Schlumberger reported second-quarter revenue of $5.53 billion versus $6.00 billion in the first quarter of 2009, and $6.75 billion in the second quarter of 2008.
Income from continuing operations attributable to Schlumberger, excluding charges, was $820 million -- a decrease of 13% sequentially and 42% year-on-year. Diluted earnings-per-share from continuing operations, excluding charges, was $0.68 versus $0.78 in the previous quarter, and $1.16 in the second quarter of 2008.
Income from continuing operations attributable to Schlumberger, including charges, was $613 million or $0.51 per share versus $0.78 in the previous quarter, and $1.16 in the second quarter of 2008.
Oilfield Services revenue of $4.96 billion was 9% lower sequentially and 18% lower year-on-year. Pretax segment operating income of $1.02 billion was 19% lower sequentially and 40% lower year-on-year.
WesternGeco revenue of $559 million was 1% higher sequentially but down 17% year-on-year. Pretax segment operating income of $97 million increased 77% sequentially but was 51% lower year-on-year.
Schlumberger Chairman and CEO Andrew Gould commented, "Compared to the first quarter, the overall sequential rate of revenue decline slowed as a further precipitous drop in North America was offset by slowing rates of decline and some recovery in other parts of the world. In Russia, revenue recovered noticeably due to seasonal trends and improving activity.
North American gas drilling in both the US and Canada reached a five-year low as demand remained weak and storage remained at levels way above seasonal averages. Whilst production has begun to show some decline and summer demand has been strong, it will still require a further substantial increase in demand to stimulate and sustain higher levels of drilling. We do not anticipate this will happen before 2010.
At WesternGeco, there was some recovery in Multiclient sales both in North America and overseas although this, together with increased activity in Land, was offset by weaker Marine revenue. Marine pricing continued to decline due to excess capacity in the market. Several new marine and land contracts were booked during the quarter giving better visibility on the next few months however multiclient sales remain difficult to forecast until there is better visibility on year-end oil prices.
Overall, our operating cost base declined approximately $300 million compared to the first quarter as cost reduction programs continued to be implemented. Careful management of both working capital and investment led to a liquidity improvement of $537 million in the quarter.
Our outlook for the remainder of 2009 assumes some stability but no major increase in the North American natural gas rig count and as a result service pricing will remain depressed. Overseas, further activity declines will occur but will be limited and the pricing concessions made in the first half of the year will affect revenues in the second half. The current volatility in the oil price makes it unlikely that our customers will sanction any major increases in expenditures.
We are aware that a number of projects are continuing to be postponed or cancelled. We are also concerned that the higher finding and development costs of new supply, coupled with lower oil and gas prices and more restrictive credit markets are stifling investment flows. This situation, if it persists, will lead to inadequate supply when demand growth returns. The shape of the economic recovery beyond 2009 and the consequent recovery in oil and gas demand remain the determining factors for future activity increases.”
Schlumberger continued to reduce its global workforce as a result of the slowdown in oil and gas exploration and production spending and its effect on activity in the oilfield services sector. These actions resulted in Schlumberger recording charges of $0.07 per share during the second quarter of 2009, primarily related to severance. Furthermore, as a consequence of these workforce reductions, Schlumberger also recorded non-cash pension and other postretirement benefit curtailment charges of $0.10 per share during the quarter.
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