- The company has been awarded a five-year, multi-country, integrated services contract by Royal Dutch Shell for drilling oil and gas exploratory wells on a recently commissioned “highly mobile” deepwater drilling rig. The Shell program will eventually involve East, West, and North Africa.
- In China, Schlumberger’s drilling and measurements unit was deployed to drill 20 wells for PetroChina (NYSE:PTR) in an unexplored and technically challenging area in the the country’s West. Despite obvious challenges, through the use of several of its proprietary technologies, Schlumberger was able to reduce the drilling time for PetroChina from an anticipated 67 days to 42 days.
- Exxon Mobil Corporation (NYSE:XOM) has been toiling on Russia’s frigid, remote, and desolate Sakhalin Island for some time. Schlumberger installed a multilateral completions system there for the operator, permitting Exxon Mobil Corporation (NYSE:XOM) to “access new sections of the reservoir by reentering existing wellbores,” thereby increasing overall hydrocarbons recovery.
Foolish takeaway
For my money, Schlumberger, in addition to topping the oil-field services group in size, also constitutes a more compelling investment than any of its multi-services peers. For instance, as technological advancements become steadily more vital to accessing oil and gas in challenging locations, the $1.1 billion the company spends annually on research and development is of far more than passing consequence.
By operating about 25 research facilities worldwide — in such locations as Saudi Arabia, Brazil, and Russia — the company increases its expertise in dealing with varying geologic conditions. And every bit as importantly, it is able to maintain relationships with expanding national oil companies in those and other countries.
Further, Schlumberger’s revenue growth and expansion of margins during the past quarter bode well for its future performances. That’s especially the case given, for instance, “subdued” activity in Angola, due to project delays. That country’s offshore geologic conditions have turned out to mirror Brazil’s pre-salt region, thereby indicating that the West African nation is ripe for significantly expanded operations.
Indeed, at this juncture, it’s difficult to locate a weakness in Schlumberger’s performance or direction. As one who has monitored the company for some time, I suggest that energy-investing Fools place it high on their company watch lists.
The article What Did Schlumberger’s Results Say to Energy Investors? originally appeared on Fool.com is written by David Smith.
Fool contributor David Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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