SLB secures major drilling contract for Mexico project

HOUSTON - Global energy technology company SLB (NYSE: SLB), with a market capitalization of approximately $57 billion and annual revenue of $36.3 billion, announced it has been awarded a significant drilling contract by Woodside Energy (NYSE: WDS) for the Trion development project offshore Mexico. The contract entails the delivery of 18 ultra-deepwater wells over three years, starting in early 2026, with a focus on using AI-enabled drilling capabilities to enhance operational efficiency and well quality. According to InvestingPro analysis, SLB currently appears undervalued based on its Fair Value assessment.

The Trion field, located in waters up to 2,500 meters deep, presents technical challenges that SLB aims to address with its expertise in ultra-deepwater drilling and advanced technologies. The comprehensive contract includes digital directional drilling services and hardware, logging while drilling (LWD), surface logging, cementing, drilling and completions fluids, completions, and wireline services. With a strong return on invested capital of 15% and healthy profit margins, SLB demonstrates robust operational efficiency in managing complex projects.

Wallace Pescarini, president of SLB’s Offshore Atlantic, emphasized the company’s extensive global experience in similar projects and its investments in local talent and supply chains in Mexico as key factors in ensuring the timely delivery of the project.

The services for the Trion project will be managed through SLB’s Performance Live™ digital service delivery centers. This contract follows a previous major contract awarded to SLB’s OneSubsea™ joint venture by Woodside in 2023 for subsea production systems, which is currently on track with its manufacturing phase.

Woodside is developing the Trion field in partnership with Mexican state-owned Pemex, with the first production targeted for 2028. SLB, known for its global presence in over 100 countries and its commitment to driving energy innovation, has outlined the contract as part of its broader strategy to support the energy transition and develop new energy systems.

This press release includes forward-looking statements regarding the expected benefits and deployment of SLB’s technologies and partnerships, as well as the company’s sustainability goals. However, these statements are subject to various uncertainties, including regulatory approvals and the risks outlined in SLB’s filings with the U.S. Securities and Exchange Commission. InvestingPro data reveals that analysts maintain a strong buy consensus on SLB stock, with multiple ProTips highlighting the company’s 55-year track record of maintaining dividends and strong five-year returns. For deeper insights into SLB’s financial health and future prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The information in this article is based on a press release statement.

In other recent news, SLB reported several significant developments affecting its financial and operational outlook. Stifel analysts have maintained a Buy rating on SLB, with a $59 price target, citing the company’s strong fourth-quarter performance and positive outlook for 2025. They noted that SLB’s robust free cash flow is expected to support an accelerated share buyback program and increased dividends. Meanwhile, RBC Capital Markets adjusted its price target for SLB to $55, retaining an Outperform rating, highlighting the recent approval for the CHX acquisition and a slight reduction in their earnings forecast due to market softness.

Jefferies also revised its price target for SLB to $59 while maintaining a Buy rating, reflecting a positive view on SLB’s financial health and market position despite recent underperformance. Additionally, SLB is undergoing a business restructuring, including workforce reductions and the establishment of a new performance function, as part of a cost-saving initiative amid cautious customer spending.

Furthermore, SLB Capturi, a joint venture between Schlumberger and Aker Carbon Capture, secured a contract for a carbon capture project in Oslo, Norway. This project involves delivering a carbon-capture plant and related facilities, with completion expected by 2029. These recent developments indicate a dynamic period for SLB, with ongoing strategic adjustments and new opportunities in carbon capture technology.

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