What happened

Shares of oil services provider Weatherford International (NYSE: WFT) are down 17% as of 11:45 a.m. EST today. The stock slide comes after the company announced that it was terminating a joint venture with fellow services provider Schlumberger (SLB 1.27%) and has instead elected to sell the assets to Schlumberger.

So what

In March 2017, Weatherford International and Schlumberger announced a joint venture called OneStim. The deal would have combined Weatherford's pressure pumping equipment and other well completion equipment, manufacturing capacity, and supply chain with Schlumberger's downhole tools and services. The two companies wanted to combine their fracking fleets in order to gain scale to compete with Halliburton (HAL 1.17%), which has a clear lead in the North American fracking market.

Drilling pipes in foreground of drilling rig

Image source: Getty Images.

As recently as a few weeks ago, it looked like this joint venture was going to happen. Regulators had just approved the joint venture deal on Nov. 28. Something happened, though, and Weatherford reversed course. The company will now sell all of its pressure pumping and pump-down equipment to Schlumberger for $430 million in cash. Weatherford will keep its multistage completions business as well as the manufacturing and supply chain related to the business. 

Management announced that it would take that cash and put it toward debt reduction, something Weatherford has sorely needed to do for some time. However, one has to wonder how Weatherford will be able to compete with Schlumberger owning so much more pressure pumping equipment and Halliburton's dominance of everything North America.

Now what

Weatherford's management has had its back up against the wall for a while. It has promised to deliver free cash flow for several years to no avail, and the OneStiim deal was one of Mark McCollum's first actions as CEO. If the company is going to change direction that quickly -- and likely rub a potential partner the wrong way -- then investors might quickly start to wonder if McCollum is the best person for this turnaround job.