DENVER/BENGALURU (Oct 22): Top oilfield firm Schlumberger NV reported third-quarter (3Q) profit which beat Wall Street estimates on Friday and echoed a rival’s forecast for a 20% increase in North American spending next year, as producers capitalise on a rebound in crude prices.
Global oil prices have climbed nearly 64% since the start of 2021 to over US$85 a barrel on the back of a vaccine-fuelled demand recovery. The worldwide rig count was 1,448 at the end of 3Q, compared with 1,019 a year earlier, according to Baker Hughes data.
“The industry macro fundamentals have visibly strengthened this year, particularly in recent weeks — with demand recovery, oil and gas commodity prices at recent highs, low inventory levels, and encouraging trends in pandemic containment efforts,” Schlumberger chief executive officer Olivier Le Peuch said in a statement, adding he expects those conditions to materially drive investment over the coming years.
Le Peuch estimated North American capital spending would increase by roughly 20% next year, in line with a recent forecast from peer Halliburton. He expects international spending to see mid-teen growth.
Schlumberger reported net income of US$550 million, or 39 cents per share, for the quarter, edging past Wall Street estimates of 36 cents each, according to Refinitiv IBES. Revenue of US$5.8 billion fell short of analysts’ expectations of US$5.9 billion, but was up 11% year-over-year.
Schlumberger’s shares fell at the market open but recovered slightly after and were down 0.85% in early trading to US$34.01. They are up 55% year-to-date, outpacing gains over the same period by Baker Hughes and Halliburton.
Wall Street analysts said the results were positive, pointing to improved margins, which topped expectations and have expanded for five straight quarters.
“These results are a wonderful breath of fresh air,” analysts for investment firm Tudor, Pickering, Holt & Co wrote in a note. They called the start to oilfield earnings season “rough”, with Halliburton and Baker Hughes’ results snagged by Hurricane Ida-related disruptions and supply chain problems.
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