Schlumberger (NYSE: SLB) reported pretax income of $1.1 billion (£910 million) in its second quarter earnings, as bosses hailed a “favourable mix” of exploration and offshore activity.
Revenue grew 14% on Q1 to £5.7 billion ($6.8 billion), the company said, or 20% on a year-on-year basis. EBITDA for the quarter stood at $1.15bn (£950m).
Schlumberger chief executive Olivier Le Peuch said the quarter marked “a significant inflection point” for the company based on its acceleration of revenue and earnings growth.
By geography, North America led in year on year growth for the company, taking £1.25 billion, a 42% increase from 2021.
US land revenue growth outperformed the rig count increase sequentially, while offshore revenue growth was more than double the pace of US land—boosted by increased exploration data licensing in the US Gulf of Mexico and higher drilling activity.
US land revenue increased due to higher drilling activity and increased sales of surface production systems, while Canada land revenue increased despite the spring breakup due to higher Asset Performance Solutions (APS) project revenue.
The “Europe/CIS/Africa” area is bringing in the most cash with Q2 revenue of £1.4 billion, however, the region is not experiencing as much growth as North America as this is only a 16% increase from last year.
This significant growth was driven by activity that strengthened beyond the impact of the seasonal drilling activity recovery in the Northern Hemisphere with higher Production Systems sales in Europe and Scandinavia and multidivisional activity increases in Sub-Sahara Africa.
Schlumberger’s wells business also reported an uptick in revenue thanks to “improved pricing and new projects” with work in Guyana, Argentina, and Sub-Sahara Africa, as well as higher drilling activity across Southeast Asia, Australia, and in the Middle East, mainly in Saudi Arabia and Qatar.
North America, Latin America, Europe/CIS/Africa and the Middle East and Asia are all up in sequential and year on year growth. Sequentially, all Divisions posted double-digit revenue growth.
“Looking ahead, the second half of the year continues to shape up very well as highlighted in our revised expectations for the full year, Le Peuch added.
“Despite near-term concerns over a global economic slowdown, the combination of energy security, favorable break-even prices, and the urgency to grow oil and gas production capacity is expected to continue to support strong upstream E&P spending growth.
“Consequently, we are witnessing a decoupling of upstream spending from near-term demand volatility, resulting in resilient global oil and gas activity growth in 2022 and beyond.”
At the time of writing, SLB stock had risen more than 7% on the news.