Now a Nimbler Firm, We Think Weatherford’s Lack of Scale, Innovation, and Risks Limit Further Upside

Weatherford is a subscale, integrated oilfield services provider that emerged from a bankruptcy reorganization in 2019. Years of losses, siloed business operations, poor incentive structures, and heavy leverage all contributed to bankruptcy. Significant leverage and poor integration were a byproduct of heavy M&A activity, where Weatherford became focused on achieving scale like the Big Three in SLB, Halliburton, and Baker Hughes. By contrast, the Big Three primarily focused their investments on key areas of strength, bolstering market-leading positions in these solutions that still stand today.