Schlumberger Q4 Up to $6.25 Billion Over Previous Year
Schlumberger Limited reported 2007 revenue of $23.28 billion versus $19.23 billion in 2006.
Net income, excluding charges and credits, reached $5.16 billion, representing diluted earnings-per-share of $4.18 versus $3.04 in 2006.
Fourth-quarter revenue reached $6.25 billion versus $5.93 billion in the third quarter of 2007, and $5.35 billion in the fourth quarter of 2006.
Net income in the fourth quarter, excluding a $17 million after-tax gain on the sale of certain workover rigs in the quarter, reached $1.37 billion — an increase of 1% sequentially and 21% year-on-year. Diluted earnings-per-share, excluding this gain, were $1.11 versus $1.09 in the previous quarter, and $0.92 in the fourth quarter of 2006.
Oilfield Services revenue of $5.44 billion increased 6% sequentially and 18% year-on-year. Pretax segment operating income of $1.54 billion increased 2% sequentially and 16% year-on-year.
WesternGeco revenue of $798 million increased 1% compared to the prior quarter and increased 11% year-on-year. Pretax segment operating income of $272 million decreased 11% sequentially but increased 4% year-on-year.
Schlumberger Chairman and CEO Andrew Gould commented, "Schlumberger revenues in 2007 grew by 21% driven by strong demand for oilfield services particularly in the Eastern Hemisphere and Latin America. All Technologies showed double-digit improvement, with Drilling & Measurements, Well Testing and Integrated Project Management recording the highest overall growth rates.
In the fourth quarter strong sequential revenue growth contributed significantly to overall performance, but a less favorable Oilfield Services revenue mix, lower pricing in US land operations, and a number of exceptional and seasonal weather effects led to less than satisfactory margins.
In addition, strong WesternGeco Multiclient sales failed to offset lower Marine utilization for the quarter due to several vessels dry docking or seasonally transiting to new contracts with consequent margin decline.
During the second half of 2007, IPM mobilized and started 17 drilling rigs for the Mezosoico and Alianza projects in Mexico. The fourth-quarter results included the expensing of significant startup costs associated with both projects.
However, with the exception of pricing for certain Oilfield Services activities on land in North America, the events in the quarter were largely seasonal or reflected the startup cost of new IPM activities and do not represent a change in the underlying trends.
Shorter-term growth presents a more complex picture than the immediate past. Natural gas drilling in North America is not expected to vary greatly in the absence of any severe weather in the remaining winter months. High utilization of the existing offshore rig fleet and limited new builds entering the market during the year will not only limit growth, but also make activity vulnerable to operating efficiency. However, growth in land activity outside North America will remain strong, while seismic exploration services worldwide will remain in high demand both on land and offshore as the industry gears up for the expanding exploration cycle.
Within this context, technology that assists our customers in mitigating risk in exploration and development projects, increasing recovery factors and improving operational efficiency will remain at a premium.
In the longer term however, current levels of drilling are insufficient to meaningfully slow decline rates, improve reservoir recovery or add sufficient new production capacity. The explosion in exploration licenses awarded in the last three years, the continual expansion of the number of new offshore rigs being ordered for delivery through and beyond the end of the decade, and the industry-wide, as well as our own plans to increase both capex and research and development spend are clear indicators of future growth. It is our view that only a global economic recession that lowers demand can flatten this trend.
In line with this overall positive outlook, I am pleased to announce that the Board of Directors has increased the quarterly dividend for the fourth consecutive year."
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