weatherford international ltd. -...

11

Weatherford International Ltd.

August , 2007

2

Six months ended June 30, 2007 annualized($ in millions)

Vital Statistics

$ 2,081EBITDA

$ 1,287Capital Expenditures

$ 1,043Net Income

$ 1,521Operating Income

$ 7,336Revenue

85Manufacturing Facilities

716Service Bases

70%% of Employees outside US

10Product Lines

108Number of Countries

33,646Employees

FinancialFinancial OperationalOperational

3

Geographic Overview

RevenuesRevenues

North America51%

LatinAmerica

11%Europe/West

Africa/CIS15%

MENA/AsiaPacific

23%

Six months ended June 30, 2007 annualized

4

Drilling Services• Directional Drilling• MWD• LWD• Rotary Steerable• Underbalanced • Managed Pressure• Coiled Tubing Drilling• Drilling with Casing

Wireline• Open Hole Wireline• Geoscience• Cased Hole Wireline• Slickline• Coring

Well Construction• Tubular Running• Cementation• Liner Hangers• Inflatables• Expandable Solids

Re-entry and Fishing• Casing Exit• Fishing • Thru-Tubing

Drilling Tools• Drilling Products • Rentals

Integrated Drilling

Completion• Completion Tools• Sand Screens• Expandable Screens• Intelligent Completion• Fiber Optic Sensing• Field Optimization

Stimulation & Chemicals• Fracturing Services• Production Chemicals

Pipeline & Specialty Services

Artificial Lift• Progressing Cavity• Reciprocating• Gas Lift• Hydraulic• Electric Submersible• Lift Optimization

Ten Service Lines – Breadth

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Ten Service Lines – Relative Size

Revenues - six months ended June 30, 2007 annualized($ in millions)

7535. Completion

9014. Drilling Tools

1,1822. Well Construction

12410. Pipeline & Specialty Services

3469. Integrated Drilling

4698. Stimulation & Chemicals

5937. Re-Entry & Fishing

6276. Wireline

1,1083. Drilling Services

$ 1,2331. Artificial Lift

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Technology & Market Position

#6Med• Electrical Submersible Pumps

#1Med• Progressing Cavity Pumps

#1High• Proprietary Tools

Drilling Tools

#4Low• Stimulation & Chemicals

#1High• Sensing

#2Med• Coring

#4High• LWD

#3High• Open Hole Wireline

#1High• Re-Entry

#1Med• Tubular Running Services

#2High• Expandables

N/AMed• Pipeline & Specialty Services

Other

#1High• Expandable Sand Screens

#1High• Optimization

#4High• Directional

Artificial Lift

Completion

Evaluation

Well Construction

#1High• Underbalanced

Drilling Services

Technology Intensity

Technology Intensity

Market Leadership

Market Leadership

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Historical Operating Results($ in millions, except EPS)

Q1 Q2 Q3 Q4 Q1 Q2

North America 922.4$ 839.8$ 954.0$ 956.4$ 1,006.6$ 883.4$ Latin America 162.1 178.6 174.0 211.5 205.9 206.6 Europe/West Africa/CIS 177.2 205.1 215.3 229.8 245.0 290.6 MENA/Asia 274.3 315.1 353.5 409.9 394.8 435.3

Total Revenues 1,536.0$ 1,538.6$ 1,696.8$ 1,807.6$ 1,852.3$ 1,815.9$

Operating Income (Expense):North America 262.4 222.3 281.5 274.0 299.8 192.3Latin America 25.2 33.6 27.9 46.4 48.6 45.7Europe/West Africa/CIS 34.2 45.2 46.0 47.6 54.9 68.8MENA/Asia 46.3 57.8 71.1 98.1 83.5 97.0

Research & Development (36.4) (37.4) (38.2) (37.4) (40.6) (40.7)Equity in Earnings 2.6 3.3 (0.2) 0.1 0.8 1.0Corporate (22.3) (21.5) (24.7) (26.6) (27.1) (23.5)

Net Operating Income 312.0$ 303.3$ 363.4$ 402.2$ 419.9$ 340.6$

Net Income from Continuing Operations 206.5$ 190.3$ 236.1$ 266.7$ 286.5$ 235.0$

Diluted EPS from Continuing Operations 0.58$ 0.53$ 0.67$ 0.76$ 0.83$ 0.68$

20072006

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Balance Sheet

Net Debt / Capitalization

~ 32.8%

Repurchased 16.6 million

SharesThrough

June 30, 2007

($ in millions)

December December March June2005 2006 2007 2007

AssetsCash 134.2$ 126.3$ 109.1$ 115.5$

Accounts Receivable 1,260.0 1,560.9 1,703.1 1,740.3

Inventories 890.1 1,239.0 1,372.9 1,515.8

Other Current Assets 367.0 465.6 474.2 504.7

Total Current Assets 2,651.3$ 3,391.8$ 3,659.3$ 3,876.3$

Fixed Assets 2,361.7 2,979.3 3,218.1 3,491.4

Goodwill, Net 2,801.3 3,000.5 3,034.1 3,239.5

Other Assets 766.0 767.6 766.3 1,122.2 8,580.3$ 10,139.2$ 10,677.8$ 11,729.4$

Liabilities & Shareholders' EquityCurrent Portion of Debt 954.8$ 648.7$ 989.2$ 268.4$

Current Liabilities 1,043.4 1,394.4 1,418.7 1,244.9

Long-Term Debt 632.1 1,564.6 1,569.7 3,072.4

Long-Term Liabilities 283.2 356.7 343.0 528.3

Shareholders' Equity 5,666.8 6,174.8 6,357.2 6,615.4

8,580.3$ 10,139.2$ 10,677.8$ 11,729.4$

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Forward Regional Spotlight:Forward Regional Spotlight:

Eastern Hemisphere

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* * Lehman – December 2006 Survey

Eastern Hemisphere: Most Growth Opportunities

* Six months ended June 30, 2007

E & P Spending **E & P Spending **WFT *WFT *

EasternHemisphere

55%

North America33%

Latin America12%

EasternHemisphere

38%

North America51%

Latin America11%

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Eastern Hemisphere – Underlying Factors

• Drainage Architecture

• Drive to Gas

• Emergence of Heavy Oil

Secular Run

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E. Hemisphere Competitive Requirements

• Breadth

• Infrastructure

• Depth

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Infrastructure

North America42247

46%

Service LocationsManufacturing Facilitiesof Employees

Latin America10310

15%


Asia60108%


Middle East544

19%


Europe / W Africa77 14

12%


Weatherford locationsRegional offices

International294 Service Locations38 Manufacturing Facilities

International294 Service Locations38 Manufacturing Facilities

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Drive to East – History of Eastern Hemisphere

$0

$1,000

$2,000

1999 2000 2001 2002 2003 2004 2005 2006

Year

Reve

nue

(mill

ions

)

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2200

2400

2600

2800

Rigs

Revenue Rig Count

WFT Growth: @4x Market Rate

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Drive to East – History of MENA

$0

$1,000

1999 2000 2001 2002 2003 2004 2005 2006

Year

Rev

enue

(mill

ions

)

0

200

400

600

800

1000

1200

1400

Rig

s

Revenue Rig Count

WFT Growth: >4x Market Rate

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Early Seeding of Growth

Oman, Egypt (Onshore & Offshore – Industry First), RomaniaProgressing Cavity Pumps

Libya, Oman, Saudi Arabia, Sudan, VenezuelaElectric Submersible Pumps

Saudi Arabia, Egypt, Algeria, Kuwait, PakistanExpandable Sand Screens

Abu Dhabi, India, Oman,Saudi Arabia, UK, Russia, China, Kazakhstan, Qatar

Logging While Drilling

Qatar, Abu Dhabi, India, Saudi Arabia, Yemen, Libya, Kazakhstan, Romania, China Wireline

Saudi Arabia, Algeria, UK, ChinaEM/MWD Combo

Abu Dhabi, Algeria, Egypt, India,Libya, Oman, Saudi Arabia, Yemen, China, Russia, Angola

Controlled Pressure Drilling

Oman, Saudi Arabia, Russia, UKExpandable Solids

Intelligent Completion

Early Production Facilities

Directional (Rotary Steerable)

Tunisia, Saudi Arabia, Abu Dhabi

Yemen, India

Abu Dhabi, India, Saudi Arabia, China, Russia, Brazil, UK

Drilling

Evaluation

Completion

Lift

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Eastern Hemisphere Migration

TargetedTargetedCurrent Revenue*Current Revenue*

2006

EasternHemisphere

35%EasternHemisphere

38%

North America51%

Latin America11%

North America34% Eastern

Hemisphere51%

2010

Latin America15%

*Six months ended June 30, 2007

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Technology:Underlying Growth Factor

Technology:Underlying Growth Factor

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The Consequences of an Aging Industry

Technology…• Existential for our clients• Higher growth rates• Better returns

Technology…• Existential for our clients• Higher growth rates• Better returns

Formation damage

Lost circulation

Differential sticking

Production decline

Poor oil recovery

Corrosion

Treatment

Sand production

Lifting problems

Bypassed oil

Hot

Deep

Remote

Complex

Viscous

Depleting pressure Encroaching water New resources

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Age of Drainage

• Optimized well construction• Directional drilling• Controlled pressure drilling• Flexible formation evaluation• Multilaterals• Expandables• Subsurface monitoring• Subsurface control systems

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Technology Portfolio StrengthWFT intellectual property independently assessed as strongest in OFS sector

OFS sector dominates Energy & Environmental technology

0 200 400 600 800 1000 1200

Total

BP

ConocoPhillips

Chevron

Smith Intl

BJ Services

Exxon Mobil

Baker Hughes

Schlumberger

Halliburton

Royal Dutch Shell

Weatherford

Technology Strength

1

Rank

2

3

4

5

6

7

9

11

13

22

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WFT portfolio key differentiators:Quality and quantity of patents Fundamental science strength Potential industry impact

Source : Wall Street Journal, 6 March 2007

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WFT Research and Development

• Technology Culture

• Large Inventory of Intellectual Property

2.5%

107.4

2.3%2.7%

83.6 149.4

% of revenue

R&D $ $$

($ in millions)

20042004 20052005 20062006

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Pursuit of Intellectual Property Advantage

Number of Oilfield* PatentsWFT

0 100 200 300 400 500 600

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

HALSLBBHIWFTSIIBJS

WFT

* WIPO IPC E21B

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• Compact® logging • Extreme LWD• Underbalanced / Managed Pressure Drilling• Electromagnetic MWD• Drilling with Casing• Rotary Steerable Drilling• Solid Expandables• Zonal Isolation• Top Drive Tubular Running• Sand Control• Fiber Optic Sensing• Lift Optimization

Accelerated Growth Through TechnologyGrowth Accelerators:Growth Accelerators:

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Examples

Examples of Technology Driving Customer ValueExamples of Technology Driving Customer Value

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Compact® Logging System

90 ft

triple combo(4.63 in. OD)

Competitor’s old

38 ft


Competitor’s new

• Unique conveyance options

• Flexibility for challenging wells

- Poor hole conditions- Highly deviated wells- Remote locations

29 ft


CompactCompact

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RSS – Driving Customer Results

4 ¾ inch Rotary Steerable System drills further and faster

• Faster– 4 wells drilled conventionally– 3 wells drilled with RSS– Average ROP 38.6% faster than conventional wells

• Further– RSS laterals 30.2% longer than conventional laterals

*Allows increased production rate and access to additional reserves

Libya – Drilling EfficiencyLibya – Drilling Efficiency

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Directional & MPD – Driving Customer Results

Where: 20-well project in Hassi Messaoud field

Goal: Enhance oil production from existing vertical wells by drilling horizontal slim hole re-entries

Technology: - Coiled tubing drilling- Controlled pressure drilling- Directional drilling- MWD tools and services- Thru-tubing casing exits

Results: Saves cost of drilling a new well @ $3 million per well; higher production rates due to CPD application

Algeria – Drilling Efficiency & Well ProductivityAlgeria – Drilling Efficiency & Well Productivity

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Completions – Driving Customer Results

11 major ESS installations in producing wells• Substantial improvement in well productivity due to

reduction in near wellbore reservoir damage• Next generation expandable reservoir completions

(ERC) technology system will be installed• Expandable completion liner (ECL) system being

utilized for borehole support

First intelligent completion system installation

• Hydraulic flow control for multiple zones• Allows customer to control production from the surface

without intervention• Zones can be produced in a linear manner; shutting off a

zone as it is depleted and moving on to next zone

Saudi – Reservoir RecoverySaudi – Reservoir Recovery

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Successful run of triple combo LWD with electromagnetic EM data transmission

• No competitor can do this• Preferred system for data transmission• Saves rig time over mud pulse, allowing survey data reception

while connections are being made• With underbalanced drilling, EM is the only method of data

transmission (fluid density issue)

Successful run of short-radius triple combo LWD

• Only one competitor can do this some of the time• WFT holds world record for dogleg severity traversed (62°/100 feet)• Many well plans and re-entries are only economically viable with

extreme short radius drilling techniques

RSS set client field records

• 6 ¾ inch runs 14 continuous days; with triple combo LWD, completed data acquisition at 358 degrees F; likely world record

• 4 ¾ inch sets field record onshore – 76 feet per hour

Technology – Operational Outperformance

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This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, the prospects for Weatherford’s operations which are subject to certain risks, uncertainties andassumptions. These risks and uncertainties, which are more fully described in Weatherford International Ltd.’s reports and registration statements filed with the SEC, include the impact of oil and natural gas prices and worldwide economic conditions on drilling activity, the demand for and pricing of Weatherford's products and services and domestic and international economic and regulatory conditions. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated.

[email protected]:713-693-4136Direct:713-693-4000Main:

Houston, Texas 77027515 Post Oak Blvd., Suite 600Weatherford International Ltd.Senior Vice President & Chief Financial OfficerAndrew P. Becnel

weatherford international ltd. -...

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