Thursday, April 21, 2011

Schlumberger (SLB), Weatherford (WFT) Boost Outlook for Oilfield Service Industry

The performance of oilfield service providers has been weak, as Gulf oil drilling permits remain extremely slow to obtain, terrible weather in Australia and unrest in the Middle East continues to weigh on the industry, although Schlumberger Ltd (NYSE:SLB) and Weatherford International Ltd (NYSE:WFT) provided a ray of hope as they boosted their outlook for the sector as exploration is speeding up and higher oil prices, along with demand, support the oil industry.

Schlumberger Chief Executive Officer Andrew Gould noted, "The absence of Libyan production worries the oil producers."

"I think that I'm much more confident that the international stream will come back faster," he added.

Bernard Duroc Danner, the CEO of Weatherford, said his company will increase capital expenditures to take advantage of improving international and North American markets for the company's services.

Assuming that's the case, it's good news in light of Diamond Offshore (NYSE:DO) reporting a 14 percent fall in quarterly profit as the rates paid for its oil and gas drilling rigs dropped. Rival Noble Corp (NYSE:NE) also reported an 85 percent decline in quarterly profit after the market close on Wednesday.

Schlumberger was trading at $89.98, gaining $2.09, or 2.38 percent, as of 2:57 PM EDT. Weatherford was at $20.68, falling $0.45, or 2.13 percent. Diamond Offshore was trading at $77.87, jumping $1.47, or 1.92 percent. Noble Corp. was trading at $42.80, losing $0.63, or 1.45 percent.

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