* Warns E&P spending to remain weak in 2016
* Says weak cash flows would curtail E&P spending
* Company commentary suggests job cuts possible-analysts
* Company to continue to seek M&A opportunities
* Cost cuts help Q3 EPS beat analysts estimates
(Adds details, graphic)
By Amrutha Gayathri
Oct 15 (Reuters) - Schlumberger Ltd SLB.N , the world's
No.1 oilfield services provider, suggested that it may have to
reduce costs further and cut more jobs as it expects any rebound
in drilling activity to now take longer than expected.
Even if crude prices improve next year, weak cash flows
would curtail the ability of oil and gas companies to increase
spending on exploration and production, Schlumberger Chief
Executive Paal Kibsgaard said in a statement. urn:newsml:reuters.com:*:nBw8M3pK9a
"In light of conservative customer budgets for next year, we
are therefore entering another period during which we will
continually adjust resources in line with activity," Kibsgaard
said on Thursday.
Kibsgaard said the oil market is also weighed down by
concerns of slowing Chinese demand and additional supply from
Iran.
Schlumberger said spending cuts by companies have been
"dramatic", but it did not say how much it expects oil and gas
companies to cut spending in North America and internationally -
a forecast it issued in the previous two quarters.
Its last forecast, issued in July, was for a drop in
spending of more than 35 percent in North America and more than
15 percent outside the region.
"They know that the next two quarters are going to be very
choppy and very tough so they want to make sure they are aligned
for that," Evercore ISI analyst James West said.
"When they said they are going to manage their operations,
it's a good indication that headcount reductions will continue."
Schlumberger kicks off the earnings for oilfield services
providers and its comments are closely watched for a glimpse
into industry trends.
Schlumberger has already cut 20,000 jobs this year and
scaled back spending in response to weak crude prices, moves
that helped its third-quarter profit marginally beat analysts'
average estimate.
Net income attributable to Schlumberger nearly halved to
$989 million, or 78 cents per share.
Total revenue fell 33 percent to $8.47 billion, including a
47 percent drop in North America and an about 27 percent decline
outside.
Analysts were expecting a profit of 77 cents per share,
according to Thomson Reuters I/B/E/S.
Schlumberger said in August it would buy equipment maker
Cameron International Corp (N:CAM) CAM.N for $14.8 billion to bolster
its pricing capability, and on Thursday said it would seek more
acquisitions.
The $35-billion merger of its rivals Baker Hughes (N:BHI) Inc
BHI.N and Halliburton (N:HAL) Co HAL.N is still awaiting regulatory
clearance.
Schlumberger shares were down 0.9 percent at $75.50 in
extended trading.