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What Weatherford’s Management Projects ahead of 1Q17 Earnings

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Management views

Weatherford International’s (WFT) management expects energy prices to move within a range in the medium term. In the 4Q16 conference call, WFT’s management commented, “We believe the entire industry should gear itself for a medium for longer oil price environment. This means that for the foreseeable future, we should expect oil prices to oscillate within the $50 to $70 per barrel band, as the U.S. becomes a swing producer and provides both bookends to this pricing arrange.”

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Negative drivers in 1Q17

  • suspension of US pressure pumping activity and lower products sales could reduce revenue by $70 million
  • WFT’s management expects seasonal weakness across the North Sea and Russia

Positive drivers in 1Q17

  • increased service revenues in the Middle East/North Africa region
  • higher rig revenue from additional contracted rigs in Algeria
  • absence of pressure pumping business loss and cost-saving initiatives to improve operating earnings

Series highlights

In this series, we’ll discuss the value drivers and industry indicators that could affect WFT’s 1Q17 performance. Next, we’ll discuss Wall Street analyst estimates for WFT in the past quarters.

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