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Schlumberger Net Doubles

Schlumberger Ltd., the largest oilfield services provider, said profit more than doubled as an increase in onshore drilling in the U.S. and Canada offset a slowdown in the Gulf of Mexico as a result of the moratorium.

Schlumberger Net Doubles

Net income in the third quarter increased to $1.7 billion, or $1.38 a share, from $787 million, or 65 cents, a year earlier, Schlumberger said today in a statement. Excluding one- time gains and credits, profit was 70 cents a share, matching the average of 32 analyst estimates compiled by Bloomberg. Sales climbed 26 percent to $6.85 billion.

“We do not expect any rapid return to deepwater drilling in the U.S. Gulf of Mexico despite the lifting of the moratorium,” Chief Executive Officer Andrew Gould said in the statement. The impact to Schlumberger, which is based in Houston and Paris, from the drilling ban was about 2 to 3 cents in the quarter, the company said.

Outside North America, delays being induced by “the knock- on effect” of the BP Plc oil spill “are now being reabsorbed,” the CEO said. “This and the recent strength in oil prices give us some optimism that the rate of recovery overseas will accelerate slightly.”

The number of rigs active in North America climbed 55 percent at the end of the third quarter from a year earlier, according to Baker Hughes Inc., which tracks worldwide use of the equipment.

‘Stronger Activity’

“The growth is primarily driven by activity and pricing in the North American market,” said Scott Gruber, an analyst at Sanford C. Bernstein in New York, who rates the shares “market perform” and owns none. “On a year over year basis, it’s overall stronger activity, in shale gas, particularly in tight oil plays.”

Other oilfield servicers Halliburton Co., based in Houston, and Weatherford International Ltd., based in Geneva, Switzerland, reported third-quarter earnings earlier this week that showed weaker-than-expected results outside of North America.

“There’s been some degradation in profitability internationally, but it’s being more than offset by activity and pricing gains domestically,” Gruber said in a telephone interview before the earnings were released.

Exploration Spending

Gould said at an energy conference in London on Oct. 13 that customer spending on exploration will probably increase for the next few years.

Producers were expected to boost spending outside of North America by 9 percent this year, 12 percent next year, “and move upward at a healthy rate through at least the middle of the decade,” James D. Crandell and James C. West, analysts at Barclays Capital, wrote July 6 in a note to investors. The markets outside North America make up about 75 percent of global spending, according to the note.

The earnings statement was released before the opening of trading on U.S. markets. Schlumberger was little changed at $64.31 yesterday in New York Stock Exchange composite trading. The shares, which have 33 buy and 4 hold ratings from analysts, climbed 11 percent during the third quarter.

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