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Fourth-quarter revenue of $7.7 billion decreased 9% sequentially
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Fourth-quarter EPS of $0.65, excluding charges and credits, declined
17% sequentially
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Fourth-quarter restructuring and asset impairment charges totaled
$1.46 per share
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Full-year free cash flow of $5 billion represented 114% of earnings
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New share repurchase program of $10 billion approved
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Quarterly cash dividend of $0.50 per share approved
Schlumberger Limited (NYSE:SLB) today reported results for full-year
2015 and the fourth quarter of 2015. Full-year results are shown in the
table below.
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Full-Year Results
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(Stated in millions, except per share amounts)
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Twelve Months Ended
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Change
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Dec. 31, 2015
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Dec. 31, 2014
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Year-on-year
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Revenue
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$
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35,475
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$
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48,580
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-27
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%
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Pretax operating income
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6,510
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10,576
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-38
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%
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Income from continuing operations, excluding charges and credits*
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4,290
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7,282
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-41
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%
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Diluted EPS from continuing operations, excluding charges and
credits*
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$
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3.37
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$
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5.57
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-39
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%
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Pretax operating margin
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18.4
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%
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21.8
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%
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-342 bps
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North America revenue
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$
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9,811
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$
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16,151
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-39
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%
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North America pretax operating income
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999
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3,057
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-67
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%
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North America pretax operating margin
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10.2
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%
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18.9
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%
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-874 bps
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International revenue
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$
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25,196
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$
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32,089
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-21
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%
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International pretax operating income
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5,955
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7,677
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-22
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%
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International pretax operating margin
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23.6
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%
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23.9
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%
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-29 bps
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*Income from continuing operations, including charges and credits, was
$2.072 billion in 2015 and $5.643 billion in 2014. Diluted EPS from
continuing operations, including charges and credits, was $1.63 in 2015
and $4.31 in 2014. See section entitled "Charges & Credits" for details.
Schlumberger Chairman and CEO Paal Kibsgaard commented, “Full-year 2015
revenue of $35.5 billion decreased 27% year-on-year in line with
upstream capex spending cuts that resulted in significantly lower E&P
investment levels. North America revenue declined 39%, with land falling
45% while offshore was down 17%. The decrease in land activity was the
sharpest seen since 1986, as capex spending by North American customers
declined by more than 40%. With the year-end US land rig count 68% lower
than the 2014 peak, at less than 700 rigs, the massive over-capacity in
the land services market offers no signs of pricing recovery in the
short to medium term.
“Full-year revenue for the International Areas declined 21% due to
customer budget cuts of more than 20%, as international and national oil
companies responded to lower commodity prices. This effect was
exacerbated by service company pricing concessions. More than one-third
of the revenue decline was the result of the fall of certain currencies
against the US dollar. Performance among the Areas was led by a 26%
decrease in Europe/CIS & Africa, mainly due to weakness in the Russian
ruble. Exploration activities in the UK and Norway fell as customer
spending decelerated. In Sub-Saharan Africa, offshore rigs demobilized
as exploration work decreased, and in North Africa work progressed
slowly, partly because activity in Libya remained muted as onshore
operations were limited by security concerns. Full-year revenue in the
Latin America Area declined 22% due to significantly decreased activity
in Mexico, Brazil and Colombia as a result of sustained budget cuts that
led to rig count reductions. Devaluation of the Venezuela bolivar
impacted revenue in the Venezuela, Trinidad & Tobago GeoMarket. Middle
East & Asia Area full-year revenue decreased 17% due to a significant
activity drop in the Asia-Pacific region, particularly in Australia.
This decrease was partially offset, however, by robust activity in the
Gulf Cooperation Council countries in the Middle East, particularly
Saudi Arabia, Kuwait and Oman, although the effect of this was offset by
pricing concessions. Activity in Iraq continued to decline.
“Full-year Schlumberger pretax operating income declined 38%, with
pretax operating margin contracting 342 basis points to 18.4%. North
America margin declined 874 basis points to 10.2% on decreased pressure
pumping activity and pricing weakness on land. International margin was
essentially flat with 2014 at 23.6% despite the revenue decline from
pricing concessions, and from an increasingly unfavorable shift in
revenue mix from offshore exploration to development. While revenues in
North America and in the International Areas have declined by 39% and
21%, respectively, decremental operating margins have been limited to
32% in North America, and 25% internationally. These figures are
substantially better than those we delivered in the 2009 downturn.
“The strength of these results demonstrates the resiliency of our
business portfolio in the face of the activity, pricing and foreign
currency challenges of 2015. Our performance was driven by excellence in
execution, prompt and proactive cost and resource management, and the
growing impact of our transformation program.
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Fourth-Quarter Results
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(Stated in millions, except per share amounts)
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Three Months Ended
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Change
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Dec. 31, 2015
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Sept. 30, 2015
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Dec. 31, 2014
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Sequential
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Year-on-year
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Revenue
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$
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7,744
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$
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8,472
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$
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12,641
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-9
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%
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-39
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%
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Pretax operating income
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1,288
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1,521
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2,781
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-15
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%
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-54
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%
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Income from continuing operations, excluding charges and credits*
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819
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989
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1,941
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-17
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%
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-58
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%
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Diluted EPS from continuing operations, excluding charges and
credits*
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$
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0.65
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$
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0.78
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$
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1.50
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-17
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%
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-57
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%
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Pretax operating margin
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16.6
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%
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18.0
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%
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22.0
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%
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-132 bps
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-537 bps
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North America revenue
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$
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1,955
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$
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2,273
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$
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4,324
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-14
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%
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-55
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%
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North America pretax operating income
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139
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202
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849
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-31
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%
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-84
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%
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North America pretax operating margin
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7.1
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%
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8.9
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%
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19.6
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%
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-175 bps
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-1,250 bps
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International revenue
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$
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5,714
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$
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6,068
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$
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8,210
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-6
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%
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-30
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%
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International pretax operating income
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1,259
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1,440
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1,990
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-13
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%
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-37
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%
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International pretax operating margin
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22.0
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%
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23.7
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%
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24.2
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%
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-170 bps
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-220 bps
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*Loss from continuing operations, including charges and credits, was
$1.016 billion in the fourth quarter of 2015. Income from continuing
operations, including charges and credits, was $302 million in the
fourth quarter of 2014. Loss per share from continuing operations,
including charges and credits, was $0.81 in the fourth quarter of 2015.
Diluted EPS from continuing operations, including charges and credits,
was $0.23 in the fourth quarter of 2014. There were no charges or
credits recorded during the third quarter of 2015. See section entitled
"Charges & Credits" for details.
“Fourth-quarter revenue decreased 9% sequentially driven by the
continuing decline in rig activity and persistent pricing pressure
throughout our global operations that also suffered from activity
disruptions and project delays and cancellations. North America revenue
fell 14% sequentially as the US land rig count declined 15% and customer
E&P budgets were exhausted. International revenue declined 6% due to the
combination of customer budget cuts, the start of the seasonal winter
slow-down, persistent pricing pressure, and the largely muted year-end
product, software, and multiclient seismic license sales.
“Among the business segments, Production Group revenue declined by 10%
on lower pressure pumping services in North America. Reservoir
Characterization and Drilling Group revenues declined sequentially by 7%
and 8%, respectively, on lower demand for exploration-related products
and services in the International Areas as customer budgets were
exhausted. These effects were amplified by the almost complete absence
of the year-end product, software, and multiclient seismic license sales
that have typically offset seasonal winter slow-downs in previous years.
“Negative market sentiments intensified in the fourth quarter, with oil
over-production continuing and extending the bearish trend in global
inventories. This led to a further drop in oil prices, which reached a
12-year low in January 2016. The worsening market conditions added
further pressure to a deepening financial crisis in the E&P industry,
and prompted customers to make further cuts to already significantly
lower E&P investment levels. Customer budgets were also exhausted early
in the quarter, leading to unscheduled and abrupt activity cancellations.
“In anticipation of an extended activity weakness in the first half of
2016, we implemented another significant adjustment to our cost and
resource base during the fourth quarter. This included a further
workforce reduction of 10,000 employees, as well as greater streamlining
of our overhead, infrastructure and asset base. This led us to recognize
in the fourth quarter $530 million in pretax restructuring charges for
expanding the incentivized leave of absence program and reducing our
workforce, as well as a largely non-cash $1.6 billion pretax impairment
charge for fixed assets, inventory write-downs, facility closures,
contract terminations, and other asset impairments.
“In spite of the challenging business landscape, we generated
approximately $5 billion in free cash flow in 2015, after taking into
account capital expenditures of $2.4 billion and $1.4 billion of
investments in future revenue streams. We returned $4.6 billion in cash
to our shareholders, through $2.4 billion in dividend payments and $2.2
billion in stock buy-backs. We also spent approximately $500 million on
technology acquisitions, while increasing our net debt by only $160
million. Our ability to generate cash in this environment has been
unmatched in the oilfield services industry, and has given us an
unrivaled ability to capitalize on a variety of significant business
opportunities.
“As the pending Cameron transaction progresses, pre-close integration
plans are substantially complete, and we will be ready to close once all
regulatory approvals are received. We expect this to occur in the first
quarter of 2016 and we have already received approvals from regulators
in the US, Canada, Brazil and Russia. In addition, Cameron shareholders
have voted to adopt the merger agreement and we have secured the
necessary financing for our US subsidiary that will make the
acquisition. The large stock component of the deal, with 78% in stock
and 22% in cash, has largely insulated us from market volatility.
“In this uncertain environment, we continue to focus on what we can
control. Throughout the year we took a number of actions to streamline
and resize our organization as we continued to navigate the downturn. In
continuing to accelerate the benefits of the transformation program
across both our Technologies and GeoMarkets in 2016, we believe we will
emerge as a stronger company relative to industry peers and competitors
once the price of oil and the market conditions in our industry
turnaround.
“We remain constructive in our view of the market outlook in the medium
term, and continue to believe that the underlying balance of supply and
demand will tighten, driven by growth in demand, weakening supply as E&P
investment cuts take effect, and by the size of the annual supply
replacement challenge.”
Other Events
During the quarter, Schlumberger repurchased 5.4 million shares of its
common stock at an average price of $73.86 per share for a total
purchase price of $398 million.
On October 19, 2015, Schlumberger and Energy Recovery, Inc. signed a
15-year technology agreement to provide Schlumberger exclusive rights to
Energy Recovery’s VorTeq™ hydraulic pumping system.
On November 9, 2015, Schlumberger and Ikon Science announced an
agreement to further develop the quantitative seismic interpretation
capability in the Petrel* E&P software platform.
On November 16, 2015, Schlumberger announced the acquisition of Fluid
Inclusion Technologies, Inc., a US-based oil and gas service company
specializing in laboratory analysis of trapped fluids in rock material
and advanced borehole gas analysis.
On November 17, 2015, Schlumberger received unconditional approval from
the US Department of Justice regarding the proposed merger between a
wholly owned subsidiary of Schlumberger Limited and Cameron
International Corporation (Cameron). In December 2015, unconditional
clearances were also received from anti-trust authorities in Brazil,
Canada and Russia. Cameron shareholders overwhelmingly approved the
merger agreement at a special meeting on December 17, 2015, and the
closing of the proposed merger now remains subject to clearance by the
European Commission and certain other jurisdictions, and the
satisfaction or waiver of other customary closing conditions.
On December 10, 2015, Schlumberger Holdings Corporation, an indirect,
wholly-owned U.S. subsidiary of Schlumberger Limited, issued five
tranches of senior notes aggregating $6 billion. These notes have a
weighted-average interest rate of approximately 3.15% and maturities
ranging from 2017 to 2025. Net proceeds will be used for general
corporate purposes, including financing part of the pending acquisition
of Cameron.
On January 21, 2016, the Company’s Board of Directors (the Board)
approved the quarterly cash dividend of $0.50 per share of outstanding
common stock, beginning with the dividend payable on April 8, 2016 to
stockholders of record on February 17, 2016. Additionally, in view of
the fact that the Company’s current $10-billion share repurchase program
that commenced in the third quarter of 2013 is about to be completed,
the Board also approved a new share repurchase program of $10 billion.
North America
North America fourth-quarter revenue of $2.0 billion decreased 14%
sequentially, largely mirroring the US land rig count decline of 15% as
customer cash flows diminished and E&P budgets were exhausted. Land
revenue fell 18% from lower activity and persistent pricing pressure,
while offshore revenue decreased 4%. The usual year-end surge in
multiclient seismic license sales was largely muted compared to previous
years.
North America pretax operating margin declined 175 basis points (bps)
sequentially to 7% as a result of pricing pressure that impacted all
services and products. In the pressure pumping market in particular,
unsustainable industry pricing levels led to more pumping equipment
being stacked and crews released. In certain basins, however, hydraulic
fracturing fleet deployment was maintained in pursuit of market share
and new technology opportunities.
Despite revenue declining sequentially by 14%, the decremental operating
margin was only 20%. The strength of this performance was underpinned by
prompt cost and resource management, effective supply chain processes,
and strong operations management.
In the fourth quarter, integrated services and new Schlumberger
technologies helped increase production and operational efficiency in
North America.
In US Land, Well Services BroadBand* unconventional reservoir completion
services have been deployed in 14% more wells and in 52% more stages as
compared to 2014. BroadBand technology maximizes wellbore coverage and
reservoir contact to increase production and recovery by stimulating and
propping open every fracture from tip to wellbore. The Eagle Ford and
Permian Basins reflected the highest activity in 2015 while total
activity covered six basins and 32 operators.
In South Texas, a combination of Schlumberger technologies enabled
Lonestar Resources Ltd. to optimize production on a group of horizontal
wells in the Eagle Ford shale play. Well Services Mangrove*
reservoir-centric stimulation design software helped improve the
hydraulic fracturing design by using geological property measurements
acquired by Wireline ThruBit* logging services. As a result, 30-day
production rates on the wells completed with the optimized fracturing
design increased 78% compared to offset wells in the same field.
Also in US Land, the Drilling & Measurements PowerDrive Orbit vorteX*
motorized rotary steerable system achieved repeated successes in the
Midland and Anadarko Basins. In the Midland Basin’s Wolfcamp formation,
this technology established a record rate of penetration (ROP) by
drilling an average of 245 ft per hour to a total depth of more than
7,100 ft in 29 on-bottom hours. In the same formation, the PowerDrive
Orbit vorteX system drilled at an average ROP of 203 ft per hour to a
total depth of 12,600 ft in a record-breaking time of four days.
Drilling & Measurements also deployed PowerDrive vorteX technology for
the first time in the Anadarko Basin’s Woodford Shale to increase ROP by
120% compared to the area’s previous well average, with the total
vertical depth of one 14,960-ft lateral being the longest run of any
size borehole in the South-Central Oklahoma Oil Province Woodford Shale.
Elsewhere in US Land, M-I SWACO deployed SCREEN PULSE* fluid and
cuttings separator technology to enhance the performance of the solids
control process, to maximize recovery of high-quality reusable drilling
fluid, and to reduce the drill cuttings waste generated. Maintaining the
drilling fluid in optimum condition enhances drilling efficiency and
reduces the cost of waste handling and disposal, while improving safety
performance at the wellsite. Since its launch in May 2015, SCREEN PULSE
technology has proven its performance with fluid discard rates reduced
by up to 50% and with oil-on-cuttings levels reduced by approximately
35% on operations in the Woodford, Eagle Ford, Haynesville and Permian
shale basins.
In Atlantic Canada, Schlumberger completed the first year of an
integrated services contract for Statoil, Inc. offshore Newfoundland.
The exploration and appraisal of the Flemish Pass Basin used a
combination of Schlumberger technologies that improved drilling
efficiency, assured wellbore integrity, and optimized placement of a
well in a water depth of 2,829 m. The PowerDrive Xceed* ruggedized
rotary steerable system, Rhino XS* hydraulically expandable reamer, and
Stinger* conical diamond element achieved stable and accurate drilling
to target depth. Quanta Geo* photorealistic reservoir geology service,
LithoScanner* high-definition spectroscopy service, and the Sonic
Scanner* acoustic scanning platform characterized the complex formations
and reduced subsurface risk. Deployed during a single descent, this
combination of technologies saved the customer rig time and Statoil
listed several hole sections among their top drilling performances
worldwide.
In another project offshore Atlantic Canada, Wireline deployed a
combination of technologies for Statoil, Inc. in the formation
evaluation and reservoir characterization of the deepwater well Bay du
Nord. Wireline technology included Rt Scanner* triaxial induction
service, Quanta Geo photorealistic reservoir geology service, and the
Sonic Scanner acoustic scanning platform in order to reduce subsurface
risk and characterize the complex formations. As a result of the
efficient wireline run, the customer saved rig time.
International Areas
Revenue for the International Areas of $5.7 billion decreased 6%
sequentially due to the combination of customer budget cuts, the start
of the seasonal winter slow-down, persistent pricing pressure, currency
weakness and the largely muted year-end product, software, and
multiclient seismic license sales.
Middle East & Asia Area revenue of $2.2 billion declined 5%
sequentially mainly due to lower activity in Australia and the
Asia-Pacific region as a result of customer budget cuts and project
completions. Revenue from the Middle East GeoMarkets was also lower as
solid activity in Kuwait and Iraq was more than offset by reductions in
the rest of the region due to the effects of service pricing
concessions, project cancellations, delayed start-ups of new projects,
and abrupt activity disruptions as budgets were exhausted.
Europe/CIS/Africa Area revenue of $2.1 billion dropped 9%
sequentially mainly in Russia and Central Asia due to weakness in the
Russian ruble, the start of the seasonal winter slow-down in Russia as
summer projects wound down, and activity reductions in the Caspian
region. Solid activity in the Nigeria & Gulf of Guinea and North Africa
GeoMarkets was offset largely by lower activity in the UK, Central &
West Africa and Angola GeoMarkets as rig count declined and projects
ended.
Revenue in the Latin America Area of $1.4 billion declined 1%
sequentially, mainly on significantly lower activity in the Colombia &
Peru, Brazil, and Argentina, Bolivia & Chile GeoMarkets due to customer
budget cuts and currency weakness. These effects were largely offset by
marine seismic acquisition surveys and multiclient seismic license sales
in Mexico.
International Area pretax operating margin of 22% decreased 170 bps
sequentially as pricing pressure across the Areas was partially offset
by streamlining the cost and resource base and by acceleration of the
transformation program. In addition, project cancellations, delayed
start-ups of new projects, and abrupt activity disruptions all
contributed to the sequential reduction in pretax operating margin,
particularly in the Middle East & Asia Area. Middle East & Asia pretax
operating margin decreased 448 bps to 22.5%, Europe/CIS/Africa fell 138
bps to 20.8%, while Latin America increased 229 bps to 23% mainly due to
strong margins from multiclient seismic license sales in Mexico and
Central America.
Sequential decremental operating margin reached 51% as abrupt
operational disruptions impeded prompt cost adjustments, and pricing
pressure accounted for more than a third of the revenue decline.
In the fourth quarter, the transformation program increased workforce
productivity through a combination of multiskilling, optimized base
support, and asset utilization. For example in the North Sea:
The creation of an Optimized Support Team in January 2014 meant that
Wireline field experts required approximately 2,000 fewer days at the
base in 2015 compared to the previous year. Field team members were thus
able to focus more on their core activities at the wellsite and reduce
the amount of time spent on non-core tasks at the base. This yielded an
annual savings of $1 million while contributing to employees’ work-life
balance. In addition, Wireline increased asset utilization by 54%
compared to 2014 by consolidating and sharing assets within a wider
geographical region. In turn, the asset utilization improvement led to a
reduction in materials and supplies in excess of $800,000.
A total of 19 M-I SWACO Drilling Solutions engineers were trained on how
to perform key field operations, which included deployment of CLEANCUT*
cuttings collection and containment systems and AUTOMATIC TANK CLEANING*
units that can be operated by smaller number of crews. During the first
four months after training, the multiskilled engineers delivered safe
and high quality job performance, while the number of people on board
was reduced by more than 350 man/days.
Wireline and Slickline crews cross-trained for operations on board Light
Weight Intervention Vessels for three international oil companies.
Through multiskilling initiatives, safety risks were reduced due to
fewer people on board, and the three customers saved a combined total of
328 work days.
The fourth quarter also saw an expansion of integrated services in the
International Areas as well as a number of new contract awards.
In South Korea, Integrated Services Management (ISM) completed a
single-well, deepwater exploration project for Woodside. Mobilization
was required over a very short timeframe and included complex logistics
related to the licensing and importation of logging tools, and supplies
for potential pipe recovery. Co-located in Woodside's Busan supply base,
the ISM project manager worked alongside the Woodside logistics team to
import the required materials and supplies from 14 different countries.
As a result of the close collaboration between Schlumberger and
Woodside, all material, personnel, and services were successfully
delivered on time and the project was successfully executed as per the
drilling plan.
Offshore Norway, Integrated Drilling Services (IDS) delivered superior
drilling and completion performance for Det Norske Oljeselskap ASA on
the Ivar Aasen Project. Schlumberger StingBlade* conical diamond element
technology contributed to improved rate of penetration while Drilling &
Measurements GeoSphere* reservoir mapping-while-drilling service was
used to geologically steer three horizontal well sections up to 2,000 m
in length. GeoSphere technology enabled the real-time delineation of
layers in the reservoir at distances in excess of 30 m while steering
the laterals to maximize reservoir contact. As a result of the close
collaboration between the Det Norske and Schlumberger teams, the
drilling and completion of all three wells ranks among the top 10 best
performances in the last eight years on the Norwegian continental shelf.
In 2015, Integrated Production Services (IPS) supported three multiwell
abandonment programs for an international oil and gas company by
providing a range of project management, plug and abandonment
engineering, and well services. The projects were both on land and
offshore in Europe and Asia. Services from Bits & Drilling Tools,
Wireline, Well Services, M-I SWACO, and Well Intervention were
integrated using IPS engineering and project management processes to
help reduce project cost, increase efficiency, and ensure compliance
with both regulatory and customer requirements.
In Norway, OMV (Norge) AS awarded Schlumberger a three-year integrated
services contract with two one-year extensions for the provision of
exploration and appraisal drilling services on the Norwegian Continental
Shelf. This included drilling fluids and waste handling, cementing,
directional drilling, measurement-while-drilling,
logging-while-drilling, mud logging, wireline logging, well testing, and
project management services. The contract will provide proof of concept
for drilling and geosteering in a very shallow reservoir to achieve high
horizontal well productivity.
The UK Oil and Gas Authority has awarded Schlumberger two projects on
the North Sea UK Continental Shelf (UKCS) and will offer the project
deliverables free of charge to oil companies with an interest in the
UKCS. This is part of the UK Government’s goal to reinvigorate interest
in exploration on the UKCS, particularly in under-explored areas.
WesternGeco will conduct two 2D marine seismic surveys in the UK Rockall
and Mid North Sea High and provide data processing services, petroleum
systems modeling, and multiclient data. Software Integrated Solutions
(SIS) will provide licenses for key software platforms, including
Petrel* E&P software, Studio* E&P knowledge environment, GeoX*
exploration risk and resource assessment software, and PetroMod*
petroleum systems modeling software.
In Mexico, Statoil Gulf of Mexico LLC Exploration signed an agreement to
license a large part of the WesternGeco Campeche deepwater wide-azimuth
(WAZ) multiclient project. This three-year project is the first WAZ
multiclient broadband survey in Mexican waters of the Gulf of Mexico and
follows the government’s opening of licensing rounds to non-government
companies for the first time. The Statoil license also includes
collaboration with WesternGeco in the seismic processing phase.
In Kuwait, the Kuwait Oil Company awarded Schlumberger a $22 million
contract to supply and install high-pressure, high-temperature liner
hangers for deep-gas wells in the Jurassic Gas development project. This
technically challenging development requires specialized, highly
reliable equipment to operate in complex wells up to 20,000 ft in depth.
Statoil, Inc. awarded Schlumberger a four-year contract with two
one-year extensions for tank cleaning and waste handling services for
all its supply vessels. The estimated $100-million contract includes
supply of the AUTOMATIC TANK CLEANING (ATC) LITE* system. This
trailer-mounted system recycles wash water and waste fluids and provides
an easily operated alternative to conventional cleaning. Fully
automated, the ATC LITE system reduces staff exposure to health, safety,
and environmental risks.
|
Reservoir Characterization Group
|
|
|
|
|
|
|
|
|
|
|
|
(Stated in millions, except margin percentages)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|
|
|
|
Dec. 31, 2015
|
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
Sequential
|
|
Year-on-year
|
Revenue
|
|
|
|
$
|
2,154
|
|
|
$
|
2,321
|
|
|
$
|
3,265
|
|
|
-7
|
%
|
|
-34
|
%
|
Pretax operating income
|
|
|
|
|
520
|
|
|
|
614
|
|
|
|
984
|
|
|
-15
|
%
|
|
-47
|
%
|
Pretax operating margin
|
|
|
|
|
24.2
|
%
|
|
|
26.4
|
%
|
|
|
30.1
|
%
|
|
-230 bps
|
|
-600 bps
|
Decremental operating margin
|
|
|
|
|
|
|
|
|
|
56
|
%
|
|
42
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir Characterization Group revenue of $2.2 billion declined 7%
sequentially, primarily due to sustained cuts in exploration spending,
the start of the seasonal winter slow-down, currency weakness, and
operational disruptions from exhausted customer budgets that impacted
Wireline activities, particularly in the Europe/CIS & Africa and Middle
East & Asia Areas. This decline was partially offset by marine seismic
surveys and multiclient seismic license sales in Mexico. Year-end
product and software sales were largely muted compared to previous years.
Pretax operating margin of 24.2% declined 230 bps sequentially as the
contribution of high-margin multiclient seismic sales was more than
offset by a decline in high-margin Wireline services. Decremental
operating margin was higher than the previous quarter at 56% as
activities were affected by abrupt operational disruptions that offered
limited prospects for prompt cost adjustments.
During the quarter, a number of Reservoir Characterization technologies
helped characterize complex reservoirs, optimize well production and
reservoir recovery, and improve operational efficiency.
In Iraq, Wireline introduced LIVE PL* digital slickline production
logging services for the Rumaila Operating Organization in the Rumaila
Field. LIVE PL technology provided real-time production logs on wells
where memory logging was previously the only option. The planned shut-in
time for the operation was 400 hours, yet only 100 hours were required.
As a result, the customer resumed production 12 days earlier than
planned thereby avoiding 18,000 bbl in deferred production.
Offshore India, Wireline introduced P3* post-perforating technology to
clean out perforations in a well for ONGC Ltd. India in the B-193 Field.
In high sour gas conditions, P3 created a high dynamic underbalance
after two runs in a low-pressure reservoir with balanced well-bore
fluids. P3 technology used the PURE* clean perforations system to remove
perforation debris and crushed-zone damage. As a result, the customer
achieved a 330% increase in oil production and a 250% increase in tubing
head pressure.
In the UK sector of the North Sea, Wireline used a combination of
technologies for TAQA to perforate an extremely long wellbore in the
Pelican Field. StreamLINE* polymer-encapsulated wireline monocable,
which has a friction coefficient that is one-half of the equivalent
standard braided line to reduce cable tension, facilitated deployment of
the 293-ft and 3,912-lbm perforating string and, thanks to its polymer
coating, reduced the risk of damaging the anti-corrosive liner. In
addition, PowerJet Nova* extradeep penetrating shaped charges increased
penetration in the stressed rock formation for maximum water injection.
As a result, the customer achieved rig-time-related savings by
completing the well in two runs instead of seven.
In the Norwegian North Sea, Wireline deployed heterodyne distributed
vibration sensing (hDVS) technology for Statoil in several wells in the
Kvitebjørn field. The hDVS technology enabled vertical seismic profile
surveys to be recorded using optical fibers already installed in the
well, thereby saving rig time. These surveys were acquired while using
VSI* versatile seismic imager technology, which delivered accurate
calibration information and near-borehole imaging to improve seismic
understanding for ongoing near-field exploration. The combined VSI and
hDVS operations were completed in 20 hours compared to four days using
conventional vertical seismic imaging methods. As a result, the customer
obtained additional seismic calibration information, and potentially
saved $1.5 million, equivalent to three days of rig time.
In Venezuela, Completions and Testing introduced P3 PURE
post-perforating controlled implosions to clean out perforations for
PDVSA in a well in the El Furrial Field East Venezuela. Previous
attempts by the company to establish better communication with the
reservoir were unsuccessful. Coiled-tubing deployed P3 technology
allowed a deep and efficient chemical stimulation of the selected
reservoir intervals. Following the treatment, the customer benefitted
from wellhead pressure increases of up to 1,500 psi.
In Algeria, Wireline introduced Saturn* 3D radial probe technology for
Sonatrach to sample low permeability reservoirs with a high overbalance.
Saturn technology extends formation testing to fluids and reservoir
environments that were formerly inaccessible with conventional formation
testers. For the first time, the customer was able to overcome
differential pressure limitations by imposing a 7,500 psi differential
on the tool and sample fluid at mobilities as low as 0.02 mD/Cp. As a
result, depleted sections of the reservoir were identified, thus
improving Sonatrach’s understanding of the subsurface.
Offshore Brazil, the Reservoir Characterization Group helped Petrobras
complete the first worldwide pre-salt deepwater formation evaluation
wireline logging job with managed pressure drilling (MPD) services.
Schlumberger well head pressure control equipment integrated for the
first time into the MPD system, successfully allowed two openhole
logging runs with 150 psi controlled wellhead pressure. This technology
was important in reducing safety risks during formation evaluation. As a
result, the customer now has vital information to characterize the
reservoir and lower the risk of field development.
In Abu Dhabi, SIS successfully completed deployment of the Exploration &
Production Information Solutions (EXPRIS) project for Abu Dhabi National
Oil Company and its operating companies. Awarded to SIS in 2012, the
contract entails deployment to more than 1,000 users, providing them
with efficient and intuitive access to a variety of geophysical,
geological, drilling, well completion, fluid sample analysis, well
testing, and production field data. EXPRIS is built on ProSource* E&P
data management and delivery systems and allows users to apply the data
in other technical applications, thus enhancing user productivity as
well as team integration.
|
|
|
|
|
|
|
Drilling Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Stated in millions, except margin percentages)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|
|
|
|
Dec. 31, 2015
|
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
Sequential
|
|
Year-on-year
|
Revenue
|
|
|
|
$
|
2,953
|
|
|
$
|
3,219
|
|
|
$
|
4,576
|
|
|
-8
|
%
|
|
-35
|
%
|
Pretax operating income
|
|
|
|
|
494
|
|
|
|
594
|
|
|
|
947
|
|
|
-17
|
%
|
|
-48
|
%
|
Pretax operating margin
|
|
|
|
|
16.7
|
%
|
|
|
18.4
|
%
|
|
|
20.7
|
%
|
|
-173 bps
|
|
-398 bps
|
Decremental operating margin
|
|
|
|
|
|
|
|
|
|
38
|
%
|
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Group revenue of $3.0 billion decreased 8% sequentially,
primarily from a drop in drilling activity, persistent pricing pressure,
the start of the seasonal winter slow-down, currency weakness, and
operational disruptions from exhausted customer budgets that impacted
Drilling & Measurements and M-I SWACO revenues, mainly in the Europe/CIS
& Africa and Middle East & Asia Areas.
Pretax operating margin of 16.7% contracted 173 bps sequentially as
revenue declined on pricing weakness and abrupt operational disruptions
that resulted in a decremental operating margin of 38%.
New Drilling Group technologies delivered better performance by
improving efficiency, optimizing well placement, and assuring wellbore
integrity in a number of regions during the quarter.
In Mexico, Drilling & Measurements introduced GeoSphere reservoir
mapping-while-drilling service for PEMEX in a horizontal well in an
oilfield offshore Tabasco, which is renowned for its geological
complexity and drilling risk. Previous campaigns using conventional
drilling methods often encountered subsurface risks such as shale-outs,
which made accurate well placement very challenging. Deployed for the
first time in this field and for PEMEX in Mexico, GeoSphere technology
reduced geological uncertainty by mapping the target sand layers along
the entire reservoir section, which enabled optimal steering of the well
inside the reservoir. The information GeoSphere technology provided also
allowed precise evaluation of the structure and thickness of the
lithology, which helped update the geological model and optimize the
design and planning of subsequent wells in the area.
Offshore Norway, Drilling & Measurements used the PowerDrive X6* rotary
steerable system for Statoil, Inc. to drill a well in the Valemon Field.
PowerDrive X6 technology reduces drilling torque to improve performance
and reliability. In addition, the IDEAS* integrated drillbit design
platform provided a four-dimensional simulation of the cutting
interface, which enabled StingBlade conical diamond element bit
technology to be combined with the PowerDrive X6 system to improve
footage drilled and rate of penetration (ROP). The ROP not only exceeded
the customer’s expectations, but established a 24-hour drilling record
of 52.69 m/hr.
In the Norwegian sector of the North Sea, Bits & Drilling Tools used
Neyrfor TTT* thru-tubing turbo drill for BP to re-establish oil
production in a well in the Ula Field. Neyrfor TTT technology removed an
influx of more than 60 m3 of oil-based drilling fluid from the well and
established underbalanced conditions with a high nitrogen ratio. In
addition, CIRP* completion insertion and removal under pressure
equipment perforated a 900-m section of the well such that the
perforating guns were removed without killing the well. The customer
achieved an increase in oil production, which was three times more than
originally expected.
In Romania, Lukoil Overseas used Schlumberger Seismic Guided Drilling*
(SGD) while-drilling integration of surface seismic and downhole
measurements, in combination with Geoservices real-time mud-weight
window monitoring services, in the successful drilling of two wells in
the Black Sea. In the first well, SGD service predicted a pore-pressure
ramp and subsequent benign pressures, while also correcting the
reservoir target position by more than 40 m, enabling the customer to
drill to total depth (TD) as per the drilling plan. In the second well,
SGD pressure estimates helped determine the optimum mud weight,
improving target positions by up to 60 m and enabling the customer to
reach TD in the reservoir considerably ahead of schedule.
In Russia, M-I SWACO used SCREEN PULSE fluids and cuttings separator
technology for Investgeoservis CJSC. SCREEN PULSE technology is a
retrofit installation that collects residual drilling fluid from
cuttings on the shale shakers and returns the fluid back to the
circulating system. This technology was used on two separate projects
and allowed the customer to reduce drill waste volumes by 26%, which
helped lower costs for dilution, treatment, transportation, and disposal.
In Kazakhstan, Drilling & Measurements introduced StethoScope* formation
pressure-while-drilling service on two horizontal wells drilled for
Karachaganak Petroleum Operating B.V. This technology secured real-time
pressure measurements to generate profiles that were combined with other
logs to model dynamic reservoir pressure, which is vital to optimizing
recovery. The customer benefited from estimated savings of $700,000 due
to a reduction in rig time, while mitigating operational risk.
In Iraq, Schlumberger used StingBlade conical diamond element bit
technology for BP to overcome the need for multiple drilling runs in
wellbores in the Rumaila Field. StingBlade technology helped increase
footage drilled and ROP due to its superior wear resistance. As a
result, the customer drilled an entire well section in a single run with
a 63.5% improvement in ROP compared to the average offset wells’ ROP,
saving the customer more than three days of rig time.
In China, Drilling & Measurements used a combination of formation
evaluation, well placement, and drilling optimization technologies for
Newfield Exploration Limited to drill nine well boreholes in the LF7-2
field development campaign. EcoScope†* multifunction
logging-while-drilling, PeriScope* bed boundary mapping, and PowerDrive
Orbit* rotary steerable system technologies were used to optimally steer
the horizontal boreholes near the top of the reservoir in single runs,
eliminating the need for sidetracks. The campaign’s drilling performance
also improved overall ROP, which enabled the customer to save 11 days of
drilling time, representing a 10% time savings versus the initial
drilling plan.
|
|
|
|
|
|
|
|
Production Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Stated in millions, except margin percentages)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Change
|
|
|
|
Dec. 31, 2015
|
|
|
Sept. 30, 2015
|
|
|
Dec. 31, 2014
|
|
|
Sequential
|
|
|
Year-on-year
|
Revenue
|
|
|
$
|
2,671
|
|
|
|
$
|
2,974
|
|
|
|
$
|
4,863
|
|
|
|
-10
|
%
|
|
|
-45
|
%
|
Pretax operating income
|
|
|
|
303
|
|
|
|
|
330
|
|
|
|
|
898
|
|
|
|
-8
|
%
|
|
|
-66
|
%
|
Pretax operating margin
|
|
|
|
11.3
|
%
|
|
|
|
11.1
|
%
|
|
|
|
18.5
|
%
|
|
|
24 bps
|
|
|
-713 bps
|
Decremental operating margin
|
|
|
|
|
|
|
|
|
|
|
|
9
|
%
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Group revenue of $2.7 billion decreased 10% sequentially with
80% of the decrease attributable to a further decline in North American
land activity as exhausted customer budgets led to a further decline in
rig count and increased pricing pressure. Market pricing for pressure
pumping services dropped to even more unsustainable levels.
Pretax operating margin of 11.3% increased 24 bps sequentially despite
lower activity and increasing pricing weakness in pressure pumping
services. Sequential decremental operating margin improved to 9% as the
decline in pressure pumping margin was largely offset by the combination
of accretive margin contributions from Schlumberger Production
Management projects in Latin America and higher net earnings from the
OneSubsea joint venture.
New Production Group technologies helped customers meet technical
challenges during the quarter by accelerating production, enhancing
recovery, and increasing operational efficiency.
In Southeast Kuwait, Well Services completed a large-scale fracturing
treatment using HiWAY* flow-channel technology for Kuwait Oil Company in
a well in a sandstone reservoir in the Greater Burgan Field. HiWAY
technology helped overcome the placement and proppant flowback
challenges commonly encountered with conventional hydraulic fracturing
methods. After the fracturing treatment, the well’s oil production
reached a natural continuous flow of 3,000 bbl/d.
In Tunisia, Well Intervention performed stimulation treatments in two
wells for Serept in the Ashtart Field. The high-temperature reservoir
required precise fluid selection while the focused, high-energy fluid
streams of the Jet Blaster* engineered high-pressure jetting service
enabled accurate placement of the stimulation fluid deep inside the
reservoir matrix. As a result, post-treatment production exceeded
customer expectations with a fourfold increase in one well and doubled
production in the second.
In Ecuador, Well Services deployed the DualSTIM* fracturing service as
part of a recompletion strategy for Petroamazonas to address declining
production in the Parahuacu Field. DualSTIM technology used water-based
fluids to stimulate this highly depleted reservoir that has moderate
permeability and a clay content sensitive to high water concentrations.
Since the start of the multiwell campaign in 2014, DualSTIM technology
combined with hydraulic fracturing has resulted in incremental
cumulative oil of more than 400,000 bbl.
Also in Ecuador, Well Services used Invizion* integrated zonal isolation
services for the Shushufindi Consortium in a well in the Aguarico Field.
Invizion technology tracked and evaluated cementing operations in real
time, which facilitated interpretation of results. In addition, the
technology allowed integration of the well data to identify zonal
isolation issues as well as an evaluation of potential short- or
long-term impact.
Elsewhere in Ecuador, Well Intervention used OneSTEP* simplified
sandstone stimulation technology for Orion Energy to remove damage and
overcome a fluid conveyance problem in a well without compromising
electrical submersible pump integrity, which made conventional
stimulation treatments unviable. OneSTEP technology uses only one fluid
solution to remove well damage for a more uniform stimulation of
sandstone reservoirs with less risk of disintegrating the rock. The
customer doubled production while maintaining basic sediment and water
at 0.1%.
Offshore Gabon, Schlumberger Completions utilized an integrated solution
for VAALCO Energy to complete three horizontal wells in the development
of the Etame Field. The solution included reservoir drilling fluids,
completion and artificial lift technologies for this openhole,
gravel-packed completion. In particular, the AquaPac* integrated
water-packing system used brine to carry and place gravel around
preinstalled screens and prevent sand production. FloPro NT* technology
was used to transport high volumes of cuttings from the reservoir
section. Operationally, the wells were gravel-packed with well
productivity meeting customer expectations.
|
|
|
|
|
|
|
|
|
|
|
Financial Tables
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Stated in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
|
Twelve Months
|
Periods Ended December 31,
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
7,744
|
|
|
$
|
12,641
|
|
|
$
|
35,475
|
|
$
|
48,580
|
|
Interest and other income
|
|
|
|
81
|
|
|
|
71
|
|
|
|
236
|
|
|
291
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
6,292
|
|
|
|
9,691
|
|
|
|
28,321
|
|
|
37,398
|
|
Research & engineering
|
|
|
|
276
|
|
|
|
324
|
|
|
|
1,094
|
|
|
1,217
|
|
General & administrative
|
|
|
|
132
|
|
|
|
122
|
|
|
|
494
|
|
|
475
|
|
Impairments & other (1)
|
|
|
|
2,136
|
|
|
|
1,773
|
|
|
|
2,575
|
|
|
1,773
|
|
Interest
|
|
|
|
91
|
|
|
|
87
|
|
|
|
346
|
|
|
369
|
|
Income (loss) before taxes
|
|
|
$
|
(1,102
|
)
|
|
$
|
715
|
|
|
$
|
2,881
|
|
$
|
7,639
|
|
Taxes on income (loss) (1)
|
|
|
|
(113
|
)
|
|
|
398
|
|
|
|
746
|
|
|
1,928
|
|
Income (loss) from continuing operations
|
|
|
|
(989
|
)
|
|
|
317
|
|
|
|
2,135
|
|
|
5,711
|
|
Loss from discontinued operations
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(205
|
)
|
Net income (loss)
|
|
|
|
(989
|
)
|
|
|
317
|
|
|
|
2,135
|
|
|
5,506
|
|
Net income attributable to noncontrolling interests
|
|
|
|
27
|
|
|
|
15
|
|
|
|
63
|
|
|
68
|
|
Net income (loss) attributable to Schlumberger
|
|
|
$
|
(1,016
|
)
|
|
$
|
302
|
|
|
$
|
2,072
|
|
$
|
5,438
|
|
|
|
|
|
|
|
|
|
|
|
|
Schlumberger amounts attributable to:
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations (1)
|
|
|
$
|
(1,016
|
)
|
|
$
|
302
|
|
|
$
|
2,072
|
|
$
|
5,643
|
|
Loss from discontinued operations
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(205
|
)
|
Net income (loss)
|
|
|
$
|
(1,016
|
)
|
|
$
|
302
|
|
|
$
|
2,072
|
|
$
|
5,438
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of Schlumberger
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations (1)
|
|
|
$
|
(0.81
|
)
|
|
$
|
0.23
|
|
|
$
|
1.63
|
|
$
|
4.31
|
|
Loss from discontinued operations
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(0.16
|
)
|
Net income (loss)
|
|
|
$
|
(0.81
|
)
|
|
$
|
0.23
|
|
|
$
|
1.63
|
|
$
|
4.16
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & amortization included in expenses (2)
|
|
|
$
|
963
|
|
|
$
|
1,065
|
|
|
$
|
4,078
|
|
$
|
4,094
|
|
|
|
|
(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.
|
|
|
Refer to “Supplemental Information” for details regarding
outstanding shares.
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31,
|
|
|
|
Dec. 31,
|
Assets
|
|
|
2015
|
|
|
|
2014
|
Current Assets
|
|
|
|
|
|
|
|
Cash and short-term investments
|
|
|
$
|
13,034
|
|
|
|
$
|
7,501
|
Receivables
|
|
|
|
8,780
|
|
|
|
|
11,171
|
Other current assets
|
|
|
|
5,098
|
|
|
|
|
6,022
|
|
|
|
|
26,912
|
|
|
|
|
24,694
|
Fixed income investments, held to maturity
|
|
|
|
418
|
|
|
|
|
442
|
Fixed assets
|
|
|
|
13,415
|
|
|
|
|
15,396
|
Multiclient seismic data
|
|
|
|
1,026
|
|
|
|
|
793
|
Goodwill
|
|
|
|
15,605
|
|
|
|
|
15,487
|
Intangible assets
|
|
|
|
4,569
|
|
|
|
|
4,654
|
Other assets
|
|
|
|
6,060
|
|
|
|
|
5,438
|
|
|
|
$
|
68,005
|
|
|
|
$
|
66,904
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
$
|
7,727
|
|
|
|
$
|
9,246
|
Estimated liability for taxes on income
|
|
|
|
1,203
|
|
|
|
|
1,647
|
Short-term borrowings and current portion
|
|
|
|
|
|
|
|
of long-term debt
|
|
|
|
4,557
|
|
|
|
|
2,765
|
Dividend payable
|
|
|
|
634
|
|
|
|
|
518
|
|
|
|
|
14,121
|
|
|
|
|
14,176
|
Long-term debt
|
|
|
|
14,442
|
|
|
|
|
10,565
|
Postretirement benefits
|
|
|
|
1,434
|
|
|
|
|
1,501
|
Deferred taxes
|
|
|
|
1,075
|
|
|
|
|
1,296
|
Other liabilities
|
|
|
|
1,028
|
|
|
|
|
1,317
|
|
|
|
|
32,100
|
|
|
|
|
28,855
|
Equity
|
|
|
|
35,905
|
|
|
|
|
38,049
|
|
|
|
$
|
68,005
|
|
|
|
$
|
66,904
|
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’s
indebtedness by reflecting cash and investments that could be used to
repay debt.
Details of changes in Net Debt follow:
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
|
|
Periods Ended December 31,
|
|
|
Twelve
Months
2015
|
|
Fourth
Quarter
2015
|
|
Twelve
Months
2014
|
Income (loss) from continuing operations before noncontrolling
interests
|
|
|
$
|
2,135
|
|
|
$
|
(989
|
)
|
|
$
|
5,711
|
|
Impairments and other charges, net of tax
|
|
|
|
2,218
|
|
|
|
1,835
|
|
|
|
1,639
|
|
Income from continuing operations before noncontrolling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interests, excluding charges & credits
|
|
|
|
4,353
|
|
|
|
846
|
|
|
|
7,350
|
|
Depreciation and amortization (1)
|
|
|
|
4,078
|
|
|
|
963
|
|
|
|
4,094
|
|
Pension and other postretirement benefits expense
|
|
|
|
438
|
|
|
|
112
|
|
|
|
355
|
|
Stock-based compensation expense
|
|
|
|
326
|
|
|
|
76
|
|
|
|
329
|
|
Pension and other postretirement benefits funding
|
|
|
|
(346
|
)
|
|
|
(54
|
)
|
|
|
(390
|
)
|
(Increase) decrease in working capital (2)
|
|
|
|
(478
|
)
|
|
|
31
|
|
|
|
(36
|
)
|
Other
|
|
|
|
434
|
|
|
|
204
|
|
|
|
(507
|
)
|
Cash flow from operations
|
|
|
|
8,805
|
|
|
|
2,178
|
|
|
|
11,195
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(2,410
|
)
|
|
|
(627
|
)
|
|
|
(3,976
|
)
|
SPM investments
|
|
|
|
(953
|
)
|
|
|
(603
|
)
|
|
|
(740
|
)
|
Multiclient seismic data costs capitalized
|
|
|
|
(486
|
)
|
|
|
(150
|
)
|
|
|
(321
|
)
|
Free cash flow (3)
|
|
|
|
4,956
|
|
|
|
798
|
|
|
|
6,158
|
|
|
|
|
|
|
|
|
|
Stock repurchase program
|
|
|
|
(2,182
|
)
|
|
|
(398
|
)
|
|
|
(4,678
|
)
|
Dividends paid
|
|
|
|
(2,419
|
)
|
|
|
(633
|
)
|
|
|
(1,968
|
)
|
Proceeds from employee stock plans
|
|
|
|
448
|
|
|
|
25
|
|
|
|
825
|
|
|
|
|
|
803
|
|
|
|
(208
|
)
|
|
|
337
|
|
|
|
|
|
|
|
|
|
Business acquisitions and investments, net of cash acquired plus
debt assumed
|
|
|
|
(478
|
)
|
|
|
(154
|
)
|
|
|
(1,501
|
)
|
Discountinued operations - settlement with U.S. Department of Justice
|
|
|
|
(233
|
)
|
|
|
-
|
|
|
|
-
|
|
Other
|
|
|
|
(252
|
)
|
|
|
19
|
|
|
|
220
|
|
Increase in Net Debt
|
|
|
|
(160
|
)
|
|
|
(343
|
)
|
|
|
(944
|
)
|
Net Debt, Beginning of period
|
|
|
|
(5,387
|
)
|
|
|
(5,204
|
)
|
|
|
(4,443
|
)
|
Net Debt
|
|
|
$
|
(5,547
|
)
|
|
$
|
(5,547
|
)
|
|
$
|
(5,387
|
)
|
|
|
|
|
|
|
|
|
Components of Net Debt
|
|
|
Dec. 31, 2015
|
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
Cash and short-term investments
|
|
|
$
|
13,034
|
|
|
$
|
6,605
|
|
|
$
|
7,501
|
|
Fixed income investments, held to maturity
|
|
|
|
418
|
|
|
|
439
|
|
|
|
442
|
|
Short-term borrowings and current portion of long-term debt
|
|
|
|
(4,557
|
)
|
|
|
(4,761
|
)
|
|
|
(2,765
|
)
|
Long-term debt
|
|
|
|
(14,442
|
)
|
|
|
(7,487
|
)
|
|
|
(10,565
|
)
|
|
|
|
|
|
$
|
(5,547
|
)
|
|
$
|
(5,204
|
)
|
|
$
|
(5,387
|
)
|
|
|
|
|
|
(1)
|
|
Includes depreciation of property, plant and equipment and
amortization of intangible assets, multiclient seismic data costs
and SPM investments.
|
|
|
|
|
|
(2)
|
|
Includes severance payments of approximately $810 million during the
twelve months ended December 31, 2015 and $205 million during the
fourth quarter of 2015.
|
|
|
|
|
|
(3)
|
|
"Free cash flow" represents cash flow from operations less capital
expenditures, SPM investments and multiclient seismic data costs
capitalized. Management believes that this is an important measure
because it represents funds available to reduce debt and pursue
opportunities that enhance shareholder value such as acquisitions,
and returning cash to shareholders through stock repurchases and
dividends.
|
Charges & Credits
In addition to financial results determined in accordance with US
generally accepted accounting principles (GAAP), this Full-Year and
Fourth-Quarter 2015 Press Release also includes non-GAAP financial
measures (as defined under the SEC’s 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 2015
|
|
|
|
|
|
|
Pretax
|
|
Tax
|
|
Noncont. Interest
|
|
Net
|
|
|
Diluted
EPS
|
Schlumberger income from continuing operations, excluding charges &
credits
|
|
|
|
$
|
1,034
|
|
|
$
|
188
|
|
|
$
|
27
|
|
$
|
819
|
|
|
|
$
|
0.65
|
|
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 terminations
|
|
|
|
|
(41
|
)
|
|
|
(2
|
)
|
|
|
-
|
|
|
(39
|
)
|
|
|
|
Other
|
|
|
|
|
(84
|
)
|
|
|
(7
|
)
|
|
|
-
|
|
|
(77
|
)
|
|
|
|
Schlumberger loss from continuing operations, as reported
|
|
|
|
$
|
(1,102
|
)
|
|
$
|
(113
|
)
|
|
$
|
27
|
|
$
|
(1,016
|
)
|
|
|
$
|
(0.81
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months 2015
|
|
|
|
|
|
|
Pretax
|
|
Tax
|
|
Noncont. Interest
|
|
Net
|
|
|
Diluted
EPS
|
Schlumberger income from continuing operations, excluding charges &
credits
|
|
|
|
$
|
5,456
|
|
|
$
|
1,103
|
|
|
$
|
63
|
|
$
|
4,290
|
|
|
|
$
|
3.37
|
|
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 terminations
|
|
|
|
|
(41
|
)
|
|
|
(2
|
)
|
|
|
-
|
|
|
(39
|
)
|
|
|
|
Other
|
|
|
|
|
(84
|
)
|
|
|
(7
|
)
|
|
|
-
|
|
|
(77
|
)
|
|
|
|
Schlumberger income from continuing operations, as reported
|
|
|
|
$
|
2,881
|
|
|
$
|
746
|
|
|
$
|
63
|
|
$
|
2,072
|
|
|
|
$
|
1.63
|
|
|
(Stated in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter 2014
|
|
|
|
|
|
|
Pretax
|
|
Tax
|
|
Noncont. Interest
|
|
Net
|
|
|
Diluted
EPS
|
Schlumberger income from continuing operations, excluding charges &
credits
|
|
|
|
$
|
2,488
|
|
|
$
|
532
|
|
|
$
|
15
|
|
$
|
1,941
|
|
|
|
$
|
1.50
|
WesternGeco restructuring
|
|
|
|
|
(806
|
)
|
|
|
(25
|
)
|
|
|
-
|
|
|
(781
|
)
|
|
|
|
Currency devaluation loss in Venezuela
|
|
|
|
|
(472
|
)
|
|
|
-
|
|
|
|
-
|
|
|
(472
|
)
|
|
|
|
Workforce reduction
|
|
|
|
|
(296
|
)
|
|
|
(37
|
)
|
|
|
-
|
|
|
(259
|
)
|
|
|
|
Impairment of SPM project
|
|
|
|
|
(199
|
)
|
|
|
(72
|
)
|
|
|
-
|
|
|
(127
|
)
|
|
|
|
Schlumberger income from continuing operations, as reported
|
|
|
|
$
|
715
|
|
|
$
|
398
|
|
|
$
|
15
|
|
$
|
302
|
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months 2014
|
|
|
|
|
|
|
Pretax
|
|
Tax
|
|
Noncont. Interest
|
|
Net
|
|
|
Diluted
EPS
|
Schlumberger income from continuing operations, excluding charges &
credits
|
|
|
|
$
|
9,412
|
|
|
$
|
2,062
|
|
|
$
|
68
|
|
$
|
7,282
|
|
|
|
$
|
5.57
|
WesternGeco restructuring
|
|
|
|
|
(806
|
)
|
|
|
(25
|
)
|
|
|
-
|
|
|
(781
|
)
|
|
|
|
Currency devaluation loss in Venezuela
|
|
|
|
|
(472
|
)
|
|
|
-
|
|
|
|
-
|
|
|
(472
|
)
|
|
|
|
Workforce reduction
|
|
|
|
|
(296
|
)
|
|
|
(37
|
)
|
|
|
-
|
|
|
(259
|
)
|
|
|
|
Impairment of SPM project
|
|
|
|
|
(199
|
)
|
|
|
(72
|
)
|
|
|
-
|
|
|
(127
|
)
|
|
|
|
Schlumberger income from continuing operations, as reported
|
|
|
|
$
|
7,639
|
|
|
$
|
1,928
|
|
|
$
|
68
|
|
$
|
5,643
|
|
|
|
$
|
4.31
|
|
Product Groups
|
(Stated in millions)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Dec. 31, 2015
|
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
|
|
|
Revenue
|
|
Income Before Taxes
|
|
Revenue
|
|
Income Before Taxes
|
|
Revenue
|
|
Income Before Taxes
|
Reservoir Characterization
|
|
|
|
$
|
2,154
|
|
|
$
|
520
|
|
|
$
|
2,321
|
|
|
$
|
614
|
|
|
$
|
3,265
|
|
|
$
|
984
|
|
Drilling
|
|
|
|
|
2,953
|
|
|
|
494
|
|
|
|
3,219
|
|
|
|
594
|
|
|
|
4,576
|
|
|
|
947
|
|
Production
|
|
|
|
|
2,671
|
|
|
|
303
|
|
|
|
2,974
|
|
|
|
330
|
|
|
|
4,863
|
|
|
|
898
|
|
Eliminations & other
|
|
|
|
|
(34
|
)
|
|
|
(29
|
)
|
|
|
(42
|
)
|
|
|
(17
|
)
|
|
|
(63
|
)
|
|
|
(48
|
)
|
Pretax operating income
|
|
|
|
|
|
|
1,288
|
|
|
|
|
|
1,521
|
|
|
|
|
|
2,781
|
|
Corporate & other
|
|
|
|
|
-
|
|
|
|
(179
|
)
|
|
|
-
|
|
|
|
(198
|
)
|
|
|
-
|
|
|
|
(221
|
)
|
Interest income(1)
|
|
|
|
|
-
|
|
|
|
8
|
|
|
|
-
|
|
|
|
8
|
|
|
|
-
|
|
|
|
8
|
|
Interest expense(1)
|
|
|
|
|
-
|
|
|
|
(83
|
)
|
|
|
-
|
|
|
|
(78
|
)
|
|
|
-
|
|
|
|
(80
|
)
|
Charges & credits
|
|
|
|
|
-
|
|
|
|
(2,136
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,773
|
)
|
|
|
|
|
$
|
7,744
|
|
|
$
|
(1,102
|
)
|
|
$
|
8,472
|
|
|
$
|
1,253
|
|
|
$
|
12,641
|
|
|
$
|
715
|
|
|
Geographic Areas
|
(Stated in millions)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Dec. 31, 2015
|
|
Sept. 30, 2015
|
|
Dec. 31, 2014
|
|
|
|
|
Revenue
|
|
Income Before Taxes
|
|
Revenue
|
|
Income Before Taxes
|
|
Revenue
|
|
Income Before Taxes
|
North America
|
|
|
|
$
|
1,955
|
|
$
|
139
|
|
|
$
|
2,273
|
|
$
|
202
|
|
|
$
|
4,324
|
|
$
|
849
|
|
Latin America
|
|
|
|
|
1,407
|
|
|
324
|
|
|
|
1,422
|
|
|
295
|
|
|
|
2,053
|
|
|
429
|
|
Europe/CIS/Africa
|
|
|
|
|
2,059
|
|
|
428
|
|
|
|
2,274
|
|
|
505
|
|
|
|
3,063
|
|
|
683
|
|
Middle East & Asia
|
|
|
|
|
2,248
|
|
|
507
|
|
|
|
2,372
|
|
|
641
|
|
|
|
3,094
|
|
|
877
|
|
Eliminations & other
|
|
|
|
|
75
|
|
|
(110
|
)
|
|
|
131
|
|
|
(122
|
)
|
|
|
107
|
|
|
(57
|
)
|
Pretax operating income
|
|
|
|
|
|
|
1,288
|
|
|
|
|
|
1,521
|
|
|
|
|
|
2,781
|
|
Corporate & other
|
|
|
|
|
-
|
|
|
(179
|
)
|
|
|
-
|
|
|
(198
|
)
|
|
|
-
|
|
|
(221
|
)
|
Interest income(1)
|
|
|
|
|
-
|
|
|
8
|
|
|
|
-
|
|
|
8
|
|
|
|
-
|
|
|
8
|
|
Interest expense(1)
|
|
|
|
|
-
|
|
|
(83
|
)
|
|
|
-
|
|
|
(78
|
)
|
|
|
-
|
|
|
(80
|
)
|
Charges & credits
|
|
|
|
|
-
|
|
|
(2,136
|
)
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
(1,773
|
)
|
|
|
|
|
$
|
7,744
|
|
$
|
(1,102
|
)
|
|
$
|
8,472
|
|
$
|
1,253
|
|
|
$
|
12,641
|
|
$
|
715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes interest included in the Product Groups and
Geographic Areas results.
|
|
Product Groups
|
(Stated in millions)
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
Dec. 31, 2015
|
|
Dec. 31, 2014
|
|
|
|
|
Revenue
|
|
Income Before Taxes
|
|
Revenue
|
|
Income Before Taxes
|
Reservoir Characterization
|
|
|
|
$
|
9,501
|
|
|
$
|
2,450
|
|
|
$
|
12,905
|
|
|
$
|
3,708
|
|
Drilling
|
|
|
|
|
13,563
|
|
|
|
2,538
|
|
|
|
18,128
|
|
|
|
3,805
|
|
Production
|
|
|
|
|
12,548
|
|
|
|
1,585
|
|
|
|
17,763
|
|
|
|
3,193
|
|
Eliminations & other
|
|
|
|
|
(137
|
)
|
|
|
(63
|
)
|
|
|
(216
|
)
|
|
|
(130
|
)
|
Pretax operating income
|
|
|
|
|
|
|
6,510
|
|
|
|
|
|
10,576
|
|
Corporate & other
|
|
|
|
|
-
|
|
|
|
(768
|
)
|
|
|
-
|
|
|
|
(848
|
)
|
Interest income(1)
|
|
|
|
|
-
|
|
|
|
30
|
|
|
|
-
|
|
|
|
31
|
|
Interest expense(1)
|
|
|
|
|
-
|
|
|
|
(316
|
)
|
|
|
-
|
|
|
|
(347
|
)
|
Charges & credits
|
|
|
|
|
-
|
|
|
|
(2,575
|
)
|
|
|
-
|
|
|
|
(1,773
|
)
|
|
|
|
|
$
|
35,475
|
|
|
$
|
2,881
|
|
|
$
|
48,580
|
|
|
$
|
7,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Areas
|
(Stated in millions)
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
Dec. 31, 2015
|
|
Dec. 31, 2014
|
|
|
|
|
Revenue
|
|
Income Before Taxes
|
|
Revenue
|
|
Income Before Taxes
|
North America
|
|
|
|
$
|
9,811
|
|
|
$
|
999
|
|
|
$
|
16,151
|
|
|
$
|
3,057
|
|
Latin America
|
|
|
|
|
6,014
|
|
|
|
1,315
|
|
|
|
7,699
|
|
|
|
1,639
|
|
Europe/CIS/Africa
|
|
|
|
|
9,284
|
|
|
|
1,979
|
|
|
|
12,515
|
|
|
|
2,765
|
|
Middle East & Asia
|
|
|
|
|
9,898
|
|
|
|
2,661
|
|
|
|
11,875
|
|
|
|
3,273
|
|
Eliminations & other
|
|
|
|
|
468
|
|
|
|
(444
|
)
|
|
|
340
|
|
|
|
(158
|
)
|
Pretax operating income
|
|
|
|
|
|
|
6,510
|
|
|
|
|
|
10,576
|
|
Corporate & other
|
|
|
|
|
-
|
|
|
|
(768
|
)
|
|
|
-
|
|
|
|
(848
|
)
|
Interest income(1)
|
|
|
|
|
-
|
|
|
|
30
|
|
|
|
-
|
|
|
|
31
|
|
Interest expense(1)
|
|
|
|
|
-
|
|
|
|
(316
|
)
|
|
|
-
|
|
|
|
(347
|
)
|
Charges & credits
|
|
|
|
|
-
|
|
|
|
(2,575
|
)
|
|
|
-
|
|
|
|
(1,773
|
)
|
|
|
|
|
$
|
35,475
|
|
|
$
|
2,881
|
|
|
$
|
48,580
|
|
|
$
|
7,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes interest included in the Product Groups and
Geographic Areas results.
|
|
Supplemental Information
|
|
|
|
1)
|
|
What is the definition of decremental operating margin?
|
|
|
Decremental operating margin is equal to the ratio of the change in
pretax operating income over the change in revenue.
|
|
|
|
2)
|
|
What were the pretax operating income margin and decremental
operating margin for the fourth quarter of 2015?
|
|
|
For the fourth quarter of 2015, the pretax operating income margin
was 16.6%. The year-over-year decremental operating margin was 31%
and the sequential decremental operating margin was 32%.
|
|
|
|
3)
|
|
What were the pretax operating income margin and decremental
operating margin for the full year 2015?
|
|
|
For the full year 2015, the pretax operating income margin was
18.4%. The year-over-year decremental operating margin was 31%.
|
|
|
|
4)
|
|
What was the free cash flow as a percentage of income from
continuing operations before noncontrolling interests and charges
and credits, for the fourth quarter of 2015?
|
|
|
Free cash flow, which was $798 million and included approximately
$205 million of severance payments, as a percentage of income from
continuing operations before noncontrolling interests and charges
and credits was 94% for the fourth quarter of 2015.
|
|
|
|
5)
|
|
What was the free cash flow as a percentage of income from
continuing operations before noncontrolling interests and charges
and credits, for the full year 2015?
|
|
|
Free cash flow, which was $4.96 billion and included approximately
$810 million of severance payments, as a percentage of income from
continuing operations before noncontrolling interests and charges
and credits was 114% for the full year 2015.
|
|
|
|
6)
|
|
What is the capex guidance for the full year 2016?
|
|
|
Capex (excluding multiclient and SPM investments) is expected to be
$2.4 billion for 2016. Capex for the full year 2015 was $2.4 billion.
|
|
|
|
7)
|
|
What was included in “Interest and other income” for the fourth
quarter of 2015?
|
|
|
“Interest and other income” for the fourth quarter of 2015 was $81
million. This amount consisted of earnings of equity method
investments of $67 million and interest income of $14 million.
|
|
|
|
8)
|
|
How did interest income and interest expense change during the
fourth quarter of 2015?
|
|
|
Interest income of $14 million increased $1 million sequentially.
Interest expense of $91 million increased $5 million sequentially.
|
|
|
|
9)
|
|
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, certain centrally managed initiatives and other nonoperating
items.
|
|
|
|
10)
|
|
What was the effective tax rate (ETR), excluding charges and
credits, for the fourth quarter of 2015?
|
|
|
The ETR for the fourth quarter of 2015, excluding charges and
credits, was 18.2% as compared to 20.0% for the third quarter of
2015.
|
|
|
|
|
|
The ETR for the fourth quarter of 2015, including charges and
credits, was 10.2%.
|
|
|
|
11)
|
|
How many shares of common stock were outstanding as of December
31, 2015 and how did this change from the end of the previous
quarter?
|
|
|
There were 1.256 billion shares of common stock outstanding as of
December 31, 2015. The following table shows the change in the
number of shares outstanding from September 30, 2015 to December 31,
2015.
|
|
|
|
|
|
|
|
|
(Stated in millions)
|
|
|
|
|
Shares outstanding at September 30, 2015
|
|
|
|
|
1,261
|
|
|
|
|
|
Shares sold to optionees, less shares exchanged
|
|
|
|
|
-
|
|
|
|
|
|
Vesting of restricted stock
|
|
|
|
|
-
|
|
|
|
|
|
Shares issued under employee stock purchase plan
|
|
|
|
|
-
|
|
|
|
|
|
Stock repurchase program
|
|
|
|
|
(5
|
)
|
|
|
|
|
Shares outstanding at December 31, 2015
|
|
|
|
|
1,256
|
|
|
|
|
12)
|
|
What was the weighted average number of shares outstanding
during the fourth quarter of 2015 and third quarter of 2015 and
how does this reconcile to the average number of shares
outstanding, assuming dilution used in the calculation of diluted
earnings per share from continuing operations, excluding charges
and credits?
|
|
|
The weighted average number of shares outstanding during the fourth
quarter of 2015 and third quarter of 2015 was 1.259 billion and
1.265 billion, respectively. The following is a reconciliation of
the weighted average shares outstanding to the average number of
shares outstanding, assuming dilution.
|
|
|
|
|
|
|
|
|
(Stated in millions)
|
|
|
|
|
|
|
|
|
Fourth Quarter 2015
|
|
|
|
Third Quarter 2015
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
1,259
|
|
|
|
1,265
|
|
|
|
|
Assumed exercise of stock options
|
|
|
|
2
|
|
|
|
3
|
|
|
|
|
Unvested restricted stock
|
|
|
|
3
|
|
|
|
4
|
|
|
|
|
Average shares outstanding, assuming dilution
|
|
|
|
1,264
|
|
|
|
1,272
|
|
13)
|
|
What were multiclient sales in the fourth quarter of 2015?
|
|
|
Multiclient sales, including transfer fees, were $117 million in the
fourth quarter of 2015 and $60 million in the third quarter of 2015.
|
|
|
|
14)
|
|
What was the WesternGeco backlog at the end of the fourth
quarter of 2015?
|
|
|
WesternGeco backlog, which is based on signed contracts with
customers, was $1.13 billion at the end of the fourth quarter of
2015. It was $910 million at the end of the third quarter of 2015.
|
|
|
|
15)
|
|
What are the interest rates and maturities of the Senior Notes
issued in December 2015 in connection with financing part of
Schlumberger’s pending acquisition of Cameron International
Corporation?
|
|
|
Schlumberger Holdings Corporation (SHC), an indirect, wholly-owned
U.S. subsidiary of Schlumberger Limited, issued five tranches of
senior notes in December 2015 totaling $6 billion with the following
interest rates and maturities: $500 million of 1.900% Senior Notes
due 2017, $1.3 billion of 2.350% Senior Notes due 2018, $1.6 billion
of 3.000% Senior Notes due 2020, $850 million of 3.625% Senior Notes
due 2022 and $1.75 billion of Senior Notes due 2025.
|
|
|
|
16)
|
|
What do the various charges Schlumberger recorded during the
fourth quarter of 2015 relate to?
|
|
|
|
|
|
Workforce reduction and Incentivized Leave of Absence Program:
|
|
|
Based on the activity outlook for 2016, as well as to further
streamline its support structure, Schlumberger decided to further
reduce its headcount and expand its incentivized leave of absence
(ILOA) program during the fourth quarter of 2015. As a result,
Schlumberger recorded a $530 million charge during the fourth
quarter associated with these headcount reductions and the ILOA
program.
|
|
|
|
|
|
Asset impairments and restructuring charges:
|
|
|
As a result of oil and gas industry market conditions that have
continued to deteriorate and its impact on the activity outlook,
Schlumberger determined that carrying values of certain assets
were no longer recoverable and also took certain decisions that
resulted in the following impairment and restructuring charges
during the fourth quarter of 2015:
|
|
|
|
|
--
|
$776 million of fixed asset impairments primarily relating to
underutilized pressure pumping and other equipment in North America,
as well as certain lower-tier drilling rigs.
|
|
|
|
|
--
|
$269 million to write-down the carrying value of certain inventory,
primarily in North America.
|
|
|
|
|
--
|
$182 million to reduce the carrying value of the remaining
investment in an SPM project in Colombia, as a result of the recent
decline in commodity prices. Considering also that the project is
approaching the end of its contractual term and its revenue stream
is directly linked to oil prices.
|
|
|
|
|
--
|
$177 million associated with facilities, including the expected sale
of certain properties and the termination of certain leases.
|
|
|
|
|
--
|
$77 million relating to assets that are no longer recoverable as a
result of geopolitical issues in certain countries in the Middle
East.
|
|
|
|
|
--
|
$41 million relating to contract termination costs.
|
|
|
|
|
--
|
$84 million of other charges associated with the current market
conditions, including $40 million relating to an
other-than-temporary impairment of marketable securities and $15
million relating to the impairment of an equity-method investment.
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Schlumberger does not expect to incur any significant cash
expenditures as a result of these asset impairment and restructuring
charges.
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About Schlumberger
Schlumberger is the world’s leading supplier of technology, integrated
project management and information solutions to customers working in the
oil and gas industry worldwide. Employing more than 95,000 people
representing over 140 nationalities and working in more than 85
countries, Schlumberger provides the industry’s widest range of products
and services from exploration through production.
Schlumberger Limited has principal offices in Paris, Houston, London and
The Hague, and reported revenues of $35.47 billion in 2015. For more
information, visit www.slb.com.
*Mark of Schlumberger or of Schlumberger companies.
†Japan Oil, Gas and Metals National Corporation (JOGMEC),
formerly Japan National Oil Corporation (JNOC), and Schlumberger
collaborated on a research project to develop LWD technology. The
EcoScope and NeoScope services use technology that resulted from this
collaboration.
Notes
Schlumberger will hold a conference call to discuss the above
announcement and business outlook on Friday, January 22, 2016. The call
is scheduled to begin at 8:00 a.m. (US Central Time), 9:00 a.m. (Eastern
Time), 3:00 p.m. (Paris time). To access the call, which is open to the
public, please contact the conference call operator at +1 (800) 230-1059
within North America, or +1 (612) 234-9959 outside of 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 21,
2016 by dialing +1 (800) 475-6701 within North America, or +1 (320)
365-3844 outside of North America, and providing the access code 373076.
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, 2016.
This full-year and fourth-quarter 2015 earnings release and Supplemental
Information, 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; capital
expenditures by Schlumberger and the oil and gas industry; the business
strategies of Schlumberger’s customers; the integration of Cameron into
our business; 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; pricing erosion;
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 risk that the
contemplated Cameron merger will not occur, negative effects from the
pendency of the contemplated Cameron merger, the inability after the
closing of the Cameron merger to successfully integrate the merged
businesses and to realize expected synergies, the inability to retain
key employees; expenses for the merger; and other risks and
uncertainties detailed in this full-year and fourth-quarter 2015
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.
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