- Revenue of $7.5 billion increased 8% sequentially
- Pretax operating income of $950 million increased 25%
sequentially
- GAAP loss per share, including charges of $0.40 per
share, was $0.05
- EPS, excluding charges, was $0.35
- Quarterly cash dividend of $0.50 per share was approved
PARIS--(BUSINESS
WIRE/ME NewsWire)--
Schlumberger Limited (NYSE:SLB) today reported results for the second quarter
of 2017.
(Stated in millions, except per
share amounts)
|
|||||||||||||||||||||
Three Months Ended
|
Change
|
||||||||||||||||||||
Jun. 30, 2017
|
Mar. 31, 2017
|
Jun. 30, 2016
|
Sequential
|
Year-on-year
|
|||||||||||||||||
Revenue
|
$7,462
|
$6,894
|
$7,164
|
8
|
%
|
4
|
%
|
||||||||||||||
Pretax operating income
|
$950
|
$757
|
$747
|
25
|
%
|
27
|
%
|
||||||||||||||
Pretax operating margin
|
12.7
|
%
|
11.0
|
%
|
10.4
|
%
|
175 bps
|
231 bps
|
|||||||||||||
Net income (loss) (GAAP basis)
|
$(74
|
)
|
$279
|
$(2,160
|
)
|
n/m
|
n/m
|
||||||||||||||
Net income, excluding charges
& credits*
|
$488
|
$347
|
$316
|
41
|
%
|
54
|
%
|
||||||||||||||
Diluted EPS (loss per share) (GAAP
basis)
|
$(0.05
|
)
|
$0.20
|
$(1.56
|
)
|
n/m
|
n/m
|
||||||||||||||
Diluted EPS, excluding charges
& credits*
|
$0.35
|
$0.25
|
$0.23
|
40
|
%
|
52
|
%
|
||||||||||||||
*These are non-GAAP financial
measures. See section below entitled "Charges & Credits" for
details.
|
|||||||||||||||||||||
n/m = not meaningful
|
Schlumberger Chairman and CEO Paal
Kibsgaard commented, “Our second-quarter revenue increased 8% sequentially
while pretax operating income rose by 25%, resulting in earnings per share
growth of 40%. Beyond seasonal effects, revenue grew in all of our Groups and
Areas.
“North America revenue increased 18%
following our rapid deployment of idle hydraulic fracturing capacity as land
activity further accelerated during the second quarter, partially offset by
further weakness offshore in the US Gulf of Mexico. In US land, revenue grew
42% sequentially, a rate almost double that of the 23% increase in land rig
count, driven primarily by hydraulic fracturing revenue that grew 68% as
completions activity intensified and pricing continued to improve. Directional
drilling revenue in US land was also higher as longer laterals requiring rotary
steerable systems and advanced drillbit technologies continued to drive
drilling intensity. Despite the significant costs associated with reactivating
equipment, all of our US land product lines were profitable in the second
quarter, driven by higher pricing, market share gains, improved operational
efficiency, timely resource additions, and proactive supply chain management.
“In the international markets,
revenue increased 4% sequentially, led by Europe/CIS/Africa as activity
recovered from the winter slowdown in Russia and the North Sea. Latin America
revenue increased due to higher reservoir characterization and drilling
activities in the Mexico & Central America GeoMarket, as well as from
increased unconventional land activity in Argentina. The Middle East & Asia
Area benefited from a seasonal rebound in China, increased activities in
Southeast Asia, and higher Integrated Drilling Services (IDS) activity in Iraq.
“Among the business segments, growth
in the second quarter was led by the Production and Drilling Groups, where
revenue increased sequentially by 14% and 6%, respectively, as hydraulic
fracturing and directional drilling activity in US land accelerated. Reservoir
Characterization Group revenue increased 9% due to higher international
activities beyond the seasonal rebounds in the Russia & CIS and North Sea
regions. Cameron Group revenue also increased 3% sequentially driven by higher
project volume and product sales for Surface Systems and Valves & Measurement
in North America.
“While the activity outlook in North
America for the second half of the year remains robust, we are now also seeing
more positive signs in the international markets with increases in activity and
new project plans starting to emerge in several GeoMarkets. The strengthening
in the international markets has so far been concentrated around land activity
in Western Siberia and in the OPEC Gulf countries but we are now also seeing an
increasing number of new offshore projects being prepared for tendering and
final investment decision (FID) in many of the world’s shallow water basins.
“In this market, we continue to
focus on serving our customers and driving our business forward, building on
our successful efforts over the past three years of broadening our technology
portfolio and increasing our addressable market, further streamlining our
execution machine, and pursuing more collaborative and commercially aligned
ways of working with new and existing customers.
“As part of this focus, we announced
a new agreement yesterday to acquire a majority equity interest in the Eurasia
Drilling Company (EDC). This extends the successful long-term relationship that
we have enjoyed with EDC through the strategic alliance that we signed in 2011.
Closing of the transaction is subject to approval by the Federal Antimonopoly
Service of Russia.
“We also remain on track to close
the OneStimSM joint venture transaction in the second half of this
year, which will allow us to further capitalize on the recovery in North
America land unconventional activity. At the same time, our increasing
investments in Schlumberger Production Management through the new projects with
OneLNG, YPF, and NNPC and FIRST E&P are not only providing additional
short-term opportunities for our various product lines, but also a long-term
activity baseline with superior full-cycle financial returns for the company as
a whole.
“Based on these, we continue to be
optimistic about the future of Schlumberger, as we maintain an attentive watch
and flexible approach to the shape and pace of the emerging oil market
recovery.”
Other Events
During the quarter, Schlumberger
repurchased 5.5 million shares of its common stock at an average price of
$72.34 per share for a total purchase price of $398 million.
On May 31, 2017, Schlumberger and
Production Plus created a joint venture to develop HEAL System™ technology and
business. HEAL System technology is designed to lower production costs by
mitigating production challenges commonly found in horizontal wells in
unconventional resource plays.
On June 29, 2017, Schlumberger, the
Nigerian National Petroleum Corporation (NNPC) and FIRST E&P signed an
agreement for development of the Anyala and Madu fields in offshore Nigeria.
Under the agreement, Schlumberger will contribute the required services in kind
and capital for the project development until first oil.
On July 19, 2017, the Company’s
Board of Directors approved a quarterly cash dividend of $0.50 per share of
outstanding common stock, payable on October 13, 2017 to stockholders of record
on September 6, 2017.
On July 20, 2017, Schlumberger
announced an agreement to acquire a majority (51%) equity interest in EDC.
Closing of the transaction is subject to approval by the Federal Antimonopoly
Service of Russia.
Consolidated Revenue by Geography
(Stated in millions)
|
|||||||||||||||||
Three Months Ended
|
Change
|
||||||||||||||||
Jun. 30, 2017
|
Mar. 31, 2017
|
Jun. 30, 2016
|
Sequential
|
Year-on-year
|
|||||||||||||
North America
|
$2,202
|
$1,871
|
$1,737
|
18
|
%
|
27
|
%
|
||||||||||
Latin America
|
1,039
|
952
|
1,007
|
9
|
%
|
3
|
%
|
||||||||||
Europe/CIS/Africa
|
1,750
|
1,652
|
1,948
|
6
|
%
|
-10
|
%
|
||||||||||
Middle East & Asia
|
2,347
|
2,319
|
2,404
|
1
|
%
|
-2
|
%
|
||||||||||
Eliminations & other
|
124
|
100
|
68
|
n/m
|
n/m
|
||||||||||||
$7,462
|
$6,894
|
$7,164
|
8
|
%
|
4
|
%
|
|||||||||||
North America revenue
|
$2,202
|
$1,871
|
$1,737
|
18
|
%
|
27
|
%
|
||||||||||
International revenue
|
$5,136
|
$4,922
|
$5,359
|
4
|
%
|
-4
|
%
|
||||||||||
n/m = not meaningful
|
Second-quarter revenue of $7.5
billion increased 8% sequentially with North America growing 18% and
International increasing 4%.
North America
In North America, revenue grew 18%
sequentially following the fast-track deployment of idle capacity as
unconventional land activity accelerated during the quarter. US land revenue
experienced 42% sequential growth, a rate almost double that of the 23% growth
in the US land rig count, driven primarily by hydraulic fracturing revenue that
grew 68% as completion activity intensified and pricing continued to improve.
Directional drilling revenue in US land was also higher, as well design and
longer laterals requiring rotary steerable systems and drillbit technologies
continued to drive well productivity. Higher product sales in Cameron Valves
& Measurement and increased activity for Cameron Surface Systems
contributed to this strong financial performance. US land revenue growth,
however, was partially offset by the seasonal spring break-up in Western Canada
and lower offshore revenue.
International Areas
Revenue in the Latin America Area
increased 9% sequentially on a strong performance in Mexico from the Reservoir
Characterization and Drilling Groups. Argentina revenue was also higher on
increased unconventional land activity while Brazil and Venezuela activity
remained weak. Ecuador revenue declined due to lower production from the
Schlumberger Production Management (SPM) Shushufindi project. The effect of
this, however, was largely offset by revenue from increased exploration in
Colombia.
Europe/CIS/Africa Area revenue increased 6% sequentially as
activity recovered following the winter slowdown in the Russia & CIS and
North Sea regions. Increased revenue in the Russia & CIS region was driven
by the start of offshore exploration drilling campaigns in Sakhalin, Astrakhan,
and Kazakhstan despite Russian alignment with OPEC production cut commitments.
The increased activity in the North Sea resulted from higher UK and Norway
drilling activity as the rig count increased. Sub-Sahara Africa GeoMarket
revenue was essentially flat as rig count stabilized with a recovery on land
and early signs of customers preparing to resume activity on key offshore
projects.
Middle East & Asia Area revenue increased 1% sequentially primarily due to seasonal
rebounds in SPM and completions activity in China in addition to higher
activity in Vietnam and Thailand. Iraq revenue was also higher on increased IDS
deviated well project delivery in the south, while further progress on the
early production facility projects coupled with product sales drove revenue
higher in Egypt. These increases, however, were partially offset by a decline
in revenue in Kuwait following the completion of a WesternGeco land seismic
acquisition project and by lower revenue in India due to monsoon weather
affecting rig activity.
Reservoir Characterization Group
(Stated in millions)
|
||||||||||||||||||||
Three Months Ended
|
Change
|
|||||||||||||||||||
Jun. 30, 2017
|
Mar. 31, 2017
|
Jun. 30, 2016
|
Sequential
|
Year-on-year
|
||||||||||||||||
Revenue
|
$1,759
|
$1,618
|
$1,586
|
9
|
%
|
11
|
%
|
|||||||||||||
Pretax operating income
|
$299
|
$281
|
$268
|
7
|
%
|
12
|
%
|
|||||||||||||
Pretax operating margin
|
17.0
|
%
|
17.3
|
%
|
16.9
|
%
|
-34 bps
|
13 bps
|
Reservoir Characterization Group
revenue of $1.8 billion, of which 78% came from the international markets,
increased 9% sequentially due to higher WesternGeco multiclient seismic license
sales, further progress for Testing & Process on early production facility
projects in the Middle East, and higher drillstem test activities in the United
Arab Emirates. Wireline revenue also grew from the seasonal activity rebound in
the Russia & CIS and North Sea regions, as well as from the start-up of
offshore exploration projects in the Sub-Sahara Africa GeoMarket.
Pretax operating margin of 17% was
essentially flat sequentially as the increased contribution from high-margin
Wireline exploration activities was offset by reduced profitability in Testing
& Process due to increased project costs.
Reservoir Characterization Group
performance was enhanced by Integrated Services Management (ISM) operations,
where specially trained project managers provide scheduling, planning, and
activity coordination for the Schlumberger product lines involved in a project.
Second-quarter performance was also boosted by new technology deployments and
contract awards.
In Vietnam, Idemitsu successfully
drilled an exploration well significantly under budget. For this project,
Schlumberger was awarded five contracts, and an ISM manager was assigned to
coordinate all Schlumberger services. The drilling and data acquisition program
was optimized to achieve the well objectives while minimizing the overall costs
of the exploration well. Drilling & Measurements StethoScope* formation
pressure-while-drilling service and EcoScope*† multifunction
logging-while-drilling service technologies for reservoir evaluation were
successfully run in the 12¼-in and 8½-in holes, respectively. The close
collaboration between Schlumberger and the customer led to the completion of
the well with no incidents.
Sirius Petroleum, an investment
company focused on oil and gas exploration and development opportunities in
Nigeria, awarded Schlumberger a multiwell contract for ISM operations in the
Ororo field. The contract, which will begin later in 2017, includes directional
drilling services, logging, completion and production fluids, cementing and
pumping services, well intervention and stimulation products and services, well
testing services, wellsite communications, data and software solutions as well
as Cameron wellheads and production trees.
Offshore Egypt, Testing &
Process used a combination of technologies for Belayim Petroleum Company
(Petrobel) to complete a production test of the first appraisal well on the
Zohr discovery in the Shorouk block. Working at a water depth of 1,450 m, the
production test string included SenTREE 3* subsea test tree and Muzic* wireless
telemetry technology that activated the SCAR* inline independent reservoir
fluid sampling and Quartet* downhole reservoir testing systems. Additional
technologies included a CERTIS* high-integrity reservoir test isolation system,
IRDV* intelligent remote dual valve, and Signature* quartz gauges. The use of
Testing Manager* well testing real-time data monitoring and collaboration
software enabled real-time transient analysis and optimization of the well test
program.
In Oman, Schlumberger deployed a
combination of technologies for Petroleum Development Oman (PDO) to enhance
productivity in seven wells in the Sadad North field. The technologies included
a QUANTUM RH* retrievable hydraulic-set sealbore production packer and Testing
& Process SXAR automatic gun release systems to create an integrated “shoot
and drop” completions operation that could be deployed in a single trip.
QUANTUM RH packer technology absorbs the high shock produced during perforation
operations while enabling easy recovery. The customer increased production by
an average of 200 m3/d of oil per well and saved a total of $700,000
in associated well costs for all seven wells.
Offshore India, Wireline deployed a
combination of technologies to increase production and reduce water cut in a
well for Oil and Natural Gas Corporation Limited (ONGC). Data collected using
the PLT* production logging tool and PressureXpress* reservoir pressure while
logging service helped design the optimal workover program. As a result, the
customer increased production to 6,100 bbl/d from the original 892 bbl/d and
decreased the water cut to 2% from the original 7.7%.
In Kuwait, Wireline used a Saturn*
3D radial probe for Kuwait Oil Company in one exploration well in an extremely
tight cretaceous carbonate reservoir. Saturn probe technology positions
self-sealing ports against the borehole wall to optimally draw reservoir
fluids. The customer saved 14 days of rig time, equivalent to $672,000.
In Russia, Software Integrated
Solutions (SIS) entered a technology partnership agreement with the Gazpromneft
Scientific Technology Centre to provide Guru* in-context guidance and support
software in the Petrel* E&P software platform. The software enables
discipline experts to collaborate and make the best possible decisions from
exploration to production. The customer benefits from a standard 3D-modeling
process that provides a 90% time saving compared with a conventional workflow.
In Norway, Aker BP ASA entered into
a four-year framework contract with two optional two-year extensions with
Schlumberger for acquisition of 4D seismic data over Alvheim, Bøyla,
Skarv/Snadd, and Ula fields in the Norwegian sector of the North Sea. The
survey will be conducted in 2017 and use IsoMetrix* marine isometric seismic
technology. Processing of the 4D and 3D data from the Alvheim and Skarv surveys
will be carried out at the WesternGeco Stavanger Geosolutions center.
WesternGeco was awarded multiple
offshore seismic survey contracts for the provision of Q-Marine* point-receiver
marine seismic technology with the CLA* continuous line acquisition method.
Repsol Exploracion Guyana, S.A. awarded WesternGeco a 4,000-km2 survey offshore
Guyana near recent major oil discoveries. In addition, Tullow awarded
WesternGeco two contracts—one for a 2,150-km2 3D survey offshore Guyana and the
second for data processing of a recently acquired dataset in Uruguay. The
Uruguay data will be processed in the WesternGeco Gatwick Geosolutions center
using prestack depth migration and a broadband processing flow.
BP awarded WesternGeco the data
processing and imaging of a state-of-the-art, ultrahigh-density ocean-bottom
survey to be acquired over the Clair Ridge Field, West of Shetland in the UK.
The survey will become the baseline for future 4D time-lapse studies of the
area and includes advanced velocity model building and multicomponent
processing and imaging technologies.
Drilling Group
(Stated in millions)
|
||||||||||||||||||||
Three Months Ended
|
Change
|
|||||||||||||||||||
Jun. 30, 2017
|
Mar. 31, 2017
|
Jun. 30, 2016
|
Sequential
|
Year-on-year
|
||||||||||||||||
Revenue
|
$2,107
|
$1,985
|
$2,034
|
6
|
%
|
4
|
%
|
|||||||||||||
Pretax operating income
|
$302
|
$229
|
$171
|
32
|
%
|
77
|
%
|
|||||||||||||
Pretax operating margin
|
14.3
|
%
|
11.5
|
%
|
8.4
|
%
|
278 bps
|
594 bps
|
Drilling Group revenue of $2.1
billion, of which 74% came from the international markets, increased 6%
sequentially, due to the seasonal rebound in activity in the Russia & CIS
and North Sea regions and strong directional drilling activity in US land that benefited
most of the Drilling Group product lines. The demand for directional drilling
technologies in US land was also higher, as well design and longer laterals
required advanced rotary steerable systems and innovative drillbit technologies
to drive well productivity. These increases were partially offset by the
seasonal spring-break up in Western Canada and lower offshore activity in the
US Gulf of Mexico.
Pretax operating margin of 14%
increased 278 basis points (bps) sequentially due to increased volume and
pricing improvements from the greater uptake of Drilling & Measurements and
Bits & Drilling Tools technologies in US land, although this was partially
offset by pricing pressure in the US Gulf of Mexico and in the international
markets.
Drilling Group performance in the
second quarter was strengthened by a combination of IDS operations, which
provide project management, engineering design, and technical optimization
capabilities. Group performance was also boosted by new technology deployments
and contract awards.
In Russia, LUKOIL awarded
Schlumberger a three-year IDS contract for 139 wells in Western Siberia. The
scope of work includes technologies and services from Drilling &
Measurements, Bits & Drilling Tools, M-I SWACO, Completions, and SIS.
In Oman, Petrogas Kahil awarded
Schlumberger an IDS contract for one year valued at $20 million to drill three
exploration wells in Block 55. This includes the provision of several
Schlumberger technologies, such as Bits & Drilling Tools AxeBlade* ridged
diamond element bits, Drilling & Measurements PowerV* vertical drilling
rotary steerable systems, and Surface Systems SOLIDrill* modular compact
wellhead systems. Operations for the first well began in the second quarter of
2017.
In Bahrain, IDS was awarded a
contract for two offshore exploration wells with a six-month optional extension
by the Bahrain Petroleum Company (BAPCO). The contract includes products and
services from the Reservoir Characterization, Drilling, Production, and Cameron
Groups. A number of technologies are included in the contract, such as the
PowerDrive vorteX* powered rotary steerable system, GeoFlex* quantitative
cuttings analysis and imaging service, FlexSTIM* modular offshore stimulation
system, and CERTIS* high-integrity reservoir test isolation system. Operations
began in the first quarter of 2017.
SCS Corporation Ltd., a subsidiary
of Hyperdynamics Corporation, awarded Schlumberger a drilling master services
contract for the Fatala-1 deepwater exploration well offshore the Republic of
Guinea. The contract includes wireline logging, measurement- and
logging-while-drilling, drilling fluids and solids control, downhole cementing,
mud logging, drillbits and reamers, as well as contingency fishing equipment
and services. Schlumberger will also provide an IDS project manager and
drilling will begin in the third quarter of 2017.
In the US Gulf of Mexico, the
Drilling Group used a combination of technologies for Shell to optimize
drilling of a challenging salt formation in the Green Canyon Block. Drilling
through salt creates very high torque levels and fluctuations that can lead to
low rates of penetration (ROP) or tool failures. The technologies included a
Drilling & Measurements PowerDrive Orbit* rotary steerable system and a
Bits & Drilling Tools AxeBlade ridge diamond element bit. As a result, the
customer was the first to drill more than 5,353 ft in a 24-hour period in the
Gulf of Mexico and was able to save seven days of drilling time in the 16½-in
section.
In Oklahoma, Drilling &
Measurements used PeriScope HD* multilayer bed boundary detection service for
Casillas Petroleum Corporation to minimize risk and optimize drilling
performance in the SCOOP plays. With its ability to detect multiple formation
layers and fluid boundary positions, PeriScope HD service enabled advanced well
placement by providing real-time reservoir delineation in a formation that
showed little contrast from top to bottom. As a result, the customer was able
to place 100% of the lateral in zone, avoiding potential lost-in-hole and
sidetrack costs.
In the UK sector of the North Sea,
Drilling & Measurements deployed a combination of technologies for a major
operator to improve drilling performance in challenging well conditions. The
combination of OptiDrill* real-time drilling intelligence service and
PowerDrive Xceed* rotary steerable system optimized technology performance by
reducing the number of bit runs from five to one. This saved the customer
approximately 10 days of drilling time, equivalent to more than $2.4 million.
In North America land, Bits &
Drilling Tools used AxeBlade ridged diamond element bit technology in four
wells for a customer to overcome drilling challenges in the Bakken Shale play.
The formation is characterized by heavily interbedded sandstone, shale, and
limestone intervals with varying compressive strengths that can limit drilling
performance. The customer saved 52 hours between four wells. In addition,
AxeBlade bit technology exceeded the customer’s 24-hour footage record twice
over the same interval.
In Colombia, Bits & Drilling
Tools used ONYX 360* rolling polycrystalline diamond compact (PDC) cutter
technology to overcome drilling challenges for Equion Energy in the Llanos
basin. ONYX 360 cutter technology provided increased bit durability while
drilling through three different compressive strength formations. The ROP was
3.5 times higher compared with offset runs in the same formations. The customer
saved nearly $3 million in operating costs.
In China, Bits & Drilling Tools
used a combination of technologies for PetroChina to drill a 9½-in curved
interbedded sandstone and shale well section in the Halahatang field. This
challenging geology typically requires two to three conventional drillbits to
reach target depth under severe shock and vibration. A combination of
RockStorm* wear-resistant high-impact PDC cutter technology and Stinger*
conical diamond element technology drilled to total depth in a single run. This
saved the customer 10 days of drilling operations, equivalent to $150,000.
In Norway, M-I SWACO deployed ATC*
automated tank-cleaning technology for Statoil to reduce health, safety, and
environmental risks on supply vessels. Average monthly performance, based on 25
boats and 150 tanks, reduced confined-space entry by more than 500 hours per
month and reduced working at height by 225 hours per month. In addition, ATC
tank-cleaning technology decreased water usage by 80% per month while also
achieving a higher level of cleaning compared with a manual process. Consequently,
the customer has saved approximately $500,000 per month since the technology
was adopted in April 2016.
Production Group
(Stated in millions)
|
||||||||||||||||||||
Three Months Ended
|
Change
|
|||||||||||||||||||
Jun. 30, 2017
|
Mar. 31, 2017
|
Jun. 30, 2016
|
Sequential
|
Year-on-year
|
||||||||||||||||
Revenue
|
$2,496
|
$2,187
|
$2,121
|
14
|
%
|
18
|
%
|
|||||||||||||
Pretax operating income
|
$221
|
$110
|
$82
|
101
|
%
|
170
|
%
|
|||||||||||||
Pretax operating margin
|
8.9
|
%
|
5.0
|
%
|
3.9
|
%
|
382 bps
|
499 bps
|
Production Group revenue of $2.5
billion, of which 59% came from the international markets, was 14% higher
sequentially due primarily to strong hydraulic fracturing activity and a
sustained pricing recovery in North America land as completions activity intensified
and stage counts increased by 26%. In US land, hydraulic fracturing revenue
grew 68% through the fast-track deployment of idle capacity as unconventional
land activity accelerated during the quarter. International revenue was also
higher on the seasonal activity rebound in China and in the Russia & CIS
region, while revenue in Argentina increased on unconventional land activity.
SPM posted a sequential increase from the seasonal recovery in China, although
this was partially offset by the decline in revenue in Ecuador due to lower
production from the SPM Shushufindi project.
Pretax operating margin of 9%
increased 382 bps sequentially due to increased activity and pricing recovery
on land in North America. Despite the significant costs incurred in reactivating
multiple fleets in the second quarter, the hydraulic fracturing business in
North America was profitable for the first time since the first quarter of
2015. Margin also expanded due to increasing benefits from the vertical
integration of the pressure pumping business.
Production Group results benefited
from a series of new technology deployments and transformation initiatives.
In North America land, Well Services
used BroadBand Sequence* fracturing service to increase production in a
horizontal shale well in the heterogeneous Wolfcamp Shale formation in the
Permian basin. Nearly one year after deploying the BroadBand* service, the well
produced 42% more hydrocarbons compared with the average production of three
offset wells with the same lateral length, stage count, and volume of proppant
and fluids.
In West Texas, Schlumberger used a
combination of technologies for Manti Tarka Permian to optimize well
completions in the Wolfcamp Shale formation. The technologies included Kinetix
Shale* reservoir-centric stimulation-to-production software, Wireline ThruBit*
through-the-bit logging services, and Sonic Scanner* acoustic scanning
platform. Data from field measurements and modeling helped to optimize the
completions design, leading to a 60% increase in the hydraulic fracturing
surface area. The customer achieved a 25% improvement in oil production
compared with offset wells in the field.
In North America land, Schlumberger
artificial lift technology established a new equipment benchmark in shale oil
operations. REDA Continuum* unconventional extended-life electrical submersible
pump (ESP) technology, which is designed for unconventional reservoir
horizontal well challenges such as slug fluid flow and damaging solids, exceeds
the reliability of conventional ESPs. Continuum ESP technology has been
installed in more than 180 operations since its introduction in September 2014
and has demonstrated run lives of 18 months, surpassing historical averages of
six to nine months.
In China, Well Services deployed a
combination of technologies to increase production for PetroChina Company
Limited in two horizontal gas wells in a tight sandstone formation in the Ordos
basin. The use of Salik* local-sand-enabled flow-channel fracturing service
enabled replacement of more than half of the ceramic proppant normally
required, and helped create high conductivity fractures in the horizontal
lateral. As a result of these combined technologies, the customer achieved a
50% increase in gas production in each well versus plan. In addition, Salik
fracturing service helped reduce overall well costs by 20%, equivalent to
$95,000.
In North America, the transformation
program enabled improved equipment reliability and reduced maintenance costs.
In particular, the Center for Reliability and Efficiency in Denton, Texas,
supports the field by monitoring equipment fleets from its Reliability Support
Center, where prognostic health monitoring capabilities (PHM) have been
developed to predict equipment reliability concerns. PHM has saved $10 million
in operation costs over the last 18 months.
Cameron Group
(Stated in millions)
|
||||||||||||||||||||
Three Months Ended
|
Change
|
|||||||||||||||||||
Jun. 30, 2017
|
Mar. 31, 2017
|
Jun. 30, 2016
|
Sequential
|
Year-on-year
|
||||||||||||||||
Revenue
|
$1,265
|
$1,229
|
$1,525
|
3
|
%
|
-17
|
%
|
|||||||||||||
Pretax operating income
|
$174
|
$162
|
$250
|
8
|
%
|
-30
|
%
|
|||||||||||||
Pretax operating margin
|
13.8
|
%
|
13.2
|
%
|
16.4
|
%
|
61 bps
|
-260 bps
|
Cameron Group revenue of $1.3
billion, of which 59% came from International markets, increased 3%
sequentially, driven by Surface Systems and Valves & Measurement activity
in US land, which grew at the same rate as the well count. The US land growth,
however, was partially offset by reduced US Gulf of Mexico activity for
Drilling Systems and OneSubsea. Internationally, revenues declined slightly due
to reduced project activity for OneSubsea and Drilling Systems, offset in part
by higher revenue in Surface Systems and Valves & Measurement from the
seasonal service activity rebound in the Russia & CIS region.
Pretax operating margin of 14%
slightly improved sequentially, as increased project volumes and product sales
in Surface Systems and Valves & Measurement and continued strong project
execution in OneSubsea more than offset the impact of falling product backlog
in Drilling Systems.
Cameron Group performance included
the following highlights during the quarter.
Cameron Drilling Systems and M-I
SWACO collaborated on product development to deliver the industry’s first
original equipment manufacturer deepwater managed pressure drilling (MPD)
system. The integrated solution is comprised of a riser joint, surface
manifolds, a single control system and umbilical, and other equipment. To date,
Schlumberger has received orders for four of the systems—the first was
delivered in May 2017 and the other three will be delivered later this year.
This deepwater MPD system received a 2017 Offshore Technology Conference Spotlight
on New Technology Award.
TAQA awarded OneSubsea an
engineering, procurement, construction, installation and commissioning (EPCIC)
contract for the Otter field in the UK sector of the North Sea. The contract
includes a subsea multiphase boosting system with topside and subsea controls
and associated life-of-field services. The project will result in a 30-km
subsea tieback to the TAQA-operated North Cormorant platform and will be the
longest subsea multiphase boosting tieback in the UK sector of the North Sea.
OneSubsea and its Subsea Integration Alliance partner, Subsea 7, will deliver a
turnkey integrated project from design through supply, installation, and
commissioning.
Noble Energy Mediterranean Ltd.
awarded Schlumberger a contract for the provision of a measurement and control
system for the deepwater Leviathan Field Development Project offshore Israel.
The Valves & Measurement system will include two large, multirun metering
skids, Caldon gas and liquid ultrasonic custody transfer meters, a
bidirectional prover, and a building to house multiple natural gas component
analyzers and supervisory control systems.
In the US Gulf of Mexico, OneSubsea
and its Subsea Services Alliance member, Helix Energy Solutions, received an
expression of interest for rental of the jointly developed 15,000 psi
Intervention Riser System, starting in the fourth quarter of 2017. This system,
in which the construction was launched mid-2015, will be the first of its kind
available on a rental basis to address the growing intervention needs of
high-pressure subsea wells.
Financial Tables
|
|||||||||||||
Condensed Consolidated Statement
of Income (Loss)
|
|||||||||||||
(Stated in millions, except per
share amounts)
|
|||||||||||||
Second Quarter
|
Six Months
|
||||||||||||
Periods Ended June 30,
|
2017
|
2016
|
2017
|
2016
|
|||||||||
Revenue
|
$7,462
|
$7,164
|
$14,356
|
$13,684
|
|||||||||
Interest and other income
|
62
|
54
|
108
|
98
|
|||||||||
Expenses
|
|||||||||||||
Cost of revenue (1)
|
6,468
|
6,465
|
12,544
|
11,925
|
|||||||||
Research & engineering
|
196
|
257
|
406
|
497
|
|||||||||
General & administrative
|
110
|
103
|
208
|
213
|
|||||||||
Impairments & other (1)
|
510
|
2,573
|
510
|
2,573
|
|||||||||
Merger & integration (1)
|
81
|
185
|
164
|
185
|
|||||||||
Interest
|
142
|
149
|
281
|
282
|
|||||||||
Income (loss) before taxes
|
$17
|
$(2,514
|
)
|
$351
|
$(1,893
|
)
|
|||||||
Taxes on income (loss) (1)
|
98
|
(368
|
)
|
148
|
(270
|
)
|
|||||||
Net income (loss)
|
$(81
|
)
|
$(2,146
|
)
|
$203
|
$(1,623
|
)
|
||||||
Net income (loss) attributable to
noncontrolling interests
|
(7
|
)
|
14
|
(2
|
)
|
36
|
|||||||
Net income (loss) attributable to
Schlumberger (1)
|
$(74
|
)
|
$(2,160
|
)
|
$205
|
$(1,659
|
)
|
||||||
Diluted earnings (loss) per share
of Schlumberger (1)
|
$(0.05
|
)
|
$(1.56
|
)
|
$0.15
|
$(1.26
|
)
|
||||||
Average shares outstanding
|
1,387
|
1,389
|
1,390
|
1,321
|
|||||||||
Average shares outstanding
assuming dilution
|
1,387
|
1,389
|
1,397
|
1,321
|
|||||||||
Depreciation & amortization
included in expenses (2)
|
$986
|
$1,113
|
$1,975
|
$2,080
|
(1) See section entitled “Charges & Credits” for details.
(2) Includes depreciation of property, plant and equipment and
amortization of intangible assets, multiclient seismic data costs and SPM
investments.
Condensed Consolidated Balance
Sheet
|
|||||
(Stated in millions)
|
|||||
Jun. 30,
|
Dec. 31,
|
||||
Assets
|
2017
|
2016
|
|||
Current Assets
|
|||||
Cash and short-term investments
|
$6,218
|
$9,257
|
|||
Receivables
|
8,925
|
9,387
|
|||
Other current assets
|
6,130
|
5,283
|
|||
21,273
|
23,927
|
||||
Fixed income investments, held to
maturity
|
13
|
238
|
|||
Fixed assets
|
12,358
|
12,821
|
|||
Multiclient seismic data
|
1,042
|
1,073
|
|||
Goodwill
|
25,058
|
24,990
|
|||
Intangible assets
|
9,636
|
9,855
|
|||
Other assets
|
5,482
|
5,052
|
|||
$74,862
|
$77,956
|
||||
Liabilities and Equity
|
|||||
Current Liabilities
|
|||||
Accounts payable and accrued
liabilities
|
$9,444
|
$10,016
|
|||
Estimated liability for taxes on
income
|
1,159
|
1,188
|
|||
Short-term borrowings and current
portion
|
|||||
of long-term debt
|
2,224
|
3,153
|
|||
Dividends payable
|
700
|
702
|
|||
13,527
|
15,059
|
||||
Long-term debt
|
16,600
|
16,463
|
|||
Deferred taxes
|
2,000
|
1,880
|
|||
Postretirement benefits
|
1,385
|
1,495
|
|||
Other liabilities
|
1,398
|
1,530
|
|||
34,910
|
36,427
|
||||
Equity
|
39,952
|
41,529
|
|||
$74,862
|
$77,956
|
Liquidity
|
|||||||||||||||
(Stated in millions)
|
|||||||||||||||
Components of Liquidity
|
Jun. 30,
2017 |
Mar. 31,
2017 |
Dec. 31,
2016 |
Jun. 30,
2016 |
|||||||||||
Cash and short-term investments
|
$6,218
|
$7,353
|
$9,257
|
$11,192
|
|||||||||||
Fixed income investments, held to
maturity
|
13
|
238
|
238
|
386
|
|||||||||||
Short-term borrowings and current
portion of long-term debt
|
(2,224
|
)
|
(2,449
|
)
|
(3,153
|
)
|
(3,371
|
)
|
|||||||
Long-term debt
|
(16,600
|
)
|
(16,538
|
)
|
(16,463
|
)
|
(18,252
|
)
|
|||||||
Net Debt (1)
|
$(12,593
|
)
|
$(11,396
|
)
|
$(10,121
|
)
|
$(10,045
|
)
|
|||||||
Details of changes in liquidity
follow:
|
|||||||||||||||
Six
|
Second
|
Six
|
|||||||||||||
Months
|
Quarter
|
Months
|
|||||||||||||
Periods Ended June 30,
|
2017
|
2017
|
2016
|
||||||||||||
Net income (loss) before
noncontrolling interests
|
$203
|
$(81
|
)
|
$(1,623
|
)
|
||||||||||
Impairment and other charges, net
of tax before noncontrolling interests
|
643
|
574
|
2,476
|
||||||||||||
$846
|
$493
|
$853
|
|||||||||||||
Depreciation and amortization (2)
|
1,975
|
986
|
2,080
|
||||||||||||
Pension and other postretirement
benefits expense
|
52
|
15
|
92
|
||||||||||||
Stock-based compensation expense
|
180
|
92
|
145
|
||||||||||||
Pension and other postretirement
benefits funding
|
(74
|
)
|
(45
|
)
|
(83
|
)
|
|||||||||
Change in working capital
|
(1,339
|
)
|
(548
|
)
|
(250
|
)
|
|||||||||
Other
|
(126
|
)
|
(135
|
)
|
5
|
||||||||||
Cash flow from operations (3)
|
$1,514
|
$858
|
$2,842
|
||||||||||||
Capital expenditures
|
(884
|
)
|
(503
|
)
|
(998
|
)
|
|||||||||
SPM investments
|
(328
|
)
|
(184
|
)
|
(729
|
)
|
|||||||||
Multiclient seismic data
capitalized
|
(190
|
)
|
(74
|
)
|
(333
|
)
|
|||||||||
Free cash flow (4)
|
112
|
97
|
782
|
||||||||||||
Stock repurchase program
|
(770
|
)
|
(398
|
)
|
(506
|
)
|
|||||||||
Dividends paid
|
(1,393
|
)
|
(697
|
)
|
(1,255
|
)
|
|||||||||
Proceeds from employee stock plans
|
143
|
8
|
195
|
||||||||||||
(1,908
|
)
|
(990
|
)
|
(784
|
)
|
||||||||||
Business acquisitions and
investments, net of cash acquired plus debt assumed
|
(364
|
)
|
(91
|
)
|
(3,790
|
)
|
|||||||||
Other
|
(200
|
)
|
(116
|
)
|
76
|
||||||||||
Increase in Net Debt
|
(2,472
|
)
|
(1,197
|
)
|
(4,498
|
)
|
|||||||||
Net Debt, beginning of period
|
(10,121
|
)
|
(11,396
|
)
|
(5,547
|
)
|
|||||||||
Net Debt, end of period
|
$(12,593
|
)
|
$(12,593
|
)
|
$(10,045
|
)
|
(1)
|
“Net Debt” represents gross debt
less cash, short-term investments and fixed income investments, held to
maturity. Management believes that Net Debt provides useful information
regarding the level of Schlumberger’s indebtedness by reflecting cash and investments
that could be used to repay debt. Net Debt is a non-GAAP financial measure
that should be considered in addition to, not as a substitute for or superior
to, total debt.
|
|
(2)
|
Includes depreciation of property,
plant and equipment and amortization of intangible assets, multiclient
seismic data costs and SPM investments.
|
|
(3)
|
Includes severance payments of
approximately $230 million and $90 million during the six months and second
quarter ended June 30, 2017, respectively; and $545 million during the six
months ended June 30, 2016. The six months ended June 30, 2016 also includes
approximately $100 million of one-off transaction-related payments associated
with the acquisition of Cameron.
|
|
(4)
|
“Free cash flow” represents cash
flow from operations less capital expenditures, SPM investments and
multiclient seismic data costs capitalized. Management believes that free
cash flow is an important liquidity measure for the company and that it is
useful to investors and management as a measure of our ability to generate
cash. Once business needs and obligations are met, this cash can be used to
reinvest in the company for future growth or to return to shareholders
through dividend payments or share repurchases. Free cash flow does not
represent the residual cash flow available for discretionary expenditures.
Free cash flow is a non-GAAP financial measure that should be considered in
addition to not as substitute for or superior to, cash flow from operations.
|
Charges & Credits
In addition to financial results
determined in accordance with US generally accepted accounting principles
(GAAP), this Second-Quarter 2017 Earnings Release also includes non-GAAP
financial measures (as defined under the SEC’s Regulation G). Net income,
excluding charges & credits, as well as measures derived from it (including
diluted EPS, excluding charges & credits; net income before noncontrolling
interests, excluding charges & credits; and effective tax rate, excluding
charges & credits) are non-GAAP financial measures. Management believes
that the exclusion of charges & credits from these financial measures
enables it to evaluate more effectively Schlumberger’s operations period over
period and to identify operating trends that could otherwise be masked by the
excluded items. These measures are also used by management as performance
measures in determining certain incentive compensation. The foregoing non-GAAP
financial measures should be considered in addition to, not as a substitute for
or superior to, other measures of financial performance prepared in accordance
with GAAP. The following is a reconciliation of these non-GAAP measures to the
comparable GAAP measures.
(Stated in millions, except per
share amounts)
|
||||||||||||||
Second Quarter 2017
|
||||||||||||||
Pretax
|
Tax
|
Noncont.
Interests |
Net
|
Diluted
EPS * |
||||||||||
Schlumberger net loss (GAAP basis)
|
$17
|
$98
|
$(7
|
)
|
$(74
|
)
|
$(0.05
|
)
|
||||||
Promissory note fair value
adjustment and other
|
510
|
-
|
12
|
498
|
0.36
|
|||||||||
Merger & integration
|
81
|
17
|
-
|
64
|
0.05
|
|||||||||
Schlumberger net income, excluding
charges & credits
|
$608
|
$115
|
$5
|
$488
|
$0.35
|
|||||||||
Six Months 2017
|
||||||||||||||
Pretax
|
Tax
|
Noncont.
Interests |
Net
|
Diluted
EPS * |
||||||||||
Schlumberger net income (GAAP
basis)
|
$351
|
$148
|
$(2
|
)
|
$205
|
$0.15
|
||||||||
Promissory note fair value
adjustment and other
|
510
|
-
|
12
|
498
|
0.36
|
|||||||||
Merger & integration
|
164
|
31
|
-
|
133
|
0.10
|
|||||||||
Schlumberger net income, excluding
charges & credits
|
$1,025
|
$179
|
$10
|
$836
|
$0.60
|
|||||||||
First Quarter 2017
|
||||||||||||||
Pretax
|
Tax
|
Noncont.
Interests |
Net
|
Diluted
EPS |
||||||||||
Schlumberger net income (GAAP
basis)
|
$334
|
$50
|
$5
|
$279
|
$0.20
|
|||||||||
Merger & integration
|
82
|
14
|
-
|
68
|
0.05
|
|||||||||
Schlumberger net income, excluding
charges & credits
|
$416
|
$64
|
$5
|
$347
|
$0.25
|
|||||||||
* Does not add due to rounding
|
(Stated in millions, except per
share amounts)
|
||||||||||||||
Second Quarter 2016
|
||||||||||||||
Pretax
|
Tax
|
Noncont.
Interests |
Net
|
Diluted
EPS * |
||||||||||
Schlumberger net loss (GAAP basis)
|
$(2,514
|
)
|
$(368
|
)
|
$14
|
$(2,160
|
)
|
$(1.56
|
)
|
|||||
Impairment & other:
|
||||||||||||||
Fixed asset impairments
|
1,058
|
177
|
-
|
881
|
0.63
|
|||||||||
Workforce reduction
|
646
|
63
|
-
|
583
|
0.42
|
|||||||||
Inventory write-downs
|
616
|
49
|
-
|
567
|
0.41
|
|||||||||
Multiclient seismic data
impairment
|
198
|
62
|
-
|
136
|
0.10
|
|||||||||
Other restructuring charges
|
55
|
-
|
-
|
55
|
0.04
|
|||||||||
Merger & integration:
|
||||||||||||||
Merger-related employee benefits
and professional fees
|
92
|
17
|
-
|
75
|
0.05
|
|||||||||
Other merger and
integration-related costs
|
93
|
19
|
-
|
74
|
0.05
|
|||||||||
Amortization of purchase
accounting inventory fair value adjustment (1)
|
150
|
45
|
-
|
105
|
0.08
|
|||||||||
Schlumberger net income, excluding
charges & credits
|
$394
|
$64
|
$14
|
$316
|
$0.23
|
|||||||||
Six Months 2016
|
||||||||||||||
Pretax
|
Tax
|
Noncont.
Interests |
Net
|
Diluted
EPS * |
||||||||||
Schlumberger net loss (GAAP basis)
|
$(1,893
|
)
|
$(270
|
)
|
$36
|
$(1,659
|
)
|
$(1.26
|
)
|
|||||
Impairment & other:
|
||||||||||||||
Fixed asset impairments
|
1,058
|
177
|
-
|
881
|
0.66
|
|||||||||
Workforce reduction
|
646
|
63
|
-
|
583
|
0.44
|
|||||||||
Inventory write-downs
|
616
|
49
|
-
|
567
|
0.43
|
|||||||||
Multiclient seismic data
impairment
|
198
|
62
|
-
|
136
|
0.10
|
|||||||||
Other restructuring charges
|
55
|
-
|
-
|
55
|
0.04
|
|||||||||
Merger & integration:
|
||||||||||||||
Merger-related employee benefits
and professional fees
|
92
|
17
|
-
|
75
|
0.06
|
|||||||||
Other merger and
integration-related costs
|
93
|
19
|
-
|
74
|
0.06
|
|||||||||
Amortization of purchase
accounting inventory fair value adjustment (1)
|
150
|
45
|
-
|
105
|
0.08
|
|||||||||
Schlumberger net income, excluding
charges & credits
|
$1,015
|
$162
|
$36
|
$817
|
$0.62
|
|||||||||
(1) Recorded in Cost of revenue in the Condensed
Consolidation Statement of Income (Loss).
|
||||||||||||||
* Does not add due to rounding
|
Product Groups
|
||||||||||||||||||||||||
(Stated in millions)
|
||||||||||||||||||||||||
Three Months Ended
|
||||||||||||||||||||||||
Jun. 30, 2017
|
Mar. 31, 2017
|
Jun. 30, 2016
|
||||||||||||||||||||||
Revenue
|
Income
Before Taxes |
Revenue
|
Income
Before Taxes |
Revenue
|
Income
Before Taxes |
|||||||||||||||||||
Reservoir Characterization
|
$1,759
|
$299
|
$1,618
|
$281
|
$1,586
|
$268
|
||||||||||||||||||
Drilling
|
2,107
|
302
|
1,985
|
229
|
2,034
|
171
|
||||||||||||||||||
Production
|
2,496
|
221
|
2,187
|
110
|
2,121
|
82
|
||||||||||||||||||
Cameron
|
1,265
|
174
|
1,229
|
162
|
1,525
|
250
|
||||||||||||||||||
Eliminations & other
|
(165
|
)
|
(46
|
)
|
(125
|
)
|
(25
|
)
|
(102
|
)
|
(24
|
)
|
||||||||||||
Pretax operating income
|
950
|
757
|
747
|
|||||||||||||||||||||
Corporate & other
|
(242
|
)
|
(239
|
)
|
(241
|
)
|
||||||||||||||||||
Interest income(1)
|
28
|
24
|
24
|
|||||||||||||||||||||
Interest expense(1)
|
(128
|
)
|
(126
|
)
|
(136
|
)
|
||||||||||||||||||
Charges & credits
|
(591
|
)
|
(82
|
)
|
(2,908
|
)
|
||||||||||||||||||
$7,462
|
$17
|
$6,894
|
$334
|
$7,164
|
$(2,514
|
)
|
(Stated in millions)
|
|||||||||||||||
Six Months Ended
|
|||||||||||||||
Jun. 30, 2017
|
Jun. 30, 2016
|
||||||||||||||
Revenue
|
Income
Before Taxes |
Revenue
|
Income
Before Taxes |
||||||||||||
Reservoir Characterization
|
$3,377
|
$580
|
$3,305
|
$601
|
|||||||||||
Drilling
|
4,092
|
531
|
4,527
|
542
|
|||||||||||
Production
|
4,683
|
331
|
4,497
|
288
|
|||||||||||
Cameron
|
2,494
|
336
|
1,525
|
250
|
|||||||||||
Eliminations & other
|
(290
|
)
|
(71
|
)
|
(170
|
)
|
(33
|
)
|
|||||||
Pretax operating income
|
1,707
|
1,648
|
|||||||||||||
Corporate & other
|
(480
|
)
|
(414
|
)
|
|||||||||||
Interest income(1)
|
52
|
37
|
|||||||||||||
Interest expense(1)
|
(254
|
)
|
(256
|
)
|
|||||||||||
Charges & credits
|
(674
|
)
|
(2,908
|
)
|
|||||||||||
$14,356
|
$351
|
$13,684
|
$(1,893
|
)
|
|||||||||||
(1) Excludes interest included in the Product Groups results.
|
|||||||||||||||
Certain prior period items have
been reclassified to conform to the current period presentation.
|
Supplemental Information
|
||
1)
|
What is the capex guidance for the
full year 2017?
|
|
Capex (excluding multiclient and
SPM investments) is expected to be $2.2 billion for 2017.
|
||
2)
|
What was the cash flow from
operations for the second quarter of 2017?
|
|
Cash flow from operations for the
second quarter of 2017 was $858 million and included approximately $90
million of severance payments.
|
||
3)
|
What was the cash flow from
operations for the first half of 2017?
|
|
Cash flow from operations for the
first half of 2017 was $1.5 billion and included approximately $230 million
of severance payments.
|
||
4)
|
What was included in “Interest and
other income” for the second quarter of 2017?
|
|
“Interest and other income” for
the second quarter of 2017 was $62 million. This amount consisted of earnings
of equity method investments of $28 million and interest income of $34
million.
|
||
5)
|
How did interest income and
interest expense change during the second quarter of 2017?
|
|
Interest income of $34 million was
$5 million higher sequentially. Interest expense of $142 million was $3
million higher sequentially.
|
||
6)
|
What is the difference between
pretax operating income and Schlumberger’s consolidated income before taxes?
|
|
The difference principally
consists of corporate items (including charges and credits) and interest
income and interest expense not allocated to the segments as well as
stock-based compensation expense, amortization expense associated with
certain intangible assets (including intangible asset amortization expense
resulting from the acquisition of Cameron), certain centrally managed
initiatives, and other nonoperating items.
|
||
7)
|
What was the effective tax rate
(ETR) for the second quarter of 2017?
|
|
The ETR for the second quarter of
2017, calculated in accordance with GAAP, was 590% as compared to 14.8% for
the first quarter of 2017. The ETR for the second quarter of 2017, excluding
charges and credits, was 18.9% as compared to 15.3% for the first quarter of
2017.
|
||
8)
|
How many shares of common stock
were outstanding as of June 30, 2017 and how did this change from the end of
the previous quarter?
|
|
There were 1.385 billion shares of
common stock outstanding as of June 30, 2017. The following table shows the
change in the number of shares outstanding from March 31, 2017 to June 30,
2017.
|
(Stated in millions)
|
|||
Shares outstanding at March 31,
2017
|
1,389
|
||
Shares sold to optionees, less
shares exchanged
|
-
|
||
Vesting of restricted stock
|
1
|
||
Shares issued under employee stock
purchase plan
|
-
|
||
Stock repurchase program
|
(5)
|
||
Shares outstanding at June 30,
2017
|
1,385
|
9)
|
What was the weighted average
number of shares outstanding during the second quarter of 2017 and first
quarter of 2017 and how does this reconcile to the average number of shares
outstanding, assuming dilution used in the calculation of diluted earnings
per share, excluding charges and credits?
|
|
The weighted average number of
shares outstanding during the second quarter of 2017 was 1.387 billion and
1.393 billion during the first quarter of 2017.
|
||
The following is a reconciliation
of the weighted average shares outstanding to the average number of shares
outstanding, assuming dilution, used in the calculation of diluted earnings
per share, excluding charges and credits.
|
(Stated in millions)
|
||||||
Second Quarter
2017 |
First Quarter
2017 |
|||||
Weighted average shares
outstanding
|
1,387
|
1,393
|
||||
Assumed exercise of stock options
|
1
|
4
|
||||
Unvested restricted stock
|
5
|
5
|
||||
Average shares outstanding,
assuming dilution
|
1,393
|
1,402
|
10)
|
What was the unamortized balance
of Schlumberger’s investment in SPM projects at June 30, 2017 and how did it
change as compared to December 31, 2016?
|
|
The unamortized balance of
Schlumberger’s investments in SPM projects was approximately $2.6 billion and
$2.5 billion at June 30, 2017 and December 31, 2016, respectively. These
amounts are included within Other Assets in Schlumberger’s Condensed Consolidated
Balance Sheet. The change in the unamortized balance of Schlumberger’s
investment in SPM projects was as follows:
|
(Stated in millions)
|
|||||
Balance at December 31, 2016
|
$2,458
|
||||
SPM investments
|
328
|
||||
Amortization of SPM investment
|
(213
|
)
|
|||
Balance at June 30, 2017
|
$2,573
|
11)
|
What was the amount of WesternGeco
multiclient sales in the second quarter of 2017?
|
|
Multiclient sales, including
transfer fees, were $182 million in the second quarter of 2017 and $138
million in the first quarter of 2017.
|
||
12)
|
What was the WesternGeco backlog
at the end of the second quarter of 2017?
|
|
WesternGeco backlog, which is
based on signed contracts with customers, was $566 million at the end of the
second quarter of 2017. It was $613 million at the end of the first quarter
of 2017.
|
13)
|
What were the orders and backlogs
for Cameron Group’s OneSubsea and Drilling Systems businesses?
|
|
OneSubsea and Drilling Systems
orders and backlogs were as follows:
|
(Stated in millions)
|
|||||
Orders
|
Second Quarter
2017
|
First Quarter
2017
|
|||
OneSubsea
|
$181
|
$546
|
|||
Drilling Systems
|
$170
|
$174
|
|||
Backlog (at the end of period)
|
|||||
OneSubsea
|
$2,371
|
$2,634
|
|||
Drilling Systems
|
$566
|
$608
|
14)
|
What is included in Impairments
& other on Schlumberger’s Condensed Consolidated Statement of Income
(Loss) for the second quarter of 2017?
|
|
During the second quarter of 2017,
Schlumberger recorded $510 million of pretax charges that are classified in
Impairments & other. The vast majority of this amount relates to a
financing agreement that Schlumberger entered into with its primary customer
in Venezuela. This agreement resulted in the exchange of $700 million of
outstanding accounts receivable for an interest bearing promissory note.
Schlumberger recorded this note at its estimated fair value on the date of
exchange, which resulted in a charge.
|
About Schlumberger
Schlumberger is the world's leading
provider of technology for reservoir characterization, drilling, production,
and processing to the oil and gas industry. Working in more than 85 countries
and employing approximately 100,000 people who represent over 140
nationalities, Schlumberger supplies the industry's most comprehensive range of
products and services, from exploration through production, and integrated
pore-to-pipeline solutions that optimize hydrocarbon recovery to deliver
reservoir performance.
Schlumberger Limited has principal
offices in Paris, Houston, London and The Hague, and reported revenues of
$27.81 billion in 2016. For more information, visit www.slb.com.
*Mark of Schlumberger or of
Schlumberger companies.
†Japan Oil, Gas and Metals National Corporation (JOGMEC),
formerly Japan National Oil Corporation (JNOC), and Schlumberger collaborated
on a research project to develop logging while drilling (LWD) technology that
reduces the need for traditional chemical sources. Designed around the pulsed
neutron generator (PNG), EcoScope service uses technology that resulted from
this collaboration. The PNG and the comprehensive suite of measurements in a
single collar are key components of the EcoScope service that deliver
game-changing LWD technology.