Weatherford International plc (NYSE:WFT) has announced selling its pressure pumping and pump-down perforating assets located in the US to a Schlumberger Limited subsidiary in a cash deal valued at $430 million.
Both parties in the deal were contented with the revised terms of the deal which reflect sale of assets as opposed to the previous deal of OneStimSM joint venture. As part of the deal, Schlumberger will take over the ownership of Weatherford’s U.S. pressure pumping and pump-down perforating related facilities and supplier and customer contracts. In addition, around 100 employees of Weatherford which are associated with the pressure pumping and pump-down perforating businesses will be absorbed by Schlumberger. On the other hand, Weatherford will continue operating its leading multistage completions portfolio, supply chain, manufacturing capability and continue being part of the growing completion markets in the U.S and Canada and the whole world. Weatherford has said it intends to use the proceeds from the sale to cut down on its outstanding indebtedness.
In a statement, Weatherford President and Chief Executive Officer Mark A. McCollum said closing of the deal is a significant step in the company’s path towards setting a strong and solid company as well as unlocking the great potential that the company has. He added that although the transaction was initially not anticipated, it will deliver cash proceeds which will enable the company to start the process of deleveraging and together with its transformation plans will lead to creation of a much smaller organization with reduced debt and high profit margins. Additionally, retaining the full portion of the company’s leading land-based multistage Completions business will open channels for significant improvement in the company’s internal operations.
Weatherford is one of the largest and leading multinational oilfield service companies engaged in the provision of technology, innovative solutions and services to the gas and oil industry. The company has operations in more than 90 countries around the world and has a network of around 860 locations including research, service, manufacturing and training facilities. The company has a workforce of around 29,500 people.