SLB Reaffirms 2024 Financial Guidance

Rhea-AI Summary

SLB (NYSE: SLB) reaffirms its full-year 2024 financial guidance despite Saudi Aramco's decision to maintain Maximum Sustainable Capacity at 12 MMBD. CEO Olivier Le Peuch expresses confidence in significant growth in the Kingdom and global energy demand, emphasizing the strength and longevity of the cycle through 2024 and beyond.

Insights

Market Research Analyst

The reaffirmation of SLB's full-year 2024 financial guidance despite Saudi Aramco's decision to maintain its Maximum Sustainable Capacity at 12 million barrels per day is indicative of the company's adaptability and confidence in its business strategy. This move suggests that SLB's revenue streams are diversified enough to withstand potential disruptions from individual projects. It is also a reflection of the company's strong positioning within the onshore and expanding gas markets, which are expected to be less affected by the decision.

Investors should note that SLB's emphasis on the long-term growth cycle and its multi-year outlook align with the broader industry trends of increasing global energy demand and the pivotal role of international production. This perspective is crucial as it underscores the company's strategic focus, which may influence investor confidence and stock performance in the medium to long term.

Energy Sector Analyst

The decision by Saudi Aramco to cap its oil production capacity could have far-reaching implications for the energy sector. SLB's proactive communication about the impact of this decision on its operations helps mitigate market uncertainty. The company's focus on onshore and gas markets within the Kingdom, as well as its market position in other Middle Eastern countries, is strategically significant. This is because these markets are less volatile and could offer more stable revenue compared to offshore projects, which are often more capital-intensive and have higher breakeven costs.

Analysts should closely monitor SLB's operational efficiency and cost management in the upcoming periods, as these will be critical in maintaining profitability amidst a potentially static production environment imposed by Saudi Aramco's decision. The ability to maintain growth projections in such a scenario may set a precedent for operational excellence within the industry.

Financial Analyst

The announcement by SLB appears to have a neutral to positive impact on the company's financial outlook, given that it is maintaining its growth forecast for 2024. The financial implications of this announcement are significant as they suggest that SLB has a resilient business model and a risk mitigation strategy that can absorb the impact of changes in project timelines by one of its key partners. This resilience is particularly important for long-term investors seeking stability in their energy sector holdings.

It is important to analyze the company's past financial performance and compare it with the current guidance to assess the credibility of the projections. Additionally, the company's ability to maintain its guidance in light of Saudi Aramco's decision may be viewed positively by the market, potentially leading to an optimistic reassessment of the company's stock valuation.

Company remains confident in the strength and longevity of the cycle

HOUSTON--(BUSINESS WIRE)-- Regulatory News:

SLB (NYSE: SLB) today announced that it is reaffirming its full-year 2024 financial guidance.

“We acknowledge the decision by Saudi Aramco to maintain its Maximum Sustainable Capacity (MSC) at 12 million barrels per day (MMBD), and not to continue increasing MSC to 13 MMBD,” said SLB Chief Executive Officer Olivier Le Peuch. “We continue to work very closely with Saudi Aramco, and our understanding is that all ongoing oil and gas projects remain intact and that only two offshore oil increment projects not yet started will be suspended.”

“Our forecast for significant growth for 2024 in the Kingdom remains intact. Looking ahead, the combination of our revenue mix in the Kingdom, which is weighted toward onshore and the expanding gas market, and our unique market position in other countries in the Middle East will continue to support the multi-year growth cycle in the region.”

“As we shared during our most recent earnings release, global energy demand continues to increase, and international production is expected to play a key role in meeting supply through the end of this decade. Given this, we are confident in the strength and longevity of this cycle through 2024 and beyond.”

About SLB

SLB (NYSE: SLB) is a global technology company that drives energy innovation for a balanced planet. With a global footprint in more than 100 countries and employees representing almost twice as many nationalities, we work each day on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition. Find out more at slb.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the U.S. federal securities laws — that is, statements about the future, not about past events. Such statements often contain words such as “expect,” “may,” “can,” “estimate,” “intend,” “anticipate,” “will,” “potential,” “projected" and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as forecasts or expectations regarding the deployment of, or anticipated benefits of, SLB’s new technologies and partnerships; statements about goals, plans and projections with respect to sustainability and environmental matters; forecasts or expectations regarding energy transition and global climate change; and improvements in operating procedures and technology. These statements are subject to risks and uncertainties, including, but not limited to, the inability to achieve net-negative carbon emissions goals; the inability to recognize intended benefits of SLB’s strategies, initiatives or partnerships; legislative and regulatory initiatives addressing environmental concerns, including initiatives addressing the impact of global climate change; the timing or receipt of regulatory approvals and permits; and other risks and uncertainties detailed in SLB’s most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the U.S. Securities and Exchange Commission. If one or more of these or other risks or uncertainties materialize (or the consequences of such a development changes), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements. The forward-looking statements speak only as of the date of this press release, and SLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240130109696/en/

Media

Josh Byerly

Vice President of Communications

Moira Duff

Director of External Communications

SLB

Tel: +1 (713) 375-3407

Email: media@slb.com

Investors

James R McDonald

SVP of Investor Relations & Industry Affairs

Joy V. Domingo

Director of Investor Relations

SLB

Tel: +1 (713) 375-3535

Email: investor-relations@slb.com

Source: SLB

FAQ

What is the ticker symbol for Schlumberger?

The ticker symbol for Schlumberger is SLB (NYSE: SLB).

What is the full-year 2024 financial guidance reaffirmed by SLB?

SLB reaffirms its full-year 2024 financial guidance despite Saudi Aramco's decision to maintain Maximum Sustainable Capacity at 12 MMBD.

What is the CEO's statement regarding the decision by Saudi Aramco?

CEO Olivier Le Peuch expresses confidence in significant growth in the Kingdom and global energy demand, emphasizing the strength and longevity of the cycle through 2024 and beyond.

What will be the impact of Saudi Aramco's decision on SLB's projects?

Only two offshore oil increment projects not yet started will be suspended as a result of Saudi Aramco's decision.

What is the revenue mix of SLB in the Kingdom?

The revenue mix of SLB in the Kingdom is weighted toward onshore and the expanding gas market.

What is the market position of SLB in the Middle East?

SLB has a unique market position in other countries in the Middle East that will continue to support the multi-year growth cycle in the region.