The planned fracking joint venture between oilfield services giants Schlumberger and Weatherford International should soon come to fruition.
Weatherford revealed the U.S. Justice Department approved the North American JV, paving the way for the deal to close by the end of the year.
Weatherford International plc (NYSE: WFT) announces that the U.S. Department of Justice has cleared the proposed OneStimSM joint venture between Weatherford and Schlumberger Ltd., granting early termination of the waiting period required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, thus paving the way for a fourth quarter 2017 closing.
Weatherford will contribute its leading multistage completions portfolio, cost-effective regional manufacturing capability, and supply chain. Schlumberger will provide the joint venture with access to its industry-leading surface and downhole technologies, efficient operational processes and advanced geo-engineered workflows.
Schlumberger and Weatherford will have 70/30 ownership of the joint venture, respectively. The transaction is expected to close in the second half of 2017, and is subject to regulatory approvals and other customary closing conditions. Under the terms of the formation agreement, Schlumberger and Weatherford will contribute all their respective North America land hydraulic fracturing pressure pumping assets, multistage completions, and pump-down perforating businesses. Weatherford will also receive a one-time $535 million cash payment from Schlumberger.
Schlumberger will manage the joint venture and consolidate it for financial reporting purposes.
Schlumberger Chairman and CEO Paal Kibsgaard commented, “The joint-venture creates a new industry leader in terms of hydraulic horsepower and multistage completions technologies in North America land, which through its scale offers a cost-effective and highly competitive service delivery platform. OneStimSM is uniquely positioned to provide customers with leading operational efficiency and best-in-class hydraulic fracturing and completions technologies, while at the same time significantly improving full-cycle shareholder returns from this market.”
Weatherford Chairman William E. Macaulay said, “The OneStimSM joint venture creates a leading unconventional products and services provider in North America land. This transaction will allow Weatherford to deleverage its balance sheet while retaining a significant exposure to the unconventional market. This transaction was unanimously approved by the Board of Directors and will create significant value for both parties.”