Weatherford could have to sell one of its 'larger businesses' next year to delever
22 MAY 2018
Weatherford [NYSE:WFT] CEO Mark McCollum said he believes the company may have to sell one of its larger businesses next year in order to delever.
Speaking at the UBS Global Oil & Gas Conference in Austin, Texas, McCollum today said exactly which business will depend on where they see the market at the time.
"Long term, as we go into next year, I don't exactly know what we're going to look at for each of the big businesses, but I still suspect that there may be one of our larger businesses that we're going to have to sell in order to delever," he said. "It's going to be a significantly different answer from a delevering standpoint to do it post- [business] transformation, than pre-. Because right now selling a business that is fundamentally underperforming, on a relative basis doesn't actually delever the business."
The Houston, Texas-based oilfield services firm has been looking to divest non-core assets going back to last year, a process reportedly being led by advisor Morgan Stanley.
Last year it sold some if its hydraulic fracturing assets into a JV with Schlumberger that raised USD 535m, and in December sold its US pressure pumping assets for USD 430m. The company is also running a process to sell its land drilling rigs business, a process that has been slowed by legal, customer qualification and contract hurdles.
The company also launched two other divestiture projects in 1Q which are expected to generate approximately USD 500m by year-end, not including proceeds from the drilling rigs sale.