Weatherford Sells Chemicals, Drilling Fluids Units to Lubrizol

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Oilfield services provider Weatherford International says Berkshire Hathaway Inc's Lubrizol Corp would pay $750 million in cash for two businesses that provide chemicals and drilling fluids for oil and gas production.

Reuters

Dec 1 (Reuters) - Oilfield services provider Weatherford International Plc said Berkshire Hathaway Inc's Lubrizol Corp would pay $750 million in cash for two businesses that provide chemicals and drilling fluids for oil and gas production.

Weatherford said the sale of its engineered chemistry and integrity drilling fluids businesses also included a potential increase of $75 million tied to the performance of the units after the closure of the deal, expected by the end of this month.

Engineered chemistry supplies additives and fluids for a range of oilfield activities, including cementing, drilling and fracking. The other unit makes drilling fluids and additives for enhanced performance of drilling operations.

The sale is part of Weatherford's broader plan to divest non-core businesses and repay debt. The company has raised about $1.8 billion from divestitures this year.

Weatherford said its net debt would be between $6.6 billion and $6.8 billion at year-end, lower than its earlier target of $7.0 billion-$7.5 billion.

"Positive that despite energy market turmoil Weatherford (is) still delivering on its strategy to jettison non-core businesses," Tudor, Pickering, Holt & Co analysts wrote in a note.

In a separate statement, Lubrizol said the purchase of the two businesses would give it "a more significant footprint in the $20 billion oilfield chemicals business."

(Reporting by Swetha Gopinath in Bengaluru; Editing by Maju Samuel)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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