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   Gold/Mining/EnergySchlumberger - The biggest/baddest oil service company


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From: JakeStraw1/20/2017 8:36:55 AM
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Schlumberger revenue beats on uptick in North America activity, prices
finance.yahoo.com

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From: JakeStraw6/21/2017 10:44:19 AM
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Schlumberger N.V. was downgraded by analysts at Barclays PLC from an "overweight" rating to an "equal weight" rating.

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From: JakeStraw6/27/2017 10:13:48 AM
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Schlumberger N.V. was downgraded by analysts at Atlantic Securities from an "overweight" rating to a "neutral" rating.

Schlumberger N.V. was downgraded by analysts at Guggenheim from a "buy" rating to a "neutral" rating.

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From: JakeStraw10/5/2017 12:15:26 PM
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Schlumberger N.V. had its price target raised by analysts at Citigroup Inc. from $77.00 to $80.00. They now have a "buy" rating on the stock.

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From: Tonnyman10/20/2017 10:56:48 AM
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With 13% revenue growth in third quarter, $SLB is clearly on the recovery path. North America remains the key market and the production wing is shining..

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From: hollyhunter10/30/2017 7:50:45 PM
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Chart looks like it wants to bounce back. On watch for clear above 66.57.

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From: JakeStraw4/20/2018 8:38:02 AM
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Schlumberger Announces First-Quarter 2018 Results
markets.siliconinvestor.com

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From: Jon Koplik10/16/2020 11:56:35 AM
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Barrons -- Schlumberger Is Scrambling to Cut Costs. Its Earnings Show It’s Still a Work in Progress.

Oct. 16, 2020
10:06 am ET

Schlumberger Is Scrambling to Cut Costs. Its Earnings Show It’s Still a Work in Progress.

By Avi Salzman

Schlumberger stock fell sharply in early trading Friday after the company posted a mixed third-quarter earnings report as it attempts to reduce expenses and become a more focused business.

Excluding one-time items, its 16 cents of earnings per share beat expectations for 13 cents, but its revenue of $5.26 billion slightly missed expectations for $5.40 billion.

While Schlumberger (ticker: SLB) mentioned several positive developments, CEO Olivier Le Peuch also warned that “the near-term recovery remains fragile owing to potential subsequent waves of Covid-19 that could pose a significant risk to this outlook.” The next two quarters should represent the trough for the industry, he said.

Schlumberger, the world’s largest oil services company, is in the middle of a major transition to deal with low oil prices and a slowdown in oil production around the world. Its revenue was down 38% year over year, and Schlumberger is focused on quickly cutting costs to make its business more efficient. It announced a plan in July to cut 21,000 jobs, or about one quarter of the staff.

The company is also pulling back on major business areas, agreeing to sell a majority stake in its North American pressure pumping business to services company Liberty oil-field services (LBRT). That business was once a major growth driver for Schlumberger, which pioneered techniques that led to the U.S. shale revolution.

Schlumberger is increasingly becoming an international business and plans to focus on major projects, like Exxon Mobil’s (XOM) decade-long production plan off the shore of Guyana.

Revenue in North America plunged 59% in the quarter. It now makes up just 22% of the firm’s overall revenue, versus 33% a year ago. CEO Le Peuch was confident that the company is setting itself up for strong earnings in the future.

“The reset of our earnings power is progressing very well,” he said on the company’s conference call.

In morning trading on Friday, shares of Schlumberger were down 5%, to $15.56.

Write to Avi Salzman at avi.salzman@barrons.com

Copyright © 2020 Dow Jones & Company, Inc.

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From: Jon Koplik10/23/2021 1:17:37 PM
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WSJ on : Schlumberger, Halliburton and Baker Hughes .......................................................

Heard on the Street

Oct. 22, 2021

Services Are Yet Another Snag for Oil and Gas

Drillers, whose discipline is leading to a tight oil market, are in turn facing a tight equipment market. Schlumberger, Halliburton and Baker Hughes are set to benefit.

By Jinjoo Lee

Scarcity sometimes begets more scarcity.

The latest source of shortage comes from the oil field service industry, which has less equipment and fewer employees after years of austerity. Meanwhile, oil and gas prices are near multi-year highs. All three major servicers -- Halliburton, Schlumberger and Baker Hughes -- said in their earnings calls this week that they are negotiating price hikes with their customers as a result. Higher labor costs, stretched supply chains and inflation are feeding into those price increases, too.

That isn’t such a bad thing for the three companies, all of which had to weather pricing cuts last year. But, as for many companies, it isn’t free from near-term snags. Hurricane Ida, which curtailed production in the Gulf of Mexico, put a dent in all of their third quarter revenues, and all three missed top-line expectations for the quarter. Baker Hughes in particular had a rough time; its digital solutions division was impacted by electrical component shortages around semiconductors, boards and displays. Since Tuesday, when the first of the three oil field services giants reported earnings, Halliburton and Baker Hughes shares have shed 1.7% and 8.4%, respectively. Schlumberger shares have edged down by 0.6%.

Equipment supply is tight enough, and oil and natural gas prices high enough, that some customers are starting tenders for services earlier than usual. It is hard to tell how much the scramble will affect energy prices. Directionally speaking, though, the equipment shortage isn’t likely to get better soon. Service companies tightened their belts earlier than their clients and all now plan to continue their spending discipline. Halliburton’s capital expenditure budget today is roughly a quarter of what it was seven years ago, the last time Brent crude prices touched $85. It plans to keep capital expenditures capped at 5% to 6% of revenue. If the market for services is tight today with the world’s producers pumping five million barrels less a day of oil than 2019, the situation isn’t going to get better next year when oil production is expected to exceed pre-pandemic levels.

Notwithstanding short-term hiccups, a tight market with increasing demand is a sweet spot for services firms. Both the Organization of the Petroleum Exporting Countries and the International Energy Agency expect oil demand to increase until at least the 2030s. That oil must be extracted somewhere in the world, even if U.S. drillers maintain discipline. Barring sudden discord between OPEC+ members or sudden drilling activity from large U.S. producers, prices seem likely to stay above pre-pandemic levels.

International service firms are in a strong negotiating position, and they are already leaner and more profitable than they were pre-pandemic. The shock of 2020 forced them to learn new capabilities such as remote monitoring for drilling. Schlumberger in the third quarter squeezed out more net income than the second quarter of 2019 on a revenue base that is 30% lower.

Halliburton is already shuffling some equipment to more lucrative jobs abroad. Moreover, the company notes that new fields are smaller and require more work to produce more barrels, which translates to more dollars. Servicers are also seeing that they can get a pretty penny (“pricing traction,” as Halliburton puts it) for selling low-emissions equipment, which will likely be in high demand in coming years. Baker Hughes’ digital solutions division seems well positioned to profit from helping firms monitor and manage emissions.

Despite the rosy outlook, service firms’ shares look cheap. On average, their price-to-forward-earnings ratio is 28% below their 10-year average. Their share prices have climbed out of a deep hole, but this is still a good opportunity to get in on the ground floor.

Write to Jinjoo Lee at jinjoo.lee@wsj.com

Copyright © 2021 Dow Jones & Company, Inc.

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From: Jon Koplik7/26/2022 1:29:29 AM
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WSJ -- Oil Doesn’t Have to Boom for These Companies to Thrive .............................................

MARKETS
HEARD ON THE STREET

July 22, 2022

Oil Doesn’t Have to Boom for These Companies to Thrive

Oilfield-service-company stocks are in the hole after demand concerns started pummeling oil prices. The reaction seems overdone.

By Jinjoo Lee

Oil-and-gas companies aren’t anywhere close to drilling as much as they did in 2014, but some oil-field service companies are squeezing out profit as if they were.

Schlumberger said on Friday that its revenue grew 20% compared with a year earlier and raised its full-year guidance. Halliburton, which has heavier exposure to North America, saw its top line grow 37% over the same period thanks to heady growth (55%) in the region.

Notably, Halliburton’s operating margins -- excluding charges related to its Russia exit -- reached 14.2% in the second quarter, a milestone not seen since the peak of the fracking frenzy of 2014. Schlumberger’s latest quarterly operating margin of 17.1% was its highest since 2015.

Drilling activity still isn’t what it used to be. Baker Hughes data shows that there are 23% fewer oil rigs in North America today than there were three years ago and 58% fewer compared with 2014. While oil-field service revenues are nowhere near their peak eight years ago, many years of belt-tightening and efficiency-finding has meant the businesses are able to eke out more profit on less drilling activity.

That, and continued supply chain bottlenecks, are adding up to a lot of pricing power. Halliburton Chief Executive Jeff Miller repeatedly said on the company’s earnings call on Tuesday that the company’s equipment is “all but sold out” in the North American market for this year. The company has started talking to customers about purchases in 2023, which already looks like a tight year for equipment, according to Mr. Miller.

Olivier Le Peuch, CEO of Schlumberger, said on a Friday call with analysts that tightness in equipment supply is “very visible” in North America and also broadening in international markets.

Baker Hughes CEO Lorenzo Simonelli said on the company’s earnings call on Wednesday that the demand outlook for the next 12-18 months is “deteriorating” as inflation diminishes consumer purchasing power and interest rates rise. But industry executives are signaling that there will continue to be strong demand for their equipment and services even if there is a slowdown in demand for hydrocarbons.

Mr. Simonelli noted that “years of under-investment” and the potential need to replace Russian barrels means there will need to be higher spending. While the two U.S. major oil companies -- Exxon Mobil and Chevron -- have reduced their combined capital expenditures by 64% since the drilling frenzy of 2014, service giants Halliburton and Schlumberger have cut their spending by an even steeper 73%.

There has been under-investment in drilling, but an even bigger one for equipment, which means it will take quite a drastic oil demand cut before oil-field service companies take a hit.

Markets appear to be baking in a full-fledged slowdown, though, for both. While Brent crude prices have slid 19% since the most recent peak on June 8, the S&P Oil & Gas Equipment Select Industry Index is down 32%, steeper than the 26% decline that an index of oil and gas producers has seen.

As a multiple of expected earnings before interest, taxes, depreciation and amortization, Halliburton, Schlumberger and Baker Hughes’ enterprise values are each at least 18% below their respective eight-year averages.

The risk that demand for oil-field services will decline appears lower than the possibility that oil demand will fall. Their services are getting costlier, but their stock prices look like a good deal.

Write to Jinjoo Lee at jinjoo.lee@wsj.com

Copyright © 2022 Dow Jones & Company, Inc.

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