- Fourth-quarter revenue of $7.1 billion
increased 1% sequentially
- Fourth-quarter GAAP loss per share,
including charges of $0.42 per share, was $0.15
- Fourth-quarter earnings per share,
excluding charges was $0.27
- Fourth-quarter cash flow from
operations was $2.0 billion. Fourth-quarter free cash flow was $1.1
billion
- Full-year cash flow from operations was
$6.3 billion. Full-year free cash flow was $2.5 billion
- Quarterly cash dividend of $0.50 per
share approved
Schlumberger Limited (NYSE:SLB) today reported results for
full-year 2016 and the fourth quarter of 2016.
Full-Year Results
(Stated in millions, except per share amounts)
Twelve
Months Ended Change Dec. 31, 2016
Dec. 31, 2015
Year-on-year Revenue
$ 27,810 $
35,475
-22% Pretax operating income
$ 3,273 $
6,510
-50% Pretax operating margin
11.8 % 18.4
%
-658 bps Net income (loss) (GAAP basis)
$
(1,687 ) $ 2,072
n/m Net income, excluding
charges and credits*
$ 1,550 $ 4,290
-64%
Diluted EPS (loss per share) (GAAP basis)
$ (1.24
) $ 1.63
n/m Diluted EPS, excluding charges and
credits*
$ 1.14 $ 3.37
-66% *These are
non-GAAP financial measures. See section below entitled "Charges
& Credits" for details. n/m = not meaningful
Full-year 2016 revenue of $27.8 billion decreased 22%
year-on-year, despite three quarters of activity from the Cameron
Group that contributed $4.2 billion in revenue. Excluding Cameron,
consolidated revenue declined 34%.
Full-year 2016 pretax operating income of $3.3 billion,
including the $653 million contribution from the Cameron Group,
decreased 50% year-on-year. Consolidated margin fell 658 basis
points (bps) to 11.8%. Excluding Cameron, consolidated margin fell
727 bps to 11.1%.
Fourth-Quarter Results
(Stated in millions, except per share amounts)
Three
Months Ended Change Dec. 31, 2016
Sept. 30, 2016 Dec. 31, 2015
Sequential
Year-on-year Revenue
$ 7,107 $ 7,019 $ 7,744
1% -8% Pretax operating income
$ 810 $
815 $ 1,288
-1% -37% Pretax operating margin
11.4 % 11.6 % 16.6 %
-21 bps -523 bps
Net income (loss) (GAAP basis)
$ (204 ) $ 176
$ (1,016 )
n/m -80% Net income, excluding charges and
credits*
$ 379 $ 353 $ 819
7% -54%
Diluted EPS (loss per share) (GAAP basis)
$ (0.15
) $ 0.13 $ (0.81 )
n/m n/m Diluted EPS,
excluding charges and credits*
$ 0.27 $ 0.25 $ 0.65
8% -58% *These are non-GAAP financial
measures. See section below entitled "Charges & Credits" for
details. n/m = not meaningful
Schlumberger Chairman and CEO Paal Kibsgaard commented,
“Fourth-quarter sequential revenue growth of 1% was driven by
strong activity in the Middle East and North America, which was
largely offset by continued weakness in Latin America and seasonal
activity declines in Europe, CIS and Africa.
“Among the business segments, the fourth-quarter revenue
increase was led by the Production Group, which grew 5% due to
increased hydraulic fracturing activity in the Middle East and in
North America land. Reservoir Characterization Group revenue
increased 1% sequentially due to strong Testing & Process
activity in Kuwait that outweighed the seasonal decline in Wireline
activity in Norway and Russia. Drilling Group revenue was flat
sequentially as continued strong directional drilling activity in
North America land was offset by activity declines in
Europe/CIS/Africa and Middle East & Asia. Cameron Group revenue
was also flat sequentially, with growth in OneSubsea and Surface
Systems offset by reduced product sales from Valves &
Measurement and from a declining order backlog in Drilling
Systems.
“Pretax operating margin was essentially flat sequentially at
11.4% as margin improvements in the Production and Drilling Groups
were balanced by contractions in the Cameron and Reservoir
Characterization Groups. In recent quarters, we have managed to
stabilize our business from an activity and capacity standpoint,
and this has subsequently allowed us to refine and reduce our
support structure to reflect current activity and service pricing
levels. This has led us to record a $536 million restructuring
charge in the fourth quarter. We also recorded $139 million of
charges relating to the Cameron integration and a currency
devaluation loss in Egypt.
“We maintain our constructive view of the oil markets, as the
tightening of the supply and demand balance continued in the fourth
quarter, as seen by a steady draw in OECD stocks. This trend was
further strengthened by the December OPEC and non-OPEC agreements
to cut production, which should, with a certain lag, accelerate
inventory draws, support a further increase in oil prices, and lead
to increased E&P investments.
“We expect the growth in investments to initially be led by land
operators in North America, where continued negative free cash
flows seem less of a constraint, as external funding is readily
available and the pursuit of shorter-term equity value takes
precedence over full-cycle return on investment. E&P spending
surveys currently indicate that 2017 NAM E&P investments will
increase by around 30%, led by the Permian basin, which should lead
to both higher activity and a long overdue recovery in service
industry pricing.
“In the international markets, operators are more focused on
full-cycle returns and E&P investments are generally governed
by the operators’ free cash flow generation. Based on this, we
expect the 2017 recovery in the international markets to start off
more slowly, driven by the economic reality facing the E&P
industry. This will likely lead to a third successive year of
underinvestment, with a continued low rate of new project approvals
and an accelerating production decline in the aging production
base. These factors together are increasing the likelihood of a
significant supply deficit in the medium term, which can only be
avoided by a broad-based global increase in E&P spending, which
we expect will start unfolding in the later parts of 2017 and
leading into 2018.
“Against this backdrop and following nine consecutive quarters
of relentless workforce reductions, cost cutting, and restructuring
efforts, we are excited to restore focus on the pursuit of growth
and improving returns. As we navigated this downturn, we have
streamlined our cost and support structure, continued to drive the
underlying efficiency and quality of our business workflows,
expanded our offering through maintaining investments in R&E,
and made a series of strategic acquisitions. The combination of
these actions has enabled us to further strengthen our global
market position during the downturn, which will enable us to
maintain and extend our well established margin and earnings
leadership in both North America and in all parts of the
International markets going forward.
“While earnings growth continues to be a very important
financial driver for us, full-cycle cash generation is even more
critical, and here, we remain unique in the industry. Over the past
two years of this downturn, we have generated $7.5 billion in free
cash flow, which is more than the rest of our major competitors
combined. Furthermore, we have returned $8.0 billion to our
shareholders through dividends and share buy-backs. This clearly
demonstrates the full-cycle robustness of Schlumberger, the careful
management of our business, and the strength of our executional
capabilities.”
Other Events
During the quarter, Schlumberger repurchased 1.5 million shares
of its common stock at an average price of $78.21 per share for a
total purchase price of $116 million.
On January 5, 2017, Schlumberger announced the acquisition of
Peak Well Systems, a leading specialist enterprise in the design
and development of advanced downhole tools for flow control, well
intervention, and well integrity.
On January 19, 2017, the Company’s Board of Directors approved a
quarterly cash dividend of $0.50 per share of outstanding common
stock, payable on April 17, 2017 to stockholders of record on
February 15, 2017.
Consolidated Revenue by Geography
(Stated in millions)
Three Months Ended
Change Dec. 31, 2016 Sept. 30, 2016
Sequential North America
$ 1,765 $ 1,699
4% Latin America
952 992
-4% Europe/CIS/Africa
1,834 1,872
-2% Middle East & Asia
2,494
2,385
5% Eliminations & other
62 71
-13% $ 7,107 $ 7,019
1% North
America revenue
$ 1,765 $ 1,699
4%
International revenue
$ 5,280 $ 5,249
1%
Fourth-quarter revenue of $7.1 billion increased 1% sequentially
with North America growing 4% and International increasing 1%.
North America
In North America, revenue increased 4% sequentially, on
increased land activity while offshore declined. Excluding Cameron
Group results, land revenue experienced double-digit growth driven
by strong hydraulic fracturing activity as stage count increased,
and higher uptake of Drilling & Measurements, Bits &
Drilling Tools, and M-I SWACO products and services as rig count
increased. Revenue on land in the US also posted double-digit
growth on higher activity and a modest pricing recovery, while
revenue in Western Canada grew strongly from a winter ramp-up in
activity in addition to higher sales of artificial lift products.
Revenue also increased from year-end WesternGeco multiclient
seismic license sales that were, however, muted when compared to
prior years. Sales from Valves & Measurement and Drilling
Systems declined.
International Areas
International revenue increased 1% sequentially led by strong
growth in the Middle East & Asia Area, which was partially
offset by continued weakness in the Latin America Area and seasonal
activity declines in the Europe/CIS/Africa Area.
Middle East & Asia Area revenue increased 5%
sequentially. This was mainly due to strong fracturing and
Integrated Production Services (IPS) activity on unconventional
land resource developments and increased productivity from land
seismic crews in Saudi Arabia. Revenue in Egypt increased from
higher perforating, while Qatar grew from increased horizontal
logging work. These increases, however, were partially offset by
declines in Drilling & Measurements and Integrated Drilling
Services (IDS) activity and lower equipment sales in the India
GeoMarket as projects were completed and well campaigns
delayed.
Revenue in the Latin America Area declined 4%
sequentially, mainly in the Mexico & Central America GeoMarket
where customer budget constraints led to a sharp drop in overall
rig count that impacted onshore and offshore operations, affecting
both deepwater and shallow-water projects. Revenue in Mexico also
declined following the strong marine surveys and multiclient
license seismic sales last quarter. Revenue in Argentina decreased
as unconventional resource development work was affected by
unfavorable weather conditions and other delays. These declines,
however, were partially mitigated by strong drilling and project
activity in the Peru, Colombia & Ecuador GeoMarket as the rig
count increased by 46% following the rise in oil prices.
Europe/CIS/Africa Area revenue decreased 2%
sequentially mainly due to the seasonal conclusion of peak summer
drilling activity in Russia and exploration services campaigns in
Norway that impacted all Technologies, led by Wireline, Drilling
& Measurements, and M-I SWACO. The Sub-Saharan Africa GeoMarket
contributed to the Area revenue decline as rigs demobilized and
projects were completed, mainly in Angola and Congo. These
decreases were partially offset by strong OneSubsea project
activity and execution.
Reservoir Characterization Group
(Stated in millions, except margin percentages)
Three
Months Ended Change Dec. 31, 2016
Sept. 30, 2016 Dec. 31, 2015
Sequential
Year-on-year Revenue
$ 1,699 $ 1,689 $ 2,193
1% -23% Pretax operating income
$ 316 $
322 $ 521
-2% -39% Pretax operating margin
18.6 % 19.1 % 23.8 %
-49 bps -519 bps
Reservoir Characterization Group revenue was $1.7 billion, with
76% coming from international operations. Revenue was 1% higher
sequentially due to the ramp-up in activity on the early production
facilities projects in Kuwait, higher Wireline perforating activity
in Egypt, increased horizontal logging work in Qatar, and increased
software license and maintenance sales. These effects were
partially offset by the seasonal decrease in Wireline activity in
the Northern Hemisphere.
Pretax operating margin of 19% decreased 49 bps sequentially as
the increased contribution from software and maintenance sales was
more than offset by the decline in high-margin Wireline exploration
activities.
Reservoir Characterization Group performance was boosted by a
number of Integrated Services Management (ISM) projects, new
contract awards, technology deployments, and transformation
efficiencies during the quarter.
In Ecuador, Schlumberger provided ISM for Petroamazonas EP and
Sinopec to optimize drilling on the Tiputini project. The Bits
& Drilling Tools ONYX* polycrystalline diamond compact (PDC)
cutter and Stinger* conical diamond element technologies enabled
better steerability and stability as well as longer and faster
runs. In addition, Wireline Dielectric Scanner* multifrequency
dielectric dispersion service directly measured water volume and
textural rock information while the Dual-Packer Module isolated the
interval for the MDT* modular formation dynamics tester tool.
Furthermore, PowerJet Nova* extradeep penetrating shaped charges
delivered improved efficiency. The customer reduced total drilling
time to 7 1/2 days from the expected 11 days, equivalent to an
estimated cost savings of $250,000.
In Egypt, Belayim Petroleum Company (Petrobel), a joint venture
between Egyptian General Petroleum Corporation and IEOC Production
B.V., awarded Schlumberger Testing & Process a contract valued
at $70 million for the engineering, procurement, construction,
commissioning, and operation of a facility for the Zohr gas field.
The facility, which is expected to be completed 11 months from the
date of the award, will provide accelerated production of gas
during the first phase of the project. In addition, Testing &
Process used a combination of technologies for Petrobel to complete
a production test of the first offshore appraisal well of the Zohr
discovery in the Shorouk block. Working at a water depth of 1,450
m, the production test string included a SenTREE 3* subsea test
tree combined with Muzic* wireless telemetry technology, which
activated the SCAR* inline independent reservoir fluid sampling and
Quartet* downhole reservoir testing systems. The use of Testing
Manager* well testing real-time data monitoring and collaboration
software enabled real-time transient analysis and optimization of
the well test program.
In Mexico, Pemex awarded WesternGeco a 2,400-km2 full-azimuth
ocean-bottom-cable project over the Canin Suuk field in the
shallow-water Bay of Campeche. The field is in an area with high
prospectivity within their exploration portfolio and requires new
seismic technology to provide better imaging due to its salt
tectonics complexity. The WesternGeco vessel WG Tasman, newly
converted to ocean-bottom operations, will use Q-Seabed*
multicomponent seabed seismic technology that has a system designed
to ensure uniform coupling in all directions. Acquisition began in
2016 and will continue for approximately one year.
Offshore Norway, Wireline introduced a combination of
technologies for Lundin Norway to overcome challenging formation
geology and reduce operating time in a well in the Barents Sea. The
potential presence of large caves that were not visible via surface
seismic imaging required the use of high-resolution imaging in,
around, and beyond the borehole. Technologies included the hDVS
distributed acoustic sensing (DAS) system using a wireline cable
with integrated optical fibers, a Z-Trac* downhole vibrator, and a
VSI* versatile seismic imager all within a single toolstring. The
data acquired by having the vibrator and imager downhole enabled
the customer to see potential hazards ahead of the drill bit and
mitigate drilling risk. The DAS technology reduced operating time
to 30 minutes compared with conventional VSP acquisition that can
require up to eight hours.
Offshore the UAE, Testing & Process deployed a combination
of technologies for Al Hosn Gas in the Hail and Gasha fields. The
combination included an eFire-TCP* tubing-conveyed perforating
electronic firing head and new perforation correlation technology,
both enabled by Muzic* wireless telemetry. The wirelessly-enabled
depth correlation was consistent with the traditional wireline
gamma ray and casing collar locator method. In addition, real-time
downhole data helped determine reservoir properties, assessed well
performance during and after stimulation, and supported downhole
sampling decisions to reduce the original well test program by 18
hours.
The transformation program enabled reductions in equipment
numbers and tool reliability repair costs for Schlumberger by using
Technology Lifecycle Management (TLM). In Saudi Arabia for example,
Schlumberger at its Middle East Center for Reliability and
Efficiency (CRE) in Dhahran implemented a new maintenance system
for Testing & Process Services that decreased the overall cost
of equipment repair by 48% and improved turnaround time by 21% in
the first three months of operations. In Australia, WesternGeco
deployed its newly developed eSource marine seismic energy source
on the Amazon Conqueror for a multiclient survey. TLM methodology
delivers seismic source reliability improvements for all
WesternGeco sources including the eSource project which is using an
acquisition technique that depends on high source reliability to
ensure maximum operational efficiency. From 2014 to 2016, the
reliability of WesternGeco sources improved 47%.
Drilling Group
(Stated in millions, except margin percentages)
Three
Months Ended Change Dec. 31, 2016
Sept. 30, 2016 Dec. 31, 2015
Sequential
Year-on-year Revenue
$ 2,013 $ 2,021 $ 2,953
- -32% Pretax operating income
$ 234 $
218 $ 494
7% -53% Pretax operating margin
11.6
% 10.8 % 16.7 %
81 bps -511 bps
Drilling Group revenue of $2.0 billion, of which 76% came from
the international markets, was flat sequentially as the continued
strong directional drilling activity in North America land was
offset by lower drilling activity in the International Areas. The
improvement in North America revenue came from increased uptake of
Drilling & Measurements, Bits & Drilling Tools, and M-I
SWACO products and services. The decreased revenue in the
International Areas was due to completed Drilling & Measurement
and IDS projects in India and Iraq, while the winter slowdown in
Russia and Norway affected Drilling & Measurements and M-I
SWACO activity.
Pretax operating margin of 12% expanded 81 bps sequentially
despite revenue being flat. This was due to pricing improvements
from greater uptake of drilling technologies on increasing activity
on land in the US which mainly affected Drilling & Measurements
and Bits & Drilling Tools. Margin also expanded as a result of
operational execution in IDS, M-I SWACO, and Bits & Drilling
Tools and through continuing transformation-related benefits as
resources were aligned to match the shape of the recovery.
A combination of IDS projects, contract awards, new technology
deployments, and transformation efficiencies contributed to
Drilling Group performance in the fourth quarter.
In the Gulf Cooperation Council (GCC) region, IDS delivered a
40% drilling performance improvement in the first three quarters of
2016 compared with non-integrated drilling services in similar
fields. The improvement is based on the feet drilled per hour below
the rotary table. This achievement was enabled by a combination of
drilling technologies, such as PowerDrive Archer* high build rate
and PowerDrive Xceed* ruggedized rotary steerable systems to
optimize drilling times in horizontal wells and during extended
reach drilling. This included the use of RigHour* multiwell
drilling operational efficiency analysis, and ROPO* rate of
penetration optimization software, which adjusts drilling
parameters to maximize on-bottom drilling performance. Schlumberger
combined these technologies with integrated workflows overseen by
multidisciplinary domain experts in the Saudi Arabia and Abu Dhabi
Drilling Technology Integration Centers to reduce both drilling and
overall development costs.
In Norway, Statoil awarded Schlumberger an eight-year contract
with optional periods to deliver integrated well construction
services for one of its Cat-J jackup rigs being built for
operations in the harsh environments and shallow wells of the
Norwegian Continental Shelf. Schlumberger will provide planning and
execution for directional drilling, measurement- and
logging-while-drilling, mud logging, drilling and completion
fluids, cementing, pumping, slot recovery and fishing, electrical
wireline logging, waste management, completions, downhole
mechanical isolation, mechanical well wash and tubing-conveyed
perforating for the Gullfaks satellites field with operations
planned for start-up later this year.
In the Norwegian sector of the North Sea, Drilling &
Measurements used the GeoSphere* reservoir mapping-while-drilling
service for ExxonMobil to map a complex injectite reservoir and
effectively geosteer into target sands in the Balder field. Given
two goals—avoid costly pilot holes in development wells that often
failed to provide sufficient information to help land the producer
wells and avoid setting the casing in thin injectite
sands—GeoSphere technology mapped the top of the massive sands from
more than 20 m total vertical depth above and detected the
oil/water contact while landing the 12 ¼-in section before
penetrating the reservoir. For the 8 ½-in reservoir section, the
customer was able to plan a geosteering strategy ahead of the bit
by combining seismic interpretation and GeoSphere mapping results,
and thus increased the productivity of the wells.
In West Texas, Drilling & Measurements used a combination of
technologies to establish a new record in drilling performance for
an operator in the Permian basin. The bottomhole assembly included
PowerDrive Orbit* rotary steerable systems to optimize directional
drilling and a DynaForce* high-performance drilling motor, which
provides the highest torque at the bit and outperforms conventional
motors in high-volume drilling. In addition, SlimPulse* retrievable
MWD service provided direction, inclination, toolface, and gamma
ray measurements in real time for mud-pulse telemetry. The customer
drilled a 7,814-ft lateral in less than 22 hours, which surpassed
the customer’s previous footage record in the Permian basin by 47%.
As a result, the customer reduced drilling time by 18 hours
compared with a previous lateral.
In Ecuador, a Drilling & Measurements PowerDrive*X6 rotary
steerable system with customized Smith PDC bit technologies was
deployed for Orion Energy to improve drilling performance in a well
in the Ocano field. With remote support from experts at the
Drilling Technology Integration Center, the operations team drilled
6,400 ft of the 16-in well section in 30 hours, increasing the rate
of penetration (ROP) to 201 ft/hr compared with 136 ft/hr in
similar wells, a 48% net increase. As a result, the customer saved
approximately $100,000 in drilling costs by completing the well
section two days earlier than originally planned.
In Egypt, Drilling & Measurements used the GeoSphere*
reservoir mapping-while-drilling service for Belayim Petroleum
Company (Petrobel), a joint venture between Egyptian General
Petroleum Corporation and IEOC Production B.V., to eliminate a
pilot hole in the Abu Rudeis field. An unconformity at the top of
the oil-bearing sandstone initially required a pilot hole to
determine intermediate casing depth while pressurized shales above
the target zone required a high mud weight that made penetration of
the target sand challenging due to potential mud circulation
losses. GeoSphere technology used deep directional electromagnetic
measurements to reveal subsurface bedding and fluid contact details
more than 100 ft from the wellbore, which helped manage the
geological uncertainty and drilling risk. By eliminating the pilot
hole, the customer saved approximately $1.8 million.
In Russia, Bits & Drilling Tools used a combination of
drillbit technologies for LLC LUKOIL-Komi, a subsidiary production
enterprise of PAO LUKOIL, to eliminate four bit trips and increase
the ROP in an offset well in the Kyrtaelskoye field in the
Timano-Pechora region. ONYX 360* rolling PDC cutter technology
increased bit durability due to its 360° of rotation while Stinger*
conical diamond elements provided superior impact strength and wear
resistance in this hard and highly abrasive sand formation. In
addition, due to its modular design, the Drilling &
Measurements PowerPak* steerable motor was customized to the
drilling environment. As a result, the customer achieved an average
ROP of 9.3 m/h, a 40% increase compared with the maximum ROP
achieved in offset wells. Furthermore, the customer saved five days
of operations by drilling the 8 5/8-in section in 15 days instead
of the expected 20 days.
In the Neuquén basin in Argentina, M-I SWACO used KLA-SHIELD*
enhanced-polymer water-base drilling fluid for Wintershall
Argentina to drill a 3,281-ft lateral in a challenging formation
defined by abnormally high pore pressure, natural fractures,
stresses, and general geomechanical complexity. The KLA-SHIELD
system optimized with STARGLIDE ROP-enhancing lubricant and
DRILZONE rate-of-penetration-enhancing antiaccretion additive,
provided an alternative to non-aqueous drilling fluids. In
addition, VIRTUAL HYDRAULICS* drilling fluid simulation software
traced the well trajectory, performed torque and drag simulations,
evaluated the rheology in terms of equivalent circulating density,
and optimized hole cleaning. The customer benefitted by drilling
the well and lateral in 70 days without any caving, swelling, or
tight wellbore issues.
The transformation program enabled an increase in reliability
and efficiency as well as product and service delivery. Design,
engineering, and maintenance teams in Drilling & Measurements
at the Middle East CRE in Dhahran, Saudi Arabia, collaborated to
create ruggedized modular housings for measurement-while-drilling
tools and decrease their susceptibility to movement and wear in a
high-shock environment. As a result, the reliability of ImPulse*
integrated MWD platform tools increased 240% and the reliability of
adnVISION* azimuthal density neutron service tools increased by 47%
in the first six months of the CRE’s operation.
Production Group
(Stated in millions, except margin percentages)
Three
Months Ended Change Dec. 31, 2016
Sept. 30, 2016 Dec. 31, 2015
Sequential
Year-on-year Revenue
$ 2,179 $ 2,083 $ 2,632
5% -17% Pretax operating income
$ 132 $
98 $ 302
34% -56% Pretax operating margin
6.0
% 4.7 % 11.5 %
134 bps -542 bps
Production Group revenue of $2.2 billion, of which 72% came from
the international markets, was 5% higher sequentially from strong
fracturing activity on unconventional resource developments on land
in the Middle East, mainly in Saudi Arabia, and in North America
where the land rig count and fracturing stage count increased.
Revenue on land in the US increased both on volume and on a modest
pricing recovery. Revenue in Western Canada grew from a seasonal
winter ramp-up in activity in addition to higher sales of
artificial lift products. Cementing revenue was up 30% mostly in
North America and IPS grew three-fold primarily in the
International Areas.
Pretax operating margin of 6% increased 134 bps sequentially on
increased activity, which drove efficiency and better operational
execution in the Middle East. The modest pricing recovery on land
in the US also contributed to the margin expansion.
Production Group results benefitted from contract awards, new
technology deployments, and transformation initiatives to improve
operational efficiency during the quarter.
The Kuwait Oil Company awarded Schlumberger a contract for the
supply and installation of ResFlow* inflow control devices to be
used in sandstone reservoirs and in a 140-well carbonate
development project. ResFlow technology helps maintain uniform
inflow rates across the entire interval in openhole completions,
even in the presence of permeability variations and thief zones.
These two technically challenging developments require reliable
equipment that can operate in complex wells in order to control and
understand reservoir behavior.
In China, Well Services used a combination of technologies for
the Schlumberger-CoPower joint venture to overcome a tight,
under-pressurized gas reservoir in the Ordos basin. FiberFRAC*
fiber-based fracturing fluid technology created a fiber network
within the fracturing fluid, providing a mechanical means to
transport and place the proppant. In addition, composite fluid from
BroadBand* unconventional reservoir completion services minimized
potential screenouts and optimized proppant distribution. The
customer achieved an average production of nearly 2,280 Mscf/d for
11 wells compared with six offset wells that used conventional
fracturing fluids and had an average production of 812 Mscf/d.
In the UAE, Well Services HiWAY* flow-channel fracturing
technique and UltraMARINE* seawater-base fracturing fluid were
deployed in an offshore environment to stimulate low-permeability,
high-stress source rock for Dubai Petroleum. Eight proppant
fracturing jobs were successfully placed with over half a million
pounds pumped. These are the first multistage, offshore source rock
hydraulic fracturing treatments done in the world, and the eight
jobs were completed in 40 hours.
In Ecuador, Well Services used the Invizion Evaluation* well
integrity service for Consortium Shushufindi to overcome wellbore
integrity challenges in the Shushufindi field. The integration of
multiwell data using the Techlog* wellbore software platform
enabled Invizion Evaluation technology to identify post-placement
channeling and differential crossflow between target sands. After
optimization of the original drilling program with improved cement
formulation and additives, the well showed no sign of
post-placement channeling. As a result, the customer avoided
potential remedial operational costs equivalent to $450,000.
Offshore Indonesia, Schlumberger used the MZ-Xpress* system for
performing multizone fracturing and gravel packing for ENI on the
Jangkrik project. Two MZ-Xpress systems were each installed in a
single trip to provide multizone sand control in a well featuring
five producing layers across two different casing sizes. The
customer saved approximately 6.5 days of rig time over four zones
of completion, equivalent to $5.1 million in cost savings.
In North America, the transformation enabled decreases in the
cost of asset ownership and improved operating efficiencies for
Well Services. To optimize the inventory of materials and supplies,
a new Supply Planning organization analyzed spend data to ensure
stock is on hand for commonly used items and maximized sharing
opportunities. In June 2016, only four months after its creation,
the organization reduced stock on hand by 20%. Moreover, the use of
Logistics Control towers that centralize management and delivery of
field supplies, such as proppant for hydraulic fracturing
operations, minimized costs for operating locations by conducting
all of the planning, tactical sourcing, and purchase-order
generation to ensure cost-effective service delivery of proppant to
the field. Since opening in late 2014, these control towers have
saved the Company $250 million in trucking costs.
In North Texas, the transformation enabled Well Services to
improve tool reliability and reduce maintenance costs. The CRE in
Denton implemented prognostic health management (PHM), using
real-time pump data collected from field locations. During the six
months after implementation, PHM achieved an estimated $6 million
of savings in operation costs.
Cameron Group
(Stated in millions, except margin percentages)
Three
Months Ended Change Dec. 31, 2016
Sept. 30, 2016 Dec. 31, 2015*
Sequential
Year-on-year Revenue
$ 1,346 $ 1,341 $ 2,088
- -36% Pretax operating income
$ 188 $
215 $ 354
-13% -47% Pretax operating margin
14.0 % 16.0 % 17.0 %
-207 bps -298 bps
*Fourth-quarter 2015 is presented on a pro forma basis for
comparative purposes.
Cameron Group revenue of $1.3 billion, of which 71% came from
international markets, was flat sequentially. Among the Group’s
businesses, OneSubsea reported an 11% sequential increase from
strong project activity and execution in the Europe/CIS/Africa and
Latin America Areas, while Surface Systems posted strong sales in
the Middle East. These increases, however, were offset by a decline
in revenue in Drilling Systems driven by falling backlog and lower
bookings. Valves & Measurement was also lower following the
prior quarter’s strong international shipments.
Pretax operating margin of 14% declined 207 bps sequentially due
to the drop in high-margin Drilling Systems project volume.
Cameron Group secured multiple strategic contract awards,
including the industry’s longest deepwater subsea multiphase
boosting tieback and contracts to reduce the total cost of
ownership for offshore equipment.
Murphy Exploration & Production Company–USA, a subsidiary of
Murphy Oil Corporation, awarded the Subsea Integration Alliance the
industry’s first deepwater integrated subsea engineering,
procurement, construction, installation, and commissioning (EPCIC)
multiphase boosting system contract for the Dalmatian field in the
US Gulf of Mexico. It will be the industry’s longest deepwater
subsea multiphase boosting tieback and the first EPCIC project
award for the Subsea Integration Alliance, which was formed in July
2015 between OneSubsea, Schlumberger, and Subsea 7. The contract
scope includes the supply and installation of subsea multiphase
boosting, topside and subsea controls, and a 35-km integrated power
and control umbilical. Offshore installation activities are
scheduled to begin in 2018.
Statoil awarded OneSubsea an engineering, procurement, and
construction contract to supply the subsea production system for
the Utgard gas and condensate field in the North Sea. Contract
scope includes a subsea template manifold system, two subsea
wellheads and vertical monobore subsea trees, production control
system, and associated intervention and workover tooling. Working
in close collaboration with Statoil, OneSubsea will develop a new
subsea wellhead system that is suitable for the fairly shallow
waters of the Utgard field. OneSubsea and Statoil have already
worked together to qualify a vertical monobore subsea tree as a
standardized solution for Statoil’s subsea developments. The
vertical trees, which are part of the contract deliverables, will
be assembled and tested at the OneSubsea facility in Horsøy,
Norway.
Transocean awarded Schlumberger two 10-year pressure control
equipment management service contracts valued at more than $350
million. The first contract includes Schlumberger management of
Transocean’s Cameron risers in the US Gulf of Mexico as well as
storage, maintenance, inspection, repair, recertification, and
data-driven riser management on the rigs. The second contract
entails the provision of a comprehensive suite of Schlumberger
solutions to maintain and service blowout preventer systems and
other pressure control equipment for nine Transocean
ultra-deepwater and harsh environment drilling rigs. These
contracts will help to reduce total cost of ownership for offshore
equipment and increase uptime associated with pressure control
equipment via integrated technical, operational, and commercial
solutions.
In Saudi Arabia, Valves & Measurement was selected by
multiple engineering, procurement, and construction companies led
by Saudi KAD to provide and install over $40 million of GROVE* ball
valves and LEDEEN* actuators to support key pipeline projects
related to the Master Gas Phase II and Fadhili Gas programs.
Schlumberger in-Kingdom facilities and support for commissioning
and execution activities positioned Cameron to be the ideal partner
for this project.
Financial Tables
Condensed Consolidated Statement of Income (Stated in
millions, except per share amounts) Fourth Quarter Twelve Months
Periods Ended December 31,
2016 2015
2016 2015 Revenue
$ 7,107 $
7,744
$ 27,810 $ 35,475 Interest and other income
47 81
200 236 Expenses Cost of revenue
6,193
6,292
24,110 28,321 Research & engineering
261
276
1,012 1,094 General & administrative
99 132
403 494 Impairments & other (1)
599 2,136
3,172 2,575 Merger & integration (1)
76 -
648 - Interest
139
91
570 346 Income
(loss) before taxes
$ (213 ) ($1,102 )
$ (1,905 ) $ 2,881 Taxes on income (loss) (1)
(19 ) (113 )
(278 ) 746 Net income (loss)
$ (194 ) ($989 )
$ (1,627
) $ 2,135 Net income attributable to noncontrolling
interests
10 27
60 63 Net income (loss)
attributable to Schlumberger (1)
$ (204
) ($1,016 )
$ (1,687
) $ 2,072 Diluted earnings (loss) per share of
Schlumberger (1)
$ (0.15 )
($0.81 )
$ (1.24 ) $ 1.63
Average shares outstanding
1,391 1,259
1,357
1,267 Average shares outstanding assuming dilution
1,391 1,259
1,357 1,275 Depreciation &
amortization included in expenses (2)
$ 1,016
$ 963
$ 4,094
$ 4,078
(1)
See section entitled “Charges & Credits” for details.
(2)
Includes depreciation of property, plant and equipment and
amortization of intangible assets, multiclient seismic data costs
and SPM investments.
Condensed Consolidated Balance
Sheet (Stated in millions)
Dec. 31, Dec.
31, Assets
2016 2015 Current Assets Cash and
short-term investments
$ 9,257 $ 13,034 Receivables
9,387 8,780 Other current assets
5,283
5,098
23,927 26,912 Fixed income investments,
held to maturity
238 418 Fixed assets
12,821 13,415
Multiclient seismic data
1,073 1,026 Goodwill
24,990
15,605 Intangible assets
9,855 4,569 Other assets
5,052 6,060
$
77,956 $ 68,005 Liabilities and Equity
Current Liabilities Accounts payable and
accrued liabilities
$ 10,016 $ 7,727 Estimated
liability for taxes on income
1,188 1,203
Short-term borrowings and current portion
of long-term debt
3,153 4,557 Dividends payable
702
634
15,059 14,121 Long-term debt
16,463
14,442 Deferred taxes
1,880 1,075 Postretirement benefits
1,495 1,434 Other liabilities
1,530
1,028
36,427 32,100 Equity
41,529 35,905
$
77,956 $ 68,005
Liquidity
(Stated in millions) Components of Liquidity
Dec. 31,2016
Sept. 30,2016
Dec. 31,2015
Cash and short-term investments
$9,257 $10,756
$13,034 Fixed income investments, held to maturity
238 354
418 Short-term borrowings and current portion of long-term debt
(3,153) (3,739) (4,557) Long-term debt
(16,463)
(17,538) (14,442) Net debt (1)
$(10,121) $(10,167) $(5,547)
Details of changes in liquidity follow: Periods Ended
December 31,
TwelveMonths2016
FourthQuarter2016
TwelveMonths2015
Net income (loss) before noncontrolling interests
$(1,627)
$(194) $2,135 Impairment and other charges, net of tax
3,236
583 2,218
$1,609 $389 $4,353 Depreciation and amortization
(2)
4,094 1,016 4,078 Pension and other postretirement
benefits expense
187 48 438 Stock-based compensation expense
267 57 326 Pension and other postretirement benefits funding
(174) (47) (346) Change in working capital
416 639
(478) Other
(138) (89) 434
Cash flow from operations
(3)
$6,261 $2,013 $8,805 Capital expenditures
(2,055) (654) (2,410) SPM investments
(1,031) (162)
(953) Multiclient seismic data capitalized
(630) (133) (486)
Free cash flow (4) 2,545 1,064
4,956 Stock repurchase program
(778) (116) (2,182)
Dividends paid
(2,647) (696) (2,419) Proceeds from employee
stock plans
415 71 448
(465) 323 803
Business acquisitions and investments, net of cash acquired plus
debt assumed
(4,022) (156) (478) Discontinued operations -
settlement with US Department of Justice
- - (233) Other
(87) (121) (252) (Increase) decrease in Net Debt
(4,574) 46 (160) Net Debt, beginning of period
(5,547) (10,167) (5,387) Net Debt, end of period
$(10,121) $(10,121) $(5,547) (1) “Net Debt”
represents gross debt less cash, short-term investments and fixed
income investments, held to maturity. Management believes that Net
Debt provides useful information regarding the level of
Schlumberger’s indebtedness by reflecting cash and investments that
could be used to repay debt. Net Debt is a non-GAAP financial
measure that should be considered in addition to, not as a
substitute for, or superior to, total debt. (2) Includes
depreciation of property, plant and equipment and amortization of
intangible assets, multiclient seismic data costs and SPM
investments. (3) Includes severance payments of approximately $850
million and $810 million during the twelve months ended December
31, 2016 and 2015, respectively, and $150 million during the fourth
quarter of 2016. Also includes approximately $100 million of
transaction-related payments associated with the acquisition of
Cameron during the twelve months ended December 31, 2016. (4) “Free
cash flow” represents cash flow from operations less capital
expenditures, SPM investments and multiclient seismic data costs
capitalized. Management believes that free cash flow is an
important liquidity measure for the Company and that it is useful
to investors and management as a measure of the ability of our
business to generate cash. Once business needs and obligations are
met, this cash can be used to reinvest in the Company for future
growth or to return to shareholders through dividend payments or
share repurchases. Free cash flow does not represent the residual
cash flow available for discretionary expenditures. Free cash flow
is a non-GAAP financial measure that should be considered in
addition to, not as substitute for, or superior to, cash flow from
operations.
Charges & Credits
In addition to financial results determined in accordance with
US generally accepted accounting principles (GAAP), this Full-Year
and Fourth-Quarter 2016 Earnings Release also includes non-GAAP
financial measures (as defined under the SEC’s Regulation G). Net
income, excluding charges & credits, as well as measures
derived from it (including diluted EPS, excluding charges &
credits; net income before noncontrolling interests and charges
& credits; and effective tax rate, excluding charges &
credits) are non-GAAP financial measures. Management believes that
the exclusion of charges & credits from these financial
measures enables it to evaluate more effectively Schlumberger’s
operations period over period and to identify operating trends that
could otherwise be masked by the excluded items. These measures are
also used by management as performance measures in determining
certain incentive compensation. The foregoing non-GAAP financial
measures should be considered in addition to, not as a substitute
for or superior to, other measures of financial performance
prepared in accordance with GAAP. The following is a reconciliation
of these non-GAAP measures to the comparable GAAP measures.
(Stated in millions, except per share amounts)
Fourth
Quarter 2016 Pretax Tax
Noncont.Interest
Net
DilutedEPS
Schlumberger net loss (GAAP basis) $ (213 ) $ (19 ) $
10 $ (204 ) $ (0.15 ) Workforce reduction 234 6 - 228
Facility closure costs 165 40 - 125 Costs associated with exiting
certain activities 98 23 - 75 Merger & integration 76 14 - 62
Currency devaluation loss in Egypt 63 - - 63 Contract termination
costs 39 9 -
30 Schlumberger net income, excluding
charges & credits $ 462 $ 73 $ 10
$ 379 $ 0.27
Third Quarter 2016
Pretax Tax
Noncont.Interest
Net
DilutedEPS
Schlumberger net income (GAAP basis) $ 200 $ 10 $ 14 $ 176 $ 0.13
Amortization of purchase accounting inventory fair value
adjustment 149 45 - 104 Merger-related employee benefits and
professional fees 46 10 - 36 Other merger and integration-related
42 5 -
37 Schlumberger net income, excluding charges &
credits $ 437 $ 70 $ 14 $ 353
$ 0.25
Fourth Quarter 2015 Pretax
Tax
Noncont.Interest
Net
DilutedEPS
Schlumberger net loss (GAAP basis) $ (1,102 ) $ (113 ) $ 27 $
(1,016 ) $ (0.81 ) Fixed asset impairments 776 141 - 635 Workforce
reduction 530 51 - 479 Inventory write-downs 269 27 - 242
Impairment of SPM project in Colombia 182 36 - 146 Facility
closures 177 37 - 140 Geopolitical events 77 - - 77 Contract
termination costs 41 2 - 39 Other 84 7
- 77 Schlumberger net
income, excluding charges & credits $ 1,034 $ 188
$ 27 $ 819 $ 0.65 (Stated
in millions, except per share amounts)
Twelve Months 2016
Pretax Tax
Noncont.Interest
Net
DilutedEPS
Schlumberger net loss (GAAP basis) $ (1,905 ) $ (278 )
$ 60 $ (1,687 ) $ (1.24 ) Fixed asset
impairments 1,058 177 - 881 Workforce reduction 880 69 - 811
Inventory write-downs 616 49 - 567 Amortization of purchase
accounting inventory fair value adjustment 299 90 - 209 Other
merger and integration-related 211 37 - 174 Multiclient seismic
data impairment 198 62 - 136 Facility closure costs 165 40 - 125
Merger-related employee benefits and professional fees 138 27 111
Costs associated with exiting certain activities 98 23 - 75
Currency devaluation loss in Egypt 63 - - 63 Other restructuring
charges 55 - - 55 Contract termination costs 39
9 - 30
Schlumberger net income, excluding charges & credits $ 1,915
$ 305 $ 60 $ 1,550 $ 1.14
Twelve Months 2015 Pretax Tax
Noncont.Interest
Net
DilutedEPS
Schlumberger net income (GAAP basis) $ 2,881 $ 746 $ 63 $ 2,072 $
1.63 Workforce reduction 920 107 - 813 Fixed asset
impairments 776 141 - 635 Inventory write-downs 269 27 - 242
Impairment of SPM project in Colombia 182 36 - 146 Facility
closures 177 37 - 140 Geopolitical events 77 - - 77 Currency
devaluation loss in Venezuela 49 - - 49 Contract termination costs
41 2 - 39 Other 84 7
- 77 Schlumberger net income, excluding
charges & credits $ 5,456 $ 1,103 $
63 $ 4,290 $ 3.37
Product Groups
(Stated in millions)
Three Months Ended
Dec. 31, 2016 Sept. 30, 2016 Dec. 31, 2015
Revenue
IncomeBeforeTaxes
Revenue
IncomeBeforeTaxes
Revenue
IncomeBeforeTaxes
Reservoir Characterization
$ 1,699 $
316 $ 1,689 $ 322 $ 2,193 $ 521 Drilling
2,013
234 2,021 218 2,953 494 Production
2,179 132
2,083 98 2,632 302 Cameron
1,346 188 1,341 215 - -
Eliminations & other
(130 ) (60
) (115 ) (38 ) (34 ) (29 ) Pretax operating
income
810 815 1,288 Corporate & other
(245
) (267 ) (179 ) Interest income(1)
23 24 8 Interest
expense(1)
(126 ) (135 ) (83 ) Charges & credits
(675 ) (237 )
(2,136 )
$ 7,107 $ (213
) $ 7,019 $ 200 $ 7,744 $ (1,102 )
(Stated in millions)
Twelve Months Ended Dec. 31,
2016 Dec. 31, 2015 Revenue
IncomeBeforeTaxes
Revenue
IncomeBeforeTaxes
Reservoir Characterization
$ 6,743 $
1,228 $ 9,738 $ 2,465 Drilling
8,561 994
13,563 2,538 Production
8,709 528 12,311 1,570
Cameron
4,211 653 - - Eliminations & other
(414 ) (130 ) (137 ) (63
) Pretax operating income
3,273 6,510 Corporate & other
(925 ) (768 ) Interest income(1)
84 30
Interest expense(1)
(517 )
(316
)
Charges & credits
(3,820 )
(2,575 )
$ 27,810 $
(1,905 ) $ 35,475 $ 2,881
(1) Excludes interest included in the
Product Groups results.
Supplemental Information
1)
What is the capex guidance for the full
year 2017?
Capex (excluding multiclient and SPM
investments) is expected to be $2.2 billion for 2017. Capex for the
full year 2016 was $2.1 billion.
2)
What was the free cash flow as a
percentage of net income before noncontrolling interests and
charges and credits, for the fourth quarter of 2016?
Free cash flow, which was $1.1 billion and included approximately
$150 million of severance payments, as a percentage of income from
continuing operations before noncontrolling interests and charges
and credits was 274% for the fourth quarter of 2016.
3)
What was the free cash flow as a
percentage of net income from continuing operations before
noncontrolling interests and charges and credits, for the full year
2016?
Free cash flow, which was $2.5 billion and included approximately
$850 million of payments associated with workforce reductions and
$100 million of transaction-related payments associated with the
Cameron acquisition, as a percentage of net income before
noncontrolling interests and charges and credits was 158% for the
full year 2016.
4)
What was included in “Interest and
other income” for the fourth quarter of 2016?
“Interest and other income” for the fourth quarter of 2016 was $47
million. This amount consisted of earnings of equity method
investments of $18 million and interest income of $29 million.
5)
How did interest income and interest
expense change during the fourth quarter of 2016?
Interest income of $29 million decreased $1 million sequentially.
Interest expense of $139 million decreased $10 million
sequentially.
6)
What is the difference between pretax
operating income and Schlumberger’s consolidated income before
taxes?
The difference principally consists of corporate items (including
charges and credits) and interest income and interest expense not
allocated to the segments as well as stock-based compensation
expense, amortization expense associated with certain intangible
assets (including intangible asset amortization expense resulting
from the acquisition of Cameron), certain centrally managed
initiatives, and other nonoperating items.
7)
What was the effective tax rate (ETR)
for the fourth quarter of 2016?
The ETR for the fourth quarter of 2016 calculated in accordance
with GAAP was 8.8% as compared to 5.1% for the third quarter of
2016. The ETR for the fourth quarter of 2016, excluding charges and
credits, was 15.8% as compared to 16.0% for the third quarter of
2016.
8)
How many shares of common stock were
outstanding as of December 31, 2016 and how did this change from
the end of the previous quarter?
There were 1.391 billion shares of common stock outstanding as of
December 31, 2016. The following table shows the change in the
number of shares outstanding from September 30, 2016 to December
31, 2016. (Stated in millions) Shares
outstanding at September 30, 2016 1,391 Shares sold to
optionees, less shares exchanged 1 Vesting of restricted stock -
Shares issued under employee stock purchase plan - Stock repurchase
program (1 ) Shares outstanding at December 31, 2016 1,391
9)
What was the weighted average number of
shares outstanding during the fourth quarter of 2016 and third
quarter of 2016 and how does this reconcile to the average number
of shares outstanding, assuming dilution used in the calculation of
diluted earnings per share, excluding charges and credits?
The weighted average number of shares outstanding during the fourth
quarter of 2016 was 1.391 billion and 1.392 billion during the
third quarter of 2016. The following is a reconciliation of the
weighted average shares outstanding to the average number of shares
outstanding, assuming dilution, used in the calculation of diluted
earnings per share, excluding charges and credits.
(Stated in millions)
Fourth Quarter2016
Third Quarter2016
Weighted average shares outstanding
1,391
1,392 Assumed exercise of stock options
5
4 Unvested restricted stock
5
5 Average shares outstanding, assuming dilution
1,401
1,401
10)
What was the amount of WesternGeco
multiclient sales in the fourth quarter of 2016?
Multiclient sales, including transfer fees, were $143 million in
the fourth quarter of 2016 and $144 million in the third quarter of
2016.
11)
What was the WesternGeco backlog at the
end of the fourth quarter of 2016?
WesternGeco backlog, which is based on signed contracts with
customers, was $759 million at the end of the fourth quarter of
2016. It was $845 million at the end of the third quarter of 2016.
12)
What were the orders and backlogs for
Cameron Group’s OneSubsea and Drilling Systems businesses?
OneSubsea and Drilling Systems orders and backlogs were as follows:
(Stated in millions)
Orders
Fourth Quarter2016
Third Quarter2016
OneSubsea
$ 523 $ 434 Drilling Systems
$ 132
$ 179
Backlog (at the end of period) OneSubsea
$ 2,526 $ 2,527 Drilling Systems
$ 607
$ 865
13)
What do the various charges
Schlumberger recorded during the fourth quarter of 2016 relate
to?
We are making further adjustments to our
global support structure and facilities footprint to align our
resources to the shape of the recovery. This has led us to record
$536 million in restructuring charges. We have also recorded $139
million of pretax charges relating to the Cameron acquisition and a
currency devaluation loss in Egypt. These $675 million of pretax
charges consist of the following:
-- $234 million of workforce reduction costs -- $165 million of
facility closure costs -- $98 million of costs associated with
exiting certain activities -- $76 million of merger and integration
costs relating to the Cameron acquisition -- $63 million of
currency devaluation loss in Egypt -- $39 million of contract
termination costs
About Schlumberger
Schlumberger is the world's leading provider of technology for
reservoir characterization, drilling, production, and processing to
the oil and gas industry. Working in more than 85 countries and
employing approximately 100,000 people who represent over 140
nationalities, Schlumberger supplies the industry's most
comprehensive range of products and services, from exploration
through production, and integrated pore-to-pipeline solutions that
optimize hydrocarbon recovery to deliver reservoir performance.
Schlumberger Limited has principal offices in Paris, Houston,
London and The Hague, and reported revenues of $27.81 billion in
2016. For more information, visit www.slb.com.
*Mark of Schlumberger or of Schlumberger companies
Notes
Schlumberger will hold a conference call to discuss the earnings
press release and business outlook on Friday, January 20, 2017. The
call is scheduled to begin at 7:30 a.m. (US Central Time), 8:30
a.m. (Eastern Time), 2:30 p.m. (Paris time). To access the call,
which is open to the public, please contact the conference call
operator at +1 (800) 288-8967 within North America, or +1 (612)
333-4911 outside North America, approximately 10 minutes prior to
the call’s scheduled start time. Ask for the “Schlumberger Earnings
Conference Call.” At the conclusion of the conference call an audio
replay will be available until February 20, 2017 by dialing +1
(800) 475-6701 within North America, or +1 (320) 365-3844 outside
North America, and providing the access code 405410.
The conference call will be webcast simultaneously at
www.slb.com/irwebcast on a listen-only basis. Please log in 15
minutes ahead of time to test your browser and register for the
call. A replay of the webcast will also be available at the same
web site until March 31, 2017.
This full-year and fourth-quarter 2016 earnings release, as well
as other statements we make, contain “forward-looking statements”
within the meaning of the federal securities laws, which include
any statements that are not historical facts, such as our forecasts
or expectations regarding business outlook; growth for Schlumberger
as a whole and for each of its segments (and for specified products
or geographic areas within each segment); oil and natural gas
demand and production growth; oil and natural gas prices;
improvements in operating procedures and technology, including our
transformation program; capital expenditures by Schlumberger and
the oil and gas industry; the business strategies of Schlumberger’s
customers; the anticipated benefits of the Cameron transaction; the
success of Schlumberger’s joint ventures and alliances; future
global economic conditions; and future results of operations. These
statements are subject to risks and uncertainties, including, but
not limited to, global economic conditions; changes in exploration
and production spending by Schlumberger’s customers and changes in
the level of oil and natural gas exploration and development;
general economic, political and business conditions in key regions
of the world; foreign currency risk; pricing pressure; weather and
seasonal factors; operational modifications, delays or
cancellations; production declines; changes in government
regulations and regulatory requirements, including those related to
offshore oil and gas exploration, radioactive sources, explosives,
chemicals, hydraulic fracturing services and climate-related
initiatives; the inability of technology to meet new challenges in
exploration; the inability to integrate the Cameron business and to
realize expected synergies; the inability to retain key employees;
and other risks and uncertainties detailed in this full-year and
fourth-quarter 2016 earnings release and Supplemental Information
and our most recent Forms 10-K, 10-Q, and 8-K filed with or
furnished to the Securities and Exchange Commission. If one or more
of these or other risks or uncertainties materialize (or the
consequences of any such development changes), or should our
underlying assumptions prove incorrect, actual outcomes may vary
materially from those reflected in our forward-looking statements.
Schlumberger disclaims any intention or obligation to update
publicly or revise such statements, whether as a result of new
information, future events or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170120005046/en/
Schlumberger LimitedSimon Farrant – Schlumberger Limited, Vice
President of Investor RelationsJoy V. Domingo – Schlumberger
Limited, Manager of Investor RelationsOffice +1 (713)
375-3535investor-relations@slb.com
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