"This sale is an important first step toward Weatherford's refocus on its core businesses and becoming a leaner, more efficient and stronger company," noted Weatherford InternationalChairman, President, and CEO Bernard Duroc-Danner in the press release announcing the sale.
On the conference call after Weatherford reported a loss of $122 million in the fourth quarter of 2012, the firm announced it would begin plans to divest some of its assets. The Houston Business Journal reported in November 2013 that Weatherford had noted in a presentation that it expected to divest three areas that had revenues of $3.5 billion in 2013. The divestiture included its land rig business, which will likely IPO in the fourth quarter of this year, and had revenues of almost $2 billion in 2013. Pipeline and specialty services was another portion to be divested. Baker Hughes has stepped up to buy that portion. Weatherford's pipeline and specialty services division provides services for onshore and offshore pipelines and process facilities.
"We believe that Baker Hughes is really well positioned to maximize the potential of this business," Duroc-Danner was quoted as saying.
The sale of the pipeline and specialty services division to Baker Hughes announced today was part of four "other" businesses Weatherford had said it intended to sell. That list also included drilling fluids, testing and production services, and well heads. In addition to the land rigs and the other businesses, it also intends to divest its early production facilities.
"The substantial demand for Baker Hughes' process and pipeline services indicates the growing importance of midstream infrastructure in supporting the expansion and sustainability of the energy industry," added the chairman and CEO of Baker Hughes, Martin Craighead, in the press release announcing the sale. "The addition of Weatherford's pipeline and specialty services not only will augment our asset assurance and integrity capabilities, but also will help us leverage our existing technologies and global supply chain network into profitable, growing markets."
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