Thursday, October 6, 2022

Schlumberger rakes in higher profits in first quarter due to increased drilling activity

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Oilfield services company, Schlumberger recorded a 14 percent hike in profits for the first quarter of 2022, raking in some $5.96 billion in revenues.

“Our first-quarter results set us firmly on the path to deliver full-year revenue growth in the mid-teens and another year with a significant increase in earnings,” said Schlumberger’s Chief Executive Officer (CEO) Olivier Le Peuch during the company’s First Quarter Earnings Result on Friday.

Schlumberger’s revenue growth when compared to the same quarter in 2021, according to Le Peuch was “broad-based”, with international revenue increasing by 10 percent and revenues in North America growing by 32 percent.

The international growth was led by Latin America, due to higher drilling in Mexico, Ecuador, Argentina, and Brazil. The growth seen in Europe and Africa was primarily from higher Production Systems sales in Turkey and increased exploration drilling in offshore Africa—particularly in Angola, Namibia, Gabon, and Kenya, he continued.

Schlumberger’s revenue in the Middle East & Asia increased as well, due to higher drilling, stimulation, and intervention activity in Qatar, Iraq, the United Arab Emirates, Egypt, Australia, and across Southeast Asia, the CEO explained.

Schlumberger’s Board of Directors also approved a 40 percent increase in the quarterly cash dividend from $0.125 per share of outstanding common stock to $0.175 per share, beginning with the dividend payable on July 14, 2022, to stockholders of record on June 1, 2022.

“The trajectory of our cashflows affords us the flexibility to accelerate our return of capital program while continuing to deleverage the balance sheet and invest for long-term success,” he noted.

Schlumberger’s outlook for the rest of the year, particularly in the second half looks promising, said Le Peuch, with an acceleration of both short and long cycle investments.

“Consequently, it is our view that increased activity—both on land and offshore—higher technology adoption, and pricing momentum will drive simultaneous growth internationally and in North America,” he explained.

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And despite the uncertainty linked to Russia, Schlumberger remains confident that current market dynamics should allow it to maintain its full-year ambitions of year-on-year revenue growth in the mid-teens along with adjusted earnings before interest, taxes, depreciation, and amortization margins exiting the year at least 200 basis points higher than the fourth quarter of 2021.

“Our positive outlook extends further into 2023 and beyond as we anticipate successive years of market growth,” the CEO said.  “As demand continues to strengthen and new investments are committed to diversifying energy supply, the duration and scale of this upcycle may potentially prove higher than originally anticipated, absent a setback in the economic recovery.”

Schlumberger Limited provides technology for the energy industry worldwide and has played an integral role in the development of Guyana’s oil and gas sector. The Company has set up a source storage and calibration facility at Houston, East Bank Demerara, on the outskirts of Georgetown to support offshore exploration and production activities.

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