Schlumberger Announces Fourth-Quarter and Full-Year 2005 Results.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 2005 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 $14.31 billion versus $11.48 billion in 2004. 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 $2.03 billion was 67% 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 $3.34 versus $2.03 in 2004. Income from continuing operations, including credits and charges, was $3.62 per share-diluted in 2005 versus $1.70 in 2004. Net income was $2.21 billion in 2005, representing diluted earnings per share of $3.64 versus $2.04 in 2004, an increase of 78%. Fourth-Quarter Results Fourth-quarter operating revenue of $4.02 billion was 9% above the prior quarter and 31% higher than the fourth quarter of 2004. Income from continuing operations, before credits and charges, was $640 million, or $1.05 per share-diluted, an increase of 82% year-on-year and 22% over the third quarter of 2005. Income from continuing operations, including credits and charges, was $1.08 per share-diluted versus $0.89 in the previous quarter and $0.59 in the fourth quarter of last year. Net income was $661 million, or $1.08 per share-diluted, double the $330 million in the same quarter of last year. Oilfield Services revenue of $3.57 billion increased 9% sequentially and 30% 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 $852 million increased 18% sequentially and 76% year-on-year. WesternGeco revenue of $464 million increased 6% sequentially and 39% year-on-year. Pretax business segment operating income of $110 million increased 29% sequentially and 156% year-on-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, "The very strong activity that we have seen in the fourth quarter resulted in new record levels of oilfield revenue and net income for Schlumberger. At Oilfield Services, sequential growth 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. was greater than the growth in 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. for the second quarter running, confirming increased activity, improved equipment utilization and stronger prices in those markets. WesternGeco also continued to deliver excellent results. Demand for seismic acquisition as well as multiclient data indicate a strong renewed interest in exploration. The continued acceptance of Q technology resulted in impressive growth, which is expected to continue in 2006. Looking ahead, several trends will define activity in 2006. First, rig count increases will be largely limited to onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. work as the global offshore rig market will remain constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. until new builds are mobilized beyond 2006. Second, shortages of people and equipment across the industry are likely to result in cost inflation and project delays, placing a high premium on reliable suppliers of both technology and skilled personnel. Third, the technology that can improve the productivity of the limited base of skilled personnel will be in high demand. This is clearly demonstrated both by the success of 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. seismic-to-simulation software tools and by growing acceptance of the remote monitoring (protocol) remote monitoring - (RMON) A network management protocol that allows network information to be gathered at a single computer. Whereas SNMP gathers network data from a single type of Management Information Base (MIB), RMON 1 defines nine additional MIBs that provide a of job execution to achieve superior performance from technology. Fourth, exploration activity, where Schlumberger has an unmatched portfolio of services, will show a large increase in 2006, and this will continue for a number of years. Overall, we expect our top line growth in 2006 to be similar to that experienced in 2005. The industry has already recognized the need for an unprecedented effort to increase secure hydrocarbon hydrocarbon (hī'drōkär`bən), any organic compound composed solely of the elements hydrogen and carbon. The hydrocarbons differ both in the total number of carbon and hydrogen atoms in their molecules and in the proportion of hydrogen supply. Plans are being put in place to achieve this, but it will take several years of sustained activity to develop the new production that can reliably replace today's supply, much of which was developed during the up-cycle of the 1970s and 1980s. In addition, this new supply will generally come from smaller reservoirs and more hostile environments See: operational environment. where Schlumberger is uniquely placed to meet the challenge." Other Events: --As part of the 15 million-share buy-back program, Schlumberger repurchased 7.64 million shares during the year for a total amount of $612 million. Since the beginning of the program in July 2004, Schlumberger has repurchased 12.79 million shares for a total amount of $932 million. --Schlumberger recorded a $21 million gain on the sale of its investment in Hanover Compressor compressor, machine that decreases the volume of air or other gas by the application of pressure. Compressor types range from the simple hand pump and the piston-equipped compressor used to inflate tires to machines that use a rotating, bladed element to achieve Company stock.
Consolidated Statement of Income (Unaudited)
(Stated in thousands except per share amounts)
Fourth Quarter Twelve Months
-------------------------------------------------
For Periods Ended
December 31 2005 2004 2005 2004
----------------------------------------------------------------------
Operating revenue $4,023,346 $3,067,670 $14,309,182 $11,480,165
Interest and other
income (1)(3) 92,895 40,164 407,769 128,698
Expenses
Cost of goods sold
and services (3) 2,911,600 2,388,693 10,623,096 9,041,972
Research &
engineering 134,392 116,431 505,513 467,354
Marketing 12,938 11,014 47,024 40,310
General &
administrative 106,331 97,694 372,498 344,448
Debt
extinguishment
costs (3) - - - 114,894
Interest (3) 49,454 44,788 197,090 272,448
----------------------------------------------------------------------
Income from
Continuing
Operations before
taxes and minority
interest 901,526 449,214 2,971,730 1,327,437
Taxes on income (3) 207,155 81,025 681,927 276,949
----------------------------------------------------------------------
Income from
Continuing
Operations before
minority interest 694,371 368,189 2,289,803 1,050,488
Minority interest (33,817) (16,791) (90,808) (36,436)
----------------------------------------------------------------------
Income from
Continuing
Operations 660,554 351,398 2,198,995 1,014,052
Income from
Discontinued
Operations - (21,626) 7,972 209,818
----------------------------------------------------------------------
Net Income $660,554 $329,772 $2,206,967 $1,223,870
----------------------------------------------------------------------
Diluted Earnings Per
Share
Income from
Continuing
Operations $1.08 $0.59 $3.62 $1.70
Income from
Discontinued
Operations - (0.04) 0.01 0.34
----------- ----------- ------------ ------------
Net Income (4) $1.08 $0.55 $3.64 $2.04
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
Average shares
outstanding 589,258 588,799 589,288 589,089
Average shares
outstanding
assuming dilution 616,760 612,462 614,858 612,872
Depreciation &
amortization
included in
expenses (2) $358,881 $339,302 $1,350,969 $1,307,931
----------------------------------------------------------------------
1) Includes interest income of:
a. Fourth quarter 2005 - $30 million (2004 - $16 million).
b. Twelve months 2005 - $100 million (2004 - $56 million).
2) Including Multiclient seismic data costs.
3) Charges and credits:
(Stated in millions except per share amounts)
Diluted Income
EPS Statement
Pretax Tax Net effect(4) Classification
-------- ------- -------- --------- ---------------
The fourth quarter
of 2005 includes:
Gain on sale of
Hanover
Compressor Interest and
stock $20.9 $- $20.9 $0.03 other income
-------- ------- -------- ---------
The third quarter
of 2005 includes:
Gain relating
to resolution
of
contingency-
Montrouge Interest and
facility $17.8 $- $17.8 $0.03 other income
-------- ------- -------- ---------
The first quarter
of 2005 includes:
Gain on sale of
Montrouge Interest and
facility $145.7 $- $145.7 $0.24 other income
Real estate Cost of goods
related sold and
charges (12.1) 0.8 (11.3) (0.02) services
-------- ------- -------- ---------
$133.6 $0.8 $134.4 $0.22
-------- ------- -------- ---------
The third quarter
of 2004 includes:
Restructuring Cost of goods
program sold and
charges $(3.0) $- $(3.0) $- services
Intellectual
Property Cost of goods
settlement sold and
charge (11.2) 1.3 (9.9) (0.02) services
-------- ------- -------- ---------
$(14.2) $1.3 $(12.9) $(0.02)
-------- ------- -------- ---------
The second quarter
of 2004 includes:
Loss on sale of
Atos Origin Interest and
shares $(6.6) $- $(6.6) $(0.01) other income
Vacated leased Cost of goods
facility sold and
charge (11.0) - (11.0) (0.02) services
Restructuring Cost of goods
program sold and
charges (4.0) - (4.0) (0.01) services
Litigation Cost of goods
reserve sold and
release 5.0 - 5.0 0.01 services
Debt Debt
extinguishment extinguishment
costs (37.4) 14.0 (23.4) (0.04) costs
US interest Interest
rate swap gain 9.6 (3.3) 6.3 0.01 expense
-------- ------- -------- ---------
$(44.4) $10.7 $(33.7) $(0.05)
-------- ------- -------- ---------
The first quarter
of 2004 includes:
Loss on sale of
Atos Origin Interest &
shares $(14.3) $- $(14.3) $(0.02) other income
Restructuring Cost of goods
program sold and
charges (19.5) 5.5 (14.0) (0.02) services
Debt Debt
extinguishment extinguishment
costs (77.5) - (77.5) (0.13) costs
Loss recognized
on interest- Interest
rate swaps (73.5) 27.2 (46.3) (0.08) expense
-------- ------- -------- ---------
$(184.8) $32.7 $(152.1) $(0.25)
-------- ------- -------- ---------
4) Amounts may not add due to rounding.
Condensed Balance Sheet (Unaudited)
(Stated in
thousands)
Assets Dec. 31, 2005 Dec. 31, 2004
----------------------------------------------------------------------
Current Assets
Cash and short-term investments $3,495,681 $2,997,425
Other current assets 5,058,232 3,997,145
Assets held for sale(1) - 65,179
----------------------------------------------------------------------
8,553,913 7,059,749
Fixed income investments, held to
maturity 359,750 203,750
Fixed assets 4,200,638 3,761,729
Multiclient seismic data 222,106 346,522
Goodwill 2,922,465 2,789,048
Other assets 1,818,620 1,839,979
----------------------------------------------------------------------
$18,077,492 $16,000,777
----------------------------------------------------------------------
Liabilities and Stockholders' Equity
----------------------------------------------------------------------
Current Liabilities
Accounts payable and accrued
liabilities $3,560,361 $2,980,790
Estimated liability for taxes on
income 1,028,571 858,785
Bank loans and current portion of
long-term debt 796,578 715,872
Dividend payable 124,733 111,136
Liabilities held for sale(1) - 34,617
----------------------------------------------------------------------
5,510,243 4,701,200
Long-term debt 3,591,338 3,944,180
Postretirement benefits 719,985 670,765
Other liabilities 159,159 151,457
----------------------------------------------------------------------
9,980,725 9,467,602
Minority interest 505,182 416,438
Stockholders' Equity 7,591,585 6,116,737
----------------------------------------------------------------------
$18,077,492 $16,000,777
(1) Assets and liabilities held for sale at December 31, 2004
represented the gross assets and liabilities of the Essentis,
Payphones and Global businesses.
Net Debt (Unaudited) Net debt represents gross debt less cash, short-term investments and fixed income investments, held to maturity. Management believes that "net debt" provides useful information regarding the level of Schlumberger indebtedness. Details of the net debt follow:
(Stated in millions)
Twelve Months 2005
--------------------------------------------------------
Net Debt, beginning of period $(1,459)
Income from continuing operations 2,199
Excess of equity income over dividends
received (86)
Charges/credits, net of tax (173)
Depreciation and amortization 1,351
US pension contribution (171)
Increase in working capital
requirements (292)
Capital expenditures (1,652)
Dividends paid (482)
Proceeds from employee stock plans 345
Proceeds from business divestitures 22
Proceeds from the sale of the Montrouge
facility 230
PetroAlliance acquisition (cash paid) (40)
Other business acquisitions (78)
Stock repurchase program (612)
Sale of Hanover Compressor stock 110
Net debt acquired (50)
Other 212
Translation effect on net debt 94
-------
Net Debt, end of period $(532)
-------
-------
(Stated in millions)
Components of Net Debt Dec. 31, 2005 Dec. 31, 2004
----------------------------------------------------------------------
Cash and short-term investments $3,496 $2,997
Fixed income investments, held to maturity 360 204
Bank loans and current portion of long-
term debt (797) (716)
Long-term debt (3,591) (3,944)
--------- ----------
$(532) $(1,459)
--------- ----------
--------- ----------
In addition to financial results determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) this Fourth-Quarter Earnings 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 2005
----------------------------------
Pretax Tax Min Int Net
----------------------------------
Income from Continuing Operations
per Consolidated Statement of
Income $901.5 $207.1 $(33.8) $660.6
Add back Charges & Credits:
--Gain on sale of Hanover
Compressor stock (20.9) - - (20.9)
----------------------------------
Income from Continuing Operations
before charges & credits $880.6 $207.1 $(33.8) $639.7
----------------------------------
----------------------------------
Before charges
Continuing operations GAAP & credits
--------------------- ----------------------------------
Effective tax rate 23.0% 23.5%
Diluted Earnings per Share $1.08 $1.05
Third Quarter 2005
----------------------------------
Pretax Tax Min Int Net
----------------------------------
Income from Continuing Operations
per Consolidated Statement of
Income $740.3 $175.0 $(24.5) $540.8
Add back Charges & Credits:
--Resolution of contingency-
Montrouge facility (17.8) - - (17.8)
----------------------------------
Income from Continuing Operations
before charges & credits $722.5 $175.0 $(24.5) $523.0
----------------------------------
----------------------------------
Before charges
Continuing operations GAAP & credits
--------------------- ----------------------------------
Effective tax rate 23.6% 24.2%
Diluted Earnings per Share $0.89 $0.86
Twelve Months 2005
----------------------------------
Pretax Tax Min Int Net
----------------------------------
Income from Continuing Operations
per Consolidated Statement of
Income $2,971.7 $681.9 $(90.8)$2,199.0
Add back Charges & Credits:
--Gain on sale of Hanover
Compressor stock (20.9) - - (20.9)
--Resolution of contingency-
Montrouge facility (17.8) - - (17.8)
--Gain on sale of Montrouge
facility (145.7) - - (145.7)
--Real estate related charges 12.1 0.8 - 11.3
----------------------------------
Income from Continuing Operations
before charges & credits $2,799.4 $682.7 $(90.8)$2,025.9
----------------------------------
----------------------------------
Before charges
Continuing operations GAAP & credits
--------------------- ----------------------------------
Effective tax rate 22.9% 24.4%
Diluted Earnings per Share $3.62 $3.34
Twelve Months 2004
----------------------------------
Pretax Tax Min Int Net
----------------------------------
Income from Continuing Operations
per Consolidated Statement of
Income $1,327.4 $276.9 $(36.4)$1,014.1
Add back Charges & Credits:
--Restructuring program charges 22.5 5.5 - 17.0
--Intellectual property settlement 11.2 1.3 - 9.9
--Debt extinguishment costs 114.9 14.0 - 100.9
--Gain on Interest Rate Swap
extinguishment (9.6) (3.3) - (6.3)
--Loss on sale of Atos Origin
shares 20.9 - - 20.9
--Vacated leased facility reserve 11.0 - - 11.0
--Litigation reserve release (5.0) - - (5.0)
--Reorganization reserve 4.0 - - 4.0
--Loss recognized on interest rate
swaps 73.6 27.2 - 46.4
----------------------------------
Income from Continuing Operations
before charges & credits $1,570.9 $321.6 $(36.4)$1,212.9
----------------------------------
----------------------------------
Before charges
Continuing operations GAAP & credits
--------------------- ----------------------------------
Effective tax rate 20.9% 20.5%
Diluted Earnings per Share $1.70 $2.03
Business Review (Unaudited)
(Stated in millions) Fourth Quarter Twelve Months
-------------------- ----------------------
2005 2004 % chg 2005 2004 % chg
-------------------- ----------------------
Oilfield Services
-----------------
Operating Revenue $3,566 $2,734 30% $12,648 $10,239 24%
Pretax Operating
Income $852 $483 76% $2,805 $1,801 56%
WesternGeco
-----------
Operating Revenue $464 $333 39% $1,662 $1,238 34%
Pretax Operating
Income $110 $43 156% $317 $124 155%
Pretax operating income represents the segments' income before taxes and minority interest. The pretax operating income excludes corporate expenses, interest income, interest expense, amortization of certain intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , interest on post-retirement benefits, stock-based compensation costs and the charges and credits described on page 4, as these items are not allocated to the segments. Oilfield Services Full-year 2005 revenue of $12.65 billion increased 24% versus 2004. Europe/CIS/Africa 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. each increased revenue by 27%, Middle East & Asia by 22%, and 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. by 21%. Pretax operating income of $2.81 billion in 2005 was 56% higher than 2004. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved 460 basis points (bps) in 2005 versus 2004, demonstrating high demand for oilfield services with strong pricing and accelerating technology delivery. Fourth-quarter revenue of $3.57 billion increased 9% sequentially and 30% year-on-year. Sequential revenue increases were recorded in all four Areas, led by Middle East & Asia and North America with double-digit increases. All Technologies contributed to the growth with significant contributions from Wireline 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 . Pretax operating income of $852 million increased 18% sequentially and 76% year-on-year. All Areas except Latin America recorded sequential double-digit growth. Operating margins improved 180 bps sequentially to reach 23.9% in the quarter. During the quarter, Schlumberger launched the Scanner Family(a) of 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. services, a revolutionary suite of downhole rock and fluid characterization A rather long and fancy word for analyzing a system or process and measuring its "characteristics." For example, a Web characterization would yield the number of current sites on the Web, types of sites, annual growth, etc. measurements. Scanner technology enables customers to evaluate formations more confidently and assess reserves more accurately. With better understanding, operators can reduce risk and optimize optimize - optimisation the productive life of their fields. The first three members of the Scanner Family are the Rt Scanner(a) multiarray triaxial tri·ax·i·al adj. Having three axes. tri·ax  i·al i·ty n. induction tool; the Sonic Scanner(a) acoustic scanning tool; and the MR
Scanner(a) new-generation nuclear magnetic resonance nuclear magnetic resonance: see magnetic resonance. nuclear magnetic resonance (NMR) Selective absorption of very high-frequency radio waves by certain atomic nuclei subjected to a strong stationary magnetic field. tool. North America Revenue of $1.04 billion increased 10% sequentially and 23% year-on-year. Pretax operating income of $278 million increased 27% sequentially and 77% year-on-year. The Gulf Coast GeoMarket recorded strong sequential revenue growth with activity improving significantly after the hurricane season Hurricane season refers to a period in a year when hurricanes usually form. For more information see: Tropical cyclone#Times of formation. For a lists of past seasons, see:
Western Canada, commonly referred to as the West , coupled with significant pricing improvement throughout. Wireline and Well Services recorded the strongest advances across the Area. The steep growth in sequential operating income was driven by stronger land activity in Well Services and Wireline, robust pricing in Canada, and improved utilization of resources 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 . This improvement was offset by $8 million, the residual effect of the third-quarter hurricane season. In the Gulf of Mexico, 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. deployed the Quicksilver quicksilver: see mercury. (1) (QuickSilver Technology, Inc., San Jose, CA, www.qstech.com) A mobile communications company that specializes in a reconfigurable logic chip for cellphones and PDAs. See adaptive computing. Probe(a) on the MDT MDT abbr. Mountain Daylight Time MDT (in the US and Canada) Mountain Daylight Time MDT n abbr (US) (= mountain daylight time) → (a) Modular Formation Dynamics Tester fluid-sampling tool to successfully acquire clean oil samples--greatly reducing a major source of uncertainty in the reservoir model. The customer utilized the new technique in various sampling programs throughout their reservoir, resulting in significantly reduced acquisition times. In Alaska, working for ConocoPhillips on the Western North Slope North Slope, Alaska: see Alaska North Slope. , Schlumberger used PeriScope periscope (pĕr`ĭskōp) [Gr.,=view around], instrument to enable a person to see objects not in his direct line of vision or concealed by some intervening body. Its essential parts are a tube, prisms, lenses, mirrors, and an eyepiece. 15(a) technology to successfully steer a 6,800 ft horizontal lateral well in a thin, 8-ft thick reservoir. Imaging the reservoir boundaries in real time up to 15 ft away from the tool, the deep-reading electromagnetic electromagnetic /elec·tro·mag·net·ic/ (-mag-net´ik) involving both electricity and magnetism. electromagnetic pertaining to or emanating from electromagnetism. service enabled the client to keep an exceptional 93% of the well in the most productive part of the reservoir. As a result of this success, the customer has planned to drill several subsequent wells using this technology. Latin America Revenue of $617 million increased 8% sequentially and 26% year-on-year. Pretax operating income of $90 million declined 1% sequentially but increased 71% year-on-year. The sequential revenue growth was mainly attributable to higher levels of third-party managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality on integrated projects in Mexico. The Latin America South GeoMarket contributed to the growth with increased 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, as did the Peru/Colombia/Ecuador GeoMarket with the start of several new Drilling & Measurements contracts. During the quarter, the PRISA PRISA Public Radio Internet Service Alliance PRISA Prudential Property Investment Separate Account barges operating for PDVSA PDVSA Petroleos De Venezuela, SA in Western Venezuela exceeded an average of 90% utilization. Discussions regarding the settlement of certain outstanding receivables for the PRISA contract were ongoing at year-end. The slight sequential operating income decline, despite the revenue increase, was due largely to an unfavorable revenue mix in the Area resulting from the higher level of low-margin third-party managed services in Mexico, fewer Petrel(a) software sales in Venezuela, and reduced profitability in Latin America South. In Trinidad and Tobago Trinidad and Tobago (trĭn`ĭdăd, təbā`gō), officially Republic of Trinidad and Tobago, republic (2005 est. pop. 1,088,000), 1,980 sq mi (5,129 sq km), West Indies. The capital is Port of Spain. , PETROTRIN-Trinmar awarded contracts valued at $25 million for Well Services and Drilling & Measurements services. The contracts include pumping, 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 , measurements-while-drilling (MWD MWD Metropolitan Water District of Southern California MWD Measurement While Drilling (oil drilling) MWD Morgan Stanley Dean Witter (stock symbol) MWD Molecular Weight Distribution MWD Military Working Dog ), and logging-while-drilling (LWD LWD Labor and Workforce Development (State of New Jersey) LWD Logging While Drilling (oil drilling industry) LWD Large Woody Debris LWD Little White Dress LWD Life With Derek ) technology services. In Mexico, 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. awarded contracts valued at $44 million for work in their South and Marine regions. The service agreements include work from Wireline, Well Completions & Productivity, Well Services, Data & Consulting Services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" , and 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 Technologies. Europe/CIS/Africa Revenue of $1.01 billion increased 7% sequentially and 45% year-on-year. Pretax operating income of $226 million increased 12% sequentially and 111% year-on-year. Sequential revenue growth was due to strong activity in North Africa and Russia; strong deepwater completion sales combined with the rapid market acceptance of Drilling & Measurements Scope(a) technology in 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. ; the start of a drilling campaign in Azerbaijan; and price increases on completion products in the Caspian. High levels of activity were maintained in the North Sea despite the seasonal winter impact. The improved sequential operating income was principally due to higher efficiency in Russia, growing international oil company presence in North Africa, and accelerated technology deployment in West Africa, together with stronger pricing across the Area. In the quarter several key technologies were used across the Area. In the North Sea, Hydro used the new advanced wireline Sonic Scanner acoustic scanning tool to provide good quality data in a very slow formation where no other technology could have achieved results. Hydro is using Sonic Scanner to improve geomechanical understanding in many difficult-to-drill formations. In Algeria, Sonatrach awarded Schlumberger a multi-year, $125 million contract for wireline, drill-stem testing, and data-processing services. The award was based on availability of differentiating technology and improved operational efficiency through optimized deployment of resources. In Norway, Schlumberger successfully completed the industry's first fully remote drilling optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. and well-placement operation for Statoil's Asgard field in the North Sea. Working onsite at the client's Stjordal facility, and from the Schlumberger Operations Support Center in Aberdeen, a joint team of Data & Consulting Services and Drilling & Measurements engineers provided key geomechanical and well-placement support. Working in the Sakhalin region of Russia for Exxon Neftegas Limited--as operator under the Sakhalin 1 Production Sharing Agreement--Schlumberger set a world record for logging in A colloquial term for the process of making the initial record of the names of individuals who have been brought to the police station upon their arrest. The process of logging in is also called booking. an extended-reach drilling well when a combined MaxTRAC(a) well tractor and FloScan Imager(a) production logging system was conveyed down 9,772 m including tractoring more than 7,800 m. High-quality flow-regime images from the FloScan Imager verified the completion effectiveness. Middle East & Asia Revenue of $860 million was 11% higher sequentially and 29% year-on-year. Pretax operating income of $264 million increased 17% sequentially and 45% year-on-year. The strong improvement in sequential revenue was led by the Middle East GeoMarkets, which all contributed significantly to the record revenue level. Growth in the East Africa & East Mediterranean GeoMarket was due to expanded market for Drilling & Measurements and the start of a new Wireline campaign. Revenue improvement in the Gulf GeoMarket was mainly attributable to Wireline and Well Completions & Productivity services. Continued rig and activity increases in Saudi Arabia Saudi Arabia (sä  `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. resulted in significant growth for Well Services, Drilling &
Measurements and Wireline technologies. In Asia, the
Brunei/Malaysia/Philippines GeoMarket contributed to the increase
through higher activity and improved pricing in Well Services.The robust growth in sequential operating income was due mainly to increased activity and pricing improvements across all Middle East GeoMarkets and across all Technologies. Improved results of the Bokor integrated project in the Brunei/Malaysia/Philippines GeoMarket also contributed to this growth. Area pretax operating margins showed continued improvement during the quarter, reaching 30.7%--an overall increase of 150 bps. In the Middle East, the Arabian, the Gulf and East Africa & East Mediterranean GeoMarkets recorded full-year revenue increases of more than 30%--and operating income growth of more than 40%--in 2005 versus 2004. Similar growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. in Asia were achieved in the Brunei/Malaysia/Philippines, Thailand/Vietnam and Australasian GeoMarkets. In Kuwait, Schlumberger successfully drilled the first ever geosteered multilateral mul·ti·lat·er·al adj. 1. Having many sides. 2. Involving more than two nations or parties: multilateral trade agreements. well for Kuwait Oil Company when conventional technology proved ineffective in the region's geologically complex reservoirs. Using a unique bottom hole assembly that combined the PowerDrive Xceed(a) 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. with GVR GVR Grant, Vacate and Remand GVR Gas Volume Ratio (a) resistivity resistivity Electrical resistance of a conductor of unit cross-sectional area and unit length. The resistivity of a conductor depends on its composition and its temperature. , PeriScope 15(a) well placement, PowerPulse(a), and proVISION(a) reservoir steering services, three lateral wells were placed in the most productive part of the reservoir. In Malaysia, Murphy Oil Murphy Oil Corporation NYSE: MUR is a petroleum corporation. It is a S&P 500 company. In 2007, it was ranked as the 169th largest company in America on the Fortune 500. The current President & CEO is Claiborne Deming. Corporation and Schlumberger developed a local solution to conduct borehole bore·hole n. A hole that is drilled into the earth, as in exploratory well drilling or in building construction. seismic surveys in deepwater exploration areas where gas clouds render conventional surveys ambiguous. In Japan, the Wireline CHDT(a) Cased Hole Dynamics Tester tool, part of the 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 technology suite, was run in a fiberglass-cased well drilled as part of the client's experimental carbon dioxide carbon dioxide, chemical compound, CO2, a colorless, odorless, tasteless gas that is about one and one-half times as dense as air under ordinary conditions of temperature and pressure. sequestration sequestration In law, a writ authorizing a law-enforcement official to take into custody the property of a defendant in order to enforce a judgment or to preserve the property until a judgment is rendered. project. Formation-pressure measurements and multiple fluid samples were taken, and the fiberglass fiberglass, thread made from glass. It is made by forcing molten glass through a kind of sieve, thereby spinning it into threads. Fiberglass is strong, durable, and impervious to many caustics and to extreme temperatures. casing plugged successfully. Highlights --Acceptance of Schlumberger Information Solutions Petrel 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. tools continued to gain momentum in the quarter as TNK-BP selected the software as its primary application for subsurface sub·sur·face adj. Of, relating to, or situated in an area beneath a surface, especially the surface of the earth or of a body of water. Adj. 1. reservoir characterization to equip e·quip tr.v. e·quipped, e·quip·ping, e·quips 1. a. To supply with necessities such as tools or provisions. b. its multifunctional teams with a PC-based seismic-to-simulation workflow. The award followed a long-term technical evaluation The study and investigations by a developing agency to determine the technical suitability of material, equipment, or a system for use in the Military Services. See also operational evaluation. . --During the quarter, Shell awarded Schlumberger Information Solutions a three-year, multi-million dollar contract to manage seismic data in an effort to harmonize their European regional operations. Services will be supported by onsite Schlumberger presence at Shell in Stavanger, Aberdeen and Assen. --In India, renewed focus on deepwater exploration and production activity in the Krishna Godavari basin led to a three-year contract extension from ONGC ONGC Oil and Natural Gas Corporation ONGC Oil and Natural Gas Commission (India) for integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. . The work scope includes use of a number of new technologies from directional drilling, MWD, LWD, wireline logging and perforating, cementing, drill-stem testing, and surface testing service lines. --In Indonesia, Chevron awarded Schlumberger a multi-year, $166 million contract for well-construction services. In addition to providing MWD and LWD services, Schlumberger will supply cementing, stimulation, gravel pack, and 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 services in Chevron's central Sumatra area of operations An operational area defined by the joint force commander for land and naval forces. Areas of operation do not typically encompass the entire operational area of the joint force commander, but should be large enough for component commanders to accomplish their missions and protect their . --During the quarter, Schlumberger signed a multi-year integrated services project with LUKSAR in Saudi Arabia. The scope of work includes services from Wireline, Well Completions & Productivity, Well Services, Data & Consulting Services, and Drilling & Measurements technologies, in addition to six sub-contractors. IPM will manage the scope of work, which involves nine or more deep vertical gas exploration wells in Rub RUB In currencies, this is the abbreviation for the Russian Ruble. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. El Khali. --Working on their North Sea Asgard Smorbuk Sor Q-3AH well, Statoil successfully deployed a unique bottom-hole-assembly that included the PeriScope 15(a) well placement, StethoScope stethoscope (stĕth`əskōp') [Gr.,=chest viewer], instrument that enables the physican to hear the sounds made by the heart, the lungs, and various other organs. The earliest stethoscope, devised by the French physician R. T. H. (a) formation pressure, EcoScope(a) multifunction LWD, TeleScope telescope, traditionally, a system of lenses, mirrors, or both, used to gather light from a distant object and form an image of it. Traditional optical telescopes, which are the subject of this article, also are used to magnify objects on earth and in astronomy; (a) high-speed telemetry telemetry Highly automated communications process by which data are collected from instruments located at remote or inaccessible points and transmitted to receiving equipment for measurement, monitoring, display, and recording. , and PowerDriveX5(a) rotary-steerable tools. The deployment of this assembly resulted in optimized well placement, better drilling performance and enabled a thorough evaluation of the reservoir. PeriScope was used to maintain the borehole within the reservoir sands throughout the entire 1,600-m interval, resulting in the best producing well in the field. WesternGeco Operating revenue for 2005 was $1.66 billion versus $1.24 billion in 2004. Pretax operating income in 2005 was $317 million versus $124 million in 2004. This strong performance was mainly attributable to the continued market acceptance of Q(a) technology, a higher level of Multiclient sales and improved 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. in Marine acquisition. Fourth-quarter revenue of $464 million was 6% higher sequentially and grew 39% compared to the same period of last year. Sequentially, revenue from Multiclient sales grew significantly, primarily in North America due to a larger number of blocks in the Gulf of Mexico coming up for renewal and the pending first quarter lease sale. Multiclient sales also increased in West Africa, the Caspian and Asia--indicating a worldwide interest in exploration. Marine revenue declined in the North Sea, Canada and Russia as a result of the winter season in the Northern Hemisphere affecting activity. This resulted in a number of vessels transiting to other areas, with transit revenues deferred and recognized over the term of the contract. The seasonal decline was partly offset by strong activity in Asia with three conventional vessels and three Q-vessels operating in the region at improved pricing and utilization levels. As a result of the transits, vessel utilization decreased slightly to 88% from 92% in the previous quarter. 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 was consistent with higher acquisition activity. Land acquisition activity was flat from the previous quarter. Revenue backlog reached an all-time high of $790 million versus $656 million at the end of the previous quarter, reflecting increasing exploration and production budgets in 2006. Pretax operating income of $110 million improved 29% sequentially and grew by $67 million year-on-year. The strong sequential growth resulted from higher Multiclient sales and transfer fees. This improvement was partly offset by higher transit days. Q technology revenues reached $399 million in 2005, more than doubling the $162 million achieved in 2004. A growth rate higher than 80% is expected in 2006. Highlights --ONGC awarded WesternGeco a multi-year contract for the provision of Q-Marine(a) technology including acquisition, integrated data processing Noun 1. integrated data processing - automatic data processing in which data acquisition and other stages or processing are integrated into a coherent system IDP automatic data processing, ADP - data processing by a computer and reservoir consulting services for a two-year minimum period. Two vessels began data acquisition during the fourth quarter. A new WesternGeco processing and reservoir products center is currently being constructed in Mumbai which will provide support to ONGC and other clients within India to plan, design, process, and interpret seismic data. --WesternGeco was awarded two large wide-azimuth marine surveys which will use the superior steering and signal-to-noise characteristics of Q-Technology(a) to provide better illumination illumination, in art illumination, in art, decoration of manuscripts and books with colored, gilded pictures, often referred to as miniatures (see miniature painting); historiated and decorated initials; and ornamental border designs. and imaging beneath complex salt structures. --WesternGeco was awarded a contract to undertake the first Q-Marine project in Thailand, conducting a survey that will cover approximately 386 km2. The work scope includes accurate mapping of the reservoirs and stratigraphic stra·tig·ra·phy n. The study of rock strata, especially the distribution, deposition, and age of sedimentary rocks. strat features, and to improve the fault imaging. The Q-Marine system will be used to increase the signal-to-noise response and the amplitude amplitude (ăm`plĭt d'), in physics, maximum displacement from a zero value or rest position. accuracy to allow reservoir characterization
based on seismic attributes and direct hydrocarbon indicators. The
vessel Geco Topaz topaz (tō`păz), aluminum silicate mineral with either hydroxyl radicals or fluorine, Al2SiO4(F,OH)2, used as a gem. will conduct the high-resolution survey--towing eight
4,000-m cables with a separation of 37.5 m.About Schlumberger Schlumberger is the world's leading oilfield services company supplying technology, project management, and information solutions that optimize performance for customers working in the oil and gas industry. The company employs more than 60,000 people of over 140 nationalities working in more than 80 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 2005, Schlumberger operating revenue was $14.31 billion. For more information, visit www.SLB.com. (a) Mark of Schlumberger Notes: --Schlumberger will hold a conference call to discuss the above announcement on Friday, January 20, 2006 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 +1-800-230-1074 (toll free) for North America, or +1-612-234-9960 outside of North America, approximately 10 minutes prior to the scheduled start time. Ask for the "Schlumberger Earnings Conference Call." A replay will be available through February 3, 2006 by dialing +1-800-475-6701 in North America, or +1-320-365-3844 outside North America, and providing the access code 812340. --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 February 3, 2006 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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