S&P Global Ratings on March 26 lowered the issuer credit rating and unsecured debt ratings of oilfield services giant Schlumberger Ltd. to A from A+. The outlook is negative.
The rating agency affirmed the company's short-term issuer credit rating and commercial paper ratings of A-1.
Following its recently revised oil and natural gas price deck assumptions, Ratings expects North American exploration and production companies to sharply cut spending plans for this year and 2021, resulting in weaker revenues, margins and cash flow/leverage measures for Schlumberger.
Various oil and gas companies around the globe have announced plans to cut their spending amid plummeting oil prices and lower demand exacerbated by the coronavirus pandemic. Schlumberger also recently announced plans to drastically cut its 2020 capital spending to defend its balance sheet.
The negative outlook reflects the potential for a downgrade if the company does not take steps to improve cash flows and leverage over the next 12 to 24 months.
Ratings also recently downgraded other oilfield services providers such as Halliburton Co., while Patterson-UTI Energy Inc. lost its investment-grade rating from the same rating agency.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.