Schlumberger reports Q2 revenue increase for North America

By Patrick C. Miller | August 07, 2018

During the second quarter this year, global oilfield services company Schlumberger Limited announced revenues of $8.3 billion, an increase of 6 percent over the previous quarter.

“Given the considerable number of new projects we are starting up throughout our international operations, our organization has responded well to both mobilization and project startup challenges,” said Paal Kibsgaard, Schlumberger chairman and CEO. “However, the associated costs together with some operational delays impacted our second-quarter pretax operating margins. This resulted in our sequential margin expansion being below our expectations.”

In North America, consolidated revenue increased 11 percent over the first quarter following the continued deployment of additional hydraulic fracturing and directional drilling capacity. Despite the impact of the spring break-up in Canada, North America land revenue grew 9 percent, outperforming both the 7 percent increase in U.S. land rig count and the 8 percent growth in U.S. land market stage count. Schlumberger said this performance was driven by market share gains and operational efficiency improvements as pricing remained flat.

The company’s activity in the U.S. land market continued to be strong as customers developed more effective well designs, balancing lateral length and completion volumes to maximize productivity while managing overall cost. Schlumberger said the customer trend of separating the procurement of pumping services and sand supply accelerated during the quarter. However, the vertical integration of the Schlumberger offering provides maximum potential for revenue from both integrated pumping services and sand supply contracts.

In March 2017, Weatherford International announced the OneStim joint venture with Schlumberger which delivers completions products and services for the development of unconventional resource plays in the U.S. and Canada land markets. Schlumberger reported that OneStim revenue grew 17 percent.

The company’s North America offshore activity began to recover as new drilling projects started up in eastern Canada, the U.S. Gulf of Mexico and the Caribbean, resulting in sequential revenue growth of 22 percent boosted by market share gains and multiclient sales. Higher service revenue and product sales in valves and measurement, together with increased activity for surface systems, also contributed to the area’s strong financial performance.

“The second quarter was both busy and exciting for Schlumberger as we completed a number of major milestones in preparation for the broad-based global activity upturn that is now emerging,” Kibsgaard said. “We delivered solid top-line growth both in North America and the international markets, building on our strong contract portfolios and our recent tender wins. We mobilized an unprecedented 29 new rigs for our international integrated drilling business, including our first commercial Land Rig of the Future deployment in Saudi Arabia.”

Kibsgaard noted that Schlumberger successfully rolled out its new, streamlined operations support organization, which builds on five years of methodical investment to improve internal efficiency, quality, teamwork and collaboration.

“As part of this, we made the last adjustment to our organizational setup in the second quarter to conclude the removal of one complete layer of our management and support structure. This will further reduce our cost base, and improve our agility and competitiveness going forward,” he said.