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Weatherford International Ltd. (WFT)

  • Dec. 1, 2014, 7:46 AM
    • Weatherford International (NYSE:WFT) agrees to sell its engineered chemistry and Integrity drilling fluids business to Berkshire Hathaway (BRK.A, BRK.B) unit Lubrizol Corp. for $750M in cash plus a potential increase of $75M for an earnout tied to the post-closing performance of the businesses.
    • WFT says the sale is another step in its plan to divest non-core businesses and will bring total 2014 cash divestiture proceeds to ~$1.8B, implying a net debt of $6.6B-$6.8B at year end.
  • Nov. 24, 2014, 11:31 AM
    • Weatherford (WFT +0.2%) is the most vulnerable among the big four oil services companies to falling crude oil prices based on price-to-book valuations, which help offer a sense of where the floor in valuations might be in a down cycle.
    • The minimum price-to-book ratio WFT reached during 2010-13 was 0.87x, while today it trades at 1.62x - the potential drop of 46% is the widest of the big four.
    • The smallest of the group, WFT's market share in technology-intensive services of less than 10% is about one-third that of Schlumberger (NYSE:SLB) or a merged Halliburton-Baker Hughes (HAL, BHI), according to Morgan Stanley’s Ole Slorer.
    • Another factor against WFT is its net debt; using management guidance and current consensus profit forecasts, WFT should end the year still more than 2x EBITDA, while the other four are below 1x EBITDA.
    | 1 Comment
  • Nov. 18, 2014, 6:48 PM
    • Halliburton’s (NYSE:HAL) $34.6B buyout of Baker Hughes (NYSE:BHI) has caused HAL shares to plunge 12% since the deal was announced Monday, the worst two-day performance for an acquirer’s stock this year; on average, a company announcing a deal has seen its stock pop 3.1% on the news.
    • But analysts say the deal may present game-changing opportunities for a few small and mid-cap oilfield services firms with enough cash on hand to buy a chunk of HAL's expected divestments without diluting their stock or damaging their credit rating.
    • Tudor Pickering Holt's Jeff Tillery speculates that Forum Energy Technologies (NYSE:FET), National Oilwell Varco (NYSE:NOV) and GE would be interested in HAL's manufacturing businesses that may come up for bid, while Superior Energy Services (NYSE:SPN) and Frank's International (NYSE:FI) might want certain services-oriented businesses.
    • Weatherford (NYSE:WFT) would seem like a logical buyer of some assets and could make it happen with a mix of cash and stock, but RBC's Kurt Hallead thinks HAL might not want to cooperate with a company that could essentially become what Baker Hughes was.
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  • Oct. 24, 2014, 9:44 AM
    • Alongside its upgrade of Halliburton, CItigroup also boosts Weatherford International (WFT +0.8%) to a Buy.
    • "Perennially, the Achilles’ heel for Weatherford has been free cash flow or lack thereof," said CEO Bernard Duroc-Danner on the earnings call yesterday (transcript). "The commentary is fair, but we are making progress." He notes negative FCF of $1.2B in 2012, and just $500M last year, with continued improvement in the $500M-$700M range expected.
    • More: "We believe core revenues and margins in Latin America and the Eastern Hemisphere will improve markedly and deliver in ‘15 positive margin incrementals over ‘14 ... This assessment isn’t a hopeful sentiment. It is based on existing contracts for well construction, lift, completion, and formation evaluation in a number of specific regional markets."
    • Previously: Citi buys the dip in Halliburton
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  • Oct. 23, 2014, 10:38 AM
    • Weatherford International (WFT -2.7%) opens sharply lower after missing Q3 earnings and revenue estimates; WFT has now missed revenue estimates for seven consecutive quarters.
    • A surge in Q3 profit is attributed to cost-cutting initiatives and the asset disposal plan adopted to reduce debt and emphasize primary businesses; during Q3, WFT’s core operating income margin improved by 145 bps to 17.9% from the same period last year, and management foresees it close at 20% by year-end.
    • Nevertheless, WFT is still losing more money in 2014 than it did last year, suffered net losses of $109M YTD vs. net losses of $74M at the same point a year ago.
    • WFT could announce at least two major divestitures before the end of the year, including one that may occur “imminently” and perhaps within the next week, company execs said on the morning's earnings conference call.
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  • Oct. 23, 2014, 12:57 AM
    • Weatherford (NYSE:WFT): Q3 EPS of $0.32 misses by $0.01.
    • Revenue of $3.88B (+1.6% Y/Y) misses by $120M.
    • Press Release
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  • Oct. 21, 2014, 5:35 PM
  • Oct. 17, 2014, 10:17 AM
    • Oil services (OIH +4%) stocks rip higher at the open following a strong earnings report from Schlumberger (SLB +7.4%) and as oil prices stabilize.
    • Tumbling crude prices haven’t shaken the faith of at least two of the top providers of drilling and production services: SLB CEO Paal Kibsgaard describes the drop as “fear of short-term oversupply” and says the company is not changing a long-term view that its earnings will almost double from last year’s level by 2017, while Baker Hughes (BHI +4.7%) CEO Martin Craighead says his company's customers don't believe crude prices will stay low.
    • HAL +5.5%, SPN +5.2%, WFT +5.1%, CAM +2.1%, NOV +2%, FTI +1.8%, DRQ +1.4%.
  • Oct. 15, 2014, 3:59 PM
    • Oil services companies are rising after Citigroup issued positive comments on a number of stocks in the sector.
    • Baker Hughes earns a Buy rating, seen as having a strong chance of meeting EPS estimates before tomorrow's open given recent contract wins in Norway and Brazil, and the stock's valuation is "compelling."
    • Among small- and mid-caps, Citi starts Patterson-UTI (PTEN +5.7%) and RPC (RES +2.3%) with Buy ratings, seeing each as likely to outperform if, as the firm forecasts, crude prices rebound and E&P companies' capital expenditures are higher than expected.
    • Citi tags Schlumberger (SLB +0.5%), Halliburton (HAL +2.1%), Weatherford (WFT +1%), Superior Energy (SPN +2%) and Helmerich & Payne (HP +5.1%) with Neutral ratings.
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  • Oct. 8, 2014, 5:38 PM
    • Top gainers, as of 5:15 p.m.: RT +18.8%. GSAT +6.6%. VHC +5.6%. SALT +4.9%. ACAD +4.6%.
    • Top losers, as of 5:15 p.m.: KFX -20.6%. GPS -8.1%. VNET -6.2%. WFT -5.3%. TWI -4.3%.
    | 1 Comment
  • Aug. 28, 2014, 9:58 AM
    • Gulf Keystone Petroleum (OTCPK:GUKYF, OTCQX:GFKSY) says it is sending staff back to Iraqi Kurdistan after U.S. airstrikes eased the threat from Islamic State militants that prompted a mass evacuation of expatriate oil workers three weeks ago.
    • Gulf Keystone says it plans to nearly double production in Kurdistan to 40K bbl/day from 22K by the end of the year; it has a 75% stake in the Shaikan oil field, one of the largest in the Kurdish region.
    • The oil explorer says Weatherford International (NYSE:WFT), its partner in the area, is sending personnel back to rigs in the region today or tomorrow.
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  • Aug. 27, 2014, 8:49 AM
    • Diebold (NYSE:DBD), Chemtura (NYSE:CHMT) and Weatherford (NYSE:WFT) are up slightly premarket following positive mentions by Mario Gabelli in a CNBC interview after yesterday's close.
    • Gabelli thinks DBD is in the beginning of a major turnaround led by new management; if it can take its capability in service and put it in software, the stock can rise 50%-60% in two years.
    • CHMT is selling an asset in the next 60 days that will provide support for the stock, Gabelli says as he sees the stock doubling over the next five years.
    • Gabelli thinks Halliburton (NYSE:HAL) will want to own WFT at a 50%-plus premium from current levels.
    | 1 Comment
  • Aug. 12, 2014, 5:28 PM
    • Schlumberger (NYSE:SLB) expects the economic sanctions in Russia will have a small financial impact on its operations in the country, but RBC analysts see SLB impacted more by the instability in Iraq.
    • The firm estimates SLB gains ~$600M from annual Iraq revenue ($0.06-$0.08 in EPS) with operating margins of ~20%, so it lowers its 2014 EPS forecast to $5.56 from $5.64 as well as its 2015 ooutlook to $6.63 from $6.70; however, the firm maintains its stock price target at $129.
    • Other companies with large exposure to Russia also fell today, including Weatherford (NYSE:WFT), Nabors Industries (NYSE:NBR), Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI).
    | 1 Comment
  • Aug. 1, 2014, 12:45 PM
    • Seadrill (SDRL -1.1%) CFO Rune Magnus Lundetrae says its North American Drilling (NADL +0.5%) unit can proceed with Rosneft's (OTC:RNFTF) six rig leases worth $4.25B because the contracts were signed before the latest U.S. and EU sanctions against Russia take effect.
    • Advocating for the business relationship and expressing doubts about the efficacy of sanctions, the CFO says "Norway and many other countries do a lot of business with Russia, and it seems a bit unrealistic to cut all ties overnight."
    • It is unclear how sanctions might affect SDRL and NADL, since they have roots in multiple countries; Norway is not part of the EU, though its government has signaled it probably will abide by the sanctions.
    • Analysts say Statoil (STO +0.5%) may be forced to cancel various deals with Rosneft to explore offshore blocks in the Barents Sea and the Sea of Okhotsk and for pilot projects for heavy oil in Siberia and shale oil in the Samara region.
    • Meanwhile, Weatherford (WFT -1.6%) says it closed its $500M sale of its land drilling and workover operations in Russia and Venezuela to Rosneft.
  • Jul. 24, 2014, 12:36 AM
    • Weatherford (NYSE:WFT): Q2 EPS of $0.24 beats by $0.03.
    • Revenue of $3.71B (-4.1% Y/Y) misses by $70M.
    • Press Release
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  • Jul. 14, 2014, 7:46 AM
    • Rosneft (OTCMKTS:RNFTF) agrees to buy Weatherford International (NYSE:WFT) drilling and well-servicing assets in Russia and Venezuela for $500M, as Russia's top oil producer pushes to build its own drilling business to cut costs.
    • Russia needs to increase its drilling to maintain its current output of ~10.5M bbl/day over the next decade; WFT accounts for ~3% of the Russian oilfield services market by revenue.
    • The sale is part of WFT's plan to sell or split off as much as $1B in assets this year.
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Company Description
Weatherford International Ltd provides equipment and services to the oil and natural gas exploration and production industry, both on land and offshore, through its two product service line groups.