Schlumberger Positioned to Benefit from Multi-Year Investment Cycle

  • Apr 22, 2022
  • Scott Peters
  • Schlumberger quarterly net income soared 70% on 14% increase in revenues. The oil field services provider indicated that the company is poised to benefit from the new investment committed to increase drilling activities and diversify energy supply base and the duration and scale of upcycle may last longer than 2023.

    Schlumberger said first quarter 2022 revenues increased 14% to $6 billion, net income soared 70% to $510 million, and diluted earnings per share increased 71% to 36 cents from 21 cents a year ago.  

    International revenues increased 10% to $4.6 billion and North America revenues rose 32% to $1.3 billion. 

    Latin America led the revenue growth across all geographies as drilling activities ramped up in Mexico, Ecuador, Argentina, and Brazil. 

    Europe/CIS/Africa grew primarily from higher Production Systems sales in Turkey and increased exploration drilling in offshore Africa—particularly in Angola, Namibia, Gabon, and Kenya. 

    These increases, however, were partially offset by revenue decline in Russia & Central Asia. Middle East & Asia revenue increased due to higher drilling, stimulation, and intervention activity in Qatar, Iraq, the United Arab Emirates, Egypt, Australia, and across Southeast Asia. 

    In North America, growth was pervasive across drilling and completions activity, coupled with a strong contribution from our APS project in Canada.

    Schlumberger CEO Olivier Le Peuch commented, “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. Compared to the same quarter last year, revenue grew 14%; EPS—excluding charges and credits—increased 62%; and pretax segment operating margin expanded 229 basis points (bps), led by Well Construction and Reservoir Performance. 

    These results reflect the strength of our core services Divisions, the broad-based activity increase, and the continued realization of our improved operating leverage.

    “Concurrently, a shift in focus is emerging in the energy landscape, exacerbating an already tightly supplied oil and gas market. The dislocation of supply flows from Russia will result in increased global investment across geographies and the entire energy value chain to ensure the diversification and security of the world’s energy supply.

    “The confluence of elevated commodity prices, demand-led activity growth, and energy security are resulting in one of the strongest outlooks for the energy services industry in recent times—reinforcing the market fundamentals for a stronger and longer multiyear upcycle—absent a global economic setback.

    “In this context, energy has never been more essential to the world. Schlumberger, which uniquely benefits from increasing E&P activity and digital transformation, provides the most comprehensive technology portfolio to help customers deliver diverse, cleaner, and more affordable energy

    Outlook and Guidance 

    The oilfield services provider held out for higher drilling activities on offshore and on land and "this will result in a sequential seasonal rebound in the second quarter followed by significant growth in the second half of the year, particularly in the international market."

    The company said that the demand strength is expected to continue in 2023 and beyond as more capital is committed to higher drilling activities and diversify energy supply an the duration of scale of this upcycle may prove higher than originally anticipated. 

     


Annual Returns

Company Ticker 2022 2021 2020
Schlumberger N V SLB 30% 37% -45%

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