Twenty years ago when the company that was to become Weatherford International opened for business as Energy Ventures, it had two employees and no net income. In fact, the fledgling company inherited a tax lien from the Internal Revenue Service. Energy Ventures began operations in one country (the United States) and annual revenue totaled about $6 million.
Flash forward to 2007. The company now operates in 121 countries and has more than 33,000 employees. Annual revenues total $7.3 billion and net income was $890 million in the last fiscal year.
CEO Bernard J. Duroc-Danner provided some insight in remarks he made on May 30 at the company’s Houston offices in the Galleria area. Addressing an assembled group of employees and customers in commemoration of Weatherford’s 20th anniversary, Duroc-Danner noted that the company’s “loyal employees and a few good business decisions” have enabled it to thrive in good times and bad even as the oil and gas industry has suffered.
This is not to say that the company hasn’t had setbacks, particularly during down cycles in the industry, he said. But Weatherford has averaged 40% growth in revenue per annum for the past 20 years.
“Some years we haven’t averaged 40%, of course,” said Duroc-Danner, “but we have averaged a 40% annual growth rate overall. I don’t know of any other company in our industry that can make this claim.”
Founded as Energy Ventures in May of 1987, the company changed its name to EVI in 1991. When EVI bought Weatherford Enterra in May of 1998, the acquiring company adopted the name of the company it purchased. A few months later, the decision was made to drop Enterra from the name, and the company became known simply as Weatherford - named for the North Texas town in which the company was founded.
Over the years, Weatherford has made more than 270 acquisitions, which must position the company as one of the most acquisitive of oil service firms. Some of the firms that were merged into Weatherford include Arrow Completion Systems, Coleve, Mallard, Tesco, Grand Prideco, Pipe Tech International, Hycal, Houston Well Screen Co., Eastman Directional, Kopp, Cardium Tool Services, Macco, Cidra, HPI, Alpine, HOMECO, Universal, and Baker Oil Tools.
There have been only four divestments - Coleve, Mallard, Grand Prideco, and Universal.
Duroc-Danner noted that Weatherford’s return on investment has been phenomenal. He said that if someone had invested $100 in the company in May of 1987, that investment would be worth $22,000 as of May 30, 2007.
“You know, I met a woman at the last shareholders meeting who had done just that [invested $100 in the company in 1987],” he said. “She had inherited the shares from her late husband and had not paid any attention to it over the years. It just sat in her safety deposit box growing in value. Now that it’s worth considerably more, she pays more attention now and regularly attends our meetings.”
