Schlumberger has reported first-quarter 2010 revenue of $5.60 billion versus $5.74 billion in the fourth quarter of 2009, and $6.00 billion in the first quarter of 2009.
Income from continuing operations attributable to Schlumberger, before charges, was $747 million—a decrease of 9% sequentially and 20% year-on-year.
Income from continuing operations attributable to Schlumberger was $672 million. First-quarter 2010 results included charges of $35 million for transaction costs in connection with the Smith International merger and the Geoservices acquisition.
Oilfield Services revenue of $5.10 billion was down 1% sequentially and 6% year-on-year. Pretax segment operating income of $969 million was down 4% sequentially and 23% year-on-year.
WesternGeco revenue of $472 million was down 14% sequentially and 14% year-on-year. Pretax segment operating income of $67 million was down 41% sequentially but increased 23% year-on-year.
Schlumberger Chairman and CEO Andrew Gould commented, “First-quarter revenues registered a marginal sequential decline as a strong performance in North America and continued strength in the Middle East and Asia offset an overall decline in product and software sales from the high levels of the fourth quarter and a sharp drop in the North Sea and Russia due to drilling efficiency and adverse weather.”
“Our outlook for the remainder of 2010 confirms the optimism we expressed at the beginning of the year.”
“At WesternGeco, while the second quarter will see increased vessel transits, strong tendering activity in Marine is leading to much improved visibility on the remainder of 2010 and utilization will be higher than originally planned. However, new capacity entering the market is likely to limit pricing gains until later in the year.”
“I am on record as saying that I felt international margins would bottom at the end of the second quarter of 2010. I am pleased to report I was mistaken. International margins appear to have bottomed and are now likely to resume a positive trend—absent any exceptional circumstances.”
Key events in Schlumberger’s Q1.
• On February 21, 2010, Schlumberger and Smith International jointly announced that they had entered into a definitive merger agreement in which the companies would combine in a stock-for-stock transaction. Under the terms of the agreement, Smith shareholders will receive 0.6966 shares of Schlumberger common stock in exchange for each Smith share. The transaction is subject to various conditions including Smith stockholder approval and customary regulatory approvals, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. It is anticipated that the closing of the transaction will occur in the latter half of 2010.
• On March 24, 2010, Schlumberger announced that it had entered into a purchase agreement to acquire Geoservices, a privately-owned French oilfield services company specialized in mud logging, slickline and production surveillance operations. The total value of the transaction, including the assumption of net debt, is approximately $1.1 billion based on current exchange rates. The acquisition is subject to various conditions, including customary regulatory approvals, and is expected to close in the second quarter of 2010.
