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Schlumberger Limited (SLB)

  • Mon, Apr. 13, 11:24 AM
    • "No one (including us) has a really good handle on energy industry earnings estimates over the next few years," says J. Marshall Adkins and team at Raymond James, downgrading Cameron International (CAM -1%), Nabors Industries (NBR -0.3%), Schlumberger (SLB -0.8%), FMC Technologies (FTI -1.5%), and Basic Energy Services (BAS -6.6%).
    • Nevertheless, Adkins gives it his best shot and his numbers are well below the Street for 2015 and 2016. Then there's valuations, and the recent surge in prices has left them less than compelling.
    • Noted is substantial pricing pressur and overcapacity in many business lines, a more prolonged downturn internationally, and offshore activity not expected to see even a moderate uptick for several years.
    • Source: Barron's
    • Previously: Schlumberger slips as Raymond James heads to the sidelines (April 13)
    • Previously: Raymond James throws in the towel on oil services (April 13)
  • Mon, Apr. 13, 8:42 AM
    • Noting valuation, international exposure and continued weakening in offshore oil over the next two years, Raymond James downgrades Schlumberger (NYSE:SLB) to Market Perform from Outperform.
    • The stock's lower by more than 20% from last summer's high, but ahead 4% YTD.
    • Shares -0.55% premarket.
    • See also: Raymond James throws in the towel on oil services (April 13)
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  • Tue, Apr. 7, 12:59 PM
    • Peabody Energy (BTU +7.3%) spikes higher after Balyasny Asset Management's Christian Zann tells CNBC he likes the stock as a value play in the coal space.
    • Zann points out that coal is a relatively low capital intensive business vs. shale producers, who must spend considerable sums drilling new wells to maintain a production base.
    • Zann likes Schlumberger (SLB +1%) and Halliburton (HAL -1.3%) among oil services stocks, and Marathon Oil (MRO +1.3%) in the E&P group.
  • Mon, Apr. 6, 11:49 AM
    • Schlumberger (SLB +2.2%) is higher after Russia's energy minister said the country would not oppose a deal with SLB for the purchase of a 45.65% stake in Eurasia Drilling on the condition that certain risks are offset.
    • SLB agreed in January to purchase a stake in Eurasia, Russia's largest onshore drilling company, for $1.7B with the option to purchase the remaining stake at a later date; the deal was supposed to close by the end of March but last week the deadline was pushed back to the end of April.
    • Russia’s Federal Antimonopoly Service has not yet provided a full list of conditions to SLB, but one possible conditions is that SLB would have to sell the Eurasia stake to Russian investors if further sanctions against the country block its operations.
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  • Wed, Apr. 1, 3:38 PM
    • Even if oil prices rebound, oilfield services firms have a tough year ahead as producers squeeze them for deeper discounts, Moody’s says in a new analysis, predicting that the industry is headed for a “deep, protracted cyclical downturn."
    • Because many oil companies are drilling but not completing wells, oil services firms that provide production-related services will fare better than those offering pressure pumping, seismic services and other exploration-type activities.
    • No company is immune, but the big three - Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) - are best positioned because they are large, diverse, well-funded and have operations outside of North America, Moody's says, while Paragon Offshore (NYSE:PGN) and Hercules Offshore (NASDAQ:HERO) will see the sharpest decline in earnings as contracts expire for their fleet of older-generation jackup rigs.
    • Moody’s expects to see more offshore firms stack rigs, delay rig deliveries and write down assets as contracts get changed or canceled;lLand drillers will not fare much better, particularly those operating in expensive U.S. shale plays.
    • ETFs: OIH, XES, IEZ
  • Mon, Mar. 30, 12:22 PM
    • Russia's Eurasia Drilling says it will extend the deadline on its proposed deal to sell a stake to Schlumberger (SLB +0.6%) to April 30 from March 31, as Russian officials are yet to grant the approvals needed for the deal to be completed.
    • SLB said last month that planned to buy a 45.65% stake in Eurasia for $1.7B, potentially paving the way for it to become the sole owner of Russia's most active oilfield services company.
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  • Thu, Mar. 26, 12:22 PM
    • Schlumberger (SLB +0.2%) must satisfy a list of conditions, in part linked to sanctions, to gain approval for its $1.7B bid to buy Russia's Eurasia Drilling, says the head of Russia’s commission on foreign investment, which will meet with SLB executives in the next 10 days.
    • One condition could require SLB to sell Eurasia if sanctions impede the company’s work, according to the Russian official.
    • Lukoil, Eurasia’s largest customer, is backing the deal, saying it would be good for Russia; Lukoil CEO Vagit Alekperov owns ~3% of the driller’s shares.
  • Wed, Mar. 25, 3:56 PM
    • Schlumberger (SLB +1.8%) has agreed to pay $232M for violating U.S. sanctions in Iran and Sudan, WSJ reports, in part of the government’s crackdown on companies doing business with countries the U.S. has declared off limits.
    • The U.S. Justice Department reportedly will announce the plea deal later this afternoon, consisting of a $155M criminal fine - the biggest criminal fine ever imposed for a U.S. sanctions violation - and forfeiture of $77M in illegally obtained profits.
    • The agreement would cap a six-year investigation by the Justice and Commerce departments.
  • Mon, Mar. 23, 9:57 AM
    • Schlumberger (SLB +0.7%) expects oil and gas industry spending on exploration and production outside of North America to drop by 10%-15% in 2015, even with a partial recovery in Brent crude prices during H2, it says as it releases presentation slides for Howard Weil's annual energy conference.
    • SLB expects the GCC part of the Middle East to still post growth in investment levels in 2015, while anticipating double-digit spend reductions in Latin America driven by Mexico and Brazil, in Europe and Africa driven by the North Sea, and sub-Sahara Africa and in Asia, driven by China, Malaysia and Australia.
    • "Going forward, we believe financial prudence, where investments are limited to the cash flow generated by production, will be the new normal for U.S. tight oil developments," CEO Paal Kibsgaard says.
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  • Fri, Mar. 13, 2:58 PM
    • Oppenheimer cuts its EPS estimates and stock price targets on Schlumberger (SLB -1%), Halliburton (HAL -2.4%) and Baker Hughes (BHI -1.8%), as the companies are in the midst of one of the sharpest activity reductions in this sector in the past 30 years, but its maintains Outperform ratings that still come with big upside if the respective price targets are met.
    • The firm believes the rapid pace of activity decline benefits investors because it could bring world oil markets into balance more quickly, and sees a better than average chance for upside surprise in 2016 due to recovering oil prices and healthy incremental margins from 2015 cost-reduction measures.
    • Oppenheimer cut SLB's 2015 EPS estimate to $3.35 from $4.25, its 2016 estimate to $4.40 from $5.50, and its price target to $101 from $110; HAL's 2015 EPS is lowered to $1.70 from $2.70, its 2016 EPS to $2.85 from $4.00, and its price target to $60 from $64; BHI's 2015 EPS is reduced to $1.75 from $2.50, its 2016 EPS to $2.60 from $3.40, and its price target to $58 from $60.
  • Fri, Mar. 6, 11:45 AM
    • Schlumberger (SLB -1.8%) continues as the top large-cap oilfield services stock at Credit Suisse, which cites SLB's lower exposure to the short-cycle onshore North America business than peers and more business related to longer-cycle international activity.
    • The firm expects SLB to outperform as long as oil prices are flat to down and the U.S. rig count is declining: "Concerns about continued weakness in exploration and the continued stacking of offshore rigs will focus the relative differences in large-cap OFS performance. For now, SLB wins."
  • Thu, Feb. 26, 6:38 PM
    • Credit Suisse says the recent rally in oil prices and in oilfield services stocks (NYSEARCA:OIH) is a classic dead cat bounce, and that as soon as U.S. storage gets full - and it is close - crude prices will fall, bringing expectations and stocks down with it.
    • The firm says its sector outlook is increasingly negative as companies report increased pricing pressure, a record drop in the activity barometer of the rig count, and offshore rigs and projects confronting headwinds that could take a couple of years to fix.
    • Relevant stocks: SLB, HAL, BHI, CAM, HLX, SPN, NOV, FET, DRQ, FTI, OIS
  • Fri, Feb. 20, 8:15 AM
    • Eurasia Drilling says it is delaying a deal to sell a stake in the company to Schlumberger (NYSE:SLB), pending approval from Russia's Federal Anti-Monopoly Service, and will not occur during Q1 as previously expected.
    • SLB said last month it planned to buy a 45.65% stake in Eurasia for ~$1.7B, potentially paving the way for it to become the sole owner of the Russian oilfield services company.
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  • Thu, Feb. 19, 6:30 PM
    • Saudi Aramco, whose prolific production has contributed to the drop in oil prices, is starting to feel the pain from its country’s decision to keep pumping and is now asking contractors for steep discounts in an effort to cut costs, according to a WSJ report.
    • The Saudi oil company reportedly summoned oil services companies including Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) to ask for discounts of up to 20% on certain services such as well testing procedures; the companies do a combined $6B/year in business with Aramco.
    • The Saudi company also is said to have delayed plans to build a $2B clean fuels plant and held up deepwater oil and gas exploration and drilling activities in the Red Sea because their profitability is now in question.
    • Aramco is considering slashing E&P spending to $30B/year from $40B while oil prices remain low, industry sources say.
  • Wed, Feb. 18, 3:15 PM
    • RBC analysts think it's time to position for an oil recovery by buying oilfield services stocks such as Schlumberger (SLB -1.2%), Patterson-UTI (PTEN -0.4%), Nabors Industries (NBR +2.5%) and Precision Drilling (PDS +0.4%).
    • The firm believes oil prices will bottom in H1 2015, improves during H2 and averages at least $75/bbl in 2016, and sees U.S. land drillers and intensive service companies providing the best returns in the early phases of cycle recovery.
    • RBC notes that three of the top five performing stocks in the sector off the lows since 1997 have been PTEN, PDS and NBR; the firm considers SLB and NBR as best ideas, while PTEN is a small-cap best idea.
  • Tue, Feb. 17, 10:19 AM
    • U.S. and European suppliers to the oil industry are still able to seek work in Russia’s Arctic despite sanctions designed to limit their involvement because the rules do not apply to international subsidiaries, according to a Bloomberg report.
    • Schlumberger’s (SLB -0.6%) Russian unit bid in a December tender to supply drilling fluids to an offshore Arctic project operated by Gazprom Neft, and in the prior month, Baker Hughes’ (BHI -0.4%) local unit and a Panamanian unit of Schlumberger offered drilling services at the same field.
    • Neither company has been accused of breaking any laws, and none of the bids was successful, but the use of subsidiaries to legally skirt sanctions will raise questions about the effectiveness of measures imposed to punish Russia.
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Company Description
Schlumberger NV is a supplier of technology, integrated project management and information solutions to customers working in the oil and gas industry. Its business segments areReservoir Characterization Group, Drilling Group and Production Group.