Introduction
Weatherford International is a multinational oilfield service company that provides a wide range of products and services to the oil and gas industry. Founded in 1941 and headquartered in Houston, Texas, Weatherford operates in over 100 countries and employs over 24,000 people worldwide. The company has gone through various mergers and acquisitions over its 80+ year history to become one of the largest oilfield service companies globally. This article will provide an overview of Weatherford, its history, services, recent financial performance, and outlook.
History
Weatherford traces its roots back to 1941 when it was founded as Weatherford Spring Company by Jesse Plain in Texas. It started off manufacturing leak-proof oil well tubing connectors which gained popularity in the oil industry. Over the next few decades, Weatherford expanded its product and service offerings through organic growth and acquisitions.
Some key events in Weatherford’s growth history include:
- 1987 – Acquired drilling tool manufacturer Directional Enterprises, marking Weatherford’s entry into downhole drilling tools sector
- 1995 – Merged with Enterra Corporation, expanding its well completion and production business
- 1998 – Acquired Petroleum Equipment Tools Company (PETCO), enhancing its well intervention services
- 2005 – Merged with Precision Drilling Corporation, adding drilling rigs and specialty rental tools business
- 2014 – Acquired the pipeline and specialty services business from Schlumberger, strengthening its well construction portfolio
Today, Weatherford has established itself as one of the leading providers of equipment and services used in the drilling, evaluation, completion, production and intervention of oil and natural gas wells. Its major business segments include drilling and evaluation, well construction, completion and production.
Services and Products
Weatherford offers a vast range of services covering the entire lifecycle of an oil or gas well. Some of its major products and services include:
Drilling – directional drilling, drilling optimization, drilling fluids, tubular running services, rental tools
Evaluation – wireline logging, drilling evaluation, well testing, reservoir monitoring
Completion – well screens, liner systems, artificial lift systems, stimulation services
Production – well intervention, artificial lift systems, gas compression
The company also provides software solutions for reservoir characterization, drilling operations and well integrity and performance. Its products have applications across land, offshore and deepwater environments.
Weatherford operates manufacturing facilities across the globe to support its service delivery capabilities. It invests heavily in R&D to develop new technologies and improve existing product designs.
Recent Financial Performance
The oil downturn of 2014 to 2016 hit Weatherford hard, resulting in multiple years of losses and mounting debts. The company initiated a turnaround strategy focused on selling non-core assets, reducing costs and optimizing operations.
In 2019, Weatherford completed a financial restructuring process to eliminate $5.7 billion of debt and secure $2.5 billion in new financing. The company returned to profitability in 2021 after six straight years of losses.
For the first nine months of 2022, Weatherford generated revenues of $2.1 billion, a 20% increase compared to the same period in 2021. The company reported a net loss of $298 million as it continued to deal with legacy issues and inflationary pressures. However, its adjusted EBITDA improved to $229 million.
The turnaround measures have stabilized the balance sheet, lowered costs and improved operational efficiency. With the recovery in oil prices and more focus on cash flow generation, Weatherford is poised to continue rebuilding profitability.
Outlook
Despite short-term macroeconomic challenges, the long-term outlook for oilfield services appears positive considering the underinvestment in upstream projects since 2015. As E&P companies increase capex, activity and demand for oilfield services is expected to rise.
Weatherford aims to capitalize on this market growth through its comprehensive service offerings, proprietary technologies and digital capabilities. Key areas of investment for the company include integrated services, enhanced oil recovery and decarbonization.
Weatherford is well-positioned in the Middle East, Latin America and North American markets which will be growth regions. It still faces competitive and inflationary pressures but appears to be headed in the right direction after years of restructuring. Profitability, cash flow generation and debt reduction remain priorities for Weatherford to ensure long-term sustainability.
Conclusion
Weatherford International has undergone major changes to emerge leaner from the industry downturn. Its reorganization and recapitalization efforts have prepared the company to leverage growth opportunities and improve financial performance. While risks remain, Weatherford is now on a healthier footing operationally and financially. Backed by its strong brand, technological edge and global footprint, the company seems ready to deliver value for its shareholders in the coming years.