Schlumberger Up; Cutting Capital Spending
March 24 2020 - 12:41PM
Dow Jones News
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)
Copyright (c) 2020 Dow Jones & Company, Inc.
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