Schlumberger (NYSE: SLB) said on April 21 a ramp-up in drilling activity in North America boosted pricing for its oilfield services, but the cost of reactivating equipment idled during the slump in crude oil prices gutted margins.

Oil stabilizing above $50 per barrel has encouraged oil producers to resume drilling after a more than two-year lull boosting demand for equipment and services provided by Schlumberger and its rivals.

The U.S. rig count rose more than 25% in the first three months of the year, according to data from Baker Hughes Inc. (NYSE: BHI)

“In the first quarter, the North America land market continued to strengthen in terms of both activity and pricing, leading us to begin accelerating deployment of idle capacity for multiple product lines,” Schlumberger CEO Paal Kibsgaard said.

The world’s No.1 oilfield services provider said revenue rose 5.7% to $6.89 billion in the quarter ended March 31, but its cost of revenue increased 11.3% to $6.08 billion.

The company’s pretax operating margin fell to 11% in the latest quarter, from 13.8% a year earlier.

Revenue from North America increased to $1.87 billion in the first quarter, up 6% from the preceding quarter and 27.8% from a year earlier.

However, international revenue fell 7% to $4.92 billion from the preceding quarter, hurt by “greater-than-expected seasonal decline in activity and sales, particularly in China, Russia land and the North Sea.” Schlumberger said production constraints imposed on its project in Ecuador also impacted the results.

OPEC production cuts and economic woes are complicating the company’s efforts to collect $1.1 billion from Ecuador’s state-owned Petroamazonas.

Schlumberger has invested $3 billion in Ecuador to-date under contracts signed earlier this decade to expand production at two oilfields, out of a total investment that was to reach $4.9 billion over 20 years.

Net profit attributable to Schlumberger fell to $279 million, or 20 cents per share, in the first quarter, from $501 million, or 40 cents per share, a year earlier.

Excluding items, Schlumberger earned 25 cents per share in the latest quarter, in-line with analysts’ estimates, according to Thomson Reuters I/B/E/S. Analysts on average had estimated revenue of $6.96 billion.

Schlumberger is the first major oilfield services provider to report earnings and is closely watched for comments on the industry. Rivals Halliburton Co. (NYSE: HAL) and Baker Hughes are set to report results early next week.

Schlumberger’s shares were little changed at $76.15 in premarket trading. Up to the April 20 close, they had fallen nearly 9% this year.