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EXHIBIT 99.1
[WEATHERFORD LOGO]
NEWS RELEASE
WEATHERFORD REPORTS
SECOND QUARTER 1999 RESULTS
HOUSTON, July 21, 1999 - Weatherford International, Inc. (NYSE:WFT) today
reported results for the second quarter of 1999. Revenues for the quarter were
$343.1 million, a decrease of 35 percent compared to the prior year second
quarter. This decline in revenue reflected the substantial decline in industry
activity and resulted in the Company recording a net loss of $2 million, or
$0.02 per share, compared to net income of $0.65 per share in last year's second
quarter, after excluding the $0.80 per share charge related to the merger of
EVI, Inc. and Weatherford Enterra, Inc. in that quarter.
Although oil prices increased significantly during the second quarter, this
recent improvement has not equated to any meaningful increase in customer E&P
spending to date. The worldwide drilling rig count averaged just over 1,200 rigs
in the second quarter, a decrease of 33 percent compared to last year's second
quarter. Canada, a significant market for Weatherford, averaged only 100 working
rigs in the second quarter as customary spring break up lasted longer than
usual. International activity also declined during the second quarter as the
average rig count outside North America fell from 800 to 600. Although
Weatherford expects an increase in activity from very low second quarter levels,
a gradual increase in customer spending over the remainder of the year is
likely.
For the six months ended June 30, 1999, revenues were $696.9 million, a 37
percent decline from last year. Net income from continuing operations was $500
thousand compared to $124.3 million last year, which excluded one time charges
of $120 million ($78 million after tax) related to the merger of EVI and
Weatherford Enterra.
COMPLETION AND OILFIELD SERVICES
Revenues declined 27 percent from last year's second quarter to $160.4 million,
but were only slightly down from the first quarter 1999. North American revenues
remained depressed, with the Canadian market continuing to be the most adversely
impacted. International revenues, in particular the North Sea, continued to
decline during the second quarter as international projects
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1999 Second Quarter Earnings
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have been delayed due to market conditions and industry consolidations.
Completion activity and revenues are expected to improve next quarter.
During the quarter, Weatherford entered into an agreement to acquire Dailey
International Inc., a leading supplier of drilling jars and other downhole
tools. This transaction, which is highly complementary and provides substantial
synergies to Weatherford is anticipated to close in the third quarter. In
addition, the acquisition of ECD Northwest Inc., one of the leading providers of
underbalanced drilling systems and fluids, closed during the quarter.
ARTIFICIAL LIFT SYSTEMS
Revenues were down 31 percent to $62.2 million in the quarter but were up
slightly from the first quarter, primarily due to an increase in North American
activity late in the quarter. An increase in customer spending related to heavy
oil production is expected to continue in Canada, as well as in South America in
future periods.
COMPRESSION SERVICES
Weatherford Global Compression Services (WGCS), the joint venture between GE
Capital and Weatherford formed in February, had revenues of $56 million, which
were significantly higher than the prior year quarter. Equipment sales were
substantially higher and contract services revenues remained strong. The
division continued to grow its longer term, higher value added compression
services business, as evidenced by the successful award by YPF of a seven year
contract to WGCS to provide total compression services in Argentina. The revenue
value of this contract will be approximately $95 million over the seven years
and gives WGCS an important presence in Argentina.
DRILLING PRODUCTS
Grant Prideco, the Company's drilling products division, continued to be
negatively impacted by the worldwide decline in drilling activity. Grant Prideco
revenues were down 63 percent from the 1998 second quarter to $64.5 million.
Drilling activity dropped to its lowest level in 60 years during the quarter and
excess drill pipe is still being consumed from idle rigs. Drill stem revenues
are not expected to recover during the third quarter of 1999.
As announced earlier today, Weatherford is currently proposing the spin-off of
Grant Prideco to the Weatherford shareholders subject to the receipt of a
favorable private letter ruling by the
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1999 Second Quarter Earnings
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Internal Revenue Service regarding the tax-free nature of the spin-off. The
spin-off is intended to allow Weatherford and Grant Prideco to continue to
expand and grow their respective businesses on a more focused basis and to
permit them to seek opportunities that might not otherwise be available on a
combined basis. Weatherford expects that following the spin-off Grant Prideco
will continue to actively pursue growth opportunities in the tubular segment of
the industry.
Houston-based Weatherford International, Inc. is one of the world's largest
providers of engineered products and services to the drilling and production
segments of the oil and gas industry.
# # #
Contacts:
Don Galletly (713) 693-4148
Bruce F. Longaker (713) 693-4161
This press release may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 concerning, among other
things, Weatherford's prospects for its operations and the integration of recent
acquisitions, all of which are subject to certain risks, uncertainties and
assumptions. These risks and uncertainties, which are more fully described in
Weatherford International, Inc.'s Annual, Quarterly and Current Reports filed
with the Securities and Exchange Commission, include the impact of oil and
natural gas prices and worldwide economic conditions on drilling activity, the
demand and pricing of Weatherford's products, as well as the ability to achieve
the anticipated synergies and savings from the recent merger between EVI, Inc.
and Weatherford Enterra, Inc. Should one or more of these risks or uncertainties
materialize, or should the assumptions prove incorrect, actual results may vary
in material aspects from those currently anticipated.
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WEATHERFORD INTERNATIONAL, INC.
Consolidated Condensed Statements of Operations
(In 000's, Except Per Share Amounts)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
Net Revenues:
Completion and Oilfield Services $ 160,411 $ 218,544 $ 325,698 $ 448,306
Artificial Lift Systems 62,227 90,427 119,698 197,556
Compression Services 55,950 47,164 98,533 90,165
Drilling Products 64,507 174,698 153,000 365,326
----------- ----------- ----------- -----------
343,095 530,833 696,929 1,101,353
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Operating Income (Loss):
Completion and Oilfield Services 9,752 54,806 26,782 111,757
Artificial Lift Systems 2,671 9,506 1,827 21,462
Compression Services 4,656 4,755 9,672 9,428
Drilling Products (2,483) 46,717 (838) 91,396
Corporate Expenses (7,243) (7,157) (13,065) (15,385)
Merger-Related Costs -- (120,000) -- (120,000)
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7,353 (11,373) 24,378 98,658
Other Income (Expense):
Other, Net 3,882 2,310 4,549 2,262
Interest Expense (13,635) (13,748) (26,287) (25,759)
----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes (2,400) (22,811) 2,640 75,161
(Provision) Benefit For Income Taxes 968 8,019 (796) (28,800)
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Income (Loss) Before Minority Interest (1,432) (14,792) 1,844 46,361
Minority Interest Expense, Net of Tax (588) (99) (1,326) (109)
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Net Income (Loss) $ (2,020) $ (14,891) $ 518 $ 46,252
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Earnings (Loss) Per Share:
Basic (0.02) (0.15) 0.01 0.48
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Diluted (0.02) (0.15) 0.01 0.47
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Weighted Average Shares Outstanding:
Basic 97,586 96,771 97,451 96,766
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Diluted 97,586 96,771 98,718 97,618
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Depreciation and Amortization:
Completion and Oilfield Services $ 25,792 $ 22,422 $ 52,075 $ 45,044
Artificial Lift Systems 4,835 4,758 9,670 9,688
Compression Services 9,166 5,883 16,734 11,975
Drilling Products 7,280 7,861 14,487 15,493
Corporate 509 663 872 1,327
----------- ----------- ----------- -----------
$ 47,582 $ 41,587 $ 93,838 $ 83,527
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