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Weatherford (WFTIQ) and ADNOC Offshore Enter $220M Accord

Zacks Equity Research

Weatherford International plc WFTIQ recently announced an accord with the Abu Dhabi Company for Offshore Petroleum Operations Limited (ADNOC Offshore). The transaction is valued at $220 million.

The agreement allows Weatherford to offer services related to directional drilling to ADNOC Offshore for a span of three years. The deal is likely to aid ADNOC Offshore boost offshore production in the United Arab Emirates. Notably, the oilfield service company has agreed to offer its Magnus rotary steerable system for ADNOC Offshore to employ this technology for operations in both new and re-entry wells.

Weatherford added that its Magnus rotary steerable system has been highly effective in delivering accurate placement of wellbore in challenging operating areas.

The latest deal follows Weatherford’s corporate procurement agreement which was signed with Saudi Aramco on Sep 17. Per the corporate procurement contract, the oilfield service player will deliver casing exit technologies and services related to completion and cementation for a period of five years.

Both the contracts are likely to secure Weatherford with incremental cashflows.  

Currently, Weatherford, a leading oilfield service firm with operations in 80 countries, carries a Zacks Rank #3 (Hold). Meanwhile, better-ranked players in the energy space include National Oilwell Varco Inc. NOV, Dril-Quip, Inc. DRQ and Delek Logistics Partners LP DKL. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

National Oilwell is likely to see earnings growth of 75% in 2019.

Dril-Quip beat the Zacks Consensus Estimate in three of the trailing four quarters, the average earnings surprise being 49%.

Delek Logistics is likely to see earnings growth of 4.9% in 2019.

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