This summary is based on the fourth quarter fiscal 2007 earnings call conducted by Schlumberger Limited (SLB: chart) on January 18, 2008.

Management:

- Vice President of Investor Relations: Malcolm Theobald
- Chairman of the Board, Chief Executive Officer: Andrew F. Gould
- Chief Financial Officer, Executive Vice President: Simon Ayat

Key Investors Issues

- Net income reached $1.37 billion or $1.12, up 21% from $1.13 billion or 92 cents in the prior year.
- Revenue increased 17% to $6.25 billion.
- The Board of Directors approved a 20% increase in the quarterly dividend.

Full Year Highlights:

- Net income increased 35.6% to $5.16 billion or $4.18 per-share from $3.71 billion or $3.04 in 2006.
- Revenues were up 21% from $19.23 billion in the prior year to $23.28 billion.
- The firm repurchased 16.3 million shares of common stock at an average price of $82.94 for a total of $1.35 billion.

Fourth Quarter Highlights:

Revenue increased by 16.8% to $6.25 billion from $5.35 billion in 2006 as a result of driven by strong demand for oilfield services particularly in the Eastern Hemisphere and Latin America.

- All Technologies showed double-digit improvement, with Drilling & Measurements, Well Testing and Integrated Project Management recording the highest overall growth rates.
- Though strong sequential revenue growth contributed significantly to overall performance, a less favorable Oilfield Services revenue mix, lower pricing in US land operations, and a number of exceptional and seasonal weather effects led to less than satisfactory margins.
- In addition, strong WesternGeco Multiclient sales failed to offset lower Marine utilization due to several vessels dry docking or seasonally transiting to new contracts with consequent margin decline.

Net income, excluding a $17 million after-tax gain on the sale of certain workover rigs, reached $1.37 billion or $1.12, up 21% from $1.13 billion or 92 cents in the prior year.

- During the second half of 2007, IPM mobilized and started 17 drilling rigs for the Mezosoico and Alianza projects and the results included the expensing of significant startup costs associated with both projects.
- However, with the exception of pricing for certain Oilfield Services activities on land in North America, the events in the quarter were largely seasonal or reflected the startup cost of new IPM activities and do not represent a change in the underlying trends.
- The Board of Directors increased the quarterly dividend by 20% to 21 cents per share.

As part of the previously announced 40 million-share repurchase program, the company repurchased 5.8 million shares of common stock at an average price of $95.67 for a total of $557 million in the quarter.

- The company has remaining authorization to repurchase 10.1 million shares of common stock.
- Net debt was $1.9 billion and significant liquidity events during the quarter included $557 million for the stock buy-back program; $984 million for capital expenditure and $699 million for the Eastern Echo transaction.
- Capital expenditure, excluding $65 million dollar of multi-client surveys capitalized was $919 million for the quarter, reaching $2.9 billion for full year.

Natural gas drilling in North America is not expected to vary greatly in the absence of any severe weather in the remaining winter months.

- High utilization of the existing offshore rig fleet and limited new builds entering the market during the year will not only limit growth, but also make activity vulnerable to operating efficiency.
- However, growth in land activity outside North America will remain strong, while seismic exploration services worldwide will remain in high demand both on land and offshore as the industry gears up for the expanding exploration cycle.
- Within this context, technology that assists the firm’s customers in mitigating risk in exploration and development projects, increasing recovery factors and improving operational efficiency will remain at a premium.

In the longer term however, current levels of drilling are insufficient to meaningfully slow decline rates, improve reservoir recovery or add sufficient new production capacity.

- The explosion in exploration licenses awarded in the last three years, the continual expansion of the number of new offshore rigs being ordered for delivery through and beyond the end of the decade, and the industry-wide, as well as plans to increase both capex and research and development spend are clear indicators of future growth.
- It is the firm’s view that only a global economic recession that lowers demand can flatten this trend.

Other Events:

- The firm acquired Eastern Echo Holding plc, a Dubai-based marine seismic company, to boost plans to meet demand for market-leading WesternGeco Q-Marine seismic technology services.
- Eastern Echo has a total of six high-performance 3D seismic vessels on order and these are ideally suited for the exploration and development markets of the future.
- The firm also acquired an additional 5.5% in Framo Engineering AS to take its holding to a majority of 52.75%. A Norwegian-based company, Framo provides multiphase booster pumps, flow metering equipment and swivel stack systems.