Stock Monitor: Schlumberger Post Earnings Reporting
LONDON, UK / ACCESSWIRE / January 03, 2018 / Active-Investors.com has just released a free research report on Weatherford International Ltd (NYSE: WFT). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=WFT as the Company’s latest news hit the wire. On December 29, 2017, Weatherford, a leading multinational oilfield service company, declared that it has sold its US pressure pumping and pump-down perforating assets to a subsidiary of its oil-well business rival Schlumberger Ltd (NYSE: SLB) for $430 million in cash, abandoning the planned joint venture (JV) OneStim. Schlumberger is a leading provider of technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. Register today and get access to over 1000 Free Research Reports by joining our site below:
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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Weatherford International and Schlumberger most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:
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Companies Announced JV in March 2017
- In March 2017, Schlumberger and Weatherford had announced their agreement to create OneStim, a JV to deliver completions products and services for the development of unconventional resource plays in the United States and Canada land markets. This JV was expected to be one of the broadest multistage completions portfolios in the market, along with one of the largest hydraulic fracturing fleets in the industry.
- As a part of the JV agreement, the companies had agreed to contribute all their respective North America land hydraulic fracturing pressure pumping assets, multistage completions, and pump-down perforating businesses. Also, Weatherford was entitled to receive a one-time cash payment of $535 million from Schlumberger and a 30% stake in OneStim. On the other hand, Schlumberger was to own 70% of the JV and manage the JV post-deal.
- The transaction was intended to better compete against market leader Halliburton and fast-growing companies such as Keane Group.
- However, the Companies abruptly called off the JV as Weatherford sold its US pressure pumping assets to Schlumberger on December 29, 2017.
Terms and Conditions of the Sale Transaction
- Weatherford and Schlumberger agreed to revise the terms of their deal, such that it indicates an asset sale.
- With this transaction, Schlumberger will get the ownership of Weatherford's US pressure pumping and pump-down perforating related facilities and supplier and customer contracts. Besides, about 100 Weatherford’s employees associated with the pressure pumping and pump-down perforating businesses will move to Schlumberger.
- However, Weatherford will retain the entirety of its leading multistage completions portfolio, manufacturing capability and supply chain. In fact, the Company will continue to participate in the growing completions markets in Canada, the US as well as globally.
Sales Proceeds to be Used Towards Deleveraging
The transaction brings major cash inflow for Weatherford, which has been strapped for cash ever since the rout in oil prices began in the second half of 2014. The Company has been looking to sell units to raise cash for bringing down its debt, which stands at $7.9 billion.
Thus, as anticipated, Weatherford intends to utilize the cash payment of $430 million towards repaying its outstanding debts. Therefore, Mark A. McCollum, President and Chief Executive Officer of Weatherford, stated that this transaction is a major step toward building a solid and strong Company and unlocking the potential of Weatherford. The cash proceeds from the transaction enable the Company to commence its deleveraging process. This, along with its transformation plans, will lead to a leaner organization with lower debt and considerably higher profit margins.
Besides, retaining 100% of its leading land-based multistage Completions business would also create significant value for Weatherford.
Stock Performance Snapshot
January 02, 2018 - At Tuesday’s closing bell, Weatherford’s stock tumbled 17.03%, ending the trading session at $3.46.
Volume traded for the day: 74.59 million shares, which was above the 3-month average volume of 22.40 million shares.
Stock performance in the last month – up 4.85%
After yesterday’s close, Weatherford’s market cap was at $3.43 billion.
The stock is part of the Basic Materials sector, categorized under the Oil & Gas Equipment & Services industry. This sector was up 2.2% at the end of the session.
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