Schlumberger Limited (NYSE:SLB) today 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. Diluted earnings-per-share from continuing
operations attributable to Schlumberger, excluding $0.06 of charges
in the first quarter of 2010, was $0.62 versus $0.67 in the
previous quarter, and $0.78 in the first quarter of 2009.
Income from continuing operations attributable to Schlumberger,
including charges, was $672 million or $0.56 per share versus $0.67
in the previous quarter and $0.78 in the first quarter of 2009.
First-quarter 2010 results included charges of $40 million for the
reduction in future tax deductions for retiree medical benefits as
a result of the passage during the quarter of the Patient
Protection and Affordable Care Act in the United States, and
charges of $35 million for transaction costs in connection with the
Smith International, Inc. 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.
North American margins improved in all GeoMarkets as activity
increased. While strong performance was recorded in the Latin
America and Middle East and Asia Areas, overall international
margins decreased slightly due to adverse winter weather conditions
in the Europe, Africa and CIS Area.
WesternGeco registered an expected sequential decline in
Multiclient revenue while Marine activity improved slightly with
higher vessel utilization.
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.
In North America, commitment drilling to hold leases as well as
interest in domestic oil plays should sustain current activity
levels in the US through the second quarter while Canada will
experience the normal spring break-up. Beyond that, the picture is
less clear as natural gas prices and the fundamentals of the
natural gas market remain uncertain.
Higher oil prices are leading to tangible evidence that
operators are contemplating higher levels of activity than
originally planned in international markets. We reiterate our
comment from the last quarter that we see improvements in some
offshore markets notably the UK sector of the North Sea, Latin
America and West Africa as well as on land in Russia. In order to
prepare for this increase in the latter half of 2010 and in 2011 we
have increased our Capex guidance by $400 million, the bulk of
which will be aimed at Drilling and Measurements and high-end
Wireline technologies.
Finally, 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.”
Other Events:
- On February 21, 2010,
Schlumberger Limited and Smith International, Inc. 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.
- During the quarter, Schlumberger
repurchased 5.3 million shares of its common stock at an average
price of $63.72 for a total purchase price of $337 million under
the stock repurchase program approved by the Schlumberger Board of
Directors on April 17, 2008.
Consolidated Statement of Income
(Stated in millions, except per share amounts) Three
Months Periods Ended March 31
2010
2009 Revenue
$
5,598
$
6,000
Interest and other income, net (1)
64 77 Expenses Cost of
revenue
4,343 4,510 Research & engineering
207 190
General & administrative
144 130 Merger &
integration (2)
35 - Interest
45 55 Income before taxes
888 1,192 Taxes on income (2)
214 252 Net Income
674
940 Net Income attributable to noncontrolling interests
(2 ) (2 ) Net
Income attributable to Schlumberger (2)
$ 672 $ 938
Diluted Earnings Per Share of Schlumberger
$ 0.56 $ 0.78 Average
shares outstanding
1,195 1,196 Average shares outstanding
assuming dilution
1,215
1,210 Depreciation & amortization
included in expenses (3)
$ 620
$ 609 1. Includes interest
income of: Three months 2010 - $17 million (2009 - $18 million)
2. See page 7 for details of charges. 3. Including
multiclient seismic data cost.
Condensed Consolidated Balance Sheet
(Stated in millions)
Mar. 31, Dec. 31, Assets
2010 2009 Current Assets
Cash and short-term investments
$ 4,203 $ 4,616
Other current assets
8,862 9,034
13,065 13,650
Fixed income investments, held to maturity
708 738 Fixed
assets
9,545 9,660 Multiclient seismic data
333 288
Goodwill
5,397 5,305 Other assets
3,835 3,824
$ 32,883
$ 33,465 Liabilities and Equity
Current Liabilities
Accounts payable and accrued liabilities
$ 4,705 $
5,003 Estimated liability for taxes on income
865 878
Short-term borrowings and current
portion of long-term debt
635 804 Convertible debentures
299 321
Dividend payable
250
253
6,754 7,259 Other long-term debt
4,052 4,355 Postretirement benefits
1,623 1,660 Other
liabilities
915
962
13,344 14,236 Equity
19,539 19,229
$ 32,883
$ 33,465
Net Debt
“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. Details of
Net Debt follow:
(Stated in millions)
Three Months 2010 Net Debt, January 1, 2010 $
(126 ) Net income 674 Depreciation and amortization 620 Pension and
other postretirement benefits expense 79 Excess of equity income
over dividends received (47 ) Stock-based compensation expense 47
Increase in working capital (152 ) Capital expenditure (449 )
Multiclient seismic data capitalized (91 ) Dividends paid (254 )
Proceeds from employee stock plans 114 Stock repurchase program
(337 ) Business acquisitions (117 ) Conversion of debentures 23
Pension and other postretirement benefits funding (64 ) Other (19 )
Translation effect on net debt 24 Net Debt, March 31,
2010 $ (75 ) Components of Net Debt
Mar. 31,
2010
Dec. 31,
2009
Cash and short-term investments $ 4,203 $ 4,616 Fixed income
investments, held to maturity 708 738 Short-term borrowings and
current portion of long-term debt (635 ) (804 ) Convertible
debentures (299 ) (321 ) Other long-term debt (4,052 )
(4,355 ) $ (75 )
$ (126 )
Business Review
(Stated in millions) Three Months 2010
2009 % chg
Oilfield Services
Revenue $ 5,097 $ 5,439 (6 )% Pretax Operating Income $ 969 $ 1,255
(23 )%
WesternGeco
Revenue $ 472 $ 551 (14 )% Pretax Operating Income $ 67 $ 55 23 %
Pretax operating income represents the segments’ income before
taxes and noncontrolling interests. The pretax operating income
excludes such items as corporate expenses, interest income and
interest expense not allocated to the segments, the charges
described on page 7, interest on postretirement medical benefits,
and stock-based compensation costs.
Charges
In addition to financial results determined in accordance with
generally accepted accounting principles (GAAP) this First-Quarter
Earnings Press Release also includes non-GAAP financial measures
(as defined under the SEC’s Regulation G). The following is a
reconciliation of these non-GAAP measures to the comparable GAAP
measures:
( Stated in millions, except per
share amounts )
First Quarter 2010 Pretax Tax
Noncont.Interest
Net Diluted
EPS
Income Statement
Classification
Net Income attributable to Schlumberger $ 888 $ 214 $ (2 ) $ 672 $
0.56 Add back charges:
- Merger-related transaction
costs
35 - - 35 0.03 Merger & integration
- Impact of elimination of tax
deduction related to Medicare Part D subsidy
- (40 ) - 40 0.03 Taxes
on income
Net Income attributable to
Schlumberger, before charges
$ 923 $ 174 $ (2 ) $ 747 $ 0.62
There were no charges in the first and fourth quarters of
2009.
Oilfield Services
First-quarter revenue of $5.10 billion decreased 1% sequentially
and 6% year-on-year. Sequentially, the Europe/CIS/Africa Area
revenue decreased significantly from lower Testing Services
equipment sales and Schlumberger Information Solutions (SIS)
software sales in addition to the effects of severe weather in
Russia and activity slow-downs in the North Sea and Libya
GeoMarkets. Latin America Area revenue fell mostly from a slow-down
in activity in Mexico/Central America as well as from currency
devaluation and lower Integrated Project Management (IPM) revenue
in Venezuela. These decreases were partially offset by an
improvement in activity across North America. Middle East &
Asia Area revenue was essentially flat with the previous
quarter.
Among the Technologies, sequential revenue declines were most
notable in SIS and Artificial Lift resulting from lower software
and product sales following the seasonally strong fourth quarter,
and in Testing Services following the completion of large equipment
sale deliveries in Europe/CIS/Africa in the fourth quarter. These
decreases were partially offset by an increase in Well Services
revenue, which was largely attributable to the activity increase in
North America.
First-quarter pretax operating income of $969 million fell 4%
sequentially and 23% year-on-year. Pretax operating margin slipped
46 basis points (bps) sequentially to 19.0% primarily due to lower
sales of SIS software, Testing Services equipment and Artificial
Lift products; reduced activity in Russia and the North Sea; and
the impact of lower pricing in international markets. These effects
were partially offset by the impact of the improved activity in
North America.
Two significant events were announced during the quarter—the
proposed merger with Smith International, Inc. and the planned
acquisition of Geoservices.
In the proposed merger with Smith, the companies’ complementary
products and services will lead to the development of engineered
drilling systems that optimize all the components of the
drillstring to allow customers to drill more economically in
demanding conditions. This step change in drilling performance and
well productivity will come from combining measurement and steering
capabilities with the engineering and design of the complete
bottom-hole assembly and its various components—including the
drilling fluid and the drillbit.
The addition of Geoservices mud-logging technology to the
Schlumberger portfolio will also be an important step in the
development of higher-performance drilling systems. The combination
of Schlumberger real-time downhole measurements with Geoservices’
drilling mud analysis will help customers better identify and react
to drilling hazards, while the combination of mud logging with
Schlumberger formation evaluation measurements will bring a more
complete understanding of rock lithology and fluid content.
In addition to Geoservices’ mud-logging technology and
expertise, Geoservices’ footprint, expertise and technology in
slickline well intervention and field production surveillance will
complement existing Schlumberger activities.
North America
First-quarter revenue of $1.03 billion was 18% higher
sequentially but 13% lower year-on-year. Pretax operating income of
$83 million improved 359% sequentially but was 49% lower
year-on-year.
Sequentially, all North America GeoMarkets recorded revenue
growth. US Land grew on increased drilling activity coupled with
pockets of pricing improvements that benefited Well Services
technologies. Canada experienced significant growth as the result
of a strong winter drilling season, particularly for oil basins in
the West, which led to higher demand for Well Services, Wireline
and Drilling & Measurements services. US Gulf of Mexico revenue
was higher sequentially on increased shelf and deepwater activity
that resulted in strong demand for Drilling & Measurements,
Testing Services and Wireline technologies. Alaska revenue grew
from seasonally high exploration activity.
Pretax operating margin increased 594 bps sequentially to 8.0%
primarily due to the increased activity across the Area,
supplemented by the pricing improvements for Well Services
technologies.
In Western Canada, Drilling & Measurements PowerDrive*
rotary steerable technology helped operator Northpoint Energy
extend the length of a lateral well 50% further than had been
planned with conventional technology. The well was geosteered
within the 3-m thickness of the reservoir over the entire length of
the lateral with overall cost savings through use of the technology
combination being estimated at $450,000.
Also in Western Canada, Drilling & Measurements PeriScope*
bed-boundary mapping technology helped steer a Pradera Resources
horizontal well through a thin reservoir for 978 m. Using this
technology to position the wellbore within the optimal portion of
the reservoir for its entire length led to well production
approximately five times that of neighboring wells.
Latin America
First-quarter revenue of $1.06 billion decreased 6% sequentially
but was 3% higher year-on-year. Pretax operating income of $185
million increased 4% sequentially but was 9% lower
year-on-year.
Sequentially, Mexico/Central America GeoMarket revenue decreased
primarily due to weather-related slow-downs that affected offshore
activity and to delays in the finalization of contracts for SIS and
Data & Consulting Services activities. Venezuela/Trinidad &
Tobago GeoMarket revenue fell from the impact of the devaluation of
the Venezuelan currency and from the absence of deferred revenue
recognized in the prior quarter, the effects of which were
partially offset by increased demand for SIS software. Revenue in
the Brazil and Peru/Columbia/Ecuador GeoMarkets decreased mostly
due to lower Completions products and SIS software sales partially
offset by an increase in IPM activity. Argentina/Bolivia/Chile
GeoMarket revenue decreased primarily due to lower SIS software
sales.
Pretax operating margin increased 174 bps sequentially to 17.5%
primarily due to a more favorable revenue mix and wellsite
efficiency improvements for IPM in the Mexico/Central America
GeoMarket and to the positive impact of the currency devaluation
along with a more favorable revenue mix in the Venezuela/Trinidad
& Tobago GeoMarket.
In Brazil, Petrobras and Schlumberger have signed a six-year
contract for subsea ESP systems for the Jubarte Phase ll
development. The contract represents the largest subsea ESP project
to be awarded for many years.
Also in Brazil, a micro-fracturing operation was designed and
executed by Schlumberger Wireline in collaboration with the OGX
reservoir, exploration and drilling team using MDT* modular
formation dynamics tester dual packer technology in a well in the
Campos basin in which hydrocarbons were encountered. The main
objective was to acquire accurate in-situ minimum horizontal stress
and breakdown data to calibrate the geomechanics model being
developed to support the drilling and completion of horizontal and
slanted wells. Teamwork between OGX and Schlumberger enabled
conclusive data to be acquired for identification of a target
carbonate formation.
In the Burgos basin in the north of Mexico, an innovative
approach enabled Schlumberger Testing Services to deploy the first
mobile, modular clean-up system to dramatically reduce the cost of
well clean-up operations. The first job performed with this
equipment was executed successfully in a well in the Burgos field,
providing PEMEX with an efficient, cost-effective, and reliable
service.
In Argentina, YPF Technical Management has made 3D modeling a
requirement to evaluate and certify reserves. As part of this
initiative, YPF technical teams, including the Neuquén Basin
Exploration Team, have decided to adopt Schlumberger Petrel*
workflow process software as the technology to help them reduce
uncertainty and enable advanced workflow integration.
Europe/CIS/Africa
First-quarter revenue of $1.63 billion decreased 9% sequentially
and 10% year-on-year. Pretax operating income of $294 million was
down 24% sequentially and 37% year-on-year.
Sequentially, the fall in revenue was largely due to lower
Testing Services equipment sales and SIS software sales, the effect
of lower pricing, and the weakening of local currencies against the
US dollar. Among the GeoMarkets, revenue in the North Sea decreased
resulting from a combination of lower drilling activity that
impacted Drilling & Measurements; delays in project start-ups
that affected Testing Services; and lower Well Services stimulation
activities. Russia revenue was lower primarily as the result of
severe winter weather while Libya GeoMarket revenue fell on early
completion of exploration campaigns.
Pretax operating margin decreased 353 bps to 18.1% primarily due
to the reduced activity in Russia and the North Sea; the lower
Testing Services and SIS sales; and the generally lower pricing in
the Area.
In Angola, Schlumberger was awarded a series of five- and
six-year contracts for wireline logging, tubing-conveyed
perforating, well testing, artificial lift, well completions,
coiled-tubing services and well stimulation vessels.
In the Congo, Schlumberger Drilling & Measurements Scope*
technologies were run in a horizontal well for Eni to position the
wellbore in two thin reservoir sections with uncertain structure.
The PeriScope bed-boundary mapper successfully placed the well
within the reservoir boundaries, while keeping it less than 1.5 m
from the reservoir tops. The well produced 30% more oil compared to
other, conventionally placed horizontal wells in the same
reservoirs, and the same services have been selected for similar
wells in the future.
Schlumberger has been awarded contracts by the operating and
consultancy arms of the Nigerian National Petroleum Corporation for
petrotechnical software and services, high-performance workstations
and data processing center hardware as part of a plan to upgrade
facilities and develop capabilities as the corporation seeks to
increase production and grow reserves. The awards are based on
Schlumberger track record and performance, and include WesternGeco
data processing solutions.
In Russia, Schlumberger has won the contract for high-pressure,
high-temperature coiled-tubing services for Gazprom Dobycha
Astrakhan on the Astrakhan gas and condensate fields. Schlumberger
Well Services will provide wellbore cleanout services under
high-temperature, high-hydrogen-sulphide content conditions, as
well as a number of technologies that include Jet Blaster* scale
removal service, VDA* viscoelastic diverter system, and
OrganoSEAL*organic crosslinked gel. Technology deployment will be
guided by the Framework Technology Cooperation agreement signed
between Gazprom and Schlumberger in 2008.
On a well in the Romanian Black Sea for OMV Petrom, Schlumberger
Drilling & Measurements SonicScope* multipole
sonic-while-drilling, adnVISION* azimuthal density neutron, and
PeriScope bed-boundary mapper technologies were run with PowerDrive
rotary steerable systems to drill optimized horizontal drain
sections of lengths up to 450 m. The formation evaluation data
acquired were used to design the subsequent Well Services
multistage fracture stimulation operations that led to production
of 900 barrels of oil equivalent per day (boe/d) in one case—up
from 110 boe/d in earlier wells. The improved production, shorter
drilling times and faster logging trips all represented clear value
for the customer in this high-cost environment.
In Algeria, a number of Schlumberger Technologies collaborated
in the development of a methodology to identify wells most likely
to benefit from fracture stimulation in an effort to reduce the
technical risk associated with complex reservoir heterogeneity.
Working with the client, target formations were defined and maximum
stress orientations determined leading to model-based fracture
stimulation programs. Subsequent multistage treatments were
executed as expected. Early post-stimulation production in one well
increased more than five-fold.
Also in Algeria, Testing Services Vx* multiphase meter
technology has continued to penetrate the well testing market for
trend analysis and reservoir allocation purposes. A total of 323
wells were tested in 2009, including the Hassi Messaoud discovery
well MD-1, which is still producing after more than 50 years. The
benefits of this closed-loop, non-flaring technology in speed of
deployment, accuracy and repeatability are making it the preferred
technique for customers in Algeria with 500 wells expected to be
tested on the Hassi Messaoud field alone in 2010.
In Libya, Schlumberger Drilling & Measurements PowerDrive
X5* rotary steerable system technology was successfully deployed
for Waha Oil Company in a deep horizontal well through an abrasive
sandstone reservoir in the Faregh field. The drilling fluid used in
this field adds to the harsh drilling conditions and drilling
motors typically average only short distances between changes.
PowerDrive technology however, backed by Schlumberger excellence in
execution, cut drilling time by 60% with consequent cost reduction.
Waha Oil Company has elected to use the same technology in the
6-in. sections of future Faregh wells.
In The Netherlands, GDF SUEZ E&P Nederland BV awarded
Wireline an exclusive three-year contract for electric wireline
logging services for well operations primarily on natural gas
wells. The award was based on the continuity of personnel and the
availability of new technology coupled with superior service
delivery.
Middle East & Asia
First-quarter revenue of $1.32 billion was essentially flat
sequentially but 4% lower year-on-year. Pretax operating income of
$410 million decreased 4% sequentially and 10% year-on-year.
Sequentially, growth was recorded in the Australia/Papua New
Guinea and East Mediterranean GeoMarkets from increased offshore
activity while East Asia GeoMarket revenue increased on higher IPM
activity. These increases were offset across much of the Area by
decreases in Artificial Lift product and SIS software sales
following the year-end seasonal surge, and by lower activity in the
Arabian, Gulf, Qatar and Indonesia GeoMarkets.
Pretax operating margin fell 136 bps sequentially to 31.0%
primarily due to the lower activity and less favorable revenue mix
in the Arabian, Gulf, Qatar and Indonesia GeoMarkets as well as the
lower Artificial Lift and SIS sales across the Area.
In Saudi Arabia, Schlumberger Drilling & Measurements worked
closely with Saudi Aramco to implement a solution to improve
drilling performance in the Ghazal field in 2009. Drilling &
Measurements successfully introduced the PowerDrive Xceed* rotary
steerable system in the highly abrasive sandstone Unayzah reservoir
that led to a 78% improvement in rate of penetration and a saving
of 28 days in drilling the 8 3/8-in. horizontal section across the
Unayzah A/B formations.
Also in Saudi Arabia, Schlumberger Well Services implemented
ACTive* integrated coiled-tubing technology together with the
high-pressure-jetting AbrasiJET* tool during a stimulation
treatment in a horizontal gas well completed open-hole. The
technologies deployed enabled the cutting of slots at the target
zones while monitoring and optimizing the placement of stimulation
fluids and the diversion efficiency using the Distributed
Temperature Survey (DTS) service. The post-stimulation well
performance met client expectations.
In Qatar, deployment of Well Services MaxCO3* degradable
stimulation technology helped Shell International Exploration and
Production Company achieve effective uniform stimulation of all
zones in a Khuff carbonate formation well without using
conventional mechanical diversion techniques. The polymer-free
treatment not only reduced rig and operational times by 30%, but
also decreased treatment volumes by 50% to shorten cleanup time and
reduce flaring.
In Abu Dhabi, UAE, Schlumberger Well Services VDA viscoelastic
diverter technology was deployed with ACTive coiled-tubing services
to stimulate carbonate formations in a super giant onshore field.
The real-time capability of the ACTive system, in conjunction with
InterACT*connectivity and collaboration services provided the
information needed to identify high permeability zones that were
then isolated to divert fluids into the target zones. The treatment
was monitored from the customer's office using the InterACT system
to track progress and make decisions in real time. Post-treatment
injection of the well increased by 40%.
In Oman, the new Wireline TuffTRAC* perforating tractor was used
by Petroleum Development Oman to convey a record of 16 runs of
perforating guns in a horizontal gas well. The technology enabled
the horizontal well to be perforated more efficiently and helped to
deliver gas production of the well at a rate higher than expected.
The success also proved the reliability and toughness of the
tractor in withstanding multiple runs of perforating gun shock.
Also in Oman, Schlumberger Wireline conducted the first
MicroPilot* small-scale enhanced oil recovery (EOR) evaluation for
a major operator. This unique and innovative solution using MDT
modular formation dynamics tester technology opens up new horizons
in reservoir injectivity measurement with direct application in
many different EOR flood projects. The technology can provide
single-well, single-zone, in-situ measurements of residual oil
saturation change in less than 24 hours and has direct application
in the understanding of reservoir sweep efficiency.
In Malaysia, following a similar campaign in 2009, Schlumberger
has been awarded and successfully completed a three-well campaign
with CIRP* completion insertion and removal under pressure,
eFire-CT* electronic firing head system and ACTive coiled-tubing
technologies. The services provided accurate and clean perforations
that maximized injection rates on water-injector wells for Talisman
Malaysia.
Also in Malaysia, PETRONAS Carigali and Schlumberger have signed
an oilfield services contract for the Samarang brownfield
re-development under an alliance concept. Following the on-going
success of the Bokor alliance, both parties agreed to repeat a
similar arrangement for an even more challenging field and scope.
The contract encompasses field and project management activities
for production enhancement, infill drilling and enhanced oil
recovery.
In the Malaysia-Thailand Joint Development Area (MTJDA),
Schlumberger Wireline deployed Quicksilver Probe* technology to
provide low oil-based-mud filtrate contamination reservoir fluid
samples in limited rig time due to high rig cost and the risk of
sticking. The Quicksilver Probe service allowed Carigali-PTTEPI
Operating Company Sdn. Bhd. (CPOC) to acquire zero-contamination
reservoir fluid samples with their subsequent laboratory analysis
enabling study of the reservoir fluids’ flow assurance and phase
behavior for the field development plan.
In China, Drilling & Measurements PowerDrive rotary
steerable technology was deployed with PeriScope bed-boundary
mapping services to drill two horizontal wells for Energy
Development Corporation in Bohai Bay in 2009. This success led to
the same technologies being selected for a new drilling campaign in
2010, with the first well being completed in late February. In
addition to the technical performance, the combination of early
planning, clear communication, and excellence in field execution
delivered first-class service to the client.
Also in China, the Korea National Oil Company (KNOC) recently
awarded deepwater gas hydrate logging-while-drilling work to
Schlumberger Drilling & Measurements. The drilling campaign
that will begin late in the second quarter of 2010 will cover 11
sites utilizing geoVISION*and sonicVISION* logging-while-drilling
services in combination with Scope imaging-while-drilling
technology. Schlumberger was chosen based on technical
differentiation, experience and track record in gas hydrate
projects.
In South China, Drilling & Measurements StethoScope*
formation pressure-while-drilling service successfully acquired a
total of nine formation pretest measurements in a highly deviated
well where temperatures reached 170 deg C and reservoir
permeability was low. The test results confirmed that the
reservoir, which was thought to be depleted, was still producible
and permitted an additional nine-well development program in the
field. The operation marked the first time for this technology to
be deployed in South China.
In Shenzhen, China, CNOOC has begun prospecting for
hydrocarbon in a low permeability play. While mud logging
data indicated the presence of hydrocarbon, Wireline MDT modular
formation dynamics tester service with a single sample probe only
recovered mud filtrate. MDT dual packer technology was then
deployed and pure oil recovered with pressure data indicating
possible production from fractures.
WesternGeco
First-quarter revenue of $472 million decreased 14% sequentially
and 14% year-on-year. Pretax operating income of $67 million
decreased 41% sequentially but was 23% higher year-on-year.
Sequentially, increased Marine revenue from high vessel
utilization was insufficient to offset a fall in Multiclient
revenue following the year-end surge in North America sales and
lower Land revenue due to completion of contracts in the Middle
East and North Africa.
Pretax operating margin declined 659 bps sequentially to 14.3%
primarily due to the reduced Multiclient sales and decreased Land
activity.
During the quarter the WesternGeco UniQ* point-receiver land
seismic system set an industry record when the system acquired data
from 80,000 live channels at a two-millisecond sample interval for
the Kuwait Oil Company (KOC). This number of channels will allow
true wide- and full-azimuth survey geometries to be deployed.
During sustained slip-sweep production, UniQ technology acquired
and real-time quality checked one terabyte of data per hour—the
equivalent of five days of production for a typical 3,000-channel
conventional crew.
WesternGeco has been contracted by Chevron and its partners
Petrobras and Frade Japão Petróleo Ltda. to perform the first
multi-azimuth project offshore Brazil. The project, which began
acquisition during the quarter, is designed to improve seismic
imaging in one of Chevron’s Campos basin blocks. The new survey
will provide improved imaging with a decreased environmental
footprint in a highly complex, deepwater environment.
Elsewhere in Brazil, WesternGeco has been awarded a contract by
Petrobras to carry out an inversion project on a controlled source
electromagnetics (CSEM) data set acquired by WesternGeco in 2009 in
the Sergipe Alagoas basin as part of a multiclient survey.
Offshore Brazil, WesternGeco has completed acquisition and begun
data processing of the first wide-azimuth (WAZ) project.
During the quarter, WesternGeco delivered final prestack time-
and depth-migrated data to Eni for a Coil Shooting* single-vessel
full-azimuth project offshore Indonesia. The survey, in the Bukat
PSC contract area, covered 563 km2. Eni were involved in all phases
of the processing workflow leading to improved illumination results
over a geologically complex area.
In the US Gulf of Mexico, two WesternGeco multiclient WAZ crews
continued operations during the quarter. The first crew completed
acquisition of the E-Octopus VII survey in the Walker Ridge area
and began acquisition of the E-Octopus VIII survey in the highly
prospective Alaminos and Keathley Canyon areas. The second crew
began acquisition of the E-Octopus X survey over the recent Tiber
discovery in Garden Banks—a survey that will integrate the previous
E-Octopus I and IX phases.
WesternGeco multiclient survey processing expanded in the US
Gulf of Mexico with the commencement of the E-Wave* advanced
imaging project over 1,322 Outer Continental Shelf blocks covering
approximately 30,800 km2 from E-Octopus phases I-V. This was
preceded by the successful completion of the 40-block pilot project
from the E-Octopus III survey. The enhanced product incorporates
the true-azimuth 3D GSMP* general surface multiple prediction
processing with full waveform inversion (FWI) model building and
titled transverse isotropic (TTI) reverse time migration (RTM).
WesternGeco has been awarded a number of seismic acquisition
surveys on the Norwegian Continental Shelf by Statoil. These
include 4D Q-Marine* point-receiver surveys as well as 3D and 4D
Q-Seabed* multicomponent ocean-bottom-cable operations.
In Denmark, Maersk Oil and Gas awarded WesternGeco a significant
contract to reprocess data from 14 seismic surveys that were
acquired over a number years in Danish waters. New depth migration
algorithms will be applied in order to create a regional dataset
and velocity model.
About Schlumberger
Schlumberger is the world’s leading supplier of technology,
integrated project management and information solutions to
customers working in the oil and gas industry worldwide. Employing
approximately 78,000 people representing over 140 nationalities and
working in approximately 80 countries, Schlumberger provides the
industry’s widest range of products and services from exploration
through production.
Schlumberger Limited has principal offices in Paris, Houston and
The Hague and reported revenues of $22.70 billion in 2009. For more
information, visit www.slb.com.
*Mark of Schlumberger
Notes
Schlumberger will hold a conference call to discuss the above
announcement and business outlook on Friday, April 23, 2010. The
call is scheduled to begin at 8:00 am US Central Time (CT), 9:00
a.m. Eastern Time (ET). To access the call, which is open to the
public, please contact the conference call operator at
+1-800-230-1092 within North America, or +1-612-234-9960 outside of
North America, approximately 10 minutes prior to the call’s
scheduled start time. Ask for the “Schlumberger Earnings Conference
Call.” At the conclusion of the conference call an audio replay
will be available until May 22, 2010 by dialing +1-800-475-6701
within North America, or +1-320-365-3844 outside of North America,
and providing the access code 144833.
The conference call will be webcast simultaneously at
www.slb.com/irwebcast on a listen-only basis. Please log in 15
minutes ahead of time to test your browser and register for the
call. A replay of the webcast will also be available at the same
web site.
Supplemental information in the form of a question and answer
document on this press release and financial schedules are
available at www.slb.com/ir.
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