Schlumberger to cut 2020 capex by 30% YOY, almost all from North America land | SLB Message Board Posts

Schlumberger Limited

  SLB website

SLB   /  Message Board  /  Read Message

 

 






Keyword
Subject
Between
and
Rec'd By
Authored By
Minimum Recs
  
Previous Message  Next Message   Post Message   Post a Reply return to message boardtop of board
Msg  87 of 91  at  3/27/2020 10:05:23 AM  by

jerrykrause


Schlumberger to cut 2020 capex by 30% YOY, almost all from North America land

 from  SNL Energy Finance Daily
 

Schlumberger to cut 2020 capex by 30% YOY, almost all from North America land

 
Byline: Jodi Shafto
 

Schlumberger Ltd. plans to drastically cut its 2020 capital spending to defend its balance sheet as producer activity sinks with crude oil prices amid the Russia-OPEC production war and demand erosion resulting from the coronavirus pandemic.

The world's largest public oilfield services company plans to cut capital spending by up to 30% from 2019 levels, with almost all of the cuts coming from its North America land operations, as 80% of its free cash flow comes from international market operations, President and CEO Olivier Le Peuch said March 24 in a presentation at the Scotia Howard Weil Energy Conference in Houston.

During its latest earnings call in January, the company said its capital expenditures for 2020 would total about $1.7 billion, mostly flat compared to 2019.

In the North America land market, where a plunge in oil prices is expected to result in a rapid reduction in rig count and completions activity, there is potential for the rig count to reach 2016 trough levels in the second quarter, the CEO said.

To allow for further prioritization of resources and capex allocation toward the international markets, Schlumberger is accelerating its land operations' restructuring efforts that began in late 2019, which include personnel and pay reductions in North America, the CEO said.

READ MORE: Sign up for our weekly coronavirus newsletter here, and read our latest coverage on the crisis here.

Schlumberger plans to reduce its frack fleet, exit its onshore coil tubing operations in North America and accelerate its fit-for-basin strategy, Le Peuch said during the company's Jan. 17 earnings call.

After cutting its workforce by more than 1,400 employees since the third quarter of 2019, Schlumberger will continue to reduce its facility footprint. It plans to shrink the areas in which it operates by an estimated 25% by the end of 2020 and will adjust the support structure accordingly, Le Peuch said Jan. 17.

The CEO said that when completed, the facility and workforce reductions will save the company more than $300 million on an annualized basis compared to the run rate in the third quarter of 2019.

In international operations, including Cameron International Corp., the escalation of the coronavirus situation will impact field crews and some operations in the second quarter as customers cut budgets, Le Peuch said March 24.

Schlumberger is preparing for more logistical disruptions as countries implement stringent restrictions, the CEO said.

Shares of Schlumberger on the NYSE closed March 24 up 14.2% at $14.65, outpacing a 9.4% gain in the S&P 500.

 


     e-mail to a friend      printer-friendly     add to library      
| More
Recs: 1     Views: 20
Previous Message  Next Message   Post Message   Post a Reply return to message boardtop of board






About Us  •  Contact Us  •  Follow Us on Twitter  •  Members Directory  •  Help Center  •  Advertise
Not a member yet? What are you waiting for? Create Account
Want to contribute? Support InvestorVillage by donating
© 2003-2019 Investorvillage.com. All rights reserved. User Agreement
   
Financial Market Data provided by
.


Loading...