Page 7 - NorthAmOil Week 17 2022

NorthAmOil PERFORMANCE NorthAmOil

Schlumberger posts increased first-

quarter profit on increased drilling

GLOBAL OILFIELD services giant Schlumberger stronger margins as drilling activity picks up
reported a higher first-quarter profit last week again following the early waves of the corona-
against the backdrop of rising oil prices bolster- virus (COVID-19) pandemic.
ing demand for drilling equipment and services. “The confluence of elevated commodity
The firm’s total revenue rose 14% year on year in prices, demand-led activity growth and energy
the quarter to reach $5.96bn. security are resulting in one of the strongest out-
Schlumberger’s international revenue rose by looks for the energy services industry in recent
about 10% y/y on the back of expanded drilling times,” stated Schlumberger’s CEO, Olivier Le
in Latin America, specifically in Mexico, Argen- Peuch. He expects to see substantial growth in
tina, Brazil, and Ecuador. On the other hand, the second half of the year and Schlumberger Le Peuch
revenue dropped 12% sequentially in the com- ending 2022 with earnings before interest, taxes,
pany’s Europe, Commonwealth of Independent depreciation and amortisation (EBITDA) mar- said that a
States (CIS) and Africa division stemming from gins at least 200 basis points higher than in the
a seasonal decline in activity and the deprecia- fourth quarter of 2021. combination of
tion of the Russian ruble. “The level of activity expansion globally, in
The company posted adjusted net income of every basin, for every division, is creating the both short-cycle
$488mn, or $0.34 per share, in the first quarter conditions for tightness in the capacity of sup- and long-cycle
of 2022, compared with $299mn, or $0.21 per ply,” he said on the company’s earnings call. The
share, in the same quarter of last year. This nar- conditions are “extremely favourable for pricing developments
rowly beat the expectation of analysts, who had power,” he added.
anticipated earnings of $0.33 per share, accord- Le Peuch said that a combination of both had spurred
ing to Refinitiv IBES data. short-cycle and long-cycle developments had
The company also agreed to a 40% dividend spurred increased drilling activity internation- increased
hike, bringing it to $0.175 per share and surpris- ally. He anticipates that there will be more final drilling activity
ing some analysts. investment decisions (FIDs) made on longer-
Oil prices have hit multi-year highs as term projects. internationally.
demand has risen in recent months, with Schlumberger has indicated it will stop new
Russia’s invasion of Ukraine exerting fur- investment in Russia following its invasion of
ther upward pressure on commodity prices. Ukraine, stating that sanctions uncertainty has
Schlumberger’s top competitors, Halibur- had an impact on its operations there, although
ton and Baker Hughes, also reported higher it did not report a write-down on its business
y/y profits in recent days and are anticipating in the country.™

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