• Fourth-quarter revenue of $7.9 billion increased 5% sequentially and 27% year on year
• Fourth-quarter GAAP EPS of $0.74 increased 17% sequentially and 76% year on year
• Fourth-quarter EPS, excluding charges and credits, of $0.71 increased 13% sequentially and 73% year on year
• Fourth-quarter cash flow from operations was $1.6 billion and free cash flow was $0.9 billion
• Board approved a 43% increase in quarterly cash dividend to $0.25 per share
• Full-year revenue of $28.1 billion increased 23% year on year
• Full-year GAAP EPS of $2.39 increased 81% year on year
• Full-year EPS, excluding charges and credits, of $2.18 increased 70% year on year
• Full-year net income attributable to SLB of $3.4 billion increased 83% year on year
• Full-year adjusted EBITDA of $6.5 billion increased 31% year on year
• Full-year cash flow from operations was $3.7 billion

SLB CEO Olivier Le Peuch commented, 
“We delivered strong fourth-quarter results and concluded a remarkable year for SLB with great success. Revenue grew across all Divisions and geographical areas, with robust year-end sales in digital and particularly strong service activity offshore and in the Middle East where we witnessed a significant inflection as capacity expansion projects mobilized.

“Sequentially, fourth-quarter revenue grew 5%; EPS, excluding charges and credits, expanded to $0.71; and adjusted EBITDA margins grew to 24.4%—219 basis points (bps) higher than the same quarter last year—exceeding our target exit rate. More importantly, fourth-quarter pretax segment operating margins and EPS were the highest since 2015, reflecting our enhanced earnings power and potential as activity growth momentum is sustained through the next few years.

An Outstanding Year of Success with Significant Tailwinds

“We concluded the year with 23% growth in revenue; 70% growth in EPS, excluding charges and credits; adjusted EBITDA margin expansion of 152 bps; cash flow from operations of $3.7 billion; and 13% ROCE, its highest level since 2014.

“Overall, 2022 was transformative for SLB as we set new safety, operational, and performance benchmarks for our customers and strengthened our market position both internationally and in North America. We launched our bold new brand identity, reinforcing our leadership position in energy technology, digital, and sustainability, and demonstrated our ability to deliver superior earnings in this early phase of a structural upcycle in energy.

“In North America, we seized the growth cycle throughout the year, increased our pretax operating margins close to 600 bps, and almost doubled our pretax operating income. We effectively harnessed our refocused portfolio, fit-for-basin technology, and performance differentiation to gain greater market access and improved pricing, particularly in the drilling markets where we significantly outperformed rig count growth. Today, we have built one of the highest-quality oilfield services and equipment businesses in North America through the implementation of our returns-focused strategy.

“In the international markets, after a first half of the year that was impacted by geopolitical conflict and supply chain bottlenecks, activity began to visibly inflect in the second half of the year, resulting in full year revenue growth of 20% and margin expansion of more than 150 bps. We laid the foundation for further growth and margin expansion through pricing improvements and a solid pipeline of incremental contract awards. In the Middle East, SLB is well positioned to be a key beneficiary of this visible market expansion, and we expect record levels of upstream investment by NOCs to continue in the next few years. During the year, we secured a sizeable share of tender awards in the region, driven by our differentiated performance, fit-for-purpose technology, and best-in-class local content. Similarly, across offshore basins, we continue to consolidate our advantaged position with new contract awards, particularly in Latin America and Africa.

“In this context, our investments in capex and inventory increased as we exited the year in support of new international and offshore project mobilizations. These factors, combined with lower-than-expected year-end collections, resulted in free cash flow reducing to $0.9 billion for the fourth quarter. Despite these effects, we continued to strengthen our balance sheet during the quarter by reducing both net and gross debt.

“Beyond our financial results, we made significant progress in our sustainability initiatives during the year. We reduced our Scope 1 and 2 carbon emissions intensity and launched several new Transition Technologies* to support the decarbonization of oil and gas. Our Transition Technologies portfolio revenue grew more than 30% year on year, and we project it will cross the $1 billion revenue mark in 2023.

“Finally, we initiated increased returns to shareholders, demonstrating confidence in our strategy, our financial outperformance, and our commitment to superior returns. We increased our dividend by 40% in April 2022, followed by a further 43% increase today, and we resumed our share buyback program this month.

“I am extremely proud of our full-year results, and I would like to extend my thanks to the entire team for their outstanding performance.”

Primed for Strong Growth and Returns—A Distinctive New Phase in the Upcycle

Le Peuch said, 
“The fourth quarter affirmed a distinctive new phase in the upcycle. In the Middle East, revenue increased by double digits sequentially, with growth in Saudi Arabia, Iraq, and the United Arab Emirates in the solid teens, affirming the much-anticipated acceleration of activity in the region. Offshore activity continued to strengthen, partially offset by seasonality in the Northern Hemisphere. In North America, US land rig count remains at robust levels, although the pace of growth is moderating. Additionally, pricing continues to trend favorably, extending beyond North America and into the international regions, supported by new technology and very tight equipment and service capacity in certain markets.

“These activity dynamics, improved pricing, and our commercial success—particularly in the Middle East, offshore, and North American markets—combine to set a very strong foundation for outperformance in 2023.

“Looking ahead, we believe the macro backdrop and market fundamentals that underpin a strong multi-year upcycle for energy remain very compelling in oil and gas and in low-carbon energy resources. First, oil and gas demand is forecast by the International Energy Agency (IEA) to grow by 1.9 million barrels per day in 2023 despite concerns for a potential economic slowdown in certain regions. In parallel, markets remain very tightly supplied. Second, energy security is prompting a sense of urgency to make further investments to ensure capacity expansion and diversity of supply. And third, the secular trends of digital and decarbonization are set to accelerate with significant digital technology advancements, favorable government policy support, and increased spending on low-carbon initiatives and resources.

“Based on these factors, global upstream spending projections continue to trend positively. Activity growth is expected to be broad-based, marked by an acceleration in international basins. These positive activity dynamics will be amplified by higher service pricing and tighter service sector capacity. The impact of loosening COVID-19 restrictions and an earlier than expected reopening of China could support further upside potential over 2023.

“Overall, the combination of these effects will result in a very favorable mix for SLB with significant growth opportunities in our Core, Digital, and New Energy. We expect another year of very strong growth and margin expansion. We have a clear strategy, an advantaged portfolio, and the right team in place to drive our business forward. I look forward to another successful year for our customers and our shareholders.”

Other Events

On October 26, 2022, SLB announced it entered into an agreement to acquire Gyrodata Incorporated, a global company specializing in gyroscopic wellbore positioning and survey technology. The acquisition will integrate Gyrodata’s wellbore placement and surveying technologies within SLB’s Well Construction business, to bring customers innovative drilling solutions. The transaction is subject to regulatory approvals and is expected to close in the first quarter of 2023.

In December 2022, SLB repurchased $804 million of its outstanding notes, consisting of $395 million of 3.75% Senior Notes due 2024 and $409 million of 4.00% Senior Notes due 2025.

On January 19, 2023, SLB’s Board of Directors approved a 43% increase in SLB’s quarterly cash dividend from $0.175 per share of outstanding common stock to $0.25 per share, beginning with the dividend payable on April 6, 2023, to stockholders of record on February 8, 2023.

Contract Awards

As the strong growth cycle in oil and gas advances, SLB continues to secure new contracts in North America and internationally, particularly in offshore basins and the Middle East. During the quarter, SLB secured the following notable projects:

• Abu Dhabi National Oil Company (ADNOC) awarded SLB a $1.4 billion framework agreement for integrated drilling fluids services to support onshore and offshore production over the next five years. The services include drilling fluids, liquid mud plants, personnel, and waste management. The agreement builds on existing SLB contributions to ADNOC’s vision to expand lower-cost, lower-carbon production and supports the acceleration of its production capacity target of five million barrels of oil per day by 2027.
• In Malaysia, Sarawak Shell Berhad awarded SLB a long-term integrated drilling services (LTIDS) contract for exploration and development of offshore wells. The LTIDS will deliver solutions via technology, synergy, and simplification of processes across multiple business lines with a contract scope that encompasses drilling services and products inclusive of drilling and measurement, electrical wireline, drilling fluids, solids control, cementing, casing drilling, bits, mud logging, and management of third-party subcontractors. SLB will leverage its sustainability portfolio to help Shell deliver cleaner well operations in complex environments.
• Offshore Angola, Azule Energy awarded SLB a contract for integrated completions in Block 15/06, including Agogo Field wells. This full-field development plan uses a completion design for these producing and injection wells that includes fit-for-purpose technologies suited for the deepwater environment, such as Alternate Path®† sand screens, FORTRESS* premium isolation valves, BluePack* production packers, Metris Extreme* high-pressure and high-temperature permanent pressure testing gauges, and a deep-set TRC-II* tubing-retrievable charged safety valve.
• In the UK, Equinor awarded SLB a four-year contract extension to continue support for Mariner Field development in the North Sea. The integrated drilling and well services contract includes drilling, measurement, electric wireline logging, drilling and completions fluids, solids control, cementing, completions, and electrical submersible pump systems, together with engineering and project management. Including delivery of more than 20 wells over the four years, the contract extension builds on the collaboration between Equinor and SLB and the implementation of well construction technologies and digital solutions that have enabled highest achievements in safety, performance, and sustainability in Mariner Field.
• Offshore Trinidad and Tobago, bp awarded to Subsea Integration Alliance a large contract for its Cypre project, a two-phase liquid natural gas tieback. The contract scope covers the engineering, procurement, construction, and installation (EPCI) of the subsea production systems and subsea pipelines. The award represents Subsea Integration Alliance’s first fully integrated EPCI single contract with bp and the alliance’s first development in the Caribbean nation.
• In India, Cairn Oil & Gas, Vedanta Limited awarded SLB a $400 million contract to provide integrated services on its Rajasthan block over a five-year period. The scope of work encompasses 14 services from across all four of SLB’s Divisions, with the objective of improving efficiency in the intervention and workover space, thereby boosting production from the block.

New Energy

SLB’s domain expertise and experience in technology industrialization is helping to lead the energy transition. The company continue to work with partners across various industries to innovate clean energy solutions for a balanced planet.

• SLB and Linde entered into a strategic collaboration on carbon capture, utilization, and sequestration (CCUS) projects to accelerate decarbonization solutions across industrial and energy sectors. The collaboration will combine decades of experience in CO2 capture and sequestration; innovative technology portfolios; project development and execution expertise; and engineering, procurement, and construction (EPC) capabilities. CO2 is found or produced in many industrial and energy applications. This collaboration will focus on hydrogen and ammonia production, where CO2 is a by-product, and on natural gas processing. CCUS abates the emissions from these energy-intensive industries, creating new low-carbon energy sources and products. Using SLB and Linde’s global footprint across multiple sectors and industries, the collaboration will expand customer reach and will focus on designing business and operating models that maximize value for all stakeholders.
• Genvia, the clean hydrogen technology venture of SLB, France’s CEA, and partners, was selected by the European Commission as part of the Important Project of Common European Interest in the hydrogen technology program (IPCEI-Hy2Tech). Genvia will receive up to 200 million euros from the French Government’s France 2030 fund as part of the program. The grant will be used to accelerate the time to market of Genvia high-performance electrolyzer technology.
• SLB is collaborating with Oman’s Ministry of Energy and Minerals and the Oman Investment Authority in building a national strategy to develop the potential of Oman’s geothermal resources. This follows the completion of an extensive project to evaluate data from more than 7,000 oil, gas, and water wells, with the objective of mapping sweet spots for geothermal prospects in the country. The next phase will include assessment of the economic feasibility of the development of potential geothermal resources. This collaboration between the Ministry of Energy and Minerals, Oman Investment Authority, and SLB is in line with Oman’s efforts to decarbonize the energy sector, achieve its net zero goal, and implement Oman Vision 2040.
• Celsius Energy, a venture of SLB’s New Energy business focused on heating and cooling solutions for buildings, was awarded a contract for one of the 10 largest geoenergy projects in Europe, where demand for low-carbon and locally sourced energy is rising. This project, based in the eastern region of France, will provide heating and cooling to dozens of buildings by combining geoenergy and waste heat from the world’s largest particle accelerator. Celsius Energy’s proprietary technology will enable the project to be completed with a limited drilling footprint of 174 bores and will leverage patented digital modeling and control capability for smart grid performance optimization.

KeyFacts Energy Industry Directory: SLB