HOUSTON - Weatherford International plc (NASDAQ:WFRD), a global energy services provider, has secured a three-year contract to deliver rigless services for the reactivation of onshore wells for the Abu Dhabi National Oil Company (ADNOC). The project is set to commence in the fourth quarter of 2024, aiming to enhance the operational efficiency and reliability of ADNOC's onshore assets.
The contract will see Weatherford deploying a range of intervention solutions designed to improve wellbore integrity, streamline the reactivation process, and optimize reservoir performance. This move is expected to bolster well productivity for ADNOC while reducing downtime and operational risks.
Girish Saligram, Weatherford's President and CEO, stated, "We are honored to partner with ADNOC on this significant project, which marks another milestone in our shared commitment to driving value and operational excellence through innovation." He emphasized the company's dedication to providing agile and reliable solutions to its global customers.
Weatherford's rigless services are recognized for their efficiency, safety, and cost-effectiveness, which are particularly suitable for revitalizing inactive wells with a reduced environmental footprint. The company's approach combines advanced technology with digitalization to create sustainable offerings that aim to maximize value and return on investment for their clients.
Operating in approximately 75 countries, Weatherford prides itself on its team of approximately 19,000 members, representing over 110 nationalities across 330 operating locations. The company is committed to delivering strategic solutions that add efficiency, flexibility, and responsibility to energy operations.
This partnership with ADNOC reflects Weatherford's ongoing mission to deliver advanced, sustainable solutions in the energy sector, reinforcing its role as a key player in the global market. The information for this article is based on a press release statement.
In other recent news, Weatherford International has reported steady growth in its third-quarter earnings, maintaining an adjusted EBITDA margin of 25.2% and generating an adjusted free cash flow of $184 million. The company's revenue remained stable sequentially but increased by 7% from the previous year, largely driven by a 9% rise in international revenue. Weatherford also announced the initiation of a capital return program, which includes a quarterly dividend and share repurchases.
In addition, Weatherford has secured significant contracts in the Middle East with the Kuwait Oil Company and a National Oil Company in Qatar, emphasizing its commitment to delivering cutting-edge technologies and dependable service. Evercore ISI has updated its outlook on Weatherford, lowering the price target to $142.00 from $149.00, while maintaining an 'Outperform' rating.
Despite a somewhat weaker near-term outlook, the firm's analysis suggests Weatherford is poised to benefit from a favorable geographical mix and the sustained international and offshore market upcycle. Furthermore, Weatherford's efficient cost structure and cost reduction initiatives are expected to bolster margins to high-20s percentages in the coming years. These are recent developments that highlight Weatherford's strategic approach to growth and profitability.
InvestingPro Insights
Weatherford International's recent contract win with ADNOC aligns well with its strong financial performance and market position. According to InvestingPro data, Weatherford boasts a market capitalization of $6.42 billion and has demonstrated impressive revenue growth of 11.08% over the last twelve months as of Q3 2024, reaching $5.53 billion. This growth trajectory supports the company's ability to secure significant contracts like the one with ADNOC.
The company's operational efficiency is evident in its robust operating income margin of 17.28%, which bodes well for the execution of the rigless services contract. This efficiency is further underscored by an InvestingPro Tip indicating that Weatherford operates with a moderate level of debt, suggesting financial stability as it takes on new projects.
Another InvestingPro Tip highlights that Weatherford is trading at a low P/E ratio relative to its near-term earnings growth, with a current P/E ratio of 12.12. This could indicate that the stock is undervalued, especially considering the potential impact of the ADNOC contract on future earnings.
Investors seeking more comprehensive analysis can access additional insights through InvestingPro, which offers 10 more tips for Weatherford International, providing a deeper understanding of the company's financial health and market position.
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