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A Review of Schlumberger's Performance on September 8

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A Review of Schlumberger's Performance on September 8 PART 1 OF 3

Schlumberger’s One-Year Returns on September 8

How Schlumberger stock compares

Schlumberger’s (SLB) stock price fell 16% YoY (year-over-year) on September 8, 2017. Since September 8, 2016, the Energy Select Sector SPDR ETF (XLE) had fallen 8%. XLE represents the broader energy industry. The VanEck Vectors Oil Services ETF (OIH) saw -16% one-year returns. Therefore, SLB has underperformed XLE, but performed in line with OIH in the past year. The Dow Jones Industrial Average (DJIA-INDEX) had risen 21% since September 8, 2016. The SPDR S&P 500 ETF (SPY) has also performed better than Schlumberger, returning 16%.

Schlumberger’s One-Year Returns on September 8

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Crude oil prices and rigs

On September 8, 2017, the price of West Texas Intermediate (or WTI) was 3% higher than a year prior. Prompted by crude oil’s strong price, the US rig count had risen 86% in the past year. For more about crude oil’s recent drivers, read Crude Oil: How It Influences Your Energy Investments. Also, for more about large-cap OFS (oilfield service) companies such as National Oilwell Varco (NOV) and Schlumberger, read SLB, HAL, NOV, WFT: How They Stack Up after 2Q17.

Recent events that could affect Schlumberger’s returns

  • Schlumberger bought Petrofac’s stake in Petro-SPM Integrated Services on August 15, bringing Schlumberger’s ownership to 100%
  • on July 20, 2017, SLB signed an agreement with Eurasia Drilling Company (or EDC) to acquire a 51% controlling stake in the company, though the Federal Antimonopoly Service of Russia may object
  • US land activity is expected to remain strong throughout 2H17, as SLB’s hydraulic fracturing calendar is booked well into 4Q17 on improved demand for drilling services
  • in 2H17, SLB is on track to complete a joint venture with Nabors Industries (NBR), OneStim, which will provide additional hydraulic horse power capacity and a full suite of multistage completion technology
  • OPEC1 Gulf countries and Russia are expected to see strong activity in the remainder of 2017, which could benefit Schlumberger

For more on Schlumberger, read Schlumberger Sees Twists and Turns before Its Recovery.

Series highlights

In this series, we’ll look at Schlumberger and its correlation with crude oil. In the next part, we’ll discuss Schlumberger’s stock price forecast.

  1. Organization of the Petroleum Exporting Countries
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