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MarketScreener Homepage  >  Equities  >  Nyse  >  Schlumberger Limited    SLB   AN8068571086

SCHLUMBERGER LIMITED

(SLB)
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SCHLUMBERGER LIMITE : NV Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

10/21/2020 | 12:29pm EST

Third Quarter 2020 Compared to Second Quarter 2020



                                                                                         (Stated in millions)

                                                Third Quarter 2020                  Second Quarter 2020
                                                           Income (Loss)                       Income (Loss)
                                                              Before                              Before
                                          Revenue              Taxes           Revenue             Taxes
Reservoir Characterization               $    1,010       $           169     $    1,052      $           185
Drilling                                      1,519                   144          1,731                  165
Production                                    1,801                   227          1,615                   25
Cameron                                         965                    60          1,015                   80
Eliminations & other                            (37 )                 (25 )          (57 )                (59 )
                                                                      575                                 396
Corporate & other (1)                                                (151 )                              (169 )
Interest income (2)                                                     3                                   7
Interest expense (3)                                                 (131 )                              (137 )
Charges and credits (4)                                              (350 )                            (3,724 )
                                         $    5,258       $           (54 )   $    5,356$        (3,627 )

(1) Comprised principally of certain corporate expenses not allocated to the

segments, stock-based compensation costs, amortization expense associated

with certain intangible assets, certain centrally managed initiatives and

other nonoperating items.

(2) Interest income excludes amounts which are included in the segments' income

($- million in Q3 2020; $- million in Q2 2020).

(3) Interest expense excludes amounts which are included in the segments' income

($7 million in Q3 2020; $7 million in Q2 2020).

(4) Charges and credits are described in detail in Note 2 to the Consolidated

    Financial Statements.




Third-quarter 2020 revenue declined 2% sequentially, as North America revenue
was 2% lower and international revenue declined 1%. In North America land,
increased completions activity on drilled but uncompleted ("DUC") wells was
offset by reduced drilling in US land. North America offshore was affected by
reduced rig activity, lower multiclient seismic license sales, and hurricane
disruption.



International revenue was driven by higher activity in Latin America, boosted by
the resumption of production in the Asset Performance Solutions ("APS") projects
in Ecuador and increased seasonal summer activity in the North Sea and Russia.
These increases were offset by the effects of rig count declines and extended
COVID-19 disruptions in Africa and in the Middle East & Asia.



Looking to the fourth quarter of 2020, Schlumberger expects to continue to
benefit from the effectiveness of its strategy, disciplined approach to North
America, and broad strength of its international business, as reflected in the
third-quarter results. In North America, the conditions are set for continued
momentum, with improving DUC well completion activity in US land and a modest
drilling resumption in the US and Canada. International activity is steady
following the budget resets completed in the third quarter and activity will be
affected by the seasonal decline in the Northern Hemisphere, partly offset by
muted year-end product and multiclient license sales.



Overall internationally, Schlumberger views the next two quarters as a period of
transition for our industry at the trough of this cycle. Improving demand
recovery supported by various government measures to stimulate economic activity
and continued supply discipline from the major producers set the conditions for
a long-term activity rebound. However, while the global lockdowns are evolving
and vaccine development is progressing, the near-term recovery remains fragile
owing to potential subsequent waves of COVID-19 that could pose a significant
risk to this outlook.



On August 31, 2020, Schlumberger and Liberty Oilfield Services Inc. ("Liberty")
entered into an agreement for the contribution to Liberty of OneStim®,
Schlumberger's onshore hydraulic fracturing business in the United Stated and
Canada, including its pressure pumping, pumpdown perforating, and Permian frac
sand businesses, in exchange for a 37% equity interest in Liberty. The
transaction is expected to close in the fourth quarter of 2020 and is subject to
Liberty stockholder approval and other customary closing conditions. OneStim
represented approximately 5% of Schlumberger's consolidated revenue for the nine
months ended September 30, 2020.

                                       24

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Reservoir Characterization


Reservoir Characterization revenue of $1.0 billion decreased 4% sequentially.
North America and international revenues declined 14% and 2%, respectively. This
was mainly due to lower WesternGeco® multiclient seismic license sales in North
America offshore. Revenue was also lower in the Middle East due to reduced
WesternGeco activity as a result of a completed project and lower Testing
Services activity due to project cancellations and delays.



Reservoir Characterization pretax operating margin of 17% contracted 90 basis points ("bps") sequentially due to lower sales of WesternGeco multiclient seismic licenses, which impacted North America margin, while international margin was flat sequentially.

Drilling


Drilling revenue of $1.5 billion decreased 12% sequentially. North America and
international revenues declined 16% and 11%, respectively. The revenue decline
in North America was primarily due to lower activity in US land as rig count
dropped 29%, along with rig count reductions and activity disruptions in the US
Gulf of Mexico due to a more active hurricane season. In addition, extended
COVID-19 disruptions caused drilling activities to be suspended or deferred in
several international GeoMarkets.



Drilling pretax operating margin of 10% was essentially flat sequentially, despite the significant revenue decline. Margin was resilient both in North America and internationally supported by prompt cost reduction measures.

Production


Production revenue of $1.8 billion increased 12% sequentially. North America and
international revenues increased 13% and 11%, respectively. This was driven
primarily by the gradual recovery in DUC well completions activity in US land
and the resumption of APS production in Ecuador following a major landslide that
led to the rupture of the main pipeline last quarter. OneStim revenue grew more
than 50% sequentially as US-market stage counts increased by more than 30%.



Production pretax operating margin of 13% expanded by 11 percentage points
sequentially. The margin expansion was due to the resumption of production in
APS projects in Ecuador and improved profitability across each of Completions,
Artificial Lift Solutions, and Well Services, supported by cost reduction
measures. OneStim margin improved due to better operating leverage as revenue
increased by more than 50%.

Cameron

Cameron revenue of $965 million decreased 5% sequentially primarily due to declines in the long-cycle businesses of OneSubsea® and Drilling Systems, driven by projects ending in Asia and Europe, coupled with the extended COVID-19 disruptions.




Cameron pretax operating margin of 6% declined by 162 bps sequentially. The
margin contraction was primarily due to the unfavorable mix where contribution
from the long-cycle businesses of OneSubsea and Drilling Systems was lower due
to reduced activity.





                                       25
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               Third Quarter 2020 Compared to Third Quarter 2019



                                                                                        (Stated in millions)

                                                Third Quarter 2020                  Third Quarter 2019
                                                           Income (Loss)                      Income (Loss)
                                                              Before                             Before
                                          Revenue              Taxes           Revenue            Taxes
Reservoir Characterization               $    1,010       $           169     $    1,651     $           360
Drilling                                      1,519                   144          2,469                 306
Production                                    1,801                   227          3,153                 288
Cameron                                         965                    60          1,363                 173
Eliminations & other                            (37 )                 (25 )          (95 )               (31 )
                                                                      575                              1,096
Corporate & other (1)                                                (151 )                             (231 )
Interest income (2)                                                     3                                  7
Interest expense (3)                                                 (131 )                             (151 )
Charges and credits (4)                                              (350 )                          (12,692 )
                                         $    5,258       $           (54 )   $    8,541$       (11,971 )

(1) Comprised principally of certain corporate expenses not allocated to the

segments, stock-based compensation costs, amortization expense associated

with certain intangible assets, certain centrally managed initiatives and

other nonoperating items.

(2) Interest income excludes amounts which are included in the segments' income

($- million in 2020; $1 million in 2019).

(3) Interest expense excludes amounts which are included in the segments' income

($7 million in 2020; $9 million in 2019).

(4) Charges and credits are described in detail in Note 2 to the Consolidated

    Financial Statements.




Third-quarter 2020 revenue of $5.3 billion was 38% lower compared to the same
period last year due to the significant fall in North America activity while
international activity dropped due to downward revisions to customer budgets
accentuated by COVID-19 disruptions. North America revenue declined 59%
reflecting the continued capital discipline of North America operators, who
reduced drilling and frac activity. International revenue decreased 27% due to
COVID-19-related disruptions, the drop in offshore activity, and reduced
customer discretionary spending.

Reservoir Characterization


Third-quarter 2020 revenue of $1.0 billion decreased 39% year-on-year mainly due
to lower Wireline and WesternGeco revenues as customers reduced activity due to
COVID-19 and cut discretionary spending and exploration in several international
GeoMarkets.


Year-on-year, pretax operating margin decreased 512 bps to 17% largely due to the revenue declines in Wireline and WesternGeco.

Drilling


Third-quarter 2020 revenue of $1.5 billion decreased 39% year-on-year primarily
due to the activity decline in US land as rig count dropped significantly, while
COVID-19 disruptions caused drilling activities to be cancelled or suspended in
several international GeoMarkets. Revenue was also lower due to the divestiture
of the Drilling Tools businesses at the end of the fourth quarter of 2019.



Year-on-year, pretax operating margin decreased 292 bps to 10% primarily due to the significant reduction in activity in North America.

Production

Third-quarter 2020 revenue of $1.8 billion decreased 43% year-on-year. This revenue decrease was driven by the sharp drop in OneStim pressure pumping activity in North America land as customers exercised capital discipline and revised budgets downward. Internationally, revenue was affected by COVID-19-related disruptions and reduced customer spending.

                                       26

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Year-on-year, pretax operating margin increased 347 bps to 13% despite the
significant drop in revenue. Margin improvement was supported by cost reduction
measures and reduced depreciation and amortization following the asset
impairment charges relating to OneStim and APS that were recorded in the second
quarter of 2020.



Cameron

Third-quarter 2020 revenue of $1.0 billion decreased 29% year-on-year primarily
as a result of lower Valves & Process Systems and Surface Systems revenues in
North America.



Year-on-year, pretax operating margin decreased 644 bps to 6% due to reduced
Surface Systems and Valves & Process Systems profitability in North America and
lower OneSubsea margins internationally.

                 Nine Months 2020 Compared to Nine Months 2019



                                                                      (Stated in millions)

                                   Nine Months 2020                 Nine Months 2019
                                           Income (Loss)                    Income (Loss)
                                              Before                           Before
                             Revenue           Taxes          Revenue           Taxes
Reservoir Characterization   $  3,372     $           538     $  4,669     $           959
Drilling                        5,540                 594        7,275                 914
Production                      6,119                 464        9,120                 740
Cameron                         3,235                 262        3,949                 486
Eliminations & other             (197 )              (111 )       (324 )              (127 )
                                                    1,747                            2,972
Corporate & other (1)                                (548 )                           (742 )
Interest income (2)                                    25                               25
Interest expense (3)                                 (397 )                           (433 )
Charges and credits (4)                           (12,596 )                        (12,692 )
                             $ 18,069$       (11,769 )$ 24,689$       (10,870 )

(1) Comprised principally of certain corporate expenses not allocated to the

segments, stock-based compensation costs, amortization expense associated

with certain intangible assets, certain centrally managed initiatives and

other nonoperating items.

(2) Interest income excludes amounts which are included in the segments' income

($1 million in 2020; $6 million in 2019).

(3) Interest expense excludes amounts which are included in the segments' income

($22 million in 2020; $29 million in 2019).

(4) Charges and credits are described in detail in Note 2 to the Consolidated

Financial Statements.



Nine-month 2020 revenue of $18.1 billion was 27% lower compared to the same
period last year due to the significant fall in North America activity, as well
as the international activity drop due to downward revisions to customer budgets
accentuated by COVID-19 disruptions.



North America revenue declined 45%, reflecting the continued capital discipline
of North America operators, who reduced drilling and frac
activity. International revenue decreased 17%. The decline was most prominent in
Latin America, Europe, and Africa due to COVID-19-related restrictions, the drop
in offshore activity, and the effect of the APS production interruption in
Ecuador during the second quarter of 2020.

Reservoir Characterization


Nine-month 2020 revenue of $3.4 billion decreased 28% year-on-year primarily due
to lower Wireline and WesternGeco revenue as customers reduced activity due to
COVID-19 and cut discretionary spending and exploration in several international
GeoMarkets.


Year-on-year, pretax operating margin decreased 459 bps to 16% due to reduced profitability largely in Wireline and WesternGeco.

                                       27

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Drilling


Nine-month 2020 revenue of $5.5 billion decreased 24% year-on-year due to the
activity decline in US land as rig count decreased significantly, while COVID-19
disruptions caused drilling activities to be cancelled or suspended in several
international GeoMarkets. Revenue was also lower due to the divestiture of the
Drilling Tools businesses at the end of the fourth quarter of 2019.



Year-on-year, pretax operating margin decreased 184 bps to 11% primarily due to the decrease in revenue and COVID-19-related disruptions.

Production

Nine-month 2020 revenue of $6.1 billion decreased 33% year-on-year. This revenue decrease was primarily driven by the sharp drop in OneStim pressure-pumping activity in North America land, lower APS revenue due to the significant production interruption in Ecuador during the second quarter of 2020 and COVID-19-related disruptions.




Year-on-year, pretax operating margin was essentially flat at 8% despite the
significant drop in revenue. The margin was resilient as it was supported by
cost reduction measures as well as reduced depreciation and amortization
following the asset impairment charges relating to OneStim and APS that were
recorded in the second quarter of 2020.

Cameron

Nine-month 2020 revenue of $3.2 billion decreased 18% year-on-year driven by lower Valves & Process Systems and Surface Systems revenue in North America.

Year-on-year, pretax operating margin decreased 421 bps to 8% due to the revenue decline.


Interest and Other Income

Interest & other income consisted of the following:



                                                                    (Stated in millions)

                                                  Third Quarter           Nine Months
                                                2020         2019       2020       2019
Equity in net earnings of affiliated companies $    19$  13$   66$  30
Interest income                                      3           8         28         31
                                               $    22$  21$   94$  61

The increases in earnings from equity method investments primarily relates to higher income associated with Schlumberger's equity investments in rig- and seismic-related businesses.




Other

Research & engineering and General & administrative expenses, as a percentage of
Revenue, for the third quarter and nine months ended September 30, 2020 and 2019
were as follows:



                           Third Quarter          Nine Months
                          2020        2019       2020      2019
Research & engineering       2.6 %      2.1 %      2.5 %     2.1 %
General & administrative     1.6 %      1.4 %      1.6 %     1.4 %




The effective tax rate for the third quarter of 2020 was (35)%, as compared to
5% for the same period of 2019.  The charges described in Note 2 to the
Consolidated Financial Statements reduced the effective tax rate by 55 and 11
percentage points for the third quarter of 2020 and 2019, respectively, as a
significant portion of these charges were not tax-effective.  Changes in the
geographic mix of pretax earnings accounted for the remaining increase in the
effective tax rate for the third quarter of 2020 as compared to the same period
of 2019.



                                       28
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The effective tax rate for first nine months of 2020 was 8% as compared to 4%
for the same period of 2019.  The charges and credits described in Note 2 to the
Consolidated Financial Statements reduced the effective tax rate by 11 and 12
percentage points for the first nine months of 2020 and 2019, respectively, as a
significant portion of these charges were not tax-effective. Changes in the
geographic mix of pretax earnings accounted for the remaining increase in the
effective tax rate for the first nine months of 2020 as compared to the same
period of 2019.

Charges and Credits

Schlumberger recorded the following charges and credits during 2020, which are fully described in Note 2 to the Consolidated Financial Statements:



                                                               (Stated in millions)

                                                  Pretax        Tax          Net
First quarter:
Goodwill                                         $  3,070     $      -     $  3,070
Intangible asset impairments                        3,321         (815 )      2,506
Asset Performance Solutions investments             1,264            4      

1,268

North America pressure pumping impairment             587         (133 )        454
Workforce reductions                                  202           (7 )        195
Other                                                  79           (9 )         70
Valuation allowance                                     -          164          164
Second quarter:
Workforce reductions                                1,021          (71 )        950
Asset Performance Solutions investments               730          (15 )        715
Fixed asset impairments                               666          (52 )        614
Inventory write-downs                                 603          (49 )        554
Right-of-use asset impairments                        311          (67 )    

244

Costs associated with exiting certain activities      205           25      

230

Multiclient seismic data impairment                   156           (2 )    

154

Repurchase of bonds                                    40           (2 )    

38

Postretirement benefits curtailment gain              (69 )         16          (53 )
Other                                                  60           (4 )         56
Third quarter:
Facility exit charges                                 254          (39 )        215
Workforce reductions                                   63            -           63
Other                                                  33           (1 )         32
                                                 $ 12,596$ (1,057 )$ 11,539




The first quarter 2020 results did not include any benefit from reduced
depreciation and amortization expense as a result of the first quarter
impairment charges.  However, commencing with the second quarter of 2020,
depreciation and amortization expense was reduced by approximately $95 million
on a quarterly basis as a result of the first quarter impairment
charges. Approximately $45 million of this quarterly reduction is reflected in
the Production segment, with the remaining $50 million reflected in the
"Corporate & other" line item.



The second quarter 2020 results did not include any benefit from reduced
expenses associated with the second quarter restructuring and impairment
charges. However, commencing with the third quarter of 2020, depreciation and
amortization expense was reduced by approximately $80 million and lease expense
was reduced by $25 million, on a quarterly basis. Approximately $70 million of
this quarterly reduction is reflected in the Production Segment, with the
remaining $35 million reflected amongst the Reservoir Characterization, Drilling
and Cameron segments.



The third quarter 2020 results did not include any benefit from reduced expenses
associated with the third quarter restructuring charges. However, going forward
depreciation and lease expense will be reduced by $15 million, on a quarterly
basis. This quarterly reduction will be reflected amongst all of the segments.



                                       29
--------------------------------------------------------------------------------

2019


Schlumberger recorded the following charges in connection with the preparation
of its third quarter 2019 financial statements, which are fully described in
Note 2 to the Consolidated Financial Statements, all of which are classified in
Impairment & other in the Consolidated Statement of Loss:



                                                    (Stated in millions)

                                         Pretax       Tax         Net
Goodwill                                $  8,828$  (43 )$  8,785
Intangible assets                          1,085       (248 )        837
North America pressure pumping             1,575       (344 )      1,231
Other North America-related                  310        (53 )        257
Argentina                                    127          -          127
Equity-method investments                    231        (12 )        219
Asset Performance Solutions investments      294          -          294
Other                                        242        (13 )        229
                                        $ 12,692$ (713 )$ 11,979




As these impairment charges were effective as of August 31, 2019, the third
quarter 2019 results include a one-month reduction in depreciation and
amortization expense of $27 million. Approximately $21 million of this amount
relates to the Production segment. The remaining $6 million is reflected in the
"Corporate & other" line item.

There were no charges or credits recorded during the first six months of 2019.

As market conditions evolve and Schlumberger continues to develop its strategy to deal with such conditions, it may result in further restructuring and/or impairment charges in future periods.

Liquidity and Capital Resources


The effects of the COVID-19 pandemic have resulted in a significant and swift
reduction in international and U.S. economic activity. These effects have
adversely affected the demand for oil and natural gas, as well as for
Schlumberger's products and services, and caused significant volatility and
disruption of the financial markets. This period of extreme economic disruption,
low oil prices and reduced demand for Schlumberger's products and services has
had, and is likely to continue to have, a material adverse impact on
Schlumberger's business, results of operations, financial condition and, at
times, access to sources of liquidity.

In view of the uncertainty of the depth and extent of the contraction in oil
demand due to the COVID-19 pandemic combined with the weaker commodity price
environment, Schlumberger has turned its strategic focus to cash conservation
and protecting its balance sheet. As a result, in April 2020 Schlumberger
announced a 75% reduction to its quarterly cash dividend. The revised dividend
supports Schlumberger's value proposition through a balanced approach of
shareholder distributions and organic investment, while providing the
flexibility to weather the uncertain environment. This decision reflects the
Company's focus on its capital stewardship program as well as its commitment to
maintain both a strong liquidity position and a strong investment grade credit
rating that provides privileged access to the financial markets.

Details of the components of liquidity as well as changes in liquidity follow:



                                                                     (Stated in millions)

                                                Sept. 30,       Sept. 30,       Dec. 31,
Components of Liquidity:                          2020            2019            2019
Cash                                           $     1,219$     1,183$    1,137
Short-term investments                               2,618           1,109          1,030
Short-term borrowings and current portion of
long-term debt                                      (1,292 )          (340 )         (524 )
Long-term debt                                     (16,471 )       (16,333 )      (14,770 )
Net debt (1)                                   $   (13,926 )$   (14,381 )$  (13,127 )




                                       30
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                                                           Nine Months Ended Sept. 30,
Changes in Liquidity:                                       2020                 2019
Net loss                                               $      (10,868 )$      (10,450 )
Impairment and other charges                                   12,596       

12,692

Depreciation and amortization (2)                               1,983       

2,741

Earnings of equity method investments, less dividends received

                                                          (18 )                  2
Deferred taxes                                                 (1,147 )               (833 )
Stock-based compensation expense                                  318                  329
Increase in working capital (3)                                  (822 )             (1,340 )
Other                                                              24                   38
Cash flow from operations                                       2,066                3,179
Capital expenditures                                             (858 )             (1,230 )
APS investments                                                  (252 )               (526 )
Multiclient seismic data costs capitalized                        (86 )               (181 )
Free cash flow (4)                                                870                1,242
Dividends paid                                                 (1,560 )             (2,077 )
Proceeds from employee stock plans                                146                  196
Stock repurchase program                                          (26 )     

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

                                        (33 )                (21 )
Net proceeds from divestitures                                    325                    -
Impact of changes in foreign exchange rates on net
debt                                                             (372 )                (87 )
Other                                                            (149 )                (82 )
Increase in net debt                                             (799 )             (1,107 )
Net debt, beginning of period                                 (13,127 )            (13,274 )
Net debt, end of period                                $      (13,926 )$      (14,381 )

(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) Includes depreciation of property, plant and equipment and amortization of

intangible assets, multiclient seismic data costs, and APS investments.

(3) Includes severance payments of approximately $699 million and $104 million

during the nine months ended September 30, 2020 and 2019, respectively.

(4) "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

our 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 substitute for or superior

to, cash flow from operations.

Key liquidity events during the first nine months of 2020 and 2019 included:

• On January 21, 2016, the Board approved a $10 billion share repurchase program

for Schlumberger common stock. Schlumberger had repurchased $1.0 billion of

Schlumberger common stock under this program as of September 30, 2020. The

Company did not repurchase any Schlumberger common stock during the third

quarter of 2020.



The following table summarizes the activity under the share repurchase program:



                                                     (Stated in millions, except per share amounts)

                                                 Total cost       Total number       Average price
                                                 of shares          of shares          paid per
                                                 purchased          purchased            share
Nine months ended September 30, 2020           $           26               0.8     $         33.81
Nine months ended September 30, 2019           $          278               7.0     $         39.92




                                       31
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• Capital expenditures were $0.9 billion during the first nine months of 2020

compared to $1.2 billion during the first nine months of 2019,

respectively. Capital expenditures for full-year 2020 are expected to be

approximately $1.1 billion, representing a 35% decrease as compared to 2019.

• During the third quarter of 2020, Schlumberger issued $500 million of 1.40%

   Senior Notes due 2025 and $350 million of 2.65% Senior Notes due 2030.



• During the third quarter of 2019, Schlumberger issued €500 million of 0.00%

Notes due 2024, €500 million of 0.25% Notes due 2027 and €500 million of 0.50%

   Notes due 2031.



• During the second quarter of 2020, Schlumberger issued €1.0 billion of 1.375%

Guaranteed Notes due 2026, $900 million of 2.650% Senior Notes due 2030 and

   €1.0 billion of 2.00% Guaranteed Notes due 2032.



• During the second quarter of 2020, Schlumberger repurchased all $600 million

of its 4.20% Senior Notes due 2021 and $935 million of its 3.30% Senior Notes

due 2021. Schlumberger paid a premium of approximately $40 million in

connection with these repurchases. This premium was classified in Impairments

   & other in the Consolidated Statement of Loss.  See Note 2 - Charges and
   Credits.



• During the second quarter of 2020, Schlumberger established a €5.0 billion

Guaranteed Euro Medium Term Note program that provides for the issuance of

various types of debt instruments such as fixed or floating rate notes in

euro, US dollar or other currencies. Schlumberger has not issued any debt

   under this program.



• During the first quarter of 2020, Schlumberger issued €400 million of 0.25%

   Notes due 2027 and €400 million of 0.50% Notes due 2031.



• During the first quarter of 2020, Schlumberger completed the sale of its 49%

interest in the Bandurria Sur Block in Argentina. The net cash proceeds from

this transaction, combined with the proceeds received from the divestiture of

   a smaller APS project, amounted to $298 million.



• During the first quarter of 2019, Schlumberger issued $750 million of 3.75%

   Senior Notes due 2024 and $850 million of 4.30% Senior Notes due 2029.




Schlumberger had a provision of $0.7 billion relating to the severance recorded
on its Consolidated Balance Sheet as of September 30, 2020. Approximately half
of this balance is expected to be paid during the fourth quarter of 2020 with
the remainder expected to be paid in 2021.

Schlumberger generates revenue in more than 120 countries. As of September 30, 2020, six of those countries individually accounted for greater than 5% of Schlumberger's net receivables balance. The United States and Mexico each accounted for greater than 10% of such receivables.


As of September 30, 2020, Schlumberger had $3.8 billion of cash and short-term
investments on hand. Schlumberger had separate committed debt facility
agreements aggregating $8.1 billion that support commercial paper programs, of
which $7.0 billion was available and unused. Schlumberger believes these amounts
are sufficient to meet future business requirements for at least the next 12
months.


Borrowings under the commercial paper programs at September 30, 2020 were $1.1 billion.


FORWARD-LOOKING STATEMENTS

This third-quarter 2020 Form 10-Q, 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 as our
forecasts or expectations regarding business outlook; growth for Schlumberger as
a whole and for each of its divisions (and for specified business lines or
geographic areas within each division); oil and natural gas demand and
production growth; oil and natural gas prices; pricing; Schlumberger's response
to, and preparedness for, the COVID-19 pandemic and other widespread health
emergencies; access to raw materials; improvements in operating procedures and
technology; capital expenditures by Schlumberger and the oil and gas industry;
the business strategies of Schlumberger and Schlumberger's customers;
Schlumberger's digital strategy; Schlumberger's strategy for its North America
operations; the expected benefits of, or timing to complete, the proposed
OneStim transaction; Schlumberger's

                                       32

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restructuring efforts and charges recorded as a result of such efforts; our
effective tax rate; Schlumberger's APS projects, joint ventures, and alliances;
future global economic and geopolitical conditions; 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, particularly during extended periods of low prices for
crude oil and natural gas; Schlumberger's inability to achieve its financial and
performance targets and other forecasts and expectations; Schlumberger's
inability to sufficiently monetize assets; the extent of future charges; general
economic, geopolitical, and business conditions in key regions of the world;
foreign currency risk; pricing pressure; weather and seasonal factors;
unfavorable effects of health pandemics; availability and cost of raw materials;
operational modifications, delays or cancellations; challenges in Schlumberger's
supply chain; production declines; Schlumberger's inability to recognize
intended benefits from its business strategies and initiatives, such as digital
or 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, hydraulic fracturing services 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 Form 10-Q and our most recent Form 10-K
and Forms 8-K filed with or furnished to the SEC. 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 2020 Form 10-Q are made as of
October 21, 2020, 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.

© Edgar Online, source Glimpses

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