The world's largest oil field services company thinks the crude oil market has bottomed.
"In the second quarter market conditions worsened further in most parts of our global operations, but in spite of the continuing headwinds we now appear to have reached the bottom of the cycle," CEO Paal Kibsgaard said in the earnings statement released Thursday.
Schlumberger joined Halliburton, the world's second-largest oil field services company, in calling the bottom. On Wednesday, Halliburton CEO Dave Lesar said in the company's earnings statement that he believed "the North America market has turned."
The worst crude-oil crash in decades, which began in mid-2014, forced oil companies to find ways to maintain cash flow and possibly stay profitable that included job cuts and rig shuttering.
Oil prices have gained about 22% this year, and amid supply disruptions they were once nearly double the cycle low.
To weather the downturn, Schlumberger has lowered prices for its clients and allocated capital mostly to assets with the highest return. It has also trimmed costs via its headcount, announcing an additional 16,000 layoffs on Thursday. These steps, and higher oil prices, give the company confidence that it will withstand "the weakness that will persist through 2016 as expected."
Higher oil prices also give Schlumberger the chance to renegotiate some of its contracts with oil explorers that may not make financial sense for it going forward.
Schlumberger reported a second-quarter loss of $1.56 a share, down big from a profit in the previous year, and a 20% year-over-year drop in revenues to $7.16 billion (versus $7.15 billion forecast).
