Schlumberger Ltd. (NYSE: SLB) and Baker Hughes Inc. (NYSE: BHGE), the world's top two oilfield services firms, warned on Oct. 20 of a slowdown in North America and a challenging year ahead as crude oil prices stay volatile.
Schlumberger said investments in North America were moderating as energy companies increasingly shied away from chasing higher production at the cost of financial returns.
"Oil prices remain volatile and, as a result, our customers remain cautious," Baker Hughes CEO Lorenzo Simonelli said.
Schlumberger reported a 53% jump in revenue from North America, its biggest market, in the latest quarter, but cautioned that activity had been slowing.
"In the U.S. Gulf of Mexico, activity continued to weaken in the third quarter, and the outlook remains bleak for this region based on current customer plans," Schlumberger said.
The company's results and warnings come amid slowing drilling activity in North America.
U.S. rig counts have been falling for several weeks and recently hit a four-month low, while production has grown at a slower rate than the U.S. Energy Information Administration's estimate.
Shares of both companies were volatile in premarket trading. Schlumberger was last up 0.16%, while Baker Hughes were down just over 1%.
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We’re taking a departure from the normal here. But what’s ‘normal’ right now anyway? And what will be normal next quarter? So, we asked.