Weatherford provides update on expected results for 1Q20

Despite the challenging environment, the company's preliminary financial results improved during 1Q20 due to operational and cost reduction initiatives.

The company's preliminary financial results for the first quarter of 2020 are:

• Revenues in the range of US$1190 to US$1210 million;
• Net loss attributable to Weatherford in the range of US$185 to US$210 million;
• Adjusted EBITDA, a non-GAAP measure, in the range of US$160 to US$170 million;
• Cash flow from operations in the range of US$5 to US$25 million and CAPEX in the range of US$30 to US$40 million; and
• Free cash flow, a non-GAAP measure, in the range of negative US$15 to negative US$25 million, including payments of approximately US$80 million primarily associated with prior year's financial restructuring and legacy corporate development activities.

The impact of the COVID-19 pandemic and recent actions by certain producing nations have had an unprecedented disruption on the supply/demand equation for oil, resulting in a precipitous decline in commodity prices and substantial reductions to the capital spending plans of exploration and production companies. In response, Weatherford supplemented its cost reduction initiatives with a number of actions, including:

• Temporary pay reductions of 20% for management and to the Board of Directors' annual cash retainer;
• Total headcount reductions across North American operations and the global support structure of 38% and 25%, respectively;
• Furloughs and pay reductions for remaining employees in the US and selected international locations;
• Reducing planned capital expenditures by approximately 50% in 2020 versus 2019 levels; and
• Further consolidating geographic and product line structures to better align with market conditions.

Currently, Weatherford has adequate liquidity and is compliant with its financial covenants. However, the emerging operating environment has led to the inability to predict the depth and length of the industry's weakness. In this backdrop, the company's debt levels are too high. Management and the Board of Directors are evaluating options to improve liquidity and address the company's long-term capital structure.

Weatherford plans to release its 1Q20 Form 10-Q on 11 May 2020 and the preliminary financial results noted above are subject to finalisation.

NYSE delisting

The company has been evaluating its options with respect to its NYSE listing and, after careful deliberations, the Board of Directors has determined that delisting is in the best interest of the company. As such, the company will withdraw its appeal to the delisting proceedings by the NYSE.

The company's shares of common stock will be delisted from trading on the NYSE through the filing of a Form 25 with the US Securities and Exchange Commission (SEC).

Weatherford will continue to evaluate listing on the NYSE or other trading platforms and will provide updates as necessary. The Company will continue to trade on the OTC Pink Marketplace under the ticker symbol WFTLF.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/16042020/weatherford-provides-update-on-expected-results-for-1q20/