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HOUSTON--(BUSINESS WIRE)--Jan. 19, 2007--Schlumberger Limited
(NYSE:SLB) today reported 2006 operating revenue of $19.23 billion
versus $14.31 billion in 2005.
Income from continuing operations, before charges and credits, of
$3.75 billion was 85% higher than in 2005, representing diluted
earnings-per-share of $3.04 versus $1.67 in 2005.
Income from continuing operations, including charges and credits,
was $3.71 billion, representing diluted earnings-per-share of $3.01
versus $1.81 in 2005, an increase of 66%.
Fourth-Quarter Results
Fourth-quarter operating revenue of $5.35 billion was 8% higher
than the $4.95 billion in the third quarter of 2006, and 33% higher
than the $4.02 billion in the fourth quarter of 2005.
Income from continuing operations, before charges and credits,
reached $1.13 billion -- an increase of 13% sequentially and 77%
year-on-year. Diluted earnings-per-share, before charges and credits,
were $0.92 versus $0.81 in the previous quarter, and $0.52 in the
fourth quarter of 2005.
Income from continuing operations, including charges and credits,
was $1.13 billion or $0.92 per-share diluted versus $0.81 in the
previous quarter and $0.54 in the fourth quarter of 2005.
Oilfield Services revenue of $4.63 billion increased 8%
sequentially and 30% year-on-year. Pretax business segment operating
income of $1.32 billion increased 9% sequentially and 55%
year-on-year.
WesternGeco revenue of $721 million increased 9% sequentially and
55% year-on-year. Pretax business segment operating income of $273
million increased 13% sequentially and 149% year-on-year.
Schlumberger Chairman and CEO, Andrew Gould, commented, "Full-year
2006 revenues grew 34%, far exceeding our original expectations. This
was driven by significant price increases, a rich portfolio of new
technology and stronger activity in almost all GeoMarkets. WesternGeco
performance during the year was particularly impressive being led by
the resurgence of exploration activity and the continued rapid growth
of Q-Technology services.
The fourth-quarter results produced new record levels of revenue
and net income despite seasonal weather-related weakness in the North
Sea, parts of Russia and US Land as well as activity-related weakness
in Canada. WesternGeco achieved further significant progress and
strong performances were recorded by Schlumberger Information
Solutions, Well Testing and Artificial Lift Technologies. Schlumberger
Completions was also a strong contributor to growth and to add further
technology to our products and services in this critical area of
reservoir production we acquired Reslink, a Norwegian-based supplier
of advanced completions solutions.
At our investor meeting in September 2006, we re-iterated our
expectation that, absent any dramatic world economic slowdown that
would reduce hydrocarbon demand, Schlumberger will continue to see
high growth through the end of this decade and well into the next. We
also stated that growth rates would eventually slow from the breakneck
pace of 2006 but would remain well above those experienced over the
long, slow post-1986 industry adjustment.
Short-term declines in commodity prices inevitably produce varying
activity growth rates if they are sustained long enough. However,
maintaining the production base for both oil and natural gas in the
face of accelerating decline rates, poorer quality or more difficult
reservoirs and eroding reserve replacement ratios will mean that any
moderation in activity will be short-lived and self-correcting. While
we remain of the opinion that there is no overall shortage of oil and
gas reserves, the world is realizing that the period of cheap
hydrocarbon energy has ended and new and higher sustained levels of
investment are necessary to meet demand and guarantee future supplies.
We therefore expect to continue to see significant growth in 2007
particularly in the Eastern Hemisphere for exploration, development
and production enhancement related services where technology is key to
improving our customers' performance and reducing their technical
risk.
As part of our capital management program we repurchased 13.6
million shares under the 40 million-share buy-back program authorized
by the Board of Directors in April 2006. I am pleased to report that
the Board has also approved a substantial dividend increase for the
third consecutive year."
Other Events
-- As part of the current 40 million-share buy-back program
approved in the second quarter of 2006, Schlumberger
repurchased 1.86 million shares during the fourth quarter for
a total amount of $119 million, at an average price of $64.12
per share. Under this buy-back program 13.6 million shares
have been repurchased to date.
-- The Board of Directors of Schlumberger Limited declared a 40%
increase in the quarterly dividend. The increased dividend of
17.5 cents per share is payable on April 6, 2007 to
stockholders of record on February 21, 2007.
Consolidated Statement of Income
(Stated in thousands except per share amounts)
Fourth Quarter Twelve Months
-------------------------------------------------
For Periods Ended
December 31 2006 2005 2006 2005
----------------------------------------------------------------------
Operating revenue $5,349,868 $4,023,346 $19,230,478 $14,309,182
Interest and other
income (1) (3) 86,935 92,895 286,716 407,769
Expenses
Cost of goods sold
and services (3) 3,585,393 2,915,617 13,214,043 10,639,377
Research &
engineering (3) 169,482 134,392 619,316 505,513
Marketing 26,230 14,645 75,704 53,964
General &
administrative 124,720 100,607 425,057 349,277
Interest 63,300 49,454 234,916 197,090
----------------------------------------------------------------------
Income from
Continuing
Operations before
taxes and minority
interest 1,467,678 901,526 4,948,158 2,971,730
Taxes on income (3) 337,064 207,155 1,189,568 681,927
----------------------------------------------------------------------
Income from
Continuing
Operations before
minority interest 1,130,614 694,371 3,758,590 2,289,803
Minority interest (3) 2 (33,817) (48,739) (90,808)
----------------------------------------------------------------------
Income from
Continuing
Operations 1,130,616 660,554 3,709,851 2,198,995
Income from
Discontinued
Operations - - - 7,972
----------------------------------------------------------------------
Net Income $1,130,616 $660,554 $3,709,851 $2,206,967
----------------------------------------------------------------------
Diluted Earnings Per
Share
Income from
Continuing
Operations $0.92 $0.54 $3.01 $1.81
Income from
Discontinued
Operations - - - 0.01
----------- ----------- ------------ ------------
Net Income $0.92 $0.54 $3.01 $1.82
=========== =========== ============ ============
Average shares
outstanding 1,178,347 1,178,516 1,181,683 1,178,576
Average shares
outstanding assuming
dilution 1,238,047 1,233,520 1,242,196 1,229,716
Depreciation &
amortization
included in expenses
(2) $439,000 $358,881 $1,561,410 $1,350,969
----------------------------------------------------------------------
1) Includes interest income of:
Fourth quarter 2006 - $27 million (2005 - $30 million)
Twelve months 2006 - $117 million (2005 - $100 million)
2) Including Multiclient seismic data costs.
3) See page 6 for details of Charges & Credits included above.
Condensed Balance Sheet
(Stated in thousands)
Assets Dec. 31, 2006 Dec. 31, 2005
----------------------------------------------------------------------
Current Assets
Cash and short-term investments $2,998,873 $3,495,681
Other current assets 6,186,789 5,058,232
----------------------------------------------------------------------
9,185,662 8,553,913
Fixed income investments, held to
maturity 153,000 359,750
Fixed assets 5,576,041 4,200,638
Multiclient seismic data 226,681 222,106
Goodwill 4,988,558 2,922,465
Other assets 2,675,654 1,818,620
----------------------------------------------------------------------
$22,805,596 $18,077,492
----------------------------------------------------------------------
Liabilities and Stockholder's Equity
----------------------------------------------------------------------
Current Liabilities
Accounts payable and accrued
liabilities $3,822,094 $3,564,854
Estimated liability for taxes on income 1,136,529 946,723
Bank loans and current portion of long-
term debt 1,321,529 796,578
Dividend payable 148,720 124,733
----------------------------------------------------------------------
6,428,872 5,432,888
Convertible debentures 1,424,990 1,424,993
Other long-term debt 3,238,952 2,166,345
Postretirement benefits 1,036,169 707,040
Other liabilities 283,272 249,459
----------------------------------------------------------------------
12,412,255 9,980,725
Minority interest - 505,182
Stockholders' Equity 10,393,341 7,591,585
----------------------------------------------------------------------
$22,805,596 $18,077,492
----------------------------------------------------------------------
Net Debt
"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 indebtedness. Details of the Net Debt follow:
(Stated in millions)
Twelve Months 2006
-------------------------------------------------------
Net Debt, January 1, 2006 $(532)
Net income 3,710
Depreciation and amortization 1,561
Charges & credits, net of minority
interest and tax 43
Excess of equity income over
dividends received (181)
US pension and postretirement benefit
contributions (225)
Increase in working capital
requirements (377)
Capital expenditures (1) (2,637)
Dividends paid (568)
Proceeds from employee stock plans 442
Stock repurchase program (1,068)
Acquisition of minority interest in
WesternGeco (2,406)
Other business acquisitions and
related payments (577)
Distribution to joint venture partner (60)
Other 107
Translation effect on net debt (66)
--------------
Net Debt, December 31, 2006 $(2,834)
==============
Components of Net Debt Dec. 31, 2006 Dec. 31, 2005
----------------------------------------------------------------------
Cash and short-term investments $2,999 $3,496
Fixed income investments, held to
maturity 153 360
Bank loans and current portion of long-
term debt (1,322) (797)
Convertible debentures (1,425) (1,425)
Other long-term debt (3,239) (2,166)
-------------- --------------
$(2,834) $(532)
============== ==============
(1) Including Multiclient seismic data expenditure.
Charges & Credits
In addition to financial results determined in accordance with
generally accepted accounting principles (GAAP) this Fourth-Quarter
and Full-Year 2006 Earnings Press Release also includes non-GAAP
financial measures (as defined under SEC Regulation G). The following
is a reconciliation of these non-GAAP measures to the comparable GAAP
measures:
(Stated in millions except per share amounts)
Fourth Quarter 2005
------------------------------------------------------
Pretax Tax Min Int Net Diluted Income
EPS Statement
Classi-
fication
------- --------- ------- ------- -------- -----------
Income from
Continuing
Operations $901.5 $207.1 $(33.8) $660.6 $0.54
Add back
Charges &
Credits:
- Gain on sale
of Hanover Interest
Compressor and other
stock (20.9) - - (20.9) (0.02) income
------- --------- ------- ------- --------
Income from
Continuing
Operations
before charges
& credits $880.6 $207.1 $(33.8) $639.7 $0.52
======= ========= ======= ======= ========
Before
Continuing GAAP charges
Operations &
credits
--------------- ------- ---------
Effective tax
rate 23.0% 23.5%
Twelve Months 2006
---------------------------------------------------------
Pretax Tax Min Int Net Diluted Income
EPS Statement
(a) Classi-
fication
--------- --------- ------- --------- -------- ----------
Income from
Continuing
Operations $4,948.2 $1,189.6 $(48.7) $3,709.9 $3.01
Add back
Charges &
Credits:
-WesternGeco Research &
in-process engi-
R&D charge 21.0 - - 21.0 0.02 neering
-Loss on Interest
sale of and other
investments income
to fund the
WesternGeco
transaction 9.4 - - 9.4 0.01
-WesternGeco Cost of
visa goods
settlement sold and
9.7 (0.3) (3.2) 6.8 0.01 services
-Other in- Research &
process R&D engi-
charges 5.6 - - 5.6 - neering
--------- --------- ------- --------- --------
Income from
Continuing
Operations
before
charges &
credits $4,993.9 $1,189.3 $(51.9) $3,752.7 $3.04
========= ========= ======= ========= ========
Before
charges
Continuing GAAP &
Operations credits
------------ --------- ---------
Effective
tax rate 24.0% 23.8%
Twelve Months 2005
---------------------------------------------------------
Income
Statement
Diluted Classi-
Pretax Tax Min Int Net EPS fication
--------- --------- ------- --------- -------- ----------
Income from
Continuing
Operations $2,971.7 $681.9 $(90.8) $2,199.0 $1.81
Add back
Charges &
Credits:
-Gain on
sale of
Hanover Interest
Compressor and other
stock (20.9) - - (20.9) (0.02) income
-Resolution
of
contingency Interest
- Montrouge and other
facility (17.8) - - (17.8) (0.01) income
-Gain on
sale of Interest
Montrouge and other
facility (145.7) - - (145.7) (0.12) income
-Real estate Cost of
related goods
charges sold and
12.1 0.8 - 11.3 0.01 services
--------- --------- ------- --------- --------
Income from
Continuing
Operations
before
charges &
credits $2,799.4 $682.7 $(90.8) $2,025.9 $1.67
========= ========= ======= ========= ========
Before
Continuing GAAP charges
Operations &
credits
------------ --------- ---------
Effective
tax rate 22.9% 24.4%
(a) May not add due to rounding.
There were no charges or credits in the fourth quarter of 2006.
Business Review
(Stated in millions)
Fourth Quarter Twelve Months
--------------------------- --------------------------
2006 2005 % chg 2006 2005 % chg
--------------------------- --------------------------
Oilfield
Services
---------------
Operating
Revenue $4,630 $3,566 30% $16,767 $12,648 33%
Pretax
Operating
Income $1,317 $852 55% $4,603 $2,805 64%
WesternGeco
---------------
Operating
Revenue $721 $464 55% $2,471 $1,662 49%
Pretax
Operating
Income $273 $110 149% $853 $317 170%
Pretax operating income represents the Business Segments' income
before taxes and minority interest. The pretax operating income
excludes corporate expenses, interest income, interest expense,
amortization of certain intangible assets, interest on postretirement
benefits, stock-based compensation costs and the charges and credits
described on page 6, as these items are not allocated to the
Segments.
Oilfield Services
Full-year 2006 revenue of $16.77 billion increased 33% versus
2005. North America revenue increased by 40%, Europe/CIS/Africa by
36%, Middle East & Asia by 31% and Latin America by 16%. Pretax
operating income of $4.60 billion in 2006 was 64% higher than 2005.
Pretax operating margins improved 527 basis points (bps) in 2006
versus 2005, demonstrating strong pricing, accelerated technology
take-up and high demand for oilfield services.
Fourth-quarter revenue of $4.63 billion was 8% higher sequentially
and 30% higher year-on-year.
Overall, sequential revenue increases were highest in the US Land,
Mexico, US Gulf Coast, Gulf and North Sea GeoMarkets*. Strong
double-digit growth rates were also experienced in Nigeria, West &
South Africa, Continental Europe, Thailand/Vietnam, India,
Australia/Papua New Guinea and Libya. Robust demand for Wireline, Well
Testing and Well Services technologies together with higher Artificial
Lift Systems and Completions product sales contributed to the
increase. In addition, increased seasonal demand for Schlumberger
Information Solutions (SIS) products and services was recorded across
all Areas.
Pretax operating income of $1.32 billion increased 9% sequentially
and 55% year-on-year. The sequential increase was mainly driven by
higher overall activity in the US Land and US Gulf Coast GeoMarkets;
and by increased rig count in West & South Africa, the Gulf and India.
This resulted in Oilfield Services pretax operating margins of 28.4%.
In 2006, the next-generation Drilling & Measurements Scope* family
of logging-while-drilling services continued its rapid industry
acceptance -- being used on more than one-sixth of the total footage
drilled with Drilling & Measurements services during the year. Scope
technology enables advanced formation evaluation, improved drilling
efficiency and increased production with optimal well placement.
Services include EcoScope* multifunction formation evaluation,
StethoScope* formation pressure-while-drilling, TeleScope* high-speed
mud pulse telemetry and PeriScope* deep directional resistivity.
During the quarter, Schlumberger acquired Norwegian-based Reslink,
a leading supplier of advanced completion solutions that include a
broad spectrum of engineering applications and products for sand
management, zonal isolation and intelligent well completions. With key
engineering and manufacturing centers in Algard, Norway and Houston,
Reslink focuses on designing and building robust and reliable
smart-well solutions for advanced well completion and production
optimization challenges for the global oil and gas industry.
SIS secured a significant number of National Data Center contracts
from state agencies, major resource holders and national oil companies
for the provision of E&P data management and support services.
Fourth-quarter contracts include awards from the Algerian Ministry of
Energy & Mines, Petroliam Nasional Berhad (Petronas), Perupetro and
contract extensions in Colombia from the Agencia Nacional de
Hidrocarburos.
North America
Revenue of $1.44 billion increased 7% sequentially and 38%
year-on-year. Pretax operating income of $442 million increased 8%
sequentially and 59% year-on-year.
Sequentially, the US Gulf Coast GeoMarket recorded strong revenue
growth resulting from greater deepwater activity and increased demand
for Drilling & Measurements, Wireline and Well Testing services as
well as for sales of Completions products. In spite of weather-related
slowdowns in some regions, US Land continued to grow due to sustained
demand for Well Services and Drilling & Measurements technologies
together with higher end-of-year SIS product sales. In Canada revenue
remained flat due to lower rig count in regions of shallow gas and
coalbed methane activity.
Improvements in sequential Area pretax operating margins were
driven by a favorable activity mix in the US Gulf Coast GeoMarket and
higher Well Services and Drilling & Measurements activities in US Land
together with strong demand for higher-margin SIS product sales. This
expansion was partially offset by lower operating leverage in Canada
and the impact of weather on Well Services activities in US Land.
In the US Gulf of Mexico, Schlumberger installed a subsea
completion on Anadarko's Cheyenne #2 well in water depths of 8,960 ft.
This marks the sixth well completed at depths greater than 8,000 ft
within the past six months using the SenTREE 7* subsea completion tree
and Commander* well control systems.
In US Land, Red Oak Capital Management awarded Schlumberger a
field development and production contract comprising 3,500 acres of
the Barnett Shale in the Fort Worth Basin. Schlumberger IPM will begin
the initial asset development drilling and completion program then
move on to manage the field's production. Additional services will
include infill-drilling and future stimulation services.
Also in US Land, the new Wireline Rt Scanner* multiarray triaxial
induction technology helped Dominion Exploration & Production, Inc.
improve evaluation of a hydrocarbon column, which resulted in double
the anticipated pay compared to conventional technology.
During the quarter Schlumberger signed a multi-year agreement in
Canada for the supply of Hotline* 550 high-temperature electrical
submersible pump systems. The agreement provides for the supply of up
to 450 pumping systems for three years and covers both new
installations and replacements.
Latin America
Revenue of $674 million increased 7% sequentially and 9%
year-on-year. Pretax operating income of $142 million increased 9%
sequentially and 57% year-on-year.
Sequential growth in revenue was driven mainly by increasing
activity in Mexico with all Technologies registering growth. Also
contributing to growth were higher SIS and Artificial Lift Systems
product sales in the Peru/Colombia/Ecuador and Latin America South
GeoMarkets and increased demand for Drilling & Measurements and Well
Testing services in Venezuela/Trinidad & Tobago. This growth however
was offset by reduced drilling activity in Peru/Colombia/Ecuador and
by deferral of revenue recognition on certain work performed during
the quarter in Venezuela where discussions regarding the new contracts
for the drilling barges work and the settlement of certain outstanding
receivables were ongoing at the end of the quarter.
Pretax operating margins improved sequentially primarily driven by
growth in Mexico and Venezuela. This was partially offset by a less
favorable activity mix in Peru/Colombia/Ecuador and Latin America
South, and IPM projects in Mexico.
In Mexico, Schlumberger Data & Consulting Services successfully
implemented a production optimization plan on the Bellota-Chinchorro
asset in the south region for PEMEX, achieving production gains in
excess of 21,300 bbl/d and 23.8 MMscfd. A multidisciplinary
Schlumberger team worked closely with the customer to apply new
project management techniques, knowledge management procedures and
best practices together with advanced Schlumberger technology. The
significant gains in production -- the result of 35 rigless workover
operations -- delivered an incremental return in excess of $376
million for PEMEX.
In Brazil's mature Carapeba field in the Campos Basin, Petrobras
chose Schlumberger to supply digitally-enabled oilfield technology to
support their objective of improving recovery and increasing
production while optimizing operational costs. The first of the
intelligent completions under the two-year Technical Cooperation
Agreement was installed during the quarter. Additionally, Schlumberger
extended its partnership with Petrobras with the opening of the
Carapeba Digital Oilfield Operations Center in Macae.
Also in Brazil, the PowerDrive* rotary steerable system delivered
outstanding performance in a shallow horizontal land well for
Petrobras by reducing overall drilling time by 14 days. With a
horizontal displacement of 3,035 m and vertical depth of 970 m, the
well was drilled in eight days.
Europe/CIS/Africa
Revenue of $1.37 billion increased 8% sequentially and 35%
year-on-year. Pretax operating income of $359 million increased 7%
sequentially and 59% year-on-year.
Sequential revenue growth in the Area was driven by higher
activity in the Nigeria, West & South Africa and Continental Europe
GeoMarkets and increased product sales in the North Sea. Demand was
particularly strong for Wireline, Well Testing and Well Services
technologies together with SIS, Completions and Artificial Lift
Systems products. This was offset by weather-related activity
slowdowns in the North Sea, and in Russia with seasonal drilling
shutdowns offshore Sakhalin.
Sequential pretax operating income growth was driven by higher
activity for Wireline and Well Testing services and increased SIS,
Completions and Artificial Lift Systems product sales. This growth
however was offset by an unfavorable activity mix in the North Sea,
West & South Africa and Caspian GeoMarkets; project start-up costs in
North Africa; and the seasonal slowdown offshore Sakhalin.
In Norway, Statoil and Schlumberger launched a new technology
collaboration in which the Wireline Sonic Scanner* service will be
used to develop a highly detailed 3D geomechanical earth model of the
high-pressure, high-temperature Kvitebjoern gas condensate field. The
model will enable improved wellbore instability forecasting;
evaluation of reservoir compaction during production; initiation or
reactivation of faults; analysis of rock anisotropy, stress
orientations and magnitudes; and quantification of alteration around
the borehole.
In Tunisia, the CarboKEY* service, a Schlumberger proprietary
fluid system designed for high-temperature carbonate reservoirs,
exceeded customer expectations when used in a matrix stimulation
treatment that tripled gas production from an offshore gas well for
BG.
In Azerbaijan, a Schlumberger Completions FIV* Formation Isolation
Valve that was installed in a well in the Azeri-Chirag-Guneshli
complex for BP was activated more than 515 days after installation.
The tool was installed during initial completion operations using a
semi-submersible rig, which suspended the wells until the permanent
upper completion and wellhead was ready to be installed. Unlike
conventional plug methods, the valves are operated without
intervention, resulting in 24 hours of rig time saved per well.
In Russia, Schlumberger Artificial Lift Systems won a major award
for the supply of more than 300 EZLine* electrical submersible pumping
systems. These low-temperature systems were specifically designed to
address the needs of the low-horsepower segment of the Russian market.
Middle East & Asia
Revenue of $1.10 billion increased 8% sequentially and 28%
year-on-year. Pretax operating income of $364 million increased 10%
sequentially and 38% year-on-year.
The sequential revenue growth resulted from increased rig count in
the Gulf, India, Australia/Papua New Guinea and Libya GeoMarkets and
sustained exploration activity in Thailand/Vietnam. This was partially
offset by lower deepwater activity in Brunei/Malaysia/Philippines, and
by heavy rains delaying rig moves in the Arabian GeoMarket, resulting
in decreased demand for Drilling & Measurements and Well Services
technologies. Demand was strong for Wireline, Well Testing and IPM
services as well as for Artificial Lift Systems and SIS product
sales--resulting in double-digit growth rates for each.
Sequential pretax operating income growth was driven by demand for
Wireline, Well Testing and Well Services technologies and increased
Artificial Lift Systems and SIS product sales. This growth was
attenuated by lower high-margin Drilling & Measurements services and
reduced sales of high-margin Completions systems compared to the prior
quarter.
In Pakistan, the Oil and Gas Development Corporation (OGDC) chose
Schlumberger Data & Consulting Services to develop a field development
plan for the Qadirpur carbonate gas field. Using newly acquired 3D
seismic data and information obtained from the drilling of several new
wells, Schlumberger Dhahran Carbonate Research Center teams will work
with OGDC to develop a new static reservoir model. This will help
engineer a full-field re-development plan to determine applicability
of horizontal drilling, multilaterals and new technology to improve
recovery and form the basis by which the facilities design will be
upgraded.
Abu Dhabi Company for Onshore Oil Production awarded Schlumberger
a multi-year contract for cementing and related services. Schlumberger
will provide new technologies that include Ultra LiteCRETE*,
FlexSTONE* and DuraSTONE* advanced cementing solutions.
In China, SIS completed the first iCenter* for CNOOC Ltd. Work on
the one-year project establishing a secure networked collaborative
environment included the provision of hardware, software and system
integration services. The facility is equipped with the latest
3D-visualization technology to support real-time interaction enabling
effective management of CNOOC's growing number of domestic and
international operations.
Elsewhere in China, CNOOC Ltd. Tianjin awarded Schlumberger a
multi-well offshore hydraulic fracturing contract permitting
the rig-up of the first-ever fracturing vessel in Bohai Bay.
Successful stimulation of the first well increased oil production more
than 10-fold from the deep-sandstone formation.
In Brunei Darussalam, Brunei Shell Petroleum Company awarded
Schlumberger a new four-year contract for the multi-purpose service
vessel BIMA. Strong performance during the past 18 months of
operations that included drilling and logging services, openhole
gravel packs, hydraulic fracturing services and sand-free production,
exceeded customer expectations by more than doubling the anticipated
production.
WesternGeco
Full-year 2006 revenue of $2.47 billion increased 49% versus 2005.
Pretax operating income of $853 million in 2006 was 170% higher than
2005. Pretax operating margins grew strongly by 1,548 bps in 2006
versus 2005, demonstrating accelerating demand for exploration-driven
seismic services. Marine vessel utilization of 99% in 2006 versus 88%
in 2005, pricing growth exceeding 50%, and robust demand for
Q-Technology* all contributed to this growth. Overall Q-Technology
revenue reached $726 million, representing 29% of 2006 full-year
revenue, an increase of 82% over 2005. In response to rapid growth in
demand for Q-Technology for exploration and production, WesternGeco
commissioned construction of the eighth and ninth Q-Marine* vessels,
to be delivered in 2008 and 2009 respectively. In addition,
WesternGeco approved the deployment of the sixth and seventh Q-Land*
crews in 2007.
Fourth-quarter revenue of $721 million was 9% higher sequentially
and 55% higher compared to the same period last year. Pretax operating
income of $273 million improved 13% sequentially and 149%
year-on-year.
The sequential revenue increase was driven by the traditionally
strong fourth-quarter Multiclient sales. Land increased with higher
crew activity across all regions and the deployment of new crews in
the Middle East and North Africa. Data Processing also increased due
to higher activity in Asia and Europe and an increase in proprietary
third-party processing activity in North America following a shift of
resources from multiclient surveys. Marine revenue decreased with the
deployment of additional resources on phase two of E-Octopus, the
world's first multiclient wide-azimuth survey in the US Gulf of
Mexico.
Pretax operating margins improved sequentially by 116 bps to reach
37.9% driven by higher Multiclient sales in Africa and North America
and higher crew utilization in Land. This was offset by the assignment
of two vessels to the E-Octopus survey and higher costs in Data
Processing.
Statoil awarded WesternGeco a 4D amplitude-variation-with-offset
(AVO) inversion contract for seismic reservoir monitoring on their
four Q-Marine 4D North Sea surveys acquired by WesternGeco over the
past five years. Reservoir Seismic Services in Stavanger will
integrate the Q-Marine measurements with 0degaard advanced surface
seismic data inversion software into the 4D simultaneous AVO workflow
to quantify changes in reservoir properties as a result of hydrocarbon
production.
During the quarter, WesternGeco began a pilot Q-Land acquisition
project for Qatar Petroleum to achieve improved resolution of a
carbonate reservoir. The extensive data acquisition program also
included deployment of the Wireline Sonic Scanner* service to ensure
recovery of slowness measurements in shallow formations --
measurements unattainable with conventional technology. Simultaneous
Q-Land and Q-Borehole* surveys were under evaluation to further extend
bandwidth limits and improve signal quality.
In the central Gulf of Mexico, WesternGeco completed data
acquisition of phase one of the E-Octopus multiclient wide-azimuth
survey. Utilizing Q-Technology, the 11,072 sq km survey covers 475
deepwater blocks and provides a step change in subsalt imaging in this
region. Due to demand generated by the upcoming lease sale and the
need for dramatic improvements in subsurface illumination, the second
phase of the project was accelerated in the fourth quarter of 2006
with the addition of a second Q-Marine vessel and two source vessels.
About Schlumberger
Schlumberger is the world's leading oilfield services company
supplying technology, information solutions and integrated project
management that optimize reservoir performance for customers working
in the oil and gas industry. The company employs more than 70,000
people of over 140 nationalities working in more than 80 countries.
Schlumberger supplies a wide range of products and services from
seismic acquisition and processing; formation evaluation; well testing
and directional drilling to well cementing and stimulation; artificial
lift and well completions; and consulting, software, and information
management. In 2006, Schlumberger operating revenue was $19.23
billion. For more information, visit www.SLB.com.
*Mark of Schlumberger
Notes
Schlumberger will hold a conference call to discuss the above
announcement on Friday, January 19, 2007, at 9:00am eastern, 8:00am
central (2:00pm London time/3:00pm Paris time). To access the call,
which is open to the public, please contact the conference call
operator at +1-888-423-3269 (toll free) for North America, or
+1-612-332-0819 outside of North America, approximately 10 minutes
prior to the scheduled start time. Ask for the "Schlumberger Earnings
Conference Call." A replay will be available through February 2, 2007,
by dialing +1-800-475-6701 in North America, or +1-320-365-3844
outside of North America, and providing the access code 850806.
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.
Supplemental information in the form of a question and answer
document on this press release and financial schedules are available
at www.SLB.com/ir.
CONTACT: Schlumberger Limited, Houston
Vice President of Communications and Investor Relations
Jean-Francois Poupeau, +1-713-375-3535
or
Investor Relations Manager
Debashis Gupta, +1-713-375-3535
investor-relations@slb.com
SOURCE: Schlumberger Limited
