Weatherford Spotlights 1Q Financial Results

Weatherford reported first quarter 2010 income of $41 million, or $0.06 per diluted share, excluding an after tax loss of $0.11 per diluted share. The excluded after tax loss was comprised of a $40 million charge related to the devaluation of the Venezuelan Bolivar, a $38 million charge related to the company’s supplemental executive retirement plan that was frozen on March 31, 2010 and severance and investigation costs. Included in the $0.06 result were $15 million of non-cash charges related to write-offs at a less-than-majority owned subsidiary and a fair value adjustment to the put option issued in connection with the TNK-BP acquisition. First quarter diluted earnings per share reflect a decrease of 78 percent over the first quarter of 2009 diluted earnings per share of $0.27, before severance and investigation costs.

First quarter revenues were $2,338 million, or four percent higher than the same period last year, against a backdrop of a six percent increase in global rig count. International revenues were up two percent against a three percent increase in international rig count compared to the first quarter of 2009. Comparing the same periods, North America revenue was up six percent against a seven percent increase in rig count.

Sequentially, the company's first quarter diluted earnings per share, before charges, were $0.04 higher than the fourth quarter of 2009 diluted earnings per share of $0.02, before severance and investigation costs.

North America

Revenues for the quarter were $891 million, which is a six percent increase over the same quarter in the prior year. Sequentially, revenues were up 21 percent. Almost all product lines showed sequential growth. North America revenues are 25% below their prior peak in the third quarter of 2008. Average rig count is down the same amount over the same period.

Operating income was $112 million, which is down $11 million compared to the same quarter in the prior year and up $71 million sequentially. The current quarter’s margins improved 690 basis points to 12.6%.

Middle East/North Africa/Asia

First quarter revenues of $565 million were three percent lower than the first quarter of 2009 and five percent lower than the prior quarter. On a sequential basis, strong performances in Iraq and Egypt were offset by weather related weakness in China and Australia as well as a sluggish environment in Algeria due to political factors.

The current quarter's operating income of $83 million decreased 38 percent as compared to the same quarter in the prior year and was flat compared to the prior quarter.

Latin America

First quarter revenues of $428 million were nine percent lower than the first quarter of 2009 and 31 percent lower than the prior quarter. Mexico was the largest contributor to the sequential decline in revenue due to a decrease in volumes of project-based work. Venezuelan activity also dropped off.

The current quarter's operating income of $31 million declined 66 percent as compared to the same quarter in the prior year and declined 37 percent compared to the prior quarter.

Europe/West Africa/FSU

First quarter revenues of $455 million were 23 percent higher than the first quarter of 2009 and five percent lower than the prior quarter. The year-over-year increase was driven by our acquisition of TNK-BP's oilfield service business in the third quarter of 2009. Severe weather conditions in Russia's Western Siberian fields was the largest contributor to the sequential decline in revenues.

The current quarter's operating income of $31 million declined 59 percent as compared to the same quarter in the prior year and decreased 28 percent sequentially. Hampering profitability were $15 million of non-cash charges related to write-offs at a less-than-majority owned subsidiary and a fair value adjustment to the put option issued in connection with the TNK-BP acquisition.

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