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Weatherford: Shocking Development


Weatherford remains in a strong position to survive the downturn in the oilfield services sector due to a corporate turnaround started long before oil collapsed.

The company is already generating positive cash flows and further expectations to build on those totals will improve liquidity.

The stock is very appealing at these levels as evidence by the recent upsized offering.

Like anybody in the oilfield services sector, Weatherford International (NYSE:WFT) faces a difficult market. The company was at the point of completing a large turnaround when the market collapsed last year. The financial position of the oilfield services company might shock the market.

While some fear the debt load and the old Weatherford that was crushed in the financial crisis, the new company is lean and actually cash flow positive for the first time since 2010. The focus on positive cash flows for operations versus revenue growth helped the oilfield services company reduce roughly $1.4 billion in annualized costs last year. Sure the cost savings came from reducing headcount by 14,000, but a big part of the savings are the closing of facilities that included 90 operating facilities in North America and six manufacturing facilities.

The key though isn't only cutting costs, but also...