LONDON--(Business Wire)--Schlumberger Limited (NYSE:SLB) today 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 Results
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."
Other Events
-- Schlumberger acquired Eastern Echo Holding plc, a Dubai-based marine
seismic company, to boost plans to meet demand for market-leading
WesternGeco Q-Marine* seismic technology services. Eastern Echo has a
total of six high-performance 3D seismic vessels on order. These
high-capacity vessels are ideally suited for the exploration and
development markets of the future.
-- Schlumberger acquired an additional 5.5% in Framo Engineering AS to take
its holding to a majority of 52.75%. A Norwegian-based company, Framo
provides multiphase booster pumps, flow metering equipment and swivel
stack systems. Schlumberger will begin consolidating the results of
Framo in the first quarter of 2008.
-- As part of the previously announced 40 million-share repurchase program
approved by the Board of Directors in the second quarter of 2006,
Schlumberger repurchased 5.8 million shares of common stock at an
average price of $95.67 for a total of $557 million in the quarter.
During 2007, Schlumberger repurchased 16.3 million shares of common
stock at an average price of $82.94 for a total of $1.35 billion. As of
December 31, 2007, Schlumberger had remaining authorization to
repurchase 10.1 million shares of common stock.
-- The Board of Directors of Schlumberger approved a 20% increase in the
quarterly dividend. The dividend, which will increase to 21 cents per
share of outstanding common stock, is payable on April 4, 2008 to
stockholders of record on February 20, 2008.
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*T
Consolidated Statement of Income
Fourth Quarter Twelve Months
--------------------- ------------------------
For Periods Ended
December 31 2007 2006 2007 2006
----------------------------------------------------------------------
Revenue $6,247,713 $5,349,868 $23,276,542 $19,230,478
Interest and other
income (1)(3) 142,810 86,935 431,495 286,716
Expenses
Cost of goods sold
and services (3) 4,217,436 3,577,381 15,481,746 13,182,753
Research &
engineering (3) 196,520 169,482 728,491 619,316
Marketing 22,960 26,230 81,545 75,704
General &
administrative 141,672 132,732 517,248 456,347
Interest 71,519 63,300 274,558 234,916
----------------------------------------------------------------------
Income before taxes and
minority interest 1,740,416 1,467,678 6,624,449 4,948,158
Taxes on income (3) 357,203 337,064 1,447,933 1,189,568
----------------------------------------------------------------------
Income before minority
interest 1,383,213 1,130,614 5,176,516 3,758,590
Minority interest (3) - 2 - (48,739)
----------------------------------------------------------------------
Net Income (3) $1,383,213 $1,130,616 $ 5,176,516 $ 3,709,851
----------------------------------------------------------------------
Diluted Earnings Per
Share (3) $ 1.12 $ 0.92 $ 4.20 $ 3.01
Average shares
outstanding 1,194,905 1,178,347 1,187,944 1,181,683
Average shares
outstanding assuming
dilution 1,239,999 1,238,047 1,238,675 1,242,196
Depreciation &
amortization included
in expenses (2) $ 554,417 $ 439,000 $ 1,953,987 $ 1,561,410
----------------------------------------------------------------------
1) Includes interest income of:
Fourth Quarter 2007 - $48 million (2006 - $27 million)
Twelve Months 2007 - $162 million (2006 - $117 million)
2) Including Multiclient seismic data costs
3) See page 6 for details of Charges & Credits
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Condensed Balance Sheet
(Stated in
thousands)
Assets Dec. 31, 2007 Dec. 31, 2006
----------------------------------------------------------------------
Current Assets
Cash and short-term investments $ 3,169,033 $ 2,998,873
Other current assets 7,886,350 6,186,789
----------------------------------------------------------------------
11,055,383 9,185,662
Fixed income investments, held to
maturity 440,127 153,000
Fixed assets 8,007,991 5,576,041
Multiclient seismic data 182,282 226,681
Goodwill 5,142,083 4,988,558
Other assets 3,025,506 2,702,196
----------------------------------------------------------------------
$27,853,372 $22,832,138
----------------------------------------------------------------------
Liabilities and Stockholders' Equity
----------------------------------------------------------------------
Current Liabilities
Accounts payable and accrued
liabilities $ 4,550,729 $ 3,848,017
Estimated liability for taxes on
income 1,071,888 1,136,529
Bank loans and current portion of
long-term debt 1,318,227 1,321,529
Convertible debentures 353,408 -
Dividend payable 210,599 148,720
----------------------------------------------------------------------
7,504,851 6,454,795
Convertible debentures 415,897 1,424,990
Other long-term debt 3,378,569 3,238,952
Postretirement benefits 840,311 1,036,169
Other liabilities 775,975 257,349
----------------------------------------------------------------------
12,915,603 12,412,255
Minority interest 61,881 -
Stockholders' Equity 14,875,888 10,419,883
----------------------------------------------------------------------
$27,853,372 $22,832,138
----------------------------------------------------------------------
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Net Debt
"Net Debt" represents gross debt less cash, short-term investments and
fixed income investments, held to maturity. Management believes that
Net Debt provides useful information regarding the level of
Schlumberger indebtedness by reflecting cash and investments that
could be used to repay debt. Details of the Net Debt follow:
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(Stated in
millions)
Twelve Months 2007
--------------------------------------------------------
Net Debt, January 1, 2007 $ (2,834)
Net income 5,177
Depreciation and amortization 1,954
Excess of equity income over dividends
received (189)
Charges & credits, net of taxes (17)
Increase in working capital
requirements (552)
US qualified pension plan contribution (150)
Capital expenditure (1) (3,191)
Dividends paid (771)
Proceeds from employee stock plans 622
Stock repurchase program (1,355)
Eastern Echo acquisition (699)
Other business acquisitions (286)
Conversion of debentures 656
Other (94)
Translation effect on net debt (128)
-------------
Net Debt, December 31, 2007 $ (1,857)
=============
Components of Net Debt Dec. 31, 2007 Dec. 31, 2006
----------------------------------------------------------------------
Cash and short-term investments $ 3,169 $ 2,999
Fixed income investments, held to maturity 440 153
Bank loans and current portion of long-
term debt (1,318) (1,322)
Convertible debentures (769) (1,425)
Other long-term debt (3,379) (3,239)
------------- -------------
$ (1,857) $(2,834)
============= =============
(1) Including Multiclient seismic data expenditure
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Charges & Credits
In addition to financial results determined in accordance with
generally accepted accounting principles (GAAP) this Fourth-Quarter
and Full-Year 2007 Earnings Press Release also includes non-GAAP
financial measures (as defined under SEC Regulation G). The following
is a reconciliation of these non-GAAP measures to the comparable GAAP
measures:
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( Stated in millions except per share amounts )
Fourth Quarter 2007
--------------------------------------------
Pretax Tax Min Int Net
-------------- --------- ------- ---------
Net Income $1,740.4 $ 357.2 $ - $1,383.2
Add back Charges &
Credits:
- Gain on sale of
workover rigs (24.5) (7.1) - (17.4)
-------------- --------- ------- ---------
Net Income before charges
& credits $1,715.9 $ 350.1 $ - $1,365.8
============== ========= ======= =========
Twelve Months 2007
--------------------------------------------
Pretax Tax Min Int Net
-------------- --------- ------- ---------
Net Income $6,624.4 $1,447.9 $ - $5,176.5
Add back Charges &
Credits:
- Gain on sale of
workover rigs (24.5) (7.1) - (17.4)
-------------- --------- ------- ---------
Net Income before charges
& credits $6,599.9 $1,440.8 $ - $5,159.1
============== ========= ======= =========
Twelve Months 2006
--------------------------------------------
Pretax Tax Min Int Net
-------------- --------- ------- ---------
Net Income $4,948.2 $1,189.6 $(48.7) $3,709.9
Add back Charges &
Credits:
- WesternGeco in-process
R&D charge 21.0 - - 21.0
- Loss on sale of
investments to
fund the WesternGeco
transaction 9.4 - - 9.4
- WesternGeco visa
settlement 9.7 (0.3) (3.2) 6.8
- Other in-process R&D
charges 5.6 - - 5.6
-------------- --------- ------- ---------
Net Income before charges
& credits $4,993.9 $1,189.3 $(51.9) $3,752.7
============== ========= ======= =========
( Stated in millions except per share amounts )
Fourth Quarter 2007
---------------------------------------------
Diluted Income Statement
EPS Classification
------------------- -------------------------
Net Income $ 1.12
Add back Charges &
Credits:
- Gain on sale of
workover rigs (0.01) Interest and other income
-------------------
Net Income before charges
& credits $ 1.11
===================
Twelve Months 2007
---------------------------------------------
Diluted Income Statement
EPS (*) Classification
------------------- -------------------------
Net Income $ 4.20
Add back Charges &
Credits:
- Gain on sale of
workover rigs (0.01) Interest and other income
-------------------
Net Income before charges
& credits $ 4.18
===================
Twelve Months 2006
---------------------------------------------
Diluted Income Statement
EPS (*) Classification
------------------- -------------------------
Net Income $ 3.01
Add back Charges &
Credits:
- WesternGeco in-process
R&D charge 0.02 Research & engineering
- Loss on sale of
investments to
fund the WesternGeco
transaction 0.01 Interest and other income
- WesternGeco visa Cost of goods sold and
settlement 0.01 services
- Other in-process R&D
charges - Research & engineering
-------------------
Net Income before charges
& credits $ 3.04
===================
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(*) May not add due to rounding.
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Business Review
(Stated in millions)
Fourth Quarter Twelve Months
-------------------- ----------------------
% %
2007 2006 chg 2007 2006 chg
------ ------ ---- ------- ------- ----
Oilfield Services
-------------------------
Revenue $5,445 $4,628 18% $20,306 $16,763 21%
Pretax Operating Income $1,535 $1,328 16% $ 5,959 $ 4,644 28%
WesternGeco
-------------------------
Revenue $ 798 $ 722 11% $ 2,963 $ 2,476 20%
Pretax Operating Income $ 272 $ 262 4% $ 1,060 $ 812 31%
*T
Pretax operating income represents the segments' income before taxes and
minority interest. The pretax operating income excludes corporate expenses,
interest income, interest expense, amortization of certain intangible assets,
interest on postretirement medical benefits, stock-based compensation costs and
the Charges & Credits described on page 6, as these items are not allocated to
the segments.
Oilfield Services
Full-year 2007 revenue of $20.31 billion increased 21% versus 2006 driven by
growth of 31% in the Middle East & Asia Area, 30% in Europe/CIS/Africa and 29%
in Latin America. Revenue in North America remained essentially flat. Pretax
operating income of $5.96 billion in 2007 was 28% higher than 2006. Pretax
operating margins of 29.3% improved 164 basis points (bps) in 2007 versus 2006.
Fourth-quarter revenue of $5.44 billion was 6% higher sequentially and 18%
higher year-on-year. Sequential revenue increases were highest in the Middle
East & Asia Area led by the Arabian, Qatar, China/Japan/Korea and India
GeoMarkets*, followed by the Latin America Area where growth was strongest in
the Mexico/Central America, Latin America South and Peru/Colombia/Ecuador
GeoMarkets. In the Europe/CIS/Africa Area, increases were led by the North Sea,
Caspian and Continental Europe GeoMarkets. Growth was also recorded in North
America, led primarily by the Canada and US Gulf Coast GeoMarkets. Among
Schlumberger Technologies, Artificial Lift Systems, Completions Systems and
Schlumberger Information Solutions (SIS) registered strong growth due to
seasonal end-of-year product sales.
Fourth-quarter pretax operating income of $1.54 billion increased 2%
sequentially and 16% year-on-year. Sequentially, growth was driven by demand for
higher-margin Drilling & Measurements services in the Middle East & Asia Area
and by increased product sales in Artificial Lift Systems in Europe/CIS/Africa
and Middle East & Asia, and by Completions Systems product sales in the Middle
East & Asia and Latin America. However, these increases were offset by pricing
erosion for well stimulation related activities on land in the US; exceptional
weather-related and operational delays in Mexico/Central America; and weather
and seasonal effects in the US West, North Sea and East Russia GeoMarkets. These
events resulted in an overall pretax operating margin of 28.2%.
North America
Revenue of $1.33 billion increased 3% sequentially but decreased 7%
year-on-year. Pretax operating income of $338 million decreased 3% sequentially
and 23% year-on-year.
Sequentially, revenue in the Canada GeoMarket continued to grow led by demand
for Well Services and Wireline technologies. In the US Gulf Coast GeoMarket,
activity partially recovered from the slowdown experienced during the hurricane
season of the third quarter with higher demand for Wireline, Well Testing and
Well Services technologies. In addition, higher SIS product sales were recorded
across the Area. This performance was largely offset by the continuing pricing
erosion in well stimulation related activities in the US land GeoMarkets,
seasonal land access constraints in the west, and by lower activity in Alaska.
Pretax operating margin for the Area declined sequentially to 25.4% due to the
lower pricing environment for well stimulation related services in the US land
and Canada GeoMarkets, as well as lower operating leverage in Alaska and Canada.
This was partially offset by a more favorable activity mix and higher operating
efficiency in the US Gulf Coast GeoMarket together with the Area-wide SIS
product sales.
Schlumberger worked with Trilogy Energy Trust, an operator of mature assets in
the Western Canadian Sedimentary Basin, to address production declines and
significantly improve recovery in a complex, naturally fractured carbonate reef
reservoir. This was accomplished by integrating the near-wellbore analysis of
Schlumberger Artificial Lift Systems with the reservoir engineering expertise of
the Data & Consulting Services (DCS) group. Using SIS Petrel*
seismic-to-simulation software, the DCS team evaluated the petrophysical,
geological and reservoir information to construct a detailed geological model
that was integrated with a simulation model. This collaborative workflow
assisted Trilogy Energy to identify nearly 20% additional oil in place.
In the US Gulf of Mexico, Schlumberger Wireline acquired a complex walkaway
seismic profile for BP to image a salt face in the vicinity of the well. A total
of 1,450 shot points along two 50,000 ft lines was acquired using a VSI*
Versatile Seismic Imager tool. The complexity of the job required sophisticated
navigation and source control that contributed to the overall success of the
operation.
Working in Canada's technologically challenging and fast-growing heavy-oil
sector, Schlumberger Testing completed for Suncor the first-ever steam-assisted
gravity drainage (SAGD) operation using the unique Vx* advanced multiphase
flowmeter in an environment where flowline surface temperatures could exceed 200
degC. The technology enabled real-time production optimization of this
multiphase flow where steam, bitumen and water are mixed with a high content of
sour gas, demonstrating that multiphase Vx technology can be applied in various
types of fluids from bitumen to gas condensate.
On land in the US, Schlumberger Wireline Flow Scanner* production logging
technology continued its introduction as part of the Scanner* family of advanced
wireline logging measurements during the quarter. Newfield Exploration Company
used the Flow Scanner tool on electric-line coiled-tubing in four horizontal
wells to save significant workover expense by eliminating the need to replace
the tubing string prior to logging. The Flow Scanner tool was also deployed for
another operator in Eastern Oklahoma in a horizontal well in the Woodford Shale
unconventional gas play to indicate water entries that were rendering the well
uneconomical. The measurements indicated that 75% of the water was coming from
perforations that were producing only 20% of the natural gas. The operator was
subsequently able to plug this zone thus eliminating the majority of the water
production with only a minimal drop in gas production.
Interest and activity in AbrasiFRAC* technology -- a member of the Contact*
family of staged fracturing and completion services -- continued to strengthen
during the quarter as operators across the Area deployed the technology on
various stimulation operations. In one instance on land in the US, an operator
used AbrasiFRAC to individually treat all productive sands in a single operation
in the well that resulted in a 50% production increase. Elsewhere, AbrasiFRAC
was deployed for another operator in a reservoir consisting of many thin,
gas-bearing sands alternating with water-bearing sands. The technology enabled
the customer to place the treatment more accurately and avoid fracture growth in
the water-bearing sands resulting in reduced water production and in one case
increased gas production from 1.2 MMscf/d to 3 MMscf/d. Use of this technique
also resulted in a significant completion cost reduction from conventional
techniques normally used in this field.
North Texas operators in the Barnett Shale continue to see the benefits of
StimMAP* LIVE, the first real-time microseismic hydraulic fracturing monitoring
service. With its ability to visualize the fracture network as it propagates,
the technology enabled one operator to successfully control the fracturing
process by diverting the fracture to increase the volume of reservoir in contact
with the well -- a measure vital to improving production. Results of this
treatment are encouraging with an estimated ultimate recovery increase of 11%.
Latin America
Revenue of $943 million increased 9% sequentially and 40% year-on-year. Pretax
operating income of $208 million increased 2% sequentially and 47% year-on-year.
Sequential revenue growth was recorded in all GeoMarkets primarily driven by IPM
activities in Mexico/Central America, Peru/Colombia/Ecuador and
Venezuela/Trinidad & Tobago. Increased demand for Well Testing technologies and
higher sales of Artificial Lift Systems, Completions Systems and SIS products in
Latin America South, together with higher sales of Artificial Lift Systems and
Completions Systems products in the Mexico/Central America and
Peru/Colombia/Ecuador GeoMarkets, also contributed to growth.
Pretax operating margin declined sequentially to 22.1% primarily due to the
activity mix in the Mexico/Central America GeoMarket, which was affected by
higher IPM project startup and third-party costs as well as by flooding in the
south and operational delays offshore. A lower mix of higher-margin Drilling &
Measurements activity in Venezuela/Trinidad & Tobago and higher-margin Wireline
technology in Peru/Colombia/Ecuador also contributed to this result.
In Colombia, the National Hydrocarbon Agency awarded SIS a two-year contract to
operate the National Data Center. The center is the cornerstone for effective
international promotion of the Colombian oil and gas industry and represents the
digital management of more than 75 years of industry logs, seismic maps,
contracts and other critical information.
Using the intelligent field development concept, Petrobras Energia Ecuador
implemented a model based on the SIS Avocet* Integrated Asset Modeler platform.
As a result of this project, it was possible to complete an evaluation of
alternatives to increase overall field production that led to a successful Well
Services hydraulic fracturing campaign on 10 wells. The result was a net field
production increase of 20%.
Schlumberger Completions and Artificial Lift Systems pioneered Dual Concentric
Completions (DCC) technology to produce non-commingled fluids from two different
zones in wells in Ecuador Block 15. Ten wells have already been equipped with
DCC systems and the technology has enabled the operator, Petroecuador subsidiary
UB-15, to double the wells' production and eliminate the cost of the extra wells
and conventional completion systems that would otherwise have been needed to
meet the field production goal.
In another new technology introduction for UB-15, Schlumberger Testing and
Artificial Lift Systems deployed the tubing-conveyed perforating gun-drop system
MAXR with the installation of the electrical submersible pump to enable
virtually damage-free perforating with immediate well clean-up and no deferred
production. PowerJet Omega* ultra-deep penetrating charges were used to further
improve performance.
Elsewhere in Ecuador, PeriScope* well-placement technology was run on a
Repsol-YPF horizontal well to navigate 1,000 ft in the 15-ft thick Upper U sand.
This is the first time a horizontal well has been drilled in this formation in
Ecuador. The well had an initial water cut of only 8%.
In Brazil, Schlumberger signed a three-year contract to provide exploration and
development wireline logging services for Petrobras. The contract includes an
extension option while allowing for deployment of the latest Schlumberger
Wireline technologies.
Europe/CIS/Africa
Revenue of $1.77 billion increased 4% sequentially and 23% year-on-year. Pretax
operating income of $493 million was flat sequentially but increased 28%
year-on-year.
Sequentially, the North Sea GeoMarket recorded the highest revenue growth driven
by increased demand for Wireline and Well Services technologies together with
higher Artificial Lift Systems and SIS product sales. Higher demand for Drilling
& Measurements technologies in the Caspian GeoMarket, increased Artificial Lift
Systems product sales in North Russia, and high demand for Drilling &
Measurements, Well Services and Well Testing technologies in Continental Europe
also contributed to growth. This performance was partially offset by the
seasonal slowdown in Sakhalin and subdued activity in Nigeria.
Pretax operating margin declined sequentially to 27.9% due to the seasonal
slowdown in Sakhalin, and to weather-related delays which led to reduced demand
for higher-margin Drilling & Measurements and Well Testing technologies in the
North Sea. A less favorable activity mix in the West & South Africa and North
Africa GeoMarkets also contributed to this result.
In Russia, Yuganskneftegaz, a subsidiary of Rosneft, awarded Schlumberger a
one-year contract for 287 fracturing treatments in the Khanty-Mansisk region of
Western Siberia. Operations will use the latest Schlumberger high-efficiency
fracturing fleets currently being deployed.
In Italy, STOGIT, the subsidiary of Eni responsible for natural gas storage,
awarded Schlumberger a contract for drilling, logging-while-drilling and well
placement services on approximately 68 wells over the next 2 1/2 years. Key
technologies to be deployed include the PowerDrive X5* rotary-steerable system,
the EcoScope* logging-while-drilling platform for environmentally sensitive
operations, PeriScope well-placement technology, and InterACT* real-time
well-site data transmission. The new GeoVISION* resistivity technology for 6-in.
diameter wells will also be run to provide high-resolution images for structural
definition.
Offshore West Africa, Schlumberger Wireline ran a successful dual-CHDT* Cased
Hole Dynamics Tester tool string with the TLC* Tough Logging Conditions system
to acquire accurate pressures in a highly deviated well for Total. The deepest
test on this extended-reach well was at a measured depth of 8,100 m. Total
required the data to verify depletion predictions in the reservoir model. With
the industry's only dual-CHDT technology, Schlumberger is uniquely capable of
performing such complex wireline operations.
Offshore Angola, Schlumberger Wireline MDT* Modular Formation Dynamics Tester
technology was deployed for Chevron in a highly deviated well to obtain
uncontaminated samples for the first time from a reservoir in which numerous
attempts had proven unsuccessful using standard technologies.
The Aberdeen Operation Support Center (OSC) performed its first real-time
well-testing job in the North Sea. The collaborative OSC workflow allowed AGR
Petroleum Services and Schlumberger personnel to save significant rig time and
cost. Data quality assurance and real-time interpretation during the test were
key factors to ensuring success. In addition, the Aberdeen OSC implemented
remote measurement-while-drilling services on a Shell Exploration & Production
Europe platform in the North Sea thus increasing efficiency and allowing
expertise of senior shore-based personnel to be shared.
In the Norwegian sector of the North Sea, StatoilHydro used a combination of
Schlumberger Wireline UltraSonic Imager* and Isolation Scanner* technologies on
more than 25 wells that were candidates for abandonment and sidetracking to
identify swollen shale sections behind casing and qualify them as annular
barriers. Proper abandonment procedures require sufficient annular barriers to
be in place to avoid reservoir leakage, and with the lack of sufficient
traditional cement barriers these wells often need costly remedial work. This
novel application eliminated the need for additional cement barriers and enabled
StatoilHydro to make substantial savings.
Middle East & Asia
Revenue of $1.35 billion increased 10% sequentially and 30% year-on-year. Pretax
operating income of $473 million increased 8% sequentially and 40% year-on-year.
The sequential growth in revenue resulted from high demand for Drilling &
Measurements and Wireline technologies together with higher Completions Systems,
Artificial Lift Systems and SIS product sales in the Arabian GeoMarket; higher
demand for exploration-related Drilling & Measurements technologies and for
Artificial Lift Systems products in Qatar; increased demand for Drilling &
Measurements and Well Testing services in China/Japan/Korea; and higher
deepwater exploration-driven demand for Wireline and Drilling & Measurements
technologies together with higher SIS product sales in India.
The pretax operating margin of 35% resulted from the more favorable activity mix
in the Arabian and India GeoMarkets being offset by reduced demand for
higher-margin Wireline, Well Services and Well Testing technologies in the
Indonesia, Thailand/Vietnam and Australia/Papua New Guinea GeoMarkets.
In Saudi Arabia, Schlumberger secured a significant contract award for Reslink
ResFlow*, a simple, reliable and robust passive inflow control completion
technology. Test installations conducted by Saudi Aramco in sandstone and
carbonate reservoirs showed excellent correlation between the production logging
program and simulations developed by Saudi Aramco and Schlumberger, as well as
improved wellbore cleanup. The successful testing campaign resulted in approval
of the ResFlow passive inflow completion system and subsequent contract award.
Saudi Aramco also evaluated the benefits of StageFRAC* technology -- part of the
Contact family of staged fracturing and completion services -- on two deep gas
wells in the Khuff formation. Initial production results from both wells
indicated significant production rate increases. Based on long-term production
forecasts, it is estimated that ultimate recovery will be increased
substantially over the economic life of the well. These results have led Saudi
Aramco to plan further deployment of StageFRAC technology in horizontal gas
wells.
Elsewhere in Saudi Arabia, Schlumberger Well Services ran the first AbrasiFRAC
job on coiled-tubing using a new slotting tool developed as part of a rapid
response project created in partnership with Saudi Aramco. The job was run in a
deep, vertical, cased-hole natural gas exploration well and injectivity tests
confirmed the success of the operation in the very tight formation. A subsequent
fracture job increased production ten-fold.
In Indonesia, Schlumberger Well Services deployed new FiberFRAC* fiber-based
fracturing technology with PrimeFRAC* polymer fracturing fluid in a
low-permeability natural-gas reservoir for Vico. The new technology combination
limited fluid loss, controlled fracture-height growth and retained high fracture
conductivity to increase production levels by factors of three to five. The
results were particularly successful given the high fracture gradients and
severely depleted reservoir pressures in the field.
Elsewhere in Indonesia, Schlumberger Wireline enabled TATELY, a Malaysian E&P
company, to evaluate a complex reservoir and design a cased-hole formation
interval test in a high-temperature well. The service included fluid analysis to
determine formation fluid properties and composition downhole in real time using
a Wireline MDT tool, equipped with high-temperature packers and the In-Situ
Fluid Analyzer. This unique tool combination and the support provided by
Schlumberger DCS at the wellsite allowed the job data to be transmitted and
processed for real-time pressure and sampling interpretation, enabling TATELY to
make the decision to complete the well.
In Malaysia, Schlumberger DCS completed a review of the Erb West field for
Petronas Carigali Sdn. Bhd. The project used SIS Petrel workflow software for 3D
modeling and the ECLIPSE* reservoir simulator for dynamic modeling and history
matching over 20 years of production using data from 52 completion strings, 17
of which are horizontal. Results of the study provided immediate production
enhancement solutions that boosted field production by 6%. New data from the
Wireline Flow Scanner imager tool were acquired in a number of the horizontal
wells and the project identified four potential reservoirs for development, and
25 new locations for in-fill drilling.
WesternGeco
Full-year 2007 revenue of $2.96 billion increased 20% versus 2006. Pretax
operating income of $1.06 billion in 2007 was 31% higher than 2006. Pretax
operating margin reached 35.8% -- an increase of 299 bps in 2007 versus 2006 --
demonstrating continued high vessel utilization, pricing increases in Marine and
accelerating demand for exploration-driven seismic services. Q-Technology*
revenue reached $1.14 billion, representing 38% of 2007 full-year revenue.
Fourth-quarter revenue of $798 million increased 1% over the prior quarter and
increased 11% compared to the same period last year. Pretax operating income of
$272 million decreased 11% sequentially but increased 4% year-on-year.
Sequentially, Multiclient revenue increased 83% due to higher sales in North
America, Africa and Asia. However, this increase was largely offset by a
decrease in Marine revenue due to vessel transits between projects, several
vessel dry docks, and lower vessel utilization. Overall vessel utilization in
2007 was 93%.
Pretax operating margin declined sequentially to 34.1% as the high-margin
Multiclient activity was more than offset by the lower Marine vessel
utilization.
Eni awarded WesternGeco two Q-Marine* acquisition and processing contracts over
their recently acquired acreage in Angola and Mozambique. The Angola survey will
cover a base area of at least 2,200 sq km -- with options to extend by a further
800 sq km -- and the Mozambique survey will cover an area of 1,040 sq km.
Following the successful 3D seismic survey acquired offshore Alaska in the
Chukchi Sea, WesternGeco used the marine vessel M/V Gilavar to complete the
first open-water towed-streamer 3D survey in the US sector of the Beaufort Sea
for Shell Offshore Inc.
In Egypt, Apache awarded WesternGeco an integrated Q-Land* single-sensor
technology acquisition and processing contract for 460 sq km in the Salloum, and
800 sq km in the West Ghazalat concessions.
WesternGeco completed a Controlled-Source ElectroMagnetics (CSEM) survey for Eni
offshore Norway using the CSEM vessel Toisa Valiant.
WesternGeco and TGS-NOPEC Geophysical Company ASA (TGS) signed a cooperative
agreement to acquire and process a minimum of 650 Outer Continental Shelf blocks
covering approximately 15,000 sq km of multiclient wide-azimuth (WAZ) 3D data in
the Mississippi Canyon and Atwater Valley areas of the Gulf of Mexico. Under
this agreement, WesternGeco and TGS will share project costs and revenues
equally. Q-Technology will be used for data acquisition and processing with the
surveys significantly complementing the WesternGeco library of multiclient WAZ
data. While both parties will market this product, TGS will be responsible for
sales. WesternGeco has acquired more than 950 Outer Continental Shelf blocks of
WAZ data since July 2006 and has an additional 1,300 blocks planned for 2008.
About Schlumberger
Schlumberger is the world's leading oilfield services company supplying
technology, information solutions and integrated project management that
optimize reservoir performance for customers working in the oil and gas
industry. The company employs more than 80,000 people of over 140 nationalities
working in approximately 80 countries. Schlumberger supplies a wide range of
products and services from seismic acquisition and processing; formation
evaluation; well testing and directional drilling to well cementing and
stimulation; artificial lift and well completions; and consulting, software, and
information management. In 2007, Schlumberger revenue was $23.28 billion. For
more information, visit www.SLB.com.
* Mark of Schlumberger
Notes
Schlumberger will hold a conference call to discuss the above announcement on
Friday, January 18, 2008, at 9:00 a.m. Eastern, 8:00 a.m. Central (2:00 p.m.
London time/3:00 p.m. Paris time). To access the call, which is open to the
public, please contact the conference call operator at +1-888-428-4480 within
North America or +1-651-291-5254 outside of North America approximately 10
minutes prior to the call's scheduled start time. Ask for the "Schlumberger
Earnings Conference Call." A replay of the conference call will be available
through February 15, 2008, by dialing +1-800-475-6701 within North America or
+1-320-365-3844 outside of North America, and providing the access code 899456.
The conference call will be webcast simultaneously at www.SLB.com/irwebcast on a
listen-only basis. Please log in 15 minutes ahead of time to test your browser
and register for the call. A replay of the webcast will also be available at the
same web site.
Supplemental information in the form of a question and answer document on this
press release and financial schedules are available at www.SLB.com/ir.
-0-
*T
Schlumberger Limited, Houston
Vice President of Investor Relations
Malcolm Theobald, +1-713-375-3535
or
Manager of Investor Relations
Debashis Gupta, +1-713-375-3535
investor-relations@slb.com
*T
Schlumberger Limited, Houston
Vice President of Investor Relations
Malcolm Theobald, +1-713-375-3535
or
Manager of Investor Relations
Debashis Gupta, +1-713-375-3535
investor-relations@slb.com
Copyright Business Wire 2008
