Struggling oil firm not filing for Chapter 11, CEO says
Weatherford International is not going to file for bankruptcy, the struggling oil field services company’s CEO, Mark McCollum, told investors Friday.
The Switzerland-based company, which has a large presence in Houston, closed 2018 with a $2.8 billion loss, most of which is attributed to $2 billion in pretax charges that dragged down the company’s fourth quarter and end-of-year performances.
During a Friday morning investors call, McCollum dismissed a question about the company filling for Chapter 11 bankruptcy.
“I don’t waste a lot of time thinking or planning how to fail,” McCollum said. “Our energy as a team is 100 percent focused on working how to succeed.”
But it will be a steep, uphill climb for the company. Now having posted 17 consecutive quarters of losses, Weatherford has not made a profit since the third quarter of 2014, when a crude oil price downturn dragged down the entire U.S. oil and natural gas industry.
Although other major oil field service companies such as Schlumberger, Halliburton and Baker Hughes returned to profitability, Weatherford has continued to struggle financially. The New York Stock Exchange gave the company a delisting warning in December.
Weatherford rolled out a threeyear transformation plan in last February in which the playbook was to shed underperforming assets, lower costs and improve performance.
Despite its financial troubles, the company continues to roll out new products such as the Magnus Rotary Steerable System, a new tool that guides drill bits underground.
“The progress we’ve made so far is evident,” McCollum told investors. “We’ve made great strides but we also recognize that we have a long way to go.”
Weatherford Executive Vice President and Chief Financial Officer Christoph Bausch said the company will return to positive cash flow in 2019.
Calling oil prices and investor appetite for risk “gravity issues,” McCollum told investors that the company will focus on things it can control and plans to reach out to its creditors to address debt issues.
“We can improve our operating efficiency whether by decreasing costs or reducing nonproductive time,” McCollum said. “We can continue to collaborate with our customers and find solutions that meet their needs and create value. These process improvements are the focus of our transformation plan.”