Weatherford: The worst is over for the oil sector

Oilfield services company mirror the sentiments expressed by its peers.

By Daniel J. Graeber

HOUSTON, July 28 (UPI) -- Mirroring sentiments expressed by its peers, oilfield services company Weatherford said the market, particularly in North America, has bottomed out.

Weatherford, based in Switzerland with offices in Houston, reported second quarter revenue of $1.4 billion, down by almost half from last year. In North America, the company said revenue was down 26 percent year-on-year, though that was better when using the 35 percent reduction in exploration and production work as a benchmark.


"We believe North America activity levels have hit a bottom," Bernard Duroc-Danner, the company's top executive, said in a statement.

On the international front, the company said revenue was down 3 percent against a 4 percent reduction in drilling operations, with Latin America showing the worst of the decline because of "steep" customer spending.

Last year, Weatherford closed six service facilities and 90 operating facilities in North America while at the same time completing its target of cutting payrolls by 14,000. Early this year, the company said a headcount reduction of up to 6,000 was possible. Duroc-Danner said continued momentum on that front should have a net positive impact on results moving forward.


Crude oil prices stabilized somewhat during the second quarter after moving below $30 per barrel in early 2016. Rig counts, a metric that loosely gauges exploration and production activity, started to improve in recent weeks as a result. This week, Schlumberger, the world's largest oilfield services company, said "we now appear to have reached the bottom."

Duroc-Danner echoed that sentiment by saying industry activity and market conditions are showing signs of recovery. Based on that position, he said his company was already hearing from its customers that new work could emerge over the coming quarters.

"With our legacy issues now behind us, and a fundamentally transformed cost structure, Weatherford is positioned for the market recovery," he said.

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