Schlumberger says Gustav, Ike cut into profits

During an investor conference in Houston, Schlumberger Chairman and Chief Executive Andrew Gould acknowledged it was impossible to predict how the ongoing financial crisis will affect energy demand, but predicted robust business for global companies seeking new supplies of hydrocarbons.

"We contend that even in such a reduced demand-growth scenario, the supply problem remains essentially the same, and a much deeper drop in demand will be necessary to materially impact exploration and production activity," he said.

A day after Schlumberger and other service providers saw their shares tank along with the broader market, the sector rebounded Tuesday.

Schlumberger shares rose $4.34, or nearly 6 percent, to close at $78.09 Tuesday.

On Monday, the sector as a whole was off nearly 12 percent.

Gould opened his presentation Tuesday by noting the late-summer storms are expected to reduce results for the July-September period by 4 cents to 6 cents a share. He said the primary cause was the loss of 22 operating days in the Gulf of Mexico, where the company provides technology, equipment and other services to help oil and gas companies find and tap new sources of fossil fuels.

Hurricanes Gustav and Ike shut down nearly 100 percent of oil and natural gas production in the Gulf for a couple of weeks.

Schlumberger is scheduled to report third-quarter earnings Oct. 17, followed by Halliburton Co. on Oct. 20.

Gould has said unless the global economy goes into the tank, he expects continued brisk spending on exploration and production--activity that bodes well for service companies. He reiterated that sentiment Tuesday, citing in particular the large number of offshore rig orders and a rash of new exploration in places like Greenland, North Africa and southeast Asia.