Schlumberger 3Q profit up on US onshore drilling

AP News
Posted: Oct 22, 2010 8:53 AM
Schlumberger 3Q profit up on US onshore drilling

Schlumberger Ltd.'s earnings more than doubled in the third quarter because of increased onshore drilling activity in the U.S. and Canada and a gain related to an acquisition.

Many of Schlumberger's customers are rushing to tap America's vast deposits of oil and gas in underground rock formations, or shale. In the third quarter, that activity helped offset a loss of offshore business caused by a drilling ban in the Gulf of Mexico.

Schlumberger, the largest U.S. oilfield services company by sales, provides services like pressure pumping, which forces fluid into wells to help oil and gas flow out. Halliburton, the second largest services company, said earlier this week that earnings were also boosted by improved business onshore in the U.S.

Schlumberger Chairman and CEO Andrew Gould said in a statement Friday that the government's ban on drilling in the Gulf _ a reaction to the BP oil spill _ cost the Houston company about 2 to 3 cents per share in the quarter.

Net income rose to $1.73 billion, or $1.38 per share, for the quarter ended Sept.30. That's compared with $787 million, or 65 cents per share, a year ago.

Revenue rose 26 percent to $6.85 billion. About $810 million of that came from the acquisition of Smith International, which closed in August. Oilfield services revenue increased 12 percent to $5.54 billion.

As part of the Smith deal, Schlumberger gained a stake in M-I SWACO, a supplier of drilling fluid systems and specialty tools for wellbore production. The company realized a gain of 98 cents per share on the investment.

Excluding that gain and charges of 30 cents per share, earnings were 70 cents per share, a penny above analysts' estimates.

Schlumberger shares rose 70 cents to $65.11 in pre-market trading.

Outside North America, the company said activity was mixed. Asia, Russia, the North Sea and West and South Africa showed improvements. North Africa and the Gulf of Guinea remained soft.