Schlumberger Ltd. on Friday reported that 2Q2010 revenue in its North American operations, which totaled $1.11 billion, surged 36% higher from the year-ago period and was up 8% sequentially, boosted by U.S. land services.
Worldwide, profits in 2Q2010 jumped to $818 million (68 cents/share), versus $613 million (51 cents) a year earlier. Revenue increased 7.4% to $5.94 billion.
The U.S. Land GeoMarket segment surged 35% from the first three months of this year "driven by a 13% increase in [the] rig count, high service intensity in unconventional oil and gas reservoirs and continued pricing improvements for well services technologies," said CEO Andrew Gould. He and his management team spoke with financial analysts during a conference call.
However, North American revenues were impacted by lower revenue from the Canadian market following the seasonal spring break-up, as well as a drop-off in U.S. Gulf of Mexico revenue "as a consequence of the moratorium on deepwater drilling," said the CEO.
"In the deepwater Gulf of Mexico we are not planning for any resumption of drilling activity this year," Gould said. "In deepwater activity elsewhere we have not seen, nor do we expect to see, any significant delays or program reductions as a result of the U.S. Gulf of Mexico drilling moratorium. Internationally. operators, contractors and regulatory bodies have stepped up maintenance and verification of key well control equipment and procedures but have not restricted actual drilling activity."
At Schlumberger, "we believe that the contribution of deepwater discoveries has been, and will remain, very significant to future hydrocarbon production," he told analysts. "We therefore welcome the current efforts to better understand and control the risks associated with these types of operations. While additional control and oversight will undoubtedly add cost, we expect this will be offset in the long run by improvements in operating procedures and technology."
The recovery in world demand for oil "has been reasonably robust and current forecasts for the coming year remain consistent with slowly increasing levels of exploration and production activity," he said.
However, "natural gas economics remain more challenging, as supply of both LNG [liquefied natural gas] and unconventional gas in the U.S. would appear to continue to outstrip the demand recovery. Overall, therefore, we see the current trend of a slow but sure recovery in activity as likely to continue without change until we have a clearer view of the sustainability of the recovery in the world economy."
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