstanding at June 30, 2020
|
1,388
| |
8)
|
What
was the weighted average number of shares outstanding during the second
quarter of 2020 and first quarter of 2020? How does this reconcile to
the average number of shares outstanding, assuming dilution, used in the
calculation of diluted earnings per share, excluding charges and
credits?
| |
The
weighted average number of shares outstanding was 1.388 billion during
the second quarter of 2020 and 1.387 billion during the first quarter of
2020.
| ||
The
following is a reconciliation of the weighted average shares
outstanding to the average number of shares outstanding, assuming
dilution, used in the calculation of diluted earnings per share,
excluding charges and credits.
|
(Stated in millions)
| ||||
Second Quarter
2020 |
First Quarter
2020 | |||
Weighted average shares outstanding
|
1,388
|
1,387
| ||
Assumed exercise of stock options
|
-
|
-
| ||
Unvested restricted stock
|
15
|
16
| ||
Average shares outstanding, assuming dilution
|
1,403
|
1,403
| ||
9)
|
What was the unamortized balance of Schlumberger’s investment in APS projects at June 30, 2020?
| |
The
unamortized balance of Schlumberger’s investments in APS projects was
approximately $1.8 billion at June 30, 2020 and $2.5 billion at March
31, 2020. These amounts are included within Other Assets in Schlumberger’s Condensed Consolidated Balance Sheet.
| ||
10)
|
What are the components of depreciation and amortization expense for the second quarter of 2020 and the first quarter of 2020?
| |
The
components of depreciation and amortization expense for the second
quarter of 2020 and first quarter of 2020 were as follows:
|
(Stated in millions)
| ||||
Second Quarter
2020 |
First Quarter
2020 | |||
Depreciation of fixed assets
|
$417
|
$449
| ||
Amortization of intangible assets
|
80
|
133
| ||
Amortization of APS investments
|
58
|
163
| ||
Amortization of multiclient seismic data costs capitalized
|
49
|
47
| ||
$604
|
$792
| |||
11)
|
What was the amount of WesternGeco multiclient sales in the second quarter of 2020?
| |
Multiclient
sales, including transfer fees, were $71 million in the second quarter
of 2020 and $88 million in the first quarter of 2020.
| ||
12)
|
What was the WesternGeco backlog at the end of the second quarter of 2020?
| |
The
WesternGeco backlog, which is based on signed contracts with customers,
was $248 million at the end of the second quarter of 2020. It was $282
million at the end of the first quarter of 2020.
| ||
13)
|
What
was the book-to-bill ratio for Cameron’s long-cycle businesses? What
were the orders and backlog for Cameron’s OneSubsea and Drilling Systems
businesses?
| |
The
book-to-bill ratio for the Cameron long-cycle businesses was 0.7. The
OneSubsea and Drilling Systems orders and backlog were as follows:
|
(Stated in millions)
| ||||
Orders
|
Second Quarter
2020 |
First Quarter
2020 | ||
OneSubsea
|
$277
|
$371
| ||
Drilling Systems
|
$95
|
$317
| ||
Backlog (at the end of period)
| ||||
OneSubsea
|
$2,139
|
$2,241
| ||
Drilling Systems
|
$457
|
$526
| ||
14)
|
What are the components of the $3.7 billion of charges recorded during the second quarter of 2020?
| |
The components of the $3.7 billion net pretax charge are as follows (in millions):
|
Severance (a)
|
$1,021
| ||
APS investments (b)
|
730
| ||
Fixed assets impairments(c)
|
666
| ||
Inventory write-downs(d)
|
603
| ||
Right-of-use asset impairments(e)
|
311
| ||
Costs associated with exiting certain activities
|
205
| ||
Multiclient seismic data impairment
|
156
| ||
Repurchase of bonds
|
40
| ||
Postretirement benefits curtailment gain
|
(69
|
)
| |
Other(f)
|
61
| ||
$3,724
|
(a)
|
Severance
is associated with reducing Schlumberger’s workforce by more than
21,000 employees. The vast majority of this charge is expected to be
paid during the second half of 2020.
| |
(b)
|
Relates to the carrying value of certain APS projects in Latin America.
| |
(c)
|
Consists of equipment that will no longer be utilized and facilities Schlumberger is exiting.
| |
(d)
|
Represents the write-down of inventory to its net realizable value.
| |
(e)
|
Relates to assets under operating leases associated with leased facilities Schlumberger is exiting and excess equipment.
| |
(f)
|
Includes a $42 million increase to the allowance for the doubtful accounts.
|
About Schlumberger
Schlumberger
is the world’s leading provider of technology for reservoir
characterization, drilling, production, and processing to the oil and
gas industry. With product sales and services in more than 120 countries
and employing approximately 85,000 people as of the end of the second
quarter of 2020 who represent over 170 nationalities, Schlumberger
supplies the industry’s most comprehensive range of products and
services, from exploration through production, and integrated
pore-to-pipeline solutions that optimize hydrocarbon recovery to deliver
reservoir performance sustainably.
Schlumberger
Limited has executive offices in Paris, Houston, London, and The Hague,
and reported revenues of $32.92 billion in 2019. For more information,
visit www.slb.com.
*Mark of Schlumberger or Schlumberger companies.
Notes
Schlumberger
will hold a conference call to discuss the earnings press release and
business outlook on Friday, July 24, 2020. The call is scheduled to
begin at 8:30 a.m. US Eastern Time. To access the call, which is open to
the public, please contact the conference call operator at +1 (844)
721-7241 within North America, or +1 (409) 207-6955 outside North
America, approximately 10 minutes prior to the call’s scheduled start
time, and provide the access code 4013483. At the conclusion of the
conference call, an audio replay will be available until August 24, 2020
by dialing +1 (866) 207-1041 within North America, or +1 (402) 970-0847
outside North America, and providing the access code 7688409. The
conference call will be webcast simultaneously at www.slb.com/irwebcast on a listen-only basis. A replay of the webcast will also be available at the same website until August 24, 2020.
This
second-quarter 2020 earnings release, as well as other statements we
make, contain “forward-looking statements” within the meaning of the
federal securities laws, which include any statements that are not
historical facts, such as our forecasts or expectations regarding
business outlook; growth for Schlumberger as a whole and for each of its
product lines (and for specified products or geographic areas within
each product line); oil and natural gas demand and production growth;
oil and natural gas prices; pricing; Schlumberger’s response to, and
preparedness for, the COVID-19 pandemic; access to raw materials;
improvements in operating procedures and technology; capital
expenditures by Schlumberger and the oil and gas industry; the business
strategies of Schlumberger and Schlumberger’s customers; Schlumberger’s
digital strategy; Schlumberger’s restructuring efforts and charges
recorded as a result of such efforts; our effective tax rate;
Schlumberger’s APS projects, joint ventures, and alliances; future
global economic and geopolitical conditions; and future results of
operations. These statements are subject to risks and uncertainties,
including, but not limited to, changing global economic conditions;
changes in exploration and production spending by Schlumberger’s
customers, and changes in the level of oil and natural gas exploration
and development; the results of operations and financial condition of
Schlumberger’s customers and suppliers, particularly during extended
periods of low prices for crude oil and natural gas; Schlumberger’s
inability to sufficiently monetize assets; the extent of future charges;
general economic, geopolitical, and business conditions in key regions
of the world; foreign currency risk; pricing pressure; weather and
seasonal factors; unfavorable effects of health pandemics; availability
and cost of raw materials; operational modifications, delays, or
cancellations; challenges in Schlumberger’s supply chain; production
declines; Schlumberger’s inability to recognize intended benefits from
its business strategies and initiatives, such as digital or new energy;
changes in government regulations and regulatory requirements, including
those related to offshore oil and gas exploration, radioactive sources,
explosives, chemicals, hydraulic fracturing services, and
climate-related initiatives; the inability of technology to meet new
challenges in exploration; the competitiveness of alternative energy
sources or product substitutes; and other risks and uncertainties
detailed in this second-quarter 2020 earnings release and our most
recent Forms 10-K, 10-Q, and 8-K filed with or furnished to the
Securities and Exchange Commission. If one or more of these or other
risks or uncertainties materialize (or the consequences of any such
development changes), or should our underlying assumptions prove
incorrect, actual outcomes may vary materially from those reflected in
our forward-looking statements. Statements in this second-quarter 2020
earnings release are made as of July 24, 2020, and Schlumberger
disclaims any intention or obligation to update publicly or revise such
statements, whether as a result of new information, future events, or
otherwise.
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