EX-99 2 d237706dex99.htm EX-99 EX-99

Exhibit 99

 

LOGO

Schlumberger Announces Third-Quarter 2021 Results

 

   

Global revenue of $5.85 billion increased 4% sequentially and 11% year-on-year

 

   

International revenue was $4.68 billion and North America revenue was $1.13 billion

 

   

GAAP EPS, including charges and credits, was $0.39 and increased 30% sequentially

 

   

EPS, excluding charges and credits, was $0.36 and increased 20% sequentially

 

   

Cash flow from operations was $1.07 billion and free cash flow was $671 million

 

   

Board approved quarterly cash dividend of $0.125 per share

HOUSTON, October 22, 2021—Schlumberger Limited (NYSE: SLB) today reported results for the third-quarter 2021.

 

Third-Quarter Results                (Stated in millions, except per share amounts)  
     Three Months Ended     Change  
     Sept. 30, 2021     Jun. 30, 2021     Sept. 30, 2020     Sequential     Year-on-year  

Revenue*

   $ 5,847     $ 5,634     $ 5,258       4     11

Income (loss) before taxes - GAAP basis

   $ 691     $ 542     $ (54     28     n/m  

Net income (loss) - GAAP basis

   $ 550     $ 431     $ (82     28     n/m  

Diluted EPS (loss per share) - GAAP basis

   $ 0.39     $ 0.30     $ (0.06     30     n/m  

Adjusted EBITDA**

   $ 1,296     $ 1,198     $ 1,018       8     27

Adjusted EBITDA margin**

     22.2     21.3     19.4     90 bps       280 bps  

Pretax segment operating income**

   $ 908     $ 807     $ 575       12     58

Pretax segment operating margin**

     15.5     14.3     10.9     120 bps       460 bps  

Net income, excluding charges & credits**

   $ 514     $ 431     $ 228       19     126

Diluted EPS, excluding charges & credits**

   $ 0.36     $ 0.30     $ 0.16       20     125

Revenue by Geography

          

International

   $ 4,675     $ 4,511     $ 4,210       4     11

North America*

     1,129       1,083       1,034       4     9

Other

     43       40       14       n/m       n/m  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 5,847     $ 5,634     $ 5,258       4 %      11
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Schlumberger divested certain businesses in North America during the fourth quarter of 2020. These businesses generated revenue of $245 million during the third quarter of 2020. Excluding the impact of these divestitures, global third-quarter 2021 revenue increased 17% year-on-year. North America third-quarter 2021 revenue, excluding the impact of these divestitures, increased 43% year-on-year.

**

These are non-GAAP financial measures. See sections titled “Charges & Credits”, “Divisions”, and “Supplemental Information” for details.

n/m = not meaningful

 

1


                       (Stated in millions)  
     Three Months Ended     Change  
     Sept. 30, 2021     Jun. 30, 2021     Sept. 30, 2020     Sequential     Year-on-year  

Revenue by Division

          

Digital & Integration

   $ 812     $ 817     $ 738       -1     10

Reservoir Performance*

     1,192       1,117       1,215       7     -2

Well Construction

     2,273       2,110       1,837       8     24

Production Systems**

     1,674       1,681       1,532       0     9

Other

     (104     (91     (64     n/m       n/m  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 5,847     $ 5,634     $ 5,258       4     11
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pretax Operating Income by Division

          

Digital & Integration

   $ 284     $ 274     $ 201       4     42

Reservoir Performance

     190       156       103       22     85

Well Construction

     345       272       173       27     99

Production Systems

     166       171       132       -3     26

Other

     (77     (66     (34     n/m       n/m  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 908     $ 807     $ 575       12     58
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pretax Operating Margin by Division

          

Digital & Integration

     35.0     33.5     27.2     154 bps       784 bps  

Reservoir Performance

     16.0     13.9     8.4     202 bps       751 bps  

Well Construction

     15.2     12.9     9.4     230 bps       576 bps  

Production Systems

     9.9     10.2     8.6     -27 bps       129 bps  

Other

     n/m       n/m       n/m       n/m       n/m  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     15.5     14.3     10.9     120 bps       460 bps  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Schlumberger divested its OneStim® pressure pumping business in North America during the fourth quarter of 2020. This business generated revenue of $219 million during the third quarter of 2020. Excluding the impact of this divestiture, Reservoir Performance third-quarter 2021 revenue increased 20% year-on-year.

**

Schlumberger divested its low-flow artificial lift business in North America during the fourth quarter of 2020. This business generated revenue of $26 million during the third quarter of 2020. Excluding the impact of this divestiture, Production Systems third-quarter 2021 revenue increased 11% year-on-year.

n/m = not meaningful

Schlumberger CEO Olivier Le Peuch commented, “We started the second half of the year with strong results, delivering another quarter of sequential revenue growth, a fifth consecutive quarter of margin expansion, and a solid free cash flow performance. Revenue growth was led by Well Construction and Reservoir Performance, our predominantly service-oriented Divisions, delivering quality revenue that more than offset the impact of transitory global supply and logistics constraints in Production Systems. International revenue grew 11% year-on-year and is on track to meet our double-digit revenue growth ambition for the second half of 2021 compared to the same period last year.

“Our returns-focused strategy continues to deliver exceptional results at this early point of the growth cycle. Our third-quarter pretax segment operating margin reached its highest level since 2015 and cash flow from operations was $1.07 billion. I am excited about our improving earnings and cash flow potential as the macro outlook for energy strengthens significantly through 2022 and beyond.

 

2


“Geographically, international revenue of $4.68 billion grew 4% sequentially and 11% year-on-year. The sequential revenue increase was led by double-digit growth in Latin America complemented by sustained activity in the Europe/CIS/Africa and Middle East & Asia areas. In North America, revenue of $1.13 billion grew 4% sequentially and 9% year-on-year. The sequential growth was driven mainly by a strong seasonal rebound in land drilling, higher Asset Performance Solutions (APS) revenue in Canada, and an increase in drilling revenue in North America offshore.

“Among the Divisions, Well Construction continued its growth momentum, with revenue increasing 8% sequentially due to higher international and North America drilling activity both on land and offshore. Similarly, Reservoir Performance revenue increased 7% sequentially from higher exploration and appraisal activity across the international markets. Revenue from Digital & Integration and Production Systems was essentially flat.

“Sequentially, third-quarter pretax segment operating income increased 12% with pretax segment operating margin expanding by 120 basis points (bps) to 15.5%, while adjusted EBITDA margin grew 90 bps to 22.2%. This was driven by our Well Construction and Reservoir Performance Divisions. We are starting to see signs of improved service rates in both of these Divisions driven by our technology, which is creating visibly higher value for our customers and resulting in stronger technology adoption and activity share gains—particularly in the international markets.

“Third-quarter cash flow from operations was $1.07 billion and free cash flow was $671 million. On a year-to-date basis, we have generated free cash flow of $1.70 billion, which has allowed us to reduce our net debt by $1.43 billion since the beginning of the year.

“Looking ahead, we anticipate another quarter of growth, and expect to close 2021 with strong momentum that will set the foundation for an exceptional growth cycle.

“The industry macro fundamentals have visibly strengthened this year, particularly in recent weeks—with demand recovery, oil and gas commodity prices at recent highs, low inventory levels, and encouraging trends in pandemic containment efforts. Absent a recession or pandemic-related setback, these favorable conditions are expected to materially drive investment over the next few years—particularly internationally—and result in exceptional multiyear capital spending growth globally, both on land and offshore. As the market leader, we have an advantaged position from which to capture this growth given our technology, integration capability, and international strength, with our core poised for activity and earnings outperformance.

“In this context and given our financial outperformance at this point in the cycle, we are increasingly confident in achieving our mid-cycle adjusted EBITDA margin ambition of 25% or higher and sustaining a double-digit free cash flow margin throughout the cycle.”

Other Events

On October 21, 2021, Schlumberger’s Board of Directors approved a quarterly cash dividend of $0.125 per share of outstanding common stock, payable on January 13, 2022 to stockholders of record on December 1, 2021.

 

3


Revenue by Geographical Area

 

                          (Stated in millions)  
     Three Months Ended      Change  
     Sept. 30, 2021      Jun. 30, 2021      Sept. 30, 2020      Sequential     Year-on-year  

North America*

   $ 1,129      $ 1,083      $ 1,034        4     9

Latin America

     1,160        1,057        828        10     40

Europe/CIS/Africa

     1,481        1,453        1,397        2     6

Middle East & Asia

     2,034        2,001        1,986        2     2

Other

     43        40        13        n/m       n/m  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
   $ 5,847      $ 5,634      $ 5,258        4     11
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

International

   $ 4,675      $ 4,511      $ 4,210        4     11

North America*

   $ 1,129      $ 1,083      $ 1,034        4     9

 

*

Schlumberger divested certain businesses in North America during the fourth quarter of 2020. These businesses generated revenue of $245 million during the third quarter of 2020. Excluding the impact of these divestitures, global third-quarter 2021 revenue increased 17% year-on-year. North America third-quarter 2021 revenue, excluding the impact of these divestitures, increased 43% year-on-year.

n/m = not meaningful

North America

North America revenue of $1.13 billion increased 4% sequentially, with both land and offshore revenue increasing, driven primarily by Well Construction activity. The sequential growth was due to a strong seasonal rebound in land drilling, higher APS revenue in Canada, and higher drilling revenue in North America offshore that was partially offset by hurricane-related disruption.

International

International revenue of $4.68 billion increased 4% sequentially led by double-digit growth in Latin America that was complemented by sustained activity in the Europe/CIS/Africa and Middle East & Asia areas.

Revenue in Latin America of $1.16 billion increased 10% sequentially due to double-digit revenue growth in Mexico, Argentina, and Brazil from robust activity in Well Construction, Reservoir Performance, and Production Systems, respectively. Revenue in Guyana, Ecuador, and Colombia also increased, driven by higher wireline and intervention activity in Reservoir Performance.

Europe/CIS/Africa revenue of $1.48 billion increased 2% sequentially, with growth reported in Scandinavia, Russia, Angola, and Nigeria. Peak summer drilling drove higher Well Construction activity in Scandinavia and Russia. Sustained exploration activity in Africa drove higher wireline and stimulation activity in Reservoir Performance, while Production Systems sales increased in Angola.

Revenue in the Middle East & Asia of $2.03 billion increased 2% sequentially with growth in Australia, East Asia, Indonesia, Saudi Arabia, and Qatar. Revenue in Australia and Indonesia increased from higher offshore drilling, benefiting Well Construction. East Asia revenue increased with growth across all four Divisions. In the Middle East, revenue in Saudi Arabia and Qatar grew from higher Reservoir Performance activity.

 

4


Results by Division

Digital & Integration

 

                       (Stated in millions)  
     Three Months Ended     Change  
     Sept. 30, 2021     Jun. 30, 2021     Sept. 30, 2020     Sequential     Year-on-year  

Revenue

          

International

   $ 615     $ 625     $ 603       -2     2

North America

     196       191       134       3     46

Other

     1       1       1       n/m       n/m  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 812     $ 817     $ 738       -1     10
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pretax operating income

   $ 284     $ 274     $ 201       4     42

Pretax operating margin

     35.0     33.5     27.2     154 bps       784 bps  

n/m = not meaningful

Digital & Integration revenue of $812 million declined 1% sequentially as higher APS project revenue was offset by lower digital solutions revenue following strong software sales in the second quarter. Revenue grew in North America, Latin America, and Middle East & Asia, offset by lower revenue in Europe/CIS/Africa.

Digital & Integration pretax operating margin of 35% expanded 154 bps sequentially, primarily due to increased profitability from APS projects.

Reservoir Performance

 

                       (Stated in millions)  
     Three Months Ended     Change  
     Sept. 30, 2021     Jun. 30, 2021     Sept. 30, 2020     Sequential     Year-on-year  

Revenue*

          

International

   $ 1,112     $ 1,038     $ 937       7     19

North America*

     79       79       275       1     -71

Other

     1       —         3       n/m       n/m  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 1,192     $ 1,117     $ 1,215       7     -2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pretax operating income

   $ 190     $ 156     $ 103       22     85

Pretax operating margin

     16.0     13.9     8.4     202 bps       751 bps  

 

*

Schlumberger divested its OneStim pressure pumping business in North America during the fourth quarter of 2020. This business generated revenue of $219 million during the third quarter of 2020. Excluding the impact of this divestiture, global third-quarter 2021 revenue increased 20% year-on-year. North America third-quarter 2021 revenue, excluding the impact of this divestiture, increased 41% year-on-year.

n/m = not meaningful

Reservoir Performance revenue of $1.19 billion increased 7% sequentially due to higher exploration and appraisal programs across the international markets. Double-digit growth in Latin America was driven by higher wireline evaluation activity in Guyana and Mexico, higher intervention activity in Brazil and Ecuador, and increased stimulation activity in Argentina. Revenue also grew in Europe and Africa primarily due to higher wireline evaluation activity. In addition, Saudi Arabia and Qatar revenue increased due to higher stimulation and intervention activity.

Reservoir Performance pretax operating margin of 16% expanded 202 bps sequentially. Profitability was boosted by higher offshore and exploration activity and a favorable technology mix, particularly in Latin America and Africa.

 

5


Well Construction

 

                       (Stated in millions)  
     Three Months Ended     Change  
     Sept. 30, 2021     Jun. 30, 2021     Sept. 30, 2020     Sequential     Year-on-year  

Revenue

          

International

   $ 1,839     $ 1,708     $ 1,562       8     18

North America

     382       352       235       9     62

Other

     52       50       40       n/m       n/m  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 2,273     $ 2,110     $ 1,837       8     24
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pretax operating income

   $ 345     $ 272     $ 173       27     99

Pretax operating margin

     15.2     12.9     9.4     230 bps       576 bps  

n/m = not meaningful

Well Construction revenue of $2.27 billion increased 8% sequentially due to higher land and offshore drilling across the international markets and increased rig activity in North America. North America revenue growth was driven by strong seasonal rebound on land drilling in Canada and higher offshore drilling in the Gulf of Mexico, notwithstanding the hurricane effects during the quarter. International revenue was driven by double-digit growth in Latin America, Africa, and Russia & Central Asia from the combination of increased offshore exploration activity and the peak of summer land drilling campaigns.

Well Construction pretax operating margin of 15% improved sequentially by 230 bps due to higher drilling revenue, boosted by the favorable mix of activity and new technology.

Production Systems

 

                       (Stated in millions)  
     Three Months Ended     Change  
     Sept. 30, 2021     Jun. 30, 2021     Sept. 30, 2020     Sequential     Year-on-year  

Revenue*

          

International

   $ 1,205     $ 1,220     $ 1,138       -1     6

North America*

     469       458       389       3     21

Other

     —         3       5       n/m       n/m  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 1,674     $ 1,681     $ 1,532       0     9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pretax operating income

   $ 166     $ 171     $ 132       -3     26

Pretax operating margin

     9.9     10.2     8.6     -27 bps       129 bps  

 

*

Schlumberger divested its low-flow artificial lift business in North America during the fourth quarter of 2020. This business generated revenue of $26 million during the third quarter of 2020. Excluding the impact of this divestiture, global third-quarter 2021 revenue increased 11% year-on-year. North America third-quarter revenue, excluding the impact of this divestiture, increased 29% year-on-year.

n/m = not meaningful

Production Systems revenue of $1.67 billion was essentially flat sequentially. Revenue increases in subsea and well production systems were offset by a revenue decline in midstream production systems. International activity was driven by double-digit growth in Latin America due to subsea production systems, particularly in Brazil and Mexico. US land revenue also increased due to higher sales of well and surface production systems, which outpaced the drilling and completed well count growth. These increases were offset by revenue declines in Europe/CIS/Africa and the Middle East & Asia, despite double-digit growth in Angola, Nigeria, East Asia, Indonesia, China, and Iraq. Revenue was partially impacted by transitory global supply and logistics constraints.

Production Systems pretax operating margin of 10% was essentially flat sequentially.

 

6


Quarterly Highlights

Schlumberger continues to win a growing number of contract awards based on technology differentiation, integration, and our ability to execute globally. This is resulting in a robust pipeline of work, particularly in the Middle East, offshore, and natural gas projects as the growth cycle expands. During the quarter, the following notable projects were secured:

 

   

Schlumberger was awarded a multibillion dollar (USD) integrated stimulation technology and services contract by Saudi Aramco for its unconventional gas resources. Fit-for-basin technologies will enable operational performance and efficiency, in a work scope that includes the full suite of products and services for hydraulic fracturing, coiled tubing intervention, wireline services, Cameron hydraulic fracturing trees with MonoFlex* dual-connection fracturing fluid delivery technology, and flow back. Mobilization is expected to start in the fourth quarter of 2021.

 

   

Petroleum Development Oman LLC (PDO) awarded Schlumberger a major services contract for the provision of high-pressure hydraulic fracturing and stimulation services for up to 350 wells in Oman. The five-year contract has two independent two-year options and comprises 105 oil and gas exploration wells and between 171 to 245 gas development wells. The work program is scheduled to commence in the fourth quarter of 2021.

 

   

Kuwait Oil Company awarded Schlumberger a five-year supply agreement for wellheads, production trees, and services for 230 new wells and 250 workover wells in the country’s deep Jurassic formations. The scope of the agreement includes the supply and installation services of 15,000-psi high-pressure, high-temperature (HPHT) wellheads, production trees, chokes, and control panels. Kuwait’s Jurassic reservoirs hold significant gas reserves and are a key element in the country’s long-term strategy.

In the offshore markets, Schlumberger continues to win significant awards as a result of its technology and integration capabilities driving performance, either by reducing time to first production, or by improving recovery from existing assets. This offshore activity growth is being driven by increased final investment decisions (FIDs) and awards of both short- and long-cycle projects. Examples from the quarter include:

 

   

Schlumberger was awarded a significant contract by Turkish Petroleum (TP) for end-to-end production solutions for the greenfield Phase 1 development of the Sakarya Field, Turkey’s largest gas reserve. The integrated project scope will cover subsurface solutions to onshore production, including well completions, subsea production systems (SPS), and an early production facility capable of handling up to 350 MMscf/d of gas. Through this integration, from subsurface to processing facility, pipeline-ready gas will be delivered on an accelerated timeline.

 

   

In the Ormen Lange Field, where A/S Norske Shell and the Ormen Lange Partnership have recently made the FID for Phase 3, OneSubsea® will deploy a subsea multiphase compression system, comprising two 16-MW subsea compression stations tied into existing manifolds and pipelines—an industry leading innovation that will unlock an additional 30 to 50 billion m3 of natural gas and increase the field recovery rate from 75% to 85%. The OneSubsea multiphase compression system will facilitate a significant reduction in energy consumption, and thus CO2 emissions, when compared to topside compression.

 

7


   

In Brazil, Petrobras awarded Schlumberger a contract for integrated completions on 21 wells in presalt concessions. The intelligent completion design chosen for these wells includes a selective open hole lower completion, integrating a premium isolation valve and downhole interval flow control valves and a Metris* permanent monitoring system. Intelligent completions will enable Petrobras to enhance ultimate recovery in these higher-pressure reservoirs by more accurately monitoring and controlling production. Installation is expected to commence in the third quarter of 2022.

 

   

OneSubsea was awarded a significant contract by Aker BP for the delivery, installation, and commissioning of a subsea production system with a reduced carbon impact for the Hanz project on the Norwegian Continental Shelf. The contract—which comprises three horizontal subsea trees, controls, and additional associated equipment—includes the use of refurbished subsea production equipment repurposed from previous projects. This unique approach will enable Aker BP to develop this field with reduced cost and carbon footprint as a tieback to the Ivar Aasen platform. This approach is estimated to remove more than 200 metric tons of CO2e emissions from the project when compared to a conventional method.

The increase in customer activity is broad based as the growth cycle widens, not only geographically, but also across operating environments including onshore and midstream. Examples include:

 

   

Cairn Oil & Gas, Vedanta Limited has awarded Schlumberger an integrated well construction and completion contract for 27 deep gas wells in the Raageshwari Field located in Rajasthan, India. Under the contract scope, Schlumberger will create reliability and efficiency improvement opportunities using a combination of unique, fit-for-basin technologies that has proven effective in the recently concluded 42-well deep gas campaign in this field. The integrated well construction and completion approach will drive value and efficiency for Cairn, which is one of the largest oil and gas exploration and production companies in India, as it executes its natural gas development plan.

 

   

In India, Reliance Industries Limited has awarded Schlumberger a contract for the engineering and supply of two 25 m3/h rich monoethylene glycol (MEG) reclamation and regeneration plants, and a pretreatment unit to support increased gas production from the existing Kakinada onshore terminal. MEG is injected in production pipelines, captured, and reused to reduce hydrate formation and maximize gas system throughput. The MEG reclamation trains will use the PUREMEG* monoethylene glycol reclamation and regeneration system, which has lower operating cost compared with conventional systems.

Digital transformation is a key part of the industry’s future. Through our digital platform, which we continue to enhance, we are delivering performance impact for customers. Highlights from the quarter include:

 

   

Schlumberger made a strategic investment in DeepIQ, Inc. to accelerate self-service analytics for enterprises’ industrial data. This will help maintain Schlumberger’s leading position in transformational digital solutions for the energy industry, leveraging DeepIQ technologies in combination with Schlumberger’s artificial intelligence (AI) solutions.

 

   

Schlumberger has expanded its digital drilling planning and operations portfolio by acquiring Independent Data Services (IDS), the industry’s only automated reporting software for drilling operations. Augmenting the DrillPlan* coherent well construction planning solution and DrillOps* on-target well delivery solution via the cloud or as a stand-alone solution, IDS enables automated analysis and reporting of operational activities, giving E&P operators and drilling contractors actionable insights to improve operational performance.

 

   

Offshore Canada, Schlumberger and ExxonMobil Canada are jointly working on the deployment of digital drilling solutions, which recently enabled ExxonMobil Canada to complete the first fully automated section drilled at the Hebron platform. This was achieved with a combination of DrillOps on-target well delivery solution, including the DrillOps Automate drilling solution, and the Cameron DrillPilot* equipment sequencing software for pipe handling automation. ExxonMobil Canada and its co-venturers on Hebron have agreed to a commercial implementation of the DrillOps Automate solution in its offshore operations. These digital solutions are expected to create a step change in procedural adherence, consistency, standardization, and operational efficiency across rig crews and enable close integration of well construction planning and execution phases in the future.

 

8


   

In Deepwater Gulf of Mexico, Performance Live* digitally connected service helped Shell Exploration and Production Company improve drilling performance while meeting reduced crew size objectives. The use of Performance Live service was increased to deploy both directional drilling and advanced logging-while-drilling services, such as StethoScope* formation pressure-while-drilling service. The result was delivery of a 19% shoe-to-shoe drilling improvement and a 72% reduction in normalized nonproductive time (NPT), while average wellsite crew size was reduced by 46% since the start of implementation.

 

   

Aramco and Schlumberger signed an agreement for the Omega* geophysical data processing platform, one of the industry’s most advanced geophysical processing solutions. The Omega platform enhances the geophysics data imaging by integrating comprehensive workflows and advanced algorithms with leading science, scalable processing, and unparalleled flexibility.

Schlumberger Transition Technologies* are being increasingly adopted by customers as they address their Scope 1 and Scope 2 emissions, a commitment we share with our own Scope 3 reduction targets. These technologies accelerate both our customers’ and Schlumberger’s journey to net zero, by reducing flaring and fugitive emissions, reducing the CO2 footprint in drilling operations, offering development solutions that minimize full-field carbon footprint, or increasing electrification of infrastructure. Specific examples of new technology deployments include:

 

   

In Kazakhstan, Schlumberger has deployed a zero-flaring well test and cleanup solution with Karachaganak Petroleum Operating B.V.—jointly operated by Shell and Eni—that has avoided the equivalent of more than 240,000 metric tons of CO2e emissions to date. Incorporating unique Schlumberger technologies such as Vx Spectra* surface multiphase flowmeter, high pressure separators, and REDA Multiphase HPS* horizontal multistage surface pumps, this project is first-of-a-kind in the world and is aligned with the long-term net-zero goals of both JV partners and Schlumberger, as well as the country’s environmental goals.

 

   

Offshore Trinidad and Tobago, Schlumberger helped bp achieve first gas seven months ahead of schedule in the Matapal Field. In collaboration with bp, OneSubsea leveraged its experience to deploy its first all-electric manifold and three 10,000-psi subsea trees with integral Vx Omni* subsea multiphase flowmeters. Agile subsea production systems (SPS) also enabled bp to capitalize on standardized hardware and reduce project-specific engineering. This contributed to reaching first gas in just three years from contract award, as compared to the four years for similar previous developments.

 

   

Offshore Norway, Equinor made its first deployment of the Manara* production and reservoir management system to enhance oil production while reducing project CO2 emissions in an extended-reach well in the Heidrun Field. Equinor will use insight into which zones are contributing to production and the ability to tailor flow from each using six all-electric monitoring and control stations to optimize oil output and minimize water production. Controlling water production with the Manara system will decrease the energy needed to pump treated water back into the reservoir, reducing the CO2 emissions per barrel of oil produced.

 

9


In addition to reducing CO2 emissions and consumption in oil and gas operations, Schlumberger domain expertise and experience are contributing to winning project awards to enable other industries to reduce carbon emissions.

 

   

FS Bioenergia has awarded Schlumberger Brazil’s first carbon capture and storage project, which will support the production of carbon-negative biofuels. Under the agreement, Schlumberger will conduct reservoir studies, design, and manage drilling of injection wells, perform injectivity tests, and monitor storage once injection commences. The project, to be built at the site of the FS Bioenergia processing plant in Lucas do Rio Verde, is anticipated to process and store 430,000 tons of CO2 per year upon completion, scheduled for 2024.

 

10


Financial Tables

Condensed Consolidated Statement of Income (Loss)

 

     (Stated in millions, except per share amounts)  
     Third Quarter     Nine Months  

Periods Ended September 30,

   2021      2020     2021      2020  

Revenue

   $ 5,847      $ 5,258     $ 16,704      $ 18,069  

Interest and other income (1)

     56        22       91        94  

Expenses

          

Cost of revenue

     4,862        4,624       14,135        16,172  

Research & engineering

     140        137       409        452  

General & administrative

     80        85       231        293  

Impairments & other (1)

     —           350       —          12,596  

Interest

     130        138       402        419  
  

 

 

    

 

 

   

 

 

    

 

 

 

Income (loss) before taxes (1)

   $ 691      ($ 54   $ 1,618      ($ 11,769

Tax expense (benefit) (1)

     129        19       301        (901
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss) (1)

   $ 562      ($ 73   $ 1,317      ($ 10,868

Net income attributable to noncontrolling interest

     12        9       37        24  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss) attributable to Schlumberger (1)

   $ 550      ($ 82   $ 1,280      ($ 10,892
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted earnings (loss) per share of Schlumberger (1)

   $ 0.39      ($ 0.06   $ 0.90      ($ 7.84
  

 

 

    

 

 

   

 

 

    

 

 

 

Average shares outstanding

     1,402        1,391       1,399        1,389  

Average shares outstanding assuming dilution

     1,424        1,391       1,422        1,389  
  

 

 

    

 

 

   

 

 

    

 

 

 

Depreciation & amortization included in expenses (2)

   $ 530      $ 587     $ 1,588      $ 1,983  
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

See section entitled “Charges & Credits” for details.

(2)

Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs, and APS investments.

 

11


Condensed Consolidated Balance Sheet

 

            (Stated in millions)  

Assets

   Sept. 30,
2021
     Dec. 31,
2020
 

Current Assets

     

Cash and short-term investments

   $ 2,942      $ 3,006  

Receivables

     5,349        5,247  

Inventories

     3,296        3,354  

Other current assets

     800        1,312  
  

 

 

    

 

 

 
     12,387        12,919  

Investment in affiliated companies

     2,110        2,061  

Fixed assets

     6,375        6,826  

Goodwill

     12,990        12,980  

Intangible assets

     3,265        3,455  

Other assets

     3,911        4,193  
  

 

 

    

 

 

 
   $ 41,038      $ 42,434  
  

 

 

    

 

 

 

Liabilities and Equity

     

Current Liabilities

     

Accounts payable and accrued liabilities

   $ 7,615      $ 8,442  

Estimated liability for taxes on income

     907        1,015  

Short-term borrowings and current portion of long-term debt

     1,025        850  

Dividends payable

     188        184  
  

 

 

    

 

 

 
     9,735        10,491  

Long-term debt

     14,370        16,036  

Postretirement benefits

     905        1,049  

Other liabilities

     2,363        2,369  
  

 

 

    

 

 

 
     27,373        29,945  

Equity

     13,665        12,489  
  

 

 

    

 

 

 
   $ 41,038      $ 42,434  
  

 

 

    

 

 

 

 

12


Liquidity

 

Components of Liquidity

   Sept. 30,
2021
    Jun. 30,
2021
    Dec. 31,
2020
    Sept. 30,
2020
 

Cash and short-term investments

   $ 2,942     $ 2,682     $ 3,006     $ 3,837  

Short-term borrowings and current portion of long-term debt

     (1,025     (36     (850     (1,292

Long-term debt

     (14,370     (15,687     (16,036     (16,471
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Debt (1)

   $ (12,453   $ (13,041   $ (13,880   $ (13,926
  

 

 

   

 

 

   

 

 

   

 

 

 

Details of changes in liquidity follow:

        

 

Periods Ended September 30,

   Nine
Months
2021
    Third
Quarter
2021
    Nine
Months
2020
 

Net income (loss)

   $ 1,317     $ 562     $ (10,868

Charges and credits, net of tax (2)

     (36     (36     11,539  
  

 

 

   

 

 

   

 

 

 
     1,281       526     $ 671  

Depreciation and amortization (3)

     1,588       530       1,983  

Stock-based compensation expense

     229       73       318  

Change in working capital

     (798     (40     (822

US federal tax refund

     477       —         —    

Other

     (58     (19     (84
  

 

 

   

 

 

   

 

 

 

Cash flow from operations (4)

     2,719       1,070       2,066  
  

 

 

   

 

 

   

 

 

 

Capital expenditures

     (694     (273     (858

APS investments

     (305     (117     (252

Multiclient seismic data capitalized

     (21     (9     (86
  

 

 

   

 

 

   

 

 

 

Free cash flow (5)

     1,699       671       870  
  

 

 

   

 

 

   

 

 

 

Dividends paid

     (524     (175     (1,560

Proceeds from employee stock plans

     137       75       146  

Stock repurchase program

     —         —         (26

Business acquisitions and investments, net of cash acquired plus debt assumed

     (98     (63     (33

Proceeds from divestitures

     —         —         325  

Other

     (79     (49     (149
  

 

 

   

 

 

   

 

 

 

Change in net debt before impact of changes in foreign exchange rates

     1,135       459       (427

Impact of changes in foreign exchange rates on net debt

     292       129       (372
  

 

 

   

 

 

   

 

 

 

Decrease (increase) in Net Debt

     1,427       588       (799

Net Debt, beginning of period

     (13,880     (13,041     (13,127
  

 

 

   

 

 

   

 

 

 

Net Debt, end of period

   $ (12,453   $ (12,453   $ (13,926
  

 

 

   

 

 

   

 

 

 

 

(1) 

“Net Debt” represents gross debt less cash and short-term investments. Management believes that Net Debt provides useful information regarding the level of Schlumberger’s indebtedness by reflecting cash and investments that could be used to repay debt. Net Debt is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, total debt.

(2)

See section entitled “Charges & Credits” for details.

(3) 

Includes depreciation of property, plant and equipment and amortization of intangible assets, multiclient seismic data costs, and APS investments.

(4) 

Includes severance payments of $226 million and $42 million during the nine months and third quarter ended September 30, 2021, respectively; and $699 million and $273 million during the nine months and third quarter ended September 30, 2020, respectively.

(5) 

“Free cash flow” represents cash flow from operations less capital expenditures, APS investments, and multiclient seismic data costs capitalized. Management believes that free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of Schlumberger’s ability to generate cash. Once business needs and obligations are met, this cash can be used to reinvest in the company for future growth or to return to shareholders through dividend payments or share repurchases. Free cash flow does not represent the residual cash flow available for discretionary expenditures. Free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations.

 

13


Charges & Credits

In addition to financial results determined in accordance with US generally accepted accounting principles (GAAP), this third-quarter 2021 earnings release also includes non-GAAP financial measures (as defined under the SEC’s Regulation G). In addition to the non-GAAP financial measures discussed under “Liquidity”, net income (loss), excluding charges & credits and pretax segment operating income, as well as measures derived from them (including diluted EPS, excluding charges & credits; Schlumberger net income (loss), excluding charges & credits; effective tax rate, excluding charges & credits; and adjusted EBITDA) are non-GAAP financial measures. Management believes that these financial measures enable it to evaluate more effectively Schlumberger’s operations period over period and to identify operating trends that could otherwise be masked by the excluded items. Certain of these measures are also used by management as performance measures in determining certain incentive compensation. The foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. The following are reconciliations of certain of these non-GAAP measures to the comparable GAAP measures. For a reconciliation of adjusted EBITDA to the comparable GAAP measure, please refer to the section titled “Supplemental Information” (Question 9).

 

     (Stated in millions, except per share amounts)  
     Third Quarter 2021  
     Pretax     Tax     Noncont.
Interests
     Net     Diluted
EPS
 

Schlumberger net income (GAAP basis)

   $ 691     $ 129     $ 12      $ 550     $ 0.39  

Unrealized gain on marketable securities (1)

     (47     (11     —          (36     (0.03
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Schlumberger net income, excluding charges & credits

   $ 644     $ 118     $ 12      $ 514     $ 0.36  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

     Third Quarter 2020  
     Pretax     Tax      Noncont.
Interests
     Net     Diluted
EPS
 

Schlumberger net loss (GAAP basis)

   $ (54   $ 19      $ 9      $ (82   $ (0.06

Facility exit charges

     254       39        —          215       0.15  

Workforce reductions

     63       —          —          63       0.05  

Other

     33       1        —          32       0.02  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Schlumberger net income, excluding charges & credits

   $ 296     $ 59      $ 9      $ 228     $ 0.16  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

 

     Nine Months 2021  
     Pretax     Tax     Noncont.
Interests
     Net     Diluted
EPS*
 

Schlumberger net income (GAAP basis)

   $ 1,618     $ 301     $ 37      $ 1,280     $ 0.90  

Unrealized gain on marketable securities (1)

     (47     (11     —          (36     (0.03
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Schlumberger net income, excluding charges & credits

   $ 1,571     $ 290     $ 37      $ 1,244     $ 0.88  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

14


     (Stated in millions, except per share amounts)  
     Nine Months 2020  
     Pretax     Tax     Noncont.
Interests
     Net     Diluted
EPS*
 

Schlumberger net loss (GAAP basis)

   $ (11,769   $ (901   $ 24      $ (10,892   $ (7.84

Goodwill

     3,070       —         —          3,070       2.21  

Intangible assets impairments

     3,321       815       —          2,506       1.80  

Asset Performance Solutions investments

     1,994       11       —          1,983       1.43  

Workforce reductions

     1,286       78       —          1,208       0.87  

Fixed asset impairments

     666       52       —          614       0.44  

Inventory write-downs

     603       49       —          554       0.40  

North America pressure pumping impairments

     587       133       —          454       0.33  

Right-of-use asset impairments

     311       67       —          244       0.18  

Facility exit charges

     254       39       —          215       0.15  

Costs associated with exiting certain activities

     205       (25        230       0.17  

Multiclient seismic data impairment

     156       2       —          154       0.11  

Repurchase of bonds

     40       2       —          38       0.03  

Postretirement benefits curtailment gain

     (69     (16     —          (53     (0.04

Other

     172       14       —          158       0.11  

Valuation allowance

     —         (164     —          164       0.12  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Schlumberger net income, excluding charges & credits

   $ 827     $ 156     $ 24      $ 647     $ 0.46  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

*

Does not add due to rounding.

(1) 

Classified in Interest & other income in the Condensed Consolidated Statement of Income (Loss)

Unless otherwise noted, all Charges & Credits are classified in Impairments & other in the Condensed Consolidated Statement of Income (Loss).

 

15


Divisions

 

                             (Stated in millions)  
     Three Months Ended  
     Sept. 30, 2021     Jun. 30, 2021     Sept. 30, 2020  
     Revenue     Income
Before
Taxes
    Revenue     Income
Before
Taxes
    Revenue     Income
(Loss)
Before
Taxes
 

Digital & Integration

   $ 812     $ 284     $ 817     $ 274     $ 738     $ 201  

Reservoir Performance

     1,192       190       1,117       156       1,215       103  

Well Construction

     2,273       345       2,110       272       1,837       173  

Production Systems

     1,674       166       1,681       171       1,532       132  

Eliminations & other

     (104     (77     (91     (66     (64     (34
    

 

 

     

 

 

     

 

 

 

Pretax segment operating income

 

    908         807         575  

Corporate & other

       (145       (138       (151

Interest income (1)

       8         5         3  

Interest expense (1)

       (127       (132       (131

Charges & credits (2)

       47         —           (350
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 5,847     $ 691     $ 5,634     $ 542     $ 5,258     $ (54
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

                   (Stated in millions)  
     Nine Months Ended  
     Sept. 30, 2021      Sept. 30, 2020  
     Revenue      Income
Before
Taxes
     Revenue      Income
(Loss)
Before
Taxes
 

Digital & Integration

   $ 2,401      $ 805      $ 2,235      $ 458  

Reservoir Performance

     3,312        448        4,354        259  

Well Construction

     6,319        827        6,747        687  

Production Systems

     4,946        475        5,001        467  

Eliminations & other

     (274      (176      (268      (124
     

 

 

       

 

 

 

Pretax segment operating income

        2,379           1,747  

Corporate & other

        (434         (548

Interest income (1)

        17           25  

Interest expense (1)

        (391         (397

Charges & credits (2)

        47           (12,596
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 16,704      $ 1,618      $ 18,069      $ (11,769
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) 

Excludes amounts which are included in the segments’ results

(2) 

See section entitled “Charges & Credits” for details.

 

16


Supplementary Information

Frequently Asked Questions (FAQs)

 

1)

What is the capital investment guidance for the full-year 2021?

Capital investment (comprised of capex, multiclient, and APS investments) for the full-year 2021 is now expected to be approximately $1.6 billion. Capital investment for the full-year 2020 was $1.5 billion.

 

2)

What were cash flow from operations and free cash flow for the third quarter of 2021?

Cash flow from operations for the third quarter of 2021 was $1.07 billion and free cash flow was $671 million, despite making $42 million of severance payments during the quarter.

 

3)

What was included in “Interest and other income” for the third quarter of 2021?

“Interest and other income” for the third quarter of 2021 was $56 million. This amount consisted of an unrealized gain on marketable securities of $47 million (refer to Question 11), interest income of $8 million, and earnings of equity method investments of $1 million.

 

4)

How did interest income and interest expense change during the third quarter of 2021?

Interest income of $8 million for the third quarter of 2021 increased $2 million sequentially. Interest expense of $130 million decreased $6 million sequentially.

 

5)

What is the difference between Schlumberger’s consolidated income (loss) before taxes and pretax segment operating income?

The difference consists of corporate items, charges and credits, and interest income and interest expense not allocated to the segments as well as stock-based compensation expense, amortization expense associated with certain intangible assets, certain centrally managed initiatives, and other nonoperating items.

 

6)

What was the effective tax rate (ETR) for the third quarter of 2021?

The ETR for the third quarter of 2021, calculated in accordance with GAAP, was 18.6% as compared to 18.2% for the second quarter of 2021. Excluding charges and credits, the ETR for the third quarter of 2021 was 18.3%. There were no charges and credits in the second quarter of 2021.

 

7)

How many shares of common stock were outstanding as of September 30, 2021 and how did this change from the end of the previous quarter?

There were 1.403 billion shares of common stock outstanding as of September 30, 2021 and 1.398 billion as of June 30, 2021.

 

     (Stated in millions)  

Shares outstanding at June 30, 2021

     1,398  

Shares issued under employee stock purchase plan

     3  

Vesting of restricted stock

     2  
  

 

 

 

Shares outstanding at September 30, 2021

     1,403  
  

 

 

 

 

8)

What was the weighted average number of shares outstanding during the third quarter of 2021 and second quarter of 2021? How does this reconcile to the average number of shares outstanding, assuming dilution, used in the calculation of diluted earnings per share?

The weighted average number of shares outstanding was 1.402 billion during the third quarter of 2021 and 1.398 billion during the second quarter of 2021. The following is a reconciliation of the weighted average shares outstanding to the average number of shares outstanding, assuming dilution, used in the calculation of diluted earnings per share.

 

17


            (Stated in millions)  
     Third Quarter
2021
     Second Quarter
2021
 

Weighted average shares outstanding

     1,402        1,398  

Unvested restricted stock

     22        23  
  

 

 

    

 

 

 

Average shares outstanding, assuming dilution

     1,424        1,421  
  

 

 

    

 

 

 

 

9)

What was Schlumberger’s adjusted EBITDA in the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020?

Schlumberger’s adjusted EBITDA was $1.296 billion in the third quarter of 2021, $1.198 billion in the second quarter of 2021, and $1.018 billion in the third quarter of 2020, and was calculated as follows:

 

                   (Stated in millions)  
     Third Quarter
2021
     Second Quarter
2021
     Third Quarter
2020
 

Net income (loss) attributable to Schlumberger

   $ 550      $ 431      $ (82

Net income attributable to noncontrolling interests

     12        12        9  

Tax (benefit) expense

     129        99        19  
  

 

 

    

 

 

    

 

 

 

Income (loss) before taxes

   $ 691      $ 542      $ (54

Charges & credits

     (47      —           350  

Depreciation and amortization

     530        526        587  

Interest expense

     130        136        138  

Interest income

     (8      (6      (3
  

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 1,296      $ 1,198      $ 1,018  
  

 

 

    

 

 

    

 

 

 

Adjusted EBITDA represents income before taxes excluding charges & credits, depreciation and amortization, interest expense, and interest income. Management believes that adjusted EBITDA is an important profitability measure for Schlumberger and that it allows investors and management to more efficiently evaluate Schlumberger’s operations period over period and to identify operating trends that could otherwise be masked. Adjusted EBITDA is also used by management as a performance measure in determining certain incentive compensation. Adjusted EBITDA should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP.

 

10)

What were the components of depreciation and amortization expense for the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020?

The components of depreciation and amortization expense for the third quarter of 2021, the second quarter of 2021, and the third quarter of 2020 were as follows:

 

                   (Stated in millions)  
     Third Quarter
2021
     Second Quarter
2021
     Third Quarter
2020
 

Depreciation of fixed assets

   $ 350      $ 352      $ 385  

Amortization of APS investments

     82        77        87  

Amortization of intangible assets

     75        75        79  

Amortization of multiclient seismic data costs capitalized

     23        22        36  
  

 

 

    

 

 

    

 

 

 
   $ 530      $ 526      $ 587  
  

 

 

    

 

 

    

 

 

 

 

18


11)

What does the pretax credit of $47 million recorded during the third quarter of 2021 relate to?

During the third quarter of 2021, a start-up company that Schlumberger previously invested in was acquired. As a result of this transaction, Schlumberger’s ownership interest was converted into shares of a publicly traded company. Schlumberger recognized an unrealized gain of $47 million to increase the carrying value of this investment to its fair value. This unrealized gain is reflected in Interest and other income in the Consolidated Statement of Income (Loss).

About Schlumberger

Schlumberger (SLB: NYSE) is a technology company that partners with customers to access energy. Our people, representing over 160 nationalities, are providing leading digital solutions and deploying innovative technologies to enable performance and sustainability for the global energy industry. With expertise in more than 120 countries, we collaborate to create technology that unlocks access to energy for the benefit of all.

Find out more at www.slb.com

 

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Mark of Schlumberger or a Schlumberger company. Other company, product, and service names are the properties of their respective owners.

Notes

Schlumberger will hold a conference call to discuss the earnings press release and business outlook on Friday, October 22, 2021. The call is scheduled to begin at 9:30 a.m. US Eastern Time. To access the call, which is open to the public, please contact the conference call operator at +1 (844) 721-7241 within North America, or +1 (409) 207-6955 outside North America, approximately 10 minutes prior to the call’s scheduled start time, and provide the access code 8858313. At the conclusion of the conference call, an audio replay will be available until November 22, 2021 by dialing +1 (866) 207-1041 within North America, or +1 (402) 970-0847 outside North America, and providing the access code 6702282. The conference call will be webcast simultaneously at www.slb.com/irwebcast on a listen-only basis. A replay of the webcast will also be available at the same website until November 22, 2021.

For more information, contact

Ndubuisi Maduemezia – Vice President of Investor Relations, Schlumberger Limited

Joy V. Domingo – Director of Investor Relations, Schlumberger Limited

Office +1 (713) 375-3535

investor-relations@slb.com

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This third-quarter 2021 earnings release, as well as other statements we make, contain “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as “expect,” “may,” “can,” “believe,” “predict,” “plan,” “potential,” “projected,” “projections,” “forecast,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “think,” “should,” “could,” “would,” “will,” “see,” “likely,” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about our financial and performance targets and other forecasts or expectations regarding, or dependent on, our business outlook; growth for Schlumberger as a whole and for each of its Divisions (and for specified business lines, geographic areas, or technologies within each Division); oil and natural gas demand and production growth; oil and natural gas prices; forecasts or expectations regarding the energy transition and global climate change; improvements in operating procedures and technology; capital expenditures by Schlumberger and the oil and gas industry; our business strategies, including digital and “fit for basin,” as well as the strategies of our customers; our effective tax rate; our APS projects, joint ventures, and other alliances; our response to the COVID-19 pandemic and preparedness for other widespread health emergencies; access to raw materials; future global economic and geopolitical conditions; future liquidity; and future results of operations, such as margin levels. These statements are subject to risks and uncertainties, including, but not limited to, changing global economic conditions; changes in exploration and production spending by Schlumberger’s customers, and changes in the level of oil and natural gas exploration and development; the results of operations and financial condition of Schlumberger’s customers and suppliers; Schlumberger’s inability to achieve its financial and performance targets and other forecasts and expectations; Schlumberger’s inability to achieve net-zero carbon emissions goals or interim emissions reduction goals; general economic, geopolitical, and business conditions in key regions of the world; foreign currency risk; pricing pressure; inflation; weather and seasonal factors; unfavorable effects of health pandemics; availability and cost of raw materials; operational modifications, delays, or cancellations;

 

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challenges in Schlumberger’s supply chain; production declines; Schlumberger’s inability to recognize efficiencies and other intended benefits from its business strategies and initiatives, such as digital or Schlumberger New Energy; as well as its restructuring and structural cost reduction plans; changes in government regulations and regulatory requirements, including those related to offshore oil and gas exploration, radioactive sources, explosives, chemicals, and climate-related initiatives; the inability of technology to meet new challenges in exploration; the competitiveness of alternative energy sources or product substitutes; and other risks and uncertainties detailed in this third-quarter 2021 earnings release and our most recent Forms 10-K, 10-Q, and 8-K filed with or furnished to the Securities and Exchange Commission. If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements. Statements in this third-quarter earnings release are made as of the date of this release, and Schlumberger disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise.

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