Weatherford International has ditched plans for a proposed joint venture with Schlumberger and instead sold its U.S. pressure pumping and pump-down perforating assets for US$430 million.
In a press statement Weatherford said that both parties agreed to revise the deal terms to reflect an asset sale, as compared to the previously announced OneStim joint venture that was announced in March last year.
The original deal saw Weatherford putting its North American pressure pumping and well completions operations into a venture with Schlumberger for $535 million in cash and a 30 per cent stake in the new business. The revised deal gives Weatherford roughly $100 million less than originally anticipated from the two companies’ planned 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.
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 said it 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. 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 per cent of our leading land-based multistage Completions business allows for significant upside potential for Weatherford," stated Mark A. McCollum, president and chief executive officer of Weatherford.