Schlumberger Announces Third-Quarter 2009 Results

http://www.businesswire.com/news/home/20091023005088/en

HOUSTON--(Business Wire)--
Schlumberger Limited (NYSE:SLB) today reported third-quarter revenue of $5.43
billion versus $5.53 billion in the second quarter of 2009, and $7.26 billion in
the third quarter of 2008.

Income from continuing operations attributable to Schlumberger was $787
million-a decrease of 4% sequentially, excluding $207 million of charges in the
second quarter of 2009, and 48% lower year-on-year. Diluted earnings-per-share
from continuing operations was $0.65 versus $0.68, excluding charges of $0.17
per share in the previous quarter, and $1.25 in the third quarter of 2008.

Oilfield Services revenue of $4.95 billion was flat sequentially but down 22%
year-on-year. Pretax segment operating income of $1.04 billion was up 2%
sequentially but down 39% year-on-year.

WesternGeco revenue of $463 million was down 17% sequentially and 48%
year-on-year. Pretax segment operating income of $61 million was down 37%
sequentially and 83% year-on-year.

Schlumberger Chairman and CEO Andrew Gould commented, "Oilfield Services revenue
was flat with the second quarter as increases in both North and South America
offset a further decline in the Middle East and Asia. As a result of this,
coupled with the implementation of cost-cutting programs earlier in the year,
overall margins slightly increased.

At WesternGeco, sequential revenue declines were due to lower Multiclient
revenues in the quarter and the rollover of Marine contracts from higher-priced
legacy backlog into new lower-priced activity. These factors resulted in lower
margins.

Our outlook for the remainder of 2009 assumes a continued modest recovery in
North American gas drilling but no significant improvement in service pricing.
Overseas, while rig activity is stabilizing, seasonal factors and pricing
concessions made in the first half year that are still being implemented leave
some risk of further small revenue declines. At WesternGeco, improvement will
depend on the level of fourth-quarter multiclient sales.

Looking further ahead, we said in our second-quarter outlook that the shape of
the economic recovery beyond 2009 and the subsequent recovery in oil and gas
demand remained the determining factors for future activity increases. Since
then, indications of inventory rebuilding across many industries together with
help from government stimuli have helped to strengthen demand for both oil and
gas. While uncertainties remain, notably the transition from current stimuli to
industrial and consumer demand and the extent to which the recovery will be
limited by high unemployment, the demand for oil and gas will increase somewhat
over the coming months.

As a result, we see continuing stabilization of activity around the world.
However, this will not be uniform across either geographies or for services by
commodity type.

We consider that world gas markets are oversupplied and will remain so for some
time absent any strong recovery in industrial demand. Both new LNG capacity
coming on stream, as well as ample storage and pent-up supply in North America,
will serve to keep prices and activity low. In North America we feel the current
slight recovery in drilling is fragile and not likely to significantly improve
service activity and pricing until late 2010.

For oil, the current robust price will lead to operators maintaining their
spending levels, and this, coupled with the lowering of their cost structures,
may produce some modest increases in activity. We see continued strength in
deepwater areas and some increases in selected land markets. We also feel that a
more robust commodity price will lead to some increase in seismic activity,
although new marine capacity will continue to depress pricing.

The worst, provided the economy continues to show signs of recovery, is behind
us."

Other Event:

On September 8, 2009, Schlumberger issued $450 million of Guaranteed Notes due
2013 at an interest rate of 3.0%. The proceeds from this issuance were used to
refinance existing debt obligations.

Consolidated Statement of Income

(Stated in millions, except per share amounts)

Third Quarter Nine Months
For Periods Ended September 30 2009 2008 2009 2008

Revenue $ 5,430 $ 7,259 $ 16,958 $ 20,295
Interest and other income, net (1) 74 107 211 306
Expenses
Cost of revenue (2) 4,122 4,967 13,019 13,934
Research & engineering 198 208 585 597
Marketing 22 23 67 71
General & administrative 128 150 390 434
Interest 54 61 169 189
Income from Continuing Operations before taxes 980 1,957 2,939 5,376
Taxes on income (2) 191 418 595 1,104
Income from Continuing Operations 789 1,539 2,344 4,272
Discontinued Operations - - - 38
Net Income 789 1,539 2,344 4,310
Net Income attributable to noncontrolling interests (2 ) (13 ) (6 ) (25 )
Net Income attributable to Schlumberger (2) $ 787 $ 1,526 $ 2,338 $ 4,285

Schlumberger amounts attributable to:
Income from Continuing Operations $ 787 $ 1,526 $ 2,338 $ 4,247
Discontinued Operations - - - 38
Net Income $ 787 $ 1,526 $ 2,338 $ 4,285

Diluted Earnings Per Share of Schlumberger:
Income from Continuing Operations $ 0.65 $ 1.25 $ 1.93 $ 3.46
Discontinued Operations - - - 0.03
Net Income (3) $ 0.65 $ 1.25 $ 1.93 $ 3.50

Average shares outstanding 1,200 1,199 1,198 1,197
Average shares outstanding assuming dilution 1,218 1,225 1,214 1,229

Depreciation & amortization included in expenses (4) $ 613 $ 583 $ 1,848 $ 1,656

1) Includes interest income of:
Third Quarter 2009 - $15 million (2008 - $31 million)
Nine Months 2009 - $51 million (2008 - $93 million)

2) See page 7 for details of charges.

3) Amounts may not add due to rounding.

4) Including Multiclient seismic data cost.

Condensed Consolidated Balance Sheet

(Stated in millions)

Sept. 30, Dec. 31,
Assets 2009 2008
Current Assets
Cash and short-term investments $ 4,228 $ 3,692
Other current assets 9,154 9,294
13,382 12,986
Fixed income investments, held to maturity 625 470
Fixed assets 9,610 9,690
Multiclient seismic data 285 287
Goodwill 5,296 5,189
Other assets 3,877 3,472

$ 33,075 $ 32,094

Liabilities and Equity
Current Liabilities
Accounts payable and accrued liabilities $ 4,734 $ 5,319
Estimated liability for taxes on income 929 1,007
Bank loans and current portion of long-term debt 879 1,597
Convertible debentures 321 -
Dividend payable 250 252
7,113 8,175
Convertible debentures - 321
Other long-term debt 4,313 3,372
Postretirement benefits 1,293 2,369
Other liabilities 892 923
13,611 15,160
Equity 19,464 16,934

$ 33,075 $ 32,094

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 Net
Debt follow:

(Stated in millions)

Nine Months 2009
Net Debt, January 1, 2009 $ (1,129 )
Net income 2,344
Depreciation and amortization 1,848
Non-cash postretirement benefits curtailment charge 135
Excess of equity income over dividends received (54 )
Stock-based compensation expense 139
Increase in working capital requirements (552 )
Capital expenditure (1,719 )
Multiclient seismic data capitalized (150 )
Dividends paid (758 )
Proceeds from employee stock plans 156
Business acquisitions (475 )
Pension plan funding (865 )
Other 486
Translation effect on net debt (66 )
Net Debt, September 30, 2009 $ (660 )

Components of Net Debt Sept. 30, Dec. 31,
2009 2008
Cash and short-term investments $ 4,228 $ 3,692
Fixed income investments, held to maturity 625 470
Bank loans and current portion of long-term debt (879 ) (1,598 )
Convertible debentures (321 ) (321 )
Other long-term debt (4,313 ) (3,372 )
$ (660 ) $ (1,129 )

Business Review

(Stated in millions)

Third Quarter Nine Months
2009 2008 % chg 2009 2008 % chg
Oilfield Services
Revenue $ 4,953 $ 6,356 (22 )% $ 15,349 $ 18,027 (15 )%
Pretax Operating Income $ 1,042 $ 1,699 (39 )% $ 3,320 $ 4,905 (32 )%

WesternGeco
Revenue $ 463 $ 892 (48 )% $ 1,573 $ 2,239 (30 )%
Pretax Operating Income $ 61 $ 355 (83 )% $ 212 $ 748 (72 )%

Pretax operating income represents the segments` income before taxes and
noncontrolling interests. The pretax operating income excludes such items as
corporate expenses and interest income and interest expense not allocated to the
segments as well as the charges described on page 7, amortization of certain
intangible assets, interest on postretirement medical benefits and stock-based
compensation costs.

Charges

In addition to financial results determined in accordance with generally
accepted accounting principles (GAAP), this Third-Quarter 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:

( Stated in millions, except per share amounts )

Second Quarter 2009
Pretax Tax Noncont. Net Diluted Income Statement
Interest EPS Classification
Income from Continuing Operations $ 767 $ 152 $ (2 ) $ 613 $ 0.51
attributable to Schlumberger
Add back charges:
- Workforce reduction 102 17 - 85 0.07 Cost of revenue
- Postretirement benefits curtailment 136 14 - 122 0.10 Cost of revenue
Income from Continuing Operations $ 1,005 $ 183 $ (2 ) $ 820 $ 0.68
attributable to Schlumberger,

before charges

There were no charges in either the first or third quarters of 2009 or the first
nine months of 2008.

Oilfield Services

Third-quarter revenue of $4.95 billion was flat sequentially as certain
geographic strengths were balanced by weaker pricing. Revenue was 22% lower
year-on-year. In North America, the positive impact of a recovery in rig count
in Canada following the spring break-up was offset primarily by a slowdown in
the US Gulf of Mexico GeoMarket* due to operator caution during the hurricane
season and by continuing pricing erosion in the US Land GeoMarket.
Internationally, Latin America revenue increased with the finalization of
certain contracts in Venezuela/Trinidad & Tobago and higher Integrated Project
Management (IPM) activity in Mexico/Central America, but these increases were
offset by lower Middle East & Asia revenue due to reduced overall activity and
the effects of weaker pricing. Europe/CIS/Africa revenue was flat as the
positive effects of the strengthening of local currencies against the US dollar
and high product sales in North Africa were offset by reductions in activity in
the West & South Africa, North Sea and Libya GeoMarkets. Across the Areas,
revenue increases in IPM, Testing Services and Well Services were primarily
offset by revenue declines in Completions, Drilling & Measurements and Wireline
Technologies.

Third-quarter pretax operating income of $1.04 billion was 2% higher
sequentially, but 39% lower year-on-year. Pretax operating margin increased to
21.0% as improvements in North America and Latin America were offset by modest
declines in Europe/CIS/Africa and Middle East & Asia.

In September, Schlumberger and National Oilwell Varco formed a joint venture to
provide high-speed drill-string telemetry systems to improve the efficiency and
safety of oil and gas operations. The IntelliServ joint venture is expected to
accelerate development and delivery of intelligent drilling solutions through
the expanded use of the IntelliServ Broadband Network, a patented technology
that provides high resolution data in real time to and from the bottom of oil
and gas wells as they are being drilled. IntelliServ also will provide
along-string evaluation services that will enable real-time monitoring of
drill-string conditions, and an unlimited ability to actuate downhole tools on
demand. The current speed of 57,600 bits per second is up to 20,000 times faster
than the transmission speed that is available using conventional mud-pulse
technology.

In Saudi Arabia, Schlumberger announced the opening of a new reservoir
completions manufacturing center in Dammam Industrial City. Representing an
investment of $25 million, the new center houses a team of design and
manufacturing engineers specialized in the production of downhole reservoir
completions equipment. The center also provides a collaborative environment in
which joint oil company and Schlumberger teams can develop and manufacture
completions solutions for application across Saudi Arabia and the Middle East.
The new center also represents a further step in Schlumberger infrastructure
investment in the area.

Recent contract awards demonstrated the value of Schlumberger technology
leadership and operational differentiation. These included an award in Denmark
for Maersk Oil for open-hole wireline operations under high-pressure,
high-temperature conditions; in Russia for Arcticgas, a SeverEnergia company,
for a series of services north of the Arctic Circle; in West Africa for subsea
completion installations, particularly in Equatorial Guinea; and in the North
Sea for Apache for electrical submersible pump systems based on excellent
service delivery.

North America

Revenue of $823 million was unchanged sequentially but 45% lower year-on-year.
Pretax operating income of $27.6 million was up 253% sequentially but fell 91%
year-on-year.

Sequentially, revenue in Canada increased on a muted post spring break-up
recovery in rig count but this was offset by decreased revenue in the US
GeoMarkets. In the US Gulf of Mexico GeoMarket revenue was impacted by a
slowdown in activity due to operator caution during the hurricane season and by
a further decrease in shelf drilling activity as a result of continued
uneconomic natural gas prices. US Land GeoMarket revenue decreased as an
improvement in oil-related activity was more than offset by pricing erosion in
the early part of the quarter. The Alaska GeoMarket also recorded lower
sequential revenue due to a slowdown in activity for seasonal rig maintenance
and operator budget constraints.

Pretax operating margin increased 240 basis points (bps) sequentially to 3.4%
primarily due to the increased activity in Canada, which was partially offset by
weaker activity in the US Gulf of Mexico and Alaska GeoMarkets.

In the US Gulf of Mexico, Schlumberger Well Services coiled-tubing and pumping
services were deployed with CoilTOOLS* coiled-tubing intervention tools and
solutions to plug and abandon a series of eight wells for Chevron without lost
time and with the minimum number of runs. An integrated approach to the
operations reduced cost and provided a single point of contact that enabled the
customer to spend time on planning other well intervention activities.

In US Land, advanced Schlumberger Wireline probe technology was used on the
PressureXpress* reservoir pressure-while-logging service for Ultra Resources to
acquire formation pressures in the Pinedale Anticline in tight reservoirs with
porosities less than 8% and mobilities inferior to 0.01md/cp. This success has
convinced the customer to continue the technique as part of their reservoir
characterization program.

Elsewhere in the US Gulf of Mexico, a Schlumberger Wireline walkaway vertical
seismic profile was run for Anadarko on the Samurai prospect on Green Canyon
Block 432. The 50,000-ft survey line was completed in 21 hours, with no lost
time, and resulted in more than 25,260 shot records. Processing was completed in
less than a week and confirmed a suspected fault located in a zone of lost
circulation at 29,315 ft. The results are now being used to plan a sidetrack to
the well to delineate and appraise this discovery.

In a Devon Energy Barnett Shale well in US Land, Schlumberger Wireline Sonic
Scanner* and Platform Express* services were run using XTRA* tractor technology
to acquire logging information for integration with other data in the
Schlumberger Petrel* workflow process. This approach to guiding subsequent
hydraulic fracture stage design will integrate StimMAP* hydraulic fracture
evaluation results to help optimize well completion.

A successful coiled-tubing logging campaign was completed by Schlumberger for
Mariner Energy in the US Gulf of Mexico. Successful integration of production
services technology from Well Services, CoilTOOLS and Wireline successfully
cleaned and logged two wells producing saltwater from an unidentified zone which
subsequently hindered production due to the salt deposits in the wellbore. Rapid
assembly of downhole tools using VANTAGE* logging-head technology helped achieve
significant time savings with consequent operating cost reductions compared to
conventional coiled-tubing logging methods.

In US Land, advanced Schlumberger Drilling & Measurements technologies including
the EcoScope* multifunction system, the SonicVISION* sonic-while-drilling
service and the PowerDrive* rotary-steerable system have been deployed in 11
wells in various shale plays including the Woodford, Eagleford, Haynesville and
Marcellus formations. As well as being used to place wells in the ideal part of
the reservoirs and maximize completion and stimulation efficiencies, the
technologies saved three days' worth of rig time per well in data acquisition
and drilled the lateral sections two days faster than conventional motor
technology.

Latin America

Revenue of $1.07 billion was 8% higher sequentially but 6% lower year-on-year.
Pretax operating income of $197 million was 12% higher sequentially but 14%
lower year-on-year.

Sequentially, Venezuela/Trinidad & Tobago GeoMarket revenue increased as
finalization of certain contracts resulted in the recognition of deferred
revenue in addition to revenue from current-quarter activities related to these
contracts. Mexico/Central America GeoMarket revenue was also higher due to the
start-up of the ATG III contract and increased activity on other IPM projects.

Pretax operating margin improved 70 bps sequentially to 18.3% primarily due to
the positive impact of cost management in the Venezuela/Trinidad & Tobago
GeoMarket and increased IPM activity in Mexico/Central America. These increases
were partially offset by a decrease in Brazil due primarily to start-up costs
for new contracts.

In East Venezuela, north of Monagas, close cooperation between Petroleos de
Venezuela S.A. (PDVSA) and Schlumberger led to a more than 12-fold production
increase on a well perforated by Schlumberger and cleaned-up using fluid
developed by the INTEVEP-PDVSA research organization. Schlumberger PURE* and
PowerJet Omega* perforating technologies were deployed, and in combination with
the clean-up fluid led to significant skin reduction and flow profile
improvement.

Elsewhere in Venezuela, new Schlumberger Wireline formation testing technology
led to successful pressure testing for PDVSA on a key well on Lake Maracaibo
where pressure data had previously proved impossible to obtain. Two target zones
in the well-one highly fractured, the other less laminated-required different
approaches but the combination of Schlumberger dual packer module technology
with Quicksilver Probe* contamination-free sampling allowed both zones to be
tested in a single run.

In Mexico, Schlumberger Drilling & Measurements new technology continued to be
deployed with the use of EcoScope* multifunction logging-while-drilling services
that allowed Pemex to make real-time decisions based on petrophysical analyses
while drilling. In a well on the Tupilco field, real-time information helped
stop unnecessary pilot well and horizontal section drilling immediately after
data showed that reservoir conditions were not as expected.

Also in Mexico, Schlumberger Drilling & Measurements continued to set new
drilling records for Pemex. PowerDrive vorteX* technology enabled increased rate
of penetration and saved time in several different areas. In the Cantarell
field, performance gains of 80% over conventional technologies were recorded and
on the Burgos project in the Cuitlahuac field the technology saved one day in
drilling in the 12 ¼"-hole section. Further deployment is expected on ATG
integrated projects and in other regions to improve performance.

In Colombia, Schlumberger IPM operational planning and execution practices led
to an average 40% reduction in operating time, a 20% saving in cost and a
net-to-gross-pay zone ratio of 98% over the 11 wells of a continuing horizontal
well campaign for Mansarovar in the Girasol field. Close integration between
customer and Schlumberger teams led to optimal technology selection while
planning and execution using Schlumberger Drilling & Measurements PeriScope*
well-placement technology added to operational performance.

In September, Schlumberger announced the signing of a joint cooperation
agreement with the Universidade Federal do Rio de Janeiro to build a key
international research center on the university`s campus. The Schlumberger
Brazil Research and Geosciences Center will focus on research and development
activities in the deep-water pre-salt environment, with emphasis on the
development of geosciences software for the exploration and production sector;
new technologies to meet reservoir challenges in pre-salt environments; and the
creation of a geophysical processing and interpretation Center of Excellence
covering time-lapse seismic and combined electromagnetic and seismic
measurements.

Europe/CIS/Africa

Revenue of $1.78 billion was flat sequentially but 18% lower year-on-year.
Pretax operating income of $422 million was 2% lower sequentially and 33% lower
year-on-year.

Sequentially, the strengthening of local currencies against the US Dollar
increased Area revenue by 2%. In addition, North Africa GeoMarket revenue
increased on high Testing Services product sales and stronger IPM activity while
the Nigeria & Gulf of Guinea GeoMarket grew primarily on strong demand for Well
Services technologies. However, these increases were partially offset by lower
revenue in the West & South Africa GeoMarket from reduced activity that
primarily affected Well Services operations and by a decrease in the North Sea
GeoMarket resulting from lower rig count and pricing that mostly impacted
Drilling & Measurements services. Libya GeoMarket revenue fell on reduced demand
for Testing Services and Well Services technologies as well as for Completion
products.

Pretax operating margin slipped 53 bps sequentially to 23.7% as increased North
Africa GeoMarket revenue and a more favorable revenue mix in Russia were
insufficient to offset lower activity and a less favorable revenue mix in the
North Sea and West & South Africa GeoMarkets.

In the UK sector of the North Sea, Schlumberger Artificial Lift was awarded a
contract covering all Apache North Sea electrical submersible pump systems. The
award follows excellent service delivery on previous contracts and includes
bonus payments for run-life performance improvement.

Also in the UK North Sea, the Schlumberger Well Testing Cleanphase* well-test
separator with SmartWeir* technology enabled Total to recover costly
high-density completion fluid while permitting safe, efficient and
environmentally-responsible fluids disposal. SmartWeir technology handles high
fluid volumes, optimizes water retention time, and does not plug with debris.

In Denmark, Maersk Oil & Gas awarded all open-hole wireline services to
Schlumberger based on technology and high-pressure, high-temperature data
acquisition capabilities.

In Norway, Schlumberger Information Solutions designed and implemented a
fit-for-purpose, fully managed petrotechnical office installation for Polskie
Górnictwo Naftowe i Gazownictwo Norway that included Petrel, ECLIPSE*, and
Interactive Petrophysics* software applications together with corresponding
infrastructure, data management services and collaboration and visualization
technology. The installation enabled the customer`s geologists and geophysicists
to become quickly operational with access to formatted regional data ready for
interpretation.

In Equatorial Guinea, Schlumberger was awarded a major subsea completions
contract by Noble Energy for work on 10 wells with the possibility of additional
development in the area. The contract covers installation of the upper and lower
well completions-including reservoir monitoring and completions technologies-on
the Aseng development project. The award was based on technology availability
and operational support.

In Nigeria, Schlumberger Completions commissioned intelligent well completions
on three deep-water in-fill wells for Eni-NAE. Multiple Schlumberger
technologies were deployed during operations including tubing-conveyed PowerJet
Omega perforating charges, tubing-retrievable hydraulic flow control valves,
Quantum* packers and wire-wrap screens. The project included a triple-zone
intelligent well combined with sand control systems in a subsea completion, with
the well considered to be a best-in-class example by the customer.

In Uganda, the Schlumberger Wireline MDT* Modular Formation Dynamics Tester dual
packer technology was run in cased hole for Tullow Oil on the Ngassa-2 well
after previous attempts in open hole had proved unsuccessful. The successful
operation minimized risk to secure 14 samples and enabled the customer to
discover a previously unknown major pay zone.

In Russia, Arcticgas, a SeverEnergia company, awarded Schlumberger a series of
contracts covering wireline logging, well perforating and well testing services
for deployment on both newly drilled and existing wells on Arcticgas fields
north of the Arctic Circle near Novy Urengoy.

In Sakhalin, East Russia, Schlumberger Wireline technology was deployed on two
wells for Venineft LLC as part of an exploration program on the Veninsky Block.
The combination of the latest-generation Wireline skid-mounted logging unit with
advanced technology logging tools delivered high-quality data with no lost time.

Also in East Russia, collaboration between Schlumberger Wireline and
Schlumberger Data & Consulting Services led to success in providing Gazflot with
reliable reservoir characterization results from the Kirinskaya-2 well drilled
to further evaluate reserves on the Kirinsky Block in Sakhalin. The geology of
the area required close cooperation between Gazflot and Schlumberger to define
and deploy an advanced logging program on TLC* Tough Logging Conditions System
equipment including CMR* Combinable Magnetic Resonance, PressureXpress formation
testing, ECS* Elemental Capture Spectroscopy and APS* Accelerator Porosity Sonde
technologies.

Middle East & Asia

Revenue of $1.23 billion decreased 6% sequentially and 17% year-on-year. Pretax
operating income of $391 million decreased 7% sequentially and 26% year-on-year.

Sequentially, revenue in the East Asia GeoMarket fell from completion of several
exploration-related campaigns with consequent lower demand for Wireline, Testing
Services and Well Services technologies. Qatar GeoMarket revenue decreased
primarily due to the completion of offshore projects that resulted in reduced
demand for all Technologies. Gulf GeoMarket revenue fell on lower rig count that
led to a decrease in Drilling & Measurements and Wireline services. The East
Mediterranean revenue dropped as the result of lower land activity that reduced
demand primarily for Well Services technologies. These decreases however were
partially offset by an increase in the Arabian GeoMarket revenue on strong
gas-related activity that resulted in higher demand for Well Services and
Testing Services technologies. Weaker pricing also contributed to lower revenue.

Pretax operating margin decreased by just 32 bps sequentially to 31.7% as the
impact of the stronger activity in the Arabian GeoMarket and a more favorable
revenue mix in the Indonesia GeoMarket almost offset the lower activity in the
East Asia, Qatar, Gulf and East Mediterranean GeoMarkets as well as the effects
of weaker pricing across the Area.

Offshore Australia, a complete Schlumberger Drilling & Measurements Scope
Family* advanced logging-while-drilling tool string was run in combination with
PowerDrive X5* rotary-steerable technology in a horizontal well for Woodside
Energy. Real-time operational support from Data & Consulting Services
petro-technical experts working in the client office helped ensure successful
penetration of two reservoir sands across a complex faulted geological block
with the StethoScope* formation pressure-while-drilling data confirming the
sands to be separate reservoir compartments. Further use of the technology is
planned in a subsequent well.

In Malaysia, Schlumberger Well Services CoilFLATE* high-pressure,
high-temperature inflatable packer technology was successfully used on a
two-well water shut-off campaign for Petronas Carigali Sdn Bhd. On the same
wells, the Testing Services eFire-CT* coiled-tubing electronic firing head
system was used to perforate a new reservoir. The combination of these two
technologies led to a threefold production increase over that originally
expected.

Also in Malaysia, following several successful deployments of Schlumberger Neon*
opto-electric permanent monitoring cable technology offshore, Schlumberger
Completions successfully installed a unique multi-gauge Neon system with four
next-generation permanent quartz gauges and double-ended distributed temperature
sensor fibers. The system allows for gas-lift optimization while providing flow
contribution measurements from the four reservoir sands in addition to a number
of critical production diagnostics. This is a critical reservoir management
technology installed to monitor enhanced oil recovery injection on the Bokor
field managed by Schlumberger IPM.

In Brunei, Schlumberger was awarded an additional campaign by Brunei Shell
Petroleum using Well Services coiled-tubing Catenary* technology. This campaign
was added to the Shell production enhancement projects after the first campaign
deploying the technology demonstrated that wells on remote, small platforms
could be accessed for fast and cost effective production enhancement projects.

In Oman, Schlumberger Subsea was awarded a pipeline surveillance contract using
INtegriti* distributed fiber-optic technology. The new INtegriti system, based
on measurements of vibration and temperature, will be deployed for detection of
leaks and third-party damage.

Also in Oman, SIS was awarded a contract by Petroleum Development Oman (PDO) for
deployment of an integrated information management system based on Schlumberger
Osprey* Operations Manager software. The system includes drilling information
management and a well engineering collaborative work environment. This
combination is designed to help PDO with performance improvement goals across
their fleet of 37 rigs. The system will monitor performance trends versus
established performance indicators linking them to systematic engagement with
the rig teams to drive a continuous improvement process.

In Saudi Arabia, a series of Schlumberger Well Services ACTive* real-time
coiled-tubing technologies was deployed as part of the stimulation treatment on
a dual lateral natural gas well completed in open hole. The technologies enabled
positive lateral identification, facilitated fluid movement monitoring and
helped customized placement of the stimulation diversion and acid systems in the
main intervals of interest. Resulting production exceeded initial expectations.

WesternGeco

Third-quarter revenue of $463 million decreased 17% sequentially and 48%
year-on-year. Pretax operating income of $61 million decreased 37% sequentially
and 83% year-on-year.

Sequentially, Multiclient revenue decreased mostly on reduced sales in North
America and the North Sea. Marine revenue fell primarily as the result of weaker
pricing and the completion of two large contracts. Land revenue was also lower
due to project delays in the Middle East and Africa. Data Processing revenue was
flat versus the previous quarter.

Pretax operating margin fell 421 bps sequentially to 13.1% primarily as a result
of the lower Multiclient sales and Land project delays.

During the quarter, the WesternGeco Magellan left the shipyard in Spain on its
maiden voyage to begin operations. The 12-streamer vessel is the world`s second
seismic X-Bow design to sail, following the WesternGeco Columbus earlier in
2009. The new design provides improved transit speeds, lower power consumption,
reduced emissions and lower levels of pitching and vibration for a friendlier
work environment.

WesternGeco recently completed the first ever wide-azimuth survey in Angolan
waters-ahead of schedule and within budget. The vessels Western Trident, Geco
Diamond and Gilavar performed the survey and their crews and shore-side
management were commended by BP for their professional approach, timely delivery
of service, excellent data quality and outstanding performance.

Following the feasibility study completed for Apache on the Forties field in the
UK North Sea, WesternGeco was awarded a 4D Q-Marine* seismic survey on the
field. The contract includes data processing of the new survey as well as the
reprocessing of several other existing datasets and is the first Q-Marine award
by Apache.

In response to significant customer interest, WesternGeco began acquisition of
multiclient surveys E-Octopus VIII and E-Octopus IX in early September. Located
in the highly prospective Alaminos Canyon, Keathley Canyon and East Breaks areas
of the US Gulf of Mexico, the surveys cover more than 450 Outer Continental
Shelf (OCS) blocks and target some of the most challenging subsalt imaging areas
of the OCS.

Operations commenced on a land 4D baseline survey for Chevron Australia during
the quarter. The survey is a mixture of onshore and transition zone work within
a Class A nature reserve on Barrow Island. The results of this and future
surveys will be used to monitor the underground injection of carbon dioxide from
gas produced from the Gorgon field and injected into a formation more than 2,000
m beneath Barrow Island.

In seismic data processing, the proven results generated by WesternGeco 3D GSMP*
Generalized Surface Multiple Prediction and Reverse Time Migration (RTM)
workflows resulted in the award of three significant contracts in North America
during the quarter.

WesternGeco Electromagnetics completed a multiclient project in the Potiguar
Basin, offshore Brazil. The project comprised integrated interpretation of 2D
prestack depth-migrated seismic data, Petromod* petroleum systems modeling, and
analysis of satellite oil-seep information to generate prospects. An accumulated
total of approximately 1,300 sq km of Controlled Source Electromagnetics (CSEM)
data were then acquired over these prospects and inverted to create resistivity
datasets. The resulting geophysical datasets have been integrated into a Petrel
database to be offered as part of a multiclient package.

WesternGeco Electromagnetics was awarded a contract to conduct the first CSEM
survey in the Turkish sector of the Black Sea. The survey, to be acquired by
Toisa Vigilant, is the largest volume of CSEM work tendered and awarded in the
industry to date.

About Schlumberger

Schlumberger is the world`s leading supplier of technology, integrated project
management and information solutions to customers working in the oil and gas
industry worldwide. Employing approximately 77,000 people representing over 140
nationalities and working in approximately 80 countries, Schlumberger provides
the industry`s widest range of products and services from exploration through
production.

Schlumberger Limited has principal offices in Paris, Houston and The Hague and
reported revenues of $27.16 billion in 2008. For more information, visit
www.SLB.com.

*Mark of Schlumberger

Mark of National Oilwell Varco

Notes

Schlumberger will hold a conference call to discuss the above announcement on
Friday, October 23, 2009. The call is scheduled to begin at 8:00 am US Central
Daylight Time (CDT), 9:00 a.m. Eastern Daylight Time (EDT). To access the call,
which is open to the public, please contact the conference call operator at
+1-877-209-9920 within North America, or +1-612-332-7515 outside of North
America, approximately 10 minutes prior to the call`s scheduled start time. Ask
for the "Schlumberger Earnings Conference Call." At the conclusion of the
conference call an audio replay will be available until November 23, 2009 by
dialing +1-800-475-6701 within North America, or +1-320-365-3844 outside of
North America, and providing the access code 111676.

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.

Schlumberger Limited
Malcolm Theobald - Vice President of Investor Relations
Robert Bergeron - Manager of Investor Relations
Office +1 (713) 375-3535
investor-relations@slb.com

Copyright Business Wire 2009