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Weatherford (WFT) Plans to Divest Laboratories Business

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Per Bloomberg, Weatherford International plc (WFT - Free Report) is contemplating the divestiture of its laboratories business and has contacted potential private equity and corporate buyers.

Weatherford did not disclose any details with respect to the same.  During Weatherford’s first-quarter earnings call, the CEO had spoken about the company’s plan to lower debt and sell non-core businesses. It is already is in the process of divesting onshore rig business and has two potential buyers.

Per a transcript from first-quarter earnings call in April, Weatherford had initiated two divestiture projects. These divestitures, excluding drilling rigs sale process, were estimated to raise proceeds of about $500 million by the end of 2018.

Weatherford’s laboratories business acquired OMNI Laboratories in 2006. This provided boost to the company’s laboratories business that appraises reservoir rock and fluids for clients. Per the company’s website, other services provided by this business include routine and special core evaluation along with geochemical analysis of rock and fluid samples.

Weatherford, based in Switzerland, is a leading oilfield services company. It manufactures and provides equipment and services for drilling, completion as well as 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 publicly-traded and national oil companies worldwide.

Weatherford is aligning its organizational structure to keep up with the changing market conditions, which will bolster financials.

Price Performance

In the past three months, Weatherford’s shares have gained 29.5% compared with the industry’s 13.5% rise.



 

Zacks Rank & Key Picks

Weatherford currently carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Anadarko Petroleum Corp (APC - Free Report) , China Petroleum and Chemical Corporation (SNP - Free Report) and CVR Refining, LP . These stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anadarko Petroleum is one of the world's largest independent oil and gas exploration and production companies. It pulled off an average positive earnings surprise of 89.24% in the last four quarters.

Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the last four quarters.

Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.

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