Weatherford To Cut Debt By Up To $5 Billion In Two Years
Nov 5 (Reuters) - Weatherford International will cut its debt by up to $5 billion in the next two years as it boosts cash flow and divests assets, the oilfield services company's CEO said on Tuesday.
Buoyed by higher-than-expected quarterly earnings on Monday and the announcement that day of a settlement of U.S. investigations that go back six years, shares of Weatherford hit their highest since March 2012.
Chief Executive Officer Bernard Duroc-Danner said he expected Weatherford's debt level to drop by between $3 billion and $5 billion by the end of 2015. Net debt now stands at $9 billion.
The company, the smallest of the sector's big four, will tighten its focus by divesting businesses with a combined $3.5 billion in revenue. These include its land-rig contracting unit via a potential initial public offering in the fourth quarter of 2014.
The unit, with 183 drilling rigs, 284 workover rigs and 14,000 employees, will generate 2014 revenue of $1.8 billion to $2 billion and earnings of $350 million to $400 million before interest, tax, depreciation and amortization, Weatherford said.
"Rigs as a product line aren't a required component of our strategy anymore," Duroc-Danner said on a conference call. "The rigs have tremendous potential in their own rights. (The unit) has strong presence in all of the key markets of the Eastern Hemisphere where activity over the next 10 years will thrive."
Other units to go are wellheads, drilling fluids, pipeline and specialty services, and testing and production services.
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