The rapid expansion of North American exploration and production led to substantially improved oilfield services results during the first quarter. Schlumberger’s income, for example, rose 92% from 2000, while other providers, including Nabors Industries and Patterson Energy, also showed rapid growth.
New York-based Schlumberger, the second largest oil services company in the world, saw its earnings climb to $261 million, or 45 cents per share, up from $136 million, or 24 cents from first quarter 2000. First Call/Thomson Financial had predicted earnings of 41-46 cents a share. Its first quarter operating revenue was up 36% from 2000, standing at $2.91 billion, and 13% higher than the fourth quarter.
Schlumberger’s core oilfield services unit, second only to Dallas-based Halliburton, benefited from a growing surge in North American oil and gas drilling activity, said CEO Euan Baird.
“The continued surge in North American activity coupled with the start of growth elsewhere, is clearly reflected in the results of oilfield services this quarter,” said Baird. “These bullish trends appear set to continue unless a global economic slowdown reduces growth in oil demand.” (Halliburton will release its first quarter earnings report on Wednesday.)
In North America alone, Schlumberger saw revenues rise 81% to $924 million, and its pretax operating income more than tripled to $226 million, up 267%. Year-over-year revenue growth in North America was led by “strong double-digit growth in all product segments” except its integrated project management, which it said would remain flat. Sequential revenue growth was led by WesternGeco, and contributions from wireline, drilling and measurements and well services.
WesternGeco is a seismic venture created last year by Schlumberger and Baker Hughes, which combined their seismic acquisition assets, data processing assets, and multi-client seismic libraries and other assets of their existing subsidiaries Western Geophysical and GECO-Prakla (see NGI, June 6, 2000).
In its North American resource management services unit, Schlumberger’s first quarter revenue increased 57%, driven by increased communication module sales and automated meter-reading fees. Its Centron meter shipments, mostly to PECO Energy Co.’s automated meter reading project, accounted for an improvement in electricity metering revenue, with orders up 30% from a year ago.
For Houston-based Nabors Industries, its first quarter earnings were pushed by a demand for its drilling rig fleet and services. It earned 51 cents per share, setting a quarterly record for net income of $124 million. First quarter 2000 earnings were 12 cents a share on $33.2 million. First Call analysts had predicted Nabors’ earnings would be 45 cents a share.
Nabors operates and markets 500 land drilling rigs and 740 workover and servicing rigs worldwide, including 43 offshore platforms, 13 jackups and three barges in the Gulf of Mexico.
“This quarter’s results represent a major increase over our highest ever quarter both in terms of operating profit and earnings per share,” said Nabors CEO Gene Isenberg. “Our returns on capital are increasing rapidly, having reached 20% in March, which approximates 1997’s peak period.” While international land operations were flat, Isenberg noted that Nabors’ Lower 48 unit “posted substantial gains…as did our Canadian and U.S. land well servicing operations.”
He also said there were “significant but smaller gains in our Alaskan and marine transport businesses…with seasonally strong construction activity on the North Slope.” Isenberg said the “upward trend is likely to endure for quite some time, as our North American land businesses continue to see strong demand.”
Snyder, TX-based Patterson Energy, which provides domestic land-based drilling services to independent oil and gas companies, reported its net income increased 67% from 2000 to $20.5 million, or 52 cents a share. Earnings for the first quarter stood at $44.9 million versus $10.3 million for the same period of 2000, and up from $30.2 million for the fourth quarter.
“We are very pleased with the company’s performance,” said CEO Cloyce A. Talbott. He said the company had been able to activate three more drilling rigs since year-end, “increasing our marketable fleet to 141 rigs.” The company’s current average rig utilization rate is approximately 84%.
Patterson currently owns 152 drilling rigs, with 141 now marketable. Its drilling operations are centered in Texas, New Mexico, Utah, Oklahoma and Louisiana.
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