Weatherford Announces First Quarter 2024 Results and Raises Full Year Margin Guidance

• First quarter revenue of $1,358 million increased 15% year-over-year, led by international growth of 21%
• First quarter operating income of $233 million increased 26% year-over-year
• First quarter net income of $112 million, an 8.2% margin, increased 56% year-over-year
• First quarter adjusted EBITDA* of $336 million, a 24.7% margin and the highest in over 15 years, increased 25% and 206 basis points year-over-year
• Cash provided by operating activities of $131 million, and adjusted free cash flow* of $82 million
• Debt repayments of $167 million on our 6.50% Senior Secured Notes in the first quarter of 2024
• Issued notice to redeem the remaining $82 million of our 6.5% Senior Secured Notes, leaving only the $1.6 billion long term notes due 2030 outstanding thereafter
• Expanded the size of our Credit Facility to $680 million, up from $550 million, with $371 million of borrowing capacity

Weatherford International (“Weatherford” or the “Company”) announced today its results for the first quarter of 2024.

Revenues for the first quarter of 2024 were $1,358 million, an increase of 15% year-over-year and almost flat sequentially. Operating income was $233 million in the first quarter of 2024, compared to $185 million in the first quarter of 2023 and $216 million in the fourth quarter of 2023. Net income in the first quarter of 2024 was $112 million, an 8.2% margin, an increase of 56% or 218 basis points year-over-year and a decrease of 20% or 203 basis points sequentially. Adjusted EBITDA* was $336 million a 24.7% margin, an increase of 25% or 206 basis points year-over-year and 5% or 117 basis points sequentially. Diluted income per share was $1.50, compared to $0.97 in the first quarter of 2023 and $1.90 in the fourth quarter of 2023.

First quarter 2024 cash flows provided by operating activities were $131 million, compared to $84 million in the first quarter of 2023 and $375 million in the fourth quarter of 2023. Adjusted free cash flow* was $82 million, an increase of $55 million year-over-year and a decrease of $233 million sequentially. Capital expenditures were $59 million in the first quarter of 2024, compared to $64 million in the first quarter of 2023 and $67 million in the fourth quarter of 2023.

Girish Saligram, President and Chief Executive Officer, commented:

“Our One Weatherford team has once again demonstrated exceptional execution, delivering results that surpassed the previous quarter, with adjusted EBITDA margins setting another record. Year-over-year Middle East, North Africa, and Asia growth of 32% and strong offshore activity, reaffirm the thesis on cycle longevity. At the same time, nine consecutive quarters of sequential adjusted EBITDA margin expansion highlights our ability to deliver continuously improving operating performance.

In the first quarter, we made meaningful progress on our fulfillment initiatives, acquisition integration, and technology commercialization, further fueling our financial performance. Simultaneously, the increase in the size of the credit facility to $680 million along with the redemption notice for the remaining 6.50% senior notes, represents another milestone in our capital structure evolution. With the redemption of these notes, the Company will have reduced $1 billion of debt in less than three years and reduced net leverage* to 0.6x, the lowest in over 15 years.

Despite macroeconomic volatility and geopolitical conflicts, the sector landscape remains favorable for further growth. International and offshore activity continue to exhibit strength, offering resilient spending that provides buoyant demand and offsets the softness in the North American market. This market backdrop and our strong first quarter performance set a robust foundation for our annual outlook that enables us to improve upon our previously issued margin guidance. Full year adjusted EBITDA margin is now expected to hit 25% in 2024 versus 2025, while reaffirming our previous revenue guidance.”

Operational Highlights

• Petroleum Development Oman awarded Weatherford a five-year contract for Managed Pressure Drilling (“MPD”) following successful technology trials over the past year, representing another proof point of the increasing market adoption of MPD.
• A major operator in the Middle East awarded Weatherford a three-year contract for our streamlined, single trip deployment and retrieval system, including isolation barriers and bridge plugs.
• In the Gulf of Mexico, bp awarded Weatherford a one-year contract for Completions equipment and Sand Control Solutions.
• Tourmaline awarded Weatherford a one-year contract to provide Completions and Liner Hanger systems and services in Canada.
• PTTEP awarded Weatherford a three-year contract for Tubular Running Services for an offshore project in the Gulf of Thailand.
• Chevron awarded Weatherford a five-year contract to provide Gas Lift services in Angola.

Technology Highlights

• Drilling & Evaluation (“DRE”)
  • We launched our new Wired RipTide^™ system, which leverages our Quattro Under Reamer platform for multiple downhole tool activations to optimize drilling efficiency.
  • In Kuwait, we deployed a powerful combination of our market leading MPD and Drilling Services offering to flawlessly deliver a challenging reservoir section for Kuwait Oil Company.
  • As part of our Wireline product line, we launched the new HD Spitfire^™ release tool from the recently acquired Impact Selector International portfolio, enhancing the overall reliability during pump down perforation operations.
• Well Construction and Completions (“WCC”)
  • Following the successful launch of our Pressure Balanced Liner system, Xpress^™ XT, a major operator in the Middle East has now deployed this technology in offshore operations, reflecting confidence in the reliability and value proposition of this offering in challenging well conditions.
  • In the Gulf of Mexico, a major operator deployed our 1500-ton Multi String Spider. This technology enables increased operational efficiency and reduction of people in the red zone.
• Production and Intervention (“PRI”)
  • We expanded our production optimization platform with the launch of ForeSite^® 5.3, which combines Artificial Intelligence, Machine Learning, and Autonomous Control for proactive failure prediction and prevention of ESP and Rod Lift systems, thereby expanding run life and improving production.
  • Using a combination of proprietary technologies from Weatherford and the recently acquired Ardyne portfolio, we successfully completed a slot recovery operation for Equinor, delivering rig time savings through improved operational efficiency.

Liquidity

We closed the first quarter 2024 with total cash of approximately $937 million as of March 31, 2024, down $126 million sequentially. In the first quarter 2024, we repurchased $167 million of our 6.5% Senior Secured Notes (“Secured Notes”). On April 23, 2024, we announced an increase in our Credit Facility by $130 million to $680 million in aggregate commitments by adding additional lenders to the facility. The Credit Facility is now comprised of a $309 million tranche available for performance letters of credit and a $371 million tranche available for revolving loans. Additionally, we issued a notice to redeem the remaining $82 million aggregate principal amount outstanding of our Secured Notes.

Net cash provided by operating activities during the first quarter 2024 was $131 million, up $47 million year-over-year and down $244 million sequentially. Adjusted free cash flow* of $82 million was up $55 million year-over-year and down $233 million sequentially. The year-over-year increase was primarily driven by a 26% increase in operating income. The sequential decrease was mainly attributed to a seasonal working capital build.

Results by Reportable Segment

Drilling and Evaluation (“DRE”)

First quarter 2024 DRE revenue of $422 million increased by $50 million, or 13% year-over-year, primarily from higher wireline and drilling services activity. Sequential DRE revenue increased by $40 million, or 10%, primarily from higher drilling-related services and wireline activity in North America and Latin America. Additionally, Canadian seasonality, and weather-related push out from the prior quarter in Latin America also contributed to this increase.

First quarter 2024 DRE segment adjusted EBITDA of $130 million increased by $22 million, or 20% year-over-year, primarily from drilling services, managed pressure drilling, and wireline. Sequential DRE segment adjusted EBITDA increased by $33 million, or 34%, primarily from managed pressure drilling and drilling-related services and certain expected cost recoveries during the quarter.

Well Construction and Completions (“WCC”)

First quarter 2024 WCC revenue of $458 million increased by $37 million, or 9% year-over-year, primarily from increased completions and tubular running services activity in Middle East/North Africa/Asia and offshore Latin America, partly offset by lower activity in North America. Sequential WCC revenue decreased by $22 million, or 5%, primarily due to the timing of certain deliveries and sales in the Middle East in the prior quarter, partly offset by higher activity in Latin America.

First quarter 2024 WCC segment adjusted EBITDA of $120 million increased by $24 million, or 25% year-over-year, primarily from higher fall through in the Middle East/North Africa/Asia around tubular running services and cementation products as well as increased offshore activity in Latin America. Sequential WCC segment adjusted EBITDA decreased by $11 million, or 8%, primarily from lower activity in the Middle East/North Africa/Asia, partly offset by higher completions activity in Brazil.

Production and Intervention (“PRI”)

First quarter 2024 PRI revenue of $348 million decreased by $1 million year-over-year, primarily from lower activity in North America, partly offset by higher international intervention services and drilling tools activity. Sequential PRI revenue decreased by $38 million, or 10%, primarily from seasonally lower international activity, partly offset by higher artificial lift activity in North America.

First quarter 2024 PRI segment adjusted EBITDA of $73 million, increased by $5 million, or 7% year-over-year, primarily from higher artificial lift margins and increased international activity in intervention services and drilling tools. Sequential PRI segment adjusted EBITDA decreased by $15 million, or 17%, primarily from the impact of lower activity.

Revenue by Geography

North America

First quarter 2024 North America revenue of $267 million decreased by $19 million, or 7% year-over-year, primarily from a slowdown in overall activity in the United States, partly offset by higher wireline products activity. Sequentially, North America revenue increased by $19 million, or 8%, primarily from seasonal winter activity in Canada and higher wireline products activity.

International

First quarter 2024 international revenue of $1,091 million increased 21% year-over-year and decreased 2% sequentially.

First quarter 2024 Latin America revenue of $370 million increased by $53 million, or 17% year-over-year, primarily from higher activity in all segments, notably in completions activity in Brazil. Sequentially, Latin America revenue increased by $28 million, or 8%, primarily from increased DRE and WCC activity in Mexico and Brazil.

First quarter 2024 Middle East/North Africa/Asia revenue of $497 million increased by $121 million, or 32% year-over-year, primarily due to increased integrated services and projects, WCC, and DRE activity. Sequentially, the Middle East/North Africa/Asia revenue decreased by $50 million, or 9%, primarily due to the timing impact of certain deliveries and sales in WCC and PRI in the Middle East in the prior quarter, partly offset by increased integrated project services activity.

First quarter 2024 Europe/Sub-Sahara Africa/Russia revenue of $224 million increased by $17 million, or 8% year-over-year, primarily from increased drilling services and intervention services activity in Europe, partly offset by lower revenue in Russia. Sequentially, Europe/Sub-Sahara Africa/Russia revenue decreased by $1 million, primarily from lower PRI activity partially offset by increased DRE activity in Europe.

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