Schlumberger Announces Second-Quarter 2012 Results

Schlumberger Limited (NYSE:SLB) today reported second-quarter 2012
revenue of $10.45 billion versus $9.92 billion in the first quarter of
2012, and $8.99 billion in the second quarter of 2011.

Income from continuing operations attributable to Schlumberger,
excluding charges and credits, was $1.4 billion?an increase of 8%
sequentially and 20% year-on-year. Diluted earnings-per-share from
continuing operations, excluding charges and credits, was $1.05 versus
$0.96 in the previous quarter, and $0.86 in the second quarter of 2011.

Following Schlumberger′s previously announced sale of both the Wilson
distribution business and its equity ownership interest in CE Franklin
Ltd. (CE Franklin), the Distribution segment has been reclassified to
discontinued operations. All prior periods have been restated
accordingly.

Schlumberger recorded charges of $0.02 per share in the second quarter
and $0.01 per share in the first quarter of 2012 and $0.05 per share in
the second quarter of 2011.

Oilfield Services revenue of $10.45 billion was up 5% sequentially and
increased 16% year-on-year. Pretax segment operating income of $2.1
billion was up 8% sequentially and increased 20% year-on-year.

Schlumberger CEO Paal Kibsgaard commented, 'Solid activity growth and a
consistent focus on execution led to results that continued to
strengthen in the second quarter.

Internationally, sequential results were underpinned by activity growth
both offshore and in key land markets. Latin America and Middle East &
Asia Areas both progressed well, while Europe, CIS and Africa showed
particular strength across the Area. In North America, the Canadian
spring break-up and the weakness in the US land hydraulic fracturing
market lowered results although this was tempered by robust performance
in other land businesses and in the US Gulf of Mexico.

Service capacity tightened further during the quarter, particularly for
seismic, wireline and drilling services. We continued to test pricing on
smaller contracts and we were successful in securing work at pricing
premiums in some cases due to the quality and consistency of our
performance.

Schlumberger Production Management saw increased activity with the
flawless startup on the Shushufindi field in Ecuador, and success in
securing future work with the award of the Panuco block in Mexico in
partnership with Petrofac.

The quarter saw several significant new technology introductions. These
included the rollout of the groundbreaking WesternGeco IsoMetrix true 3D
seismic acquisition and processing system, and the unique Drilling &
Measurements fully sourceless NeoScope formation evaluation tool. In
addition, the Mangrove stimulation design software that brings enhanced
decision making to well completions was announced.

Against these results, the worsening of the Eurozone crisis and the
disappointing numbers from China and the US led to downward revisions of
GDP growth and oil demand. Together with inventory builds from higher
OPEC production, these brought oil prices lower in spite of tight global
spare oil capacity and potential production disruption due to
geopolitical events. With the situation in the global economies
remaining unsettled, the present climate of uncertainty is likely to
remain for some time to come.

In the midst of such uncertainty, we are maintaining focus on what we
can control, which is the planning and execution of our work. We are
currently undertaking further initiatives to extend our leadership in
execution and we believe that such actions, together with our
international strength and our balanced portfolio in North America,
should enable strong relative future performance.?

Other Events:

• 
  During the quarter, Schlumberger repurchased 7.5 million shares of its
  common stock at an average price of $66.30 for a total purchase price
  of $499 million.
  
• 
  On May 31, 2012, Schlumberger announced the completion of the sale of
  its Wilson distribution business to National Oilwell Varco, Inc. (NOV)
  for $906 million. Additionally, on July 19, 2012, Schlumberger
  divested the remaining portion of its distribution business to NOV by
  selling its 56% equity ownership interest in CE Franklin for
  approximately $122 million.
  
• 
  During the quarter, Schlumberger completed the previously announced
  acquisition of SPT Group?a privately owned software company based in
  Norway specializing in dynamic modeling for the oil and gas industry.
  
• 
  During the quarter, Schlumberger also acquired, or agreed to acquire,
  the following business interests:
  
  
  • 
    GEDCO, a Calgary-based provider of geophysical survey design
    software and services. GEDCO offers consulting services for
    integrated seismic solutions from design through interpretation.
    
  • 
    The CASING DRILLING? division of Tesco Corporation. Schlumberger
    and Tesco also entered a long-term agreement in which Tesco will
    provide Casing Drive System equipment to support CASING DRILLING
    projects.
    
  • 
    The remaining shares of Radius Service, after having been the
    minority shareholder for the past seven years. Radius Service is
    the market leader in the engineering, manufacturing and service of
    downhole motors and drilling tools for the Russian land market.
    The company employs approximately 1,000 people and operates in all
    major oil and gas producing regions of Russia.
    
  • 
    A 20% minority share in Anton Oilfield Services Group, a leading
    independent oilfield services provider in China. This extends a
    strategic cooperation agreement that began in 2010 in drilling
    fluids and well-cementing services. This transaction is expected
    to be completed in the third quarter of 2012.
    
  • 
    An ownership interest in the Liquid Robotics Oil & Gas joint
    venture to integrate and deploy new services for the oil and gas
    industry using Liquid Robotics Wave Glider ? wave-powered,
    autonomous marine vehicles.
    

Net Debt

'Net Debt? represents gross debt less cash, short-term investments and
fixed income investments, held to maturity. Management believes that Net
Debt provides useful information regarding the level of Schlumberger′s
indebtedness by reflecting cash and investments that could be used to
repay debt. Details of changes in Net Debt for the year to date follow:

Charges & Credits

In addition to financial results determined in accordance with US
generally accepted accounting principles (GAAP), this Second-Quarter
Press Release also includes non-GAAP financial measures (as defined
under the SEC′s Regulation G). The following is a reconciliation of
these non-GAAP measures to the comparable GAAP measures:

Oilfield Services

Second-quarter revenue of $10.45 billion increased 5% sequentially and
16% year-on-year. Sequentially, revenue increased in all Groups as
higher exploration offshore and in key land markets, together with
strong deepwater activities, continued to benefit the Reservoir
Characterization and Drilling Groups. Higher sales of Artificial Lift
and Completions products combined with increased Schlumberger Production
Management (SPM) project activity helped the Production Group post a
sequential increase despite lower Well Services revenue in North America
land. All Geographical Areas grew sequentially with the exception of
North America as a result of the seasonal spring break-up in Western
Canada and continued pricing pressure in the US land hydraulic
fracturing market. Excluding Western Canada, North America grew
sequentially on increased offshore activity, particularly in the US Gulf
of Mexico. Internationally, revenue grew sequentially by 9% following a
seasonal rebound of activity in Russia, the North Sea and China; more
project-related revenues, robust product sales and higher offshore
activity in the Mexico & Central America GeoMarket*; the commencement of
an SPM project in the Ecuador GeoMarket; and increased offshore rig
activity in the Australia & Papua New Guinea GeoMarket.

Increased Reservoir CharacterizationGroup revenue was
driven primarily by a rebound in Schlumberger Information Solutions
(SIS) software sales together with strong Testing Services and Wireline
activity on deepwater exploration projects in Africa, and in the North
Sea and Australia & Papua New Guinea GeoMarkets. WesternGeco grew
slightly as higher UniQ* land seismic productivity in the Saudi Arabia &
Bahrain GeoMarket more than offset lower Marine vessel utilization from
planned transits and dry-docks during the quarter. DrillingGroup
revenue expanded on robust international and offshore demand for
Drilling & Measurements and M-I SWACO technologies. Integrated Project
Management (IPM) operations in Latin America and in the North Africa and
Australia & Papua New Guinea GeoMarkets were also stronger. ProductionGroup revenue grew as increased sales of Artificial Lift and
Completions products across all Areas in addition to the start of an SPM
project in Ecuador more than compensated for lower Well Services revenue
on land in North America.

On a geographical basis, North America Area revenue decreased due
to the seasonal spring break-up in Western Canada and the weaker US land
hydraulic fracturing market. Revenue in North America however, excluding
Western Canada, improved sequentially due to increased offshore
activity?particularly in deepwater US Gulf of Mexico operations. In the Latin
America Area, the increase in revenue came mainly from the Mexico &
Central America GeoMarket?driven by IPM land activity, SIS software
sales, and demand for Drilling Group technologies offshore. The Ecuador
GeoMarket was also up significantly with the start of an SPM production
incentive contract. In the Europe/CIS/Africa Area, revenue
increased from the strong seasonal rebound of exploration and
development activity in the North Sea GeoMarket while the seasonal
pick-up of activity in Russia?particularly in Sakhalin, the Caspian and
Western Siberia?also contributed to the sequential improvement.
Sub-Sahara Africa also grew due to high exploration activity in Tanzania
and Mozambique as well as strong exploration and development activity in
the Nigeria & the Gulf of Guinea GeoMarket. In the Middle East &
Asia Area, the revenue increase was led by the Australia & Papua New
Guinea GeoMarket as a result of strong offshore drilling activity. The
China GeoMarket also posted a strong seasonal pick-up in onshore
activity while the Saudi Arabia & Bahrain GeoMarket continued to
register growth in both rig and rig-less operations.

Second-quarter pretax operating income of $2.1 billion increased 8%
sequentially and 20% year-on-year. Pretax operating margin increased 50
basis points (bps) sequentially. International pretax operating
margin expanded 161 bps sequentially to 20.8% due to the seasonal
rebounds of activity in Russia, the North Sea and China combined with
strong results in Europe and Africa, and in other GeoMarkets in the
Asia-Pacific countries and Latin America Area. The continued shift to
higher-margin exploration and deepwater activities helped sustain
international margins. In North America pretax operating margin
decreased 208 bps sequentially to 20.8% as a result of the spring
break-up in Canada and continued cost inflation and pricing pressure in
the US land hydraulic fracturing market.

Reservoir Characterization Group

Second-quarter revenue of $2.78 billion increased 7% sequentially and
13% year-on-year. Pretax operating income of $784 million was 17% higher
sequentially and grew 30% year-on-year.

Sequentially, the revenue increase was driven primarily by a rebound in
SIS software sales. Strong performances by Testing Services and Wireline
Technologies on deepwater exploration projects in Africa, the North Sea
and the Australia & Papua New Guinea GeoMarkets also contributed to
growth. WesternGeco was slightly higher as increased productivity from
the land seismic UniQ crew in the Saudi Arabia & Bahrain GeoMarket more
than offset lower Marine vessel utilization resulting from planned
transits and dry-docks during the quarter.

Pretax operating margin increased 223 bps sequentially to 28.2%
primarily due to strong SIS software sales combined with the more
favorable revenue mix that resulted from higher deepwater and
exploration activity.

A number of technology highlights across the Reservoir Characterization
Group portfolio contributed to the second-quarter results.

In the UAE, new Wireline MDT* modular formation dynamics tester packer
technologies were used for the first time in the world for Al Hosn Gas
in the Shah field in the presence of the highest concentrations of H2S
gas tested so far. The dual-packer technique deployed not only reduced
single-probe sampling station times of 21 hours to 6 hours, but also
reduced pressure drawdowns significantly.

Offshore Angola, Wireline imaging technologies complemented real-time
lithology logs and sidewall cores to evaluate a Cobalt International
Energy presalt exploration well. ECS* elemental capture spectroscopy, Rt
Scanner* triaxial induction, and PressureXpress* fluid sampling services
were deployed as part of the well's logging programs, which were
conducted without lost time over a three-week period.

Wireline Dielectric Scanner* multifrequency dielectric dispersion and MR
Scanner* expert magnetic resonance technologies have been used in heavy
oil reservoirs in the Orinoco Belt in Venezuela for Petrocarabobo. By
avoiding incorrect hydrocarbon volume estimations due to possible fresh
water and salinity variations and determining the presence of free
water, the dielectric and magnetic resonance measurements helped confirm
true reservoir potential.

Advanced Schlumberger Wireline technologies were deployed in the South
Fuwaris field in the Neutral Zone to evaluate the Ratawi Oolite
carbonate heavy oil reservoir for Joint Operations. The workflow
combined data from magnetic resonance logs with Dielectric Scanner
multifrequency dielectric dispersion saturation measurements and was
complemented by laboratory measurements. The approach successfully
resolved production uncertainties and was supported by in situ fluid
analysis and downhole mobility measurements.

In Kazakhstan, Schlumberger Wireline successfully acquired production
logging data in one highly deviated and two horizontal wells for
Zhaikmunai LLP. Since a complex multiphase flow profile was expected in
all wells, FloScan Imager* technology was used for production logging
data acquisition using MaxTRAC* downhole well tractor technology in the
horizontal wells. Despite the presence of stagnant water in all wells,
flow profiles were successfully measured with five mini-spinners
deployed on the vertical axis of the wellbore.

WesternGeco IsoMetrix* marine isometric seismic technology was launched
at the EAGE convention in Copenhagen on June 5, 2012. This breakthrough
technology provides isometrically sampled point-receiver data in both
crossline and inline directions, capturing the returning wavefield in
three dimensions for the first time and providing highly accurate images
of the subsurface. Using MEMS multisensor technology, IsoMetrix service
measures both acoustic pressure and vertical and crossline acceleration
over a wide frequency range.

In Australia, Drillsearch Energy Limited awarded WesternGeco more than
1,500 km2 of acquisition and processing using UniQ integrated
point-receiver land seismic technology in the Cooper-Eromanga Basin. In
a second win for the UniQ system, Hess Corporation also awarded
WesternGeco over 2,000 km2 of 2D data acquisition and processing in the
Beetaloo Basin of the Northern Territory. The seismic data will be
combined with gravity and electromagnetic measurements to build
near-surface velocity and surface statics models. These awards highlight
continuing acceptance of UniQ technology in the Australian market, in
which a low-impact point-source, point-receiver configuration is key to
addressing environmental issues in remote areas.

WesternGeco has begun acquisition of the first of three ocean-bottom
cable surveys in the UK North Sea for BP using a Q-Seabed*
multicomponent seabed seismic system. The survey will also include the
first commercial deployment of the WesternGeco Azimuthally Invariant
Source Array (AISA), an omni-directional marine source that is designed
to remove the complications created by azimuthal variations in the
source output.

BP also awarded WesternGeco a 280-km2 shallow-water, high-resolution 3D
marine acquisition and processing program over the ACG field in the
Caspian Sea. This is the third in a sequence of recent programs for BP
in the Caspian Sea and will be acquired with the seismic vessel Gilavar.

Offshore Angola, WesternGeco has successfully completed acquisition of a
7,000-km2 seismic survey over Blocks 19 and 20 in conjunction with
Sonangol E.P. The 6-month survey, which was completed ahead of schedule,
is the first multiclient 3D survey using Q-Marine Solid* streamer
technology to be acquired in West Africa and is part of a 4-year
acquisition and reprocessing depth-merge program that successfully
illuminates the presalt section over 38,000 km2 of the Kwanza Basin.

In the US Gulf of Mexico, WesternGeco successfully completed acquisition
of the Petronius 4D monitor survey for Chevron U.S.A. Inc. and Marathon
Oil Company. This time-lapse survey was acquired using WesternGeco
Q-Marine Solid streamer technology including Dynamic Spread Control
(DSC) to maximize source and receiver repeatability in the complex
current regimes of the Gulf of Mexico.

Tullow Oil plc has awarded WesternGeco a contract for approximately
3,000 km2 of seismic acquisition offshore Suriname. The survey will be
acquired during the second and third quarters of 2012 by the Western
Regent using Q-Marine Solid streamer technology. To ensure optimal
coverage in the area's challenging currents, WesternGeco is using DSC
technology for automated positioning of the vessel, source and streamers.

Petrobras has awarded WesternGeco a two-year electromagnetics data
processing contract that includes leading-edge inversion solutions for
several marine projects. The work will be executed in the WesternGeco
GeoSolutions data processing facility located in Rio de Janeiro.

Schlumberger Testing Services helped complete a Union Oil Company of
California deepwater well in the US Gulf of Mexico in more than 7,000 ft
of water using advanced perforating systems under bottomhole pressure of
20,000 psi at a total well depth that exceeded 28,000 ft. During the
operation, four production zones were simultaneously perforated with
7-in, 18 shot-per-foot PowerFlow* slug-free big hole shaped charges with
INsidr* perforating shock and debris reduction technology. The total
perforating string spanned nearly 1,300 ft?a record length for large
diameter guns at such depths and pressures. The bottomhole assembly was
deployed on 5 ?-in drill pipe, and included Schlumberger IRIS*
intelligent remote implementation and PosiTest* long-stroke retrievable
packer technologies. The job was completed in a single run without
non-productive time and reflected excellent execution between rig
personnel, Chevron U.S.A. Inc. (an affiliate of Union) and Schlumberger.

In Iraq, Schlumberger Testing Services drillstem test (DST) technologies
have been deployed for Petronas Carigali Iraq?including Signature*
quartz gauges, IRIS intelligent remote implementation valves and SCAR*
inline independent reservoir fluid sampling services. The technologies
saved three days of rig time and form part of the Quartet*
high-performance downhole reservoir testing system that offers greater
safety, a shorter string design, and fewer connections compared to
conventional DST technologies.

In Russia, Schlumberger has been awarded a contract by LUKOIL for well
testing services on a high-pressure natural gas exploration well in the
remote Yamal arctic region. The services include perforating, drillstem
testing, surface testing and fluid sampling using the latest-generation
Quartet high-performance downhole reservoir testing system. Quartet
technology will be deployed in conjunction with the InterACT*
connectivity, collaboration, and information system for quality control
and well test data interpretation.

Talisman has awarded Schlumberger a five-year Global Licensing Agreement
covering all operations in North America, Latin America, Southeast Asia,
the North Sea, North Africa and Poland. The contract includes Petrel*
E&P software with geology, geophysics, and reservoir engineering
modules, the Ocean* software development framework, ECLIPSE* reservoir
simulation software and PetroMod* petroleum systems modeling software.
The range of products licensed aligns with a business objective of
increasing efficiency and better quantifying uncertainty across
exploration and development activities.

Drilling Group

Second-quarter revenue of $4.00 billion increased 6% sequentially and
19% year-on-year. Pretax operating income of $738 million was 12% higher
sequentially and grew 38% year-on-year.

Sequentially, revenue increased primarily on strong international and
offshore activity for Drilling & Measurements and M-I SWACO
technologies. In particular, Drilling & Measurements performance was
driven by both stronger activity and an improved technology revenue mix
that led to some pricing gains. In addition, M-I SWACO also posted
strong results from deepwater operations in the US Gulf of Mexico as M-I
SWACO activity returned to pre-Macondo levels. IPM operations in Latin
America, and the North Africa and Australia & Papua New Guinea
GeoMarkets were also higher with the start of several new projects.

Sequentially, pretax operating margin increased 107 bps to 18.4% due to
increasing high-margin deepwater activity both in North America and
internationally. Margin expansion was also the result of a favorable
revenue mix that led to selected pricing gains?particularly for Drilling
& Measurements services.

A number of highlights that included a focus on the integration of
Drilling Group Technologies contributed to second-quarter results.

Integration of Drilling Group technologies delivered further record
drilling performance in the TNK-BP Verknechonskoe field in Siberia. On
pad 19-2244, PowerDrive X6* rotary steerable systems with a Smith
MDSi613WPX bit were used with an M-l SWACO FLO Pro NT* mud system to
drill the longest well and the longest horizontal section in the field.
Average rates of penetration and meterage per circulating hour reached
34.1 m/h and 17.2 m/h respectively. Both figures represented new best
performances for any bottomhole assembly run in the field.

In Iraq, operator HKN Inc. selected a combination of Drilling &
Measurements PowerDrive vorteX* rotary steerable systems, Schlumberger
measurement-while-drilling and logging-while-drilling technologies, and
Smith MDi616 polycrystalline diamond compact (PDC) bits with ONYX*
cutters to drill the 8  ?-in section of a well in a measured pressure
drilling environment. The section was drilled with a 140% improvement on
below rotary table times compared to conventional methods used earlier
on the well.

In Ecuador, a number of Schlumberger technologies helped IPM drill and
complete a horizontal well in the OSO field for Petroamazonas EP. The
well was completed 1  ? days ahead of schedule with the longest
horizontal section drilled in the field and is the field′s best producer
with initial production of 6,700 bbl/d. PeriScope* bed boundary mapper,
PowerDrive Xceed* rotary steerable systems, ScavengerPlus* scavenger
slurry stabilizer and the Perform* performance through risk management
process all contributed to this success.

Integration of Pathfinder and Smith Bits services in Oklahoma helped
Marathon Oil save approximately 3  ? days compared to offset well
performance in the Cana/Woodford Field. The combination of Schlumberger
PowerDrive Archer* 675 high-build-rate rotary steerable technology with
a Smith MSi613UPX bit delivered dogleg severity of 10 ?/100 ft in the
curve before drilling 90 ft into the lateral at an optimal rate of
penetration. Also in Oklahoma, a new design for the Smith MSi713 bit was
developed with collaboration from Cimarex engineers that helped improve
rate of penetration. The bit was deployed with the PowerDrive Archer
service to achieve the highest footage per day ever drilled in the curve
section in the Cana field for Cimarex at 353 ft versus an average of 191
ft.

PowerDrive Archer high-build-rate rotary steerable technology has been
introduced in Thailand for Salamander Energy to allow accurate well
positioning in an unconsolidated formation in a well with a 1,000-m
tangent section at an inclination of 80 ?. The complete section was
drilled in a single run and represented the first PowerDrive Archer
deployment in Thailand and the second combination of PowerDrive Archer
and EcoScope*^? multifunction logging-while-drilling service
worldwide. The bottomhole assembly was run with a new Smith MDi519LBPX
five-blade drill bit that had been identified with the IDEAS* integrated
drillbit design platform as being capable of yielding low vibrations at
high rates of penetration through high dogleg sections. The system
recorded consistent performance while improving rate of penetration by
more than 60% compared to previous wells drilled with motors.

In Saudi Arabia, an integrated approach combining Schlumberger
seismic-while-drilling, sonic-while-drilling and vertical seismic
profile technologies helped optimize drilling practices through and
below salt in an exploration well for Saudi Aramco. The data sets not
only helped predict and drill through the salt sections, but also
established the workflows to be used to drill similar structures in
future wells in the area.

In the Cuu Long Basin of Vietnam, advanced Drilling & Measurements
logging-while-drilling technologies were deployed for Japan Vietnam
Petroleum Co., LTD. to evaluate a fractured granite basement reservoir.
Due to hole conditions, NeoScope*^? sourceless formation
evaluation while drilling service was used to acquire conventional
triple-combo measurements in combination with geoVISION* resistivity for
fracture evaluation, and sonicVISION* sonic-while-drilling technology
for formation evaluation and rock strength determination.

In the South China Sea, CNOOC deployed Drilling & Measurements
PowerDrive rotary steerable, EcoScopemultifunction
logging-while-drilling and PeriScope bed boundary mapper technologies in
a challenging horizontal well in a mature reservoir. The value of the
technology was clearly demonstrated by smoothly landing the well in the
reservoir and accurately placing the 304-m horizontal section within a
thin channel layer that varied from 1  ? to 3 m in thickness. The well
has reached oil production of 6,000 bbl/d?far exceeding the production
goal of 1,500 bbl/d and marking a new production record from a highly
mature reservoir in the South China Sea.

In Azerbaijan, Schlumberger logging-while-drilling measurements helped
Total evaluate an exploration well in which conventional wireline
operations were not possible due to high overburden and depleted
reservoir pressures. Drilling & Measurements arcVISION* and adnVISION*
services in combination with StethoScope*
formation-pressure-while-drilling technology were successfully used to
acquire the formation evaluation measurements needed for reserves
estimation. Subsequent tests confirmed the discovery of a natural gas
and condensate reservoir.

Also in Azerbaijan, Drilling & Measurements real-time formation
evaluation measurements were deployed for SOCAR on an exploration well.
TeleScope* and arcVISION logging-while-drilling technologies were run
from surface to a total depth of 6,380 m with the acquired data helping
evaluate formation properties under the challenging conditions of high
pressure and depleted zones.

In Sichuan, Central China, PetroChina SWOGC used Drilling & Measurements
PowerDrive rotary steerable, PeriScope bed boundary mapper and
SonicScope sonic-while-drilling technologies to accurately place a 506-m
lateral well in a tight carbonate oil reservoir while identifying
fractures to optimize completion design. During the subsequent
stimulation job, PetroChina SWOGC made adjustments to the program based
on the data that led to improved well performance.

ONYX II* premium cutter technology has been successfully introduced for
OrenburgNeft in the Volga-Urals region in Russia. Smith PDC bits
optimized with IDEAS drillbit design software achieved targets by
drilling an 8  ?-in directional interval through hard carbonate rock with
proper control, maximum footage and a penetration rate 29% higher than
offset wells. This performance also made it possible to drill the
section in one run instead of two.

In the Yakutsk region, Eastern Siberia, Smith Bits technologies enabled
Surgutneftegaz to increase drilling speeds on the Talakan and Alinsloe
fields. Analysis of the drilling process, and the use of ONYX cutters
together with SHARC* high-abrasion-resistance PDC drillbit technology,
and the IDEAS integrated drillbit design platform led to development of
an optimized bit that helped drill faster. As a result, the rate of
penetration while drilling the 6,200-m section was increased by 60%,
leading to significant cost savings and the possibility of starting oil
production earlier than planned.

In California, SERVCO sidetracking services successfully completed the
first known three-casing whipstock exit in North America utilizing the
Trackmaster* whipstock system with a FasTrack* one-trip mill to
successfully mill through 7-in, 8 5/8-in and 13 3/8-in casings in a
single run.

In Norway, Schlumberger has been awarded a five-year contract by
ConocoPhillips for M-I SWACO drilling and completion fluids, drilling
waste management, mechanical clean-up and circulation tools, and onshore
real-time engineering services on the Greater Ekofisk Development.

In Kuwait, M-I SWACO FAZEPRO* reversible invert emulsion mud and
FAZEBREAK* filtercake breaker together with MeshRite* stainless steel
screens helped KOC drill and complete two dual lateral wells in a
complex reservoir with heterogeneous highly permeable sands, active
faults and shale stringers. The combination of the technologies led to
production rates approximately 60% above expectation, and their use has
been planned for all similar upcoming wells.

Production Group

Second-quarter revenue of $3.74 billion increased 6% sequentially and
19% year-on-year. Pretax operating income of $612 million was 1% lower
sequentially and flat year-on-year.

Sequentially, revenue grew as increased sales of Artificial Lift and
Completions products across all Areas and the start of an SPM project in
Ecuador more than compensated for lower Well Services revenue on land in
North America. Well Services revenue from offshore and international
activities also grew sequentially to further offset the lower Well
Services land activity due to the Canadian spring break-up and the
downward pricing trend.

Second-quarter pretax operating margin decreased 117 bps to 16.4%. This
decline was largely attributable to the North American land hydraulic
fracturing market as a result of the spring break-up in Canada and the
continued cost inflation and pricing pressure in US land. This was
offset in part by better margins posted by the other Production Group
Technologies.

Production Group highlights during the quarter included successes for a
number of Group Technologies.

Well Services HiWAY* flow-channel hydraulic fracturing technology was
deployed in West Siberia for Megionneftegaz in the Taylakovskoe oilfield
on refracturing operations for the first time in Russia. On one well,
which had first been fracture-stimulated in 2009 with a conventional
treatment, HiWAY technology almost doubled stabilized oil production.
Megionneftegaz plans on continuing to use the technology for wells
previously stimulated with conventional methods.

In Egypt, Well Services HiWAY technology has continued to penetrate the
market and has now been deployed for the first time for the Qarun
Petroleum Company?a joint venture between EGPC, Phoenix Resources
Company of Qarun, Apache Oil Egypt Inc. and GNR Seagull.
Post-stimulation, initial production data showed a considerable increase
in oil production rate compared to offsets in the same field.

In the Eagle Ford Shale in LaSalle County, South Texas, Hess Corporation
implemented use of Well Services HiWAY flow-channel hydraulic fracture
technology in December 2011. Recent comparisons of well performance have
shown increased production from HiWAY-treated wells relative to those
treated with other technologies. The productivity differential between
HiWAY and conventional treatments has continued to increase with time,
leading to an increase in expected ultimate recovery for wells in which
HiWAY technology was deployed.

Also in US land, Well Services HiWAY technology with nitrogen foam has
been deployed for the first time for Encana. The initial production of
the well was greater than expected and significantly higher than offset
wells that were completed with conventional technology.

Customised Well Services OCA* organic clay acid technology has been
deployed to stimulate a well for Tullow Oil in the Jubilee field
offshore Ghana. The stimulation design incorporated data from core
samples and used Virtual Lab* geochemical simulation software to
simulate fluid interactions to ensure optimum fluid formulation. The
operation, which was executed flawlessly using a FlexSTIM* modular
offshore stimulation system, significantly increased production and as a
result of this success, a number of additional wells have been planned
for similar treatments.

In the Marcellus Shale, Well Services StimMAP* hydraulic fracture
stimulation diagnostics technology helped Shell assess fracture
orientation, size and growth. As part of the deployment, Wireline VSI*
versatile seismic imager tools were conveyed by MaxTRAC tractor
technology along two horizontal wells and run in a third vertical well.
The acquired data contributed to understanding of the field, and will
allow for optimal development in the future. StimMAP diagnostics were
also used in Colorado for a leading North American energy producer.
Wireline TuffTRAC* technology conveyed an 8-sensor VSI imager over more
than 1  ? miles of horizontal wellbore to a measured depth of 15,633 ft
at a speed of 1,400 ft/h to help optimize the well treatment program.

Well Services Losseal* W reinforced composite mat pills have been
introduced for an operator in the North of Oman to stop lost circulation
in the 8  ?-in hole section where static losses of up to 350 bbl/h are
normally experienced. The new technology was deployed in two wells after
attempts with conventional pills had failed. No further fluid losses
were encountered and the operator was able to resume drilling and run
casing without problems.

In Italy, Well Services FlexSTONE* advanced flexible cement technology
has been deployed for Eni on three wells in the Adriatic Sea. The wells,
which are fracture-stimulated and gravel-packed, make zonal isolation a
critical challenge as such completions can damage conventional cement
and compromise hydraulic isolation. Cement bond logging confirmed
successful FlexSTONE placement, which contributed to the success of this
offshore well construction program.

In Russia, Schlumberger AbrasiFRAC* abrasive perforating and fracturing
technology with fiber-enhanced proppant plugs was deployed on a
multistage fracturing stimulation operation in a horizontal sidetrack
well completed with a cemented liner in the LUKOIL Tevlinsko-Russinskoe
oilfield. Production increased by a factor of four?representing an
improvement 35% greater than expected. Use of the technology succeeded
in providing the reliable zonal isolation that conventional proppant
plugs have historically been unable to achieve.

In Colombia, integrated Schlumberger Well Intervention and Testing
Services technologies enabled Equion Energia to improve efficiency in
perforating a well in the Mirador formation. The e-Fire* electronic
firing head system for coiled tubing deployment was run with ACTive*
in-well live performance coiled tubing technology to change wellbore
fluid, correlate, perforate underbalance, drop the guns, take fluid
samples and isolate the formation by pumping cement?all in a single run.
The success of this operation has led to plans for similar operations on
the Florena and Resetor fields.

In Libya, Schlumberger Well Intervention Services technology was
deployed in an offshore deviated well to demonstrate its viability in
the stimulation of an oil producer well on the Mellitah Oil and Gas
Bouri field. In a rig-less operation, Schlumberger CoilFLATE* packer
technology was used for a selective zonal matrix treatment on the newly
perforated upper zone of the well. The results were highly successful
and will permit operational and quality optimization on future
treatments as CoilFLATE technology becomes the solution of choice for
selective zonal matrix treatments.

In the UK sector of North Sea, Enquest PLC awarded Schlumberger
Artificial Lift a contract to supply, install and provide operational
support for electrical submersible pump (ESP) systems for the Alma and
Galia subsea field development project. The project involves subsea
deployment of DualLife* tandem ESP completion systems for seven wells.
The award was based on the Schlumberger ability to provide integrated
technology covering ESPs, variable speed drives, and electrical
connectors as well as a proven track record in subsea installations
worldwide.

In Norway, Framo has recently been awarded a contract by A/S Norske
Shell for a complete Subsea Booster Pump System for the Draugen Field in
the North Sea. Framo, the industry leader in multiphase subsea pumping
and metering focused on a systems approach, was fully acquired by
Schlumberger in 2011.

Schlumberger Completions was awarded a three-year contract by Total E&P
for intelligent completions products and services in Qatar. The award
was based on a five-year history of successful intelligent completion
installation, new technology introduction, operational excellence and
continuous reliability improvement. Work under the contract began in May
2012.

In Iraq, Schlumberger Completions WellWatcher* permanent monitoring
quartz gauges have been installed in the Gharraf field for Petronas
Carigali Iraq. The technology represents a step change in production
monitoring to maximize overall recovery.

In Equatorial Guinea, Schlumberger Completions provided a full range of
completion services to Noble Energy on three subsea gas injector wells
and three platform producer wells on the Alen field. The products and
services provided included M-I SWACO drilling and completion
technologies; AquaPac* integrated water-packing and OptiPac* Alternate
Path^? gravel pack systems; and WellWatcher* permanent
monitoring technology as well as TRMAXX* surface-controlled and
SlimTech* reduced-OD safety valves.

In Brazil, Schlumberger Completions has been awarded the first OGX field
development program. The award was based on cooperation and experience
during prior exploration campaigns managed by Schlumberger IPM, and by
integration of the completion systems and stimulation designs that will
be required for field development.

About Schlumberger

Schlumberger is the world′s leading supplier of technology, integrated
project management and information solutions to customers working in the
oil and gas industry worldwide. Employing approximately 115,000 people
representing over 140 nationalities and working in about 85 countries,
Schlumberger provides the industry′s widest range of products and
services from exploration through production.

Schlumberger Limited has principal offices in Paris, Houston and The
Hague, and reported revenues from continuing operations of $36.96
billion in 2011. For more information, visit www.slb.com.

*Mark of Schlumberger or of Schlumberger Companies.

^?Japan Oil, Gas and Metals National Corporation (JOGMEC),
formerly Japan National Oil Corporation (JNOC), and Schlumberger
collaborated on a research project to develop LWD technology. The
EcoScope and NeoScope services use technology that resulted from this
collaboration.

?Alternate Path is a Mark of ExxonMobil Corp and the technology is
licensed exclusively to Schlumberger.

Notes

Schlumberger will hold a conference call to discuss the above
announcement and business outlook on Friday, July 20, 2012. The call is
scheduled to begin at 8:00 a.m. US Central Time (CT), 9:00 a.m. Eastern
Time (ET). To access the call, which is open to the public, please
contact the conference call operator at +1-800-230-1951 within North
America, or +1-612-234-9960 outside of North America, approximately 10
minutes prior to the call′s scheduled start time. Ask for the
'Schlumberger Earnings Conference Call.? At the conclusion of the
conference call an audio replay will be available until August 20, 2012
by dialing +1-800-475-6701 within North America, or +1-320-365-3844
outside of North America, and providing the access code 246811.

The conference call will be webcast simultaneously at www.slb.com/irwebcast
on a listen-only basis. Please log in 15 minutes ahead of time to test
your browser and register for the call. A replay of the webcast will
also be available at the same web site.

Supplemental information in the form of a question and answer document
on this press release and financial information is available at www.slb.com/ir.

Schlumberger Limited

Malcolm Theobald, +1 (713) 375-3535

Vice
President of Investor Relations

or

Joy V. Domingo, +1 (713)
375-3535

Manager of Investor Relations

investor-relations@slb.com