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Schlumberger Financials Rebound in Q1; Will Up Pressure Pumping Horsepower in 2018

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Schlumberger reported its Q1 2018 results.

Highlights:

• Revenue up +14% YOY to $7.8 billion

• Sequential decline of -4% (Paal Kibsgaard commented: “Overall, the first-quarter sequential revenue decline was led by the Cameron Group, which fell 7%, driven by seasonally lower project volumes and reduced product sales.")

“On land in North America, our Drilling services business continued to grow, driven by strong demand for horizontal drilling technologies. Revenue also increased due to the ramp-up of activity in Canada. The US land pressure pumping business, however, was impacted by weaker than expected activity as well as by softer pricing, inefficiency, rising supply chain costs, and rail logistical challenges

• In the Q1 conference call, Kibsgaard talked about ramping up its horsepower throughout 2018: "We also see continued growth throughout 2018 in our North America land pressure pumping business, driven by strong underlying activity as well as market share gains, as we deployed a further 1 million horsepower over the course of 2018. We continue to deploy and I would say that we deployed less than what we planned to, mainly because the overall softness that we experienced in the market. I think, the overall stage count growth market wide was a bit lower than expected and in addition to that, a number of other companies added fairly significant capacity to the market and this had an impact on softening pricing and also it impacted utilization. So we introduced somewhat lower, a lower number of fleets in the first quarter and it was more backend loaded, but we are back on our plan rate of introduction as we enter Q2 and our plan is still to deploy the full 1 million horsepower that we acquired during the course of 2018."