Schlumberger, the world’s biggest oilfield services company, reported a surge in profits in the fourth quarter, as oil and gas drilling activity picked up on the back of rising oil prices.
Net income rose in the quarter to $601m, up 60 per cent from a year earlier and 9 per cent higher than in the third quarter. Diluted earnings per share came in at 42 cents a share. Revenue of $6.2bn was up 13 per cent from a year earlier. All beat the market consensus.
Cash flow from operations more than doubled in the fourth quarter to $1.93bn, with free cash flow — a much-watched oil industry metric — hitting $1.3bn, up from $550m a year earlier, the company said.
While all segments of the business generated more revenue in the fourth quarter, pre-tax revenue from Schlumberger’s reservoir performance and well construction units, both directly related to oilfield drilling activity, each surged more than 100 per cent.
Olivier Le Peuch, Schlumberger’s chief executive, pointed to a strong 2022 for the industry and forecast global oil demand would exceed pre-pandemic levels by the end of the year and continue rising in 2023.
“The industry macro fundamentals are very favourable, due to the combination of projected steady demand recovery, an increasingly tight supply market, and supportive oil prices. We believe this will result in a material step-up in industry capital spending with simultaneous double-digit growth in international and North American markets,” Le Peuch said.
Schlumberger said it was increasing its capital spending in 2022 to between $1.9bn and $2bn, compared with $1.7bn in 2021.