SCHLUMBERGER IS BETTER
FT - Schlumberger, the world's largest oilfield services group, has predicted a brighter year ahead for the global oil industry after what it described as three years of "unprecedented market downturn".
Reporting earnings for the fourth quarter of 2017 that were better than analysts had forecast, Paal Kibsgaard, chief executive, said the company had become "increasingly positive on the global outlook for our business".
He also pointed to signs of weakness in the oil industry around the world as evidence that the market could tighten further and support prices through the year.
Oilfield services groups have been among the companies hardest hit by the slump in prices that began in 2014, suffering from both a slowdown in activity and falling rates for their work.
The improvement in the outlook for Schlumberger is a sign of how the rise in oil prices, with Brent crude rising above $70 a barrel this month, is boosting prospects for the entire industry. Schlumberger serves a wide range of oil producers, from the largest national oil companies in resource-rich countries to small independents in the US.
In a sign of the lasting impact of the downturn, however, Schlumberger has decided to pull out of the business of acquiring seismic survey data both offshore and onshore. In the quarter it took a $1.36bn pre-tax charge for restructuring WesternGeco, its marine seismic subsidiary, and for writing down the value of some of its seismic data.
It also took a $938m writedown on the value of operations in crisis-hit Venezuela, including $469m on the value of accounts receivable.
Excluding those items, earnings per share for the fourth quarter of 2017 were 48 cents, up 78 per cent from the equivalent period of 2016 and above the average forecast of 44 cents.
Including those items, earnings per share showed a loss of $1.63 for the fourth quarter. Revenues were $8.18bn, up 15 per cent from the final quarter of 2016.
Mr Kibsgaard said surveys of the oil production companies that are Schlumberger's customers suggested their spending in North America was expected to grow by 15-20 per cent this year. In the rest of the world, growth is expected to be slower at just 5 per cent, but that would still be the first increase for four years.
As a result, he added, "there is renewed excitement and enthusiasm throughout our organisation".
Assessing the outlook for the oil market, Mr Kibsgaard said the North American shale industry was growing strongly, but in the rest of the world the production base was "showing fatigue after three years of unprecedented underinvestment".
He added: "The underlying signs of weakness will likely become more evident in the coming year, as the production additions from investments made in the previous upcycle start to noticeably fall off."
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Earlier:
2017, October, 23, 11:10:00
SCHLUMBERGER NET INCOME $545 MLN- Revenue of $7.9 billion increased 6% sequentially - Pretax operating income of $1.1 billion increased 11% sequentially - GAAP EPS, including Cameron integration-related charges of $0.03 per share, was $0.39 - EPS, excluding Cameron integration-related charges, was $0.42 - Cash flow from operations was $1.9 billion; free cash flow was $1.1 billion
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2017, September, 4, 12:15:00
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2017, January, 23, 18:35:00
SCHLUMBERGER NET LOSS $1.7 BLNFull-year 2016 revenue of $27.8 billion decreased 22% year-on-year, despite three quarters of activity from the Cameron Group that contributed $4.2 billion in revenue. Excluding Cameron, consolidated revenue declined 34%.
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2016, September, 2, 18:30:00
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2016, April, 8, 20:40:00
SCHLUMBERGER & CAMERON MERGERThe transaction combines two complementary technology portfolios into a pore-to-pipeline products and services offering to the global oil and gas industry. The merger will create technology-driven growth by integrating Schlumberger reservoir and well technology with Cameron wellhead and surface equipment, flow control and processing technology. This will result in the industry’s first complete drilling and production systems, which are enabled by Schlumberger expertise in instrumentation, data processing, control software, and system integration.
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2015, December, 11, 19:35:00
HALLIBURTON & BAKER HUGHES PROBLEMS: $35 BLNHalliburton and Baker Hughes, which do the physical work of drilling wells and extracting oil and natural gas for energy companies, trail only Schlumberger Ltd. in the marketplace.
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2015, October, 19, 19:05:00
SCHLUMBERGER CUTS 20,000 JOBSHe gave the warning in a statement as Schlumberger reported third-quarter earnings per share that were 48 per cent below the equivalent period of 2014, but slightly above analysts’ expectations. |