Activity directed towards shale and tight oil plays is likely to take the biggest cut, given the higher marginal production costs and shorter investment planning cycles. However, we think that Schlumberger is likely to be the least affected by this among the big services companies. For instance, Schlumberger derives less than a third of its revenues from North America and its revenue exposure to pressure pumping – a largely shale directed service – stands at just about 15% (FY 2013) compared to over 30% for Halliburton. [ 1 ] Additionally, the company derives a meaningful portion of revenues from projects such as ultra-deepwater exploration and mature plays, which are typically undertaken by larger and more cash-rich oil and gas companies that have long capex planning horizons. We do not expect to see a large decline in contracting activity from these projects, although customers are likely to have better bargaining leverage in contract negotiations and extensions.