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Schlumberger announces Q1 2011 results


Schlumberger Limited announced Q1 2011 revenue of US$8.72 billion versus US$9.07 billion in the fourth quarter of 2010 and US$5.60 billion in the first quarter of 2010.

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

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

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

Distribution revenue of US$601 million increased 4 per cent sequentially. Pretax segment operating income of US$22 million improved 7 per cent 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 Characterisation 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.

Schlumberger anticipates 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.sddsds