Weatherford to hive off non-core businesses, cut jobs

Tue Feb 25, 2014 6:10pm EST

Feb 25 (Reuters) - Oilfield services provider Weatherford International Ltd said it would divest five businesses, exit another and lay off 6192 employees as it struggles with weak demand in North America.

The company, which is being probed for violations of the United Nations oil-for-food program in Iraq, on Tuesday also reported a wider quarterly net loss.

Weatherford, which had said last month it would cut 7,000 jobs, said on Tuesday cash proceeds from sale of its businesses would be used to pay down debt.

The Switzerland-based company is the smallest of the four large oilfield services firms - Schlumberger Ltd, Halliburton Co and Baker Hughes Inc.

It gets 45 percent of its revenue from North America, where a drop in natural gas directed drilling has weakened prices of oilfield services. Its international growth has also been slow.

Weatherford said on Tuesday it expects to divest its pipeline and specialty services, testing and production services, drilling fluids, and wellheads businesses by the end of this year.

Weatherford also said it would exit its early production facility business and that it expected to spin-off or take public its land drilling rig business in fourth quarter of 2014 or in the first quarter of 2015.

The company, which had about 70,000 employees at the end of 2012, said it expects its net debt to reduce to $7 billion by the end of 2014. Its long-term debt was $7.06 billion as of December.

Net loss attributable to Weatherford widened to $271 million, or 35 cents per share, in the fourth quarter ended Dec.31, from $122 million, or 16 cents per share, a year ago.

Weatherford was asked pay $253 million in fines to the U.S. government to settle charges that ranged from flouting sanctions against Iran and Syria to sending business partners on World Cup soccer junkets.

Weatherford shares were up nearly 3 percent in trading after the bell. They closed $15.58 on Tuesday on the New York Stock Exchange.