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Schlumberger (SLB) Scores Deal for Well Drilling Services

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Schlumberger Limited (SLB - Free Report) has been awarded a major contract by Saudi Aramco to provide integrated drilling and well construction services in a gas drilling project.

The project’s scope involves drilling rigs, technologies and services. This includes drill bits, measurement while drilling and logging while drilling, drilling fluids, cementing, and completing wells. The company did not reveal any financial or technical details of the contract.

Schlumberger will leverage digital solutions like DrillOps on-target well delivery solution to improve integrated well drilling performance. The DrillOps solution uses data analysis, learning systems and automation to implement a digital drilling plan.

The recent spike in oil and natural gas prices worldwide, triggered by Russia’s invasion of Ukraine, has raised the demand for drilling projects and higher production. The latest contract suggests a validation of Schlumberger’s fit-for-basin technology and its proficiency in gas well development in the region.

Schlumberger has been contributing to Saudi Arabia’s growth for about 80 years. The awarded contract represents the continuation of an ongoing partnership with Saudi Aramco. Schlumberger will cooperate with Saudi Aramco on well delivery activities by deploying specialized teams, differentiated technology, and integrated drilling and well construction services.

Company Profile & Price Performance

Headquartered in Houston, TX, Schlumberger is a leading oilfield service provider. The company provides leading digital solutions and deploys innovative technologies to enable performance and sustainability for the energy industry.

Shares of Schlumberger have outperformed the industry in the past six months. Its stock has gained 39.7% compared with the industry’s 12.1% growth.

 

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Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy space can look at some better-ranked companies like Imperial Oil Limited (IMO - Free Report) , Oasis Petroleum and PDC Energy, Inc. . All companies sport a Zacks Rank #1 (Strong Buy) at present.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Imperial Oil is one of the largest integrated oil companies in Canada. Its debt-to-capitalization of 19.3% is quite conservative versus 32.7% for the sub-industry to which it belongs. Apart from low leverage for its industry, Imperial Oil has ample liquidity, with cash and cash equivalents of C$1.5 billion.

Imperial Oil’s earnings for 2022 are expected to surge 95% year over year. IMO remains strongly committed to returning money to investors via dividends. The company's board of directors recently approved a hike in quarterly dividend payment. The new payout of 34 Canadian cents is 26% above the prior dividend.

Oasis Petroleum is an independent explorer that engages in the acquisition and development of oil and natural gas resources. As of 2021-end, OAS had a proved reserve base of 250.8 million barrels of oil equivalent in the Williston Basin.

Oasis Petroleum’s earnings for 2022 are expected to grow 192% year over year. OAS currently pays a quarterly dividend of 58.5 cents ($2.34 annualized). It recently completed a $100-million share repurchase program.

PDC Energy is an independent upstream operator that engages in the exploration, development and production of natural gas, crude oil and natural gas liquids. In the fourth quarter of 2021, the company returned approximately $110 million through dividends and share repurchases.

PDC Energy’s earnings for 2022 are expected to grow 66.7% year over year. As of Dec 31, PDC Energy had $33.8 million in cash and cash equivalents, and $942.1 million in long-term debt, representing a debt-to-capitalization of 24.5%.


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