Despite harsh winter weather in North America, customer demand in North America’s unconventional plays lifted Schlumberger Ltd.’s first quarter profits, as well as those of Weatherford International Ltd., the companies said Thursday.

Schlumberger, the world’s largest oilfield services contractor, in the past year has turned more attention to the North American market, where Halliburton Co. has long been the leader. Halliburton reported a solid performance during 1Q2011 on the strength of its North American operations (see Daily GPI, April 19).

Schlumberger CEO Andrew Gould told analysts during a conference call that poor winter conditions in parts of North America waylaid some operations during the quarter, but customer demand continues to surge.

The company’s reservoir production segment “continued to make strong gains in North America in both activity and pricing,” he said. “The first quarter also saw continued strong sales of new technology,” with the company’s hydraulic fracturing services “being in particular demand. There was also significant success in international unconventional gas activity.”

Global explorers have increased spending, in part because the energy industry is attempting to make up for lost production in the Middle East, where civil unrest has disrupted some oil and gas drilling activities. There also is an increased demand for gas and fuel oil in Japan, said Gould.

“The absence of oil production from Libya, combined with continued recovery in demand, has reduced the world’s spare capacity significantly,” he told analysts. “The call on both fuel oil and natural gas will increase as Japan recovers. The exploration and production industry has begun to respond and, absent a further leg to the recession, will have to substantially increase investment to maintain a comfortable supply cushion in an era of political uncertainty.

“We anticipate that high oil prices will continue to support additional drilling in the liquid-rich plays in North America.”

In addition, he said “the upturn in deepwater activity more generally is becoming increasingly visible, and the rate of permitting in the U.S. Gulf of Mexico is accelerating…These activities will progressively mobilize over the next six months and the projected increases will reach levels where resources will become constrained. Schlumberger is ready for this scenario with new technology, equipment and people.”

Schlumberger’s profits in the first quarter reached $944 million (69 cents/share), from $672 million (56 cents) in the year-ago quarter. Excluding one-time items, the company earned 71 cents/share, well ahead of Wall Street’s expectations that it would earn 76 cents. Revenue jumped 56% in the latest period to $8.72 billion.

Weatherford, the world’s fourth-largest oilfield services provider, also was lifted by higher profits in its North America segment, which offset weakness overseas. International operations accounted for more than 60% of the company’s revenue.

The company’s quarterly revenue in North America during the first three months of this year increased 8% sequentially and 53% from the year-ago quarter. Canadian activity was “strong” but “colder winter temperatures subdued progress in the United States,” it said. Weatherford reported a quarterly profit of $59.2 million (8 cents/share), versus a year-ago loss of $68.4 million (minus 9 cents). Revenue increased 23% to $2.86 billion.

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