• Revenue of $8.31 billion increased 3% sequentially and 11% year on year
• GAAP EPS of $0.78 increased 8% sequentially and 24% year on year
• Net income attributable to SLB of $1.12 billion increased 9% sequentially and 24% year on year
• Adjusted EBITDA of $2.08 billion increased 6% sequentially and 18% year on year
• Cash flow from operations was $1.68 billion and free cash flow was $1.04 billion
• Board approved quarterly cash dividend of $0.25 per share

NEW YORK--(BUSINESS WIRE)--Regulatory News:

SLB (NYSE: SLB) today announced results for the third-quarter 2023.

Third-Quarter Results

International Markets Driving Profitable Growth

SLB CEO Olivier Le Peuch commented, “Our third-quarter results continue to reflect strong year-to-date performance with revenue and adjusted EBITDA growth of 19% and 28%, respectively. These results, which reinforce our full-year financial ambitions, were driven by sustained growth in the international markets, where we posted our ninth consecutive quarter of double-digit year-on-year growth.

“Compared to the same quarter a year ago, international revenue grew 12%, outpacing North America, which increased 6%. Year on year, global third-quarter revenue grew 11% and pretax segment operating margin expanded 153 basis points (bps) to 20%. We have also increased our year-on-year pretax segment operating margin for the 11^th consecutive quarter.

“I am very pleased with these results, which demonstrate how SLB is continuing to seize this multiyear growth cycle. Our differentiated technology and service offerings, combined with our focus on the quality of our revenue, enabled profitable growth and drove our adjusted EBITDA margin to a new cycle high of 25%.”

Strong Sequential Performance Led by the Middle East & Asia

“Third-quarter revenue increased 3% sequentially—by more than $200 million—driven by the Middle East & Asia, which increased 8% in the quarter and continues to demonstrate positive investment momentum. Our strong quarterly performance was propelled by broad-based growth across Saudi Arabia, the United Arab Emirates, Indonesia, China, Malaysia, Kuwait, and Oman.

“Similarly, revenue in our offshore business grew as our activity continues to benefit from operators working to renew supply, accelerate cycle times, and increase the productivity of their assets. This was particularly notable in offshore Africa, Brazil, and Scandinavia.

“Overall, our third-quarter pretax segment operating margin expanded 73 bps sequentially. We also generated strong cash flow from operations of $1.68 billion and free cash flow of $1.04 billion.

“I want to thank the SLB team for delivering these impressive results.”

Growth Powered by the Core

“Looking ahead, we believe the market fundamentals remain very compelling for our business. The oil and gas industry continues to benefit from a multiyear growth cycle that has shifted to the international and offshore markets where we are the clear leader. Concurrently, upstream spending is accelerating as operators continue to invest in long-cycle developments, production capacity expansions, exploration and appraisal, and enhanced gas production. The long-term nature of these global investments underscores the breadth, durability, and resilience of this cycle, and we expect these market dynamics to continue to drive profitable growth in the years ahead.

“SLB’s Core business has been primed for this opportunity. On a year-to-date basis, the Core business—comprising Reservoir Performance, Well Construction, and Production Systems—grew revenue by 22% and expanded pretax segment operating margin by 295 bps. Customers continue to make SLB their partner of choice for delivering enhanced value through our unmatched technology offerings, and our international and offshore leadership is perfectly aligned with the cycle’s activity trends. In the international market, we continue to benefit from our leading exposure to the Middle East, and we have further bolstered our unparalleled offshore offering with the formation of our OneSubsea joint venture with Aker Solutions and Subsea7. This joint venture offers a combined technology portfolio that will drive innovation and efficiency in subsea production, helping customers to unlock reserves and reduce cycle time.”

Strong Close to the Year

“In the fourth quarter, we expect continued sequential revenue growth driven by year-end sales in Digital & Integration and seasonal product and equipment sales in Production Systems. In addition, the fourth quarter will reflect the results of the OneSubsea joint venture.

“I remain highly confident in our business and look forward to the exciting opportunities ahead. We will remain focused on driving financial outperformance, and our teams will continue delivering strong results for our customers and stakeholders in the quarter ahead.”

Other Events

During the quarter, SLB repurchased 2.6 million shares of its common stock at an average price of $57.46 per share for a total purchase price of $151 million.

On October 2, 2023, SLB, Aker Solutions, and Subsea7 closed their previously-announced joint venture. The new business, OneSubsea, will drive innovation and efficiency in subsea production by helping customers unlock reserves and reduce cycle time. OneSubsea now comprises SLB’s and Aker Solutions’ subsea businesses, which include an extensive complementary subsea production and processing technology portfolio, world-class manufacturing scale and capacity, access to industry-leading reservoir and digital domain expertise, unique pore-to-process integration capabilities, and strengthened R&D capabilities.

On October 19, 2023, SLB’s Board of Directors approved a quarterly cash dividend of $0.25 per share of outstanding common stock, payable on January 11, 2024, to stockholders of record on December 6, 2023.

Third-Quarter Revenue by Geographical Area

International

Revenue in Latin America of $1.68 billion increased 4% sequentially due to higher sales of production systems offshore Brazil, partially offset by lower revenue in Guyana. Year on year, revenue grew 11%, led by higher sales of production systems and increased drilling in Brazil and increased intervention, stimulation, and drilling activity in Argentina.

Europe & Africa revenue of $2.09 billion increased 3% sequentially due to higher exploration, drilling, and production activity offshore Angola, Namibia, the Republic of the Congo, and Uganda and higher sales of production systems in Scandinavia and Angola. Year on year, revenue grew 3% resulting from increased exploration, drilling, and production activity offshore Africa.

Revenue in the Middle East & Asia of $2.84 billion increased 8% sequentially driven by strong growth in Saudi Arabia, the United Arab Emirates, Indonesia, China, Malaysia, Kuwait, and Oman. This was a result of higher drilling, intervention, stimulation, and evaluation activity, both on land and offshore. Year on year, revenue increased 22%, driven by significant growth across Saudi Arabia, the United Arab Emirates, Kuwait, and Egypt.

North America

North America revenue of $1.64 billion decreased 6% sequentially due to reduced drilling activity in US land and in the US Gulf of Mexico. Offshore revenue declined as a result of lower subsea sales and decreased drilling activity. Year on year, North America revenue grew 6% led by strong land and offshore sales of production systems and higher drilling activity, partially offset by lower APS project revenue in Canada stemming from lower commodity prices.

Third-Quarter Results by Division

Digital & Integration

Digital & Integration revenue of $982 million increased 4% sequentially due to increased APS revenue in Ecuador and increased digital revenue, which includes higher exploration data sales in Angola, the US Gulf of Mexico, and Malaysia. Year on year, revenue increased 9% due to strong growth in digital revenue, partially offset by lower APS revenue in Canada.

Digital & Integration pretax operating margin of 32% contracted 200 bps sequentially due to lower profitability in APS, more than offsetting improved digital margins. Year on year, pretax operating margin decreased 186 bps due to reduced profitability in APS, which was impacted by lower commodity prices in Canada.

Reservoir Performance

Reservoir Performance revenue of $1.68 billion grew 2% sequentially primarily due to increased evaluation and stimulation activity internationally. More than 70% of the revenue growth came from Europe & Africa, mainly in offshore Angola, Namibia, and the United Kingdom. Strong growth was also achieved in Saudi Arabia from robust stimulation activity, offset by lower revenue in India. Year on year, revenue grew 15% driven by double-digit growth across all international areas, led by the Middle East & Asia supported by higher intervention and stimulation activity.

Reservoir Performance pretax operating margin of 20% expanded 190 bps sequentially and 376 bps year on year, the highest level of pretax operating margin in this cycle. These increases were primarily driven by higher activity, pricing, and improved operating leverage across evaluation and stimulation. New technology deployment also contributed to the margin expansion, particularly in the Middle East and West Africa.

Well Construction

Well Construction revenue of $3.43 billion increased 2% sequentially led by strong growth in the Middle East & Asia, which was partially offset by lower revenue in North America. Year on year, revenue increased 11%, driven by 25% growth in Middle East & Asia due to very strong activity. This year-on-year increase was driven mainly by strong measurements, fluids, and equipment sales.

Well Construction pretax operating margin of 22% expanded 38 bps sequentially driven by the international markets, mainly in Europe & Africa and the Middle East & Asia. Year on year, pretax operating margin expanded 58 bps with profitability improving in measurements, fluids, and equipment sales as a result of higher activity.

Production Systems

Production Systems revenue of $2.37 billion increased 2% sequentially driven by strong sales of completions, artificial lift, and surface production systems, partially offset by reduced sales of midstream production systems. The strong international sequential revenue growth was led by the Middle East & Asia, with double-digit growth, followed by Latin America. North America revenue declined due to lower subsea activity. Year on year, revenue grew 10% due to strong activity in the Middle East & Asia and Latin America, partially offset by a decline in Europe & Africa.

Production Systems pretax operating margin expanded 147 bps sequentially to 13%, its highest level in this cycle. The expansion was driven primarily by higher sales of completions, artificial lift, and surface production systems. Year on year, pretax operating margin expanded 305 bps led by improved profitability in completions, surface production systems, artificial lift, and subsea production systems, and driven by an improved activity mix, pricing, and the easing of supply chain constraints.

Quarterly Highlights

CORE

Contract Awards

SLB continues to win new long-cycle contract awards that align with SLB’s core strengths, particularly in the international and offshore basins. Notable highlights include the following:

• In Mexico, Woodside awarded a significant contract to OneSubsea for the supply of subsea trees and controls for the country’s first deepwater subsea development. The contract scope is for Phase 1 of the multiphase Trion project, and OneSubsea will deliver subsea horizontal trees, controls, and topside equipment. The first delivery of the equipment is expected in the fourth quarter of 2024, and first oil is targeted for 2028.

• In Nigeria, Shell Nigeria Exploration and Production Company (SNEPCo) has awarded SLB a contract for provision of completion equipment and associated services for 35 deepwater wells in the Bonga Field.

• In Malaysia, SLB was awarded contracts by major customers for the provision of drilling fluids and cementing over the next five years for offshore operations. The contracts cover exploration and development wells for various operators and span shallow- and deepwater and high-temperature, high-pressure applications in East and West Malaysia. SLB will provide technological solutions to address the drilling challenges such as drilling depleted reservoirs and wells with ultrahigh temperatures and pressures, while continuing to decarbonize the operations.

• bp has signed a memorandum of understanding with Subsea Integration Alliance (Alliance) aimed at developing a framework to enhance subsea project performance. The agreement with the Alliance, which comprises Subsea7 and OneSubsea, will combine the skills, knowledge, and experience of the three companies across a global portfolio of projects. The agreement will combine bp’s experience to frame, build, and execute projects with the Alliance’s capability to deliver integrated subsea production systems and subsea umbilical, riser, and flowline systems. The team will work together, from concept development through the full field lifecycle, to support project delivery through new ways of working and an innovative commercial model.

• In Egypt, Petrojet awarded SLB a contract for detailed engineering, procurement, commissioning, and startup of the Meleiha gas treatment plant, with further opportunities for operations and maintenance in the future. The project is located in the Western Desert and is owned by Agiba Petroleum Company, an Eni/EGPC joint venture. Petrojet is the main engineering, procurement, construction, and commissioning contractor. The project will adopt a zero-flaring approach, in line with the SLB decarbonization strategy.

Technology and Performance

Notable technology introductions and deployment in the quarter include the following:

• SLB and Eni, through its subsidiary Enivibes, have announced an alliance to deploy the e-vpms^® Eni vibroacoustic pipeline monitoring system, an innovative vibroacoustic wave detection system capable of providing real-time analysis, monitoring, and leak detection for pipelines around the world. Enivibes will bring the new proprietary pipeline integrity technology to the global market through SLB industry-leading digital expertise and operations in more than 100 countries. The e-vpms technology can be retrofitted to any pipeline, regardless of age, providing immediate integrity data essential for maintaining a network’s continuously reliable operation.

• In the United Arab Emirates, the introduction of the PeriScope Edge™ multilayer mapping-while-drilling service in an offshore field has enabled mapping the top of a target that could not previously be mapped with confidence. The PeriScope Edge technology improved the depth of investigation for mapping reservoir boundaries and target intervals by 80%. This supported earlier and more efficient decision making, which resulted in a smoother wellbore with less undulation. The enhanced deep resistivity measurements and a high-resolution inversion improved geosteering and reservoir understanding to develop the offshore field.

• In southeastern Kuwait, the Kuwait Oil Company (KOC) increased production by 900 barrels per day in the Mauddud carbonate, after acquiring 3D far field sonic data with the SLB ThruBit™ through-the-bit logging service. Using the ThruBit service, KOC was able to understand fracture geometry in a highly deviated well, to quantify the target, and to detect fractures up to 95 feet from the borehole in a complex well that lacked advanced logs. The critical well data and a robust mechanical earth model enabled KOC to optimize the stimulation job to increase production.

• In the Republic of the Congo, a successful five-well, eight-stage acid stimulation campaign was performed for Perenco deploying OpenPath Reach™ and OpenPath Sequence™ technologies via the Greatship Ramya stimulation vessel. The campaign, a mix of high-rate acid fracturing and matrix stimulation stages, represented the first implementation of this technology for Perenco worldwide. The main drivers for selecting SLB as a partner for reviving mature offshore fields were operational efficiency and a record of successful well stimulations. The operations were completed a day ahead of schedule, and well performance from initial flowback was deemed very promising, enabling Perenco to achieve both key objectives.

• Offshore Norway, the Quest™ gyro-while-drilling service was run for the first time globally with wired drillpipe (WDP) firmware. The gyro surveys were taken over 29 connections on the Deepsea Aberdeen semi-submersible rig without consuming rig time, thereby saving almost 5 hours of rig time compared to conventional mud-pulse telemetry surveys. The development of the WDP technology was accelerated with the acquisition of Gyrodata in the first quarter of 2023, with the one-year development plan being completed within a few months.

Decarbonization and Transition Technologies™

SLB is focused on technologies that can reduce emissions and environmental impact with practical, quantifiably proven solutions in our Core operations and extending these to adjacent industries. Examples include the following:

• SLB End-to-end Emissions Solutions (SEES) introduced its next-generation methane point instrument, a self-installed continuous methane monitoring system that uses IoT-enabled sensors to quickly and cost effectively detect, locate, and quantify emissions across oil and gas operations. Effective monitoring is essential to reducing emissions of methane, a greenhouse gas (GHG) that represents about half of the oil and gas sector’s operational emissions. The methane point instrument provides operators with industry-leading leak detection sensitivity, and the continuous methane monitoring eliminates the need for manual data collection.

• In the US, SEES delivered an evaluation to Chord Energy of options for eliminating routine flaring. Focusing on sites producing small volumes of rich gas in the Bakken, SEES helped to identify, assess, and high-grade gas capture solutions based on overall reduction in emissions with the least cost or best revenue maximization. The SEES recommendation followed a rigorous thermodynamic analysis and techno-economic review of emerging and mature technologies for converting flared gas into a commodity.

• In Pakistan, SLB received a contract award from Mari Petroleum Company Limited (MPCL) for provision of CO₂ separation membrane technology in combination with life-of-field services. This project includes the provision of CO₂ removal membranes from natural gas, commissioning, and field service, with future development and installation of Process Live™ data-enriched performance services, which provide digital insights and direct collaboration with SLB subject matter experts. These services will focus on maximizing treated gas production within the system, while predicting the CO₂ membranes’ remaining useful life with early identification of process upsets and optimization of membrane replacement cycles. This first implementation of the Process Live digital application in the Middle East & North Africa region will allow MPCL to optimize the economic performance of the production network by increasing uptime and reducing total membrane replacement expenditure.

Contacts

Investors
James R. McDonald – SVP, Investor Relations & Industry Affairs, SLB

Joy V. Domingo – Director of Investor Relations, SLB

Tel:+1 (713) 375-3535

Email: [email protected]

Media
Josh Byerly – Vice President of Communications, SLB

Moira Duff – Director of External Communications, SLB

Tel: +1 (713) 375-3407

Email: [email protected]

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