Schlumberger reported second-quarter 2011 revenue of $9.62 billion versus $8.72 billion in the first quarter of 2011, and $5.94 billion in the second quarter of 2010.
Income from continuing operations attributable to Schlumberger, excluding charges, was $1.18 billion--an increase of 22% sequentially and 45% year-on-year. Diluted earnings-per-share from continuing operations, excluding charges, was $0.87 versus $0.71 in the previous quarter, and $0.68 in the second quarter of 2010.
Schlumberger recorded charges of $0.05 per share in the second quarter of 2011 and $0.02 per share in the first quarter of 2011.
Oilfield Services revenue of $8.99 billion increased 11% sequentially and 51% year-on-year. Pretax segment operating income of $1.75 billion was up 20% sequentially and 56% year-on-year.
Distribution revenue of $637 million increased 6% sequentially. Pretax segment operating income of $24 million improved 8% sequentially.
Schlumberger Chairman and CEO Andrew Gould commented, "Second-quarter results showed strong growth worldwide. All Product Groups grew at double-digit rates. In North America, a prolonged Canadian spring break-up and poor weather in the northwest were offset by very strong growth in the rest of US land and a significant contribution from deepwater operations as the rig count increased and renewed interest in exploration activity in the Gulf of Mexico led to high multiclient seismic data sales.
"Internationally, the trend towards higher deepwater rig count, and higher exploration spending continued. This activity was coupled with a surge in development and workover activity as producers moved to compensate for reduced Libya barrels and to profit from higher prices. As a result, all Groups had standout product lines in the quarter and technology sales showed good progress. Strong advances were made in all Technologies linked to deepwater exploration and complex development drilling including WesternGeco, Drilling & Measurements, M-I SWACO, and openhole Wireline and Testing services. The Drilling Group continued to record strong synergistic revenue with the legacy Smith Bits and Drilling Tool businesses in many areas of the world. At Reservoir Production, in addition to the strong North American stimulation market, high growth rates were experienced internationally as operators moved to improve production and to test unconventional gas plays in several markets.
"Pricing power in North America pressure pumping remained robust, but more importantly towards the end of the quarter it became clear that pricing traction for certain other services--particularly those related to drilling high-risk deepwater plays or other complex developments--was in place both in North America and internationally. This is not yet universal, but a positive trend is in place which should yield results by the end of the year.
"In our second-quarter outlook, we outlined the key constituents of supply and demand for oil and gas over the next few years and pointed out that, absent a further leg to the recession, substantial increases in investment would be necessary to maintain an adequate supply cushion in an era of political uncertainty. We anticipated that the international supply response would progressively ramp up over the second half of 2011. It transpired that the international ramp-up made a strong start in the second quarter that will continue through the rest of the year and into 2012.
"The continued strength in drilling liquid-rich plays in North America, coupled with an acceleration in drilling both in exploration and development internationally, will put considerable strain on the ability of the service industry to meet activity levels. While it is not unprecedented that a North American cycle has run concurrently with increasing activity internationally, the service intensity of drilling and completing horizontal wells in liquid-rich plays and shale gas basins has introduced a new dynamic in as much as this activity requires far more service equipment than was traditionally used in the North American land market. As a result, the ability of the industry to supply both the North American and international markets with the required equipment and people in a concurrent growth phase will be challenged.
"Schlumberger, through size, geographical coverage, multinational workforce, comprehensive product and service portfolio and technology capability is uniquely placed to help our customers meet these challenges worldwide."
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