Weatherford International plc (WFT - Free Report) recently declared that it has signed a deal to sell 84,500,000 ordinary shares in a registered direct offering.
The shares will likely be sold for $5.40 each, which is at a premium of 5% to the shares’ closing price on Nov 15, 2016. The offering is likely to close on Nov 21, 2016, depending on customary approvals. The company anticipates initial gross proceeds from the offering of around $456 million.
Also, Weatherford has decided to issue warrants for buying an aggregate of 84,500,000 ordinary shares at an exercise price of $6.43 per share, which is at a 25% premium to the share’s closing price on Nov 15, 2016. If exercised, the company will likely garner another $543 million. Hence, total gross proceeds from both the measures will be roughly $1 billion.
The proceeds are expected to be utilized by Weatherford to repay debt as well as general corporate activities.
Switzerland-based Weatherford is a leading oilfield services company. It manufactures and provides equipment and services for drilling, completion, and production of oil and natural gas wells. The company is among the top players in each of its product/service categories and is present in most major hydrocarbon-producing regions of the world. The company enjoys very strong relationships with both publicly traded and national oil companies, worldwide.
However, Weatherford’s reported third-quarter 2016 adjusted loss of 39 cents per share was much wider than the Zacks Consensus Estimate of 24 cents and the year-earlier adjusted loss of 5 cents. Moreover, revenues of $1,356 million decreased significantly from $2,237 million in the year-ago period and missed the Zacks Consensus Estimate by 5.2%.
Weatherford currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Ultra Petroleum Corp. , EQT Midstream Partners, LP (EQM - Free Report) and Helix Energy Solutions Group, Inc. (HLX - Free Report) .
Ultra Petroleum is likely to witness year-over-year earnings growth of 425.8% in the current year. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EQT Midstream is projected to witness year-over-year earnings growth of almost 12% in the current year. It has a Zacks Rank #2 (Buy).
Helix Energy posted an average positive earnings surprise of 56.42% in the last four quarters. The company has a Zacks Rank #2.
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