Weatherford Reports Second Quarter 1999 Results

21 Jul 1999

Houston, July 21, 1999

Weatherford International, Inc. (NYSE:WFT) today reported results for the second quarter of 1999. Revenues for the quarter were $343.1 million, a decrease of 35 percent compared to the prior year second quarter. This decline in revenue reflected the substantial decline in industry activity and resulted in the Company recording a net loss of $2 million, or $0.02 per share, compared to net income of $0.65 per share in last year's second quarter, after excluding the $0.80 per share charge related to the merger of EVI, Inc. and Weatherford Enterra, Inc. in that quarter.

Although oil prices increased significantly during the second quarter, this recent improvement has not equated to any meaningful increase in customer E&P spending to date. The worldwide drilling rig count averaged just over 1,200 rigs in the second quarter, a decrease of 33 percent compared to last year’s second quarter. Canada, a significant market for Weatherford, averaged only 100 working rigs in the second quarter as customary spring break up lasted longer than usual. International activity also declined during the second quarter as the average rig count outside North America fell from 800 to 600. Although Weatherford expects an increase in activity from very low second quarter levels, a gradual increase in customer spending over the remainder of the year is likely.

For the six months ended June 30, 1999, revenues were $696.9 million, a 37 percent decline from last year. Net income from continuing operations was $500 thousand compared to $124.3 million last year, which excluded one time charges of $120 million ($78 million after tax) related to the merger of EVI and Weatherford Enterra.

Completion and Oilfield Services

Revenues declined 27 percent from last year’s second quarter to $160.4 million, but were only slightly down from the first quarter 1999. North American revenues remained depressed, with the Canadian market continuing to be the most adversely impacted. International revenues, in particular the North Sea, continued to decline during the second quarter as international projects have been delayed due to market conditions and industry consolidations. Completion activity and revenues are expected to improve next quarter.

During the quarter, Weatherford entered into an agreement to acquire Dailey International Inc., a leading supplier of drilling jars and other downhole tools. This transaction, which is highly complementary and provides substantial synergies to Weatherford is anticipated to close in the third quarter. In addition, the acquisition of ECD Northwest Inc., one of the leading providers of underbalanced drilling systems and fluids, closed during the quarter.

Artificial Lift Systems

Revenues were down 31 percent to $62.2 million in the quarter but were up slightly from the first quarter, primarily due to an increase in North American activity late in the quarter. An increase in customer spending related to heavy oil production is expected to continue in Canada, as well as in South America in future periods.

Compression Services

Weatherford Global Compression Services (WGCS), the joint venture between GE Capital and Weatherford formed in February, had revenues of $56 million, which were significantly higher than the prior year quarter. Equipment sales were substantially higher and contract services revenues remained strong. The division continued to grow its longer term, higher value added compression services business, as evidenced by the successful award by YPF of a seven year contract to WGCS to provide total compression services in Argentina. The revenue value of this contract will be approximately $95 million over the seven years and gives WGCS an important presence in Argentina.

Drilling Products

Grant Prideco, the Company’s drilling products division, continued to be negatively impacted by the worldwide decline in drilling activity. Grant Prideco revenues were down 63 percent from the 1998 second quarter to $64.5 million. Drilling activity dropped to its lowest level in 60 years during the quarter and excess drill pipe is still being consumed from idle rigs. Drill stem revenues are not expected to recover during the third quarter of 1999.

As announced earlier today, Weatherford is currently proposing the spin-off of Grant Prideco to the Weatherford shareholders subject to the receipt of a favorable private letter ruling by the Internal Revenue Service regarding the tax-free nature of the spin-off. The spin-off is intended to allow Weatherford and Grant Prideco to continue to expand and grow their respective businesses on a more focused basis and to permit them to seek opportunities that might not otherwise be available on a combined basis. Weatherford expects that following the spin-off Grant Prideco will continue to actively pursue growth opportunities in the tubular segment of the industry.

Houston-based Weatherford International, Inc. is one of the world’s largest providers of engineered products and services to the drilling and production segments of the oil and gas industry.

Weatherford International, Inc.
Consolidated Condensed Statements of Operations
(In 000's, Except Per Share Amounts)

Three Months Ended

Six Months Ended

June 30,

June 30,

1999

1998

1999

1998

Net Revenues:

Completion and Oilfield Services

$ 160,411

$ 218,544

$ 325,698

$ 448,306

Artificial Lift Systems

62,227

90,427

119,698

197,556

Compression Services

55,950

47,164

98,533

90,165

Drilling Products

64,507

174,698

153,000

365,326

343,095

530,833

696,929

1,101,353

Operating Income (Loss):

Completion and Oilfield Services

9,752

54,806

26,782

111,757

Artificial Lift Systems

2,671

9,506

1,827

21,462

Compression Services

4,656

4,755

9,672

9,428

Drilling Products

(2,483)

46,717

(838)

91,396

Corporate Expenses

(7,243)

(7,157)

(13,065)

(15,385)

Merger-Related Costs

-

(120,000)

-

(120,000)

7,353

(11,373)

24,378

98,658

Other Income (Expense):

Other, Net

3,882

2,310

4,549

2,262

Interest Expense

(13,635)

(13,748)

(26,287)

(25,759)

Income (Loss) Before Income Taxes

(2,400)

(22,811)

2,640

#

75,161

(Provision) Benefit For Income Taxes

968

8,019

(796)

(28,800)

Income (Loss) Before Minority Interest

(1,432)

(14,792)

1,844

46,361

Minority Interest Expense, Net of Tax

(588)

(99)

(1,326)

(109)

Net Income (Loss)

$ (2,020)

$ (14,891)

$ 518

$ 46,252

Earnings (Loss) Per Share:

Basic

(0.02)

(0.15)

0.01

0.48

Diluted

(0.02)

(0.15)

0.01

0.47

Weighted Average Shares Outstanding:

Basic

97,586

96,771

97,451

96,766

Diluted

97,586

96,771

98,718

97,618

Depreciation and Amortization:

Completion and Oilfield Services

$ 25,792

$ 22,422

$ 52,075

$ 45,044

Artificial Lift Systems

4,835

4,758

9,670

9,688

Compression Services

9,166

5,883

16,734

11,975

Drilling Products

7,280

7,861

14,487

15,493

Corporate

509

663

872

1,327

$ 47,582

$ 41,587

$ 93,838

$ 83,527

Contacts:
Bruce Longaker (713) 693-4161
Don Galletly (713) 693-4148

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, Weatherford's prospects for its operations and the integration of recent acquisitions, all of which are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in Weatherford International, Inc.'s Annual, Quarterly and Current Reports filed with the Securities and Exchange Commission, include the impact of oil and natural gas prices and worldwide economic conditions on drilling activity, the demand and pricing of Weatherford's products, as well as the ability to achieve the anticipated synergies and savings from the recent merger between EVI, Inc. and Weatherford Enterra, Inc. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated.

Weatherford International, Inc.
515 Post Oak Blvd, Suite 600
Houston, Texas 77027
713-693-4000