Weatherford to boost job cuts to 11,000

Weatherford International says it plans to bump its job cuts from 10,000 to 11,000, about 20 percent of its workforce, with the increase coming mostly from its U.S. support staff.

The oil field services firm, based in Switzerland with main offices in Houston, said the layoffs come as the North American market continues to weaken. It had completed all but 3 percent of its previously announced cut of 10,000 jobs, it said in its second-quarter earnings release late Wednesday.

“The aggregate results of these measures will help mitigate the effects of the downturn, while at the same time, take advantage of the opportunity to develop a leaner structure and a tighter organization,” the company said.

It also closed three manufacturing and service facilities in the second quarter, and has shuttered 60 percent of its operating facilities in North America so far, and plans to close 30 more facilities by the end of the year.

The company’s second-quarter profits came in at a net loss of $489 million, or a loss of 63 cents a share, compared to a loss of $145 million, or 19 cents a share, in the April-June period last year. Revenues fell from $3.7 billion to $2.4 billion.

The company’s North American sales fell the most, dropping 51 percent to $808 million. Its Middle Eastern revenue declined 11 percent to $516 million; Latin American sales fell 11 percent to $463 million; European and Russian sales declined 25 percent to $418 million.

“The second quarter was a very difficult one to navigate,” Weatherford CEO Bernard Duroc-Danner said in a written statement. He pointed out North American revenues declined 30 percent compared to the first quarter, outperforming the 40 percent decline in active rigs.

“Market conditions will not improve significantly in the balance of the year,” Duroc-Danner said. “There will be modest activity increases in North America and selecte international geographies but these will not be material. In this environment, we expect to grow market share internationally and benefit from better operating economics in the U.S.”

Cameron profit falls by one-third
http://fuelfix.com/blog/2015/07/23/cameron-profit-falls-by-one-third/#33445101=0

Oil service firm Cameron said Thursday a downturn in drilling ate into its second-quarter profits.

Houston-based Cameron, which provides equipment to offshore producers, reported a net income for the three months ending June 30 of $155 million, down from $233 million in the same period last year. Revenues fell to $2.2 billion from $2.5 billion.

In its earnings release, the company said that orders were on the rise from the first quarter of 2015.

“We believe the pace of the decline in customer spending has begun to moderate,” said Cameron CEO and Chairman Jack Moore.

But the company said it would remain on the defensive. Cameron reported a $13 million facility closing and severance charge on the quarter.

“In this environment, we remain focused on the things we can control: the ongoing systemic reduction in our cost structure, execution, customer relationships and technology advancement,” Moore said in a statement.

Cameron will host a conference call to discuss the quarters results at 8:30 a.m.

Hercules Offshore posts $88.3 million loss
http://fuelfix.com/blog/2015/07/23/hercules-offshore-posts-88-3-million-loss-amid-tough-oil-price-environment/#29969101=0

Hercules Offshore posted a $88.3 million loss in the second quarter amid a lingering crude slump that’s hammered the offshore oil services industry.

The Houston-based shallow-water driller Thursday reported a net loss in earnings of $88.3 million, or 55 cents per diluted share, during the three-month period ending June 30. That’s down from a $6.6 million profit, or 4 cents per diluted share, during the same period last year.

“Second quarter results reflect the weak operating operations across the offshore services sector as well as the impact of our resolution with Saudi Aramco for our three rigs in the Middle East,” CEO and President John T. Rynd said in a statement. “The latest pullback in the price of oil is likely to delay any improvement in worldwide activity levels well into 2016.”

The firm made “retroactive dayrate concessions” to Saudi Aramco on existing contracts on three rigs, resulting in a $13.4 million adjustment.

The company also saw a dramatic pullback in domestic offshore activity as it operated fewer rigs, for less time and less money than the same time a year ago. Its average revenue per rig per day day plunged to $92,538 from $108,237 in the second quarter of last year.

The tough environment spurred the Houston-based firm, which contracts jack-up rigs mostly in the shallow waters of the Gulf of Mexico, to restructure its finances earlier this year. The company reached an agreement with its debt holders to convert $1.2 billion in senior debt into new equity, giving them almost 97 perent of the company’s shares. Rynd said he expects the plan to get full approval in late October.

Offshore services companies have been particularly hard hit by the downturn in crude prices. Hercules slashed 40 percent of its 1,800 employees and cold-stacked 11 of its 20 Gulf rigs earlier this year, and Rynd said Thursday that the firm continues to “aggressively reduce costs.”

“By controlling costs and establishing a stronger balance sheet, we will be better positioned to weather the protracted downturn and possibly capitalize on opportunities that may arise in such industry conditions,” he wrote.

Oceaneering International profit falls 40 percent in second quarter
http://fuelfix.com/blog/2015/07/22/oceaneering-international-profit-falls-40-percent-in-second-quarter/#31744101=0

Oceaneering International’s profit fell 40 percent in the second quarter as its fleet of more than 300 underwater robots found less work at offshore oil-industry projects compared to last year.

The Houston company, which deploys remotely operated vehicles to deep-sea oil-drilling sites, wrote down the value of its inventory of oil field equipment by $9 million after it chose to stop manufacturing control systems for blowout preventers, the emergency valves that guard against oil spills thousands of feet in the ocean. It also took a $6 million loss on foreign currency exchange fluctuations.

Oceaneering’s net income was $65 million, or 66 a share, in the second quarter, down from $110 million, or $1.02 a share, in the same April-June period last year. Revenues fell from $927 million to $810 million.

In a written statement, Oceaneering CEO, M. Kevin McEvoy, said even though sales from its ROV business, subsea products line and other units were down, the earnings exceeded the company’s expectations and would have been higher than in the first quarter if not for the asset write-down.

“This was attributable to performances from our ROV and subsea products segments,” he said. “ROV benefitted from better-than-expected revenue per day on hire due to more vessel work, and subsea projects profited from higher U.S. Gulf of Mexico demand for deep-water intervention and diving services.”

He said weak demand prompted the company to stop manufacturing blowout preventer control systems but it will still provide after-market parts for the units it has already installed. The company put three new ROVs in the field and retired another three. It had a total of 336 ROVs in its fleet.

The company’s outlook for the second half of the year is “down somewhat from last quarter’s guidance,” McEvoy said, noting the company expects its subsea products unit and ROV business to see lower earnings.

“We believe our cash flow and liquidity position us well to manage our business through the current low commodity price environment,” McEvoy said. “Longer-term, deep-water is still expected to continue to play a critical role in global oil supply growth required to replace depletion and meet projected demand.”

Oceaneering shares fell $1.40 on Wednesday to $38.82 a share on the New York Stock Exchange as the price of U.S. crude fell to its lowest point in three and a half months. The company reported its earnings after the market closed.

Bankrupt oil company wants payments back
http://fuelfix.com/blog/2015/07/22/bankrupt-oil-company-wants-payments-back/#31510101=0

The city of Homer is filing a response to a request from an oil company seeking the return of thousands of dollars in previous payments to businesses.

The Homer News reports Australian company Buccaneer Oil filed for Chapter 11 bankruptcy in May of last year. The city, Homer Electric Association and several business received letters from the company’s trustee saying preferential payments made to them in the 90 days before the bankruptcy filing had to be returned.

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FMC Technologies expects more job cuts this year
http://www.bizjournals.com/houston/news/2015/07/22/fmc-technologies-expects-more-job-cuts-this-year.html

Like many energy companies, Houston-based FMC Technologies Inc. (NYSE: FTI) may have to cut more jobs this year due to the ongoing oil slump.

According to the Houston Chronicle, executives said in a conference call July 22 that the workforce reduction announced earlier this year is mostly complete, but an unspecified number of jobs could still be cut.

In February, the oilfield equipment manufacturer said it planned to cut about 2,000 jobs, about 10 percent of its companywide workforce at the time.

FMC CFO Maryann Seaman expects restructuring charges for the second half of 2015 to total $15 million to $20 million, the Chronicle reports.

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