- Energy prices and production likely will increase this year after hitting bottom but without a "dramatic" short-term recovery in international markets, compared with North America where shale producers already are ramping up drilling activity, Schlumberger (SLB -0.9%) CEO Paal Kibsgaard said in today's earnings conference call.
- SLB sees E&P investments in North America rising by 30% this year, with the biggest growth in the Permian Basin, "which should lead to both higher activity and a long overdue recovery in service industry pricing," the CEO says.
- But SLB shares are lower, as the company is "a little bit less exposed to onshore North America than others," Edward Jones analyst Rob Desai tells Bloomberg. "There will be a little bit slower international recovery, and given Schlumberger is more international, they’ll benefit a little less near term."
- Kibsgaard says SLB has begun renegotiating prices with clients but "we need significantly higher pricing before we get into a sustainable operating environment," signaling that oil producers will need to continue to rely more on innovation and efficiencies.
- SLB peers are trading mixed: HAL +1.3%, BHI -0.2%, FTI -0.3%.