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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O&G Industry Leads Ok. State to Better Revenues

- O&G Industry Leads Ok. State to Better Revenues

Monday, July 11, 2011
Tulsa World, Okla.

Oklahoma Treasurer Ken Miller's smile was as wide as a billboard advertisement for toothpaste. He had a lot to beam about as he announced last month's revenue collections. Gross revenue collections for June were slightly more than $1 billion -- $134.5 million higher than a year ago.

That's 15.5 percent more than the same month last year, largely thanks to the oil and natural gas industry.

Gross production taxes on oil and gas generated $102.53 million, a whopping increase of 28.4 percent from June 2010. Current collections, however, reflect drilling activity from a few months ago when oil topped $100 a barrel. Prices since then have dropped, and Miller anticipates that gross production collections will go down in coming months.

But Miller isn't thinking about a half-empty barrel.

"Now entering the third year of the cyclical expansion, Oklahoma's double-digit revenue growth last month shows our state's economy is clearly regaining its strength while the national economy continues its rather anemic growth," Miller said.

Here's the evidence that Oklahoma's on a roll: Every major revenue category showed growth.

Miller, also an economist, recently pointed to the state's declining unemployment rate as another sign the Oklahoma economy is strongly on the rebound. Net income tax collections, which includes personal and corporate income taxes, brought in $373.98 million, an increase of 20.4 percent from the same time last year. Personal income tax collections were $283.86 million or a 14.5 percent increase; corporate collections were $90.12 million, a 44.1 percent increase. Sales tax collections, including remittances on behalf of cities and counties, totaled $322.69 million, or a 6.5 percent increase from June 2010. The latter is good news for struggling cities that rely almost entirely on sales-tax revenues to pay the bills.

The increased revenues unfortunately come too late to do much about the state budget that reflected deep cuts, particularly to public schools. Oklahomans can only hope that next year's budget can make up for lost ground.

Oklahoma doesn't always have a lot to brag about when it comes to robust economic figures. But the state is not a bottom-of-the-barreler this time around. Oklahoma is doing better than most of the rest of country when it comes to revenue collections.

The oil and gas industry should take a bow.

Copyright (c) 2011, Tulsa World, Okla.

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Max Petroleum Spies Oil Pay at Kazakh Prospect

Max Petroleum Spies Oil Pay at Kazakh Prospect

Friday, April 01, 2011
Max Petroleum plc

Max Petroleum updated its activities in the Blocks A&E License area in the Republic of Kazakhstan.

Kazakstan

Preliminary Drilling Results at Asanketken

The ASK-1 exploration well on the Asanketken prospect in Block E has reached an intermediate depth of 2,000 meters with electric logs indicating 24 meters of net oil pay at depths from 1,230 to 1,302 meters in the Jurassic Formation. Reservoir quality is excellent with porosities ranging from 17% to 33%. A fluid sample taken from a depth of 1,278 meters yielded 45 degree API oil. Current mapping and pressure data suggest that reserves in this accumulation are limited by the proximity of a trapping fault, but the Jurassic reservoirs, a secondary objective in the well, are expected to be commercially viable.

The Company will run casing over this portion of the well as planned and continue to drill ahead to a total depth of approximately 3,300 meters to evaluate the primary exploration targets in the lower Triassic section.

Procurement of two additional drilling rigs

The Company has entered into a two-year contract with PM Lucas Enterprises Limited for an IDECO 8055 Rambler rig capable of drilling to 3,200 meters (the "IDECO Rig").

Due to recent weather conditions limiting access to the Uytas Field, the IDECO rig is currently mobilizing to drill the NARS-1 exploration well on the Narmundanak South prospect in Block E, which is expected to spud on or around 20 April 2011.

The Company intends to drill three confirmation wells at Uytas with the IDECO Rig subsequent to drilling the NARS-1 well.

The Company has also awarded a tender to Saipem, a subsidiary of Eni, S.p.A, for a rig to drill its deep pre-salt exploration program and expects to execute a drilling contract shortly.

The Company plans to commence drilling the first pre-salt well, NUR-1, in Block E during August 2011, targeting unrisked mean resource potential of 467 million barrels of oil equivalent (mmboe) distributed over a probable range (P90 to P10) of 170 million to 817 million mmboe with a 29% geological chance of success.

Trial Production at Borkyldakty

The Central Committee for Exploration and Development (CCED) has recommended the trial production project for the Borkyldakty Field to the Committee of Geology for final approval.

This final approval and the issuance of required gas flaring and emissions permits are expected in the next 30-45 days. The Company intends to drill at least one appraisal well at Borkyldakty during the first half of 2011 using the ZJ-30 rig that is currently drilling the first of two Triassic appraisal wells in the Zhana Makat Field.

Robert Holland, Executive Co-Chairman, commented, "We are encouraged to see high quality oil pay in the Jurassic section in Asanketken, which lowers the risk of charge for the well's primary objectives in the lower Triassic. Adding additional rigs, including the deep rig for our pre-salt exploration program, is a key step in our plans to significantly ramp up our exploration, appraisal and development activity in 2011.

We also expect a substantial increase in production and revenues in the near-term as we bring on additional appraisal and development wells in Zhana Makat, Borkyldakty and Uytas."