Schlumberger is the world’s largest oilfield services (OFS) company. Weatherford International is the world’s fourth largest OFS company. They both have operations in the Marcellus/Utica region. We’ve posted a number of stories about Weatherford’s financial troubles–and seemingly inevitable march toward bankruptcy (see our stories here). In order to stay in business, in March 2017 Weatherford formed a joint venture with Schlumberger to service fracking markets in the U.S. and Canada (see Schlumberger Throws Weatherford a Lifeline, Challenges Halliburton). Nine months later, Weatherford sold their portion of the jv to Schlumberger, liquidating their fracking business here in the U.S. (see Weatherford Sells U.S. Fracking Business to Schlumberger for $430M). Financially it’s been a wild ride for Weatherford. But perhaps the company has now turned a corner. At least, that’s what some (certainly not all) analysts are saying. Yesterday Weatherford announced a “multi-step debt financing plan” to help take the pressure off, financially. The plan is to float $600 million of new IOUs (called notes). The notes will be “senior” notes–but unsecured. Meaning if the company does go belly up, good luck with cashing in your notes. The purpose of floating the notes is to pay off older notes. Floating new debt to pay off old debt. You can’t do that forever. But apparently you can do it for at least a few years…
