EXTRACT: During the quarter, Shell extended their pan-European contracts for
Drilling & Measurements and Wireline logging services for a further two years
at attractive commercial rates. The exceptional safety record, good service
quality, and high level of support provided during the past three years led to
these contract extensions.
THE ARTICLE
NEW YORK, July 21 /CNW/ – Schlumberger Limited (NYSE:SLB) today reported
second-quarter 2006 operating revenue of $4.69 billion versus $4.24 billion in
the first quarter of 2006 and $3.43 billion in the second quarter of last
year.
Income from continuing operations, before charges and credits, reached
$900 million–an increase of 25% sequentially and 90% year-on-year.
Earnings-per-share diluted, before charges and credits, were $0.73, versus
$0.59 in the previous quarter and $0.39 in the second quarter of last year.
Income from continuing operations, including charges and credits, was
$0.69 per share-diluted versus $0.59 in the previous quarter and $0.39 in the
second quarter of 2005. Net income was $857 million or $0.69 per
share-diluted, compared to $0.59 in the previous quarter and $0.40 in the
second quarter of 2005.
Oilfield Services revenue of $4.13 billion increased 11% sequentially and
36% year-on-year. Pretax business segment operating income of $1.12 billion
increased 18% sequentially and 67% year-on-year.
WesternGeco revenue of $562 million increased 6% sequentially and 47%
year-on-year. Pretax business segment operating income of $180 million
increased 13% sequentially and 211% year-on-year.
Schlumberger Chairman and CEO Andrew Gould commented, “Led by increased
demand for Q technology, seismic has now become the fastest growing
Schlumberger Technology. WesternGeco revenue increased 47% year-on-year and
the segment has the healthiest backlog in its history. This
exploration-dominated growth demonstrates that our customers’ concerns are as
much a longer-term preoccupation with the renewal of reserves through defining
new reservoirs, as they are concerns with short-term production volumes. The
accelerating growth rates of our reservoir characterization and well testing
technology portfolios serve as confirmation of this trend.
The second-quarter growth patterns proved to be the opposite of the first
quarter of 2006. Sequential growth in North America slowed as impressive
results in US Land and exceptional performance in the US Gulf Coast were
partially offset by a prolonged spring break-up in Canada. Outside North
America, sequential growth rates improved dramatically as Russia recovered
from the severe winter weather and other regions showed accelerating trends.
Many Schlumberger Technologies saw positive sequential growth rates
worldwide with Seismic, Drilling & Measurements, Well Testing, Completion
Systems, and Integrated Project Management being particularly strong, driven
by a combination of increased activity, project demand, and technology-led
pricing power.
During the quarter, we made several small but highly significant
acquisitions that will add to our reservoir definition capability. We also
completed the final stage of the acquisition of PetroAlliance whose
performance over the past year has far exceeded our original expectations.
Sequential growth rates for the remainder of 2006 will continue to be
strong, particularly in the Eastern Hemisphere, albeit at slightly lower
levels than the blistering pace of the second quarter. In North America some
temporary slowing of natural gas drilling activity cannot be excluded though
currently there are no clear signs of this.”
Other Events:
— On April 28, Schlumberger completed the acquisition of the 30%
minority interest in WesternGeco held by Baker Hughes for $2.4 billion in
cash. Excluding one-time charges of $21 million for in-process R&D and $9.4
million for liquidation of certain investments in connection with the funding
of the transaction, the acquisition was approximately one-and-a-half cents
accretive for the quarter, and is now expected to remain accretive in the
future.
— On May 16, Schlumberger completed the final stage of the acquisition
of PetroAlliance Service Company Limited for $165 million in cash and
approximately 4.7 million shares of Schlumberger stock.
— As part of the new 40 million-share buy-back program announced in the
first quarter of 2006, Schlumberger repurchased 3.6 million shares during the
quarter for a total amount of $213 million, at an average price of $59 per
share.
— During the quarter, after-tax charges totaling $42.8 million were
recorded. These included the $21 million WesternGeco in-process R&D charge; a
$9.4 million loss on the liquidation of certain investments to fund the
WesternGeco transaction; WesternGeco visa settlement costs of $6.8 million;
and other in-process R&D charges amounting to $5.6 million.
< <
Consolidated Statement of Income (Unaudited)
(Stated in thousands except per share amounts)
Second Quarter Six Months
-----------------------------------------------
For Periods Ended June
30 2006 2005 2006 2005
----------------------------------------------------------------------
Operating revenue $4,686,775 $3,428,632 $8,925,792 $6,587,743
Interest and other
income (1)(3) 63,590 46,220 129,082 234,773
Expenses
Cost of goods sold
and services (3) 3,255,264 2,549,054 6,250,058 4,954,186
Research &
engineering (3) 170,890 121,635 300,296 242,855
Marketing 14,274 12,196 27,440 22,258
General &
administrative 107,376 90,895 204,600 176,317
Interest 61,421 50,437 109,265 96,999
----------------------------------------------------------------------
Income from Continuing
Operations before
taxes and minority
interest 1,141,140 650,635 2,163,215 1,329,901
Taxes on income (3) 278,419 162,123 535,070 299,819
----------------------------------------------------------------------
Income from Continuing
Operations before
minority interest 862,721 488,512 1,628,145 1,030,082
Minority interest (3) (5,821) (15,311) (48,734) (32,444)
----------------------------------------------------------------------
Income from Continuing
Operations 856,900 473,201 1,579,411 997,638
Income from
Discontinued
Operations - 9,000 - 7,972
Net Income $856,900 $482,201 $1,579,411 $1,005,610
----------------------------------------------------------------------
Diluted Earnings Per
Share (3)
Income from
Continuing
Operations $0.69 $0.39 $1.28 $0.82
Income from
Discontinued
Operations - 0.01 - 0.01
-------- -------- -------- --------
Net Income $0.69 $0.40 $1.28 $0.83
-------- -------- -------- --------
Average shares
outstanding 1,184,357 1,177,482 1,182,351 1,178,074
Average shares
outstanding assuming
dilution 1,246,077 1,225,964 1,243,386 1,226,748
Depreciation &
amortization
included in
expenses (2) $375,042 $326,516 $729,645 $654,981
----------------------------------------------------------------------
1) Includes interest income of:
a. Second quarter 2006 - $29 million (2005 - $23 million)
b. Six months 2006 - $65 million (2005 - $43 million)
2) Including Multiclient seismic data costs.
3) Charges and credits:
(Stated in millions except per share amounts)
Diluted
EPS Income
Minority effect Statement
Pretax Tax Interest Net (a) Classification
------- ------ --------- ------- -------- --------------
The second
quarter of
2006
includes:
WesternGeco
in-process Research &
R&D charge $(21.0) $- $- $(21.0) $(0.02) engineering
Loss on sale
of
investments
to fund the
WesternGeco Interest and
transaction (9.4) - - (9.4) (0.01) other income
WesternGeco Cost of goods
visa sold and
settlement (9.7) (0.3) 3.2 (6.8) (0.01) services
Other in-
process R&D Research &
charges (5.6) - - (5.6) - engineering
------- ------ --------- ------- -------
$(45.7) $(0.3) $3.2 $(42.8) $(0.03)
------- ------ --------- ------- -------
The first
quarter of
2005
includes:
Gain on sale
of
Montrouge Interest and
facility $145.7 $- $- $145.7 $0.12 other income
Real estate Cost of goods
related sold and
charges (12.1) 0.8 (11.3) (0.01) services
------- ------ --------- ------- -------
$133.6 $0.8 $- $134.4 $0.11
------- ------ --------- ------- -------
(a) May not add due to rounding
There were no charges or credits in the first quarter of 2006 or the
second quarter of 2005.
Condensed Balance Sheet (Unaudited)
(Stated in thousands)
Assets Jun. 30, 2006 Dec. 31, 2005
----------------------------------------------------------------------
Current Assets
Cash and short-term investments $2,108,283 $3,495,681
Other current assets 5,758,601 5,058,232
----------------------------------------------------------------------
7,866,884 8,553,913
Fixed income investments, held to
maturity 73,500 359,750
Fixed assets 4,767,445 4,200,638
Multiclient seismic data 243,129 222,106
Goodwill 4,736,182 2,922,465
Other assets 2,537,227 1,818,620
----------------------------------------------------------------------
$20,224,367 $18,077,492
----------------------------------------------------------------------
Liabilities and Stockholders' Equity
----------------------------------------------------------------------
Current Liabilities
Accounts payable and accrued
liabilities $3,555,789 $3,564,854
Estimated liability for taxes on
income 1,180,949 1,028,571
Bank loans and current portion of
long-term debt 1,212,998 796,578
Dividend payable 149,226 124,733
----------------------------------------------------------------------
6,098,962 5,514,736
Long-term debt 4,137,124 3,591,338
Postretirement benefits 725,575 707,040
Other liabilities 168,604 167,611
----------------------------------------------------------------------
11,130,265 9,980,725
Minority interest - 505,182
Stockholders' Equity 9,094,102 7,591,585
----------------------------------------------------------------------
$20,224,367 $18,077,492
----------------------------------------------------------------------
Net Debt (Unaudited)
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 indebtedness. Details of the net debt follow:
(Stated in millions)
Six Months 2006
--------------------------------------------------------
Net Debt, January 1, 2006 $(532)
Income from continuing operations 1,579
Depreciation and amortization 730
Charges & credits, net of minority
interest and tax 43
Excess of equity income over dividends
received (76)
US pension contribution (200)
Increase in working capital
requirements (443)
Capital expenditures(1) (1,088)
Dividends paid (271)
Proceeds from employee stock plans 305
Stock repurchase program (467)
Acquisition of minority interest in
WesternGeco (2,406)
Other business acquisitions and related
payments (305)
Distribution to joint venture partner (60)
Other 62
Translation effect on net debt (39)
-------------
Net Debt, June 30, 2006 $(3,168)
-------------
(Stated in millions)
Components of Net Debt Jun. 30, 2006 Dec. 31, 2005
----------------------------------------------------------------------
Cash and short-term investments $2,108 $3,496
Fixed income investments, held to maturity 74 360
Bank loans and current portion of long-
term debt (1,213) (797)
Long-term debt (4,137) (3,591)
------------- -------------
$(3,168) $(532)
------------- -------------
1. Including Multiclient seismic data expenditure.
In addition to financial results determined in accordance with
generally accepted accounting principles (GAAP), this Second-Quarter
Earnings Press Release also includes non-GAAP financial measures (as
defined under SEC Regulation G). The following is a reconciliation of
these non-GAAP measures to the comparable GAAP measures:
(Stated in millions except per share amounts)
Second Quarter 2006
---------------------------------------------
Diluted
Pretax Tax Min Int Net EPS
---------------------------------------------
Income from Continuing
Operations per
Consolidated Statement
of Income $1,141.1 $278.4 $(5.8) $856.9 $0.69
Add back Charges &
Credits:
- WesternGeco in-
process R&D charge 21.0 - - 21.0 0.02
- Loss on sale of
investments to fund
the WesternGeco
transaction 9.4 - - 9.4 0.01
- WesternGeco visa
settlement 9.7 (0.3) (3.2) 6.8 0.01
- Other in-process R&D
charges 5.6 - - 5.6 -
---------------------------------------------
Income from Continuing
Operations before
charges & credits $1,186.8 $278.1 $(9.0) $899.7 $0.73
---------------------------------------------
Before charges
Continuing operations GAAP & credits
--------------------- ------------------------------------
Effective tax rate 24.4% 23.4%
Business Review (Unaudited)
(Stated in millions)
Second Quarter Six Months
---------------------- ----------------------
2006 2005 % chg 2006 2005 % chg
---------------------- ----------------------
Oilfield Services
-----------------
Operating Revenue $4,127 $3,044 36% $7,838 $5,823 35%
Pretax Operating Income $1,124 $674 67% $2,072 $1,232 68%
WesternGeco
-----------
Operating Revenue $562 $383 47% $1,092 $761 43%
Pretax Operating Income $180 $58 211% $338 $121 179%
Pretax operating income represents the segments' income before taxes
and minority interest. The pretax operating income excludes corporate
expenses, interest income, interest expense, amortization of certain
intangible assets, interest on post-retirement benefits, stock-based
compensation costs, and the charges and credits described on page 4,
as these items are not allocated to the segments.
>>
Oilfield Services
Second-quarter revenue of $4.13 billion was 11% higher sequentially and
36% higher year-on-year.
Sequential revenue increases were highest in the US Land, US Gulf Coast,
Mexico, North Sea, West Africa, Arabian, Gulf, and Russian GeoMarkets. All
Technologies contributed to the strong growth with Drilling & Measurements,
Well Testing, Integrated Project Management (IPM), and Completion Systems
recording double-digit increases.
Pretax operating income of $1.12 billion increased 18% sequentially and
67% year-on-year. These results were driven by higher activity, increased
pricing, stronger demand for higher-margin technologies, and operating
efficiency improvements. The combination of these factors resulted in
sequential growth of 160 basis points (bps) in pretax operating margins to
reach 27.2%.
During the quarter, Schlumberger acquired TerraTek, Inc., a global leader
in geomechanics measurements and analysis. TerraTek will become the
Schlumberger Geomechanics Laboratory Center of Excellence–providing rock
mechanics evaluations, unconventional gas reservoir analysis, large-scale
drilling and completions performance testing, and log-to-core integration.
This acquisition provides unparalleled expertise in technologies to reduce
reservoir risk and uncertainty by delivering superior reservoir
characterization.
North America
Revenue of $1.27 billion increased 3% sequentially and 40% year-on-year.
Pretax operating income of $376 million was flat sequentially but increased
61% year-on-year.
Revenue growth in the Area was driven primarily by strong demand for
Wireline, Drilling & Measurements, and Well Testing technologies, coupled with
an increase in Completions technology product sales in the US Gulf Coast, and
higher activity and continuing price increases in the US Land GeoMarket.
Revenue growth in the Area was partially offset by Canada where the
longer-than-expected spring break-up and continual heavy rains during the
quarter caused the active rig count to fall 61% sequentially.
Sequential pretax operating income was driven by the favorable activity
mix, price increases, and accelerated adoption of new technology in the US
Gulf Coast and US Land GeoMarkets. This was offset by Canada with the absence
of high-margin winter projects, lower Arctic revenues, and the impact of the
prolonged spring break-up in the West.
In the US Gulf Coast, Schlumberger successfully completed multiple
completion and well testing operations on Chevron’s Jack prospect well test.
PowerFlow(a) tubing-conveyed perforating, IRIS(a) downhole testing, SenTREE(a)
high-performance subsea well control test tree, Vx(a) multi-phase flow
metering, and PVT Express(a) fluid sampling and analysis services were
deployed, enabling ultra high-pressure completion and well testing. The Jack
well was completed and tested in 7,000 ft of water at more than 20,000 ft
beneath the sea floor, breaking the 2004 Tahiti discovery well record as the
deepest well test in the Gulf of Mexico.
Also in the US Gulf Coast, a new world record for subsea completions was
established on Kerr-McGee’s Merganser #1 well. The SenTREE 7(a) well control
and Commander(a) telemetry control and monitoring systems were deployed in
7,919 ft of water, the greatest depth in which a subsea completion has been
installed from a dynamically positioned rig with a subsea completion tree.
This operation surpasses the previous record of 7,209 ft set by Schlumberger
on the Canyon Express project for Total and Marathon.
The REDA Hotline(a) electrical submersible pump (ESP) artificial lift
system operating on the Firebag P2P1 well for Suncor Energy Inc. in Canada
passed an operating milestone during the quarter. The system has now been
working successfully for more than one year in a heavy oil reservoir under
steam injection where temperatures regularly exceed 250 degrees Celsius.
Latin America
Revenue of $666 million increased 12% sequentially and 20% year-on-year.
Pretax operating income of $128 million increased 33% sequentially and 53%
year-on-year.
Sequential revenue growth in the Area was attributable primarily to the
rising rig count and increased demand for PowerDrive(a) and Scope(a) Drilling
& Measurements technologies. Increased activity on integrated projects in
Mexico, stronger Artificial Lift technology product sales in the
Peru/Colombia/Ecuador GeoMarket, and rising demand for Completions technology
equipment in the Venezuela/Trinidad & Tobago GeoMarket also contributed to the
growth.
The strong sequential gain in pretax operating margins of 300 bps was
mainly driven by higher Drilling & Measurements and Well Services activity
across the Area, combined with stronger pricing gains on product sales in the
Latin America South GeoMarket and improved performance-related incentives on
the Casabe integrated production management project in Colombia.
Discussions regarding the settlement of certain outstanding receivables
for the PRISA contract in Venezuela were ongoing at the end of the quarter.
In Mexico, Pemex used the Sonic Scanner(a) acoustic scanning tool in
combination with the MDT(a) Modular Formation Dynamics Tester fluid-sampling
tool to accurately evaluate porosity type, fluid type, pressure, well design,
and potential production. The customer’s deployment of this new measurement
technique greatly reduced the uncertainty in the reservoir model and helped to
successfully identify additional reserves in the asset.
In Peru, Repsol used a combination of artificial-lift and drill-stem
testing technologies, together with the PowerJet Omega(a) deep-penetrating
perforating charges, the PVT Express(a) well fluid analysis system, and
EverGreen(a) burner technology, to successfully test their Delfin-1
exploration well. This integration of technology enabled Repsol to limit the
rig time required for well testing and to obtain fast, accurate results on
site.
Europe/CIS/Africa
Revenue of $1.18 billion increased 18% sequentially and 43% year-on-year.
Pretax operating income of $294 million increased 40% sequentially and 91%
year-on-year.
Sequential revenue growth in the Area was mainly driven by higher
activity across Russia following the end of the extreme winter weather
conditions experienced in the previous quarter, and increased demand for IPM,
Well Services, and Drilling & Measurements services. The North Sea GeoMarket
achieved double-digit growth due primarily to higher exploration activity in
Norway, accelerating demand for PURE(a) and Quicksilver Probe(a) Wireline
technologies, and higher demand for Well Testing services. Double-digit growth
was also recorded in the Continental Europe and Nigeria GeoMarkets due to
increased activity, and in North Africa due to strong demand for Well Testing
services.
Robust sequential gains in pretax operating margins of 390 bps resulted
from strengthening pricing, higher efficiency, increased demand for Wireline
and Drilling & Measurements new technologies, and the favorable activity mix
in the developing exploration market.
During the quarter, Shell extended their pan-European contracts for
Drilling & Measurements and Wireline logging services for a further two years
at attractive commercial rates. The exceptional safety record, good service
quality, and high level of support provided during the past three years led to
these contract extensions.
The first espWatcher(a) system for Petrom was installed on their Gloria
Platform offshore Romania. This data acquisition system for monitoring and
surveillance of electrical submersible pumps has already led to significant
production increases at levels above the client’s expectations. Other benefits
realized by the customer include improvements in the economics of their
artificial lift methods and a better understanding of the field.
Statoil and Schlumberger Information Solutions (SIS) announced the start
of a three-year technology collaboration agreement to develop new
production-optimization technologies to extend the life of oil and gas fields.
In addition to new technology development, the agreement calls for
standardizing and automating workflow processes with the goal of increasing
oil recovery and accelerating production by identifying best practices and
information management processes for the complete producing asset, including
the processing facilities.
Middle East & Asia
Revenue of $975 million increased 13% sequentially and 33% year-on-year.
Pretax operating income of $322 million increased 19% sequentially and 56%
year-on-year.
The strong sequential revenue growth resulted from new exploration
activity and higher rig count levels, coupled with improved pricing across the
Middle East; sustained demand for new technology and higher coiled-tubing
drilling activity in the U.A.E; increased activity in Australia and Vietnam;
and higher activity and improved pricing in China.
Area pretax operating margins grew 170 bps sequentially–due primarily to
stronger activity in higher margin Drilling & Measurements and Well Testing
technologies, coupled with pricing gains in the Arabian GeoMarket and
performance-related incentives on the Bokor integrated production management
project. Pretax operating margins reached a new record level of 33% during the
quarter.
Demonstrating Schlumberger leadership in the field of rotary steerable
technology, PowerDrive Xbow(a), the new 3 1/4-in fully rotational system, was
deployed on a sidetrack for Saudi Aramco. Running for 140 circulating hours,
the system drilled a record-breaking 3 7/8-in hole to a total length of 1,765
ft, while achieving the client’s directional objectives. The operation marked
the smallest hole successfully drilled with a rotary steerable system.
PowerDrive Xbow is designed for through-tubing rotary drilling and coil-tubing
drilling applications.
Elsewhere in Saudi Arabia, the South Rub Al-Khali Company Limited (SRAK),
a Shell/Total/Saudi Aramco gas joint venture, awarded Schlumberger an
integrated well construction services contract to provide Drilling &
Measurements and Well Services technologies, and IPM services in the Rub
Al-Khali basin. The work scope comprises three remote gas exploration wells
with an option for four additional wells.
In Australia, Woodside awarded Schlumberger a multi-well, multilateral
Drilling & Measurements contract for the deepwater Vincent project off the
Northwestern Shelf. In the first phase of the contract seven 9 5/8-in
RapidX(a) multilateral systems will be installed. Phase two will consist of an
additional 7 to 14 systems. Phase three is undergoing feasibility reviews.
PetroChina awarded Schlumberger a Drilling & Measurements Master Services
Contract. Advanced Schlumberger well placement and performance drilling
technologies will be deployed in wells across the Tarim, Jidong, Liaohe,
Xinjiang, Sichuan, and other oilfields.
In India, Reliance Industries used the Rt Scanner(a) triaxial induction
tool to markedly improve the accuracy of the hydrocarbon estimation in
low-resistivity pay zones in the Krishna Godavari basin. Demonstrating its
leading edge over conventional technology for the estimation of net pay, Rt
Scanner also confirmed the presence of thin reservoir beds that were later
seen on core images, and calculated dip and azimuth that correlated well with
image logs.
Highlights
— Schlumberger acquired rights to Quorum Volume Management (QVM)
software, a comprehensive field operations data-management application from
Quorum Business Solutions. Used in combination with SIS products and services,
QVM technology supports the vision of the digital oilfield by expanding the
Schlumberger portfolio to include production operations, engineering,
management, and accounting.
— Russia Petroleum, 62.89%-owned by TNK-BP, awarded Schlumberger
contracts for directional drilling, LWD, cementing and wireline operations on
the Kovykta field project in East Siberia. This giant gas field, with
estimated reserves of 1.9 trillion cubic meters, necessitates the drilling of
high-deviation wells with total vertical depths of 3,500 m.
— In Libya, the first StethoScope(a) operation for Eni was successfully
run in an offshore extended-reach well with inclinations varying from 50 to 70
degrees. Quality formation-pressure data were difficult to obtain at these
inclinations in previous wells using conventional technology. Deployment of
StethoScope reduced the time of operation by two rig days.
— In Mexico, Pemex awarded Schlumberger a two-year, multi-million
dollar contract to perform surface testing services on their offshore fields
in the Sonda de Campeche.
— In Trinidad & Tobago, BHP Billiton awarded Schlumberger a
multi-million dollar contract to provide directional drilling, MWD, and LWD
services for their ongoing exploration and development projects. Work will
begin with the King Bird 1 exploration well, followed by work on development
wells in the Greater Angostura field.
— The Quicksilver Probe wireline sampling technology, a method to
deliver contamination-free samples during sampling of formation fluids in a
fraction of the time it takes with conventional sampling techniques, was
recognized during the quarter with two prestigious industry awards–a Hart’s
Meritorious Engineering award and a 2006 Offshore Technology Conference
Spotlight on New Technology award.
WesternGeco
Second-quarter revenue of $562 million was 6% higher sequentially and 47%
higher compared to the same period last year. Pretax operating income of $180
million improved 13% sequentially and 211% year-on-year.
Sequentially, Marine revenue increased to record levels with the vessel
fleet utilization at 89%. Q(a) vessel utilization remained substantially flat
at 91%. WesternGeco commissioned its sixth Q-Marine(a) vessel during the
quarter with the upgrade of the Western Monarch to address increased industry
demand for Q-Marine technology. The vessel has a backlog of contracts through
May 2007. Land acquisition revenue increased with new crews added in the North
Africa and the Middle East regions, coupled with improved efficiencies in
operations in the South America region. Data Processing revenue increased with
higher activity in both Asia and India linked to the recently opened Mumbai
data processing and reservoir services center. Seasonal declines in
Multiclient revenue, although less than expected due to a late surge in sales
in the US, partially offset sequential gains in Marine, Land, and Data
Processing.
Pretax operating margins improved sequentially by 200 bps to reach 32%.
This was primarily driven by Marine due to higher utilization and improved
pricing, coupled with Land activity increases in the South America, North
Africa, and the Middle East regions, together with high-margin Q-data
processing. These improvements were partially offset by the seasonal decline
in Multiclient.
During the quarter, Schlumberger acquired Copenhagen-based 0degaard A/S,
the leader of advanced surface seismic data inversion software. The company,
which will become part of WesternGeco, specializes in applications of seismic
data to determine rock parameters critical to better reservoir
characterization and improved oil and gas recovery. The integration of surface
seismic data with key Schlumberger petrophysical and electromagnetic
measurement technologies will lead to reduced reservoir uncertainty,
particularly in the smaller and more complex reservoir targets of the future.
Revenue backlog is at an all-time high of $1.2 billion, an increase of
35% over the previous quarter reflecting strong and sustained Marine, Land,
Multiclient, and Data Processing market positions.
Highlights
— Santos Ltd. contracted WesternGeco to conduct a high-resolution
Q-Marine survey over its Mutineer-Exeter field in the Carnarvon basin, off
Australia’s Northwest Shelf. The Mutineer-Exeter field is a core area of
exploration for Santos Ltd.
— WesternGeco acquired the first rich-azimuth towed-streamer seismic
project over the Shenzi field in the Gulf of Mexico. BHP Billiton jointly
operates the field with partners Hess Corporation and BP. The rich-azimuth
design, through the unique capabilities of Q-Marine, takes advantage of the
varying angles and offsets of the receivers and sources to better illuminate
beneath the complex salt canopy surface.
— Turkiye Petrolleri A.O. (TPAO), the Turkish state oil company,
contracted WesternGeco to conduct two 3D Q-Marine seismic surveys over
deep-water blocks 3922-Sinop and 3920-Kozlu in the Turkish sector of the Black
Sea. The imaging results and datasets from these surveys are integral to the
customer’s plans to identify significant hydrocarbon reserves in the
geological plays of the Turkish Black Sea.
— Abu Dhabi Company for Onshore Oil Operations awarded WesternGeco a
contract to acquire a 3D land seismic survey covering approximately 1,500 sq
km in Abu Dhabi, U.A.E. The survey acquisition started in March 2006 and will
take approximately 18 months to complete.
— WesternGeco announced plans to acquire the first Multiclient
wide-azimuth, towed-streamer seismic survey in the Gulf of Mexico, a major
portion of which will be underwritten by Shell Exploration. The project covers
a minimum of 200 Outer Continental Shelf blocks in the central Gulf of Mexico,
about 125 miles off the coast of Louisiana in water depths of 4,400 ft.
About Schlumberger
Schlumberger is the world’s leading oilfield services company supplying
technology, information solutions, and integrated project management that
optimize reservoir performance for customers working in the oil and gas
industry. The company employs more than 66,000 people of over 140
nationalities working in more than 80 countries. Schlumberger supplies a wide
range of products and services from seismic acquisition and processing;
formation evaluation; well testing and directional drilling to well cementing
and stimulation; artificial lift and well completions; and consulting,
software, and information management. In 2005, Schlumberger operating revenue
was $14.31 billion. For more information, visit www.SLB.com.
(a) Mark of Schlumberger
Notes:
Schlumberger will hold a conference call to discuss the above
announcement on Friday, July 21, 2006, at 9:00 a.m. New York City time (2:00
p.m. London time/3:00 p.m. Paris time). To access the call, which is open to
the public, please contact the conference call operator at +1-800-230-1074
(toll free) for North America, or +1-612-234-9960 outside of North America,
approximately 10 minutes prior to the scheduled start time. Ask for the
“Schlumberger Earnings Conference Call.” A replay will be available through
August 4, 2006, by dialing +1-800-475-6701 in North America, or
+1-320-365-3844 outside of North America, and providing the access code
831645.
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 through August 4, 2006 at the above 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.
For further information: Schlumberger Limited Investor Relations
Jean-Francois Poupeau or Debashis Gupta, +1-212-350-9432
[email protected]