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Schlumberger Announces Third-Quarter 2013 Results



  Schlumberger Announces Third-Quarter 2013 Results

                             Schlumberger Limited

Business Wire

HOUSTON -- October 18, 2013

Schlumberger Limited (NYSE:SLB) today reported third-quarter 2013 revenue of
$11.61 billion versus $11.18 billion in the second quarter of 2013, and $10.50
billion in the third quarter of 2012.

Income from continuing operations attributable to Schlumberger, excluding
charges and credits, was $1.71 billion—an increase of 12% sequentially and an
increase of 24% year-on-year. Diluted earnings-per-share from continuing
operations, excluding charges and credits, was $1.29 versus $1.15 in the
previous quarter, and $1.04 in the third quarter of 2012.

Schlumberger recorded net credits of $0.51 per share in the second quarter of
2013 and charges of $0.02 per share in the third quarter of 2012. Schlumberger
did not record any charges or credits in the third quarter of 2013.

Oilfield Services revenue of $11.61 billion was up 4% sequentially and
increased 11% year-on-year. Oilfield Services pretax operating income of $2.50
billion was up 10% sequentially and increased 20% year-on-year.

Schlumberger CEO Paal Kibsgaard commented: “Schlumberger third-quarter results
reached new highs in both revenue and pretax operating income driven by
consistent performance across all geographic Areas through strong execution
based on integration, quality and efficiency. The international business grew
further, with leading margins expanding in spite of some operational delays.
Performance in North America was particularly strong despite continued pricing
weakness in the land market. Operating margins exceeded 20% in all Areas and
expanded in all Product Groups.

Results were led by North America with a new high in overall revenue,
supported by solid offshore activity and the seasonal rebound of activity in
Western Canada. US land operations showed impressive resilience through
improved efficiency, new technology penetration and market share gains in a
highly competitive market with largely constant rig count. International
results were led by the Middle East & Asia with growth in key markets in Saudi
Arabia and Iraq, while offshore activity strengthened in Asia, and land
drilling and stimulation activity improved in China. Europe/CIS/Africa saw
strong summer activity in Russia and Central Asia and a seasonal increase in
WesternGeco marine activity in the Area. Latin America activity was driven by
Integrated Project Management and Schlumberger Production Management
operations.

The global economic outlook remains largely unchanged as relatively
encouraging news among OECD countries and in China has offset lower growth
expectations in some of the major emerging economies. In the US, the
underlying trends are positive and the level of macroeconomic uncertainty was
reduced in the near term following the temporary resolution of the fiscal
debate. Demand for oil in 2013 has again been revised upward and current
estimates for 2014 point to even stronger growth in demand. Overall, the
market continues to support Brent prices at current levels while international
natural gas prices remain steady. The upward E&P spend revision made in June
continues to be confirmed by rig count improvement and increased customer
activity. Within this landscape, we remain positive on the outlook for the
industry.

Last month I shared a view of the internal transformation initiatives that we
are pursuing together with the potential they hold in terms of enhanced
financial performance. We believe that the size of our operations and the
breadth of our offering represent significant competitive advantages, and our
entire organization is now focusing on executing these initiatives in parallel
with maintaining just as clear a focus on our operational execution through
integration, quality and efficiency.”

Other Event

  * During the quarter, Schlumberger repurchased 10.1 million shares of its
    common stock at an average price of $82.61 for a total purchase price of
    $833.3 million.

                              Oilfield Services

Third-quarter revenue of $11.61 billion was up 4% sequentially and increased
11% year-on-year. International Area revenue of $7.91 billion grew $209
million, or 3% sequentially, while North America Area revenue of $3.60 billion
increased $245 million, or 7% sequentially. Third-quarter revenue set a new
high for both North America and International Areas.

Sequentially by segment, Reservoir Characterization Group revenue of $3.23
billion grew 7% while Drilling Group revenue of $4.41 billion increased 3%.
These increases were due to strong exploration and drilling activity, both
offshore and in key international land markets that benefited Wireline,
Testing Services, Drilling & Measurements and M-I SWACO Technologies.
WesternGeco revenue also increased from improved global marine vessel activity
leading to high asset utilization during the quarter. Production Group revenue
of $4.02 billion grew 3% despite the transfer of the Schlumberger subsea
business at the end of the second quarter to OneSubsea™, a
Cameron/Schlumberger joint venture. Excluding this effect, the Production
Group grew 6% sequentially mainly from strong results in Well Services,
Completions & Artificial Lift Technologies and Schlumberger Production
Management (SPM) projects. The seasonal rebound in Western Canada following
the spring break-up accounted for the majority of the sequential increase in
Well Services activity with a significant amount also coming from improved
efficiency in US land hydraulic fracturing services that enabled deployment of
four additional fleets from existing equipment despite continued pricing
weakness.

Sequentially by Area, North America led the increase with revenue of $3.60
billion growing 7%. The performance in North America was driven with the
offshore business setting a new high for quarterly revenue, Western Canada
land rebounding from the seasonal spring break-up in the previous quarter, and
US land being up from improved efficiency, growing new technology penetration,
and market share gains. Middle East & Asia revenue of $2.80 billion increased
5%, mainly from continued growth across a diversified portfolio of projects
and activities in Saudi Arabia and Iraq, while high growth rates were posted
in the United Arab Emirates and Qatar. Strong WesternGeco marine vessel
activity in the Brunei, Malaysia & Philippines and Indonesia GeoMarkets, and
increased land drilling and stimulation activities in China also contributed
to the strong results. Europe/CIS/Africa revenue of $3.18 billion increased 2%
from high WesternGeco marine vessel activity in the North Sea and Equatorial
Guinea and peak summer drilling and exploration activity in Russia and Central
Asia, while Angola and North Africa activity continued to be subdued by
project delays. The Area revenue for the third quarter reflects the absence of
the results of the subsea business that was transferred to the OneSubsea joint
venture in the second quarter of 2013. Excluding the effect of this business
transfer, the revenue for the Area grew 5% sequentially. Latin America revenue
of $1.93 billion grew 1% with strong sequential growth posted in Venezuela and
Argentina. Higher incremental production results from the SPM project in
Ecuador also contributed to growth. These increases, however, were partially
offset by a decrease in Brazil due to lower rig count, both on land and in
deepwater.

Third-quarter pretax operating income of $2.50 billion was up 10%
sequentially, and increased 20% year-on-year. International pretax operating
income of $1.84 billion increased 9% sequentially, while North America pretax
operating income of $730 million increased 10% sequentially. Third-quarter
pretax operating income also set a new high, driven by the International
Areas.

Sequentially, pretax operating margin of 21.5% increased 114 basis points
(bps), as International pretax operating margin expanded 134 bps to 23.3%.
Middle East & Asia posted a 151-bps sequential margin improvement to reach
26.1%, Europe/CIS/Africa increased by 189 bps to 22.5%, while Latin America
was steady at 20.6%. The expansion in International margins was due to strong
results in Russia & Central Asia resulting from deployment of higher-margin
technologies during the peak summer drilling and exploration campaigns.
Increased high-margin wireline and seismic activities also helped boost
international margins further in Middle East & Asia as exploration work
increased. North America pretax operating margin increased 57 bps sequentially
to 20.3% as Western Canada recovered following the previous quarter’s seasonal
spring break-up. US land margin continued to expand on improving efficiency,
better utilization, and lower raw material costs in pressure pumping
stimulation services. North America offshore operating margin continued to
grow on increasing activity and technology deployment but overall results
decreased sequentially due to lower multiclient sales during the quarter.

Sequentially by segment, Reservoir Characterization Group pretax operating
margin expanded 27 bps to 30.4% due to strong exploration activities that
benefited Wireline and Testing Services Technologies. The pretax operating
margin of the Drilling Group increased 154 bps to 20.3% through improved
Drilling & Measurements operational performance and increased profitability on
Integrated Project Management (IPM) projects in the Latin America and Middle
East & Asia Areas. Production Group pretax operating margin increased 165 bps
to 17.6% on improved profitability in Well Services as Western Canada
recovered from the previous quarter’s spring break-up and as US land margin
continued to expand on improving efficiency, better utilization, and lower raw
material costs. SPM projects in Latin America and Asia also continued to be
accretive to the group’s expanding margins.

A number of technology innovation and integration highlights contributed to
the third-quarter results.

In Turkmenistan, Schlumberger has been awarded a contract by Turkmengeology
State Corporation for Drilling Group technologies and Well Services cementing
services to accelerate the development of Galkynysh, one of the country’s
largest gas fields. The contract includes Schlumberger drilling motors, Smith
drill bits, M-I SWACO drilling fluids and Well Services cementing services for
a development well campaign, with the objective of increasing operational
efficiency and meeting aggressive gas production goals.

In South Texas, Schlumberger technologies were deployed for the Eagle Ford
Completions Optimization Consortium of BHP Billiton, Lewis Energy, Marathon
Oil and Swift Energy in several horizontal wells in the unconventional Eagle
Ford formation. Openhole data were acquired with SureLog* Thrubit wireline
triple-combo and Wireline Sonic Scanner* acoustic scanning services conveyed
by TuffTRAC* technology, and used to generate optimized completions designs
with Well Services Mangrove* stimulation design software. The production from
each well was evaluated using data from the Wireline Flow Scanner* well
production logging system conveyed by MaxTRAC* downhole wireline tractor
technology, and analysis was performed using Schlumberger Information
Solutions (SIS) Petrel* E&P software and Techlog* wellbore software platforms
to evaluate the impact of reservoir and completion quality. As a result,
Schlumberger technologies and workflows enabled the optimized completions to
increase the number of perforation clusters contributing to production by 28%,
which elevated all the Consortium wells to the top quartile in performance
compared to their peers.

Statoil has awarded Schlumberger three multiyear contracts for the provision
of drilling and completion fluids, offshore waste management and cementing
services in the Norwegian continental shelf. The three-year contracts, with
options for three times two additional years, cover drilling and completion
fluids for multiple drilling rigs and cementing services on up to nine
platforms and six deepwater rigs. The award was based on commercial terms,
QHSE, and the Schlumberger proven track record in product and service quality,
reliable execution, and technology deployment.

Reservoir Characterization Group

Third-quarter revenue of $3.23 billion increased 7% sequentially and grew 14%
year-on-year. Pretax operating income of $983 million was 8% higher
sequentially, and increased 23% year-on-year.

Sequentially, the increase in revenue was driven primarily by higher use of
Wireline and Testing Services technologies as a result of strong exploration
activity in the Middle East & Asia and Europe/CIS/Africa Areas. This was
particularly marked in Russia & Central Asia where drilling & exploration
activity increased during the summer. WesternGeco revenue also increased
sequentially from improved global marine vessel activity leading to high asset
utilization during the quarter, although the effect of this was partially
offset by sequentially lower multiclient sales.

Pretax operating margin of 30.4% increased 27 bps sequentially from robust
higher-margin exploration activity for Wireline in Russia and the Middle East
& Asia Area, while Testing Services across all Areas also contributed to the
group’s expanding margin.

A number of technology highlights across the Reservoir Characterization Group
contributed to the third-quarter results.

In Kazakhstan, a combination of Wireline technologies was deployed for
Zhaikmunai LLP to acquire production logging data in two horizontal production
wells, one highly deviated production well, and one horizontal injector well
located on Chinarevskoe field. Wireline Flow Scanner horizontal and deviated
well production logging and PS Platform* production services technologies were
used for logging data acquisition in the production and injector wells,
respectively. The tool strings were conveyed efficiently with the MaxTRAC
downhole wireline tractor system that allows data acquisition while tractoring
down. The flow profile in the producing wells was successfully quantified.
Results of the production logging data analysis were used for time-lapse
production monitoring, updating the dynamic reservoir model, and locating the
source of water production in some wells.

In Libya, Wireline MDT* modular formation dynamics tester and Quicksilver
Probe* technologies in combination with the InSitu Fluid Analyzer* system were
introduced for Akakus Oil Operations to obtain high-quality water samples from
a well drilled with water-based mud. In order to accurately estimate the
resistivity and ionic concentrations of the formation water, it was essential
to acquire a water sample free of contamination from water-based mud filtrate.
The Quicksilver Probe technology was effective in separating filtrate from
formation water, while the InSitu Fluid Analyzer downhole sensors enabled
real-time measurement of contamination levels prior to taking samples. As a
result, two sample chambers were filled with pure formation water, free of any
filtrate contamination, enabling the operator to carry out the analysis
required to optimize the field’s water injection process.

In West Texas, Schlumberger PetroTechnical Services developed a mechanical
earth model for ExL Petroleum, LP to mitigate risk and reduce horizontal well
construction costs in a field known for its challenging drilling conditions.
The formation evaluation used Wireline ECS* elemental capture spectroscopy and
Sonic Scanner acoustic scanning technologies, which were conveyed in the
horizontal section using the TuffTRAC cased hole services tractor. The
combination of these technologies and the resulting workflow allowed the
operator to reposition the wells’ lateral sections and eliminate an
intermediate casing string for a 10% completions cost savings of $200,000 per
well.

Woodside has awarded WesternGeco the acquisition of the Fortuna 4,000-km2 3D
seismic survey on the offshore North West Shelf of Australia using IsoMetrix*
marine isometric seismic technology. Scheduled to begin in December 2013, this
will be the first survey in Australia using IsoMetrix technology, and will
provide the foundation for future exploration and appraisal programs for
Woodside in the region. With this contract, IsoMetrix technology will have
been deployed offshore across four continents in 2013.

WesternGeco has been awarded a major contract by Abu Dhabi Marine Operating
Company (ADMA-OPCO) for an 800-km2 Ocean-Bottom Cable (OBC) survey on the Umm
Shaif field offshore Abu Dhabi, using Q-Seabed* technology and the SimSource*
simultaneous seismic source acquisition technique. Two source vessels will be
used for the survey, with the goal of providing the customer with a current,
state-of-the-art dataset to enable decisions regarding field development and
secondary recovery.

Onshore Brazil, Agencia Nacional de Petroleo (ANP) has awarded WesternGeco a
contract for the processing and interpretation of a 2D electromagnetics survey
in the Parecis basin, one of the frontier basins being evaluated by the ANP to
define future bidding blocks for exploration and production. The project will
be managed by the WesternGeco Integrated Electromagnetics Center of Excellence
and includes survey design, data acquisition, infield processing, and advanced
interpretation.

In Mexico, Pemex has awarded WesternGeco GeoSolutions a multiyear contract in
the dedicated processing center in Poza Rica, enabling access to leading
WesternGeco technologies including full waveform inversion, reverse-time
migration, seismic-guided drilling, and rock physics-guided migration. These
state-of-the-art technologies will support Pemex with an unprecedented level
of integrated solutions for enhanced imaging, reservoir characterization, and
drilling support.

In Angola, Testing Services deployed the Quartet* downhole reservoir testing
system with Muzic* downhole wireless telemetry for Maersk Oil in the deepwater
Block 16. The services forming part of the Quartet system included the CERTIS*
high-integrity reservoir test isolation system, IRDV* intelligent remote dual
valve technology, SCAR* inline reservoir fluid sampling, and Signature*
high-resolution quartz gauges. The single-trip Quartet system’s flexible
design eliminated the need for multiple runs, and the wireless transmission
and monitoring of downhole pressure facilitated real-time transient analysis,
which optimized decision-making and enabled the operator to save four days of
costly rig time.

Tanzania Petroleum Development Corporation (TPDC) has awarded SIS a multiyear
software licensing agreement for their oil and gas exploration activities. The
agreement includes the Petrel E&P software platform to better understand the
country’s unexplored subsurface potential and accurately select the right
plays that enhance exploration success while reducing operational risks and
uncertainties. The agreement also includes Techlog wellbore software for
assurance that wells to be drilled intercept the targeted sweet spots and
collect all the well data required to quantify reservoir potential. The
strategic decision to adopt the Schlumberger technology platforms supports
TPDC’s commitment to refocus on core oil and gas activities and fast track
their evolution as an independent operating company.

In Brazil, Perenco has awarded Schlumberger PetroTechnical Services an
integrated exploration study in the deepwater blocks 39, 40, and 41 of the
Espirito Santo basin. The comprehensive study includes seismic processing,
seismic inversion, multiclient data, a mechanical earth model and 3D pore
pressure predictions. The results of the study will support plans for
Perenco’s exploratory drilling campaign in 2013 where deepwater wells will
target post-salt reservoirs by drilling through sedimentary sequences with
uncertainties and complexities related to challenging subsalt and salt
tectonics.

Drilling Group

Third-quarter revenue of $4.41 billion was up 3% sequentially and grew 9%
year-on-year. Pretax operating income of $894 million was 11% higher
sequentially, and increased 23% year-on-year.

Sequentially, revenue increased primarily on strong M-I SWACO performance from
the rebound of Western Canada land activity, increased deepwater work in North
America, and increased activity in Mexico and Russia. Strong Drilling &
Measurements activity in the Middle East & Asia Area, in Russia, and offshore
North America also contributed to growth.

Sequentially, pretax operating margin grew 154 bps to 20.3% from improved
profitability in Drilling & Measurements from stronger activity and a more
favorable geographical and technology mix. Improved profitability on IPM
projects in the Middle East & Asia and Latin America Areas continued to
contribute to the group’s expanding margins.

A number of Drilling Group technologies contributed to the third-quarter
results.

In Kurdistan, Drilling & Measurements deployed, for the first time, the
PowerDrive Xceed* rotary steerable system for HKN, Inc. on a deviated well in
the Mangesh field. The PowerDrive Xceed technology helped improve drilling
performance in the 17 1/2-in deviated section by 65%, drilled the section five
days ahead of plan, and kicked off the well successfully from vertical to a
55° inclination at shallow depth, meeting all the directional well plan
objectives.

In China, Drilling & Measurements established a new drilling record in the
Bohai Bay for CNOOC while drilling eight directional wells in the Qikou field.
In the 8-in well sections, PowerDrive vorteX* powered rotary steerable
technology helped increase the rate of penetration by 114% compared to
previous conventional drilling systems. As a result of deploying Drilling &
Measurements technologies, the well construction time for wells with total
depths between 3,500 m and 4,000 m was significantly reduced, enabling the
operator to save approximately 26 days of rig time compared to the well
construction plan.

In Algeria, M-I SWACO WELL COMMANDER* ball-activated drilling valve technology
was deployed in a Schlumberger integrated bottom hole assembly for Sonatrach
to drill a 6-in reservoir section with expected fluid losses. The WELL
COMMANDER technology allowed the controlled pumping of numerous lost
circulation material pills through the drill string, with reduced risks of
plugging the directional and measurement-while-drilling tools. As a result,
the total depth for the well was reached according to plan, with zero
downtime.

Offshore Ivory Coast, Drilling & Measurements deployed a formation evaluation
technology suite for Foxtrot International which featured the acquisition of a
high-quality set of nuclear measurements without the need for chemical
sources. The combination of NeoScope*^† sourceless formation evaluation while
drilling, proVISION* nuclear magnetic resonance, StethoScope* formation
pressure-while-drilling, and SonicVISION* sonic-while-drilling technologies, a
first worldwide, helped the customer identify reservoir fluid contents in a
complex reservoir and enabled the design of a horizontal drain.

In Russia, Schlumberger Drilling Group Technologies and Petrotechnical
Engineering Center expertise helped ERIELL successfully drill the first
horizontal well through the complex Achimov formation in the Urengoyskoe field
in northwest Siberia. A geomechanical model was developed to overcome the main
challenges of drilling through the Achimov formation with its high
overpressure, narrow equivalent circulating density window, and unstable
formations lying between the productive layers. Drilling & Measurements
SonicScope* multipole sonic-while-drilling technology was used to update the
geomechanical model in real time to prevent costly wellbore stability issues.
In addition, the combination of PowerDrive X6* rotary steerable technology
with a customized Smith polycrystalline diamond compact (PDC) bit and the M-I
SWACO Megadril* drilling fluid system drilled the well 15 days ahead of plan,
which led to a significant cost saving for the operator.

Offshore Mexico, integration of Drilling & Measurement technologies with
Schlumberger PetroTechnical Services helped Pemex drill a highly challenging
section in an exploration well in the Chac field. The use of SonicScope
multipole sonic-while-drilling technology and real-time geomechanics enabled
accurate prediction of formation pore pressures so that mud weight could be
maintained below the forecasted value. This operation marked the first time
Pemex has used logging-while-drilling and sonic-while-drilling technologies
for shallow-water exploration wells and, as a result, the customer saved one
casing run by drilling 300 m deeper than originally planned.

In Russia, Schlumberger was earlier this year awarded a contract by
GazpromNeft Orenburg, one of the largest operators in the country, for the
supply and service of Smith drill bits on the Kapitonovskoe, Tsarichanskoe and
Orenburgskoe fields in the Orenburg region. This contract award was based on
the broad experience and solid track record achieved by Smith drill bits with
some of the large operators in the region.

In Canada, Smith drillbit technology helped Sinopec Daylight Energy drill a
horizontal well in the highly abrasive Rock Creek formation in central
Alberta. A 6 ¼-in customized Smith PDC bit with ONYX 360* cutter technology
enabled the operator to improve efficiency by drilling longer well sections
and by reducing the number of bit trips. In one application, fully rotating
ONYX 360 cutters contributed to the drilling of a continuous well section that
was 80% longer than the average of three previous wells drilled using
conventional PDC bits in the same type of formation. In the well’s horizontal
section, the ONYX 360 cutter technology also enabled a single bit run to be
drilled 18% faster than subsequent runs in the same horizontal section using
conventional drill bits.

In US land, Schlumberger deployed Stinger* conical diamond element technology
for Apache Corporation in over 10 wells in the Anadarko Basin. In the 8 3/4-in
vertical section of these wells, Smith customized PDC bits with Stinger
technology increased the rate of penetration over 59%, and drilled the
sections 36% faster compared to offset wells. This performance led to
significant drilling cost savings for the customer.

In the US Gulf of Mexico, a Drilling Tools & Remedial Services Rhino RHE*
dual-reamer system was deployed for Noble Energy in a deepwater exploration
well in the Troubadour prospect. The Rhino RHE technology eliminated the need
to conduct a dedicated cleanout operation which led to a 30-hour reduction in
drilling time and a cost saving for the operator of approximately $1.3
million.

Production Group

Third-quarter revenue of $4.02 billion increased 3% sequentially, and grew 10%
year-on-year. Pretax operating income of $707 million was 13% higher
sequentially and increased 32% year-on-year.

The group’s revenue increased 3% despite the transfer of the subsea business
to the OneSubsea joint venture. Excluding the effect of the transfer of this
business, the Group grew 6% mainly from strong results in Well Services,
Completions, Artificial Lift and SPM. The rebound from the seasonal spring
break-up in Western Canada accounted for the majority of the sequential
increase in Well Services while a significant proportion came through improved
efficiency in the US land hydraulic fracturing market with the deployment of
additional fleets and crews from existing assets despite continued pricing
weakness. Strong sales of Completions and Artificial Lift products in the
Latin America and Middle East & Asia Areas also contributed to growth.

Pretax operating margin of 17.6% increased 165 bps sequentially  on improved
profitability in Well Services as Western Canada recovered from the previous
quarter’s seasonal spring break-up and as US land margin continued to expand
on improving efficiency, better utilization, and lower raw material costs. SPM
projects in Latin America and Asia also continued to be accretive to the
group’s expanding margins.

Highlights during the quarter included successes for a number of Production
Group technologies.

In Russia, PetroStim, a Schlumberger joint venture, conducted its first
fracturing treatment in the Domanic shale formation of DirectNeft’s Kashaev
block in the Orenburg region. The exploration well was stimulated with
conventional crosslinked fluid with reduced polymer loading and
intermediate-strength proppant. The job was executed as per plan, and the
initial production test showed significant potential.

In North Dakota, a combination of Schlumberger technologies was used for
Whiting Petroleum to optimize the completion design on wells in the Bakken
shale play. An extensive set of measurements was taken from a neighboring
well, including Wireline Sonic Scanner acoustic scanning, ECS elemental
capture spectroscopy, CMR-Plus* magnetic resonance, and Rt Scanner* triaxial
induction logging data. These datasets were used in a model which allowed Well
Services engineers to recommend improvements to the fracturing fluid system,
stage count, pumping schedule, and proppant type. The wells that underwent
this optimized completion design are currently performing in the top quartile
for the particular Whiting Petroleum areas studied.

HiWAY* hydraulic fracturing technology continues to gain momentum and add
value for customers worldwide. Since its commercialization, Schlumberger Well
Services has used the HiWAY technique in over 20,000 fracturing treatments in
19 countries. At the end of the third quarter, the number of HiWAY fracturing
treatments worldwide had already exceeded the total number in 2012 by over
21%. The key benefits leading the expansion of HiWAY technology include
significant production gains from both oil- and gas-bearing reservoirs,
savings associated with reduced water and proppant use, elimination of
premature treatment termination, and new viability of marginal or mature
targets not possible with conventional fracturing treatments.

In Argentina, Well Services Mangrove reservoir-centric stimulation design
software enabled Panamerican Energy to optimize multistage completions on two
exploratory wells in the Lindero Atravesado field in the Neuquén basin. By
using an integrated workflow including the selection of payzones, the
application of specific petrophysics for tight gas formations, and a
methodology to complete the zones efficiently based on an anisotropic model
and the Mangrove fracturing simulator, the best completion approach was
adopted. Following successful completion of the two wells, the results enabled
Panamerican Energy to secure the required budget for starting a development
phase in the area.

In Egypt, Schlumberger Well Intervention performed a workover operation for
PHPC-BP to restore productivity in the Ha’py 10 subsea gas well. ACTive*
family live downhole coiled tubing technology enabled the controlled placement
of the treatment fluid in the well’s upper zone, consisting of two producing
intervals. ACTive distributed temperature sensing, acquired while the well was
flowing, delivered a quantitative production log for the producing zone and
confirmed the contribution from both intervals. The combination of
Schlumberger technologies delivered the real-time data that enabled the
operator to make timely decisions and reduce operational risk. As a result of
this intervention, the upper zone’s productivity index was increased more than
threefold, and the well’s overall production was restored.

In Kazakhstan, Schlumberger Well Intervention and AMS Co., a service division
of CNPC, performed their first joint operation consisting of a complex
carbonate stimulation treatment for CNPC in an oil-producing well in the
Kenkiyak field. Schlumberger provided the technical design, stimulation fluids
and well site job supervision. The stimulation treatment was completed as per
design and the well was returned to a production level which exceeded the
customer’s expectations.

Offshore Mexico, Well Intervention deployed combined ACTive profiling in-well
live performance and Jet Blaster* jetting scale removal technologies for the
first time in the matrix stimulation of a high-temperature well in the
Taratunich field for Pemex. Data interpretation from the ACTive distributed
temperature sensing (DTS) measurements enabled Pemex to optimize the
stimulation treatment in a carbonate formation with highly contrasted
permeability profiles.

In Oman, Schlumberger Completions has been awarded a $30-million contract by
PDO for the provision of gaslift and completion products and associated
services. The five-year contract, with an option for a two-year extension, was
granted based on a strong technical submission and competitive commercial
offering while maximizing national Omani content and in-country value that
included setting up infrastructure, developing nationals, and creating local
employment.

In Norway, Schlumberger Completions has been awarded a four-year contract by
Marathon Oil for the lower completions in their upcoming developments on the
continental shelf. Key to the award was the combination of ResCheck*
technology with ResFlow* inflow control devices and LineSlot* single
wire-wrapped sand screen technologies that enabled efficient standalone screen
installation in long, highly deviated wells, resulting in substantial rig-time
savings.

Onshore India, Schlumberger Artificial Lift has been awarded an electric
submersible pump (ESP) contract worth $15 million by Cairn India Limited. The
three-year sales and services contract covers the supply of ESPs to lift
produced oil and injection water on 63 wells in the Mangala, Aishwarya and
Thumbli fields. This is the first ESP contract awarded to Schlumberger in
India by this customer, and the offering includes technologies such as new
pump-stage designs and low-line harmonic variable speed drives.

In Malaysia, Schlumberger has been awarded a five-year contract for the supply
of cementing services for all six production sharing contract (PSC) operators
who participated in the joint Pan-Malaysian Cementing Tender, including
Petronas Carigali Sdn. Bhd. (PCSB), Murphy Sarawak Oil Co., Ltd. and Murphy
Sabah Oil Co., Ltd. The contract includes the provision of Well Services
DeepCRETE* deepwater cementing solution, FUTUR* self-healing cement system,
EverCRETE* CO2-resistant cement system, Losseal* reinforced composite mat
pills, and FlexSTONE* advanced flexible cement technology. The contract scope
covers conventional and deepwater wells.

                               Financial Tables

                                                                     
Condensed Consolidated Statement of Income
                                                                       
(Stated in millions, except per share amounts)
                                                                       
                                   Third Quarter         Nine Months
Periods Ended September 30         2013       2012       2013         2012
                                                                       
Revenue                            $ 11,608   $ 10,498   $ 33,360     $ 30,648
Interest and other income, net       43         44         105          137
^(1)
Gain on formation of                 -          -          1,028        -
OneSubsea^(2)
Expenses
Cost of revenue                      8,926      8,237      26,047       24,124
Research & engineering               286        291        870          849
General & administrative             110        95         305          294
Merger & integration^(2)             -          32         -            68
Impairment & other^(2)               -          -          456          -
Interest                             98         89         294          246
Income before taxes                  2,231      1,798      6,521        5,204
Taxes on income^(2)                  506        436        1,361        1,268
Income from continuing               1,725      1,362      5,160        3,936
operations
Income (loss) from discontinued      -          65         (69    )     211
operations
Net income                           1,725      1,427      5,091        4,147
Net income attributable to           10         3          23           20
noncontrolling interests
Net income attributable to         $ 1,715    $ 1,424    $ 5,068      $ 4,127
Schlumberger
                                                                       
Schlumberger amounts
attributable to:
Income from continuing             $ 1,715    $ 1,359    $ 5,137      $ 3,916
operations^(2)
Income (loss) from discontinued      -          65         (69    )     211
operations
Net income                         $ 1,715    $ 1,424    $ 5,068      $ 4,127
                                                                       
Diluted earnings per share of
Schlumberger
Income from continuing             $ 1.29     $ 1.02     $ 3.84       $ 2.92
operations^(2)
Income (loss) from discontinued      -          0.05       (0.05  )     0.16
operations
Net income                         $ 1.29     $ 1.07     $ 3.79       $ 3.08
                                                                       
Average shares outstanding           1,322      1,328      1,326        1,331
Average shares outstanding           1,333      1,336      1,336        1,340
assuming dilution
                                                                       
Depreciation & amortization        $ 931      $ 864      $ 2,737      $ 2,570
included in expenses^(3)
                                    
1) Includes interest income of:
Third quarter 2013 - $9 million (2012 - $8 million)
Nine months 2013 - $20 million (2012 - $23 million)
2) See pages 13 for details of charges and credits.
3) Including multiclient seismic data cost.

                                                          
Condensed Consolidated Balance Sheet
                                                            
(Stated in millions)
                                                            
                                             Sept. 30,     Dec. 31,
Assets                                       2013          2012
Current Assets
Cash and short-term investments              $  6,435      $ 6,274
Receivables                                     12,057       11,351
Other current assets                            6,601        6,531
                                                25,093       24,156
Fixed income investments, held to maturity      363          245
Fixed assets                                    14,828       14,780
Multiclient seismic data                        650          518
Goodwill                                        14,623       14,585
Other intangible assets                         4,732        4,802
Other assets                                    4,834        2,461
                                             $  65,123     $ 61,547
                                                            
Liabilities and Equity                                      
Current Liabilities
Accounts payable and accrued liabilities     $  8,366      $ 8,453
Estimated liability for taxes on income         1,471        1,426
Short-term borrowings and current portion
of long-term debt                               2,498        2,121
Dividend payable                                418          368
                                                12,753       12,368
Long-term debt                                  9,916        9,509
Postretirement benefits                         1,833        2,169
Deferred taxes                                  1,479        1,493
Other liabilities                               1,111        1,150
                                                27,092       26,689
Equity                                          38,031       34,858
                                             $  65,123     $ 61,547
                                                              

                                   Net Debt

“Net Debt” represents gross debt less cash, short-term investments and fixed
income investments, held to maturity. Management believes that Net Debt
provides useful information regarding the level of Schlumberger’s indebtedness
by reflecting cash and investments that could be used to repay debt. Details
of changes in Net Debt for the year to date follow:

                                                    
(Stated in millions)
                                                                   
Nine Months                                          2013
Net Debt, January 1, 2013                            $ (5,111 )
      Income from continuing operations                5,137
      Depreciation and amortization                    2,737
      Gain on formation of OneSubsea                   (1,028 )
      Pension and other postretirement benefits        388
      expense
      Stock-based compensation expense                 255
      Pension and other postretirement benefits        (468   )
      funding
      Increase in working capital                      (1,182 )
      Capital expenditures                             (2,753 )
      Multiclient seismic data capitalized             (300   )
      Dividends paid                                   (1,196 )
      Proceeds from employee stock plans               415
      Stock repurchase program                         (1,526 )
      Payment for OneSubsea transaction                (600   )
      Other business acquisitions, net of cash and     (544   )
      debt acquired
      Other                                            203
      Currency effect on net debt                      (43    )
Net Debt, September 30, 2013                         $ (5,616 )
                                                                     
Components of Net Debt                               Sept. 30,      Dec. 31,
                                                     2013           2012
Cash and short-term investments                      $ 6,435        $ 6,274
Fixed income investments, held to maturity             363            245
Short-term borrowings and current portion of           (2,498 )       (2,121 )
long-term debt
Long-term debt                                         (9,916 )       (9,509 )
                                                     $ (5,616 )     $ (5,111 )
                                                                              

                              Charges & Credits

In addition to financial results determined in accordance with US generally
accepted accounting principles (GAAP), this Third-Quarter Press Release also
includes non-GAAP financial measures (as defined under the SEC’s Regulation
G). The following is a reconciliation of these non-GAAP measures to the
comparable GAAP measures:

                                                                         
               (Stated in millions, except per share amounts)
                                                             
               Third Quarter 2012
                                      Noncont.                Diluted     Income
               Pretax       Tax       Interest   Net          EPS         Statement
                                                                          Classification
Schlumberger
income from
continuing     $ 1,798      $ 436     $   3      $ 1,359      $ 1.02
operations,

as reported
Merger and                                                                Merger &
integration      32           4           -        28           0.02      integration
costs
Schlumberger
income from
continuing
operations,    $ 1,830      $ 440     $   3      $ 1,387      $ 1.04   

excluding
charges &
credits
                                                                           
               Nine Months 2013
                                      Noncont.                Diluted     Income
               Pretax       Tax       Interest   Net          EPS         Statement
                                                                          Classification
Schlumberger
income from
continuing     $ 6,521      $ 1,361   $   23     $ 5,137      $ 3.84
operations,

as reported
Currency
devaluation      92           -           -        92           0.07      Impairment &
loss in                                                                   other
Venezuela
Gain on
formation of                                                              Gain on
OneSubsea        (1,028 )     -           -        (1,028 )     (0.77 )   formation of
joint                                                                     OneSubsea
venture
Impairment
of equity        364          19          -        345          0.26      Impairment &
method                                                                    other
investments
Schlumberger
income from
continuing
operations,    $ 5,949      $ 1,380   $   23     $ 4,546      $ 3.40   

excluding
charges &
credits
                                                                           
               Nine Months 2012
                                      Noncont.                Diluted     Income
               Pretax       Tax       Interest   Net          EPS         Statement
                                                                          Classification
Schlumberger
income from
continuing     $ 5,204      $ 1,268   $   20     $ 3,916      $ 2.92
operations,

as reported
Merger and                                                                Merger &
integration      68           6           -        62           0.05      integration
costs
Schlumberger
income from
continuing
operations,    $ 5,272      $ 1,274   $   20     $ 3,978      $ 2.97   

excluding
charges &
credits
                                                                           
               Second Quarter 2013
                                      Noncont.                Diluted     Income
               Pretax       Tax       Interest   Net          EPS         Statement
                                                                          Classification
Schlumberger
income from
continuing     $ 2,673      $ 449     $   5      $ 2,219      $ 1.66
operations,

as reported
Gain on
formation of                                                              Gain on
OneSubsea        (1,028 )     -           -        (1,028 )     (0.77 )   formation of
joint                                                                     OneSubsea
venture
Impairment
of equity        364          19          -        345          0.26      Impairment &
method                                                                    other
investments
Schlumberger
income from
continuing
operations,    $ 2,009      $ 468     $   5      $ 1,536      $ 1.15   

excluding
charges &
credits
                                                                           
                                                                           
There were no charges or credits in the third quarter of 2013.

                                                                                  
Product Groups
(Stated in millions)
                    Three Months Ended
                    Sept. 30, 2013           Jun. 30, 2013            Sept. 30, 2012
                                 Income                   Income                   Income
                    Revenue      Before      Revenue      Before      Revenue      Before
                                 Taxes                    Taxes                    Taxes
Oilfield Services
Reservoir           $ 3,232      $ 983       $ 3,014      $ 908       $ 2,835      $ 799
Characterization
Drilling              4,415        894         4,292        804         4,035        727
Production            4,024        707         3,926        625         3,655        537
Eliminations &        (63    )     (88   )     (50    )     (59   )     (27    )     21     
other
                      11,608       2,496       11,182       2,278       10,498       2,084
Corporate & other     -            (179  )     -            (181  )     -            (177  )
Interest              -            6           -            4           -            8
income^(1)
Interest              -            (92   )     -            (92   )     -            (85   )
expense^(1)
Charges & credits     -            -           -            664         -            (32   )
                    $ 11,608     $ 2,231     $ 11,182     $ 2,673     $ 10,498     $ 1,798  
                                                                                    
Geographic Areas
(Stated in millions)
                    Three Months Ended
                    Sept. 30, 2013           Jun. 30, 2013            Sept. 30, 2012
                                 Income                   Income                   Income
                    Revenue      Before      Revenue      Before      Revenue      Before
                                 Taxes                    Taxes                    Taxes
Oilfield Services
North America       $ 3,602      $ 730       $ 3,357      $ 662       $ 3,303      $ 612
Latin America         1,934        399         1,913        394         1,860        333
Europe/CIS/Africa     3,178        714         3,125        643         2,984        645
Middle East &         2,801        730         2,667        655         2,244        511
Asia
Eliminations &        93           (77   )     120          (76   )     107          (17   )
other
                      11,608       2,496       11,182       2,278       10,498       2,084
Corporate & other     -            (179  )     -            (181  )     -            (177  )
Interest              -            6           -            4           -            8
income^(1)
Interest              -            (92   )     -            (92   )     -            (85   )
expense^(1)
Charges & credits     -            -           -            664         -            (32   )
                    $ 11,608     $ 2,231     $ 11,182     $ 2,673     $ 10,498     $ 1,798  
                                                                                    
^(1) Excludes interest included in the Product Groups and Geographic Areas Results.

                                                                     
Product Groups
(Stated in millions)
                               Nine Months Ended
                               Sept. 30, 2013             Sept. 30, 2012
                                             Income                    Income
                               Revenue       Before       Revenue      Before
                                             Taxes                     Taxes
Oilfield Services
Reservoir Characterization     $8,996        $2,616       $8,066       $2,183
Drilling                       12,820        2,429        11,772       2,102
Production                     11,708        1,888        10,896       1,746
Eliminations & other           (164)         (193)        (86)         (26)
                               33,360        6,740        30,648       6,005
Corporate & other              -             (529)        -            (516)
Interest income^(1)            -             15           -            24
Interest expense^(1)           -             (277)        -            (241)
Charges & credits              -             572          -            (68)
                               $33,360       $6,521       $30,648      $5,204
                                                                        
Geographic Areas
(Stated in millions)
                               Nine Months Ended
                               Sept. 30, 2013             Sept. 30, 2012
                                             Income                    Income
                               Revenue       Before       Revenue      Before
                                             Taxes                     Taxes
Oilfield Services
North America                  $10,249       $2,019       $10,112      $2,082
Latin America                  5,751         1,164        5,483        1,010
Europe/CIS/Africa              9,154         1,865        8,485        1,666
Middle East & Asia             7,874         1,933        6,290        1,372
Eliminations & other           332           (241)        278          (125)
                               33,360        6,740        30,648       6,005
Corporate & other              -             (529)        -            (516)
Interest income^(1)            -             15           -            24
Interest expense^(1)           -             (277)        -            (241)
Charges & credits              -             572          -            (68)
                               $33,360       $6,521       $30,648      $5,204
                                                                        
^(1) Excludes interest included in the Product Groups and Geographic Areas
Results.
 

About Schlumberger

Schlumberger is the world’s leading supplier of technology, integrated project
management and information solutions to customers working in the oil and gas
industry worldwide. Employing approximately 120,000 people representing over
140 nationalities and working in more than 85 countries, Schlumberger provides
the industry’s widest range of products and services from exploration through
production.

Schlumberger Limited has principal offices in Paris, Houston and The Hague,
and reported revenues from continuing operations of $41.73 billion in 2012.
For more information, visit www.slb.com.

*Mark of Schlumberger or of Schlumberger Companies.

^†Japan Oil, Gas and Metals National Corporation (JOGMEC), formerly Japan
National Oil Corporation (JNOC), and Schlumberger collaborated on a research
project to develop LWD technology. The EcoScope and NeoScope services use
technology that resulted from this collaboration.

Notes

Schlumberger will hold a conference call to discuss the above announcement and
business outlook on Friday, October 18, 2013. The call is scheduled to begin
at 8:00 a.m. US Central Time (CT), 9:00 a.m. Eastern Time (ET). To access the
call, which is open to the public, please contact the conference call operator
at +1-800-230-1059 within North America, or +1-612-234-9959 outside of North
America, approximately 10 minutes prior to the call’s scheduled start time.
Ask for the “Schlumberger Earnings Conference Call.” At the conclusion of the
conference call, an audio replay will be available until November 18, 2013 by
dialing +1-800-475-6701 within North America, or +1-320-365-3844 outside of
North America, and providing the access code 298703.

The conference call will be webcast simultaneously at www.slb.com/irwebcast on
a listen-only basis. Please log in 15 minutes ahead of time to test your
browser and register for the call. A replay of the webcast will also be
available at the same web site.

Supplemental information in the form of a question and answer document on this
press release and financial information is available at www.slb.com/ir.

Contact:

Schlumberger Limited
Malcolm Theobald – Schlumberger Limited, Vice President of Investor Relations
Joy V. Domingo – Schlumberger Limited, Manager of Investor Relations
Office +1 (713) 375-3535
investor-relations@slb.com
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