Weatherford Reaches Record Revenues in 2Q11

- Weatherford Reaches Record Revenues in 2Q11

Tuesday, July 26, 2011
Weatherford International Ltd.

Weatherford reported second quarter 2011 income of $126 million, or $0.17 per diluted share, excluding an after-tax loss of $16 million. On a GAAP basis, our net income for the second quarter of 2011 was $110 million, or $0.15 per diluted share. The excluded after-tax loss is comprised of $13 million in severance and exit charges and $3 million in government investigation costs.

Second quarter diluted earnings per share reflect an increase of $0.09 over the second quarter of 2010 diluted earnings per share of $0.08, before charges. Sequentially, the company's second quarter diluted earnings per share, before charges, were $0.07 higher than the first quarter of 2011. International markets drove the entire sequential improvement in both revenue and profitability.

Second quarter revenues of $3.052 billion were the highest in the company's history, despite the severe negative impact of Canada's spring break-up. Revenues were 25 percent higher than the same period last year and seven percent higher than the prior quarter. International revenues were up 14 percent sequentially and up 12 percent versus the year ago quarter. North America revenue was down one percent sequentially and up 46 percent versus the second quarter of 2010. The sequential decline in North America was due to the severe impact of the Canadian break-up. The Canadian results overshadowed a very strong performance in the U.S., where sequential revenue growth outpaced rig count by more than two-to-one and operating margins expanded.

Segment operating income of $421 million improved 36 percent year-over-year and 19 percent sequentially. The company's international operations provided all of the sequential growth compared to the first quarter of 2011 and delivered 51 percent incremental margins. International operating income was down three percent compared to the year ago quarter.

The company expects earnings per share before excluded items of approximately $0.24 to $0.26 in the third quarter of 2011, supported by a seasonal recovery in Canada and steady improvement in the U.S. and international markets. For full-year 2011, the company anticipates that revenue growth will be approximately 25 percent, which is higher than the 20 percent growth rate estimated last quarter. In addition, the company expects international margins in the fourth quarter of 2011 to be meaningfully higher than full-year 2010 margins of 11 percent.

North America

Revenues for the quarter were $1.344 billion, which is a 46 percent increase over the same quarter in the prior year and down one percent sequentially. The Stimulation and Chemicals, Artificial Lift and Well Construction product lines contributed strong results for the quarter.

The current quarter's operating income was $244 million, up $117 million from the second quarter of 2010 and was down $40 million, or 14 percent, compared to the prior quarter. On a sequential basis, strong growth and steadily expanding margins in the U.S. were offset by the impact of the Canadian break-up.

Middle East/North Africa/Asia

Second quarter revenues of $617 million were two percent higher than the second quarter of 2010 and seven percent higher than the prior quarter. Weather improvements in China and Australia and a stronger Iraq helped offset the impact of a full quarter of reduced activity due to political unrest in the Middle East and North Africa. Libya operating expenses cost almost $0.01 per share. The Well Construction, Integrated Drilling and Artificial Lift product lines posted strong sequential performances.

The current quarter's operating income of $34 million decreased 54 percent as compared to the same quarter in the prior year and increased $23 million compared to the first quarter of 2011.

Europe/West Africa/FSU

Second quarter revenues of $592 million were 17 percent higher than the second quarter of 2010 and 16 percent higher than the prior quarter. The region had strong performances in the North Sea, Russia and Caspian as the winter seasonality abated. The Completion, Stimulation and Chemicals, Drilling Services and Integrated Drilling product lines had the strongest sequential growth.

The current quarter's operating income of $93 million was up 37 percent compared to the same quarter in the prior year and up $55 million compared to the prior quarter.

Latin America

Second quarter revenues of $498 million were 21 percent higher than both the second quarter of 2010 and the first quarter of 2011. Argentina, Colombia and Venezuela posted strong sequential performances. The Drilling Services, Stimulation and Chemicals and Artificial Lift product lines benefited from improved demand.

The current quarter's operating income of $51 million increased 22 percent as compared to the same quarter in the prior year and increased $30 million compared to the prior quarter.

Liquidity and Net Debt

Net debt for the quarter increased $144 million, with working capital increasing $193 million during the quarter. Recently, the company successfully renegotiated its unsecured revolving credit facility to increase the size of the facility from $1.75 billion to $2.25 billion and extend the scheduled maturity to July 16, 2016.

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BP, Weatherford In Settlement on Deepwater Horizon

- BP, Weatherford In Settlement on Deepwater Horizon

Monday, June 20, 2011
Dow Jones Newswires
by Drew FitzGerald

BP on Monday reached a settlement with Weatherford's U.S. subsidiary that indemnifies the oil-services company from future Deepwater Horizon-related disaster claims.

Under the deal, Weatherford agreed to pay BP $75 million to spend on its Gulf Coast recovery fund. The entire cost of the settlement is being funded by insurance policies Weatherford had in place when the disaster happened.

The deal ties up another end in a web of litigation for companies that worked on the drilling rig, which exploded last year and caused one of the largest oil spills in U.S. history. Weatherford provided BP with products and services for the Macondo oil well, along with rig-owner Transocean and contractor Halliburton.

Under the latest agreement, BP indemnified Weatherford from all current and future environmental, pollution, personal, business, property and economic loss claims arising from the accident.

Separately, Transocean said Friday that insurers of its sunken rig have asked a federal judge to decide if BP and other owners of the doomed Macondo well are entitled to any coverage for the accident.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Weatherford Plans to Sell Up To $1B in Assets -Wells Fargo

- Weatherford Plans to Sell Up To $1B in Assets -Wells Fargo

Wednesday, June 15, 2011
Dow Jones Newswires
HOUSTON
by Ryan Dezember

Weatherford plans to sell between $500 million and $1 billion worth of assets, according to analysts with Wells Fargo Securities, who said company officials briefed them on the plan in a recent meeting.

The divestitures would be of "mostly non-oilfield subsidiaries Weatherford has accumulated through its myriad acquisitions over the years," the analysts wrote in a client note.

Weatherford officials were not immediately available to respond to requests for comment.

Shares of Weatherford were up 0.28%, or 5 cents, at $17.66 in midday trading.

In selling the assets, the company's goals "are to free up both capital and managerial attention currently dedicated to these businesses," the analysts wrote.

Oilfield-service profits have risen rapidly from the recession as producers raced to exploit North America's unconventional onshore reserves amidst high oil prices. Weatherford's earnings, however, have lagged behind competitors Halliburton, Schlumberger, and Baker Hughes.

The Wells Fargo analysts said their meeting with Weatherford officials in Houston on Monday was one of several in which the executives are meeting with investors and "working on rebuilding the company's credibility."

In early March, Weatherford disclosed errors in its tax accounting for 2007 through 2010, which forced the company to adjust previously reported earnings. The March 2 disclosure pushed shares, which had been trading near a 52-week high, down 12.6%.

Late last month, in a rare rebuke, shareholders voted against the company's executive compensation plan in an advisory say-on-pay tally.

Copyright (c) 2011 Dow Jones & Company, Inc.

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CIS Awarded Major Contract by Weatherford Nigeria

- CIS Awarded Major Contract by Weatherford Nigeria

Monday, May 23, 2011
Conductor Installation Services Ltd.

Conductor Installation Services (CIS) has been awarded the largest contract in its history by Weatherford Nigeria. The USD multi-million dollar contract requires CIS to provide a range of conductor installation services in Nigeria on behalf of two major operators in the region.

Services will be carried out in conjunction with construction of a jetty, onshore and offshore platforms, and offshore stand-alone conductors. In addition to installing conductors, CIS will provide conductor make-up and cold-cutting services, and a variety of installation tooling equipment, including connection drive chasers and a range of directional drive shoes.

To carry out the conductor-driving operations, CIS will use two 150 kJ and two 90 kJ hydraulic hammers that are based permanently in Nigeria to support operations in the region. While the powerful 150 kJ hammer is designed to drive the larger conductors that measure up to 42 inches, the 90 kJ hammer is typically used to install smaller 20-inch to 36-inch conductors. CIS anticipates that it will be drive approximately 48 slots throughout the program, which is scheduled for completion in 2013.

Driving slots for construction of offshore barge

Already, CIS has commenced work on the first phase of the conductor installation program, which involves driving slots for construction of an offshore barge. This project requires CIS to install 36-inch conductors utilizing its 90 kJ hydraulic hammer spread. The contract is being supported by CIS from Port Harcourt, Nigeria and from its global headquarters in Great Yarmouth, England.

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Weatherford Swings to Profit in 1Q11

Weatherford Swings to Profit in 1Q11

Thursday, April 21, 2011
Weatherford International Ltd.

Weatherford reported first quarter 2011 income of $78 million, or $0.10 per diluted share, excluding an after-tax loss of $18 million. On a GAAP basis, our net income for the first quarter of 2011 was $59 million, or $0.08 per diluted share. The excluded after-tax loss is comprised of the following items:

• $9 million after-tax charge incurred in connection with the termination of a corporate consulting contract;
• $8 million in after-tax severance; and
• $1 million for investigation costs.

First quarter diluted earnings per share reflect an increase of $0.07 over the first quarter of 2010 diluted earnings per share of $0.03, before charges. Sequentially, the company's first quarter diluted earnings per share, before charges, were $0.06 lower than the fourth quarter of 2010.

First quarter revenues were $2,856 million, or 23 percent higher than the same period last year, and down two percent sequentially. North America revenues increased 53 percent compared to the first quarter of 2010 while international revenues were up four percent over the same period.

Segment operating income of $353 million improved 38 percent year-over-year but was down 17 percent sequentially. Margin performance was held back primarily due to political turmoil in the Middle East and North Africa, unfavorable weather conditions and an equity tax enacted in Colombia.

The company expects earnings per share before excluded items of approximately $0.15 to $0.17 in the second quarter of 2011.

North America

Revenue increased eight percent sequentially and 53 percent compared to the first quarter of 2010. Canadian activity was strong while colder winter temperatures subdued progress in the United States. Operating income of $284 million improved $22 million sequentially, and margins increased 20 basis points to 20.9 percent.

Middle East/North Africa/Asia

Revenue decreased $109 million sequentially, or 16 percent, as political disruptions in the Middle East and North Africa and challenging weather events in Australia and China took a heavy toll, accounting for approximately two-thirds of the drop. Operating income declined $38 million sequentially, on decrementals of 35 percent.

Europe/West Africa/FSU

Revenue declined $18 million, or three percent, sequentially but was up 12 percent compared to the first quarter of 2010. The winter effect in the North Sea, Russia and Caspian were primarily responsible for the decline. Operating income declined $27 million sequentially. Contributing to the severe decrementals were increased employee-related costs, as well as higher fuel and transportation costs in Russia.

Latin America

Revenue decreased eight percent, or $36 million, on a sequential basis and declined four percent, or $17 million, compared to the first quarter of 2010. Mexico and Venezuela led the declines. Operating income fell $32 million sequentially. Approximately $16 million of the decline was due to the charge for the Colombia equity tax. Adjusting for this effect, decrementals were approximately 44 percent.

Net Debt

Net debt for the quarter increased $547 million primarily as a result of an increase in working capital of $365 million. The increase in working capital was largely driven by North America and Latin America.

Lamprell Bags Weatherford Contract

Lamprell Bags Weatherford Contract

Wednesday, March 30, 2011

Lamprell

Lamprell has received a new contract award from Weatherford Drilling International for the engineering, construction and delivery of two 3000HP land drilling rigs, with a total contract value of $41 million.

The rigs have a static hook load capacity of 1,500,000 lbs and 800,000 lbs set back capacity.

The mast will accommodate a 750T top drive supplied by three triplex mud pumps rated at 2200HP with a 7500psi high pressure mud system. The rig will be powered by five 3516B CAT engines. Lamprell will fabricate the rigs at its yard in Jebel Ali. The project is planned to be completed during the first quarter 2012.

Commenting on the contract award Nigel McCue, Chief Executive Officer, Lamprell said, "We are delighted to be announcing this significant new contract award from Weatherford.

We believe that this land rig award, the largest yet for our oilfield engineering business, demonstrates the exciting opportunity to develop Lamprell's offering in this developing regional market. We look forward to working with Weatherford on this important project."