It's good to be the king. Not only do you eat better than your rivals when times are tough, but when times get good, they can get really good for those in the catbird seat. And so it is for Schlumberger (NYSE:SLB) -- renewed activity in exploration, drilling, and production has meant a nice pickup in business for this energy services royalty.

In the recently completed quarter, the company's revenue rose 27% as each geographic region chipped in with 20% or better top-line growth. Overall oilfield services revenue rose 25%, while the smaller WesternGeco unit's revenue rose 45%. Investors might recall that WesternGeco is jointly owned with Baker Hughes (NYSE:BHI), another oil and gas services company.

Operating income growth was also robust around the world, and Schlumberger posted a 65% increase in per-share income from continuing operations. One of the companies legitimately hurt by the Gulf hurricanes, Schlumberger estimated that it lost at least 25 operating days in the Gulf and $0.06 a share in net income (out of a reported $0.89 per share). As a result, North America was the only region that didn't post improved operating profit from the second quarter.

We at The Motley Fool have already talked a lot about the relationships between high energy prices, tough production environments (for some large companies), and the drive toward higher exploration and exploitation activities and investments. In other words, companies like BP (NYSE:BP), ConocoPhillips (NYSE:COP), and Devon (NYSE:DVN) want to produce more, and they can use Schlumberger's help. What's more, Schlumberger is a prolific investor in the space -- spending around half a billion dollars or more each year. That's more than many of its rivals spend combined and it has helped to keep the company on the leading edge.

Still, many of us at The Motley Fool do believe that cash flow is king. While Schlumberger has consistently generated positive cash flow for some time now, it looks as though valuation has outpaced even an optimistic assessment of future cash flow growth. I'd expect the stock to stay in favor as earnings growth stays strong and earnings estimates head upwards, but that cash flow issue makes me wonder about whether the sizzle has surpassed the steak.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).