Page 6 - NorthAmOil Week 29

NorthAmOil COMMENTARY NorthAmOil
Schlumberger, Halliburton report second-quarter results
Both Schlumberger and Halliburton have reported lagging North American activity, while signs of recovery are clearer in overseas markets, writes Anna Kachkova
GLOBAL
WHAT:
Internationally, the oil and gas industry is showing signs of recovery, but North American activity is lagging.
WHY:
Both Schlumberger and Halliburton have released second-quarter results that re ect this trend.
WHAT NEXT:
North American upstream rms are likely to scale back spending and drilling in the second half of the year.
THE oil and gas industry is starting to report its second-quarter earnings, and the two lead- ing oilfield services providers have already announced their results. Schlumberger and Hal- liburton’s second-quarter performance gives an indication of what can be expected from others – including upstream players – during this earn- ings season.
Both Schlumberger and Halliburton have pointed to a challenging operating environment in North America. In more positive news, how- ever, both expect a further increase in interna- tional drilling activity, showing that globally, the oil industry’s slow recovery is set to continue.
Meeting expectations
Schlumberger’s second-quarter earnings were in line with analyst expectations. e services giant reported net income of $492mn, or $0.35 per share, in the quarter up to June 30, up from $430mn, or $0.31 per share, in the same quar- ter a year ago. e company’s global revenue of $8.27bn marked a slight year-on-year decline from $8.30bn, but nonetheless represented a 5% increase on the rst quarter of this year.
A similar trend can be seen in Schlumberger’s North America revenue, which was down year on year from $3.1bn to $2.8bn in the second quarter of 2019, but grew 2% from $2.7bn in the rst quarter.
The company’s international revenue, at
$5.5bn, marked both a year-on-year and a sequential rise. It was up from $5.1bn a year ago, and $5.0bn in the rst quarter of this year.
“Second-quarter revenue of $8.3bn increased 5% sequentially, driven by our international business that grew 8% and showed continued signs of a broad upturn in E&P investment and activity,” Schlumberger’s chairman and CEO, Paal Kibsgaard, said in a statement. “Interna- tional rig counts increased 6% sequentially and 5% year over year. In contrast, North America land revenue grew 1% sequentially, while North America o shore revenue increased 10%.”
Kibsgaard’s comments illustrate the ongoing struggles of the shale industry, while other areas continue a steady recovery. He also noted that “weak hydraulic fracturing pricing and a gen- eral decrease in drilling activity” onshore North America had o set other gains in that region.
Exceeding expectations
Halliburton’s second-quarter earnings, mean- while, beat analyst estimates but this was also driven by growth in international markets, which o set lagging North American activity. e company reported net income of $75mn, or $0.09 per diluted share, for the second quarter of 2019. is marked a decline from net income of $511mn in the same quarter a year ago, and $152mn in the rst quarter of this year.
However, the result reflected $247mn in
Schlumberger has noted weak hydraulic fracturing pricing and a general decrease in drilling activity onshore North America.
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Week 29 25•July•2019