By Michael Dabaie

 

Schlumberger Ltd. shares were up 8.3% to $13.89 in midday trading.

The company earlier said it is cutting capital spending by up to 30% from 2019 levels amid the Covid-19 pandemic. Schlumberger, which provides technology for reservoir characterization, drilling, production, and processing to the oil and gas industry, said its capital expenditures will be almost entirely allocated toward international markets. The company said more than 80% of its free cash flow is generated internationally.

The magnitude of the reduction depends on changes to customer plans, the company said.

The company said it is implementing a "downturn playbook" with strict cost control and cash discipline.

Schlumberger said will accelerate North America land operations restructuring and personnel and compensation reductions.

The company said its second-quarter outlook for North America land operations is for a rapid reduction in rig counts and completions activity. Rig count is projected to potentially reach 2016 trough levels, Schlumberger said.

Internationally, the company said that it expects that in the second quarter the escalating Covid-19 situation will impact field crews and some operations. The company said it is planning for reduced activity due to customer budget cuts.

Stephens Inc. maintained its Equal-Weight rating on the stock.

 

Write to Michael Dabaie at michael.dabaie@wsj.com

 

(END) Dow Jones Newswires

March 24, 2020 12:26 ET (16:26 GMT)

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