WFTLF - Earnings call transcript Q2 2018 | Weatherford International plc

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Operator

Good morning. My name is Carol and I will be your conference operator today. At this time, I would like to welcome everyone to the Weatherford International Second Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question answer session. Instructions]. [Operator

Investor ladies like call over your to David-Green, President reminder I being to conference. gentlemen, Communications. Vice now and would turn of and a may is today's recorded. Karen Ma'am, As you Marketing begin Relations, the conference

Karen David-Green

Conference Financial have and Thank Quarter Chief Mark XX President Today's and Executive morning, Officer; McCollum, Bausch, being a International's Good on Executive recorded, and me Carol. days. available replay welcome to President With you, Weatherford call is will today's Christoph Vice for the on Officer. and Second Call. call, we and website Weatherford's Chief be

and quarter is included Mark's statements. factors Christoph provide of measures we and second our press some XX-K, quarter can found non-GAAP risk our may on the and second and forward-looking uncertainties Before our by like that of would on an today's actual I that could comments latest A to involve GAAP progress Form release risks to strategy of now cause forward-looking be other cautions our our website. reconciliation presentation, prepared in filings to results, our with financial and matters from which begin our differ of may materially statements, These statement. audience to followed for remind result refer will SEC forward-looking Company's our comments include overview regarding our X-K Please our our statements. transformation.

welcome Christoph. to the to turn Following your And like would call these questions. prepared statements, now, we I over

Christoph Bausch

the improved of quarter in billion was than X% and the offset activity XXXX of levels and of Mexico, Russia. quarter projects product quarter lower with projects In levels the The associated X% production The the Mexico. $X.XX Asia increase in reported increase U.S., was in of levels, in U.S. activity for several second Saudi higher of improvements effects of activity Revenue in compared projects Canada. an by in for higher Eastern offset revenue levels countries, Operating services by rate of slowdown you, break in combined higher amount loss first Karen. Thank higher service second work in a XXXX and seasonal Hemisphere, to billion, the XXXX, in primarily of integrated Africa completions the spring Arabia and adverse in XXXX. Sea the higher was of was up West due exchange the second offshore activity in integrated $XX with to increased the increase million. increased mix was the quarter the sequential in activity revenue seasonal to year-over-year North and due $X.XX

Of quarter non-GAAP compares the In excluding cost and and result net lower per net non-GAAP Western diluted combined share. America, a XXX the in $XX of operating were up lower second and to per the net quarter, prior the we unusual income $XX loss increases per of initiatives XXXX unusual up $X.XX year Eastern charges share quarter the by with loss driven loss or credits the efforts. recorded for and million and a loss or costs improvement XXXX completions and efficiency the income operating due operational with $X.XX $X.XX XXXX structure. Western the diluted for was mix increased set in second Hemisphere and improved XXX million Excluding million and quarter diluted devaluation in or million resulting pretax of quarter outstanding million Angolan million This first second transformation million, XXX or loss rigs. The in or the Non-GAAP XXX charges sequentially charges year-over-year. due for share. operating gains Latin to production this write-downs, $XX These Hemisphere were asset both amount our our drilling U.S. by was charges. Eastern XXX% million. volume, initiatives additional the the $XXX associated favorable transformation related to XX% of for restructuring charges and as partially which of share market and to segment higher in to the impairments fair and a An transformation XX the XX product of warrant. offset in loss a credits, adjustment related kwanza million operating related income transformation credit year-over-year majority and activity improvements million line of currency sequential were primarily was of The Hemisphere. value

in Moving the Canada. a for result XXX integrated Mexico. of million the Hemisphere, Western and were year-over-year. margins Year-over-year levels and activity XX revenues and second and the Sequentially onto resulted construction on of spring increased projects U.S. the and improved increased results Mexico, in from by million activity lines million the our growth in XX higher in mix rig or revenues as quarter by growth up up XX% from counts, Colombia Hemisphere. Argentina service up In production completions break product higher in offset well U.S. product

this deliveries resulted and which quarter recognition more sequentially sequentially lines up Year-over-year all depreciation increase the The across XX The seasonal well Second certain Sea construction North operating higher of transformation Arabia offset in in increase offset and to Hemisphere product exchange the in due reduced completions sequential Eastern cost improvements lines widening a in mentioned Saudi during in previously income due Mexico with and and was segment Canada, Change quarter the Saudi and in in commodity of our Hemisphere severe projects downturn half was price by sequential rates in by differentials exacerbated operating Venezuela costs product In completions drivers were by decreased offshore in revenues up revenue higher U.S. was levels and the the results efforts. the of year. year-over-year. Western quarter first fewer second and foreign XX year-over-year. up operating due or XXX from million to impact reduced revenue the activity, million and decreased improved Arabia XX million Africa in prior production of results Russia. of XXX slightly slightly X% and in Year-over-year offset seasonal activity increased million by the West revenues decreased Asia, primarily Kuwait. million year. second to

and lower in structure. operating income cost primarily and used transformation was our million revenue XX improvements Hemisphere Eastern increases was XX mix due up million for and XXX activities severance, including more up by quarter cash free million interest The operating X million sequential restructuring net favorable year-over-year. of by sequentially XX XXX of flow and transformation. Second Total from expenditures cash Net XX were quarter year-over-year of the a segment million and to million. a of initiatives resulting for second million, capital the XX debt asset XX in quarter negative of million XXXX, disposals million for proceeds and cash impacted was from cash payments

during increased as wireline and inventory. due product million, is and prior where as our XX and America. increased expenditures investment Inventory for of existing DSO to the Ramadan mainly collection as from million million decreased several at XX tools. drilling capital sale to traditionally related in sales lagged was in days due quarter compared Middle international a up result for evaluation to delays in in reserves Collections our Customer days systems slower to Second held new related rigs largest drilling the overall compared countries. rotary North the and our in markets receivables line, in quarter East four learning reflecting well approximately were steerable the levels in slow-moving curve million rigs, following investments XX quarter drilling XX VAT of were the investments non-cash including implementation or capital time Apart business. X investments

realized sequential Our second benefits momentum transformation guidance a improvements line were provided to the In recurring of annualized at is (Ph) rate quarter conference that potential the incremental highest second stream total last in work the XX our with EBITDA combined of sales of terms delivering put amounts of [XXX us the We result call. the which which, gain with XXXX, in we during during as and realized quarter on over transformation in of the return work largest improvements initiatives improvements. first million, XX% the goal. with the commercial run or our continue stream, total an million] the incremental quarter,

During total the second our goals XX% of for quarter, reached stream. we work this

were not cash satisfied are unable to the quarter generation our our that seasonal setbacks capital balance. we increased as various drags overcome and during We working second flow with

working capital focused to excluding sharply year. Achieving target for we are restructuring the remainder through trends of XXXX move as these flow working breakeven and related improve everyone's has expenditures cash we rigs drilling transformation meet processes our several on and the In to and full-year to internal capital identified reversing management. our attention. We on for aggressively have our in objective, order expenditures full this are efficiencies

we outstanding Specifically, of compared during from the up the to current reducing days, the our XX which days the of sales XX set level year to of QX. was goal have end of by days XX

progression Beyond recovering changes help processes from track additional need and of implementation us on are to seasonal effects and focus scrutiny. these that in applications areas to QX, the we

orders inventory adjusted at the levels manufacturing inventory a to centers positive have overall On reduce front our to we pace.

builds. the costs East will fees eliminating during third deliveries related quarter in induced quarter time and advisory capital country exits. costs severance XX Additionally, in Transformation for and Middle including provisions restructuring the million, delayed the the during second to were working quarter, ship

incremental at of to targets million items end overall rate our To-date, by we for benefits year-end. XX% We recurring rate by that Least provide of should initiatives the our a opportunity specific EBITDA action efforts completed transformation have XXX from the quarter. run run in next for expect of current benefits reach the

momentum efforts We in in performance. our operating by results continue transformation our to the evidenced build

transaction capital will We to with information, greater and we divestitures of be towards third section interest and also fourth in the from about strategy cash can long-term and in to the this the flow quarter, one-time shareholder website. (Ph) planned drive value. our maximize venture encourage refocus release This have outlook. and provides our line benefits the resulting part results, Again improved working financial week, announced hard to sale accompanying an and India. asset you to in of this in an review found earnings relations quarters our also very transformation we which the of portfolio the with we our press cash of During sales. Company's example presentation detail Last is deal from investor joint is supplemented our [Gurgaon] our small continue that

account programs rate normal other for underway have target million $XXX large for divestiture divestiture our which will of a We proceeds. portion

to past to shareholder across the maximize various continue will line We getting be we deals these as in diligent value. finish explore

will the We are one planned we during at the divestitures third of least agreement confident that on reach an quarter.

are an with We are credit of our of our speak. renegotiating we resolution a group process also to we process. lending facility the And revolver nearing as extension in driver

on structure We very announcement expect a terms to the of make near in the formal this future. revised

we quarter spring price break up Canada Hemisphere In increase driven third single-digit Moving in market improvements outlook. the activity that of as onto we to and our move as mid in XXXX in the improve. expect range differentials of Western by revenue out

American to inflation of Western a expected Canada likely with We deterioration Argentina impacts quarter impact by production as related during in expect from function in the is positive revenues experienced second we are is from construction. income very during have inflation increase some the incremental lower uncertainty are in modestly in positive increased driven of be to States operating quarter increase by particular the the Latin the market slightly where reverse, destabilizing contributions to in in to offset expected and revenue effects. Latin decremental activity Unites expected some the rates America Argentina. primarily our the some the Hemisphere

situation Iraq Europe. We increase Hemisphere single-digit the levels Sea but product in in to soon. top-line calm sales led activity will and the improvements revenue range we reduce unrest are could the expect Through Eastern in down that continental and by hopeful results, in North continued mid the

through contribution positive our improved. the generated cash We of by expect initiatives. transformation to higher net revenue due meaningfully and fall activities margins operating combination to We from forecast be

with cash are in expenditures from negative XXXX capital of XX quarter Capital lower and expenses. and higher XX offsetting tax third the transformation be between costs million to than working reductions EBITDA, severance more and million. interest expected impacts higher cash During

reiterate we cash XXXX For flow. the full-year of breakeven our expectation

of of to before, mentioned restructuring driven management our I achieve With efficient As call market will that, flow related rig cost will EBITDA increases working help processes support implementations our cash the Mark. turn internal system and this transformation to The capital improvements such, our us capital most and and transformation excludes growth. over to will and expenditures. initiatives target. drilling as and by be our

Mark McCollum

hello happy to does and I’m and important results path improving business the in Once debt. improvements our Company and cash again, second Thank a reduce sequential to during the you, operating earnings Transforming our quarter. and is which overall providing step Christoph everyone. to most the report way flow year-over-year in

a we force and its our ultimate towards is effect tangible head now Our already together right and with in clear team of goals. considerable our strategy this and transformation we bottom back-to-back Weatherford embracing solid organizational full on have our mission quarters progress evidence on structure and made line a is the have challenge

XX% I'm sequentially, we target. nearly higher As expectations. above Christoph our of $X pleased our of which the was that mentioned. impacts high-end reached initiatives our of billion have were XX% transformation

these We accelerate. transformation our progress to continues as will make on initiatives additional

approach next expect of recurring target to our end EBITDA We of the XX% by quarter. the

running are improvements profit toward goal $X billion our and We of setting targets. sights bigger in on her internally

to like Weatherford to share progress our Our and sustainable ultimate key a first shot the generate all would value of aim streams, our work give Shortly, for but out stakeholders. I is I'll individual to transformation team. more

to they and organization that embraced two the shown results as relentlessly easy. different has coming duties. and a working is This coming are incredibly part being close to team ask. mean to sacrifice processes, changes culture, make to new new understate employees put a all and systems, transformation dedication doesn't completing to to install to to reality perform results these the to last toward but fast XXXX is I time our the continuing the done. forth get and is disciplines targets are Our by the the by quarters. project massive from This The new not new team our day-to-day hard new this of required is cannot transformation integration implement initiatives. The while build working a amount learn instill of organization, a their simple really

hard results want team achieving your personally I for Weatherford the thank determination, work testament It’s to commitment. to a to-date. So and the

to was update our Now I One stream we to showed to the from area streams would pricing cost we sales on quarter commercial success this in of this full instrumental like an we marked increase the for were great our improvement the This opportunity to needs. customized profitability and quarter the most and in create our products for manufacture products work a design driving where for help tools during to customer streams A are ensure have customers. deal provide SPOK to using which second in that work has initiative value progress. most specific new planning movement. the the accounted relates key quarter work had upward produce

further last in wells to of sales. projects performance contributing and more in operational into offshore group revenues its on and the Mexico, in from doubled we respective increase addition, quarter, win revenue the us onshore improved enabled strong service scope The to rate In extend execution the and have our with moving profitability. work integrated complex success

at service more a longer. sales specifically talent in integrated we also the on initiatives for local invested produce lower and stream. help Permian barrels Our work to focused operators results designed positively basin centers cost influenced this in

improve and also We a dedicated to customer call service. responsiveness implemented center overall enhance

progress Another Geo product of quarter. lines made our and segments. This the zones also and work work began with earlier operational stream product significant this realignment

realignment the simply continued through we to This the organization. quarter, down cascade

that and within structure collaboration and organization. responsibilities, is there and intended, in new accountability so clarity greater the Our increased roles as working is

two improvements led the work this quarter. for way these streams So

initiatives During this our were streamline and the finalized quarter and in standardize Company. to policies across G&A, compensation benefits

products year with finance, procurement also little are XXXX. contracts outsource will a The and activities XX, of human and we signed spend. to at We we remainder our will or This fast. already IT. in us to expected where but activities behind maximize parts is vendor savings the several our to In these enable with but purchase our take ground bundling and particular, June to wanted and complete we for efficiently. more to up making be In transition to resources base the our align benefits approach vendors are better of organization the we proposals underway, are larger we leverage RFPs back-office request as of similar throughout and volume materials we

primary for vendors scale handle up purchasing. opens larger opportunities it volumes can addition, of our to who from benefit our In the

the about initiatives of million implementation compared amount queue accelerate related results RFPs large have plans. work $XXX into in the logistics half stream machining, during quarter. early The We the to a key to representing that and were there value delays, released include streams, year. in of deliver are for annual These and spend elastomers we toward in of XXXX. to year already this RFPs no the second lift original this during facilities in footprint, the In quarter. accounted for Canada made this have we our the by the including closing a decisions quarter our expected freight some Vietnam. nature on take components. costs and And artificial we In plant manufacturing several savings our are costs are time. their stream in rationalize and These consolidating to able work distribution work to end of post And

that results. we to distribute several Beyond to products develop smarter docking are piloting cross ways are efficient yielded early initiatives that, our working and more positive

around items the our core is size of working to transportation our our leverage to one which We world. the internal and collaboration values ship together are and needed increasing streamline

our of a work We quarters are but transformation, tremendous into amount remains. now a couple of

committed cash the we flow disappointed pleased primary and quarter very I’m by that the cash. is on Many our of continue this our focus cash correct generating call remain growth. this, for on accelerated see target the may free must year. We We transformation with daily recognize challenge benefits, results. achieving transformation both the I’m breakeven we a particular, second flow the as our to magnitude in to operations equally While of recognize

where ourselves focus service we get goal remedial done. critical focus is also previously path flawless aggressive as is execution we noted, set profitability. this to taking action it quality A Christoph on However, to are for and our to necessary

standardization our has improved same reduction we record are enhanced currently fact At increasing market as time This sets levels. for nonproductive target operational In service performance. improving. our exceeding in achieve to XXXX. metrics on focus enabled quality us service are And is process activity foundation time quality for solid the a our

this where lose driven wavelike continues The is as development is the I continue momentum uncertainty drilling in we best to but anticipated, trends demonstrate directionally running overall demonstration the industry in price quickly, the plentiful these global of as activity an quarters. of the patterns, basin basis specific supply takeaway coming constraints suddenly have surrounding completion of acceleration Permian areas headwinds on perhaps As created seeming have to higher. to recovery rapid the move just and resources and fluctuations

counts, alliance electrical strongest alliance competency to the plays a fill Weatherford. Valiant offering you customers basin as related in of have frac be doesn’t most it a Even rig to watching nor artificial delay recently decreased to or technologies wheelhouse. our The in create our enthusiasm We us core expressed with forward current pump helps quarters. emphasis Permian pricing announced pullback with seems in you capacity the on portfolios telling there customers the are with right will Lift substantial of we production. maintaining they We submersible Permian our to, of in as really operators Multiple us This Artificial is continued impact our trend detail applications and activity, from neither into for coming heard be which the this sharing completions see today. in situation lift peers, carefully, look but the more the of brings. industry. to the noise plan have a

We U.S. have several operators contracts across with also signed software basins. new major

production platform install the in of combine ForeSite these One first XX,XXX was contracts production approximately integrated engage to software on marking introduced wells. Weatherford XXXX, The software in advanced that series of a offerings ForeSite of proven Things. the Weatherford existing for capabilities We computing and building this first analytics. expanded its less] optimization data technologies further reciprocating quarter, [rod platform (Ph) the cloud on during Internet systems. with

awards elsewhere and now systems lift, example Our in in for five-year gas awarded the world. pump flowing this and this during trend operator we U.S. results for region completions shown and what will the million Latin from contract Regardless Weatherford has second America We testing promising very near also wells. services. platform Argentina happens coiled integrated benefited term quarter. West A tubing, remain by encouraged submersible $XXX in we major project electrical for a believe of very supports levels in continue. wireline, Texas, around the naturally and activity fracturing

has five-year onshore running which then, jobs operator contract oil using with Colombia Another April, we to an our integrated we to testing. in tubular Magnus fishing, days work In meet one In saved our several control. needs. activity system reliable $XXX well million in unique have and for for directional drilling wireline, with including to drilling a X.X new awarded run steerable including rotary feet drilled fracturing, estimates. we XXXX and customer's project a Mexico Magnus precise re-entry, design Weatherford in solution executed directional services, line combines and push-the-bit performed tubing compared services coiled completions multiple product drilling Since increased, high-performance Mexico, introduced the RSS and

even first activity the Eastern the be experienced second modest to results of expect Our half year operations the we and half stronger. Hemisphere increases during

markets through have We an tender into our product activity identified have multiple to seen opportunities in uptick lines. new business and extend

we of and expansion received to further represents space the customers enabling the product focus an in hangers portfolio to This contract drilling services liner our drilling throughout high-pressure this on in supply complete gas to products, markets access We technologies. markets For in operations and in East. for offering Weatherford as expand we offering operations field untapped for deep Kuwait region us additional the example, Middle anticipate the in a sector.

to Our well transformation stage commercial temperatures line and XX campaign optimize local operator safety initiatives We drilling tool. subject synergies. methods in compared deployed to the ultra-narrow equipment, sales time evaluation help Middle we gas Elsewhere major managed cross high a East we pressure the SwageSet delivered for from the tubular in window by operations pressures largely and cementing our region, In three-year which product our completions and the to packoff our reduce will for VØ conventional and us average Australia equipment experience running software the connection to achieve including services Asia-Pacific days. drilling workforce. performance contract a differentiating and including won our based on technologies, a

by market earnings, As results, continue trends continuing growing to by EBITDA Weatherford highlights is demonstrated to first wins flows transformation. and benefit operational our contract from and and new well-positioned to responding cash half our

the The path to second profitability. momentum building transformation delivering quarter is that and results confirm intended our

our of improvement in by changes. our shifts in and $X recurring year growth pleased by in will I the to confident culture. XXXX our with certain assets divestitures and in debt operating achieve progress discipline non-core positive half toward the organizational the annualized that EBITDA and the strong I’m remain billion improvements XXXX. ratio we seeing goals cut year-end end process our are We of

the stakeholders. the Company historically Changing stewards our business formidable ultimately that Weatherford create assured You has for deliver way of will utilize for our company assets growth long-term. to sustainable resources can and will a and your rest all done profitable of

healthier, We operator, call on services our are I'll turn in to look the more way a over telling quarters to With forward well Carol? Company. our becoming that, integrated evolution I about stronger, back the you the energy to ahead.

Operator

comes Crédit from from go Please Thank you. first Suisse. Wicklund [Operator ahead. Instructions] question Our Jim

James Wicklund

morning guys. Good

Mark McCollum

Jim. Hey

James Wicklund

My question is Hemisphere. about the Eastern

you to most of last transformational know at has in great the price know you of There starting least see of couple either. of like talk would walk that international so? seem as in it the Eastern due any international activity markets the We but about efforts. the water on-shore to the kind pricing contracts, you was Hemisphere see role see. you about next improvement and the year talk improvement been the all the didn't quarters. you contracts, shallow You income Can through of Can markets momentum pricing deal a improve, of or operating us the timing over it the for for

Christoph Bausch

Hey here. Jim Christoph. moving A of its lot parts

the quarter. on second So first

and think quarter delivery. of most benign reason growth for some of main the equipment for was I second delays

So, will you up that gearing QX. in see

Your second question about I parts now. several in and the contracts there quarter and that are it's to that general, think said think I we and same pricing

the see with contracts the some we and see some pricing not an over a a tendering we quarter It's and mixed last already able tendering one and to price and say improvements. would bag, I clear pricing You And to that’s opportunities. on Middle seen have increase activity activity other continue see we the pressure May really the most contracts where bids have is in we we direction. trend see of area been competitive East that. whereas see in be have some other we parts in

many know through pricing goes ago year Middle one that goes are you out. to contracts have next agreed the tenders year do have in see building that point effects and we we for a you multiyear East our won. And increasing are do One the on in again already we East, further that growth expect the the think of and tender activity an sure, into forward. based I another Middle last you So so you know until going is contracts work

in bit Eastern usually So, longer. the East pricing or takes the Hemisphere improvement in usually a Middle in takes general

opportunities or and are but think sell your I your commercials, up hope customers service deliver happy, question. top you able you very Now to answers your maybe if some that to quality improve are I get additional

Mark McCollum

Mark. is this James

new that Hemisphere sharp Eastern - that of service our providing lowest to works; Let think the technologies through have I then come I terms opportunities there to your customers way the typically this and typically mean the is are finding me off add wins, multiyear of pencil superior been is exactly it, quality in Christoph you are as through. of traditionally cost contracts, right guys sell pricing and

think net many market world as work to that's tightening and that positive. back up in I the a areas is around equipment the gets

there trying aggressively across as service and to coming think and to are out are I more be those built who turnkey those discount locks are those. on contracts multiple get integrated services very tend for that

noise and you up are is pricing of the the good And so you your just typically guy so the on game. the undercutting I people think pricing some if wins price going think because lost that’s if typically you hear this is is, nature feel of lose because are and you who that I you about and

James Wicklund

project you follow-up Hemisphere, - Mexico, tails of all for Hemisphere you win. remember to projects [counter ago, we let win, me how if about to (Ph) I turnkey you peck] Heads kind in the are service due taking scope Western going lump-sum you risk years indifferent, talked much talked to could are My take you Weatherford, the about to your expanded risk here? capital be any How Mexico. you going if that that balance you elsewhere and to do sheet in terms quality you are do

Mark McCollum

number you looking a we take to process learned a Mexico, Yes, the and in have things drilling expenditures very, contract vigorous sort know in and there sophisticated very, have the wells from on and have we basis. into benign. existing built that risk infrastructure now over the and of have you are to acquired of at I of projects drilling house very so of very risk which accordingly And and overall one the needs of very the I them, very we much Jim risk that think are risk the be in far curve. lot mix you past, think performance wheel or of we little, terms have the what pricing capital is ahead our invested, and the nothing Those it operate we it’s of because we all that's past. in done have different was a build capital

the very so expect projects risks in in actually same very other the so those that those pricing. part confident bid process you have We East, Middle part part of the we the not rigid touched our we in know and and of quite view is approach we rigid involved projects, our we risk for way it in risk are

James Wicklund

appreciate thank I much. Gentlemen, it. Okay. you very

Christoph Bausch

Thank Jim.

Operator

Perfect.

from go Our Barclays. next David Please comes from ahead. Anderson

David Anderson

see Hey if transcript. was kind back lot these least of thank that the out Is double-digit the mentioned curious say side? that. fair the very could the of of international step side, just a the if little the have a details costs bit. international you you all breakdown of on wondering take you Hemi. just coming in growth for sounds year wins it like you it just been in easy next much your I’m of I are that Eastern seems kind Mark, And markets. the the kind international on on It to

skewed I’m curious, next pretty that for kind guess feel the of we where seeing is confident. couple should I quarters? towards just it You Is of more internationals? this be

Mark McCollum

at the the No if fairly Hemisphere, actually accumulated. that you case. spread how look have that’s they I don’t It’s on results evenly think between actually the

seeing I But East are particularly structure there savings product - lines from revenue Hemisphere multiple of both And is [XX] as because been some of that more historically from that to coming heavy oftentimes coming regions think And going bit are the having our revenue each have that cost in a regions. West. the more and of are the layers integrated. opportunities in have of each have the remember the being probably and been countries cost as across of is the (Ph) in and part we all management existed some those opportunities large well Eastern what the you opportunities. that savings are opportunities of cost a

on mean had to the So do the lot done all course more market, of and way particularly of for U.S., a market opportunities I And streamline growth has disaggregated and the created and moving things. have in logistics better here. is the given where is job SPOK to for more approach we they we and work opportunity U.S. with were we that pricing have the strength us revenue opportunities had that over in more of there the the

a that will think see. I that's that to you trend continue probably

are visibility benefit. and they these where fairly distributed. high they each track where as happening we should So it’s And more evenly initiatives are been of have recorded of and they

David Anderson

outsized of it’s about real on you East on you East. impact for a evolves? That maybe curious side. purchasing. the was I a that big massive everything of Middle were opportunity competitive such that Mark also an part tendering cannot how seem in have price the to So Middle about how say it as I think could terms be business talking Is your that it in very your terms talking activity about in of and impact and procurement scale procurement guys to you fair

Mark McCollum

quarter Absolutely, I is the first the manufacturing. machine at feeds obviously are mean procurement business how looking

ways East around around world with better leverage the manufacturing the our our both West spend down a of the in distributed got finding manufacturing in the have see logistics can to the We Then and brings cost that facilities. all way basis them. world of resources the movement the shows and

are we in lump turnkey product massive internal there sourcing or ability are it more get it our we well faster there costs. deliveries get East, going other into cost-effectively, as projects our reduced So making and sum to as are the tendering as we Middle

makes competitive. us more even Just

a the actually lot opportunity it’s have fairly we effects accounted and So of for some downstream for exciting of that.

David Anderson

quick what five, the last And Right. you remainder. first repeat off one just packages about sale you the talked can question asset

there? of two [indiscernible] of the mentioned heard separate expect I by you total you just to those third think explain to said what we you around supposed think meant you I end packages packages, think can close is one last I you the quarter, there

Mark McCollum

the Those - the have or over of more quarter, of announce so. bring value least There we XXX to we things clarify quarter are next was they a a packages in queue don't $XXX packages teeing are that in we I one of or out. couple represent slight What have been a the Yes. majority but David said of couple this third at a will to up the opportunities. forward Those two million. series different represent

David Anderson

Fantastic. Thank you.

Operator

comes Meakim Sean from next Our Please go from JPMorgan. ahead. question

Sean Meakim

morning. hey good you Thank

Mark McCollum

Hey Sean.

Sean Meakim

your that’s you timelines street. a reputations fly put the that have key why an out perhaps certainly you or on timelines conservative out things I’m questions, curious good make Perhaps put process are pressure out course opportunity to of been of you you to thought the of necessarily milestones So just number that course a willing the just terms the putting like happen positive, of my of one have of it’s at aren’t goals timelines or of and sure new to what in the the within list divestitures looking comfort internally Mark there? on control, there for these revolver extension. put some some the takeaway to so these now curious and is that completely these some promised about outlook to of these

Mark McCollum

I the hitting the is he responsible that. shot, will I’m first let take because the guy who Christoph for those deadlines. is not

Christoph Bausch

out good Mark. you We I if have Thank put achieve there we confidence wouldn’t those. we wouldn’t timelines think a that

I that to and so the revolver QX stand similar so in and that’s going why we very timelines. very get to we we think happen commit package can future done feel we the near the as that’s that we specifically in to one And very confident that feel confident

Mark McCollum

complication challenges a Christoph transactions to I one was that for more little on on his go and that career bit hats We here and of navigating my have team shortage all that. the in complicated probably and entire transaction the rig those done more have have of we to off

those we working what a at of can are and not willing things put I’m are data that no where a we we So that we of are to sense clearly give and other you see point. on, to sort are this there things on trying

Sean Meakim

very would to Lift? applications you Lift of would just strategy to details, is granular quarter make the term level of more and for value alliance I of be on great the question check going were can nearer on little And those off ESPs fits think you can high wait but think also portfolio to hear in your like markets understand just some how a a the to this in I productive. ask bit elaborate you boxes. terms maybe and be the on going do sounds it get third that how opportunities into or sort just impact that more

Christoph Bausch

Sean Hey again. Christoph its

the network We very and have reputation have very good that we the distribution into the has U.S. in Valiant, with portfolio, whole good discussion in right good a very Valiant product fits a done already

full offering because Western the existing. have the where overall on can Valiant we side the Hemisphere side at in on offerings also, distribute with we ESPs very the We side And have have execute opportunities Lift already as and want ESP to wells had one. will later ordered more we We our those customers Lift solution, where distribution our relations the U.S., customer Valiant discussions. we an good bring these if and have type earlier places have for opportunities integrate globe In on what set we for table. up incremental and to the we record so And very it’s just of it our Eastern have stages the the for each Hemisphere into then lift come when network, and artificial well. good just expertise

how answers your think to I it. see question broadly that we on

Mark McCollum

portfolio. I we complete see opportunity a what catalog big the can is having for this that our offer. in Obviously Everything

think value a it’s things And Weatherford think, these whole to come having North of but lifecycle the customers managing just buy with get through full customers. because foreside production is tools as proposition production our ability of opportunity and the I the in for data customers the better having to there also to - of cash and Along manage service and them. we to we across and wells to the there contract. I quality take see tend into different a our reputation about catalog provide it’s understanding phase a and is good particularly our all think discussions solutions, of takes the that as of lifecycle creates price ability I to America, performance more

so And about with I'm excited and we this JV do seeing can alliances and what having it.

Sean Meakim

detail, I Thank appreciate a it. lot for the

Operator

comes Please from ahead. question Our Herbert go Bill next Simmons. from

William Herbert

which or it match could what us do forward what first guys expected if is regions garnering And the and sold you of exceed you on first? morning kind are and of to disposition takes? good your for touch And and you land portfolio? remind How the likely Christoph. path be the rig of they timeline the remainder are Can proceeds to many Mark Thanks just day. from

Mark McCollum

going all, Yes broader through will not the thanks. I’m you understanding. give but I

Saudi and Arabia cover Kuwait first have which we others is which and with piece let's the Algeria. So signed

QX all the will this those operations the includes in be and three end in XX portion of rest countries. in and in bigger that part Our rigs, to close QX

of rigs as and is a there We rigs of pool working another stack countries a there and then XX there and operating globally contracts pool installments are is forth. and future rig in left then with and so

one. entertain During already go process we because offers the for to and to the talk wanted the bigger the want know about had on individual some you them, didn't we we but divestiture focus other package to first countries,

which some take some get little will will very longer. other there quick, these ones to will we a So which and is go bit

and be whether be whether would So year, will overall example we sold free QX it said or happen will QX in QX or the jack I next QX didn’t those will it know. next quarter rigs or for be so it

Okay.

And so to don’t I answer on want those.

don’t what the but not and can. so an we On it’s to Algeria, Kuwait piece proceeds will we diligently lower it countries be the I key for we sell. in depends on again proceed absolute and number, going to side, got same as amount Saudi, and to going overall the we there as a it’s the out so quickly amount as want give dollar be

William Herbert

$X was was intensity, you. CapEx second And sold? $X land of capital that the in for for correctly the $XX are your I million rigs million the you or to rigs being quarter, land if thank in million with regard heard Okay

Mark McCollum

close comes the those of in sold the goes, the rigs being very in high No, that’s are countries nine rigs for ones because land the and total to spec. highest the CapEx where those rigs

William Herbert

Okay.

of your first $XX a go which almost all going the the sale in CapEx this of to annualized - lot land basically bit rigs a stage? up for So with little is rounding made million

Mark McCollum

It’s actually very hard to remember.

Christoph Bausch

of It’s but you was the the very in mean just opportunity capital I that and was the actually proceed that get, selling biggest is evaluate come spec, capital, because out the some come also also not these they paying these high latest they a market avoid there that of of in in countries to are - to I they on there. mean are [indiscernible] and about the as relative hard

it is big us. avoidance So our a of part cost very was capital for be helpful that to going

William Herbert

is Why I just have year? the one spending one. of much capital and Okay second the up last have going in so half

Mark McCollum

before those get there this them That I there legal forecasting we the then is time the I starting on will rigs, conservatively of that right. of have some for be spin sold will to Christoph will all rigs mean and that that of be it think transitory to money a so of some the some actually will some Because we and as is forecast requirements go and that to money finish away. itself incur closed.

Christoph Bausch

we Yes. a high sold ramping upgrade that on a specific fleet there CapEx are enough our is contract, of in to other some want for are the a part we the which go fleet will and and It’s very market project and big we there. that and of spent conversion up Magnus outside rigs to have opportunity on the out

that are right in in and wireline up have think - long the contracts now we some we quite state we the have seen on into are are tools. some we Lastly, getting on short build so we wireline I some where also tools of ramping and

William Herbert

East these forward? you bottom in sale annualized going what of land saves the the CapEx so in XX Middle right line Okay

Mark McCollum

It on at it's XXXX CapEx if for come zero basis XXXX but in to that year XXXX. full on a XX in about or it you look million we depends what XX probably lumpy, scope CapEx you about in so. because In year a basis million, take eight on spent you will

million. full year If for the you it look XX to XX million at

would a year bit less. be Next

which even is expect invest. I think high something there we your always we expect, and but again

William Herbert

Got it. Thanks so much.

Christoph Bausch

Sure.

Operator

Hallead Our ahead. next go Please question comes RBC. from from Kurt

Kurt Hallead

Hey good morning.

Mark McCollum

Kurt. Hey

Kurt Hallead

the a completion the Mark maybe you guys with follow-up upon concerns the call. to lot wanted to related from I operational very obviously detailed mentioned you on Permian presenting an on good of in So related, just standpoint activity.

have be you. emphasized be you you guys You that this But in exposure your and to on kind what of point think kind production. could to risk for risk? there What portfolio? going at there were be? dynamics don’t product impacts Permian just seek the to magnitude And of Do if on basis lines any of relative a would off the positive frac

Mark McCollum

probably Well obviously, do. going you it I on depends are what know to customers think

completions frac to (Ph), things we the duck only of is that exposure that is that going the the have to areas packers, is there, would a relatively are customers see be cementation the CapEx on spend which than our really tight itself. some as small. spend [duck] continues next over much So of plus What continue the do course their get well. exceedingly toward completion line business side we inventory increasing the and there of to and and Part they but quarters products

to exposure that oil we to count being U.S. that’s ducks. don’t whether shift evaluation California And continue and all impact the see have And direct somewhere obviously the see they our a in wouldn’t the rig be have to rig quite business. or that just go it's across the And then they else, they drilling it that related reduce just reality a impact from big to itself prices spend. look risk. to going to us and accumulation balanced you going count ways I so Bakken. we supportive on basin frankly, at and decide more is of are shifted, But many pretty or If

Kurt Hallead

great, wins through got a of particularly project that’s and Okay great couple And Latin America. maybe couple from things a regions, walk into thanks. color of

this in So second as on through orders this not focus or to set revenue into year kind of rank the or of you growth on see Where you regions much point best your XXXX? highest you international terms half think the market forward profitability. about opportunities from maybe for so obviously improvement and internationally you of do and were if the opportunity lowest in growth

Mark McCollum

activity Sea contract thinking and continues across guess do excess great in we that about Eastern of Western separated, have Hemisphere ramp And to some were Arabian Hemisphere an our and is well. Well wins I Eastern in as to up. the East Hemisphere Arabia. clearly Saudi the very got geo continues zone that Middle

the seen a in tendering we haven’t of contracts and very activity some the lot necessarily we have We headlines, Sea, North well. continue in have to our there do are are maintenance and while scenes, the of behind winning as well we

should pickup activity second our that the benefit particularly results half. in So

We that our the differentials breakup, on as more we other come a of out was percentage Canada a this exposed season. of result severe more some are breakup basis, into than highly this as peers of widening to coming year

inflationary Latin guys there might Now there, we rock even that expect moderated still are trends we opportunity have a It our some happen happening continued the won at that the that great differentials America but there. coming where had been in that solid activity of be. a there. I may are the this we year match Latin bullish that they managing Canadian have about America And opportunity growth currencies and Mexico the out think in Argentina, in came that always think business, it’s and In to we on frankly, what have of because exist. quite underlie first contracts thought been part, I of hit breakup, job would have some did or activity and show it and Columbia, got maybe may little down all we outperformed bumpy, half fairly in

in about the Columbia, very future particularly feel broadly So I speaking. good and Argentina

Kurt Hallead

the know growth third margin could color. by in be to quick one quarter? - revenue you about going did margin talk of I magnitudes do about how in Christoph. for you guidance If for sneak Hemisphere, would improvement I improvement for ranges we Hemispheres gave That’s real a the the think generically, you great us the think is

Christoph Bausch

Hemisphere in small, simple will so I we going that my said be I and marginally is I used the good prepared And grow have forgot the Canada incremental. is or think think to reason modestly. the will Western that I that in remarks word

guided and normal Argentina but incremental so see of that’s will Latin you good a we evolves, we because The have have incremental the We will I Western the into expect know expect the do revenue the good offset, Hemisphere. a our quarter. America QX, that’s predominantly the inflation in U.S. Hemisphere so Eastern and how expectation would in that say we you from to perspective third there would risk

Kurt Hallead

Thank you.

Karen David-Green

half the hour And now. we past are little

So thank joining now to us for turn over today’s on I back will call. Carol. all the the you line operator.

Operator

Thank you and you. does may conclude conference now all This call today’s disconnect.

Weatherford International (WFRD) 27 Jul 182018 Q2 Earnings call transcript