Schlumberger Announces Fourth Quarter 2004 Results, Increases Dividend.NEW YORK New York, state, United StatesNew York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Schlumberger Limited (NYSE NYSE See: New York Stock Exchange :SLB SLB Solomon Islands (ISO Country code) SLB Schlumberger Ltd. (oil field services firm) SLB Server Load Balancing SLB Sport Lisboa e Benfica (soccer) ) reported today 2004 operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $11.48 billion versus $10.02 billion in 2003. Income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , before credits and charges, of $1.21 billion was 45% higher than last year, representing diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $2.03 versus $1.43 in 2003. Income from continuing operations was $1.01 billion ($1.70 per share-diluted) compared to $398 million ($0.68 per share) last year. Net income of $1.22 billion more than tripled over the prior year with diluted earnings per share rising to $2.04 in 2004 from $0.65 in 2003. Fourth Quarter Results Fourth quarter operating revenue of $3.07 billion was 6% above the prior quarter and 17% higher than the fourth quarter of 2003. Income from continuing operations was $351 million, or $0.59 per share-diluted versus $0.50 in the third quarter of 2004 and $0.31 in the fourth quarter of last year. Excluding credits and charges, diluted-earnings per share were $0.52 in the third quarter of 2004 and $0.41 in the fourth quarter of 2003. Discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. recorded a loss of $22 million ($0.04 per share) in the quarter. Net income was $330 million, or $0.55 per share-diluted, compared to net income of $177 million, or $0.30 per share-diluted last year. Oilfield Services revenue of $2.73 billion increased 5% sequentially and 18% compared to the same quarter of last year. Pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern business segment operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $483 million increased 10% sequentially and 15% year-on-year. WesternGeco revenue of $333 million increased 11% sequentially and 8% year-on-year. Pretax business segment operating income of $43 million improved $10 million sequentially and $11 million compared to the same quarter of last year. Schlumberger Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Andrew Gould Andrew Gould (December 17, 1946) is chairman and chief executive officer of Schlumberger Limited, a global oilfield services company supplying technology, information solutions and integrated project management. commented, "Strong fourth-quarter activity resulted in new record levels of Oilfield Services revenue and pretax operating income. Activity increased in almost all regions with the largest year-on-year growth recorded in the GeoMarkets in India; Malaysia, Brunei and the Philippines; Canada; East Africa and the Eastern Mediterranean; and Arabia. On a yearly basis, Russia continued to make impressive progress with growth exceeding our expectations despite the absence of any activity for Yuganskneftegas in the quarter. "Pricing increases in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. accelerated during the quarter, particularly in Canada and US Land. In addition, contract awards and renewals in the Eastern Hemisphere Eastern Hemisphere Part of the Earth east of the Atlantic Ocean. It includes Europe, Asia, Australia, and Africa. Longitudes 20° W and 160° E are often considered its boundaries. were generally executed at improved pricing levels. "The introduction and market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of new technology also contributed to the growth. The Drilling & Measurements PowerDrive family, together with Wireline Analysis Behind Casing and PressureXpress services and Well Services Well services is a department within a petroleum production company through which matters concerning existing wells are handled. Having a shared well services department for all (or at least multiple) assets operated by a company is seen as advantageous as it allows the pooling of stimulation technologies, all made very satisfactory progress. The rate of new technology introductions will accelerate over the coming two-year period. "WesternGeco delivered excellent results driven by further uptake uptake /up·take/ (up´tak) absorption and incorporation of a substance by living tissue. up·take n. of Q-Technology and increased multiclient library sales. The marine seismic market began to tighten with vessel utilization rising and pricing increasing. "The industry is now clearly focused on the need to build additional supply capacity for both oil and gas. This is evidenced by increasing exploration budgets and new field development plans, as well as unprecedented efforts to increase production and recovery from existing reservoirs. Strong market fundamentals, our extensive technology portfolio and unique global workforce make us ideally placed to grow in this environment. "We are pleased to announce that the Board of Directors approved a 12% increase in the quarterly dividend." Other Events: --The increased quarterly dividend of $0.21 is payable on April 8, 2005, to stockholders of record on March 2, 2005. --As part of the 15 million-share buy-back program, Schlumberger repurchased 5.15 million shares at an average price of $62.20, including fees, for a total amount of $320 million in 2004. --Schlumberger has launched a $1.5 million fund available for GeoMarkets located in the areas affected by the Asian tsunami. The Schlumberger Foundation will add $500,000 to this fund. The GeoMarkets will be able to access this fund to leverage their own local efforts in selected relief and reconstruction aid projects. Schlumberger will also support company employees who wish to devote their personal time to relief efforts. In addition, as a technology leader in the field of geophysical ge·o·phys·ics n. (used with a sing. verb) The physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology. measurement, Schlumberger is committed to contribute expertise and technical knowledge to help research warning systems in this field.
Consolidated Statement of Income (Unaudited)
(Stated in thousands except per share amounts)
Fourth Quarter Twelve Months
-------------------------------------------------
For Periods Ended
Dec. 31 2004 2003(6) 2004 2003(6)
----------------------------------------------------------------------
Operating revenue $3,067,670 $2,624,131 $11,480,165 $10,017,215
Interest and other
income(1) 40,164 68,168 128,698 166,493
Expenses
Cost of goods sold
and services(2) 2,388,693 2,124,129 9,041,972 8,428,631
Research &
engineering 116,431 108,273 467,354 430,801
Marketing 11,014 10,469 40,310 47,589
General &
administrative 97,694 80,675 344,448 317,326
Debt extinguishment
costs(3) - - 114,894 167,801
Interest(4) 44,788 73,246 272,448 334,336
----------------------------------------------------------------------
Income from
Continuing
Operations
before taxes
and minority
interest 449,214 295,507 1,327,437 457,224
Taxes on income(2)
(3)(4) 90,910 107,019 293,821 174,224
----------------------------------------------------------------------
Income from
Continuing
Operations
before minority
interest 358,304 188,488 1,033,616 283,000
Minority interest (6,906) (5,032) (19,564) 115,169
----------------------------------------------------------------------
Income from
Continuing
Operations 351,398 183,456 1,014,052 398,169
Income (Loss) from
Discontinued
Operations (21,626) (6,415) 209,818 (15,167)
----------------------------------------------------------------------
Net Income $329,772 $177,041 $1,223,870 $383,002
Diluted Earnings
(Loss) Per Share(7):
Income from
Continuing
Operations $0.59 $0.31 $1.70 $0.68
Income (Loss) from
Discontinued
Operations (0.04) (0.01) 0.34 (0.03)
----------- ----------- ------------ ------------
Net Income $0.55 $0.30 $2.04 $0.65
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
Average shares
outstanding 588,799 585,755 589,089 583,904
Average shares
outstanding assuming
dilution 612,462 607,967 612,872 586,491
Depreciation &
Amortization
included in
expenses(5) $339,302 $302,989 $1,307,931 $1,341,102
----------------------------------------------------------------------
1) Includes interest income of:
- Fourth quarter 2004 - $16 million (2003 - $14 million).
- Twelve months 2004 - $56 million (2003 - $52 million).
The first quarter of 2004 includes a $14 million ($0.02 per share)
loss on the sale of Atos Origin shares.
The second quarter of 2004 includes a $7 million ($0.01 per share)
loss on the sale of Atos Origin shares.
2) The third quarter of 2003 includes a $205 million ($0.34 per share)
multiclient library impairment charge (pretax $398 million, tax
benefit $106 million and minority interest credit $88 million), a
$38 million ($0.06 per share) vessel impairment charge (pretax $54
million and minority interest credit $16 million) and a pretax and
after-tax gain of $31 million ($0.05 per share) on the sale of a
rig.
The fourth quarter of 2003 includes a $20 million ($0.03 per share)
credit (pretax $32 million, tax charge $12 million) related to the
gain on the sale of a note and a pretax and after-tax charge of
$81 million ($0.13 per share) related to the write down of an
investment.
The first quarter of 2004 includes a $14 million ($0.02 per share)
charge (pretax $20 million and tax benefit of $6 million) related
to the restructuring program in the United States.
The second quarter of 2004 includes a pretax and after-tax idle
leased facility reserve of $11 million ($0.02 per share), a
reorganization reserve of $4 million ($0.01 per share) and a
litigation reserve release of $5 million ($0.01 per share).
The third quarter of 2004 includes a pretax and after-tax $3
million severance charge and a $10 million charge ($0.02 per share)
related to an Intellectual Property settlement (pretax $11 million
and tax benefit of $1 million).
3) The second quarter of 2003 includes an $81 million pretax and
after-tax charge ($0.14 per share) related to the repurchase of
Euro denominated Bonds.
The third quarter of 2003 includes an $86 million pretax and
after-tax charge ($0.14 per share) related to the repurchase of UK
Pound and Euro denominated Bonds.
The first quarter of 2004 includes a $77 million pretax and
after-tax charge ($0.13 per share) related to the repurchase of UK
Pound and Euro denominated Bonds.
The second quarter of 2004 includes $23 million ($0.04 per share)
related to the repurchase of US Dollar denominated Bonds (pretax
$37 million and tax benefit of $14 million).
4) The first quarter of 2004 includes a $46 million ($0.08 per share)
write off of the US Interest Rate Swap (pretax $73 million and tax
benefit of $27 million).
The second quarter of 2004 includes a gain of $6 million ($0.01 per
share) on the settlement of the US Interest Rate Swap (pretax $10
million and tax benefit of $3 million).
5) Including multiclient seismic data costs.
6) Restated for discontinued operations.
7) For the total year 2003, the computation of diluted earnings per
share excludes any effects of the convertible debentures because to
do so would have had an anti-dilutive effect.
Condensed Balance Sheet (Unaudited)
(Stated in
thousands)
Assets Dec. 31, 2004 Dec. 31, 2003
---------------------------------------------------------------------
Current Assets
Cash and short-term investments $2,997,425 $3,108,973
Other current assets 4,016,953 4,022,307
Assets held for sale (1) 65,179 3,237,841
---------------------------------------------------------------------
7,079,557 10,369,121
Fixed income investments, held to
maturity 203,750 223,300
Fixed assets 3,761,729 3,799,711
Multiclient seismic data 346,522 505,784
Goodwill 2,789,048 3,284,254
Other assets 1,856,929 1,859,155
---------------------------------------------------------------------
$16,037,535 $20,041,325
---------------------------------------------------------------------
Liabilities and Stockholders' Equity
---------------------------------------------------------------------
Current Liabilities
Accounts payable and accrued
liabilities $3,017,548 $3,247,545
Estimated liability for taxes on
income 858,785 807,938
Bank loans and current portion of
long-term debt 715,872 1,411,168
Dividend payable 111,136 110,511
Liabilities held for sale (1) 34,617 1,217,568
---------------------------------------------------------------------
4,737,958 6,794,730
Long-term debt 3,944,180 6,097,418
Postretirement benefits 670,765 614,850
Other liabilities 151,457 254,708
---------------------------------------------------------------------
9,504,360 13,761,706
Minority interest 416,438 398,330
Stockholders' Equity 6,116,737 5,881,289
---------------------------------------------------------------------
$16,037,535 $20,041,325
---------------------------------------------------------------------
(1) Assets and liabilities held for sale at Dec. 31, 2004 represent
the gross assets and liabilities of the Essentis, Payphones and
Global businesses. Assets and liabilities held for sale at Dec.
31, 2003 represent the gross assets and liabilities of the
SchlumbergerSema business.
Net Debt (Unaudited)
Net debt represents gross debt less cash, short-term investments and
fixed income investments, held to maturity. Details of the net debt
follow:
(Stated in millions)
Twelve Months 2004
----------------------------------------------------
Net Debt, beginning of period $(4,176)
Income from continuing operations 1,014
Excess of equity income over
dividends received (66)
Charges 199
Depreciation and amortization 1,308
Increase in working capital
requirements (465)
Capital expenditures (1,279)
Dividends paid (441)
Proceeds from employee
stock plans 278
Proceeds from business
divestitures 1,729
Proceeds from the sale of
the Axalto shares 99
Proceeds from the sale of the
Atos Origin shares 1,165
Stock repurchase program (320)
US pension plan payment (249)
Debt extinguishment costs (111)
Settlement of US Interest
Rate Swap (70)
Investment in PetroAlliance (12)
Other 13
Translation effect on net debt (75)
--------
Net Debt, end of period $(1,459)
--------
--------
(Stated in millions)
Components of Net Debt Dec. 31, 2004 Dec. 31, 2003
---------------------------------------------------------------------
Cash and short-term
investments $2,997 $3,109
Fixed income investments, held
to maturity 204 223
Bank loans and current
portion of long-term debt (716) (1,411)
Long-term debt (3,944) (6,097)
--------- ---------
$(1,459) $(4,176)
--------- ---------
--------- ---------
Business Review (Unaudited)
(Stated in millions) Fourth Quarter Twelve Months
----------------------- ----------------------
2004(2) 2003(2) % chg 2004(2) 2003(2) % chg
----------------------- ----------------------
Oilfield Services
---------------------
Operating Revenue $2,734 $2,313 18% $10,239 $8,823 16%
Pretax Operating
Income(1) $483 $420 15% $1,801 $1,537 17%
WesternGeco
---------------------
Operating Revenue $333 $308 8% $1,238 $1,183 5%
Pretax Operating
Income(1) $43 $32 32% $124 $(20) -
1) Pretax operating income represents income before taxes and
minority interest, excluding interest income, interest expense and
amortization of intangibles.
2) The second quarter 2003 excludes debt extinguishment costs of $81
million pretax.
The third quarter of 2003 excludes debt extinguishment costs of
$86 million pretax and a pretax charge of $421 million for
impairment and other charges/credits.
The fourth quarter of 2003 excludes a net charge of $49 million
for the write down of an investment and the gain on sale of a
note.
The first quarter of 2004 excludes a pretax charge of $73 million
for the US Interest Rate Swap write off, a pretax loss of $14
million on the sale of Atos Origin shares, a pretax charge of $77
million of debt extinguishment costs and a pretax charge of $20
million related to the restructuring program in the United States.
The second quarter of 2004 excludes a pretax loss of $7 million on
the sale of Atos Origin shares, a pretax idle leased facility
reserve of $11 million, a pretax reorganization reserve of $4
million, a pretax release of a litigation reserve of $5 million, a
pretax gain of $10 million for the settlement of the US Interest
Rate Swap and a pretax charge of $37 million of debt
extinguishment costs.
The third quarter of 2004 excludes a pretax charge of $11 million
for an Intellectual Property settlement and a pretax $3 million
severance charge.
Oilfield Services Revenue of $10.24 billion increased 16% in 2004 versus 2003. North America and Middle East & Asia each increased by 18%, and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. increased 21%. Europe/CIS/West Africa was up by 4%. Pretax operating income of $1.80 billion in 2004 was 17% higher than in 2003. Fourth-quarter revenue of $2.73 billion was 5% higher sequentially and increased 18% year-on-year. Pretax operating income of $483 million increased 10% sequentially and grew 15% year-on-year. Overall sequential revenue increases were highest in the Canada, Mexico, India, Venezuela and East Africa GeoMarkets. By technology, all Segments were higher with demand particularly strong for Wireline and Well Services. Robust year-on-year revenue growth was experienced across all regions with the US Land, Canada, Mexico, Russia, West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. , India, the Arabian and Gulf GeoMarkets posting the highest increases. Double-digit growth was experienced by all service technology Segments. North America Revenue of $847 million increased 7% sequentially and 25% year-on-year. Pretax operating income of $157 million rose 32% sequentially and 48% year-on-year. Sequential revenue growth was due to increased activity in Canada and the resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of drilling in the Gulf Coast after weather-related slowdowns in the prior quarter. In addition to the strength of the drilling activity, market share gains and higher pricing also contributed to the strong performance in Canada. Robust pretax operating income growth in US Land was mainly due to increased operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. , with double-digit price improvements experienced in Wireline and Well Services from 2003 averages. In Canada, a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. geographical mix, coupled with sustained pricing improvements, also led to the improvement in the operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . During the quarter the technology component of turnkey See turnkey system. service revenue in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east was evaluated against our objectives but proved insufficient to outweigh out·weigh tr.v. out·weighed, out·weigh·ing, out·weighs 1. To weigh more than. 2. To be more significant than; exceed in value or importance: The benefits outweigh the risks. the risk associated with the turnkey drilling business model. As a result, the decision was made to exit the activity. During the quarter, pretax operational losses and termination costs of $10 million were incurred. In the quarter a number of key technology solutions were deployed across the Area. Working on a deepwater project, ChevronTexaco, together with Schlumberger Drilling & Measurements, successfully developed and deployed the world's first 26-inch PowerDrive vorteX(a) high performance rotary steerable system A rotary steerable system is a new form of drilling technology used in directional drilling. It employs the use of specialized downhole equipment to replace conventional directional tools such as mud motors. . This unique tool configuration improved both drilling efficiency and well placement accuracy. In the Gulf of Mexico, the Offshore Minerals Management Program, a division of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Department of Interior Minerals Management Service, selected the Schlumberger Information Solutions Schlumberger Information Solutions (SIS) functions as an operating unit of the global oil services giant Schlumberger Limited. SIS products consist of software developed by Schlumberger itself, as well as products acquired from GeoQuest (GeoFrame), Iron Mountain (eSearch), Merak next-generation data repository See repository. and logical data model as a foundation component for their phased, multi-year Outer Continental Shelf In the federal United States, the Outer Continental Shelf (OCS) consists of the submerged lands, subsoil, and seabed, lying between the seaward extent of the States' jurisdiction and the seaward extent of Federal jurisdiction. (OCS OCS - Object Compatibility Standard ) transformation project, OCS Connect. Well Services introduced carbon-dioxide-compatible ClearFRAC(a) CO2, the latest addition to the ClearFRAC family of viscoelastic Adj. 1. viscoelastic - having viscous as well as elastic properties natural philosophy, physics - the science of matter and energy and their interactions; "his favorite subject was physics" surfactant Surfactant Definition Surfactant is a complex naturally occurring substance made of six lipids (fats) and four proteins that is produced in the lungs. It can also be manufactured synthetically. fracturing fluids. This unique fluid system extends the application of ClearFRAC technology to the tight-gas and mature reservoir markets. This system was extensively field tested in the United States and Canada during the second half of 2004, showing improved well economics over traditional polymer-based fracturing systems. Key contracts secured in the quarter included a multi-year award from BHP Billiton BHP Billiton is the world's largest mining company.[1] Its origin is in the 2001 merger of Australia's Broken Hill Proprietary Company (BHP) and the UK's Billiton, which has a South African background. The result is a dual-listed company. for 100% of the wireline, LWD/MWD, PowerDrive(a) rotary Rotary can refer to:
Latin America Revenue of $491 million was up 13% sequentially and 20% year-on-year. Pretax operating income of $53 million increased 17% sequentially but declined 21% year-on-year. While all GeoMarkets posted sequential revenue increases, results were strongest in Mexico and Venezuela, with demand higher across all technology Segments. The revenue increase in Mexico was mainly due to the return of PEMEX Pemex officially Petróleos Mexicanos Mexico's state-owned oil company. In 1938 Pres. Lázaro Cárdenas nationalized 17 foreign oil companies to create Pemex, the largest Latin American petroleum company and a major world exporter of fossil fuel. drilling activity levels to those experienced prior to the third quarter, coupled with higher levels of Integrated Project Management (IPM (1) (Impressions Per Minute) Generally refers to document scanners that scan both sides of the page at the same time. Thus, a scanner that scans at 100 ppm (pages per minute) can provide 200 ipm. See ppm and document scanner. ) activity on the Burgos projects. Revenue in Venezuela improved markedly with increased drilling activity and market share, primarily due to Drilling & Measurements and Wireline technologies. During the quarter, contract negotiations continued with PDVSA PDVSA Petroleos De Venezuela, SA on certain integrated projects. Sequential operating income improved on higher activity in Mexico and Venezuela. However, the consequent con·se·quent adj. 1. a. Following as a natural effect, result, or conclusion: tried to prevent an oil spill and the consequent damage to wildlife. b. improvement in operating margin was moderated by a larger contribution of Schlumberger-managed third-party services on IPM projects in Mexico. The year-on-year operating margin decline was mainly attributable to higher project costs in Mexico and reduced levels of IPM activity in Venezuela. During the quarter, Well Completions & Productivity engineered a new and unique solution combining electrical submersible pump A submersible pump is a pump which has a hermetically sealed motor close-coupled to the pump body. The whole assembly is submerged in the fluid to be pumped. The advantage of this type of pump is that it can provide a significant lifting force as it does not rely on external air technology with well testing services for a heavy oil environment offshore in the Bay of Campeche Noun 1. Bay of Campeche - a part of the Gulf of Mexico to the west of Yucatan Golfo de Campeche, Gulf of Campeche Mexico, United Mexican States - a republic in southern North America; became independent from Spain in 1810 . The successful results enabled PEMEX to better evaluate and understand the reservoir. Also in Mexico, PEMEX awarded Schlumberger a new 350-well IPM contract in the Burgos Basin. The multi-year contract value is estimated at $550 million and will include drilling and completion work for development and appraisal gas wells. Europe/CIS/West Africa Revenue of $699 million declined 5% sequentially but increased 4% year-on-year. Pretax operating income of $106 million decreased 9% sequentially and 8% year-on-year. Sequentially, the revenue declined mainly due to a halt of activities for Yuganskneftegas in Russia and the seasonal weather-related slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the Caspian Sea Caspian Sea (kăs`pēən), Lat. Mare Caspium or Mare Hyrcanium, salt lake, c.144,000 sq mi (373,000 sq km), between Europe and Asia; the largest lake in the world. . The successful redeployment re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. of the equipment previously working for Yuganskneftegas was completed in the quarter. Year-on-year growth was primarily driven by the Russia, West Africa and Continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. GeoMarkets. In Russia, business grew by more than 30%, mainly due to continued expansion of the customer base and the deployment of new production-related technologies. These included PhaseTester(a), ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. (a) Analysis Behind Casing and MaxTRAC(a) technology services. Activity growth in the West Africa GeoMarket resulted from continued interest in deepwater projects by international oil companies, increasing demand for Well Services and Well Completions & Productivity technology services. This demand also resulted in the M/V M/V Motor Vehicles M/V Motor Vessel M/V Merchant Vessel Galaxie stimulation vessel recording a 38% activity increase over the prior year. Growth in the Continental Europe GeoMarket was mainly due to market share gains in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. . Operating income was adversely affected by lower activity in the Caspian Sea, coupled with redeployment costs and associated decreased operating efficiency in Russia, and persistent union strikes in Norway. The weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. of the US dollar against other currencies had a negative
impact of $7 million year-on-year. These negative effects were partially
offset by the continued strengthening of offshore drilling Offshore drilling typically refers to the act of extracting resources, primarily oil, in an ocean or lake. ControversyAs with all oil drilling, there has been a certain level of controversy surrounding the issue. activity in Nigeria. During the quarter, key technology solutions were deployed across the Area. In the UK, FSI FSI Foreign Service Institute FSI Fluid Structure Interaction FSI Fuel Stratified Injection FSI Federazione Scacchistica Italiana (Italian Chess Federation) FSI Free Standing Insert FSI Flight Simulator (a) FloScan Imager was used for Shell to acquire logging data in horizontal wells, providing continuous operations and rig-time savings. Utilizing InterACT(a) the logs were transmitted to the customer in real time for immediate interpretation and rapid decision-making, which ultimately led to successful gas shut-off. In West Africa, the first Wireline MaxTRAC downhole well tractor system was used to deploy a VSI VSI Vinyl Siding Institute VSI Voltage Source Inverter VSI Virtual Switch Interface VSI Vertical Speed Indicator VSI Voluntary Separation Incentive VSI Virtual Socket Interface VSI Vision Systems International VSI Vertical Shaft Impactor (a) Versatile Seismic Imager tool for TOTAL Congo as part of their extended-reach drilling campaign. This groundbreaking job saved time and reduced costs for the operator. Key contract awards during the quarter included a contract for more than $100 million by Sibneft to provide well construction and stimulation services in Western Siberia Western Siberia is a part of Siberia located between the Ural mountains and a watershed of the rivers Ob and Yenisei. Politically-administratively the territory of Western Siberia is divided into Kemerovo, Novosibirsk, Omsk, Tomsk, and Tümen Provinces, Hunty-Mansi Autonomous . Middle East & Asia Revenue of $665 million increased 8% sequentially and 24% year-on-year. Pretax operating income of $182 million increased 10% sequentially and 39% year-on-year. Sequential revenue growth was primarily driven by the GeoMarkets in the Middle East, Malaysia and India. Activity in Saudi Arabia Saudi Arabia (sä  `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. was
focused on increasing production capacity, resulting in higher levels of
drilling activity throughout the quarter. This trend is expected to
continue in the coming quarters. Activity in Qatar continued to increase
due to ongoing gas development projects in the North Field. Increased
deepwater activity in India continued to build on strong performance
with additional offshore rigs deploying Drilling & Measurements and
Wireline technologies. Demand for Well Completions & Productivity
technologies was particularly strong in the quarter, mainly in the Gulf
from projects with RasGas, in Saudi Arabia from the commissioning of the
Abu Safah project, and in Malaysia from higher testing activities and
artificial lift sales.Pretax operating margins increased to 27.4% driven primarily by improved pricing on contract renewals and technology introductions. During the quarter, key technology solutions were deployed across the Area. The CHDT(a) Cased Hole Dynamic Tester tool, part of the suite of ABC Analysis ABC analysis is a business term used to define an inventory categorization technique often used in materials management. ABC analysis provides a mechanism for identifying items which will have a significant impact on overall inventory cost [1] Behind Casing technology services, was used to identify a high-pressured zone in a depleted de·plete tr.v. de·plet·ed, de·plet·ing, de·pletes To decrease the fullness of; use up or empty out. [Latin d reservoir in China; to acquire pressures and fluid samples in Saudi Arabia and Abu Dhabi Abu Dhabi (ä`b thä`bē, zä–, dä–), Arab. Abu Zabi, sheikhdom (1995 pop. 928,360), c. ; and to
acquire samples and pressure readings in Malaysia in two wells where
conventional, open-hole methods were not successful.In the quarter a number of contracts were awarded. These included a multi-year contract from ONGC ONGC Oil and Natural Gas Corporation ONGC Oil and Natural Gas Commission (India) India for all wireline logging Wireline Logging consists of measuring and recording the physical properties of the rocks in oil wells. "Logging" consists of introducing sensors in a borehole via a "wireline", an electromechanical cable. , perforating and drill-stem test work for their offshore operations. The value of this contract is estimated at more than $125 million. In the Gulf, demonstrated service quality and the introduction of new technology services led to the award of major contracts in Qatar and Oman. These included a $320 million, multi-year wireline and tubing conveyed perforating contract by Petroleum Development Oman Petroleum Development of Oman (PDO) is the foremost exploration and production company in the Sultanate. It accounts for more than 90% of the country's crude-oil production and nearly all of its natural-gas supply. (PDO PDO Php Data Objects (PHP extension) PDO Protected Designation of Origin (EC) PDO Pacific Decadal Oscillation (weather) PDO Property Damage Only ) for their North and South operations. In Brunei, Shell awarded Schlumberger a multi-year contract for a multi-purpose service vessel and all associated services. The contract is valued at $60 million and includes wireline, directional drilling Directional drilling (sometimes known as slant drilling outside the oil industry) is the science of drilling non-vertical wells. Directional drilling can be broken down into three main groups: Oilfield Directional Drilling, Utility Installation Directional Drilling (commonly , LWD/MWD, cementing, coiled tubing Coiled tubing refers to metal piping, normally 1" to 2" in diameter, used for interventions in oil and gas wells, which comes spooled on a large drum. The main benefits over wireline are the ability to pump chemicals through the coil and the ability to push it into hole rather than , gravel packing and other associated services. In Indonesia, TOTAL awarded Schlumberger a data storage and consolidation contract, which included rental, maintenance and support of information storage, network, connection equipment, operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. and management software -- along with continuous integration to existing hardware and systems. Highlights --Since 2002, the Petrel petrel (pĕ`trəl), common name given various oceanic birds belonging, like the albatross and the shearwater, to the order known commonly as tube-nosed swimmers. (a) interpretation and modeling software application suite has delivered revenue growth near 300%. This excellent market performance was fueled by the E&P industry's acceptance of Petrel's innovative and expanding seismic to simulation workflow The automatic routing of documents to the users responsible for working on them. Workflow is concerned with providing the information required to support each step of the business cycle. capabilities, combined with its easy-to-use interface. This makes it a welcome improvement to older 1990-generation interpretation software applications. In the fourth quarter Unocal chose to adopt Petrel technology as an element of its global standardization standardization In industry, the development and application of standards that make it possible to manufacture a large volume of interchangeable parts. Standardization may focus on engineering standards, such as properties of materials, fits and tolerances, and drafting initiative and Apache Apache (əpăch`ē), Native North Americans of the Southwest composed of six culturally related groups. They speak a language that has various dialects and belongs to the Athabascan branch of the Nadene linguistic stock (see Native American formed a technology alliance with Schlumberger around the future development of the Petrel suite of tools. --The new Wireline PressureXpress(a) service, which provides measurements of formation pressure and fluid mobility, was launched in US Land during the quarter and has rapidly gained acceptance due to outstanding results in low mobility environments. Pricing for this new service is strong based on its unique capability in this important market. Schlumberger is accelerating the PressureXpress rollout, to bring its advantages to mature basins worldwide in the first quarter of 2005. --Well Completions & Productivity launched the Axia(a) lifting service, which includes a new electrical submersible pump (ESP (1) (Enhanced Service Provider) An organization that adds value to basic telephone service by offering such features as call-forwarding, call-detailing and protocol conversion. ) together with monitoring and diagnostic services diagnostic services, n.pl the imaging and laboratory capabilities available for determining the cause of an illness. . Axia combines industry unique ESP enhancements with real-time monitoring solutions and expertise to improve the overall performance of a well's lifting system. Early results for Signal Hill Petroleum Company demonstrated a 70% production increase due to Axia's ability to identify and correct well performance issues. --The PURE(a) Perforating for Ultimate Reservoir Exploitation system was successfully run with miniature high-shock, high-speed gauges for the first time for Nexen Petroleum UK Limited. The operation clearly showed the dynamic underbalance and the operator was pleased with the higher production results compared to previously expected flow. --In the UK sector of the North Sea, Schlumberger Drilling & Measurements, working for Statoil Gullfaks, set a world record for through-tubing rotary drilling. Utilizing the PowerDrive Xtra 475(a) rotary steerable and VISION475(a) logging-while-drilling systems, 998 meters were successfully drilled in one run with 200 sustained pumping hours. --The introduction of PowerDrive X5(a) rotary steerable technology provided a step change in performance for TOTAL in Indonesia. PowerDrive X5 demonstrated its sustained superior reliability and provided a marked improvement in drilling efficiency. The new technology has now been successfully deployed on all TOTAL fields in Indonesia. WesternGeco Operating revenue increased 5% to $1.24 billion in 2004 from $1.18 billion in 2003. Pretax operating income reached $124 million in 2004 versus a loss of $20 million in 2003. These improvements were attributable to the successful expansion of Q-Technology(a), a strong year for Multiclient sales, and overall cost reduction. Q(a) revenue grew from $79 million in 2003 to $162 million in 2004, with a similar growth rate expected in 2005. Fourth-quarter revenue of $333 million was 11% higher sequentially and increased 8% compared to the same period last year. Pretax operating income of $43 million improved by $10 million sequentially and $11 million year-on-year. Sequentially, Multiclient sales increased 53% mainly in the Gulf of Mexico, resulting from high levels of customer interest, and in preparation for the central Gulf of Mexico lease sale in the first quarter of 2005. Land activity increased 15% mainly in the Middle East with more crews active in Libya, Algeria and Saudi Arabia. Data Processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a increased 10% reflecting higher acquisition volume. Marine activity declined 22% reflecting the seasonal slowdown in the North Sea, adverse weather in Latin America and a high number of vessel transits during the quarter. Marine activity in the first half of 2005 is expected to recover with higher vessel utilization and improved pricing. Year-on-year Multiclient sales increased by 18%, mainly in North America, driven by the high oil and gas price environment and a pending lease sale in the central Gulf of Mexico. Sequential operating income increases were mainly due to accelerating demand for reservoir-focused Q-Marine(a) activity, together with Multiclient sales. This strong result was partially offset by the high costs of the exceptionally large number of vessel transits during the quarter. The WesternGeco backlog at the end of the fourth quarter reached $670 million, increasing 11% over the previous quarter and more than doubling year-on-year. Other Events: WesternGeco and Schlumberger have received grand jury subpoenas from the US Attorney's office in the Southern District of Texas seeking documents relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc possible fraud in obtaining visas for non-US citizens working as crewmembers on vessels operating in the Gulf of Mexico. We are in the process of responding to the investigation, including providing information sought by the subpoenas. The Company is unable to predict the timing or outcome of this matter. Highlights --Sonatrach awarded WesternGeco a 14-month land contract in the Hassi Messaoud Hassi Messaoud (häs`sē mĕs'sä d`) [Arab.,=blessed well], town, E Algeria. area of Algeria.--Seismic activity accelerated in Libya as evidenced by the award of a marine contract by Repsol and the re-start of land seismic activity with two crews active, one for TOTAL and one for Woodside. --Shell placed a multiclient commitment for more than $18 million, including $10 million in existing Q data. --The Kuwait Oil Company upgraded their seismic crew from conventional to Q-Land(a) technology to cover their remaining work. --In Brazil, the Q vessel Pride began shooting the largest ever 4D over the Marlin Field for Petrobras. About Schlumberger Schlumberger is the world's leading oilfield services company supplying technology, project management and information solutions that optimize optimize - optimisation performance for customers working in the oil and gas industry. The company employs more than 52,000 people of over 140 nationalities working in 100 countries, and comprises two business segments. Schlumberger supplies a wide range of products and services from formation evaluation In petroleum exploration and development, formation evaluation is used to determine whether a potential oil or gas field is commercially viable. Essentially, it is the process of "recognizing a commercial well when you drill one". through directional drilling, well cementing and stimulation, well completions and productivity to consulting, software, information management and IT infrastructure services that support core industry operational processes. WesternGeco, jointly owned with Baker Hughes Baker Hughes NYSE: BHI is the world's third-largest oilfield services company behind Schlumberger & Halliburton, its main competitors. Baker Hughes provides the world's oil & gas industry with products and services for drilling, formation evaluation, completion and production. , is the world's largest seismic company and provides advanced acquisition and data processing services. In 2004, Schlumberger operating revenue was $11.48 billion. For more information, visit slb.com. (a)Mark of Schlumberger Notes: --Schlumberger will hold a conference call to discuss the above announcement on Tuesday, Jan. 25, 2005, at 9:00 a.m. New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. time (2:00 p.m. London time/3:00 p.m. Paris time). To access the call, which is open to the public, please contact the conference call operator at +1-888-428-4479 (toll-free) for North America, or +1-651-291-0900 from outside North America, approximately 15 minutes prior to the scheduled start time. Ask for the "Schlumberger Earnings Conference Call." A replay will be available through Feb. 8, 2005, by dialing +1-800-475-6701 in North America, or +1-320-365-3844 outside North America, and providing the access code 762738. --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 browser Software that allows a computer user to find and view information on the Internet. The first text-based browser for the World Wide Web became available in 1991; Web use expanded rapidly after the release in 1993 of a browser called Mosaic, which used and register for the call. A replay of the webcast will also be available through Feb. 8, 2005 at the above 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. |
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