Leading oilfield services company,
Weatherford International plc
) announced the divestment of its pipeline and specialty services
business to Baker Hughes Incorporated (
). The sale is part of Weatherford's previously announced plan to
divest its non-core businesses.
The divestiture has added $241 million in cash to the company's
kitty and $9 million in retained working capital. Weatherford
International would mainly use the proceeds from the transaction to
pay down outstanding debt.
Weatherford International is one of the world's leading providers
of equipment and services used for the drilling, completion and
production of oil and natural gas wells. The company conducts
operations in numerous countries and has service and sales
locations in almost all oil and natural gas producing regions in
the world. Its products and services are divided into the following
four principal operating divisions: Drilling and Intervention
Services; Completion Systems; Artificial Lift Systems; and
With respect to the second half of 2014, the company expects growth
in its North American, Latin American, North Sea, Sub-Sahara Africa
and the Middle Eastern areas. Overall, the company expects margins
to improve in 2014 with lower costs and growth in more profitable
core businesses. The company expects adjusted earnings per share to
range between $1.10 and $1.20.
We remain optimistic on Weatherford International's operational and
financial leverage to overseas growth in 2014. But the company's
debt-heavy balance sheet, weak free cash flow as well as
competition from larger peers are causes of concern.
Weatherford currently carries a Zacks Rank #2 (Buy). Investors can
also consider oil and gas stocks such as WPX Energy, Inc. (
) and Sunoco Logistics Partners L.P (
), both sporting a Zacks Rank #1 (Strong Buy).
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BAKER-HUGHES (BHI): Free Stock Analysis Report
WEATHERFORD INT (WFT): Free Stock Analysis
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