Schlumberger Announces 1Q06 Results

Schlumberger Limited (NYSE:SLB) reported first-quarter 2006 operating revenue of $4.24 billion versus $4.02 billion in the fourth quarter of 2005 and $3.16 billion in the first quarter of last year.

On April 7, 2006, Schlumberger effected a two-for-one split of the Company's common stock. Accordingly, all share and earnings-per-share data contained in this press release have been restated.

Income from continuing operations, before charges and credits, was $723 million, an increase of 13% sequentially and 85% year-on-year. Earnings-per-share diluted, before charges and credits, were $0.59, versus $0.52 in the previous quarter and $0.32 in the first quarter of last year.

Income from continuing operations, including charges and credits, was $0.59 per share-diluted versus $0.54 in the previous quarter and $0.43 in the first quarter of 2005. Net income was $723 million or $0.59 per share-diluted, compared to $0.54 in the previous quarter and $0.43 in the first quarter of 2005.

Oilfield Services revenue of $3.71 billion increased 4% sequentially and 34% year-on-year. Pretax business segment operating income of $949 million increased 11% sequentially and 70% year-on-year.

WesternGeco revenue of $530 million increased 14% sequentially and 40% year-on-year. Pretax business segment operating income of $158 million increased 44% sequentially and 149% year-on-year.

On April 20, 2006, Schlumberger and Baker Hughes signed an agreement pursuant to which Schlumberger will acquire Baker Hughes' 30% minority interest in WesternGeco for $2.4 billion in cash.

Schlumberger Chairman and CEO Andrew Gould commented, "Activity increases and strong pricing momentum, particularly in North America, drove first-quarter results despite the severe curtailment of activity in Russia early in the year. Internationally by geographical area, Saudi Arabia, North Africa and the North Sea strengthened significantly as new projects and additional rigs were mobilized. Demand for new technology continued to increase with Drilling & Measurements and Well Services Technologies showing double-digit sequential growth.

WesternGeco reported another exceptional quarter with activity reaching new record levels driven by exploration demand as well as continued Q technology uptake. The industry exploration cycle that has now clearly begun is likely to be longer and more sustainable than anything seen in recent years. Targeted reservoirs are likely to be smaller and will be more complex, with ultimate recovery factors being key to project economics. Our decision to purchase the minority interest of WesternGeco reflects our confidence in the seismic market and our belief that greater reservoir complexity will require more accurate reservoir characterization. A closer integration between surface seismic and other Schlumberger measurement technologies will lead to substantial progress in eliminating reservoir uncertainties.

Our research and development capability was expanded during the quarter with the official opening of the Electrical Submersible Pump engineering and manufacturing center in Tyumen, West Siberia and the inauguration of the Schlumberger Dhahran Center for Carbonate Research in Saudi Arabia. Both facilities reflect our commitment to add and develop technology in local markets and in close cooperation with customers and academia.

While the exceptionally high gas storage levels following the mild winter may lead to some temporary slowing in gas activity in the U.S., the struggle to increase the world's margin of spare production capacity in the face of accelerating decline rates and growing geopolitical issues will continue to provide the fundamentals for strong sustainable growth."