What To Expect As Schlumberger Publishes Q2 Results

by Trefis Team
Schlumberger Limited
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Schlumberger  (NYSE:SLB), the largest oilfield services company, will publish its Q2 2018 results on Friday, July 20, reporting on a quarter that is likely to have seen growing oilfield services activity on account of stronger crude oil prices. While Q1 was a transitory quarter of sorts for the company, on account of equipment mobilization, reactivation, and redeployment associated with new contract wins, things should pick up in Q2 with the company beginning work on many new contracts. Below we take a look at some of the key trends to watch as Schlumberger publishes its results.

Our interactive dashboard analysis outlines our expectations for the company for the full year.

North American Unconventionals

Brent crude oil prices have risen from levels of around $67 per barrel in April to levels of around $75 per barrel currently, supporting higher oilfield service activity. The North American rig count grew to 1212 units at the end of Q2, up from 1129 in the year-ago period, and Schlumberger has noted that it expects to see revenue growth in both its drilling and pressure pumping operations during the quarter. While the company said that there was an oversupply of U.S. fracking equipment available in Q1, this is likely to have balanced out during Q2, helping to improve pricing. While the company’s fracking capacity additions over Q1 were lower than initially planned due to lower utilization, inefficiencies, and softer pricing, we will be watching the trend over Q2.

International Markets Could See Mixed Performance

The rig count in international markets has also seen some improvement, although activity growth has been mixed across different geographic markets. While Schlumberger could see strong performance in the Middle East, Russia, and the North Sea with some potential improvement in Asia, growth could be more limited in Africa and Latin America, amid potentially lower activity in Brazil and declines in Venezuela. Pricing pressure could also remain, as the company previously said that prices for standalone products and services have yet to see an inflection point, noting that there is still sufficient capacity in the market. That said, the company’s emphasis on performance-based contracts and integrated projects could give it an edge over rivals.

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