Schlumberger Limited reported third-quarter 2010 revenue of $6.85 billion versus $5.94 billion in the second quarter of 2010, and $5.43 billion in the third quarter of 2009.

Net income attributable to Schlumberger, excluding charges and credits, was $875 million—an increase of 7% sequentially and 11% year-on-year. Diluted earnings-per-share, excluding charges and credits, was $0.70 versus $0.68 in the previous quarter, and $0.65 in the third quarter of 2009.

During the third quarter of 2010, Schlumberger recorded a gain of $0.98 per share on its investment in M-I SWACO as a result of the merger with Smith International, Inc. (Smith), which was offset in part by restructuring and merger-related charges of $0.30 per share. These items resulted in a net after-tax credit of $859 million. Diluted earnings-per-share, including charges and credits, was $1.38 versus $0.68 in the previous quarter, and $0.65 in the third quarter of 2009.

Oilfield Services revenue of $5.54 billion increased 2% sequentially and 12% year-on-year. Pretax segment operating income of $1.10 billion was up 3% sequentially and 6% year-on-year.

WesternGeco revenue of $478 million increased 1% sequentially and 3% year-on-year. Pretax segment operating income of $40 million decreased 14% sequentially and 34% year-on-year.

The third-quarter 2010 results reflect one month of activity from the acquired Smith businesses which contributed revenue of $810 million and pretax operating income of $84 million. The merger was dilutive to the third-quarter 2010 earnings-per-share by just under $0.02.

Schlumberger Chairman and CEO Andrew Gould commented, “The sequential revenue increase was largely driven by strong improvements in US land and Canada, which more than offset a sharp decline in the US Gulf of Mexico as the deepwater drilling moratorium took full effect. Favorable activity, coupled with robust pricing power for pressure pumping and the effects of our restructuring efforts led to a major improvement in margins.

Outside North America activity was mixed. Solid improvements were recorded in Asia, Russia, the North Sea, and West & South Africa, which offset continued weakness in North Africa and the Gulf of Guinea. Latin America performed well in all GeoMarkets except Mexico where budget constraints, weather and security concerns led to major reductions in IPM project activity.

At the end of the quarter, WesternGeco began a marine seismic acquisition and processing contract to acquire both wide-azimuth and conventional 3D surveys utilizing four vessels to explore for deep subsalt oil and gas reservoirs in the Red Sea.

We expect the fourth quarter to show continued strong activity in North America on land, but we do not expect any rapid return to deepwater drilling in the US Gulf of Mexico despite the lifting of the moratorium. Further clarification of the new rules and liabilities under which activity will be conducted will be necessary before any major increase takes place. Our restructuring efforts will continue to deliver margin improvements.

In the West Texas Bone Spring/Avalon Shale play, operator Anadarko used Schlumberger Data & Consulting Services and Drilling & Measurements well placement services to drill horizontal laterals up to 3,500 ft in length, within a 10 to12-ft thick zone. In addition, the combination of cutting edge directional drilling equipment and the well placement services reduced drilling times by about 20 days for these wells.

In Poland, Schlumberger completed its operations on the second Baltic Basin shale gas well for Lane Energy and partner ConocoPhillips. All Schlumberger services, which included drilling, logging and cementing operations, were completed without lost time and in full compliance with local and international standards. In addition, M-I SWACO provided the drilling fluid services. Both wells were delivered under budget and ahead of the planned drilling curves by more than 25%. Schlumberger will now be providing completion, stimulation and well testing services during the production evaluation phase of this work.

Sequentially, revenue increased primarily due to higher customer spending for maintenance, repair and operating supplies in the US shale markets and to the seasonal recovery in Canadian activity. Activities in support of the US Gulf of Mexico cleanup efforts also contributed to this result. These increases were partially offset by lower demand for line pipe in the US.