In late March 2017, the oilfield services companies agreed to create a joint venture called OneStim, with Schlumberger holding 70% stake and Weatherford owning the remaining stake. The aim of the joint venture was to deliver completions products and services for the development of unconventional resource plays in the US and Canada land markets.
As per the original agreement, both companies were to contribute all their respective North America land hydraulic fracturing pressure pumping assets, multistage completions, and pump-down perforating businesses to the joint venture. Additionally, Schlumberger was to make a one-time payment of $535m to Weatherford.
However, the companies had agreed to revise the terms of the agreement to include the sale of the hydraulic fracturing business of Weatherford in the US.
With the closing of the deal, Schlumberger has also become the owner of the supplier and customer contracts related to the former US hydraulic fracturing business of Weatherford.
As part of the revised terms, about 100 employees of Weatherford associated with its pressure pumping and pump-down perforating businesses in the US will be absorbed in Schlumberger.
The Texas-based Weatherford will retain 100% of its multistage completions portfolio, manufacturing capability and supply chain, which is expected to enable significant upside potential for the company.
Weatherford will also continue to take part in the emerging completions markets in Canada and the US and in other parts of the world.
The company plans to utilize the sale proceeds to cut down its outstanding debt.
Weatherford president and CEO Mark A. McCollum said: “The closing of this transaction represents another step on our path toward building a solid and strong company and unlocking the potential that exists within Weatherford.
“Although not as originally anticipated, this transaction delivers cash proceeds that enable our Company to begin the deleveraging process and, coupled with our transformation plans, will lead to a leaner organization with lower debt and significantly higher profit margins.”
