Page 10 - NorthAmOil Week 04 2021

NorthAmOil PERFORMANCE NorthAmOil

Increased horizontal
drilling and pressure
pumping helped to
boost Schlumberger’s
revenue.

Schlumberger, Baker Hughes

anticipate recovery

GLOBAL OILFIELD services firms Schlumberger America, Schlumberger saw activity grow in the
and Baker Hughes have both reported bet- US Gulf of Mexico, as well as onshore, where
ter-than-expected results for the fourth quarter increased horizontal drilling and pressure
of 2020, and have predicted that a gradual recov- pumping helped to boost revenue.
ery will take place over the course of 2021. They Schlumberger has projected that its capi-
follow in the footsteps of Halliburton – the other tal expenditures this year will be $1.5-1.7bn, a
oilfield service firm among the top three glob- slight improvement at the midpoint of the range
ally – which reported its fourth-quarter results from last year’s $1.5bn, bolstered by the ongoing
earlier last week. recovery.
Schlumberger, which is the world’s leading Baker Hughes also reported revenue of
oilfield services firm, reported fourth-quarter $5.5bn for the fourth quarter of 2020, up 9%
revenue of $5.5bn, up by 5% from $5.3bn in the sequentially from $5.0bn in the third quarter of
previous quarter but down 33% year on year 2020 but down 13% from $6.3bn in the fourth
from $8.2bn in the fourth quarter of 2019. On quarter of 2019. The company’s adjusted operat-
a sequential basis, however, this was the first ing profit nearly doubled sequentially to $462mn
increase in revenue for the company since the in the fourth quarter, beating Wall Street esti- Baker Hughes
third quarter of 2019. mates of $335mn.
The company’s net income, excluding charges In response to last year’s downturn, Baker is forecasting
and credits, came in at $0.22 per share in the Hughes cut its budget and staff numbers,
fourth quarter of 2020, beating estimates of restructured operations and closed facilities. improvements in
$0.17 per share, according to Refinitiv IBES data The company said in its fourth-quarter earnings
cited by Reuters. This was aided by cost-cutting call that it had exceeded its cost savings target of North American
measures that Schlumberger implemented in $700mn for 2020, and added that it would con- drilling activity in
response to last year’s downturn. tinue to optimise its operations to further reduce
“We concluded the year posting very strong costs. the first half of
fourth-quarter results, as we leveraged the indus- “As we look ahead to 2021, we are cautiously
try recovery, which has now commenced,” com- optimistic that the global economy and oil 2021.
mented Schlumberger’s CEO, Olivier Le Peuch. demand will begin to recover from the impact
“Fourth-quarter revenue grew 5% sequentially, of the pandemic,” Baker Hughes’ CEO, Lorenzo
driven by strong activity and solid execution Simonelli, said on the earnings call. “We expect
both in North America and in the international spending and activity levels to gain momentum
markets. Despite seasonality, revenue grew through the year as the macro environment
sequentially in all four divisions for the first time improves, likely setting up the industry for
since the third quarter of 2019.” stronger growth in 2022.”
Le Peuch noted that his company’s sequen- Baker Hughes is forecasting improvements in
tial international revenue growth was led by North American drilling activity in the first half
Latin America and a “global rebound of activity of 2021, but a relatively flat first half internation-
in most offshore deepwater markets”. In North ally, followed by a recovery in the second half.™

P10 www. NEWSBASE .com Week 04 28•January•2021