- U.S. shale production likely will slow this year as drillers cut their budgets in response to lower oil prices, says Schlumberger (NYSE:SLB) CEO Paal Kibsgaard, who is seeing the company's customers taking a more conservative spending approach so far.
- "We could be facing a more moderate growth in U.S. shale production in coming years," Kibsgaard said during today’s earnings conference call.
- While drilling activity should pick up outside the U.S., "I think it’s going to be a fairly tough year in North America," the CEO said, expecting U.S. shale producers will spend within cash flow and focus on drilled but uncompleted wells instead of drilling new ones.
- Assuming WTI oil prices recover to average roughly 2018 levels of at least $60/bbl, operator focus on some of the thousands of DUCs would still drive U.S. production growth but at a rate "substantially" lower than the 1.9M bbl/day in 2018, Kibsgaard said.
- Despite volatile oil prices and expected slower activity in early 2019, SLB is "more or less sold out" of its high-end product lines and advanced technologies, according to Kibsgaard, adding that much of the company's 2019 planned capex of $1.5B-$1.7B will focus on making sure it has enough capacity to take on more work requiring that equipment.
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- Now read: Halliburton (NYSE:HAL): My Opinion After Third-Quarter 2018
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