Schlumberger (SLB) - Get Report shares were indicated higher in pre-market trading Friday after it reported stronger-than-expected second quarter earnings, offsetting news that longtime boss Paal Kigsbaard will step down from his role as CEO and chairman after more than two decades with the oil services group.
Kigsbaard will be replaced by Schlumberger veteran Olivier Le Peuch, the company's chief operating officer, as of August 1. Mark Papa will take on the role of company chairman, Schlumberger said in a statement shortly before its second quarter earnings report, which showed a Street-meeting profit of 35 cents per share on stronger-than-expected revenues of $8.3 billion.
Schlumberger also said it doesn't see a mid-term change in structural oil demand, and sees oil market sentiment to be "remain balanced" over the second half of the year and said OPEC production cuts, which along with support from Russia will take 1.2 million barrels from the market each day until early next year, will keep crude price "range bound at present levels".
"The oil demand forecast for 2019 has been reduced slightly on trade war fears and current global geopolitical tensions, but we do not anticipate a change in the structural demand outlook for the mid-term," Kibsgaard said in a statement alongside the earnings report. "On the supply side, we continue to see US shale oil as the only near- to medium-term source of global production growth, albeit at a slowing growth rate, as E&P operators continue to transition from an emphasis on growth to a focus on cash and returns, with consequent restraining effects on investment levels."
Schlumberger shares were marked 1.3% higher in pre-market trading Friday following the news of Kgsbaard's departure and the second quarter earnings, and were indicating an opening bell price of $39.28 each.