March 23, 2009 / 4:43 PM / 9 years ago

UPDATE 2-Schlumberger eyes more job cuts, seismic cash flow

* Seismic measurement unit to be cash flow positive in 2009

* After 5 pct job cut in Q1, CEO eyes similar-size cuts

* Natural gas down cycle to be longer than oil‘s, CEO says

* Shares up 8.2 pct, reversing Friday sell-off; sector up (Adds view on U.S. land drilling, project cuts, paragraphs 6-8)

By Braden Reddall

NEW ORLEANS, March 23 (Reuters) - Schlumberger Ltd (SLB.N) expects its WesternGeco seismic unit to remain cash flow positive this year despite the substantial impact of reduced client spending, Chief Executive Andrew Gould said on Monday.

Gould also said the company, after cutting 5 percent of its 87,000-strong workforce this quarter, would probably make headcount cuts of a similar size in the coming months.

Shares of the world’s largest oilfield services company rose 8.2 percent to $44.93, reversing a sharp sell-off on Friday after a Citigroup analyst said oilfield service companies could announce profit warnings this week. [ID:nBNG391627]

Gould, whose comments are watched closely by the industry because of Schlumberger’s size and global reach, said the contraction in natural gas supply necessary for a price recovery would be complicated by increasing supplies of liquefied natural gas and steady U.S. shale gas production.

“The probability of rapidly increasing supply means that the down cycle will last longer than for oil,” Gould told the 2009 Howard Weil Energy Conference in New Orleans.

He did not expect to see a substantial recovery this year in overall U.S. land drilling.

Gould said the biggest spending cuts by oil and gas companies had been in Canadian heavy oil projects and in Russia, though he expected Western Siberia to recover somewhat in the second half of this year.

Schlumberger would continue to seek attractively priced acquisitions, he said, though Gould told reporters at an energy conference last month that it was mostly targeting start-ups short of funding.

Gould said Schlumberger would have $2.9 billion in capital expenditures for 2009. The company had said in January it expected $3 billion in 2009 capex -- including $800 million for WesternGeco, which measures prospective oil and gas reservoirs -- down from a total of nearly $4.1 billion in 2008.

Shares of rivals Halliburton Co (HAL.N), Weatherford International Ltd (WFT.N) and Baker Hughes Inc BHI.N, which were also sold off on Friday, rose 7 percent, 8.6 percent and 8.9 percent, respectively, on Monday. (Additional reporting by Anna Driver in New Orleans; Editing by Lisa Von Ahn and Brian Moss)

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