Fracking Leader SLB Reports Surge In Production; OPEC+ Keeping 'Prices At Supportive Levels'

Schlumberger (SLB) reports better-than-expected Q1 results, buoyed by international and North American revenue increases.

SLB, formerly Schlumberger and a provider of oil field services and equipment, announced Friday that its Q1 results were above expectations, thanks to revenue growth in North America and internationally. Baker Hughes' (BKR) report on Wednesday was also a success. Early Friday, the Baker Hughes and SLB stocks were mixed.

Baker Hughes, SLB, and Halliburton all predicted a strong oil demand in 2023 and tight supply for the near future. All three companies offer a wide range of technologies and services for oilfields. The oilfield services leaders also highlighted the many international growth opportunities available, particularly in the Middle East.

The U.S. crude futures remained steady at $77.30 a barrel on Friday. Oil prices had dropped as low as $66.74 in March. U.S. crude futures reached a five-month peak of $83.5 per barrel earlier in April after OPEC+ made a surprise cut to oil production.

Halliburton will report on Tuesday, after Baker Hughes and SLB have reported their earnings.

Analysts predicted that SLB earnings in Q1 would increase 76%, to 60 cents a share. Wall Street predicted sales to increase 24% to $7.44 Billion.

Results: The EPS increased by 85%, to 63 cents. The revenue grew 30% to $7.74 Billion. Revenues from well construction and production systems increased by 36% and 38% respectively. The pretax income of these units soared by 73% and 80%.

SLB's international revenue, which represents 77% of its total, has increased by 29%. North American revenue increased by 32%.

In a press release, SLB CEO Olivier le Peuch said that "revenue growth exceeded rig count growth in North America as well as internationally." This was the largest quarterly increase year-over-year in more than 10 years.

Le Puech stated that pricing trends are positive, as customers adjust contracts to offset inflation and service capacity continues tightening across international markets.

Le Peuch said that "there is wider recognition of the positive outlook for long-term oil and gas demand and the potential of a stronger rebound in demand during the second half of this year."

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He said that recent OPEC+ decisions have kept commodity prices at a level that is supportive for operators, giving them more confidence to carry out their projects.

SLB fell more than 4% in Friday's market trading, from 51.97 to 49.81. On Thursday it had closed down by 1.3%. According to MarketSmith's analysis, shares are consolidating with a 56.54 official buy point.

SLB was the top-ranked company for revenue and earnings in the fourth quarter on Jan. 20, 2019. The company's EPS grew by 73%, to 71 cents a share. Revenue jumped by 27%, to $7.9 Billion.

SLB anticipates record upstream investments in the Middle East through 2023. The company has already put in place a variety of offshore oil and gas development plans throughout the Middle East.

SLB's earnings will increase 70% in 2022 to $2.18 a share. The total revenue for the year was $28.1 billion, up 23% from 2021. The company's expectations were met. SLB aims to grow 15% in 2023 compared to the growth of 2022.

Le Puech, in a Friday statement, said: "We expect strong growth in the second quarter with seasonal recovery in Northern Hemisphere. We also expect capacity expansion projects to ramp up in the Middle East at various stages. And robust activity in Asia, Sub-Sahara Africa and Asia."

Wall Street predicted Baker Hughes earnings per shares of 26 cents. This is a 73% increase compared to the previous year. Analysts predicted that revenue would increase 14%, to $5.52 Billion.

Results: Baker Hughes reported EPS jumped 86 percent to 28 cents, while revenue grew 18% to $5.72 Billion.

BKR reported revenue of $1.34 billion from Middle East and Asia operations, which is a 23% rise from last year. North America was ranked second in revenue with $992 millions in Q1.

In a Wednesday statement, CEO Lorenzo Simonelli stated that he was "pleased with our first-quarter results" and remained optimistic about the outlook for 2023.

Baker Hughes fell to 29.66 on Friday, a 1.4% drop. Baker Hughes' stock fell 1.5% on Thursday to 30.09.

Baker Hughes missed its fourth quarter earnings and sales target on Jan. 23. Revenue grew 8% in Q4 to $5.9 Billion. Earnings grew 52%, to 38 cents a share. BKR painted a positive picture of the oil market in 2023.

Baker Hughes executives reported an unprecedented backlog of 25 billion dollars, which was aided in part by the increased orders of liquefied gas (LNG).

Orders increased by 24% in 2022 to $26.7 billion. The company's revenue for the full year increased 3%, to $21.16 Billion. This is the first increase in three years. The company's revenue from its oilfield services division increased by 10% in comparison to 2021. The full-year EPS jumped 43% to 90c per share.

Baker Hughes predicted that by the end of 2023, revenue would range between $24 billion and 26 billion dollars and adjusted EBITDA would be between $3.6 and $3.8 billion.

Baker Hughes' Composite Rating is 79 out of 99. IBD StockCheckup's exclusive Relative Strength rating of 75 is a gauge to measure share price movement. The EPS is 86.

Halliburton, a fellow oil field services firm, will report earnings on Tuesday morning 25 April. The Street anticipates that the company's earnings per share will skyrocket 91% in Q1, to 67 cents, with sales rising 28% to $5.49 Billion.

HAL's Q4 revenue and earnings both increased 100% to $5.58 billion and 72 cents, respectively. It reported 2022 earnings per share of $2.15. This is up 99% from 2021. The full-year sales jumped 33% to $20,3 billion.

FactSet reports that analysts expect Halliburton's 2023 earnings to grow 40%, to $3.00 per share. The full-year revenue is expected to increase by 15%, to $23,47 billion.

Jeff Miller, CEO of BP, told investors that everything pointed "towards continued tightness in oil and gas in 2023." Miller believes that activity in the U.S. will remain strong, and service intensity will increase until 2023. Global demand will be heavily influenced by the reopening economy of China.

Halliburton stock fell 1.4% Friday.

Follow Kit Norton on Twitter @URL to get more updates.

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