Weatherford International plc(WFT) announced it has sold its U.S. pressure pumping and pump-down perforating assets to a subsidiary of Schlumberger Limited for $430 million in cash.
The parties agreed to revised deal terms that reflect an asset sale, as compared to the previously announced OneStimSM joint venture. As part of this transaction, Schlumberger will take ownership of Weatherford's U.S. pressure pumping and pump-down perforating related facilities and supplier and customer contracts. Additionally, approximately 100 Weatherford employees associated with the pressure pumping and pump-down perforating businesses will transfer to Schlumberger. Weatherford will retain the entirety of its leading multistage completions portfolio, manufacturing capability and supply chain and will continue to participate in the growing completions markets in both Canada and the U.S. as well as globally.
Weatherford will use the proceeds from the sale to reduce outstanding indebtedness.
"The closing of this transaction represents another step on our path toward building a solid and strong company and unlocking the potential that exists within Weatherford," stated Mark A. McCollum, President and Chief Executive Officer of Weatherford. "Although not as originally anticipated, this transaction delivers cash proceeds that enable our Company to begin the deleveraging process and, coupled with our transformation plans, will lead to a leaner organization with lower debt and significantly higher profit margins. In addition, retaining 100 percent of our leading land-based multistage Completions business allows for significant upside potential for Weatherford."