Schlumberger Books Huge Loss In 3Q Due To Impairment Charges

Oilfield services provider Schlumberger has recorded a huge loss in the third quarter of 2019 due to impairment charges amid difficult market conditions.

In its quarterly report on Friday, Schlumberger said that its revenues in 3Q 2019 were $8.54 billion, nearly flat compared to revenues of $8.504 billion in the same period last year.

The company’s loss before taxes amounted to a staggering amount of $11.97 billion in 3Q 2019 compared to a profit of $787 million in the same period last year.

The company’s net loss was $11.38 billion in 3Q 2019 compared to a profit of $644 million in 3Q 2018.

In the report, Schlumberger said it had recorded a $12.7 billion pretax charge primarily relating to the impairment of goodwill, intangible assets, and fixed assets.

Schlumberger CEO, Olivier Le Peuch, commented, “We ended the third quarter with revenue of $8.5 billion, a 3% sequential increase while pretax segment operating income of $1.1 billion rose 13%. I am pleased with the results and proud of the team’s performance. Sustained international activity drove overall growth despite mixed results in North America. The North America business saw strong offshore sales with minimal growth on land due to slowing activity and further pricing weakness.”

Le Peuch also stated: “In North America, offshore revenue grew sequentially due to higher WesternGeco multiclient seismic license sales. Land revenue was slightly higher, as a modest increase in OneStim activity was offset by softer pricing while land drilling revenue was essentially flat despite the lower rig count. As we exited the quarter, OneStim activity decelerated as frac programs were either deferred or cancelled due to customer budget and cash flow constraints.”

He added: “The third quarter results reflect a $12.7 billion pretax charge driven by market conditions. This charge is almost entirely noncash and primarily relates to goodwill, intangible assets, and fixed assets.”