The Corporate-Front Page (July 1998)

While a low oil price depresses oil company results, the service sector goes from strength to strength. How long can this go on?

Following the strong first quarter reported in last month's PDM, Petroleum Geo-Services (PGS) has now returned what is described as its best-ever quarterly results. Second quarter net income increased by 41%; revenues by 29%, and operating profit grew by 52%. PGS has acquired Louisiana-based Acadian Geophysical Services Inc., a 3D-seismic acquisition company specializing in transition zone and shallow water areas. Transaction cost was $55 million. A new seismic production record is claimed for PGS' Ramform Challenger which acquired over 2,100 square kilometers in a 30-day period off of the coast of Australia. During the six months ended June 30, 1998, the Company invested $163.5 million in its multi-client library, primarily in strategic seismic surveys in the North Sea, Gulf of Mexico and Asia Pacific regions. Schlumberger also reports second quarter net income of $359 million - up by 17% over the same period last year. CEO Euan Baird commented: "The oilfield results remained strong despite the anticipated slowdown in the growth of exploration and production expenditures experienced during the quarter. The uncertainty surrounding the demand for oil will keep our customers cautious about upstream spending, and we are adjusting our operations accordingly." Western Atlas and Baker Hughes have cleared the U.S. antitrust review of their merger and report a second quarter revenue hike of 31% to $547 million while operating profit was up 59% to $75 million." Meanwhile Halliburton and Dresser have received clearance for their merger in Canada and from the European Commission. At the present time the companies have other regulatory filings in process with the U.S. Department of Justice and regulatory agencies in certain other countries. The companies expect to complete the merger during the fall of 1998.

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