Schlumberger Announces First-Quarter 2013 Results

Schlumberger Limited (NYSE:SLB) today reported first-quarter 2013
revenue of $10.67 billion versus $11.17 billion in the fourth quarter of
2012, and $9.92 billion in the first quarter of 2012.

Income from continuing operations attributable to Schlumberger,
excluding charges and credits, was $1.35 billion?a decrease of 6%
sequentially but an increase of 4% year-on-year. Diluted
earnings-per-share from continuing operations, excluding charges and
credits, was $1.01 versus $1.08 in the previous quarter, and $0.96 in
the first quarter of 2012.

Schlumberger recorded charges of $0.07 per share in the first quarter of
2013 versus $0.06 per share in the previous quarter, and $0.01 per share
in the first quarter of 2012.

Oilfield Services revenue of $10.67 billion decreased 5% sequentially
but increased 8% year-on-year. Oilfield Services pretax operating income
of $2.0 billion decreased 6% sequentially but increased 4% year-on-year.

Schlumberger CEO Paal Kibsgaard commented, 'International strength, in
combination with resilience to challenging market conditions in North
America, led to solid performance in the first quarter. While our
sequential results displayed the effects of the normal seasonal slowdown
in the Northern Hemisphere and the Far East, as well as lower product
sales compared to the fourth quarter, our year-on-year figures
demonstrated the potential of the international market, the strength of
our execution, and the importance of our integration capabilities.

Year-on-year international growth outpaced rig count, led by the Middle
East & Asia Area with strong activity in key markets such as Saudi
Arabia, Iraq, Australia ?and China. In Europe/CIS/Africa, strength in the
Sub-Saharan region, and growth in Russia and the Caspian as well as in
the North Sea drove performance. Latin America was boosted by production
management activity in Ecuador, strength in ?the Mexico & Central
America ?and growth in the Argentina, Bolivia & Chile GeoMarkets. In
North America, strong activity in Canada and solid results from the US
Gulf of Mexico ?partially ?offset further pricing and activity weakness on
land in the US.

First-quarter international pricing trends remained unchanged, with a
continuation of the slow but steady progress in revenue per rig that has
now been observed for the last six quarters. This was driven not only by
activity, but also by technology mix where we continue to introduce
high-end services supported by strong execution and operational
performance. In North America, pricing for land services weakened in
general and further pressure on pressure pumping contracts was observed.

The world macroeconomic environment saw mixed news in the first quarter
from the main economies including China, the US and the Eurozone. Still,
the overall outlook for 2013 remains largely unchanged from our earlier
projections, both in terms of GDP growth as well as the fundamentals for
the global oil and gas markets. We still expect that oil supply will
continue to grow in North America while other non-OPEC production will
likely continue to face challenges, and we expect global spare capacity
to remain around current levels?absent any unexpected macroeconomic
change or geopolitical event.

As a result, we continue to see strong and consistent growth in line
with our expectations in key regions that include Sub-Sahara Africa,
Russia, the Middle East, China and Australia. The outlook for North
America remains uncertain, with lower-than-expected rig activity and
continuing pricing weakness. And while cold weather and flattening
natural gas production has resulted in significant storage withdrawals,
this has yet to result in any change in dry gas drilling activity.

In this environment, we remain focused on operational and financial
outperformance in every market that we participate in. And with the
commitment and drive displayed by our entire organization, I am
confident that we will continue to provide superior returns to our
investors going forward.?

Other Events

• 
  During the quarter, Schlumberger repurchased 2.5 million shares of its
  common stock at an average price of $77.63 for a total purchase price
  of $193 million.
  

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 document 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

First-quarter revenue of ?$10.67 billion decreased 5% sequentially but
increased ?8% year-on-year, ?with ?International Area ?revenue
of $7.26 billion ?growing ?$853 million, or ?13% year-on-year, ?while North
America Area ?revenue of $3.29 billion ?declined ?$144 million, or ?4%
year-on-year. The strong year-end product, software
and ?multiclient ?sales experienced in the fourth quarter of 2012
accounted for more than half of the sequential decline ?in
revenue. ?The ?rest of the sequential decline ?was ?due to ?seasonal ?activity
slowdowns ?in the North Sea, Russia ?and ?China, ?weather-related work
delays in ?the ?Brunei, Malaysia & Philippines and Australasia GeoMarkets,
and ?lower pricing ?as a result of excess capacity ?in US land. However,
these sequential ?effects ?were partially offset by ?strong exploration and
drilling activity ?in Angola, ?and ?strong winter ?project ?activity ?in
Western Canada & Alaska.

Given the significant impact that year-end and seasonality factors had
on sequential performance, the following paragraphs focus on a
year-on-year basis unless otherwise noted.

International ?revenue ?increased ?13%, ?outpacing ?the rig count
which ?was up ?7% ?year-on-year. This ?increase was led by the Middle
East & Asia ?Area ?with ?revenue of $2.5 billion growing 21%,
mainly from ?robust ?results ?across all Technologies ?in Saudi Arabia,
strong Integrated Project Management (IPM) results in Iraq,
and ?sustained ?land and offshore drilling activity ?in ?the ?Australasia and
China ?GeoMarkets. Europe/CIS/Africa ?revenue of $2.9 billion
increased 11%, ?led by ?the ?Sub-Sahara Africa ?region ?on ?strong
development ?and exploration ?drilling. The ?Russia and Central Asia region
saw ?strong ?activity ?offshore ?Sakhalin ?as well as ?strong ?land activity in
West Siberia and ?Kazakhastan ?while the North Sea GeoMarket ?posted firm
growth as activity migrated from exploration to development
and ?production-related projects. Latin America ?revenue of
$1.9 billion grew 8%, ?mainly in Ecuador ?from solid progress ?on the
Schlumberger Production Management (SPM) Shushufindi ?project. Strong
revenue was also reported by ?the Mexico & Central America and Argentina,
Bolivia & Chile GeoMarkets, while Brazil revenue was flat. North
America ?revenue of $3.3 ?billion decreased 4%?mainly
from ?land ?activity, ?which was down 11% year-on-year while offshore was
up 26%. ?The increase in offshore revenue resulted from higher drilling
activity as the ?number of deepwater ?rigs increased ?by ?more than 30%
year-on-year in the US Gulf of Mexico. The decline in land revenue was
mainly due to pricing weakness for both pressure pumping services and
for other Technologies as overall rig count declined by 15% year-on-year.

By segment, Reservoir Characterization Group revenue of $2.8
billion increased $221 million, or 9%, led by double-digit growth in
Testing Services and Schlumberger Information Solutions (SIS), driven by
improved offshore exploration activity and increased software sales
across all international Areas. WesternGeco grew on higher marine vessel
utilization at better pricing and improved UniQ* and conventional land
seismic productivity in the Middle East and Australia. Drilling Group
revenue of $4.1 billion increased $347 million, or 9%, led by robust
demand for Drilling & Measurements services as offshore drilling
activity strengthened in the US Gulf of Mexico, Sub-Sahara Africa,
Sakhalin, Asia and Australia, and as the rig count increased in key
international land markets in Saudi Arabia, China and Australia.
Drilling Tools & Remedial activity expanded across all Areas and IPM
revenue grew strongly as projects in Iraq and Australia ramped up. Production
Group revenue of $3.8 billion increased $243 million, or 7%, with
double-digit growth posted by Artificial Lift, Well Intervention,
Completions and Well Services production technologies in the
international Areas. Framo and Subsea Services Technologies posted
growth of more than 50% while SPM revenue more than doubled as projects
in Latin America came in ahead of plans. The Production Group revenue
increase was, however, partly offset by a decline in pressure pumping
revenue in North America land.

First-quarter pretax operating income of $2.0 billion decreased 6%
sequentially, but increased 4% year-on-year. International pretax
operating income of $1.5 billion increased $262 million, or 21%
year-on-year, while North America pretax operating income of $627
million declined $150 million, or 19% year-on-year.

Sequentially, and despite revenue declining from year-end and
seasonality effects, pretax operating margin of 19.0% slipped by only 37
basis points (bps) with International margin stable at 20.5% and North
America margin settling at 19.1%.

Year-on-year, pretax operating margin of 19.0% declined slightly by 59
bps, as International pretax operating margin expanded 135 bps to
20.5% while North America pretax operating margin declined 356
bps to 19.1%. Middle East & Asia posted a 125 bps
year-on-year margin improvement to reach 24.3%, Europe/CIS/Africa
increased by 120 bps to 17.8%, and Latin America improved by 123
bps to 19.5%. The decline in North America margin was mainly due
to pricing pressure for Well Services production technologies on land,
while the expansion in International margin was due to strong
contributions from Testing Services and Drilling & Measurements
Technologies on improved profitability from higher offshore exploration
and drilling activity. Improved profitability of IPM and SPM
project-related activities in the Latin America and Middle East & Asia
Areas also contributed to the expanded international margin.

Year-on-year by segment, Reservoir Characterization Group pretax
operating margin expanded 94 bps to 27.0% due to improved profitability
in Testing Services while the pretax operating margin of the Drilling
Group increased 57 bps to 17.9% from better margins posted by
Drilling & Measurements. Production Group pretax operating
margin declined 237 bps to 15.1% due mainly to lower prices for Well
Services production technologies in US land, although the effect of this
was partially offset by improved profitability on SPM projects in Latin
America.

A number of technology integration highlights contributed to
first-quarter results.

Saudi Aramco and Schlumberger worked closely in a joint project to
develop and implement a customized pore system characterization
technology for the world′s largest oil field. Named CIPHER from the
decoding approach used, this technique integrates texture-sensitive
nuclear magnetic resonance data with image logs on other spectral
porosity measurements to obtain a full pore system evaluation of
carbonate reservoirs. The complex pore systems of carbonate rocks
require details of the carbonate pore geometries as an essential input
for improved permeability determination and for forecasting the ultimate
oil recovery. Understanding these carbonate pore system details is
crucial for carbonate formation evaluation. CIPHER will enable a step
change in Saudi Aramco′s ability to forecast and operate for maximum oil
recovery.

In Eastern Canada, Wireline deployed the latest generation rock and
fluid sampling services to improve both measurement quality and
operating efficiency in an offshore well. The XL-Rock* large-volume
rotary sidewall coring technology with a new bit design allowing the
weight on bit to be controlled from surface recovered approximately 80%
of the attempted cores, some of which were in unconsolidated zones of
less than 500 psi compressive strength. Also, low contamination fluid
samples were recovered from multiple test zones using the MDT* modular
formation dynamics tester equipped with Quicksilver Probe* focused
extraction technology and the InSitu Fluid Analyzer* system. This
combination of technologies allowed representative rock and fluid
samples to be collected at a level of accuracy and operational
efficiency not previously attained.

In West Texas, the integration of Schlumberger technologies enabled
Endeavor to optimize a horizontal well design in the Wolfcamp shale
formation in the Permian basin. A combination of Wireline ECS* elemental
capture spectroscopy and Sonic Scanner* acoustic scanning technologies
was used to characterize a section of the Wolfcamp shale deeper than had
previously been targeted. During drilling, a Schlumberger PeriScope* bed
boundary mapper was used to maintain the horizontal wellbore within the
confines of the deeper target. A high-flow design horizontal completion
was then installed, accompanied by a 19-stage stimulation treatment
executed with Well Services HiWAY* flow-channel hydraulic fracturing
technology. This integrated Schlumberger solution enabled the operator
to increase the 60-day oil production from this well by 34% compared to
the nearest offset well in the same field.

In Saudi Arabia, Schlumberger Completions installed the world's first
trilateral 3  ?-in IntelliZone Compact* modular multizonal management
system in an offshore field for Saudi Aramco. IntelliZone Compact
technology is a new-generation integrated intelligent completions system
that consists of a remotely operated flow control valve, a real-time
dual monitoring system with choke position sensor, and a feed-through
packer in one assembly. The system is designed to optimize production
while improving installation efficiency and minimizing future
intervention.

In Japan, the world′s first offshore production of gas from methane
hydrate layers was confirmed by Japan Oil, Gas and Metals National
Corporation (JOGMEC). A combination of Schlumberger formation
evaluation, drilling, completions and monitoring technologies was used
by JOGMEC in the drilling of two monitoring wells and one production
well, and in the flow testing of the production well through
dissociation of methane hydrate. The Schlumberger technologies included
WellWatcher* real-time reservoir and production monitoring in
combination with fiber-optic distributed temperature sensing and a
high-resolution digital sensor array. In addition, Wireline Sonic
Scanner acoustic scanning platform with Borehole Acoustic Reflection
Survey (BARS) modelling and ABC* analysis behind casing technologies
were run before and after the production test. These Schlumberger
technologies have been instrumental in enabling JOGMEC to validate the
method and economics of producing gas from methane hydrates in this
ground-breaking project.

Reservoir Characterization Group

First-quarter revenue of $2.80 billion decreased 11% sequentially but
grew 9% year-on-year. Pretax operating income of $758 million was 18%
lower sequentially, but increased 13% year-on-year. Sequential declines
were primarily due to lower WesternGeco multiclient and SIS software
sales following their strong year-end highs, but these effects were
partially offset by increased WesternGeco marine vessel utilization.

Year-on-year, revenue increased by $221 million, led by double-digit
growth in Testing Services activity and SIS software sales, which were
driven by improved offshore exploration activity and increased sales
across all international Areas. WesternGeco grew on higher marine vessel
utilization at better pricing and improved UniQ and conventional land
seismic productivity in the Middle East and Australia.

Pretax operating margin of 27.0% decreased 215 bps sequentially, but
expanded 94 bps year-on-year. Sequential margin decline was due to the
seasonally lower WesternGeco multiclient and SIS software sales.

Year-on-year, pretax operating margin expanded due to improved
profitability in Testing Services which benefited from high-margin
offshore exploration activity.

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

WesternGeco has just completed acquisition of the first high-resolution,
broadband multiclient survey in New Zealand, in preparation for the 2014
acreage bid round. Conducted offshore Taranaki, the survey used several
WesternGeco technologies, including Q-Marine Solid* streamers, ObliQ*
sliding-notch broadband acquisition and imaging, Delta* calibrated
marine broadband seismic source, and the Continuous Line Acquisition*
method for full-fold coverage in shallow waters. Due to environmental
considerations in the area, WesternGeco worked closely with local
environmental and regulatory agencies to ensure the survey was carried
out safely and responsibly, and was commended by the New Zealand
Department of Conservation.

WesternGeco was awarded a contract by Thombo Petroleum Ltd. for the
acquisition and processing of a 3D survey using IsoMetrix* marine
isometric seismic technology over Block 2B offshore South Africa. ?The
survey covers a full-fold area of 686 km2 extending over the A-J1
graben, which Thombo Petroleum said contains an oil discovery as well as
other prospects and leads around its margins. Thombo described the use
of IsoMetrix technology as an important step in their evaluation of the
reserves and resources.

Offshore Angola, WesternGeco completed a 600-km2 4D monitor survey using
Q-Marine* technology over the Girassol, Jasmin, Dalia and Rosa fields
operated by Total Exploration and Production Angola. The highly
congested area includes two FPSOs, two tanker loading stations and one
drilling rig, requiring the use of an undershooting technique with an
additional source vessel to illuminate the reservoir below the surface
installations.

BP has awarded WesternGeco one of the largest ever data processing and
imaging contracts for approximately 900 km2 of ocean-bottom-cable data
in the South Columbus basin of Trinidad and Tobago. The surveys were
acquired over two winter seasons using Q-Seabed* technology and the
SimSource* simultaneous seismic source acquisition technique. The award
is part of a multiyear, multiproject collaboration between the two
companies that resulted in a combined BP/WesternGeco team winning the
globally recognized BP Helios award.

Following the availability of the UniQ integrated point-receiver land
seismic system for lease or for sale, several companies are already
deploying the technology. IG Seismic Services Ltd (IGSS) purchased a
40,000-channel system, which has been operating successfully in Russia.
Sichuan Geophysical Company (SCGC) in China leased a 45,000-channel
system and completed a project for PetroChina Southwest Oil and Gas
Field Company with record efficiency. A one-year lease agreement has
also been continuing for deployment of the UniQ system on projects in
Mexico.

In Australia, Wireline MR Scanner* expert magnetic resonance service was
used for Apache in a complex glauconitic reservoir to provide fluid
identification in a development well in the Stag field. The high
concentration of glauconite affected the resistivity logs such that the
saturations, and even fluid types, were not identifiable using
conventional logging techniques. MR Scanner fluid typing, however, was
able to provide not only the saturation but also to identify the
water/oil/gas contacts. This successful result has led Apache to
incorporate the technology in their field′s well development program.

In Kuwait, Wireline Dielectric Scanner* multifrequency dielectric
dispersion technology was used for the Kuwait Oil Company (KOC) to
detect producible water zones in a horizontal well in the Raudhatain
field with complex stratigraphy and variations in sedimentology.
Subsequently, the MDT modular formation dynamics tester with Quicksilver
Probe focused extraction technology was used to quantify the water cut
in zones of interest, and confirmed the results from the Dielectric
Scanner service. This fluid characterization helped the customer to
optimize the completion design and achieve efficient reservoir oil
drainage for maximum recovery.

In Alaska, Wireline TuffTRAC* cased hole services tractor and PowerJet
Omega* deep penetrating perforating shaped charges were deployed to
re-perforate four wells for Cook Inlet Natural Gas Storage in the Kenai
gas field. Previously, all wells in the field had been perforated
overbalanced and the resulting flow tests were below expectations. In
order to minimize perforation damage and allow a more efficient
perforation tunnel, the wells were re-perforated at balanced pressure,
leading to an increase in injection rates of 50 to 300%.

In Colombia, Wireline Flow Scanner* horizontal and deviated well
production logging and RST* reservoir saturation technologies were used
to acquire formation evaluation data in five gravel-packed openhole
wells for Hocol S.A. The data interpretation provided by Schlumberger
PetroTechnical Services gave the customer a better understanding of the
production profile and the reservoir properties, as well as their
influence on production performance along the wells′ horizontal
sections. As a result, Hocol S.A. is planning a new field development
strategy that involves improvements in both drilling and completions
designs.

In Kazakhstan, Wireline PressureXpress* reservoir pressure while logging
technology was deployed for Karachaganak Petroleum Operating B.V. (a
consortium between ENI, BG, Chevron, Lukoil and KazMunaiGaz) in an
extended reach 6-in horizontal well, recording the deepest ever
formation pressure survey in the Karachaganak field. The PressureXpress
tool was deployed on drillpipe in a challenging 1,200-m horizontal
section using best practices of job design, planning execution and
real-time monitoring. The data acquired enabled the operator to better
understand the pressure regime from the main drilling platform towards
the Western Buildup.

In Colombia, Wireline Sonic Scanner acoustic scanning platform and USI*
ultrasonic imager technology with CBL Adviser* cement bond evaluation
software were used for Union Temporal IJP to assess near-wellbore
fracture characteristics in an oil producing well in the Palagua field.
With multidisciplinary reservoir characterization support from
Schlumberger PetroTechnical Services, the height and propagation of the
fractures were described in detail, enabling new estimates of the well's
productivity. As a result, the customer has plans to carry out the same
workflow on two additional wells.

In Russia, Schlumberger Testing Services executed a complex well test at
high flow rates for Venineft, offshore Sakhalin. Despite harsh weather
conditions, an offshore rig with a limited operating window and a high
spread cost, the well test operation was flawless, leading to a 10%
saving in rig time versus plan. This success was made possible by a
customized well test design, thorough job preparation, real-time data
monitoring and collaboration between Venineft and Schlumberger offshore
and onshore teams.

In the UAE, a new Master Agreement has been signed with Abu Dhabi
Company for Onshore Oil Operations (ADCO). This three-year contract
allows all ADCO business units to access Schlumberger E&P software
technology, technical consulting and training services. Through its
unique capability to deliver end-to-end petrotechnical solutions
including seismic, geological modelling, reservoir simulation and
petroleum economics, Schlumberger continues to be recognized as ADCO′s
trusted technology partner.

In South Africa, Sasol Petroleum International selected Schlumberger
Petrel* E&P software as the platform of choice for modelling and seismic
interpretation for all their global assets. This forms part of a
strategic scientific software, data management and process environment
project. Petrel software will be providing the asset teams with the
necessary integration and is a key enabler to the collaborative
'thinking and planning? environment.

In Poland, Polish Oil and Gas Company S.A. (PGNiG) has selected Petrel
E&P software as a platform of choice for reservoir modelling and seismic
interpretation on all their domestic assets with special focus on the
shale gas concession areas. The decision to adopt the Petrel technology
platform supports PGNiG′s commitment to improve conventional and
unconventional gas reservoir exploration and development.

Drilling Group

First-quarter revenue of $4.1 billion was flat sequentially but grew 9%
year-on-year. Pretax operating income of $741 million was 7% higher
sequentially, and increased 13% year-on-year. Revenue was flat
sequentially as a decline in M-I SWACO product sales following a strong
year-end high was offset by higher revenues from Drilling & Measurements
services, on improving pricing from a more favorable technology mix and
increased activity in Europe/CIS/Africa Area and the Middle East.

Year-on-year, revenue increased by $347 million led by robust growth in
Drilling & Measurements technologies as offshore drilling activity
strengthened in the US Gulf of Mexico, Sub-Sahara Africa, Sakhalin, Asia
and Australia, and as rig count grew in key international land markets
in Saudi Arabia, China and Australia. Drilling Tools & Remedial activity
increased across all Areas and IPM grew strongly as projects in Iraq and
Australia ramped up.

Pretax operating margin of 17.9% increased 111 bps sequentially and
expanded 57 bps year-on-year. Sequentially, margin expanded as a result
of better pricing from a higher-technology mix for Drilling &
Measurements services and improved profitability in IPM projects in the
Middle East.

Year-on-year, pretax operating margin expanded through increasing
drilling activity in the US Gulf of Mexico and the international Areas,
and more favorable pricing from an improved technology mix?particularly
in Drilling & Measurements.

A number of Drilling Group technologies contributed to the first-quarter
results.

In China, the first implementation of the Schlumberger PowerDrive
Archer* high build rate rotary steerable system and the Smith IDEAS*
integrated drillbit design platform broke two field records while
drilling three deep wells for PetroChina in the Hade field?the longest
single bit run in an 8  ?-in interval and the fastest rate of
penetration. In addition, PowerDrive Archer technology also set a
worldwide record with the deepest total vertical depth ever drilled
since its commercialization in 2012. The combination of PowerDrive
Archer and Smith Bits technologies enabled the drilling from kick-off to
landing the well in a single run, which translated into savings for the
operator of up to five runs, or up to seven days per well compared to
previous drilling systems. The synergy provided by the technologies also
allowed PetroChina to shorten the build-up section and increase the
reservoir exposure by approximately 20%.

Also in China, Drilling & Measurements established multiple drilling
records in the Changbei project for Shell during 2012. To date, out of
the four completed dual lateral wells, three are considered 'Best in
Class' and one is in the 'Top Quartile' compared to wells drilled in the
same field over the past six years. The performance-based drilling
contract is aligned with Shell′s objectives, and has already generated
substantial savings for the customer of 101 days ahead of the total
planned AFE. This achievement was made possible through the joint
efforts of Drilling & Measurements field personnel and the Shell
Changbei team.

In the South China Sea, Drilling & Measurements PowerDrive* rotary
steerable system, EcoScope*^? multifunction
logging-while-drilling and PeriScope bed boundary mapper technologies
were deployed for CACT Operators Group (CNOOC, Chevron and ENI) to
develop highly laminated mature reservoirs in a horizontal re-entry well
drilling project. By accurately placing the entire lateral sections of
the horizontal wells within the thin 2-m target reservoir, the operator
has been able to improve hydrocarbon drainage. As a result, the
horizontal wells have been producing at higher rates and at very low
water cuts compared to expectations.

In Russia, Schlumberger Drilling Group technologies delivered a new
benchmark in horizontal drilling performance for Eriell in the
Samburgskoe field in the Novy Urengoy region. The combination of
Schlumberger Drilling & Measurements PowerDrive X6* rotary steerable
technology and a customized Smith polycrystalline diamond compact (PDC)
bit with premium cutter technology achieved a rate of penetration of 32
m/h while drilling a horizontal well, setting a new field record.

Also in Russia, Drilling & Measurements deployed MicroScope*
resistivity- and imaging-while-drilling technology for Lukoil in the
Perm region. The service demonstrated high efficiency in the carbonate
formation of Pavlovskoye oilfield, providing more accurate formation
resistivity in the highly resistive environment, structural dips, and
fracture information while drilling. Having this critical information in
real time allowed successful placement of two horizontal wells in the
sweet spot of the reservoir. The proven value of MicroScope measurements
created new opportunities for the rapid growth of this technology in the
Volga Ural Region and in the Russia market.

Elsewhere in Russia, Schlumberger Drilling Group technologies have
recently been introduced for Gazprom Burienie in the Dulisma field in
East Siberia. The integration of Drilling & Measurements PowerPak*
steerable motors and customized Smith bits enabled drilling an 8  ?-in
horizontal well section with the most complicated profile that has been
ever drilled in this field by the customer. In particular, Smith Bits
PDC technology overcame the technical challenges in the dolerites
section of the formation to drill 1,383 m in a single run, compared to
at least three runs that were required on previously drilled wells.

Offshore Australia, Schlumberger Drilling Group technologies were
deployed for Vermilion Oil & Gas to drill a very challenging well in a
field with a highly unconsolidated reservoir. The technologies included
Drilling & Measurements PowerDrive Archer high build rate rotary
steerable system, EcoScope multifunction logging-while-drilling service,
PeriScope bed boundary mapper, and Smith bits customized using the IDEAS
integrated drillbit design platform, together with the WellDefined TVD*
survey optimization service. This combination enabled the precise
placement of the well, while maintaining a difficult trajectory within
the desired zone and between previously drilled wells. The PeriScope
technology was able to map an expected water cone and guided the
steering within the desired sand. This operation was conducted in a
single run of 2,200 m.

In Thailand, Schlumberger Drilling & Measurements
measurement-while-drilling (MWD) technology was recently awarded a
contract by PTTEP for all of their offshore Thailand work. This
three-year contract marks the re-entry of Schlumberger Drilling &
Measurements in the Gulf of Thailand slim-hole drilling market. This
challenging ultra-high temperature drilling environment requires special
MWD technology capable of operating at 200 degC.

In Ecuador, Smith Bits technology helped EP Petroecuador achieve the
fastest recorded rate of penetration in the 12  ?-in section of a well
drilled in the Auca field. The 12  ?-in customized Smith PDC bit with
ONYX* cutter technology showed minimum wear and helped the operator save
more than three days compared to previous similar wells that used two or
three conventional PDC bits.

In Argentina, Schlumberger PowerDrive Archer high build rate rotary
steerable system and customized Smith bits were deployed for Apache to
drill a horizontal well in the Vaca Muerta unconventional shale
formation in the Neuquen basin. This combination of Schlumberger
drilling technologies enabled optimization of the well curve and drain
sections, which were drilled in a single run at an average rate of
penetration 35% higher than those of offset wells. As a result, the 8
 ?-in section reached the well total depth 7 days ahead of schedule.

In 2013, the application of an integrated Schlumberger drilling system
including a bit, drilling fluid, and motor helped Vintage Production
California LLC, a wholly owned subsidiary of Occidental Petroleum
Corporation (Vintage), to reduce well construction costs by 36% and
improve operational efficiencies by 33% in their California Rose Field
operations. The engineered drilling system approach resulted in a 9.4
day reduction to drill a 13,000-ft well. Contributing to this improved
performance were Schlumberger mud motors for the upper hole sections, a
PowerDrive rotary steerable system for the lateral, and a customized
Smith PDC bit. The system delivered an 8 ?/100-ft curve section at
optimal rate of penetration. M-I SWACO fluids were used for clay
inhibition and lubricity, while keeping the low gravity solids in check
which reduced NPT related to downhole tool and rig component erosion.
The Schlumberger and Vintage collaborative well site team successfully
managed hole cleaning and prevented stuck pipe, while optimizing the
drilling system to deliver on the above results. Ready access to all
data by Schlumberger cementing services led to optimal and timely cement
designs which provided effective zonal isolation.

In Brazil, IPM completed the drilling of three offshore wells for Vanco
in the Santos basin, known for challenging drilling conditions such as
formation-induced vibrations, severe levels of stick-slip and high
temperature gradients. The Schlumberger technologies deployed were
enabled by an OSC* interactive drilling operations support center and
achieved Brazil′s record for the longest 17  ?-in section run. Overall,
21 days were saved compared to the operator′s approved for expenditures
plan.

Also in Brazil, M-I SWACO WARP* Fluids Technology was used for Petrobras
on a deepwater HPHT exploratory well with a narrow mud pressure
operating window. WARP technology enabled the well to be drilled as per
plan and improved the ability to obtain data from the
measurement-while-drilling and logging-while-drilling tools at signal
strengths up to ten times higher than those of conventional drilling
fluid systems. This improved drilling fluid performance allowed
Petrobras to have greater confidence in the data that were supplied by
the Drilling & Measurements StethoScope* formation
pressure-while-drilling, TeleScope* high-speed telemetry-while-drilling
and sonicVISION* sonic-while-drilling technologies.

Elsewhere in Brazil, M-I SWACO WARP Fluids Technology micronized barite
fluid enabled the Wireline UBI* ultrasonic borehole imager to be
deployed for OGX on a deepwater HPHT exploratory well in the Santos
Basin. By using a proprietary micron-sized weighting material of 2 to 4
microns, which is about 10 times smaller than standard API barite, WARP
technology delivered a high mud weight of 17.2 ppg with low rheological
properties and no barite sag or settling. This combination of
Schlumberger technologies provided OGX with enhanced formation
evaluation while reducing operational risk in a challenging HPHT
environment.

Production Group

First-quarter revenue of $3.8 billion decreased 4% sequentially, but
grew 7% year-on-year. Pretax operating income of $573 million was 3%
lower sequentially and decreased 8% year-on-year. The sequential
declines were primarily due to lower Completions and Artificial Lift
product sales following their strong year-end highs. In addition, Well
Services production technologies were also lower due to weaker pricing
as a result of excess capacity in US land despite an increase in stage
count due to Western Canada winter activity gains.

Year-on-year, revenue increased by $243 million led by double-digit
growth in Artificial Lift, Well Intervention, Completions and Well
Services production technologies in the international Areas. Framo and
the Subsea Services Technologies posted growth of more than 50% while
SPM revenue more than doubled as projects in Latin America came in ahead
of plans. The Group revenue increase, however, was partly reduced by a
decline in pressure pumping revenues in North America land.

Pretax operating margin of 15.1% was flat sequentially but declined 237
bps year-on-year. Sequentially, margin expanded on improved
profitability for SPM project-related activities in Latin America and
from better Well Services results in both the US Gulf of Mexico and the
international Areas. This expansion, however, was offset by pricing
weakness in US land. Elsewhere in North America, Well Services land
margin improved by 135 bps as a result of higher stage count in Western
Canada and lower guar costs.

Year-on-year, pretax operating margin declined mainly due to pricing
weakness in Well Services production technologies in US land, although
the effect of this was partially offset by improved profitability in SPM
projects in Latin America.

Highlights during the quarter included successes in a number of
Production Group technologies.

In Romania, Well Services LiteCRETE* slurry was deployed for OMV Petrom
in the Dealu Batran field as the optimal technology to cement depleted
reservoirs prone to fluid losses. As a result of LiteCRETE technology
implementation on numerous wells, losses were mitigated and zonal
isolation confirmed by cement bond and variable density logs. As a
result, the operator avoided the need for remedial cementing operations
and saved costs associated with the drilling rig and services.

In Russia, a successful hydraulic fracturing treatment was performed for
the first SPM project with TNK-BP Varyeganneftegas in the
Novo-Khokhryakovskoye field. The initial rate of the well exceeded
customer expectations by 50%. Data obtained after fracture evaluation
will serve for future optimization of the horizontal well completion.

In Russia, Well Services CemCRETE* concrete-based cementing technology
has been deployed for Open Joint Stock Company (OJSC)
Verkhnechonskneftegaz to significantly improve cement sheath quality and
to prolong the life of their wells in the VCNG field in Eastern Siberia.
In addition, the customer drilling department has decided to replace
conventional cementing technology with Well Services LITEFIL* cement
additive for low-density slurries on all their wells in the VCNG field
during 2013.

In South Mexico, Schlumberger completed the first horizontal well in the
Terra field using over 500 m of slotted liner in a highly heterogeneous
carbonate pay zone for Pemex. A stimulation treatment was performed
using Well Services SXE* superX emulsion and VDA* viscoelastic diverting
stimulation fluids, and resulted in an initial oil production of
approximately 5,000 bbl/d, or 66% above plan. As a result, the customer
is now drilling a second horizontal well in the same field, where they
plan to carry out a similar stimulation treatment. This achievement was
made possible by the customized engineering and teamwork between Pemex
and Schlumberger field operations.

In Kuwait, Schlumberger Well Intervention Services technologies were
deployed for KOC to revive a well that ceased to produce in 2000. A
novel approach was adopted for the first time in this field, combining
ACTive* in-well live performance matrix stimulation using distributed
temperature sensing (DTS) with ABRASIJET* hydraulic pipe-cutting and
perforating service. In addition, energized fluids were used to optimize
the treatment penetration into the formation and increase reservoir
contact for optimum results. The intervention was designed and executed
successfully allowing the well to flow again and to positively
contribute to KOC′s production.

In the UK sector of the North Sea, Schlumberger Completions technologies
were deployed for Xcite Energy in a unique intelligent multizone
completion in the Bentley field. The IntelliZone* family of zonal
management systems was combined with the SFIV* surface-controlled
formation isolation valve system, allowing flow control of two
horizontal wellbores during an extended well test. In addition,
WellWatcher real-time reservoir and production monitoring technology and
DTS were deployed to monitor the production parameters, while an
electric submersible pump with a variable speed drive provided the lift
required to produce the well. A groundbreaking 14 control lines were
installed in the well to deliver an integrated multiple zone management
system, which allowed efficient production testing and data acquisition
of the two wellbores without costly well intervention.

In Norway, Schlumberger provided a complete range of products and
services to Shell on two subsea gas wells in the offshore Ormen Lange
field. The range of offerings included OptiPac* Alternate Path^?,
WellWatcher real-time reservoir and production monitoring, and FIV*
formation isolation valve systems. OptiPac technology enabled a positive
gravel pack of the wellbore in a highly depleted formation, improving
the longevity of the completion. The two wells were successfully brought
on line by reliably activating the FIV tool through a remotely operated
vehicle, simplifying the operations and allowing the operator to save
$15 million in rig time costs per well.

In Indonesia, Schlumberger Artificial Lift was awarded a six-year
electrical submersible pump (ESP) runlife service contract by CNOOC for
ESP equipment and services on 144 wells in the offshore South Sumatra
field. The award was based on the Schlumberger proven track record in
supplying high reliability systems for challenging well conditions in
the South Sumatra field for nearly 40 years.

In Canada, Schlumberger Completions used the Falcon* multistage
stimulation system with graduated dissolvable balls for Mancal Energy to
complete 6 new wells, including the stimulation of 95 stages in total.
The dissolvable balls were activated by wellbore fluids. Their use as an
alternative to the standard Falcon balls reduces the likelihood of
intervention by coiled tubing during the completion process, which can
cost $200,000 per well in this area.

In Russia, a number of successful Schlumberger technology applications
were achieved in 2012 for Gazpromneft-Razvitie in the Messoyakha field.
Schlumberger Drilling & Measurements Periscope bed boundary mapper
technology was used for better placement of horizontal well sections and
improved understanding of reservoir conditions. Two horizontal wells
were also completed with Schlumberger Sand Management Services MeshRite*
stainless-steel compressed mesh screens in order to reduce sand flowback
during production. In addition, Schlumberger Testing Services provided
extended well test services on two pads in the East Messoyakha field.
The controlled and environmentally safe operation enabled
Gazpromneft-Razvitie to confirm reserves in place and reinforced their
confidence in full-scale pad 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 120,000 people
representing over 140 nationalities and working in more than 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 of $42.15 billion in 2012. 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, April 19, 2013. 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 +1-800-288-9626 within North
America, or +1-612-332-0345 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 May 19, 2013 by
dialing +1-800-475-6701 within North America, or +1-320-365-3844 outside
of North America, and providing the access code 280257.

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

Malcolm Theobald ? Schlumberger Limited, Vice
President of Investor Relations

Joy V. Domingo ? Schlumberger
Limited, Manager of Investor Relations

Office +1 (713) 375-3535

investor-relations@slb.com