Schlumberger’s one-week returns compared to peers
Schlumberger’s (SLB) one-week return was 0% on November 3, 2017. In comparison, since October 27, 2017, the Energy Select Sector SPDR ETF (XLE) has risen 2%. The VanEck Vectors Oil Services ETF (OIH) saw 5% one-week returns. So, SLB underperformed both XLE and OIH in the past week. The Dow Jones Industrial Average (DJIA-INDEX) remained unchanged in the week ending November 3, 2017. During this period, the SPDR S&P 500 ETF (SPY) performed in line with SLB. SPY has also produced 0% returns during this period. Read more about SLB in Market Realist’s Schlumberger: A Look at Its Fiscal 3Q17 Performance.
Crude oil price and rigs
West Texas Intermediate (or WTI) prices rose 6% in the week ending November 3, 2017. Despite that, 11 more rigs went offline in the US during the week. For the latest on energy prices, read Market Realist’s Global Crude Oil Glut: Is It Shrinking?
Recent developments that could affect Schlumberger’s returns
- SLB is slated to complete the OneStim joint venture (or JV) with Nabors Industries (NBR) during 2H17. On October 24, WFT confirmed that it expects to close the JV before the end of the year. The JV has made progress on integration and is finalizing the contractually agreed-upon price adjustments.
- On October 19, 2017, Canadian exploration and production company Torxen Energy and Schlumberger entered a definitive agreement with Cenovus Energy (CVE) to purchase Palliser Block, located in Alberta, Canada, for ~$1.0 billion.
- SLB is currently drilling and completing the 11th well in the SM Energy (SM) project in the Powder River Basin.
- In the 3Q17 earnings conference call on October 20, SLB’s management identified the cost of scaling up and scaling down capacity as its biggest risk to its full cycle returns in the core business.
Read more on Schlumberger in Schlumberger: A Look at Its Fiscal 3Q17 Performance.
In this series, we’ll look at Schlumberger and its correlation with crude oil. We’ll discuss Schlumberger’s stock price forecast next.