Schlumberger (NYSE:SLB) announced the launch of a new marine seismic technology yesterday. The company describes the IsoMetrix marine seismic technology as a profound breakthrough in the field. ((Schlumberger Launches Breakthrough Marine Seismic Technology, Schlumberger)) The oilfield services firm operates its marine exploration services under the business, which is expected to show strong growth because of strong activity in deepwater markets across the world. The launch of the new technology is expected to strengthen Schlumberger’s lead in the marine seismic business. The launch is a result of research and engineering efforts for 10 years at WesternGeco and should help the company increase its pricing for this business line.
We have a $93 price estimate for Schlumberger, which is at a 50% premium to its current market price.
The demand for marine technology is expected to see strong growth over the rest of 2012. With strong activity in deepwater markets such as the North Sea, Western Africa, Arctic regions and offshore Brazil, WesternGeco expects to see its backlog increase in the present quarter.  Rising demand will also push up pricing of the company’s services. The IsoMetrix technology will help the company gain a stronger hold of the seismic imaging market. The IsoMetrix technology is part of Schlumberger’s efforts to improve the performance of companies in the exploration industry.  The company is betting that a shift toward increasingly complex and costly exploration projects to replace declining oil and gas reserves will help increase industry spending on de-risking technologies such as Isometrix.
The Isometrix marine seismic technology uses a multicomponent sensor that can produce a 3 dimensional picture of the subsurface.  The new technology can help reduce capex and operational complexity of imaging projects. Schlumberger claims with the new technology, 12 of its streamers can produce data generally produced by 30-60 streamers. Strong demand for WesternGeco’s new technology could result in an upside for our revenue and margin estimates for Schlumberger over the next few years.
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