Weatherford International plans continued cost cuts to bring its net debt from $6.5 billion at the end of 2016 to less than $3 billion over the next four years, said CEO Krishna Shivram on a Feb. 2 conference call, reports the Houston Business Journal.
Part of the plan to reduce costs comes in the form of job cuts. The company plans to eliminate 3,000 jobs, 2,000 of which have already been eliminated. At the height of the shale boom in 2014, Weatherford had around 67,000 employees. Since then, the company has reduced its workforce to fewer than 30,000 employees.
Other parts of the cost reduction plan includes closing uneconomical field locations, reducing pressure-pumping operations in the U.S. and removing structure in two deepwater regions–the Asia-Pacific and Sub-Sahara Africa. The company also plans general streamlining.
The pressure-pumping operations accounted for around $40 million in lost revenue last year, resulting in the program’s suspension. This includes its fracking operations. FuelFix reports:
Weatherford, which operates out of Houston, has about 20 U.S. fracking crews. Next year, after making upgrades, Weatherford intends to sell its land drilling rigs business, including more than 100 rigs, that’s based primarily in the Middle East and North Africa.
Weatherford forms agreement with Nabors
The cost-cutting scheme wasn’t Weatherford’s only news this week. A Feb. 1 press release outlines a Memorandum of Understanding (MOU) with Nabors Drilling in which the two companies will form an alliance focused on delivering enhanced drilling solutions to the oil and gas land market in the lower 48 states of the United States. The company believes the alliance will help with more accurate wellbore placement in order to increase efficiency and reduce costs.
For investors, this means a more hopeful future for both companies. Anthony Petrello, chief executive officer for Nabors said:
We expect our alliance to result in a powerful value proposition that will accelerate market penetration, enhance both of our companies’ returns and drive further growth in a key market.