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As part of its strategy to further cut costs and reduce debt, oilfield services company Weatherford International (NYSE:WFT) said on Thursday that it had launched another head count reduction plan totaling 3,000 employees.
Weatherford’s Chief Financial Officer and Executive Vice President Christoph Bausch said at the company’s earnings call on Thursday for the fourth-quarter and full-2016 results:
“At the time of this call, we have already reduced 2,000 employees out of the 3,000 mentioned before.”
In its drive to cut more costs, Weatherford will also pull back its pumping operations in the U.S. and close additional uneconomical field locations, Bausch said, adding that all those actions are expected to generate additional annualized cost savings of about US$300 million.
Yesterday Weatherford reported a net loss for the fourth quarter of US$549 million, compared to a loss of US$1.78 billion for the third quarter and a US$1.21-billion loss in the fourth quarter of 2015. Net debt was reduced by US$507 million during the fourth quarter to US$6.5 billion at end-December 2016.
Weatherford would continue to reduce debt by monetizing its U.S. pressure pumping business, after suspending the land pressure pumping operations in the fourth quarter and idling the last of the nine working crews on December 30, CEO Krishna Shivram said at the conference call.
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“We have decided to pursue a disposition strategy rather than reenter the frac market on US land,” Shivram said.
“There is a huge amount of interest in our frac business… We are discussing combinations, we are discussing outright sales and the potential -- we have not discussed IPOs so much, but the first two we have discussed,” the manager noted, adding that the company expects to fully monetize the disposition of this business in 2017 and 2018.
Weatherford has been cutting jobs in the thousands since the oil price downturn began.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.