Weatherford International is showing struggles despite improvements in the energy market. File Photo by A.J. Sisco/UPI | License Photo
July 27 (UPI) -- The head of oil and gas field services company Weatherford said Friday the company would have to take a challenge of a second quarter miss head on.
"Seasonal trends worked against us this quarter, causing us to miss our working capital objectives and, in turn, our cash flow target," President and CEO Mark McCollum said in a statement. "With a clear mission, the right structure, and a solid strategy, our team is embracing this challenge head-on."
Weatherford reported a net loss of $264 million for the second quarter, though revenues of $769 million were up 13 percent from the same period last year.
A subsidiary of the company last week sold its entire ownership in Sunita Hydrocolloids, a company that makes a gum that's used in pressure pumping solutions. Though terms were not disclosed, the company said it would use the proceeds to reduce its debt.
Weatherford in early July signed a $287.5 million agreement to sell off its land drilling rig operations in Algeria, Kuwait and Saudi Arabia, as well as two idle land rigs in Iraq. Through the agreement, ADES International Holding more than doubled its payroll count and adds 31 rigs and related contracts to its portfolio.
Weatherford, one of the largest oilfield services in the world, reported first quarter revenue at $1.42 billion, down 4 percent from the fourth quarter, but 3 percent higher year-over-year. Two years ago, it set a target of cutting 14,000 from its payrolls.
"The entire organization, however, remains intensely focused on delivering our objective of breakeven free cash flow for the year, and remedial actions have already been implemented to get us back on plan," McCollum said.
Weatherford's results are in contrast to its industry peers. Total revenue for Schlumberger, the largest company of its kind, was up 6 percent from the first quarter. Revenue from North America, the largest contributor, was up 11 percent sequentially, while the Middle East and North Africa, coming in at No. 2, was up 3 percent.
Gains are supported by higher crude oil prices. At around $74 per barrel for Brent crude oil on Friday, the market is up about 50 percent from this time last year.