TIDMSCL
Schlumberger Limited (NYSE:SLB) today reported full-year 2011
revenue of $39.54 billion versus $27.45 billion in 2010.
Full-year 2011 income from continuing operations attributable to
Schlumberger, excluding charges and credits, was $4.97 billion,
representing diluted earnings-per-share of $3.66 versus $2.86 in
2010.
Fourth-Quarter Results:
Fourth-quarter 2011 revenue was $10.97 billion versus $10.23
billion in the third quarter of 2011, and $9.07 billion in the
fourth quarter of 2010.
Income from continuing operations attributable to Schlumberger,
excluding charges and credits, was $1.49 billion--an increase of
13% sequentially and 28% year-on-year. Diluted earnings-per-share
from continuing operations, excluding charges and credits, was
$1.11 versus $0.98 in the previous quarter, and $0.85 in the fourth
quarter of 2010.
Schlumberger recorded charges of $0.06 per share in the fourth
quarter of 2011 versus $0.02 per share in the previous quarter, and
$0.09 per share in the fourth quarter of 2010.
Oilfield Services revenue of $10.30 billion increased 8%
sequentially and 21% year-on-year. Pretax segment operating income
of $2.17 billion was up 12% sequentially and 28% year-on-year.
Distribution revenue of $685 million decreased 2% sequentially
but increased 19% year-on-year. Pretax segment operating income of
$26 million declined 14% sequentially but increased 26%
year-on-year.
Schlumberger CEO Paal Kibsgaard commented, "Fourth-quarter
results showed solid sequential growth driven by stronger activity
both on land and offshore for most Technologies, and stronger
product sales for completions, software and multiclient seismic.
All Areas and Product Groups grew sequentially.
Growth in North America was led by high-technology services in
deepwater Gulf of Mexico, where operational performance was
extremely solid. Significant multiclient seismic sales were
recorded and a second wide-azimuth seismic fleet was mobilized.
North America land revenue grew in line with rig count while
performance improved through asset deployment and crew efficiency.
Pricing momentum in our Wireline and Drilling product lines
continued though the trend slowed somewhat versus the prior
quarter.
International growth was driven by deepwater and exploration
activity, particularly in East and West Africa, and by strong land
activity in the Middle East and North Africa. In addition, regional
strength was seen for drilling and production technologies in a
number of GeoMarkets.
Bidding remained competitive on large tenders for standard
technology. We continued to see positive pricing signs for Wireline
and Drilling & Measurements driven by our unique technology
capability and strong operational performance.
Integration with Smith made further progress during the quarter
and revenue synergies in 2011 exceeded our revised targets. The
transaction was accretive on an earnings-per-share basis in the
quarter and for the full year.
Uncertainty remains over the outlook for 2012 due to the
continuing sovereign debt crisis in Europe which places downward
pressure on GDP and oil demand forecasts. Natural gas markets are
well supplied in North America with gas storage well above
five-year highs. In this environment, the thin excess oil supply
cushion is expected to support oil prices close to current levels,
while global demand for LNG continues to increase. Recent E&P
customer spending forecasts also point to higher E&P investment
in 2012, particularly in international markets.
Against this backdrop we are planning for growth in 2012, while
building the required flexibility into our resource plans. We
remain confident that any potential reductions in activity will be
short-lived and that our competitive position remains strong, given
our presence and strength in the international markets and the
balance we have established between reservoir characterization,
drilling and production services in our North America
offering."
Other Events:
-- During the quarter, Schlumberger repurchased 9.2 million shares of its
common stock at an average price of $69.42 for a total purchase
price
of $635 million.
-- On December 2, 2011, Schlumberger and Saxon Energy Services Inc.
("Saxon") merged their rig businesses. Under the terms of
the
transaction, 14 Schlumberger land drilling rigs and crews in
Oman,
Pakistan and Venezuela have become part of Saxon's operations.
Saxon
will also provide technical drilling contracting support to
existing
Schlumberger joint ventures and operations in Saudi Arabia,
Algeria,
Iraq, and Venezuela (Lake Maracaibo). Saxon continues to be
owned by
Schlumberger, affiliates of First Reserve Corporation and
Saxon
management.
-- During the quarter, Schlumberger completed the purchase of ThruBit,
LLC, a company that provides openhole logging services using a
unique
through-the-bit deployment technique.
-- On January 5, 2012, Petrofac and Schlumberger signed a cooperation
agreement under which both will establish a working relationship
to
deliver integrated and high-value production projects in the
emerging
and growing production services and production enhancement
market.
-- On January 19, 2012, the Board of Directors approved a 10% increase in
the quarterly dividend. The next quarterly dividend, which
will
increase to $0.275 per share of outstanding common stock, is
payable
on April 13, 2012 to stockholders of record on February 22,
2012.
Condensed
Consolidated
Statement of
Income
(Stated in millions, except per share amounts)
Fourth Quarter Twelve Months
Periods Ended 2011 2010 2011 2010
December 31
Revenue $ 10,974 $ 9,067 $ 39,540 $ 27,447
Interest and 35 45 129 214
other
income, net(1)
Gain - - - 1,270
on investment
in M-I SWACO(2)
Expenses
Cost 8,642 7,305 31,418 21,842
of revenue(2)
Research 273 256 1,073 919
& engineering
General 100 90 427 311
&
administrative(2)
Merger 22 33 115 165
&
integration(2)
Restructuring - 32 - 331
& other(2)
Interest 86 61 298 207
Income from 1,886 1,335 6,338 $ 5,156
continuing
operations
before taxes
Taxes 466 290 1,545 890
on income(2)
Income from 1,420 1,045 4,793 4,266
continuing
operations
Income - - 220 -
from
discontinued
operations
Net income 1,420 1,045 5,013 4,266
Net income 6 2 16 (1 )
(loss)
attributable
to
noncontrolling
interests
Net $ 1,414 $ 1,043 $ 4,997 $ 4,267
income
attributable
to
Schlumberger(2)
Schlumberger
amounts
attributable
to:
Income from $ 1,414 $ 1,043 $ 4,777 $ 4,267
continuing
operations
Income - - 220 -
from
discontinued
operations
Net Income $ 1,414 $ 1,043 $ 4,997 $ 4,267
Diluted
earnings
per share
of
Schlumberger(2)
Income from $ 1.05 $ 0.76 $ 3.51 $ 3.38
continuing
operations
Income - - 0.16 -
from
discontinued
operations
Net Income $ 1.05 $ 0.76 $ 3.67 $ 3.38
Average shares 1,338 1,363 1,349 1,250
outstanding
Average shares 1,347 1,376 1,361 1,263
outstanding
assuming
dilution
Depreciation & $ 860 $ 808 $ 3,280 $ 2,759
amortization
included
in expenses(3)
1) Includes interest income of:
Fourth quarter 2011 - $11 million (2010 - $10 million)
Twelve months 2011 - $39 million (2010 - $50 million)
2) See pages 6-7 for details of charges and credits.
3) Including multiclient seismic data cost.
Condensed Consolidated Balance Sheet
(Stated in millions)
Dec. 31, Dec. 31,
Assets 2011 2010
Current Assets
Cash and short-term investments $ 4,827 $ 4,990
Receivables 9,500 8,278
Other current assets 6,212 4,830
20,539 18,098
Fixed income investments, held to maturity 256 484
Fixed assets 12,993 12,071
Multiclient seismic data 425 394
Goodwill 14,154 13,952
Other intangible assets 4,882 5,162
Other assets 1,952 1,606
$ 55,201 $ 51,767
Liabilities and Equity
Current Liabilities
Accounts payable and accrued liabilities $ 7,579 $ 6,488
Estimated liability for taxes on income 1,245 1,493
Short-term borrowings and current 1,377 2,595
portion of long-term debt
Dividend payable 337 289
10,538 10,865
Long-term debt 8,556 5,517
Postretirement benefits 1,732 1,262
Deferred taxes 1,731 1,636
Other liabilities 1,252 1,043
23,809 20,323
Equity 31,392 31,444
$ 55,201 $ 51,767
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 byreflecting cash and investments that could be used to repay debt. Details of changes in Net Debt for the full year follow:
(Stated in millions)
Twelve Months 2011
Net Debt, January 1, 2011 $ (2,638 )
Income from continuing operations 4,793
Depreciation and amortization 3,281
Pension and other postretirement benefits expense 365
Excess of equity income over dividends received (64 )
Stock-based compensation expense 272
Pension and other postretirement benefits funding (601 )
Increase in working capital (2,148 )
Capital expenditures (4,016 )
Multiclient seismic data capitalized (289 )
Dividends paid (1,300 )
Proceeds from employee stock plans 438
Stock repurchase program (2,998 )
Business acquisitions, net of cash and debt acquired (610 )
Proceeds from divestiture of Global Connectivity Services business 385
Other 257
Currency effect on net debt 23
Net Debt, December 31, 2011 $ (4,850 )
Components of Net Debt Dec. 31,2011 Dec. 31,2010
Cash and short-term investments $ 4,827 $ 4,990
Fixed income investments, held to maturity 256 484
Short-term borrowings and current portion of long-term debt (1,377 ) (2,595 )
Long-term debt (8,556 ) (5,517 )
$ (4,850 ) $ (2,638 )
Charges and Credits
In addition to financial results determined in accordance with generally accepted accounting principles (GAAP), this Fourth-Quarter and Full-Year Results 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)
Fourth Quarter 2011
Pretax Tax Noncont. Interest Net DilutedEPS (*) Income Statement Classification
Schlumberger income from continuing operations, as reported $ 1,886 $ 466 $ 6 $ 1,414 $ 1.05
Merger and integration costs 22 2 - 20 0.01 Merger & integration
Write-off of assets in Libya 60 - - 60 0.04 Cost of revenue
Schlumberger income from continuing operations, excluding charges & credits $ 1,968 $ 468 $ 6 $ 1,494 $ 1.11
Third Quarter 2011
Pretax Tax Noncont. Interest Net DilutedEPS Income Statement Classification
Schlumberger Income from continuing operations, as reported $ 1,717 $ 410 $ 6 $ 1,301 $ 0.96
Merger and integration costs 27 4 - 23 0.02 Merger & integration
Schlumberger income from continuing operations, $ 1,744 $ 414 $ 6 $ 1,324 $ 0.98
excluding charges & credits
Twelve Months 2011
Pretax Tax Noncont. Interest Net DilutedEPS (*) Income Statement Classification
Schlumberger income from continuing operations, as reported $ 6,338 $ 1,545 $ 16 $ 4,777 $ 3.51
Merger and integration costs 115 19 - 96 0.07 Merger & integration
Donation to Schlumberger Foundation 50 10 - 40 0.03 General & administrative
Write-off of assets in Libya 60 - - 60 0.04 Cost of revenue
Schlumberger income from continuing operations, $ 6,563 $ 1,574 $ 16 $ 4,973 $ 3.66
excluding charges & credits
(*) Does not add due to rounding
Charges and Credits (cont.)
(Stated in millions, except per share amounts)
Fourth Quarter 2010
Pretax Tax Noncont. Interest Net DilutedEPS (*) Income Statement Classification
Schlumberger income $ 1,335 $ 290 $ 2 $ 1,043 $ 0.76
from continuing
operations, as reported
Inventory fair value 115 42 - 73 0.05 Cost of revenue
adjustments
Merger-related employee 16 4 - 12 0.01 Merger & integration
benefits
Professional fees and other 17 1 - 16 0.01 Merger & integration
Repurchase of bonds 32 12 - 20 0.01 Restructuring & other
Schlumberger income from $ 1,515 $ 349 $ 2 $ 1,164 $ 0.85
continuing operations,
excluding charges & credits
Twelve Months 2010
Pretax Tax Noncont. Interest Net DilutedEPS (*) Income Statement Classification
Schlumberger income $ 5,156 $ 890 $ (1 ) $ 4,267 $ 3.38
from continuing
operations, as reported
Restructuring and
Merger-related
Charges:
Severance and other 90 13 - 77 0.06 Restructuring & other
Impairment relating to 78 7 - 71 0.06 Restructuring & other
WesternGeco's first
generation Q-Land
acquisition system
Other WesternGeco-related 63 - - 63 0.05 Restructuring & other
charges
Professional fees and other 107 1 - 106 0.08 Merger & integration
Merger-related employee 58 10 - 48 0.04 Merger & integration
benefits
Mexico restructuring 40 4 - 36 0.03 Restructuring & other
Inventory fair value 153 56 - 97 0.08 Cost of revenue
adjustments
Repurchase of bonds 60 23 - 37 0.01 Restructuring & other
Total restructuring and 649 114 - 535 0.42
merger-related charges
Gain on investment (1,270 ) (32 ) - (1,238 ) (0.98 ) Gain on Investment in M-I SWACO
in M-I SWACO
Impact of elimination - (40 ) - 40 0.03 Taxes on income
of tax deduction
related to Medicare
Part D subsidy
Schlumberger income from $ 4,535 $ 932 $ (1 ) $ 3,604 $ 2.86
continuing operations,
excluding charges & credits
(*) Does not add
due to rounding
Product
Groups
(Stated in
millions)
Three Months Ended
Dec. 31, 2011 Sept. 30, 2011
Revenue IncomeBeforeTaxes Revenue IncomeBeforeTaxes
Oilfield
Services
Reservoir $ 2,787 $ 777 $ 2,488 $ 610
Characterization
Drilling 3,909 658 3,676 613
Reservoir 3,598 768 3,373 707
Production
Eliminations 8 (34 ) 9 1
& other
10,302 2,169 9,546 1,931
Distribution 685 26 698 31
Eliminations (13 ) - (15 ) -
672 26 683 31
Corporate - (154 ) - (158 )
& Other
Interest - 8 - 9
Income(1)
Interest - (81 ) - (69 )
Expense(1)
Charges & - (82 ) - (27 )
Credits
$ 10,974 $ 1,886 $ 10,229 $ 1,717
Geographic
Areas
(Stated in
millions)
Three Months Ended
Dec. 31, 2011 Sept. 30, 2011
Revenue IncomeBeforeTaxes Revenue IncomeBeforeTaxes
Oilfield
Services
North $ 3,516 $ 947 $ 3,304 $ 836
America
Latin 1,834 302 1,655 270
America
Europe/CIS/Africa 2,704 476 2,494 408
Middle East 2,136 500 2,003 444
& Asia
Eliminations 112 (56 ) 90 (27 )
and other
10,302 2,169 9,546 1,931
Distribution 685 26 698 31
Eliminations (13 ) - (15 ) -
672 26 683 31
Corporate - (154 ) - (158 )
& Other
Interest - 8 - 9
Income(1)
Interest - (81 ) - (69 )
Expense(1)
Charges & - (82 ) - (27 )
Credits
$ 10,974 $ 1,886 $ 10,229 $ 1,717
(1)Excludes interest included in the product groups and
geographic areas results.
Product
Groups
(Stated in
millions)
Twelve Months Ended
Dec. 31, 2011 Dec. 31, 2010
Revenue IncomeBeforeTaxes Revenue IncomeBeforeTaxes
Oilfield
Services
Reservoir $ 9,929 $ 2,449 $ 9,321 $ 2,321
Characterization
Drilling 14,248 2,275 8,230 1,334
Reservoir 12,748 2,616 9,055 1,368
Production
Eliminations 34 (35 ) 67 48
& other
36,959 7,305 26,673 5,071
Distribution 2,621 103 774 29
Eliminations (40 ) - - -
2,581 103 774 29
Corporate - (592 ) - (405 )
& Other
Interest - 37 - 43
Income(1)
Interest - (290 ) - (202 )
Expense(1)
Charges & - (225 ) - 620
Credits
$ 39,540 $ 6,338 $ 27,447 $ 5,156
Geographic
Areas
(Stated in
millions)
Twelve Months Ended
Dec. 31, 2011 Dec. 31, 2010
Revenue IncomeBeforeTaxes Revenue IncomeBeforeTaxes
Oilfield
Services
North $ 12,273 $ 3,051 $ 6,729 $ 1,145
America
Latin 6,453 1,072 4,985 808
America
Europe/CIS/Africa 9,762 1,489 8,024 1,457
Middle East 8,065 1,868 6,650 1,764
& Asia
Eliminations 406 (175 ) 285 (103 )
and other
36,959 7,305 26,673 5,071
Distribution 2,621 103 774 29
Eliminations (40 ) - - -
2,581 103 774 29
Corporate - (592 ) - (405 )
& Other
Interest - 37 - 43
Income(1)
Interest - (290 ) - (202 )
Expense(1)
Charges & - (225 ) - 620
Credits
$ 39,540 $ 6,338 $ 27,447 $ 5,156
(1)Excludes interest included in the product groups and
geographic areas results.
Oilfield Services
Full-year 2011 revenue of $36.96 billion increased 39% over 2010
driven by significantly improved worldwide activity; stronger
pricing and improved asset efficiency in North America as the
market continued to shift to liquids-rich plays; and marked
international growth as deepwater and exploration work continued to
strengthen with further signs of early pricing traction for
Wireline and Drilling & Measurements services. The full-year
impact of the Smith International and Geoservices businesses
acquired in 2010, the resumption of deepwater operations in the US
Gulf of Mexico and higher WesternGeco marine activity and
multiclient sales worldwide also contributed to overall
performance. In addition, a number of international regions showed
particular strength in Reservoir Production and Drilling Group
Technologies. These included Iraq with strong operational
performance and new Integrated Project Management (IPM) contract
awards, and Latin America, the North Sea, Russia, Saudi Arabia,
Bahrain and East Asia that benefited from strengthening drilling
and production activity. However, international results were
tempered by activity disruptions following the first quarter's
geopolitical unrest in North Africa and the Middle East. Pretax
operating income of $7.31 billion was 44% higher than in 2010.
Pretax operating margin increased 75 basis points (bps) to 19.8%
following the resumption of higher-margin activity in the US Gulf
of Mexico, improved pricing and asset efficiency for Well Services
technologies in North America, and improving activity for
WesternGeco although these gains were muted by the effects of the
first quarter's geopolitical events.
Fourth-quarter revenue of $10.30 billion increased 8%
sequentially and 21% year-on-year. Sequentially, revenue increased
across all Groups and geographical Areas.
Sequentially, Reservoir Characterization revenue increased on
strong WesternGeco multiclient sales in the US Gulf of Mexico and
the Angola GeoMarket, together with robust end-of-year Schlumberger
Information Solutions (SIS) software sales across all Areas.
WesternGeco also improved with the resumption of land seismic
activity in the Middle East and new surveys in North Africa.
Wireline reported considerable growth across all geographical
Areas, and particularly on stronger offshore exploration activities
in the Nigeria & Gulf of Guinea, Southern & Eastern Africa
and Central & West Africa GeoMarkets. Drilling revenue
increased on higher M-I SWACO activity in North America Land, the
US Gulf of Mexico and Latin America. IPM revenue increased
significantly, mostly from projects in Mexico and Iraq, while
Drilling & Measurements revenue was higher on improved pricing
and strong activity in the US Gulf of Mexico and the Nigeria &
Gulf of Guinea GeoMarket. Reservoir Production revenue increased,
driven by stronger Completions and Artificial Lift product sales
across all Areas. In North America Land, Well Services grew through
capacity additions and continued improvements in asset utilization
and crew efficiency. In addition, Framo and Schlumberger Production
Management (SPM) posted strong sequential increases.
On a geographical basis, North America Area revenue grew
sequentially on increasing deepwater work in the US Gulf of Mexico,
higher rig count and land activity in the US and Canada, and
significant WesternGeco multiclient sales. In addition, Well
Services reported considerable increases from additional fleet
deployment and continued improvements in asset utilization and crew
efficiency. In the Latin America Area, strong revenue was recorded
in the Mexico & Central America GeoMarket from higher IPM
project activities and SIS software sales; in the Venezuela,
Trinidad & Tobago GeoMarket from WesternGeco marine seismic
activities; and in the Peru, Colombia & Ecuador GeoMarket from
robust Artificial Lift product sales. In the Europe/CIS/Africa
Area, strong results were led by the Angola GeoMarket, which saw
vigorous WesternGeco multiclient sales in addition to expanded
presalt offshore activity for Wireline, Testing Services and
Drilling & Measurements; the Nigeria & Gulf of Guinea
GeoMarket, which recorded robust Completions product sales and
higher Drilling & Measurements and Wireline activity; and the
North Africa GeoMarket that reported higher Wireline, Testing
Services, Well Services and IPM project activity. These increases,
however, were reduced by lower North Sea activity which was
impacted by seasonal weather issues. In the Middle East & Asia
Area, strong Completions and Artificial Lift product sales and
robust SIS software sales drove results--particularly in the India
GeoMarket. These results were augmented by continued growth in the
Saudi Arabia, Bahrain GeoMarket due to the rebound of land seismic
acquisition, strong rigless activity and land rig additions. The
Oman GeoMarket grew primarily on higher Wireline and Artificial
Lift activities while the Iraq GeoMarket saw an increase in
non-project services in addition to new IPM projects.
Pretax operating income of $2.17 billion increased 12%
sequentially and 28% year-on-year. Pretax operating margin
increased 82 bps sequentially to 21.1% primarily due to the strong
sales of WesternGeco multiclient licenses, SIS software and
Completions products. Drilling & Measurements and Wireline also
contributed to this sequential improvement through increasing
higher-margin exploration activities.
Technology highlights during the quarter confirmed further
market penetration of new Schlumberger technologies across all
Product Groups in a number of key areas.
In the UAE, Crescent Petroleum awarded WesternGeco an
acquisition and processing contract for a full-offset, full-azimuth
3D survey in their Sharjah onshore concession using the UniQ*
integrated point-receiver land seismic system. The contract
integrates several of the most recent technologies from
WesternGeco, including Managed Spread and Source (MSS), Surface
Wave Analysis Modeling and Inversion (SWAMI), and anisotropic
Reverse Time Migration (RTM) depth migration.
WesternGeco has also been awarded a five-year contract by Kuwait
Oil Company for the world's largest channel-count seismic survey
ever conducted, encompassing land acquisition and data processing
of 2,895 km2 covering five fields in Kuwait. The contract includes
acquisition with the WesternGeco UniQ integrated point-receiver
system, utilizing over 200,000 point receivers on a single
crew.
In Western Australia, Origin Energy awarded WesternGeco a
contract for a 3D land seismic survey in the Perth Basin using the
UniQ integrated point-receiver land seismic system. This is the
first commercial survey of its kind in the Asia-Pacific region and
marks a return to the Australia land seismic market for
WesternGeco. The goal of the survey is to improve reservoir
delineation and aid drill placement for multiple plays in a mature
basin.
Advanced Schlumberger Wireline technologies were deployed for
Statoil in two exploration wells drilled off the Atlantic coast of
Canada. The services run included the Sonic Scanner* acoustic
imaging platform for compressional and shear sonic data, the Rt
Scanner* triaxial induction tool for horizontal and vertical
resistivity measurements, and the USI* ultrasonic imager tool for
cement evaluation. The MDT* modular formation dynamics tester with
InSitu Fluid Analyzer* technology provided real-time fluid density,
viscosity, contamination and fluid color measurements while the
MSCT* mechanical sidewall coring tool recovered a series of
high-quality cores. Walkaway and vertical seismic profiles were
also recorded using eight-shuttle VSI* versatile seismic imager
technology with dual ITAGA| seismic sources.
In Brazil, Petrobras Exploration acquired a further 20 Petrel*
E&P software technology licenses to support basic seismic
interpretation workflows and real-time monitoring of exploration
field operations. Integration of WesternGeco multiclient seismic
data in Petrel workflows further improves Petrel scalability and
flexibility across multiple zones.
In Mexico for PEMEX Marine, a number of state-of-the-art
Schlumberger Wireline services including CMR-Plus* magnetic
resonance, Rt Scanner triaxial induction, Sonic Scanner acoustic
scanning, OBMI2* dual oil-base microimager, PressureXpress*
reservoir pressure, InSitu Fluid Analyzer fluid sampling and MSCT
mechanical sidewall coring technologies were run in a deepwater
exploration well. High-resolution logging combined with
Schlumberger leadership in formation testing allowed PEMEX to
define the vertical extent of the hydrocarbon column and acquire
representative fluid samples that, in this case, were paramount as
a standard petrophysical evaluation would not have been sufficient
to decide on the well completion. PEMEX acknowledged the value of
these technologies in reducing uncertainty in deepwater
exploration.
Combined interpretation of advanced Wireline logging
measurements for Ural Oil and Gas LLP in Kazakhstan improved
reservoir characterization and facilitated planning of exploration
drilling and development in a complex carbonate reservoir
environment. Data from the CMR-Plus, ECS* elemental capture
spectroscopy sonde and Platform Express* tools aided reservoir
understanding, while FMI* fullbore formation microimager,
PressureXpress reservoir pressure while logging and MDT modular
formation dynamics tester technologies optimized formation pressure
and sampling programs.
Drilling & Measurements successfully introduced PowerDrive
Archer* high-build-rate rotary steerable technology for an operator
in Asia in response to a need for directional control in
unconsolidated sands encountered while drilling lateral sections.
The PowerDrive Archer system was run with a Smith 8 1/2-in bit with
the entire bottomhole assembly modeled with Smith IDEAS* software.
The evaluation string run with the combination included PeriScope*
bed-boundary mapper, adnVISION* logging-while-drilling and
TeleScope* high-speed telemetry-while-drilling technologies.
Deployment of these technologies saved four days budgeted rig time
while the system's superior well placement capability added extra
production.
In Argentina, Schlumberger StimMAP* LIVE real-time fracture
monitoring technology was deployed on a job in the Vaca Muerta
shale for YPF. Drawing on products, services and expertise from
Wireline, Well Services and Data & Consulting Services, two
vertical treatment wells were monitored from a single offset
vertical well. The operation provided a better understanding of the
nature of the fracture network created and YPF is currently
planning further StimMAP operations for 2012.
In the Mexico North region, Schlumberger was awarded the
completion of two PEMEX horizontal wells in the Eagle Ford shale
formation. Combined Schlumberger Well Services and Wireline
technical expertise was used to design a perforating technique to
yield optimal hydraulic fracturing results. The Schlumberger
perforating design of 14 stages included 6 gun clusters that were
conveyed using the pump-down technique. The distance between
perforating intervals enabled innovative use of addressable gun
switches for operational safety. PEMEX acknowledged the value of
this integrated solution in terms of cost savings, service quality
and excellence in execution.
Also in Mexico, Schlumberger Completions have run their first
inflow control device (ICD) installation in the PEMEX Southern
Region. The technology was deployed in the Tecominoacan field which
contains low pressure formations and a shallow oil-water contact.
The well was predicted to produce at 30% water cut without inflow
control, but the ICD installation reduced this to 24% while
sustaining oil production at 1,200 bpd. The results have encouraged
PEMEX management to seek more well candidates in Southern Region
fields where production can be improved through controlling water
coning.
Reservoir Characterization Group
Fourth-quarter revenue of $2.79 billion was 12% higher both
sequentially and year-on-year. Pretax operating income of $777
million was 28% higher sequentially and increased 16%
year-on-year.
WesternGeco and SIS posted significant sequential revenue growth
on strong multiclient sales in the US Gulf of Mexico and the Angola
GeoMarket, and on robust software sales across all geographical
Areas, respectively. WesternGeco also improved on the resumption of
land seismic activity in the Middle East and new surveys in North
Africa. Wireline recorded increases across all Areas led by
stronger offshore exploration activities in the Nigeria & Gulf
of Guinea, Southern & Eastern Africa and Central & West
Africa GeoMarkets. Data & Consulting Services and Testing
Services also posted gains.
Sequentially, pretax operating margins increased markedly by 340
bps to 27.9% through the seasonally strong sales of WesternGeco
multiclient licenses and SIS software. Increasing higher-margin
Wireline exploration activities also contributed to the growth.
Reservoir Characterization Group activities saw a number of new
or significant technology deployments in the quarter.
ENI has awarded WesternGeco a contract for a high-resolution
seismic survey offshore Angola using Q-Marine* point-receiver
marine seismic technology. The six-month survey is being conducted
by the WGAmundsen and will be completed in the first quarter of
2012.
WesternGeco has begun acquisition of two significant multiclient
surveys in the US Gulf of Mexico: the 2,800 km2 Revolution III
full-azimuth survey and the 11,655 km2 Patriot wide-azimuth 3D
orthogonal survey, which is the first of its kind. The Revolution
survey, conducted using Dual Coil Shooting* multivessel
full-azimuth technology, will increase the WesternGeco full-azimuth
portfolio to more than 10,000 km2, while data from the Patriot
survey, conducted in partnership with TGS, will be combined with
the existing Freedom wide-azimuth multiclient dataset to provide
the industry with a dual-azimuth orthogonal subsurface image.
WesternGeco has commenced Phase 2 of its agreement with PetroSA
for a Q-Marine program offshore South Africa using the DISCover*
deep interpolated streamer coverage seismic technique. The
four-month project comprises 3,500 km2 and follows the successful
Phase 1 of the program, in which the broadband capabilities of the
DISCover technique demonstrated an ability to broaden the weather
acquisition window and yielded significant data quality improvement
compared to a conventional seismic survey.
Advanced Wireline Rt Scanner triaxial induction logging
technology in combination with epithermal neutron, advanced
magnetic resonance and density measurements guided identification
of thinly-bedded zones in a Vanco Cote d'Ivoire Ltd exploration
well in the Ivory Coast. In addition to the thin beds that could
have been missed with conventional technology, the reservoirs
showed a high degree of anisotropy due to grain size variation that
required the three-dimensional measurement capability of the Rt
Scanner service for accurate evaluation.
In Malaysia, Schlumberger Wireline MDT modular formation
dynamics tester technology helped evaluate thinly-bedded formations
in an offshore exploration well. Insitu Fluid Analyzer and
dual-packer module services were used to evaluate reservoir
formations and fluids in real time and obtain representative
samples from the thinly-bedded formations. The results helped the
customer with early confirmation of reservoir potential, reducing
the need for additional cost and operational risk.
In Saudi Arabia, innovative use of Wireline Sonic Scanner
acoustic scanning platform technology enabled a horizontal well to
intersect an old vertical well bore. The Sonic Scanner tool was
used to run a borehole acoustic reflection survey (BARS) that
correctly located the target well and accurately predicted its
distance and direction. This was confirmed by drilling sidetracks
to intersect the vertical well. Schlumberger Data & Consulting
Services in Saudi Arabia and the acoustic group in the Schlumberger
Tokyo Technology Center collaborated on the BARS data
processing.
In Brazil, Wireline ran Quicksilver Probe* focused extraction of
pure reservoir fluid technology on an OGX exploration well where
standard technologies had shown limitations in decreasing filtrate
contamination below 40%. The Quicksilver Probe samples taken in the
carbonate formations in this well resulted in contamination levels
below 10% and OGX plan to use this technology on future exploration
wells.
Offshore Abu Dhabi, Wireline Dielectric Scanner* multifrequency
dielectric dispersion technology was logged for the first time in a
cretaceous carbonate reservoir. Data repeatability between
successive runs of the tool was excellent and the results showed
the water volume measurement to be unaffected during drilling fluid
changes. Later saturation measurements in the laboratory from 56
core plugs and 165 cores confirmed the quality and accuracy of the
residual oil measurements acquired by the tool.
In India, integration of data from advanced Wireline logging
technologies in the complex ONGC Padra field has enabled
identification of producing zones in the field's basaltic rock.
Basalts have negligible porosity and permeability but produce
through fractures that are difficult to identify with standard
logs. Using FMI fullbore formation imager, DSI* dipole sonic imager
and Sonic Scanner acoustic scanning platform technologies,
Schlumberger Data & Consulting Services developed methodology
to identify the productive intervals that were confirmed by
production logging data. The success of the method paves the way
for the necessary logging suite to be deployed in future wells.
In Argentina, innovative Schlumberger TargeTT* intelligent well
intervention and testing helped Pan American Energy LLC with future
completion design, electrical submersible pump (ESP) production
regime, and workover intervention planning. Collaboration between
Wireline, Artificial Lift and Data & Consulting Services
developed a technique to access producing zones below the ESP pumps
to be able to evaluate production. Unique Wireline GHOST* gas
holdup optical sensor technology detected even the smallest
hydrocarbon entries and after evaluation and remedial work in five
wells, a reduction in water production of more than 50% was
achieved.
Chevron USA Inc. has awarded Schlumberger a three-year contract
for tubing-conveyed perforating and drillstem testing services on
nine wells on the Jack/St. Malo deepwater project. Key technologies
to be deployed include the new 6 5/8-in 27,000 psi INsidr* gun
system with PowerFlow Max* charges, the new deepwater Omegamatic*
long-stroke 9-5/8-in packer, and the use of PURE* planner software
for gun shock and dynamic underbalance modelling.
In Ecuador, Testing Services introduced PowerJet Nova*
extra-deep-penetrating shaped charges for Petroamazonas following
increased production after perforating a well in a double casing
overlap with this new technology. As a result, Petroamazonas will
run PowerJet Nova for future work on their fields.
In the Caspian, PSA LLP announced the purchase of SIS software
including Petrel seismic-to-simulation, ECLIPSE* reservoir
simulation, and Techlog* petrophysical analysis software. The
purchase represents the first Techlog sale in the Caspian
region.
Drilling Group
Fourth-quarter revenue of $3.91 billion was 6% higher
sequentially and 22% higher year-on-year. Pretax operating income
of $658 million improved 7% sequentially and increased 41%
year-on-year.
Significant sequential revenue growth was recorded by M-I SWACO
from higher rig count on land in the US & Canada; sustained
growth in deepwater activity in the US Gulf of Mexico; and strong
contributions in Latin America. IPM activity increased
significantly, mainly from projects in Mexico and in Iraq. Drilling
& Measurements revenue increased on improved pricing and strong
activity in the US Gulf of Mexico and the Nigeria & Gulf of
Guinea GeoMarket, although this was partially offset by
weather-related activity reductions in the North Sea and East Asia
GeoMarkets. In addition, Geoservices and Bits & Advanced
Technologies registered robust sequential increases.
Sequentially, pretax operating margins were up slightly to
16.8%. Drilling & Measurements obtained increased margins from
improved technology mix and service pricing but this was partly
offset by the effects of weather-related activity delays and
reductions. Most of the other Technologies exacted margin expansion
following the continued successful integration and expansion of
Smith, Geoservices and Schlumberger drilling technologies.
During the quarter, a number of highlights confirmed further
opportunities generated by the combination of Smith and
Schlumberger drilling technologies.
In Russia, continued synergy between Schlumberger Drilling &
Measurements, Smith Bits and M-I SWACO has enabled TNK-BP to pass
another significant milestone by further extending the achievable
drilling envelope in the Verknechonskoe field in Eastern Siberia.
In particular, the combination of PowerDrive X6* and PowerDrive
vorteX* rotary steerable systems with Smith 8 1/2-in MDSi716 bit
technology has achieved an almost 50% improvement in drilling
performance versus conventional technologies. The same combination
has also been responsible for all runs to date when single-run
distances exceeded the 2000-m threshold. The continuing extension
of drilling length has also been assisted by innovative M-I SWACO
Asphasol Supreme* shale inhibitor and supplemental high-temperature
fluid-loss additive that helped limit rotary torque and drag. On
one recently drilled well, the field's longest-ever extended-reach
section of 3,824 m was drilled to total depth 6 days ahead of
schedule.
In Malaysia, integration of Drilling & Measurements PowerV*
vertical drilling system technology with Smith IDEAS integrated
drillbit design and OSC* interactive drilling operations monitoring
helped drill the entire 17 1/2-in section of a PETRONAS Carigali
well in a single run. PowerV technology was used to maintain
verticality while yielding a smooth borehole for subsequent
wireline logging. The IDEAS design platform enabled a specific
polycrystalline diamond compact (PDC) drillbit to increase drilling
efficiency and prevent disturbance of a weak coal formation. The
combined Smith and Schlumberger technologies resulted in minimal
stick, slip and vibration, no losses and a rate of penetration that
exceeded plan.
In Kazakhstan, Smith Services Neyrfor turbines were deployed for
Great Wall Kazakhstan as part of a joint project to improve
drilling performance and reduce drilling times in the 8 1/2-in
sections of wells in the Kenkiyak field. Before use of turbine
technology, drilling time could reach 105 days but with turbine use
in conjunction with a Smith drillbit in a new well the section was
drilled in two runs in 38 days with full directional control even
with dogleg severities of 7º/30 m. This is approximately three
times faster compared to previously used conventional motor
technology. Based on these results, turbine technology has been
adopted as standard for all directional wells on the Kenkiyak and
other fields in the Aktobe area.
In Malaysia, Drilling & Measurements StethoScope 675*
formation pressure-while-drilling service was run in a PETRONAS
appraisal well in conjunction with @balance Services* managed
pressure and underbalance drilling technology to allow safe
drilling with a narrow mud weight window in an operation that would
have been impossible using conventional drilling practices. This
was the first operation in Asia to combine these technologies with
StethoScope real-time formation pore pressure measurements used to
guide bottomhole pressures in successfully drilling to total depth
in a reservoir that had never been successfully penetrated.
In a Chevron horizontal natural gas well in the Netherlands,
Drilling & Measurements TeleScope high-speed
telemetry-while-drilling technology transmitted real-time data from
EcoScope*| multifunction logging-while-drilling and PeriScope bed
boundary mapper tools at rates high enough to geosteer the well at
up to 150 ft/hr while remaining within 3 ft of the top of the
reservoir. The bottomhole assembly was steered over 1,500 ft using
a PowerDrive Xceed* rotary steerable system.
In China, Drilling & Measurements PowerV vertical drilling
system technology enabled PetroChina to improve rate of penetration
(ROP) by 68% in the 13 1/8-in. section of a well in the Tarim
oilfield. A total interval of 230 m was drilled in 94 on-bottom
hours representing a saving of three days over similar sections
drilled with conventional technology in offset wells. The
operation, which was marked by excellent hole quality, represented
the first job for this technology in this hole size in the
world.
Also in China, Drilling & Measurements PowerDrive vorteX
powered rotary steerable system technology successfully drilled a
high-inclination well for CCLT in Bohai Bay with significantly
improved ROP. A total of 1,026 m was drilled in one run with
accurate trajectory control at an ROP 260% faster than that
achieved in adjacent wells. This success has convinced CCLT, the
CNOOC branch in Bohai, that PowerDrive vorteX technology is
fit-for-purpose in wells of this type.
In the Eagle Ford shale, Schlumberger Pathfinder at-bit
inclination, gamma ray and imaging logging-while-drilling
technology was run above a mud motor for a customer to provide
reservoir images in a well with an extreme dogleg profile requiring
more than 1.5° of bend at the motor. This innovative combination
yielded accurate, real-time imaging that facilitated the successful
landing of the well in the reservoir target zone.
In Brazil, Petra Energia selected Schlumberger dynamic pressure
measurement technologies to provide managed pressure drilling
services for their São Francisco basin exploration campaign. This
technology choice was driven by the need to enhance drilling
performance, enable gas zones identification while reducing
non-productive time due to lost circulation and well kicks, and
support real-time reservoir characterization in the target zones.
Well pressure response data will further enhance characterization
from measurement-while-drilling, logging-while-drilling, wireline
logging and well testing, clearly showing the differentiation of
integrated services.
In Colombia, Smith Trackmaster Plus* technology was successfully
deployed for the first time in Latin America on a double casing
sidetrack operation on 7 ?-in and 9 ?-in strings on a well for
Equion Energia. The operation also included a 6-in whipstock
sub-assembly equipped with an expandable anchor and a FasTrack*
mill. After sidetracking, drilling operations continued without
further delays as the bottomhole assembly was able to cross the
casing window smoothly.
In designing the fluids program for the 8 ½-in section on a well
in the Norwegian North Sea where previous wells had experienced
challenging cementing operations, M-I SWACO and Schlumberger
engineers recommended use of M-I SWACO WARP* drilling fluid prior
to running and cementing the 7-in casing. The section was first
drilled with VersaTec* fluid, and WARP drilling fluid was then
displaced in the hole prior to pulling out of hole at total depth.
The displacement from VersaTec fluid to WARP fluid gave an instant
reduction in torque and pump pressure, and no cementing problems
were consequently experienced.
M-I SWACO PRESSPRO RT* software has been used for the first time
on a PEMEX well in the Mexico South region to control drilling
fluid equivalent circulating density to prevent mud losses. Mexico
South is one of the most difficult environments for drilling
because the wells reach high temperature and cross zones of both
high and low pressure with a very complex mud weight window. Lost
circulation, stuck pipe and well control events are the main
drilling risks. PRESSPRO RT implementation in the 12 1/4-in section
of the well achieved the main goal of zero mud losses while
drilling, tripping and running casing and the software's hydraulic
calculations were validated against Drilling & Measurements
APWD* annular pressure while drilling measurements. This success
was achieved through teamwork and commitment from the engineering
team, the OSC interactive drilling operations center and PRESSPRO
RT engineers.
Reservoir Production Group
Fourth-quarter revenue of $3.60 billion increased 7%
sequentially and 29% year-on-year. Pretax operating income of $768
million was 9% higher sequentially and increased 32%
year-on-year.
Among Reservoir Production Group Technologies, Completions and
Artificial Lift posted the strongest sequential growth driven by
robust product sales across all Areas. Well Services sequential
growth was seen mainly in North America Land as additional fleets
deployed and continued improvements in asset utilization and crew
efficiency were achieved although these positive factors were
partially muted by the impact of year-end seasonal effects. Framo
and SPM also posted strong sequential increases.
Sequentially, fourth-quarter pretax operating margins were
slightly up at 21.3%. Completions, Artificial Lift and Well
Services reported improvements from strong sales.
Reservoir Production Group highlights included technology
deployments in a number of key areas.
Petroleum Development of Oman (PDO) has awarded Schlumberger a
five-year contract for 35% of the total cementing scope in North
Oman. Schlumberger Well Services ability to provide innovative
solutions for challenging well environments including high
pressures and temperatures, lost circulation, salt-zone cementing
and cyclic steam and polymer injection led partly to this
award.
In Kazakhstan, Well Services MaxCO3* degradable diversion fluid
technology has been introduced for Tengizchevroil in the Tengiz
field, one of the world's deepest super giant oil fields with a
very thick hydrocarbon column. MaxCO3 technology is of particular
value in naturally fractured reservoirs as its fibrous component
degrades completely while leaving the reservoir undamaged. For
application in Tengiz, the MaxCO3 system has been blended with VDA*
viscoelastic diverting fluid and the combination is now being
optimized following encouraging production results.
In southern Mexico, Well Services ScavengerPlus* scavenger
slurry stabilizer has been introduced for PEMEX to improve zonal
isolation in the 20-in and 13 3/8-in sections in onshore fields
where water-based and oil-based drilling fluids are used
respectively. The technology improved mud removal and zonal
isolation, both of which are critical for well life. Use of the
ScavengerPlus system has now become common practice and has
resulted in increased operational efficiency and improved safety in
cementing operations.
Offshore Mexico, Well Services OilSEEKER* diverter technology
was successfully applied at bottom hole temperatures above 300 deg
F in a matrix stimulation treatment in a fractured carbonate
formation. Water cut was reduced from 20% to zero and oil
production of 4,700 bpd was the highest ever in the history of the
well--clearly indicating that the stimulation fluids were
successfully diverted to the oil-saturated zones. The right
combination of engineering and stimulation fluids together with
teamwork between Schlumberger and PEMEX made this success
possible.
In Brazil, Schlumberger Well Services has mobilised the BRASIL I
DeepSTIM* offshore stimulation vessel for Petrobras. The vessel's
five-year contract for matrix stimulation, sand control and
hydraulic fracturing services in presalt exploration and
development wells covers key Schlumberger technologies including
MaxCO3 degradable diversion and VDA viscoelastic diverting fluids.
The large storage capacity and state-of-the-art mixing and pumping
equipment will be important factors for successful presalt
reservoir stimulation.
Elsewhere in Brazil, Schlumberger Well Services has renewed its
contract for the FlexSTIM* modular offshore stimulation system with
OGX. The system was designed and mounted on a standard supply
vessel to provide the flexibility, capacity and response time
needed by the client to complete horizontal wells requiring
multistage matrix stimulation in the Campos Basin. Following the
successful 2011 completion campaign, the system is being upgraded
to allow treatment of all intervals in a single trip to location
while eliminating mixing operations between stages, thus reducing
rig time and associated logistics.
In Colombia, Schlumberger Well Services deployed CoilFLATE* and
ACTive* technologies simultaneously for the first time to perform a
pressure build-up test for Equion Energia Limited in the Mirador
formation. A CoilFLATE high-pressure, high-temperature packer was
set at 14,100 ft and the well partially opened to generate a
drawdown above the packer to take fluid samples after flow and
pressure had stabilized. The well was then shut in for a 12-hour
build-up test with real-time data. The use of these technologies
enabled Equion to plan similar operations in the Florena and
Cusiana fields.
Schlumberger Well Services deployed CoilFLATE coiled-tubing
through-tubing inflatable packer technology as a mechanical
diverter to perform a selective matrix stimulation in the Guadalupe
and Barco formation for Ecopetrol in Colombia. The CoilFLATE packer
was run in a Chrome 13 completion under dynamic downhole conditions
with cross flow between formations, low bottom hole pressures and
high gas cut. The complex well treatment included a harsh fluid
environment with energized xylene with injection above and below
packer. The results of this successful technology introduction
allowed Ecopetrol to plan future wells with mechanical diverter
treatment packers on operations in the Cupiagua fields.
In Algeria, Schlumberger used a combination of the ACTive
in-well live performance system with ABRASIJET* hydraulic
pipe-cutting and perforating technology to bring oil wells on
production for Sonatrach in the Hassi Messaoud field. The combined
technologies offer an alternative to conventional perforation with
the fiber-optic capability of the ACTive system permitting
real-time depth correlation in addition to monitoring differential
pressure for optimum performance.
In the UK sector of the North Sea, Xcite Energy has awarded
Schlumberger Artificial Lift and Schlumberger Completions a
contract to supply, install, and provide operational support for
ESP systems and intelligent completions for the Phase 1A
Development of the Bentley field. The award was based on
Schlumberger expertise in heavy oil solutions and the ability to
provide a unique lifting solution integrating REDA* electrical
submersible pumping systems, variable speed drives and Schlumberger
intelligent completion systems.
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
more than 113,000 people representing over 140 nationalities and
working in approximately 85 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 $39.54 billion in 2011. For
more information, visit www.slb.com.
*Mark of Schlumberger or of Schlumberger Companies
|Japan Oil, Gas and Metals National Corporation (JOGMEC),
formerly Japan National Oil Corporation (JNOC), and Schlumberger
collaborated on a research project to develop LWD technology.
EcoScope service uses technology that resulted from this
collaboration.
|Mark of Exxon Mobil Corporation
Notes
Schlumberger will hold a conference call to discuss the above
announcement and business outlook on Friday, January 20, 2012. The
call is scheduled to begin at 8:00 a.m. 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
+1-800-230-1059 within North America, or +1-612-234-9959 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 February 20, 2012 by dialing
+1-800-475-6701 within North America, or +1-320-365-3844 outside of
North America, and providing the access code 222324.
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 information is
available at www.slb.com/ir.
Schlumberger LimitedMalcolm Theobald, +1 (713) 375-3535Vice
President of Investor RelationsorJoy V. Domingo, +1 (713)
375-3535Manager of Investor Relationsinvestor-relations@slb.com
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