Orders and revenue during the first three months of the year increased year/year for Houston-based Baker Hughes, a GE company (BHGE), with international, offshore and the natural gas export market expected to improve the bottom line going forward.

CEO Lorenzo Simonelli on Tuesday said the company delivered a “solid” quarter on stabilizing global oil and gas markets, with the U.S. rig count declining slightly less than expected and on steady international activity.

In addition, the liquefied natural gas (LNG) market “is very active,” he said. “While the speed of the recovery varies across these markets, we see our company positioned to benefit from multiple growth drivers.”

BHGE’s LNG market outlook “is predicated upon the supply and demand fundamentals,” Simonelli said. “As we look out to 2030, we do not expect near-term challenges in LNG spot pricing to impact this outlook.”

To produce 550 million metric tons/year (mmty) by 2030, as many analysts are forecasting, “the industry will need to operate approximately 650 mmty of nameplate capacity. This represents significant growth from today's 380 mmty of the capacity.”

BHGE expects the plethora of final investment decisions for LNG projects this year will be “only the beginning of a substantial LNG project cycle, for which we are well positioned.”

The company booked $5.7 billion in orders during 1Q2019, up 9% year/year but down 17% sequentially with year/year growth in three of four segments. The sequential decrease was attributed to seasonality.

Stronger orders from a year ago were driven by the Oilfield Equipment (OFE), Oilfield Services (OFS), and Digital Solutions business segments, partially offset by a decline in Turbomachinery and Process Solutions (TPS) orders.

Equipment orders were up 17% and service orders increased 4%. The total book-to-bill ratio in the quarter was 1.0; the equipment book-to-bill ratio was 1.0.

In the OFS segment, “we saw typical seasonal declines in volume sequentially, and strong year/year growth across all product lines,” Simonelli said.

“In the quarter, we continued to execute in our core well construction product lines, and re-entered a number of markets globally by securing large, multi-year awards from customers.” The company remains focused on “re-gaining profitable share in critical markets and improving margins.”

The TPS segment secured contracts to provide equipment for the sanctioned Golden Pass LNG export facility on the Texas coast, which is sponsored by ExxonMobil Corp. and Qatar Petroleum. The company also was awarded a contract for BP plc’s Tortue Floating LNG project in West Africa.

“We remain at the forefront of technology and solutions for the LNG market and are well positioned as new projects are sanctioned,” Simonelli said. The “next wave of LNG projects” should be a positive for the company.

Overall, the strengthening international markets “will have the largest positive impact on our business, while operators in North America will continually re-evaluate their spending plans.”

Among the technology highlighted, BHGE said the latest line of drilling motors is helping operators drill “faster and longer laterals” in the Permian Basin. One customer used the Navi-Drill Duramax motor to drill 7,652 feet in 80 drilling hours, a 30% rate-of-penetration (ROP) improvement versus the offset well, saving the customer three days in rig time. The system has drilled 41 runs to date with ROP improvements averaging between 25-40% versus offset wells, BHGE noted.

Another customer working in the Gulf of Mexico deployed the AutoTrak rotary steerable system and drilled the longest slim hole side track in the region, it said.

Net income was $32 million (7 cents/share) in 1Q2019, versus $70 million (17 cents) a year ago and $131 million (28 cents) in 4Q2018. Revenue hit $5.6 billion, a 4% increase year/year but off 10% from 4Q2018.

BHGE posted negative cash flow at $184 million, with negative free cash flow of $419 million.