Given that industry bottomed during Q2, worst of historical downturn is behind us, market is slowly turning – Duroc-Danner
Weatherford International plc reported a net loss of $1.78 billion, or a net loss of $1.98 per share, and adjusted net loss before charges and credits of $349 million ($0.39 adjusted net loss per share) on revenues of $1.36 billion for the third quarter of 2016, according to a press release.
Third Quarter 2016 Highlights
- Total revenue declined 3 per cent sequentially and excluding revenue from the now concluded Zubair project, revenue increased sequentially by 1 per cent, after seven consecutive quarterly declines;
- North America revenue increased 12 per cent sequentially;
- Both International and North America sequential operating income and operating income margin showed improvement;
- Completed 100 per cent of the planned 8,000 reduction in force with realized annualized savings of $504 million;
- Ceased operations in three manufacturing and service facilities, a year-to-date total of ten, exceeding the nine planned closures for the year;
- Closed five additional operating and other facilities, now at 59 year-to-date;
- Named oilfield services company of the year at the 2016 Oil & Gas Middle East Awards out of four finalists including Schlumberger
“Our third quarter results represent the first period of revenue growth ex-Zubair, following seven consecutive industry-wide quarters of declining activity and pricing. Given that the industry bottomed during the second quarter, the worst of the historical downturn is behind us, and the market is slowly turning,” said Bernard J. Duroc-Danner, Weatherford CEO.
In North America, revenue grew sequentially by 12 per cent with increased utilization and operating efficiencies. Operators are exhibiting increased willingness to invest in production oriented projects with oil prices at or just above $50/barrel.
Internationally, excluding the Zubair project which has concluded, revenue declined by 4 per cent. Latin America grew sequentially in Mexico, Bolivia and Colombia with the region showing some signs of life. Both the North Sea and Russia were quite resilient while sub-Sahara Africa continued its downward spiral in Angola and Nigeria.
In the Middle East/ North Africa/ Asia Pacificregion, further slowdowns in activity across Asia Pacific combined with pricing headwinds in the Middle East offset increased activity levels in the Gulf Cooperation Council region.
Leading market indicators continue to show a tightening of the global supply and demand balance, and Weatherford anticipates these trends will steadily accelerate.
In addition to these fundamentals, potential production discipline by OPEC and Russia should further underpin the strengthening of oil prices, giving rise to increased spending by Weatherford customers next year.
“Technology and service quality will drive our path forward. Operations is our entire focus. Through innovation, we are further integrating our product line disciplines, which will improve productivity and result in higher capital efficiency,” said Duroc-Danner.