WEATHERFORD ENTERRA INC, 10-K, 1996-03-21

WEATHERFORD ENTERRA INC
10-K, 1996-03-21
OIL & GAS FIELD MACHINERY & EQUIPMENT

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM .......... TO ...........

COMMISSION FILE NUMBER 1-7867

WEATHERFORD ENTERRA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 74-1681642
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

1360 POST OAK BOULEVARD, SUITE 1000 77056
HOUSTON, TEXAS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(713) 439-9400
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
Common Stock, $.10 par value New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein and will not be contained,
to the best of the registrant's knowledge, in the Proxy Statement or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ].

The aggregate market value of the outstanding Common Stock of the
registrant held by non-affiliates of the registrant as of March 19, 1996,
based on the closing sale price of the Common Stock on the New York Stock
Exchange on said date, was $1,220,777,845.

There were 51,089,042 shares of Common Stock of the registrant
outstanding as of March 19, 1996.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement issued in connection with the 1996 Annual
Meeting of Stockholders are incorporated into Part III of this Report.

PART I

ITEM 1. BUSINESS.

INTRODUCTION TO BUSINESS

Weatherford Enterra, Inc. (formerly Weatherford International
Incorporated ("Weatherford")) was organized under the laws of the State of
Delaware in 1970. The "Company" or "Weatherford Enterra", as used herein,
refers to Weatherford Enterra, Inc. and its subsidiaries and affiliates,
unless the context indicates otherwise.

Weatherford Enterra is a diversified international energy service and
manufacturing company that provides a variety of services and equipment to the
exploration, production and transmission sectors of the oil and gas industry.
The Company's principal business segments include (i) the oilfield services
segment, which consists of renting specialized oilfield equipment, providing
fishing, well control assistance and other downhole services and related
tools, and providing tubular running services and related tools; (ii) the
energy products and services segment, which consists of manufacturing, selling
and servicing a variety of products, including cementation products, power
equipment, fishing and milling tools and heavy wall drill pipe, gas lift
valves, production and service packers and related equipment, electrical and
instrumentation control systems and pedestal-mounted marine cranes; (iii) the
gas compression segment, which consists of manufacturing, packaging, selling,
renting and servicing reciprocating natural gas compressors; and (iv) the
pipeline services segment, which consists of manufacturing, selling and
renting specialized pipeline equipment and services. Weatherford Enterra
operates in virtually every oil and gas exploration and production region in
the world, with more than 330 locations in 47 countries, including the United
States.

Since 1991, the Company's management has implemented a business strategy
focused on offering a broader mix of services and products in domestic and
international markets, becoming a leading participant in each of its core
businesses and pursuing cost efficiencies in both its existing operations and
its newly-acquired businesses. Management has pursued this strategy through a
series of acquisitions, the most significant of which was the merger (the
"Enterra Merger") with Enterra Corporation ("Enterra") in October 1995,
pursuant to which all outstanding shares of Enterra common stock were
exchanged for approximately 23.7 million shares of the Company's Common Stock
(after giving effect to a contemporaneous one-for-two reverse stock split of
the Company's Common Stock). On December 15, 1995, the Company acquired the
assets of Energy Industries, Inc. and Zapata Energy Industries, L.P.
(collectively, "Energy Industries"), a gas compression business complementary
to the Company's existing gas compression business, for approximately $130
million, subject to adjustment, and the assumption of certain current
liabilities.

The Enterra Merger and the acquisition of Energy Industries provided
complementary products and services, increased the Company's worldwide market
share in its existing rental tool and fishing and downhole services
businesses, provided gas compression and pipeline services as new "core"
businesses, added several additional energy products and services businesses
and improved profitability and cash flow through anticipated annualized
consolidation savings in excess of $55 million.

Including the Enterra Merger and the acquisition of Energy Industries,
the Company has acquired 23 businesses since November 1991 for a total
consideration of approximately $950 million, of which approximately 75% has
been financed through the issuance of the Company's Common Stock. As a result
of these acquisitions, management believes it has positioned Weatherford
Enterra as a market leader in the oilfield services segment, the gas
compression segment and the pipeline services segment and in certain
businesses included in the energy products and services segment while
significantly expanding and diversifying the Company's geographic operations
and product and service offerings. The acquisitions have allowed the Company
to expand its product and service lines, improve its worldwide market position
and realize significant consolidation cost savings.

RECENT DEVELOPMENTS

The Company has entered into a letter of understanding with and currently
is engaged in negotiations relating to the possible acquisition of the assets
and business of Nodeco AS, a Norwegian company engaged in the energy products
business. There can be no assurance that a definitive agreement will be
reached or that such acquisition will be consummated.

The Company intends to file in the first quarter or early in the second
quarter of 1996 a shelf registration statement with the Securities and
Exchange Commission with regard to the possible issuance of public
indebtedness. The Company will determine whether to issue any such public
indebtedness based upon then existing market conditions; however, there can be
no assurance that the Company will issue any such public indebtedness.

FINANCIAL INFORMATION BY INDUSTRY SEGMENT

See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 9 of Notes to Consolidated Financial
Statements contained elsewhere herein for additional information.

DESCRIPTION OF BUSINESS

OILFIELD SERVICES. Weatherford Enterra rents a full line of specialized
equipment and tools and tubular goods for drilling, completion and workover of
oil and gas wells. Operators and drilling contractors often find it uneconomic
to maintain complete inventories of tools, drill pipe and other equipment and
therefore supplement such inventories by renting. Items rented include
pressure control equipment (such as blowout preventers, high-pressure valves,
accumulators, adapters and choke and kill manifolds); drill pipe, drill
collars and tubing; pipe handling equipment (such as elevators, spiders,
slips, tongs and kelly spinners); and fishing tools (such as milling tools,
casing cutters, jars, spears, overshots and whipstocks). Weatherford Enterra
also provides fishing, milling and cutting services, which consist of removing
or otherwise eliminating "fish" or "junk" in a well (such as cables, pipes,
casing, well bore tools or debris) that is causing an obstruction. An
essential step in the fishing operation is the proper selection and assembly
of the fishing string. Items that might be on a fishing string include jars,
subs, overshots (external), spears (internal), milling tools, casing cutters
and other tools for retrieving or eliminating the "fish". The Company also
provides pipe recovery electric wireline services and coring services. In
addition, Weatherford Enterra provides well control assistance services in
critical well situations (such as a well blow-out or a high pressure sour gas
well). Management believes that, based on total revenues, Weatherford Enterra
is the leading worldwide supplier of rental tools and provider of fishing and
other downhole services.

Weatherford Enterra provides services and equipment used to "make up"
threaded tubular connections and to "run" tubulars that are used during the
drilling, completion and workover of oil and gas wells. Tubulars include
casing, tubing, special high alloy chrome pipe and fiberglass reinforced pipe.
Casing is pipe installed (or run) in a wellbore to protect the structural
integrity of the wellbore and to seal various zones in the well. Tubing is
small diameter pipe run in a producing well through which oil and gas is
produced. These services and related equipment ensure the mechanical integrity
and leak-tight performance of tubular connections. In running tubulars,
Weatherford Enterra personnel operate power tongs (similar in principle to
hydraulic wrenches) and other related handling equipment, to connect the pipe
as it is placed in the well, ensuring a good connection and minimizing thread
damage. Management believes that, based on total revenues, the Company is the
leading worldwide provider of tubular running services.

ENERGY PRODUCTS AND SERVICES. Weatherford Enterra's energy products and
services business consists of the manufacture, sale and servicing of a variety
of products. The Company provides cementation products and trained cementation
engineers to perform computerized well program studies, submit cementation
proposals, finalize cementation plans and advise and assist during the
cementation process. The Company does not provide cement pumping services. The
Company's cementation products, marketed under the Weatherford trade name,
include cementing products used to center casing strings in the wellbore (such
as centralizers, wellbore wipers and scratchers); float equipment used in the
cementation of the casing string to prevent cement from flowing back into the
casing (such as guide shoes, float shoes and float collars); and stage tools
used to set cement in the annular space between the wellbore and the casing
string. The Company also sells various proprietary rubber and elastomer
products that have broad drilling and tubular thread protection applications,
in addition to applications in cementation services. Management believes that,
based on total revenues, the Company is the leading worldwide manufacturer and
supplier of cementation products.

Weatherford Enterra designs, manufactures, sells and services power tongs
and related pipe handling equipment used to provide tubular handling services;
tubular connection testing equipment used to verify the integrity of
connections; milling tools, cutters, overshots, whipstocks and wireline
equipment used to provide fishing and other downhole services; heavy wall
drill pipe; McMurry-Macco 3/5 gas lift and related equipment to increase the
flow of oil; and Arrow 3/5 packers and related equipment to control the flow
in oil and gas wells and to provide remedial stimulation and testing services
in oil and gas wells. Weatherford Enterra, through Total Engineering Services
Team, Inc. (TEST), provides electrical and instrumentation construction
services to the worldwide oil and gas production industry and designs, builds,
installs and services instrument control systems for electrical power
generation packages used on offshore production platforms and associated
offshore storage and handling facilities. The Company also designs,
manufactures, sells and services American AeroT pedestal-mounted hydraulic
cranes used on offshore production platforms, marine vessels and dockside
locations.

GAS COMPRESSION. Weatherford Enterra manufactures, packages, sells,
rents and services gas compression units used for increasing natural gas
pressure exiting the wellhead and within gas gathering systems, injecting
natural gas into oil wells to enhance oil recovery, injecting natural gas into
gas storage wells and other general uses such as cogeneration, seismic marine
surveys and natural gas fueling stations. The acquisition of Energy Industries
in December 1995 greatly expanded the Company's gas compression business
through the addition of larger horsepower units and manufacturing and
packaging capabilities. The Company is a major manufacturer of gas compressors
ranging from 26 horsepower to 7200 horsepower. Weatherford Enterra currently
offers an entire line of reciprocating gas compressors and is able to serve
the international marketplace. Management believes that the Company is the
second largest gas compressor rental company based on number of units and the
fourth largest based on available horsepower.

PIPELINE SERVICES. Weatherford Enterra's pipeline services business
consists of CRC-Evans 3/5 pipeline equipment, CRC-Evans automatic welding
services and Pipeline Induction Heat Ltd. ("PIH") services. The pipeline
equipment segment includes the manufacture of conventional line travel
pipeline construction equipment, the manufacture of specialized equipment for
pipe coating plants and pipe handling systems for offshore lay barges and the
manufacture of rehabilitation equipment for coating removal, surface
preparation and recoating pipelines. The automatic welding segment includes
the provision of proprietary automatic welding systems for use in pipeline
construction. PIH offers specialized field joint coating and heat treatment
services for use in pipeline construction. Management believes that, based on
revenues, the Company is the leading worldwide manufacturer and supplier of
conventional pipeline construction equipment.

PATENTS AND LICENSES

The Company has followed a policy of seeking U.S. and non-U.S. patents
and licenses for products and equipment that appear to have commercial
applications. The Company believes its

patents and licenses to be adequate for the conduct of its products and
services businesses and, while it considers them to be valuable in the
aggregate, the Company does not believe that its business is materially
dependent on its patents or licenses. In management's opinion, engineering and
production skills and application experience are more responsible for the
Company's market position than are patents or licenses.

SEASONALITY

Demand for the Company's oilfield services and energy products and
services is generally affected by the seasonality of drilling activity. Higher
activity generally is experienced in the spring, summer and fall. In the
United States and Europe, the lowest drilling activity occurs during the early
months of the year due to inclement weather; however, in Alaska and Canada,
activity generally slows in the spring and early summer due to difficulty in
moving equipment during the spring thaws. Weather conditions are not a
significant factor in other geographic areas in which the Company offers
oilfield services and energy products and services. Weather is not necessarily
a significant factor in the Company's gas compression segment, although
increased demand for gas during the winter months depletes gas reserves,
thereby increasing the need for gas compression services. The pipeline
services segment is generally affected by the weather due to constraints on
pipeline construction during winter months due to inclement weather conditions
and constraints during the spring and early summer due to spring thaws.

BACKLOG ORDERS

At December 31, 1995, the Company's backlog of orders for products and
equipment believed to be firm was approximately $63,800,000 compared to
approximately $81,400,000 at December 31, 1994. Substantially all of such
orders will be filled in 1996.

INTERNATIONAL AND U.S. OPERATIONS AND EXPORT SALES

The Company has manufacturing operations, either through direct ownership
(including joint ventures) or through license arrangements, in the United
States, Germany, Canada, Italy, The Netherlands and Saudi Arabia. The Company
has product and equipment sales or service operations in more than 330
locations in 47 countries (including the United States).

The Company's international operations traditionally have been more
stable and profitable than its U.S. operations. International revenues in
1995, 1994 and 1993 were $387,235,000 (45% of total revenues), $293,673,000
(43% of total revenues) and $215,328,000 (43% of total revenues),
respectively. Revenues for the United States segment included export sales to
international customers of $65,465,000, $63,211,000 and $49,388,000 in 1995,
1994 and 1993, respectively.

The following table sets forth the Company's revenues,
acquisition-related costs and other unusual charges, operating income and
identifiable assets attributable to each of its geographic segments. See Note
9 of Notes to Consolidated Financial Statements contained elsewhere herein for
additional information.

YEAR ENDED DECEMBER 31,
-----------------------------------------
1995 1994 1993
------------- ------------- -----------
(IN THOUSANDS)
REVENUES:
United States................. $ 471,672 $ 383,076 $ 285,163
Canada........................ 106,491 75,809 25,811
Europe........................ 110,065 84,830 73,291
Africa........................ 57,450 41,574 38,168
Other international........... 113,229 91,460 78,058
------------- ------------- -----------
$ 858,907 $ 676,749 $ 500,491
============= ============= ===========
ACQUISITION-RELATED COSTS AND OTHER
UNUSUAL CHARGES:
United States................. $ 43,276 $ 2,500 $ 4,000
Canada........................ 2,850 -- --
Europe........................ 4,302 -- --
Africa........................ 624 -- --
Other international........... 8,119 -- --
Corporate..................... 29,011 -- --
------------- ------------- -----------
$ 88,182 $ 2,500 $ 4,000
============= ============= ===========
OPERATING INCOME (LOSS):
United States................. $ 5,745 $ 28,924 $ 17,996
Canada........................ 11,382 15,502 4,920
Europe........................ 3,088 3,023 5,607
Africa........................ 13,912 11,204 6,726
Other international........... 4,267 12,490 22,239
Corporate..................... (38,212) (5,439) (7,817)
------------- ------------- -----------
$ 182 $ 65,704 $ 49,671
============= ============= ===========
IDENTIFIABLE ASSETS:
United States................. $ 790,625 $ 706,175 $ 324,730
Canada........................ 73,368 89,462 35,943
Europe........................ 141,673 125,365 65,975
Africa........................ 40,299 38,708 30,526
Other international........... 148,579 149,677 110,279
Corporate..................... 64,316 44,583 68,149
------------- ------------- -----------
$ 1,258,860 $ 1,153,970 $ 635,602
============= ============= ===========

The Company's international operations are subject to special
considerations inherent in doing business outside the United States, including
war, civil disturbances and governmental activities, which may limit or
disrupt markets, restrict the movement of funds or result in the deprivation
of contract rights or the taking of property without fair compensation.
Certain areas, including Algeria, Nigeria, Angola and parts of the Middle
East, have been subjected to political disruption or social unrest in the past
twelve months. International operations also can be affected by U.S. laws and
regulations limiting or prohibiting exports to, and operations in, certain
countries, including Iran, Iraq, Libya, Cuba and

Nigeria. Government-owned petroleum companies in some of the countries in
which the Company operates have adopted policies (or are subject to
governmental policies) giving preference to the purchase of goods and services
from companies that are majority-owned by local nationals. As a result of such
policies, the Company relies on joint ventures, license arrangements and other
business combinations with local nationals in these countries. In addition,
political considerations may disrupt the commercial relationships between the
Company and government-owned petroleum companies. Generally, business
interruptions resulting from civil or political disruptions negatively impact
near-term results of operations; however, management of the Company believes
that it is unlikely that any specific business disruption caused by existing
or foreseen civil or political instability will have a material adverse impact
on the financial condition or liquidity of the Company.

INDUSTRY CONDITIONS

The oil and gas industry in which the Company participates historically
has experienced significant volatility. Demand for the Company's oilfield
services and energy products and services depends primarily upon the number of
oil and gas wells being drilled, the depth and drilling conditions of such
wells, the volume of production, the number of well completions and the level
of workover activity. Drilling and workover activity can fluctuate
significantly in a short period of time, particularly in the United States and
Canada.

Drilling activity is largely dependent on the level and volatility of oil
and gas prices. For the years ended December 31, 1995, 1994 and 1993, average
worldwide drilling activity has remained relatively stable, at 1,711, 1,772
and 1,714 active rigs, respectively. Drilling activity outside of North
America increased 3% in 1995 and decreased 5% in 1994 when compared to the
prior year's average activity levels. U.S. drilling activity decreased 7% in
1995 and increased 3% in 1994 when compared to the prior year's average
activity levels. Canadian drilling activity increased significantly in 1994
when compared to the average activity level in 1993 and increased slightly in
1995 when compared to the average activity level in 1994, but decreased in the
last half of 1995.

The willingness of oil and gas operators to make capital expenditures for
the exploration and production of oil and natural gas will continue to be
influenced by numerous factors over which the Company has no control,
including the prevailing and expected market prices for oil and natural gas.
Such prices are impacted by, among other factors, the ability of the members
of the Organization of Petroleum Exporting Countries ("OPEC") to maintain
price stability through voluntary production limits, the level of production
by non-OPEC countries, worldwide demand for oil and gas, general economic and
political conditions, costs of exploration and production, availability of new
leases and concessions, and governmental regulations regarding, among other
things, environmental protection, taxation, price controls and product
allocations. However, worldwide exploration and production expenditures by the
oil and gas industry increased approximately 9% in 1995 when compared to 1994
and management of the Company anticipates expenditures to increase in 1996. No
assurance can be given as to the level of future oil and gas industry activity
or demand for the Company's oilfield services and energy products and
services.

Demand for the Company's gas compression equipment and services depends
primarily on demand for natural gas, the level and stability of natural gas
prices, natural gas production and consumption, construction of gathering and
storage systems, and the age and operating pressures of natural gas wells.

Demand for the Company's pipeline equipment and services depends on
various factors, including the price of oil and gas, the need for pipelines to
transport oil and gas to areas of high demand, the age and condition of
existing pipelines, political and economic influences, environmental and other
governmental regulations, and the demand for rehabilitation and repair of
existing pipeline systems. The existence of relatively few construction
projects for large diameter oil and gas pipelines at any time causes
substantial fluctuations in revenues from the sale or rental of equipment used
in connection
7

with such projects. Management of the Company anticipates that the
rehabilitation and repair of existing pipeline systems, many in existence
prior to 1970, should increase at some point in the future.

COMPETITION

OILFIELD SERVICES. The Company experiences significant price pressures
in the markets in which it offers rental tools and fishing and other services,
particularly in the U.S. markets. The principal methods of competition that
apply to the Company's rental tools and fishing and other services are price,
quality, availability and reputation. Weatherford Enterra competes with Baker
Hughes Incorporated in most of the markets in which it participates. In
addition, the Company competes with numerous small, single-site operators,
larger concerns operating at multiple locations and various well servicing
companies engaged in such businesses. Also, many customers own and operate
large inventories of equipment they might otherwise choose to rent and have
the ability to purchase additional equipment, as opposed to renting.

The Company historically has enjoyed a strong competitive position in
tubular running services in countries in which it operates outside the United
States, but has experienced increasing competition and price pressures outside
the U.S. market in recent years. The Company has experienced significant
competition and price pressures in the U.S. tubular running services market.
The principal methods of competition that apply to the Company's tubular
running services business are price, quality, reputation and range of services
offered. Weatherford Enterra competes with Frank's International, Inc. in all
of the U.S. markets and in some international markets in which the Company
participates. In addition, the Company competes with BJ Services Company in
several of the international markets in which the Company participates.
Several other small- to medium-sized companies compete with Weatherford
Enterra on a regional basis in the United States and in certain other
countries.

Management expects competition and customer price pressures to continue
in the foreseeable future in its international and U.S. oilfield services
markets.

ENERGY PRODUCTS AND SERVICES. The Company experiences significant
competition in the pricing of its cementation products. Management of the
Company believes that price will continue to be a significant factor
considered in customer purchasing decisions in the foreseeable future. The
principal methods of competition that apply to the Company's cementation
products business are price, quality, availability and reputation. The Company
competes with Halliburton Company and Davis-Lynch Inc. in most of the markets
in which it participates.

Weatherford Enterra has experienced competition in the pricing of
virtually all of its other energy products and services businesses. The
Company competes with small- to medium-sized companies as well as with larger
companies and subsidiaries of large public companies having significant
financial resources.

GAS COMPRESSION. The Company has experienced competition in the pricing
of its gas compression equipment and services. Management believes that by
manufacturing a significant portion of the components used in its compressor
systems, the Company has certain cost advantages over its competitors in the
rental business that do not have similar manufacturing capabilities. The
principal methods of competition are price, quality, reliability, delivery
time and reputation. Management believes that price will continue to be a
significant factor considered in customer purchasing and rental decisions in
the foreseeable future. The Company competes with Tidewater Inc. and Hanover
Compressors Company and various other small- to medium-sized companies.

PIPELINE SERVICES. The Company's CRC-Evans pipeline business competes
with various small-to medium-sized companies on a regional basis. However,
management believes that these companies do not offer the broad range of
products and services offered by the Company. The principal methods of
competition are product reliability and performance, delivery, service,
warranty and price.
8

CUSTOMERS

The Company had no one customer that accounted for 10% or more of its
revenues in 1995, 1994 or 1993.

EMPLOYEES

At December 31, 1995, the Company employed 6,451 persons, of whom 2,446
were in international locations and 4,005 were in the United States. Of the
6,451 employees, 3,719 were employed in the oilfield services segment, 1,436
in the energy products and services segment, 764 in the gas compression
segment and 295 in the pipeline services segment, with 237 in administrative
functions. The Company considers its employee relations to be satisfactory.

EXECUTIVE OFFICERS

The names of the executive officers of the Company and certain
information with respect to each of them are set forth below.
<TABLE>
<CAPTION>
NAME AGE OFFICES
- --------------------------------------- --- ------------------------------------------------------------
<S> <C> <C>
Philip Burguieres...................... 52 Chairman of the Board, President and Chief
Executive Officer
James R. Burke......................... 58 Senior Vice President and President -- Products and
Equipment
M. E. Eagles........................... 56 Senior Vice President and President -- Services
Norman W. Nolen........................ 53 Senior Vice President, Chief Financial Officer and Treasurer
H. Suzanne Thomas...................... 42 Senior Vice President, Secretary and General Counsel
Steven C. Grant........................ 53 Vice President -- Corporate Development and Investor
Relations
Jon R. Nicholson....................... 42 Vice President -- Human Resources
</TABLE>
Mr. Burguieres was elected President and Chief Executive Officer of the
Company effective April 3, 1991, a director effective April 23, 1991, and
Chairman of the Board effective December 10, 1992. From January 1990 to
November 1990, he was Chairman of the Board, President and Chief Executive
Officer of Panhandle Eastern Corporation, a company that operates interstate
natural gas transmission systems. From January 1987 to November 1989, he was
Chairman of the Board, from January 1986 to November 1989, Chief Executive
Officer, and from April 1981 to November 1989, President and Chief Operating
Officer, of Cameron Iron Works, Inc., a manufacturer of oilfield equipment.

Mr. Burke, who joined the Company on December 12, 1991 as Senior Vice
President, Corporate Development and Marketing, became President of the
Products Division effective March 1, 1994, Senior Vice President and
Compression/Products President effective October 5, 1995 and Senior Vice
President and President -- Products and Equipment effective March 15, 1996.
From December 1989 to December 1991, he was an independent management
consultant. From June 1983 to December 1989, he was Vice President of
Corporate Development, and from 1976 to 1983, he was General Manager of a
manufacturing operation, of Cameron Iron Works, Inc.

Mr. Eagles, who joined the Company on March 1, 1993 as Executive Vice
President and President and General Manager of the Rental and Fishing Tool
Division, became Senior Vice President of the Company and President of the
Services Division effective March 1, 1994. From June 1992 until March 1993,
Mr. Eagles served as Senior Vice President of McDermott, Inc., a marine
engineering construction company, and President of McDermott Energy Services,
Inc.; and from November 1990 until June 1992, he served as Vice President of
Marketing of McDermott, Inc. Prior thereto, Mr. Eagles was

employed by Cameron Iron Works, Inc. for over 30 years and served as Vice
President of Sales and Marketing from October 1981 until November 1990.

Mr. Nolen joined the Company on April 29, 1991 as Senior Vice President,
Chief Financial Officer and Treasurer. From March 1990 to April 1991, he was
Vice President and Chief Financial Officer of Petro/Source Corporation, an oil
gathering and marketing company. From October 1980 to February 1990, he was
Corporate Treasurer of Cameron Iron Works, Inc.

Ms. Thomas, who joined the Company in January 1982 as Counsel, was
elected Secretary in March 1986, Vice President and General Counsel in July
1987 and Senior Vice President in December 1989. Ms. Thomas was responsible
for Human Resources from January 1992 until October 1995. Prior to joining the
Company, Ms. Thomas was an attorney with the law firm of Baker & Botts from
September 1978 to December 1981.

Mr. Grant joined the Company on October 5, 1995 as Vice
President -- Corporate Development and Investor Relations. Prior to joining
the Company, Mr. Grant was Enterra's Senior Vice President -- Corporate
Development since March 1991 and prior to that, since January 1988, was
Enterra's Senior Vice President -- Finance and Chief Financial Officer.

Mr. Nicholson, who joined the Company as Director of Human Resources in
February 1993, was elected Vice President-Human Resources effective October 5,
1995. From March 1992 until January 1993, he was a human resources consultant.
From July 1990 until March 1992, Mr. Nicholson served as President of Atlas
Bradford Corporation, an oilfield services company, and from December 1988
until June 1990, he served as Vice President of Human Resources of Baroid
Corporation, an oil services company.

ITEM 2. PROPERTIES.

The Company has numerous manufacturing facilities located in the United
States and various other countries used for the manufacture of energy products
and equipment, pipeline equipment and gas compressors, the principal of which
are:
<TABLE>
<CAPTION>
OWNED (O)
APPROXIMATE OR LEASED (L) -
LOCATION MANUFACTURED PRODUCTS SQUARE FEET EXPIRATION DATE
- ------------------------------------------------------------------------- ------------ ----------------
<S> <C> <C> <C>
Houston, Texas...................... Cranes, power tongs, power units and 157,169 O
accessories
Pearland, Texas..................... Fishing tools, milling tools, 149,706 O
cutters, overshots, wireline
equipment, whipstocks, heavy wall
drill pipe and coring equipment
Tulsa, Oklahoma..................... Pipeline equipment 145,000 O
Corpus Christi, Texas............... Gas compressors 90,000 O
Huntsville, Texas................... Production and service packers and 71,270 O
related equipment
Houma, Louisiana.................... Mechanical cementing products, float 109,761 O
equipment, stage tools, rubber
products and industrial valves
Hannover, Germany................... Mechanical cementing products, power 65,950 L-9/99
tongs, power units and accessories
and specialized bucking machines
</TABLE>
10

The Company believes that its manufacturing facilities will be suitable
and adequate to meet production demands anticipated during the next several
years. The Company's manufacturing facilities operated below capacity
throughout 1995.

In addition to its manufacturing plants, the Company leases its corporate
headquarters office and various administrative offices in Houston, Texas and
leases or owns numerous sales offices, warehouses, service centers, pipe yards
and stocking locations for its operations in the United States and
internationally. During the year ended December 31, 1995, the Company paid
real estate rentals in the aggregate amount of approximately $10,967,000.

The Company's operations generally do not require highly specialized
facilities, and suitable facilities generally are readily available on a lease
or purchase basis, as required.

ITEM 3. LEGAL PROCEEDINGS AND REGULATORY MATTERS.

The Company is not a party to, nor is any of its property the subject of,
any material pending legal proceedings, other than ordinary routine litigation
incidental to its business and which is believed to be either covered by
insurance or not material in amount.

Various federal, state and local laws and regulations covering the
discharge of materials into the environment, or otherwise relating to the
protection of the public health and the environment, affect the Company's
operations, expenses and costs. The clear trend in environmental regulation is
to place more restrictions and limitations on activities that may impact the
environment, such as emissions of pollutants, generation and disposal of
wastes, and use and handling of chemical substances. Increasingly strict
environmental restrictions and limitations have resulted in increased
operating costs for the Company and other similar businesses throughout the
United States, and it is possible that the costs of compliance with
environmental laws and regulations will continue to increase, both for the
Company and its customers. In this regard, the Resource Conservation and
Recovery Act ("RCRA"), the principal federal statute governing the disposal of
solid and hazardous wastes, includes a statutory exemption that allows oil and
gas exploration and production wastes to be classified as non-hazardous waste.
A similar exemption is contained in many of the state counterparts to RCRA. If
oil and gas exploration and production wastes were required to be managed and
disposed of as hazardous waste, either as a result of changes in RCRA or the
imposition of more stringent state regulations, domestic oil and gas
producers, including many of the Company's customers, could be required to
incur substantial obligations with respect to such wastes. Because of the
potential impact on the Company's customers, any regulatory changes that
impose additional restrictions or requirements on the disposal of oil and gas
wastes could adversely affect demand for the Company's services and products.
In addition, the Company is subject to laws and regulations concerning
occupational health and safety. The Company believes that it is in substantial
compliance with the requirements of environmental and occupational health and
safety laws and regulations, but inasmuch as such laws and regulations are
frequently changed, the Company is unable to predict the ultimate impact of
such laws and regulations on the Company's business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On October 5, 1995, a special meeting was held at which the stockholders
of Weatherford were asked to vote on the Enterra Merger, the one-for-two
reverse stock split of Weatherford's Common Stock (the "Split") and the name
change to "Weatherford Enterra, Inc.", the amendment of the 1991 Stock Option
Plan (the "1991 Plan") to increase the number of shares authorized for
issuance thereunder and the amendment of the Restricted Stock Incentive Plan
(the "Restricted Plan") to increase the number of shares authorized for
issuance thereunder. The Weatherford stockholders approved all the proposals.
Of the shares of Weatherford Common Stock entitled to vote and present at the
meeting, (1) 43,333,279 shares were voted in favor of the Enterra Merger,
136,503 shares against and 159,683 shares abstained; (2) 47,110,740 shares
were voted in favor of the Split and the name change, 271,543 shares against
and 187,764 shares abstained; (3) 41,577,950 shares were voted in favor of the
amendment of the 1991 Plan, 1,098,493 shares against and 886,356 shares
abstained; and (4) 40,627,455 shares were voted in favor of the amendment of
the Restricted Plan, 1,949,341 shares against and 985,813 shares abstained.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

The Company's Common Stock, $0.10 par value (the "Common Stock"), is
traded on the New York Stock Exchange under the symbol "WII". It previously
traded, until October 1994, on the American Stock Exchange. The following
table sets forth, on a per share basis for the periods indicated, the high and
low sale prices for the Common Stock as reported by the New York Stock
Exchange (and prior to October 19, 1994, by the American Stock Exchange). The
sale prices set forth below have been adjusted to reflect the Split effected
on October 5, 1995. (See Note 6 of the Notes to Consolidated Financial
Statements.)

HIGH LOW
--------- ---------
1994
First Quarter................... $ 22.25 $ 16.25
Second Quarter.................. 29.50 16.00
Third Quarter................... 28.00 23.25
Fourth Quarter.................. 25.50 16.50
1995
First Quarter................... 21.25 16.50
Second Quarter.................. 25.75 19.75
Third Quarter................... 30.00 23.50
Fourth Quarter.................. 29.50 21.25
1996
First Quarter (through March 19,
1996)......................... 35.88 26.00

On March 19, 1996, the closing sale price for the Common Stock as
reported by the New York Stock Exchange was $35.00. As of March 19, 1996,
there were approximately 4,217 record holders of Common Stock.

The Company has not declared or paid dividends on the Common Stock since
December 1982 and management does not anticipate paying dividends on the
Common Stock at any time in the foreseeable future.

ITEM 6. SELECTED FINANCIAL DATA.

The Selected Financial Data should be read in conjunction with the
Company's Consolidated Financial Statements and the notes thereto, included
elsewhere herein. The Company's Consolidated Financial Statements and the
financial information presented below have been restated for all periods
presented to include the accounts and results of operations of Enterra with
those of the Company. All per share amounts and numbers of shares of Common
Stock have been restated to reflect a contemporaneous one-for-two reverse
stock split. See Notes 2 and 6 of Notes to Consolidated Financial Statements
contained elsewhere herein for additional information.
<TABLE>
<CAPTION>
AS OF OR FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1995(1) 1994(2) 1993(3) 1992 1991(4)
------------- ------------- ----------- ----------- -----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS AND PERCENTAGES)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues............................. $ 858,907 $ 676,749 $ 500,491 $ 374,203 $ 397,480
Acquisition-related costs and other
unusual charges.................... 88,182 2,500 4,000 -- 20,044
Operating income..................... 182 65,704 49,671 35,579 31,044
Depreciation and amortization........ 95,957 71,037 50,449 35,738 35,720
Net income (loss).................... (10,558) 41,977 35,175 26,760 14,234
Net income (loss) per share.......... $ (0.21) $ 0.94 $ 0.88 $ 0.73 $ 0.37
PERCENTAGE OF REVENUES:
Selling, general and administrative
expenses........................... 16.1% 17.1% 18.3% 22.6% 22.5%
Gross profit......................... 27.2% 27.9% 29.5% 33.2% 35.6%
Operating income..................... 0.0% 9.7% 9.9% 9.5% 7.8%
Net income (loss).................... (1.2)% 6.2% 7.0% 7.2% 3.6%
BALANCE SHEET DATA:
Working capital...................... $ 267,380 $ 251,778 $ 211,834 $ 197,526 $ 197,879
Total assets......................... 1,258,860 1,153,970 635,602 474,490 470,702
Total debt........................... 329,266 196,672 21,253 28,685 31,572
Stockholders' equity................. 730,843 734,634 474,472 349,458 334,002
Total debt-to-total capitalization... 31% 21% 4% 8% 9%
OTHER DATA:
Capital expenditures, excluding
acquisitions....................... $ 110,625 $ 114,018 $ 63,757 $ 38,259 $ 50,636
Weighted average shares
outstanding........................ 50,989 44,845 38,607 34,786 34,394
</TABLE>
- ------------

(1) Includes acquisition-related costs and other unusual charges of
$88,182,000, or $1.17 per common share.

(2) Includes acquisition-related costs of $2,500,000, or $0.06 per common
share.

(3) Includes acquisition-related costs of $4,000,000, or $0.10 per common
share.

(4) Includes acquisition-related costs and other unusual charges of
$20,044,000, or $0.58 per common share.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

The following discussion should assist in an understanding of the
Company's financial position and results of operations for each of the three
years in the period ended December 31, 1995. The Consolidated Financial
Statements and notes thereto included elsewhere herein contain detailed
information that should be referred to in conjunction with this discussion.

BUSINESS REVIEW

In 1991, the Company's management implemented a business strategy focused
on offering a broader mix of services and products in domestic and
international markets, becoming a leading participant in each of its core
businesses and pursuing cost efficiencies in its existing operations and its
newly-acquired businesses. Management has pursued this strategy through a
series of acquisitions, having acquired 23 businesses since November 1991. As
a result of these acquisitions, management believes it has positioned the
Company as a market leader in its oilfield services, gas compression and
pipeline services segments and in certain businesses included in its energy
products and services segment. The acquisitions have allowed the Company to
expand its product and service lines, improve its worldwide market position
and realize significant consolidation cost savings.

On October 5, 1995, the Company completed the Enterra Merger, which
represents the Company's most significant business combination to date.
Management believes that the Enterra Merger strengthens the Company's position
as the worldwide leader in the rental and fishing tool services business. In
addition, the Enterra Merger adds gas compression, pipeline services and
several additional energy product and service businesses to the Company. In
connection with the Enterra Merger, the Company effected a one-for-two reverse
stock split and changed its name to "Weatherford Enterra, Inc." In this
report, all per share amounts and numbers of shares of Common Stock have been
restated to reflect the reverse stock split. Weatherford issued approximately
23,668,000 shares of Common Stock in exchange for all the outstanding shares
of Enterra common stock based on an exchange ratio of 0.845 of a share of
Weatherford Common Stock for each share of Enterra common stock outstanding.
The Enterra Merger was accounted for as a pooling of interests. Accordingly,
the consolidated financial statements have been restated for all periods
presented to include the accounts and results of operations of Enterra with
those of Weatherford, as if the two companies had been combined since
inception.

On December 15, 1995, the Company acquired substantially all of the
assets of Energy Industries, a natural gas compression business complementary
to the Company's gas compression business, for approximately $130,000,000 in
cash, subject to adjustment, and the assumption of certain liabilities
totaling approximately $12,485,000. The results of the Energy Industries
operations are included in the accompanying financial statements since the
date of acquisition.

Management believes that the Company will achieve operating efficiencies
and annualized consolidation cost savings in excess of $55,000,000 after
combining the operations of Weatherford, Enterra and Energy Industries, and
that most of the cost saving measures will be in place by the summer of 1996.

On August 12, 1994, Enterra entered the gas compression business and
several energy products businesses through its acquisition of the outstanding
common stock of Total Energy Services Company ("Total Energy") in exchange for
shares of Enterra common stock valued, in the aggregate, at

$213,570,000. Enterra also acquired the minority interests in two Total Energy
subsidiaries for $23,000,000 in cash, paid transaction costs and
employment-related obligations totaling approximately $15,000,000 and assumed
Total Energy's long-term debt of $75,000,000. Other significant acquisitions
within the past three years, all made by Weatherford, include the September
1994 merger with H & H Oil Tool Co., Inc. ("H & H") which was accounted for as
a pooling of interests, the April 1994 acquisition of the Rental Division of
Odfjell Drilling and Consulting Company ("Odfjell Rental") for $56,200,000 and
the assumption of certain contractual rights and obligations and the April
1993 acquisition of substantially all of the assets of Homco International,
Inc. and its subsidiaries (collectively, "Homco") for $97,500,000 in cash and
the assumption of certain liabilities totaling approximately $39,200,000. The
results of the Odfjell Rental and Homco operations are included in the
accompanying financial statements since the date of their respective
acquisition.
RESULTS OF OPERATIONS

A summary of operating results by business segment is shown below:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1995 1994 1993
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
REVENUES:
Oilfield services:
Rental and fishing/downhole services................................. $ 328,343 $ 300,214 $ 244,697
Tubular running services............................................. 130,387 109,503 105,715
Other oilfield services.............................................. 11,818 13,664 7,636
---------- ---------- ----------
Total oilfield services......................................... 470,548 423,381 358,048
---------- ---------- ----------
Energy products and services:
Cementation products................................................. 47,237 43,201 41,734
Other oilfield products.............................................. 118,394 66,283 30,653
Other products and services.......................................... 59,791 34,273 19,777
---------- ---------- ----------
Total energy products and services.............................. 225,422 143,757 92,164
---------- ---------- ----------
Gas compression:
Manufacturing, packaging, parts and services......................... 57,565 32,790 --
Rental............................................................... 36,821 13,355 --
---------- ---------- ----------
Total gas compression........................................... 94,386 46,145 --
---------- ---------- ----------
Pipeline services:
Rentals and services................................................. 46,227 32,240 30,825
Sales................................................................ 22,324 31,226 19,454
---------- ---------- ----------
Total pipeline services......................................... 68,551 63,466 50,279
---------- ---------- ----------
$ 858,907 $ 676,749 $ 500,491
========== ========== ==========
ACQUISITION-RELATED COSTS AND OTHER UNUSUAL CHARGES:
Oilfield services.................................................... $ 31,715 $ 2,500 $ 4,000
Energy products and services......................................... 22,694 -- --
Gas compression -- -- --
Pipeline services.................................................... 4,762 -- --
Corporate............................................................ 29,011 -- --
---------- ---------- ----------
$ 88,182 $ 2,500 $ 4,000
========== ========== ==========
OPERATING INCOME (LOSS):
Oilfield services.................................................... $ 41,214 $ 52,665 $ 44,743
Energy products and services......................................... (14,210) 16,668 10,726
Gas compression...................................................... 7,788 4,047 --
Pipeline services.................................................... 3,602 (2,237) 2,019
Corporate............................................................ (38,212) (5,439) (7,817)
---------- ---------- ----------
$ 182 $ 65,704 $ 49,671
========== ========== ==========
</TABLE>
15

OILFIELD SERVICES. Revenues increased 11% in 1995 to $470,548,000
compared to $423,381,000 in 1994. International revenues increased 23% to
$245,698,000, primarily as a result of increased activity in certain markets,
including Latin America, Africa, the North Sea and Canada. During 1995, the
average international drilling rig count (excluding Canada) was 3% higher than
in 1994. United States revenues increased 1% to $224,850,000, despite a 7%
decline in the average U.S. drilling rig count. Operating income for the
oilfield services segment decreased in 1995 compared to 1994 as a result of
the acquisition-related costs and other unusual charges in 1995 discussed
below. Excluding such charges, operating income would have improved 32% to
$72,929,000, primarily as a result of the increased international activity and
cost savings achieved in consolidating the operations of H & H and Enterra
into the Company.

Oilfield services revenues increased 18% in 1994 to $423,381,000 compared
to $358,048,000 in 1993. International revenues increased 23% in 1994 to
$200,169,000, primarily as a result of expansion into Latin America, increased
drilling activity in Canada and the addition of the Odfjell Rental operations
acquired in April 1994. During 1994, the average international drilling rig
count (excluding Canada) was 5% lower in 1994 than in 1993. United States
revenues increased 14% in 1994 to $223,212,000 compared to 1993, reflecting
the addition of the Homco operations in April 1993 and several smaller
acquisitions. Operating income increased 18% in 1994 to $52,665,000, primarily
as a result of the increased activity in Canada, expansion into Latin America
and cost savings achieved in consolidating the operations of Homco.

ENERGY PRODUCTS AND SERVICES. Revenues increased 57% in 1995 to
$225,422,000 compared to $143,757,000 in 1994, primarily as a result of the
addition of the Total Energy businesses acquired in August 1994. Operating
income, excluding the acquisition-related costs and other unusual charges
discussed below, decreased 49% to $8,484,000, primarily as a result of
operating losses incurred in 1995 by the Arrow packer business acquired from
Total Energy.

Energy products and services revenues increased 56% in 1994 to
$143,757,000 compared to $92,164,000 in 1993, primarily as a result of the
addition of the Total Energy businesses in August 1994. Operating income
improved 55% to $16,668,000 due to the addition of the Total Energy businesses
and improved operating results from the cementation products business.

GAS COMPRESSION. The gas compression segment was acquired as part of the
Total Energy acquisition which was accounted for as a purchase, in August
1994. Consequently, comparisons of the operating results for the periods
presented are not meaningful. Compression rental revenues have remained fairly
stable since the business was acquired. Sales of packaged compression units,
particularly in Canada, declined significantly during the second half of 1995,
as many customers deferred the acquisition of units due to the relatively low
demand for natural gas. Canadian operations accounted for 45% of gas
compression revenues in 1995 compared to 55% for the period from August 12,
1994 through December 31, 1994. Market conditions for compressor sales are
expected to improve during 1996.

PIPELINE SERVICES. Revenues increased 8% in 1995 to $68,551,000 compared
to $63,466,000 in 1994. Rental and service revenues of $46,227,000 increased
43% compared to 1994 as a result of increased coating service revenues from a
large international pipeline construction project and increased automatic
welding unit rental and service revenue in Canada, Malaysia and North Africa.
Equipment sales revenue decreased $8,902,000, or 29%, primarily due to an
unusually large contract in 1994 to design and construct specialized equipment
to be installed on a large offshore pipe laying vessel (the "Contract"), which
yielded revenues of $10,000,000 but an operating loss of $4,200,000 in 1994.
Exclusive of the acquisition-related costs and other unusual charges discussed
below, operating income improved to $8,364,000 in 1995 compared to an
operating loss of $2,237,000 in 1994, primarily as a result of the higher
rental and service activity in 1995 and the $4,200,000 loss on the Contract in
1994.
16

Revenues for the pipeline services segment in 1994 increased 26% to
$63,466,000 compared to 1993, primarily as a result of revenues from the
Contract. Operating income decreased $4,256,000 to a loss of $2,237,000 in
1994, primarily due to losses incurred on the Contract.

GROSS PROFIT. The consolidated gross profit percentage was 27.2% in 1995
compared to 27.9% in 1994 and 29.5% in 1993. The decline is primarily
attributable to weakness in the gas compression segment and several businesses
in the energy products and services segment.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses as a percentage of revenues decreased to 16.1% in 1995
from 17.1% in 1994 and 8.3% in 1993, primarily as a result of cost
efficiencies achieved in consolidating the operations of acquired businesses
into the Company. Management expects the selling, general and administrative
expense percentage to decrease further in 1996, as the operations of Enterra
and Energy Industries are fully consolidated into the Company.

RESEARCH AND DEVELOPMENT. Research and development costs of $4,954,000
in 1995 increased 5% compared to 1994. Research and development costs in 1994
of $4,735,000 increased 30% compared to 1993. The increases primarily
reflected the expansion of the Company's operations and development activities
to support all four of its principal business segments.

EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATES. The Company owns an
interest of 50% or less in several joint ventures, primarily in the oilfield
services segment. The Company's equity in the earnings of these affiliates was
$1,477,000 in 1995 compared to $1,169,000 in 1994 and $2,716,000 in 1993. The
increase of 26% in 1995 compared to 1994 was primarily attributable to
improved drilling activity in Saudi Arabia, and the decrease of 57% in 1994
compared to 1993 was primarily the result of increased competition and reduced
drilling activity in Saudi Arabia. The Company received cash dividends from
its 50% or less-owned affiliates totaling $1,666,000, $2,203,000 and
$3,622,000 in 1995, 1994 and 1993, respectively.

FOREIGN CURRENCY (GAIN) LOSS, NET. As a result of the fluctuation of the
U.S. dollar against the major foreign currencies in which the Company conducts
business, the Company recorded net foreign currency gains of $74,000 in 1995
compared to a net gain of $2,205,000 in 1994 and a net loss of $713,000 in
1993. A substantial portion of the gain in 1994 represented an unrealized
currency gain related to certain intercompany loans.

OTHER EXPENSE, NET. Other expense, net, increased to $3,835,000 in 1995
compared to $3,073,000 in 1994 and $906,000 in 1993. The increase in 1995 and
1994 was primarily attributable to the amortization of goodwill related to the
1994 acquisitions of Total Energy and Odfjell Rental, partially offset in 1995
by increased gains on sales of property, plant and equipment.

ACQUISITION-RELATED COSTS AND OTHER UNUSUAL CHARGES. During the second
quarter of 1995, Enterra recorded unusual charges totaling $28,282,000
($26,000,000 of which was non-cash), representing writedowns to fair value of
certain businesses to be disposed of, asset writedowns related to certain
excess facilities, equipment and inventories, and estimated costs in
connection with the closure of certain pipeline businesses and the
consolidation of certain oilfield service administrative and operating
facilities. During the fourth quarter of 1995, the Company recorded expenses
of $59,900,000 ($40,196,000 of which was non-cash in 1995) related to the
Enterra Merger and the financial impact of management decisions related to the
future operations of the combined companies. These acquisition-related costs
primarily consisted of transaction costs, severance and termination agreements
with former officers and employees, facility closure costs primarily to
consolidate the oilfield services operations and administrative functions of
Enterra and Weatherford, and the reduction in recorded value of certain assets
that had diminished future value in the operations of the combined Company.

H & H merger and employee termination and facility closure costs to
consolidate the operations of H & H and Homco into Weatherford.

OPERATING INCOME. Operating income decreased substantially in 1995 to
$182,000 compared to $65,704,000 in 1994 and $49,671,000 in 1993, primarily as
a result of the acquisition-related costs and other unusual charges. Excluding
such charges, operating income would have been $88,364,000 in 1995 compared to
$68,204,000 in 1994 and $53,671,000 in 1993, reflecting the impact of the
Company's acquisitions and related cost savings.

INTEREST. Net interest expense increased to $15,136,000 in 1995 compared
to $6,888,000 in 1994 and $784,000 in 1993, primarily as a result of higher
average debt balances outstanding. The increased indebtedness primarily
related to the acquisitions of Energy Industries in December 1995, Total
Energy in August 1994, Odfjell Rental in April 1994 and Homco in April 1993.

INCOME TAXES. The income tax provision (benefit) consists of taxes on
foreign earnings, foreign taxes withheld on certain remittances from
international subsidiaries, U.S. alternative minimum and state taxes and the
recognition of deferred tax credits relating to financial statement losses
that are not currently deductible for tax purposes. The income tax provision
does not include U.S. regular federal income tax due to the availability of
U.S. net operating loss carryforwards. Income tax provision (benefit) as a
percentage of income (loss) before income taxes and minority interests was
31%, 29% and 28% for 1995, 1994 and 1993, respectively. The increase in the
effective tax rates was primarily a result of differences in the components
and tax rates applicable to foreign taxable income, and a result of
nondeductible goodwill amortization related to the Total Energy acquisition.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1995, the Company had cash and cash equivalents of
$32,800,000. The Company's operations provided cash of $78,873,000 during 1995
compared to $67,569,000 during 1994 and $44,649,000 in 1993. Operating cash
flow before changes in working capital accounts increased 16% to $118,720,000
in 1995 over 1994 and 31% to $102,010,000 in 1994 compared to 1993, reflecting
the impact of the acquisitions and growth in the Company's operations. Changes
in working capital and other operating accounts used cash of $39,847,000
during 1995 compared to $34,441,000 in 1994 and $33,291,000 in 1993. Working
capital of $267,380,000 at December 31, 1995 increased $15,602,000 from
December 31, 1994, primarily due to the Energy Industries acquisition, and
December 31, 1994 working capital of $251,778,000 increased $39,944,000 from
December 31, 1993 as a result of the acquisition of Total Energy.

Capital expenditures, excluding business acquisitions, decreased 3% to
$110,625,000 in 1995 compared to $114,018,000 in 1994, reflecting lower
capital spending in the oilfield services segment due to the consolidation of
the Weatherford and Enterra rental and service equipment inventories which was
partially offset by the capital requirements of the Total Energy operations
acquired in August 1994. Capital expenditures, excluding business
acquisitions, increased 79% in 1994 to $114,018,000, primarily to support the
growth of the Company's operations resulting from the acquisitions of Total
Energy, Odfjell Rental, H & H, Homco and other businesses. Management
anticipates that the Company's capital spending levels will continue to be
primarily influenced by market opportunities and growth in the Company's
operations.

In addition to the Enterra and H & H mergers and the acquisitions of
Energy Industries, Total Energy, Odfjell Rental and Homco, the Company has
made several other acquisitions, principally in its oilfield services and
energy products and services segments. The total cash consideration paid in
connection with these acquisitions, net of cash acquired and notes issued, was
$9,135,000, $12,046,000 and $21,964,000 in 1995, 1994 and 1993, respectively.

The Company's consolidated indebtedness increased to $329,266,000 at
December 31, 1995 from $196,672,000 at December 31, 1994, primarily as a
result of debt incurred in connection with the

acquisition of Energy Industries. The Company's total debt-to-total
capitalization ratio was 31% at December 31, 1995 compared to 21% at December
31, 1994.

In connection with the Enterra Merger, the Company entered into new bank
credit facilities (the "Facilities") consisting of a $200,000,000 term loan
(the "Term Loan") and a $200,000,000 revolving credit facility (the "Revolving
Credit Facility"). The Facilities replaced the previous primary bank credit
facilities of Weatherford and Enterra. The Term Loan is payable in 23 equal
quarterly installments commencing March 31, 1996. The Revolving Credit
Facility matures on September 30, 2000. Amounts outstanding under the
Facilities accrue interest at a variable rate ranging from 0.375% to 0.625%
above a specified Eurodollar rate, depending on the Company's total debt-to-
total capitalization ratio. The applicable interest rate on amounts
outstanding at December 31, 1995 was 6.4%. A commitment fee ranging from 0.15%
to 0.225% per annum, depending on the Company's total debt-to-total
capitalization ratio, is payable quarterly on the unused portion of the
Revolving Credit Facility. The Facilities agreement requires that the Company
maintain certain financial ratios and limits the Company's ability to incur
indebtedness, make investments and dispose of assets. At December 31, 1995,
the balances outstanding under the Term Loan and the Revolving Credit Facility
were $200,000,000 and $120,000,000, respectively, and the Company had
$80,000,000 available to borrow under the Revolving Credit Facility.
Subsequent to December 31, 1995, the Company has repaid $16,000,000 of the
balance outstanding under the Revolving Credit Facility. In addition, at
December 31, 1995, the Company had $11,822,000 available for borrowing under
working capital facilities of certain of its international subsidiaries. The
Company also has various credit facilities available only for stand-by letters
of credit and bid and performance bonds, pursuant to which funds are available
to the Company to secure performance obligations and certain retrospective
premium adjustments under insurance policies. The Company had a total of
$18,857,000 of letters of credit and bid and performance bonds outstanding at
December 31, 1995.

The Company conducts a portion of its business in currencies other than
the U.S. dollar, including the Canadian dollar, the German mark, the U.K.
pound sterling, the Norwegian krone, certain Latin American currencies and the
Italian lira. Although most of the revenues of the Company's foreign
operations are denominated in the local currency, the effects of foreign
currency fluctuations are largely mitigated because local expenses of such
foreign operations also generally are denominated in the same currency. As a
result of a weaker U.S. dollar, the weighted average currency exchange rates
used to translate the statements of income of the Company's international
subsidiaries were generally lower during 1995 and 1994 compared to 1993,
thereby increasing the amount of U.S. dollars reflected on the Company's 1995
and 1994 consolidated statements of income. Had the average exchange rates in
1995 and 1994 been the same as in 1993, revenues for 1995 would have been
approximately $9,000,000 lower and revenues for 1994 would have been virtually
unchanged. The impact on net income would not have been material.

The Company occasionally enters into forward exchange contracts only as a
hedge against certain existing economic exposures, and not for speculative or
trading purposes. These contracts reduce exposure to currency movements
affecting existing assets and liabilities denominated in foreign currencies,
such exposure resulting primarily from trade receivables and payables and
intercompany loans. The future value of these contracts and the related
currency positions are subject to offsetting market risk resulting from
foreign currency exchange rate volatility. Settlement of forward exchange
contracts resulted in net cash outflows totaling $2,719,000 and $1,036,000
during 1995 and 1994, respectively. The Company entered into no forward
exchange contracts during 1993.

The Company has entered into a letter of understanding with and currently
is engaged in negotiations relating to the possible acquisition of the assets
and business of Nodeco AS, a Norwegian company engaged in the energy products
business. The Company would fund any cash portion of such acquisition with
borrowings under the Revolving Credit Facility. There can be no assurance that
such acquisition will be consummated or, if consummated, that the terms
thereof will not change.
19

Management believes the combination of working capital, the unused
portion of existing credit facilities and cash flows from operations provide
the Company with sufficient capital resources and liquidity to manage its
routine operations. The Company continues to seek opportunities to enhance its
competitiveness through strategic acquisitions. In addition to the potential
acquisition mentioned above, the Company is currently considering several
other potential acquisitions, which are at various stages of negotiation or
due diligence. Management believes that any borrowings made in connection with
any such acquisitions will not have a materially adverse impact on the
Company's liquidity. Management believes that it is premature to provide
specific information with respect to any other such possible acquisitions
because of the status of, and possible adverse impact on, negotiations, and
because, in any event, there can be no assurance that any of such possible
acquisitions will be consummated.

The Company intends to file in the first or second quarter of 1996 a
shelf registration statement with the Securities and Exchange Commission with
regard to the possible issuance of public indebtedness. Net proceeds from the
sale of any such public indebtedness would be used primarily to repay all or a
portion of the amounts then outstanding under the Facilities. The Company will
determine whether to issue any such public indebtedness based upon existing
market conditions; however, there can be no assurance that the Company will
issue any such public indebtedness.

Like most multinational oilfield service companies, the Company has
operations in certain international areas, including parts of the Middle East,
North and West Africa, Latin America, the Asia-Pacific Region and the
Commonwealth of Independent States (the "CIS"), that are inherently subject to
risks of civil disturbance and political activities that may disrupt oil and
gas exploration and production activities, restrict the movement of funds or
limit access to markets for periods of time. Historically, the economic impact
of such disruptions has been temporary and oil and gas exploration and
production activities have eventually resumed in relation to market forces.
Certain areas, including Algeria, Nigeria, Angola and parts of the Middle
East, have been subjected to political disruption or social unrest in the past
twelve months. Generally, business interruptions resulting from civil or
political disruptions negatively impact near-term results of operations;
however, management believes that it is unlikely that any specific business
disruption caused by existing or foreseen civil or political instability will
have a materially adverse impact on the financial condition or liquidity of
the Company.

The Company has not declared dividends on Common Stock since December
1982 and management does not anticipate paying dividends on Common Stock at
any time in the foreseeable future.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Weatherford Enterra, Inc.:

We have audited the accompanying consolidated balance sheets of
Weatherford Enterra, Inc. (a Delaware corporation) and subsidiaries (the
"Company") as of December 31, 1995 and 1994, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1995. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Weatherford Enterra, Inc. and subsidiaries as of December 31, 1995 and
1994, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
February 29, 1996

21
<PAGE>
WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
(IN THOUSANDS EXCEPT SHARE AMOUNTS)

1995 1994
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....... $ 32,800 $ 36,106
Receivables, net of allowance of
$15,942 and $11,240............ 231,125 232,882
Inventories, net................ 165,383 153,191
Deferred tax assets............. 10,995 10,349
Prepayments and other........... 23,059 17,458
------------ ------------
Total current assets....... 463,362 449,986
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at
cost:
Land............................ 22,381 17,017
Buildings and improvements...... 85,229 81,203
Rental and service equipment.... 965,603 859,209
Machinery and other equipment... 108,357 132,811
------------ ------------
1,181,570 1,090,240
Less -- Accumulated
depreciation................... 667,025 627,941
------------ ------------
514,545 462,299
------------ ------------
GOODWILL, net........................ 259,450 221,397
------------ ------------
OTHER ASSETS......................... 21,503 20,288
------------ ------------
$ 1,258,860 $ 1,153,970
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt................. $ 306 $ 113
Current portion of long-term
debt........................... 36,670 17,813
Accounts payable................ 52,157 64,250
Accrued compensation and
employee benefits.............. 31,353 30,922
Accrued income taxes............ 4,650 8,104
Customer advances............... 6,272 17,994
Accrued insurance............... 9,435 11,850
Other accrued liabilities....... 55,139 47,162
------------ ------------
Total current
liabilities.................. 195,982 198,208
------------ ------------
LONG-TERM DEBT....................... 292,290 178,746
------------ ------------
DEFERRED TAX LIABILITIES............. 5,243 25,966
------------ ------------
OTHER LONG-TERM LIABILITIES.......... 33,348 14,371
------------ ------------
MINORITY INTERESTS................... 1,154 2,045
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $1 par; shares
authorized 1,000,000, none
issued......................... -- --
Common stock, $.10 par; shares
authorized 80,000,000; issued
50,988,741 and 50,575,768..... 5,099 5,058
Paid-in capital................. 602,231 593,744
Retained earnings............... 130,243 140,801
Cumulative translation
adjustment..................... (5,869) (4,168)
Treasury stock, 41,260 and
51,202 common shares, at
cost........................... (861) (801)
------------ ------------
Total stockholders'
equity................... 730,843 734,634
------------ ------------
$ 1,258,860 $ 1,153,970
============ ============

The accompanying notes are an integral part of these consolidated financial
statements.

22
<PAGE>
WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1995
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

1995 1994 1993
----------- ----------- -----------
REVENUES............................. $ 858,907 $ 676,749 $ 500,491
COSTS AND EXPENSES:
Cost of sales and services......... 625,346 488,133 352,677
Selling, general and administrative
expenses........................ 137,959 115,978 91,591
Research and development........... 4,954 4,735 3,649
Equity in earnings of
unconsolidated affiliates....... (1,477) (1,169) (2,716)
Foreign currency (gain) loss,
net............................. (74) (2,205) 713
Other expense, net................. 3,835 3,073 906
Acquisition-related costs and other
unusual charges................. 88,182 2,500 4,000
----------- ----------- -----------
Total operating costs and
expenses..................... 858,725 611,045 450,820
----------- ----------- -----------
OPERATING INCOME..................... 182 65,704 49,671
Interest expense..................... 17,217 8,847 4,027
Interest income...................... (2,081) (1,959) (3,243)
----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES AND
MINORITY INTERESTS................. (14,954) 58,816 48,887
Income tax provision (benefit)....... (4,616) 16,958 13,635
----------- ----------- -----------
INCOME (LOSS) BEFORE MINORITY
INTERESTS.......................... (10,338) 41,858 35,252
Minority interests................... 220 (119) 77
----------- ----------- -----------
NET INCOME (LOSS).................... $ (10,558) $ 41,977 $ 35,175
=========== =========== ===========
Weighted average common and common
equivalent shares outstanding...... 50,989 44,845 38,607
=========== =========== ===========
INCOME (LOSS) PER COMMON AND COMMON
EQUIVALENT SHARE................... $ (0.21) $ 0.94 $ 0.88
=========== =========== ===========

The accompanying notes are an integral part of these consolidated financial
statements.

23
<PAGE>
WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1995
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMMON STOCK CUMULATIVE TREASURY STOCK
PREFERRED ---------------- PAID-IN RETAINED TRANSLATION ---------------
STOCK SHARES AMOUNT CAPITAL EARNINGS ADJUSTMENT SHARES AMOUNT
--------- ------- ------ --------- -------- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1992 as
previously reported................ $ 586 21,270 $2,127 $ 181,688 $(45,699) $ 1,195 24 $(272)
Adjustment for pooling of
interests.......................... -- 13,628 1,363 95,166 116,651 (3,347) -- --
--------- ------- ------ --------- -------- ----------- ------ ------
BALANCE, December 31, 1992........... 586 34,898 3,490 276,854 70,952 (2,152) 24 (272)
Shares issued under employee benefit
plans.............................. -- 46 4 982 -- -- -- --
Stock grants and options exercised... -- 410 41 6,729 -- -- 8 (170)
Issuance of Common Stock............. -- 4,675 468 92,028 -- -- -- --
Issuance of Common Stock in
acquisition........................ -- 80 8 2,075 -- -- -- --
Settlement of a note receivable from
a former officer................... -- -- -- 224 -- -- -- --
Conversion of Preferred Stock........ (572) 778 78 494 -- -- -- --
Redemption of Preferred Stock........ (14) -- -- (340) -- -- -- --
Currency translation adjustment...... -- -- -- -- -- (4,892) -- --
Net income........................... -- -- -- -- 35,175 -- -- --
Dividends on Preferred Stock
($12.47 per share)................. -- -- -- -- (7,303 ) -- -- --
--------- ------- ------ --------- -------- ----------- ------ ------
BALANCE, December 31, 1993........... -- 40,887 4,089 379,046 98,824 (7,044) 32 (442)
Shares issued under employee benefit
plans.............................. -- 9 1 178 -- -- -- --
Stock grants and options exercised... -- 131 13 1,905 -- -- 19 (359)
Issuance of Common Stock in
acquisition........................ -- 9,549 955 212,615 -- -- -- --
Currency translation adjustment...... -- -- -- -- -- 2,876 -- --
Net income........................... -- -- -- -- 41,977 -- -- --
--------- ------- ------ --------- -------- ----------- ------ ------
BALANCE, December 31, 1994........... -- 50,576 5,058 593,744 140,801 (4,168) 51 (801)
Shares issued under employee benefit
plans.............................. -- 8 1 187 -- -- -- --
Stock grants and options exercised... -- 405 40 8,300 -- -- (10) (60)
Currency translation adjustment...... -- -- -- -- -- (1,701) -- --
Net loss............................. -- -- -- -- (10,558 ) -- -- --
--------- ------- ------ --------- -------- ----------- ------ ------
BALANCE, December 31, 1995........... $ -- 50,989 $5,099 $ 602,231 $130,243 $(5,869) 41 $(861)
========= ======= ====== ========= ======== =========== ====== ======
</TABLE>
TOTAL
---------
BALANCE, December 31, 1992 as
previously reported................ $ 139,625
Adjustment for pooling of
interests.......................... 209,833
---------
BALANCE, December 31, 1992........... 349,458
Shares issued under employee benefit
plans.............................. 986
Stock grants and options exercised... 6,600
Issuance of Common Stock............. 92,496
Issuance of Common Stock in
acquisition........................ 2,083
Settlement of a note receivable from
a former officer................... 224
Conversion of Preferred Stock........ --
Redemption of Preferred Stock........ (354)
Currency translation adjustment...... (4,892)
Net income........................... 35,175
Dividends on Preferred Stock
($12.47 per share)................. (7,303)
---------
BALANCE, December 31, 1993........... 474,473
Shares issued under employee benefit
plans.............................. 179
Stock grants and options exercised... 1,559
Issuance of Common Stock in
acquisition........................ 213,570
Currency translation adjustment...... 2,876
Net income........................... 41,977
---------
BALANCE, December 31, 1994........... 734,634
Shares issued under employee benefit
plans.............................. 188
Stock grants and options exercised... 8,280
Currency translation adjustment...... (1,701)
Net loss............................. (10,558)
---------
BALANCE, December 31, 1995........... $ 730,843
=========

The accompanying notes are an integral part of these consolidated financial
statements.

24
<PAGE>
WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1995
(IN THOUSANDS)

1995 1994 1993
----------- ----------- -----------
NET INCOME (LOSS).................... $ (10,558) $ 41,977 $ 35,175
Income items not requiring
(providing) cash:
Depreciation and amortization... 95,957 71,037 50,449
Non-cash portion of
acquisition-related costs and
other
unusual charges............... 66,196 -- --
Deferred income tax provision
(benefit)..................... (20,781) 649 (214)
Gain on sales of assets, net.... (12,503) (9,559) (8,452)
Unrealized foreign currency
gain.......................... -- (2,843) --
Undistributed earnings of
affiliates.................... 189 868 905
Minority interests.............. 220 (119) 77
Increase (decrease) in operating
cash flow resulting from:
Receivables, net.............. 16,277 (32,345) (26,330)
Inventories, net.............. (12,603) (14,619) (2,921)
Payment of deferred loan
costs...................... (892) (818) (6,424)
Prepayments and other......... (5,799) (477) 1,194
Accounts payable and accrued
liabilities................ (46,307) 15,798 (961)
Other long-term liabilities... 9,477 (1,980) 2,151
----------- ----------- -----------
CASH PROVIDED BY OPERATING
ACTIVITIES......................... 78,873 67,569 44,649
----------- ----------- -----------
Purchases of property, plant and
equipment.......................... (110,625) (114,018) (63,757)
Acquisitions, net of notes issued and
cash acquired...................... (139,226) (105,850) (117,835)
Proceeds from sales of property,
plant and equipment................ 40,630 19,810 31,072
Other net cash flows from investing
activities......................... (9,245) (1,502) (2,052)
----------- ----------- -----------
CASH USED IN INVESTING ACTIVITIES.... (218,466) (201,560) (152,572)
----------- ----------- -----------
Borrowings under credit facilities... 411,737 144,539 102,500
Repayment of borrowings.............. (283,346) (45,299) (110,462)
Proceeds from Common Stock issuance,
net of costs....................... -- -- 92,496
Net cash flows from currency hedging
transactions....................... (2,719) (1,036) --
Proceeds from stock option exercises,
sales of stock to employee
benefit plans and other............ 6,268 1,693 6,878
Preferred Stock dividends paid....... -- -- (7,303)
----------- ----------- -----------
CASH PROVIDED BY FINANCING
ACTIVITIES......................... 131,940 99,897 84,109
----------- ----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH............................... 4,347 66 (1,076)
----------- ----------- -----------
DECREASE IN CASH AND CASH
EQUIVALENTS........................ (3,306) (34,028) (24,890)

CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR.................. 36,106 70,134 95,024
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF
YEAR............................... $ 32,800 $ 36,106 $ 70,134
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest........................ $ 14,396 $ 6,380 $ 2,773
Income taxes.................... 17,741 14,236 12,136
Purchases of equipment financed by
debt............................... -- 3,213 625

The accompanying notes are an integral part of these consolidated financial
statements.

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --

BASIS OF PRESENTATION. On October 5, 1995, Weatherford International
Incorporated ("Weatherford") completed a merger with Enterra Corporation
("Enterra") and changed its name to "Weatherford Enterra, Inc." (see Note 2).
The merger was accounted for as a pooling of interests; accordingly, the
accompanying consolidated financial statements have been restated to include
the results of Enterra for all periods presented. Contemporaneously with the
Enterra merger, Weatherford effected a one-for-two reverse stock split of its
Common Stock (see Note 6). In this report, all per common share amounts and
numbers of common shares have been restated to reflect the reverse stock
split.

PRINCIPLES OF CONSOLIDATION. The accompanying consolidated financial
statements include the accounts of Weatherford Enterra, Inc. and subsidiaries
(the "Company" or "Weatherford Enterra") after elimination of all significant
intercompany accounts and transactions. The Company accounts for its 50% or
less-owned affiliates using the equity method.

ACCOUNTING ESTIMATES. The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at the
balance sheet date and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from such estimates.

CASH AND CASH EQUIVALENTS. The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents. The reported value of all financial instruments approximates
market value. Prepayments and other current assets at December 31, 1995 and
1994 included cash of approximately $2,367,000 and $2,117,000, respectively,
which was restricted as a result of exchange controls in certain foreign
countries or cash collateral requirements for performance bonds, letters of
credit and customs bonds.

INVENTORIES. Inventories, net of allowances, are valued at the lower of
cost (first-in, first-out or average) or market and are summarized as follows
(in thousands):

1995 1994
----------- -----------
Spare parts and components........... $ 34,911 $ 45,894
Raw materials........................ 44,494 37,944
Work in process...................... 27,287 19,605
Finished goods....................... 58,691 49,748
----------- -----------
$ 165,383 $ 153,191
=========== ===========

Work in process and finished goods inventories include the costs of
materials, labor and plant overhead.

PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment is
depreciated on a straight-line basis over the estimated useful lives of the
assets. Estimated useful lives of assets are as follows:

Buildings and improvements 5 - 45 years
Rental and service equipment 3 - 15 years
Machinery and other equipment 3 - 15 years

Expenditures for major additions and improvements are capitalized while minor
replacements, maintenance and repairs are charged to expense as incurred. When
property is retired or otherwise disposed of, the cost and accumulated
depreciation are removed from the related accounts, and any resulting gain or
loss is included in the consolidated statements of income.

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

GOODWILL. Goodwill represents the excess of the aggregate price paid by
the Company in acquisitions accounted for as purchases over the fair market
value of the net assets acquired. Goodwill is amortized on a straight-line
basis generally over a period of 40 years. Management continually evaluates
whether events or circumstances have occurred that indicate the remaining
estimated useful life of goodwill may warrant revision or that the remaining
balance of goodwill may not be recoverable. Goodwill amortization expense
totaled $5,852,000, $2,970,000 and $191,000 during 1995, 1994 and 1993,
respectively. Accumulated amortization at December 31, 1995 and 1994 was
$9,808,000 and $3,956,000, respectively.

INCOME TAXES. The Company applies the liability method of accounting for
income taxes. Accordingly, deferred tax assets and liabilities are determined
based on the estimated future tax effects of differences between the financial
statement and tax bases of assets and liabilities given the provisions of
enacted tax laws.

The Company does not provide federal income taxes on the undistributed
earnings of certain of its foreign subsidiaries because it believes these
amounts are permanently invested outside the United States. The cumulative
amount of such undistributed earnings on which federal taxes have not been
provided was $107,255,000 at December 31, 1995. If these foreign earnings were
to be ultimately remitted, certain foreign withholding taxes would be payable,
and U.S. federal income taxes payable at that time would be reduced by foreign
tax credits generated by the repatriation, net of operating loss carryforwards
and tax credit carryforwards.

ENVIRONMENTAL EXPENDITURES. Environmental expenditures that relate to
ongoing business activities are expensed or capitalized, in accordance with
the Company's capitalization policy. Expenditures that relate to the
remediation of an existing condition caused by past operations, and which do
not contribute to current or future revenues, are expensed. Liabilities for
these expenditures are recorded when it is probable that obligations have been
incurred and the costs can be reasonably estimated. Estimates are based on
currently available facts and technology, presently enacted laws and
regulations and the Company's prior experience in remediation of contaminated
sites. Liabilities included $17,743,000 and $9,371,000 of accrued
environmental expenditures at December 31, 1995 and 1994, respectively.

FOREIGN CURRENCY TRANSLATION. The functional currency for most of the
Company's international operations is the applicable local currency. The
translation of the foreign currencies into U.S. dollars is performed for
balance sheet accounts using exchange rates in effect at the balance sheet
date and for income statement accounts using a weighted average exchange rate
for the period. The gains or losses resulting from such translation are
included as a separate component of stockholders' equity. Gains or losses
resulting from foreign currency transactions are included in the consolidated
statements of income.

FOREIGN EXCHANGE CONTRACTS. The Company occasionally enters into foreign
exchange contracts only as a hedge against certain existing economic
exposures, and not for speculative or trading purposes. These contracts reduce
exposure to currency movements affecting existing assets and liabilities
denominated in foreign currencies, such exposure resulting primarily from
trade receivables and payables and intercompany loans. The future value of
these contracts and the related currency positions are subject to offsetting
market risk resulting from foreign currency exchange rate volatility. The
counterparties to the Company's foreign exchange contracts are creditworthy
multinational commercial banks. Management believes that the risk of
counterparty nonperformance is immaterial. At December 31, 1995 and 1994, the
Company had contracts maturing the following January to sell $56,594,000 and
$55,880,000, respectively, in Norwegian kroner, U.K. pounds sterling and Dutch

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
guilders. Had such respective contracts matured on December 31, 1995 and 1994,
the Company's required cash outlay would have been $38,000 and $461,000,
respectively.

REVENUE RECOGNITION. Revenues are recognized when services and rentals
are provided and when products and equipment are shipped. Proceeds from
customers for the cost of oilfield rental equipment that is involuntarily
damaged or lost downhole are reflected as revenues.

INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE. Income (loss) per
common and common equivalent share is computed on the basis of the weighted
average number of shares of Common Stock and common stock equivalents, if
dilutive, outstanding during the periods. For purposes of this calculation,
dividends on the Company's $2.625 Convertible Exchangeable Cumulative
Preferred Stock (the "Preferred Stock") of $1,153,000 were deducted from net
income during 1993. Preferred Stock dividends in arrears paid in 1993 totaling
$6,150,000 had been deducted from net income for purposes of calculating
income per common and common equivalent share during the years in which the
arrearages accumulated. Fully diluted income per share is equal to primary
income per share in all periods presented.

CONCENTRATION OF CREDIT RISK. The Company grants credit to its
customers, which are primarily in the oil and gas industry. Credit risk with
respect to trade accounts receivable is generally diversified due to the large
number of entities comprising the Company's customer base and their dispersion
across many different countries. The Company performs periodic credit
evaluations of its customers and generally does not require collateral. The
Company monitors its exposure for credit losses and maintains an allowance for
anticipated losses (see Note 12).

RECLASSIFICATIONS. Certain reclassifications were made to previously
reported amounts in the consolidated financial statements and notes to make
them consistent with the current presentation format.

(2) ACQUISITIONS AND MERGERS --

Results of operations for business combinations accounted for as
purchases are included in the accompanying consolidated financial statements
since the date of acquisition. With respect to business combinations accounted
for as poolings of interests, the consolidated financial statements have been
restated for all periods presented as if the companies had been combined since
inception.

ENTERRA. On October 5, 1995, Weatherford completed a merger with
Enterra, a worldwide provider of specialized services and products to the oil
and gas industry through its oilfield, pipeline and gas compression services
businesses. After giving effect to a contemporaneous one-for-two reverse stock
split (see Note 6), Weatherford issued approximately 23,668,000 shares of
Common Stock in exchange for all the outstanding shares of Enterra common
stock based on an exchange ratio of 0.845 of a share of Weatherford Common
Stock for each share of Enterra common stock outstanding. The merger was
accounted for as a pooling of interests.

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A reconciliation of revenues and net income (loss) of the combined
entities as restated follows (in thousands):

JANUARY 1, 1995 YEAR ENDED DECEMBER 31,
THROUGH ------------------------
OCTOBER 5, 1995 1994 1993
---------------- ----------- -----------
Revenues:
Weatherford................. $312,466 $ 374,506 $ 335,434
Enterra..................... 348,573 302,243 165,057
---------------- ----------- -----------
Combined.................... $661,039 $ 676,749 $ 500,491
================ =========== ===========
Net Income (Loss):
Weatherford................. $ 28,621 $ 29,460 $ 21,990
Enterra..................... (3,609) 12,517 13,185
---------------- ----------- -----------
Combined.................... $ 25,012 $ 41,977 $ 35,175
================ =========== ===========

ENERGY INDUSTRIES. On December 15, 1995, the Company acquired
substantially all of the assets of the natural gas compression business of
Energy Industries, Inc. and Zapata Energy Industries, L.P. (collectively,
"Energy Industries") in a transaction accounted for as a purchase. Energy
Industries was engaged in the business of fabricating, selling, installing,
renting and servicing natural gas compressor units used in the oil and gas
industry. The Company paid approximately $130,000,000 in cash, subject to
adjustment, and assumed certain liabilities totaling approximately
$12,485,000.

H & H. On September 1, 1994, Weatherford completed a merger with H & H
Oil Tool Co., Inc. ("H & H"), a rental and fishing tool company operating in
California and the Rocky Mountain Region. The Company issued approximately
1,323,000 shares of Common Stock in exchange for all the outstanding shares of
H & H common stock based on an exchange ratio of 0.3945 of a share of Company
Common Stock for each share of H & H common stock outstanding. The merger was
accounted for as a pooling of interests. In connection with the H & H merger,
Weatherford repaid indebtedness of H & H totaling $1,595,000, which included a
$1,370,000 note payable to a shareholder of H & H. In addition, Weatherford
recorded acquisition-related costs totaling $2,500,000, primarily representing
transaction fees and employee termination and facility closure costs to
consolidate the H & H operations into Weatherford.

TOTAL ENERGY. On August 12, 1994, Enterra acquired all of the
outstanding common stock of Total Energy Services Company ("Total Energy") in
exchange for shares of Enterra common stock valued, in the aggregate, at
$213,570,000 in a transaction accounted for as a purchase. Total Energy was
primarily engaged in the businesses of designing, fabricating, selling,
installing and renting gas compressor units and of manufacturing and servicing
specialized oilfield equipment for use in the oil and gas industry. Enterra
also acquired the minority interests in two Total Energy subsidiaries for
$23,000,000 in cash, paid transaction costs and employment-related obligations
totaling approximately $15,000,000 and assumed Total Energy's long-term debt
of $75,000,000.

ODFJELL RENTAL. On April 15, 1994, Weatherford acquired the rental
assets and business of various companies comprising the Rental Division of
Odfjell Drilling and Consulting Company (collectively, "Odfjell Rental") in a
transaction accounted for as a purchase. Odfjell Rental was engaged in the
rental of oilfield tools to the oil and gas industry in Norway, the United
Kingdom, the Netherlands and Southeast Asia. Weatherford paid $56,200,000 in
cash and assumed certain contractual rights and obligations.

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following unaudited pro forma summary results of operations assume
that the acquisitions of Energy Industries, Total Energy and Odfjell Rental
occurred on January 1, 1994 (in thousands except per share amounts):

1995(1) 1994
----------- -----------
Revenues............................. $ 920,456 $ 903,060
Net income........................... $ 71,727 $ 85,887
Income per common and common
equivalent share................... $ 1.41 $ 1.69

- ------------

(1) Includes unusual charges of $28,282,000, or $0.24 per common share. See
Note 3.

The unaudited pro forma summary results of operations are not necessarily
indicative of results of operations that would have occurred had the
transactions taken place on January 1, 1994 or of future results of operations
of the combined businesses.

HOMCO. On April 1, 1993, Weatherford acquired substantially all of the
assets of Homco International, Inc. and its subsidiaries (collectively,
"Homco") in a transaction accounted for as a purchase. Homco's primary
businesses included rental tools and fishing tool services and manufactured
products. Weatherford paid Homco $97,500,000 in cash and assumed certain
liabilities totaling approximately $39,200,000. In connection with the Homco
acquisition, Weatherford recorded acquisition-related costs totaling
$4,000,000, primarily representing employee termination and facility closure
costs to consolidate the Homco operations into Weatherford. Between April 1,
1993 and December 31, 1993, the Company sold five Homco business lines for
total consideration of $25,853,000, consisting of cash of $17,353,000 and
notes receivable and marketable securities valued at approximately $8,500,000.
No gains or losses were recognized in connection with these sales.

OTHER ACQUISITIONS. During 1995, 1994 and 1993, the Company acquired
several businesses in addition to those mentioned above in transactions
accounted for as purchases. The impact of these acquisitions on reported
results of operations, on a pro forma basis, was not material to the Company's
consolidated results of operations.

(3) ACQUISITION-RELATED COSTS AND OTHER UNUSUAL CHARGES --

In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
SFAS No. 121 requires that long-lived assets and intangibles to be held and
used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable and that long-lived assets and intangibles to be disposed of be
reported at the lower of carrying amount or fair value net of selling costs.
SFAS No. 121 also establishes the procedures for review of recoverability, and
measurement of impairment if necessary, of long-lived assets and intangibles
to be held and used by an entity.

During the second quarter of 1995, the Company adopted SFAS No. 121 and
management of Enterra made certain strategic decisions which resulted in
$28,282,000 of unusual charges. Such charges included a $10,041,000 writedown
to fair value, based on management's estimation of net sales price, related to
three energy products and services businesses to be sold. Revenues and
operating income related to such businesses were $46,747,000 and $3,080,000 in
1995, $27,940,000 and $2,490,000 in 1994 and $1,024,000 and $231,000 in 1993,
respectively. On September 25, 1995, Enterra sold substantially all of the
fixed assets and inventory of one such business for cash of $9,494,000. At
December 31, 1995, the carrying value of the remaining businesses to be sold
was

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
approximately $18,500,000. One of these businesses was sold on January 31,
1996 for cash of $9,754,000, subject to adjustment.

The remaining second quarter unusual charges of $18,241,000 consisted
primarily of asset writedowns related to certain excess facilities, equipment
and inventories, and estimated costs in connection with the closure of certain
pipeline businesses and the consolidation of certain oilfield service
administrative and operating facilities. This restructuring resulted in
reductions of approximately 40 and 80 personnel in the pipeline and oilfield
services segment, respectively.

During the fourth quarter of 1995, the Company recorded expenses of
$59,900,000 related to the merger with Enterra and the financial impact of
management decisions related to the future operations of the combined
companies. The acquisition-related costs primarily consisted of transaction
costs, severance and termination agreements with former officers and
employees, facility closure costs primarily to consolidate the oilfield
service operations and administrative functions of Enterra and Weatherford
(reducing approximately 600 personnel), and the reduction in recorded value of
certain assets that had diminished future value in the operations of the
combined Company.

A summary of the 1995 acquisition-related costs and other unusual charges
follows (in thousands):

SECOND FOURTH
QUARTER QUARTER YEAR
------- ------- -------
Enterra merger transaction-related
costs.............................. $ -- $18,800 $18,800
Severance and termination costs...... 1,588 10,900 12,488
Facility closure and consolidation
costs.............................. 1,893 19,050 20,943
Writedowns of assets to be sold...... 10,041 2,240 12,281
Other asset writedowns............... 13,762 8,210 21,972
Other................................ 998 700 1,698
------- ------- -------
$28,282 $59,900 $88,182
======= ======= =======

Weatherford recorded acquisition-related costs of $2,500,000 in the third
quarter of 1994 related to the H & H merger and $4,000,000 in the second
quarter of 1993 in connection with the Homco acquisition (See Note 2). The
1994 and 1993 acquisition-related costs primarily represented transaction
costs of the H & H merger and employee termination and facility closure costs
to consolidate the operations of H & H and Homco into Weatherford.

(4) LONG-TERM DEBT --

Long-term debt consisted of the following (in thousands):

1995 1994
----------- -----------
Bank term loan....................... $ 200,000 $ 67,105
Bank revolving credit facility....... 120,000 122,500
Foreign bank debt, denominated in
foreign currencies................. 2,071 129
Industrial Revenue Bonds............. 3,085 3,310
Other indebtedness................... 3,804 3,515
----------- -----------
328,960 196,559
Less -- Amounts due within one
year............................... 36,670 17,813
----------- -----------
$ 292,290 $ 178,746
=========== ===========

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In connection with the Enterra merger, the Company entered into new bank
credit facilities (the "Facilities") consisting of a $200,000,000 term loan
(the "Term Loan") and a $200,000,000 revolving credit facility (the "Revolving
Credit Facility"). The Facilities replaced the previous primary bank credit
facilities of Weatherford and Enterra. The Term Loan is payable in 23 equal
quarterly installments commencing March 31, 1996. The Revolving Credit
Facility matures on September 30, 2000. Amounts outstanding under the
Facilities accrue interest at a variable rate ranging from 0.375% to 0.625%
above a specified Eurodollar rate, depending on the Company's total debt-to-
total capitalization ratio. The applicable interest rate on amounts
outstanding at December 31, 1995 was 6.4%. A commitment fee ranging from 0.15%
to 0.225% per annum, depending on the Company's total debt-to-total
capitalization ratio, is payable quarterly on the unused portion of the
Revolving Credit Facility. The Facilities agreement requires that the Company
maintain certain financial ratios and limits the Company's ability to incur
indebtedness, make investments and dispose of assets.

The Industrial Revenue Bonds are payable in annual installments ranging
from $275,000 to $610,000, plus interest, through July 2002. The applicable
rate of interest on amounts outstanding at December 31, 1995 was 5.2%. The
Industrial Revenue Bonds are collateralized by a $3,142,000 irrevocable letter
of credit.

Maturities of the Company's long-term debt at December 31, 1995 were as
follows (in thousands):

1996................................. $ 36,670
1997................................. 38,022
1998................................. 36,001
1999................................. 35,605
2000................................. 155,392
Thereafter........................... 27,270
-----------
$ 328,960
===========

At December 31, 1995, the Company had $80,000,000 available to borrow
under the Revolving Credit Facility and $11,822,000 available for borrowing
under working capital facilities of certain of the Company's international
subsidiaries. In addition, the Company has various credit facilities available
only for stand-by letters of credit and bid and performance bonds, pursuant to
which funds are available to the Company to secure performance obligations and
certain retrospective premium adjustments under insurance policies. The
Company had a total of $18,857,000 of letters of credit and bid and
performance bonds outstanding at December 31, 1995.

(5) INCOME TAXES --

The components of income (loss) before income taxes and minority
interests were as follows (in thousands):

1995 1994 1993
----------- --------- ---------
Foreign.............................. $ 23,853 $ 35,233 $ 37,064
United States........................ (38,807) 23,583 11,823
----------- --------- ---------
$ (14,954) $ 58,816 $ 48,887
=========== ========= =========

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The income tax provision (benefit) was comprised of the following (in
thousands):

1995 1994 1993
----------- --------- ---------
Current:
Foreign......................... $ 15,219 $ 13,790 $ 12,655
U.S. alternative minimum taxes
and
state income taxes........... 946 2,519 1,194
----------- --------- ---------
Total current............. 16,165 16,309 13,849
----------- --------- ---------
Deferred:
Foreign......................... 3,038 847 (769)
U.S. Federal.................... (23,819) (198) 555
----------- --------- ---------
Total deferred............ (20,781) 649 (214)
----------- --------- ---------
$ (4,616) $ 16,958 $ 13,635
=========== ========= =========

The consolidated provision for income taxes differs from the provision
computed at the statutory U.S. federal income tax rate of 35% for the
following reasons (in thousands):

1995 1994 1993
----------- --------- ---------
Tax provision at U.S. statutory
rate............................... $ (5,234) $ 20,399 $ 16,930
Foreign income, taxed at more (less)
than U.S.
statutory rate..................... 7,687 2,448 (938)
Intercompany dividends............... 557 1,479 665
Benefit of U.S. NOL carryforwards.... (15,299) (8,869) (3,667)
Nondeductible goodwill............... 1,601 692 45
Nondeductible expenses related to
acquisitions....................... 3,307 -- --
Other nondeductible expenses......... 1,819 394 236
Tax-exempt interest income........... -- (102) (449)
U.S. alternative minimum taxes and
state income taxes................. 946 517 813
----------- --------- ---------
$ (4,616) $ 16,958 $ 13,635
=========== ========= =========

On the accompanying consolidated balance sheets, current deferred tax
assets and liabilities are netted within each tax jurisdiction. The components
of the net deferred tax assets (liabilities) shown on the consolidated balance
sheets are as follows (in thousands):

1995 1994
--------- -----------
Current deferred tax assets.......... $ 20,850 $ 16,192
Valuation allowance, current......... (9,855) (4,358)
Non-current deferred tax assets...... 11,299 48,780
Valuation allowance, non-current..... (6,644) (26,625)
--------- -----------
Total deferred tax assets....... 15,650 33,989
--------- -----------
Current deferred tax liabilities..... (117) (1,486)
Non-current deferred tax
liabilities........................ (5,627) (48,120)
--------- -----------
Total deferred tax
liabilities........................ (5,744) (49,606)
--------- -----------
Net deferred tax assets
(liabilities)...................... $ 9,906 $ (15,617)
========= ===========

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The change in the valuation allowance in 1995 primarily relates to
current year utilization of U.S. net operating loss ("NOL") carryforwards and
management's assessment that future taxable income will be sufficient to
enable the Company to utilize remaining NOL carryforwards. The tax effects of
significant temporary differences giving rise to deferred tax assets
(liabilities) are as follows (in thousands):

1995 1994
----------- -----------
Net operating loss and tax credit
carryforwards...................... $ 40,056 $ 30,458
Depreciation and amortization........ (39,378) (37,332)
Financial reserves and accruals not
yet deductible..................... 16,804 16,770
Other differences between financial
and tax bases
of assets and liabilities.......... 8,923 5,470
Valuation allowances................. (16,499) (30,983)
----------- -----------
$ 9,906 $ (15,617)
=========== ===========

The Company has U.S. alternative minimum tax credit carryforwards of
approximately $3,674,000 which do not expire and can be used to reduce regular
tax to the extent it exceeds alternative minimum tax liability in future
years. The Company also has U.S. NOL carryforwards available to reduce future
U.S. taxable income of $47,780,000 expiring between 1999 and 2009 and general
business credit carryforwards available to reduce future U.S. federal income
taxes payable of $9,677,000 expiring between 1996 and 2000.

(6) CAPITAL STOCK --

COMMON STOCK. On October 5, 1995, contemporaneously with the Enterra
merger (see Note 2), the Company effected a one-for-two reverse stock split of
Company Common Stock. In this report, all per common share amounts and numbers
of common shares have been restated to reflect the reverse stock split. The
Company has not declared dividends on Common Stock since December 1982 and
management does not anticipate paying dividends on Common Stock at any time in
the foreseeable future. On April 27, 1993, the Company completed the sale,
pursuant to a public offering, of 4,675,000 shares of Common Stock at a price
of $21.00 per share. The proceeds to the Company of $92,496,000, net of
underwriters' discount and expenses of $536,000, were substantially used to
repay indebtedness incurred in connection with the acquisition of Homco (See
Note 2).

PREFERRED STOCK. In the fourth quarter of 1993, the Company paid cash
dividends in arrears totaling $6,150,000, or $10.50 per preferred share, on
its Preferred Stock. These dividend arrearages accumulated during a 16-quarter
period from 1986 through 1989. On October 27, 1993, the Company announced that
it would redeem all shares of Preferred Stock outstanding on November 30, 1993
(the "Redemption Date") at a redemption price of $25.263 per preferred share.
Prior to the Redemption Date, holders of 571,693 shares of Preferred Stock
elected to convert such shares into 777,498 shares of Common Stock. The
remaining 14,012 shares of Preferred Stock were redeemed for an aggregate
redemption price of $354,000.

EMPLOYEE STOCK PLANS. The Company has a number of stock option plans
pursuant to which officers and other key employees may be granted options to
purchase shares of Common Stock. At December 31, 1995, there were 2,324,217
shares available for issuance under the plans, at fair market value. Options
generally become exercisable in three annual installments, beginning one year
after the date of grant. Unexercised options expire five or ten years after
the date of grant. Pursuant to the Enterra merger, the Company replaced all
options outstanding under Enterra's option plan with options to purchase an
equivalent number of shares of Company Common Stock. The Company has a Non-

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Employee Director Stock Option Plan (the "Director Option Plan") pursuant to
which each non-employee director receives upon election as a director an
initial option to purchase 2,500 shares and, at each annual meeting
thereafter, an additional option to purchase 500 shares of Common Stock, in
each case at fair market value. At December 31, 1995, there were 60,000 shares
available for issuance under the Director Option Plan. Options become
exercisable six months after the date of grant, and unexercised options expire
ten years after the date of grant. Enterra had a similar plan, pursuant to
which directors of Enterra received immediately exercisable options to
purchase shares of Enterra common stock, at fair market value. All outstanding
options under the Enterra director plan were exercised prior to the Enterra
merger.

The following table summarizes activity related to stock option plans of
the Company:

<TABLE>
<CAPTION>
NUMBER OF SHARES
-------------------------
NON-EMPLOYEE OPTION PRICE
EMPLOYEES DIRECTORS PER SHARE
--------- ------------ -------------------------
<S> <C> <C> <C>
Outstanding, December 31, 1992....... 1,176,929 35,913 $ 4.50 - $ 23.95
Granted......................... 187,125 10,562 10.14 - 24.71
Exercised....................... (363,341) (8,450) 4.50 - 23.95
Terminated...................... (33,770) -- 8.75 - 20.27
--------- ------------
Outstanding, December 31, 1993....... 966,943 38,025 5.63 - 24.71
Granted......................... 156,201 29,575 12.04 - 23.95
Exercised....................... (84,188) (8,450) 5.63 - 19.09
Terminated...................... (60,021) -- 6.75 - 19.75
--------- ------------
Outstanding, December 31, 1994....... 978,935 59,150 6.75 - 24.71
Granted......................... 953,985 57,575 18.50 - 26.00
Exercised....................... (220,284) (88,725) 8.75 - 23.08
Terminated...................... (424,404) -- 11.75 - 21.30
--------- ------------
Outstanding, December 31, 1995....... 1,288,232 28,000 6.75 - 26.00
========= ============
Exercisable, December 31, 1995....... 432,494 20,500 6.75 - 24.71
========= ============
</TABLE>

In addition to the options in the above table, the Company granted
options to purchase 34,200, 45,337 and 84,500 shares of Common Stock in 1991,
1994 and 1995, respectively, to former directors and former employees of
acquired companies and to a former officer of the Company. These options were
granted pursuant to separate agreements and are not covered by an option plan.
Exercises of such options totaled 4,400, 5,600 and 40,334 shares in 1993, 1994
and 1995, respectively, and 113,703 of such options were outstanding and
exercisable at December 31, 1995 at prices ranging from $10.14 to $25.75 per
share.

The Company has a Stock Appreciation Rights Plan (the "SAR Plan")
pursuant to which certain officers and other key employees were granted stock
appreciation units ("SAR's"). The SAR Plan was amended in 1992 to provide that
no additional grants would be made. SAR's were awarded in connection with
stock options granted under one of the Company's stock option plans and can be
exercised only if the related stock option is exercised. Compensation expense
is recorded based on the increase in the market price of the Company's Common
Stock since the date of grant. At December 31, 1995, there were 54,166 SAR's
outstanding, all of which were vested, at an average price of $10.46 per SAR.
During 1995, 1994 and 1993, the Company recognized compensation expense of
$121,000, $350,000 and $801,000, respectively, in connection with SAR's.

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company has a stock bonus plan (the "Bonus Plan") pursuant to which
officers and certain other key employees of the Company may be granted shares
of Common Stock. The market value of shares granted under the Bonus Plan is
recorded to compensation expense on the date of grant. With respect to the
Bonus Plan, the Company granted 9,875 shares and recognized compensation
expense of $195,000 during 1994. The Company granted no shares under the Bonus
Plan in 1995 and 1993. There were 25,179 shares available for future grants
under the Bonus Plan at December 31, 1995.

The Company has a restricted stock plan for certain officers of the
Company and previously had a restricted stock plan for non-employee directors
of the Company (collectively, the "Restricted Plans"), pursuant to which
shares of common stock may be granted. Shares granted under the Restricted
Plans are subject to certain restrictions on ownership and transferability
when granted. With respect to grants made to officers prior to 1993, such
restrictions generally lapse in four equal annual installments based on
continued employment. Beginning in 1993, restrictions on grants made to
officers lapse in part based on continued employment and in part based on
Company performance. With respect to grants made to non-employee directors,
such restrictions lapsed in three equal annual installments based on continued
service. The director Restricted Plan has expired by its terms. The
compensation related to the restricted stock grants is deferred and amortized
to expense on a straight-line basis over the period of time the restrictions
are in place, and the unamortized portion is classified as a reduction of
paid-in capital in the accompanying consolidated balance sheets. The following
table provides a summary of activity related to the Restricted Plans:

RESTRICTED PLAN
RESTRICTED PLAN FOR NON-EMPLOYEE
FOR OFFICERS DIRECTORS
---------------- -----------------
Outstanding, December 31, 1992....... 71,038 39,545
Granted (market price: $15.75
per share)................... 41,250 --
Forfeited....................... (5,000) (3,330)
Restrictions terminated......... (24,150) (21,924)
---------------- -----------------
Outstanding, December 31, 1993....... 83,138 14,291
Granted (market price: $19.75
per share)................... 25,450 --
Forfeited....................... (2,438) --
Restrictions terminated......... (52,318) (14,291)
---------------- -----------------
Outstanding, December 31,
1994......................... 53,832 --
Granted (market price: $18.50
per share)................... 29,500 --
Restrictions terminated......... (47,193) --
---------------- -----------------
Outstanding, December 31, 1995....... 36,139 --
================ =================
Shares available for future grants at
December 31, 1995.................. 160,437 --
================ =================
Compensation expense:
1995............................ $392,000 $ --
1994............................ 512,000 84,000
1993............................ 876,000 187,000
Deferred compensation at December 31:
1995............................ $884,000 $ --
1994............................ 730,000 --

The Company has an Employee Stock Purchase Plan (the "ESPP"), pursuant to
which eligible employees can purchase shares of Common Stock through payroll
deductions. The Company matches

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
a specified percentage of the employee contributions made to the ESPP. Company
matching contributions to the ESPP totaled $48,000, $45,000 and $46,000 during
1995, 1994 and 1993, respectively. There were 72,377 shares available for
future purchases under the ESPP at December 31, 1995.

(7) RETIREMENT AND EMPLOYEE BENEFIT PLANS --

The Company has defined benefit and defined contribution pension plans
covering substantially all U.S. employees and certain international employees.
Plan benefits are generally based on years of service and average compensation
levels. The Company's funding policy is to contribute, at a minimum, the
annual amount required under applicable governmental regulations. With respect
to certain international plans, the Company has purchased irrevocable annuity
contracts to settle certain benefit obligations. Plan assets are invested
primarily in equity and fixed income mutual funds.

Pension expense related to the Company's defined contribution pension
plans totaled $4,489,000, $3,691,000 and $2,962,000 in 1995, 1994 and 1993,
respectively. Pension expense related to the Company's defined benefit pension
plans included the following components (in thousands):

1995 1994 1993
--------- --------- ---------
Service cost -- benefits earned
during the period.................. $ 692 $ 1,071 $ 650
Interest cost on projected benefit
obligation......................... 365 310 237
Actual return on plan assets......... (354) (47) (227)
Net amortization and deferral........ 115 (121) 107
--------- --------- ---------
$ 818 $ 1,213 $ 767
========= ========= =========

The following table sets forth the funded status of the Company's defined
benefit pension plans and the assumptions used in computing such information
(in thousands, except percentages):

U.S. PLANS NON-U.S. PLANS
-------------------- --------------------
1995 1994 1995 1994
--------- --------- --------- ---------
Actuarial present value of benefit
obligations:
Vested benefit obligation.......... $ 941 $ 426 $ 2,591 $ 2,170
========= ========= ========= =========
Accumulated benefit obligation..... $ 1,441 $ 689 $ 2,939 $ 2,402
========= ========= ========= =========
Projected benefit obligation....... $ 2,042 $ 1,075 $ 3,735 $ 2,992
Plan assets at fair value.......... 1,130 958 1,729 1,422
--------- --------- --------- ---------
Projected benefit obligation in
excess of plan assets............ (912) (117) (2,006) (1,570)
Unrecognized prior service cost.... 10 -- 183 183
Unrecognized net (gain) loss....... 481 (57) (732) (879)
Unrecognized transition obligation. -- -- 160 157
--------- --------- --------- ---------
Unfunded accrued pension cost...... (421) (174) (2,395) (2,109)
Adjustment for minimum liability... (21) -- -- --
--------- --------- --------- ---------
Pension liability.................. $ (442) $ (174) $ (2,395) $ (2,109)
========= ========= ========= =========
Assumed discount rates............. 7.25% 8.5% 6.8-8.0% 7.5-8.0%
Assumed rates of increase in
compensation levels.............. 4.0% 5.25% 4.0-5.0% 4.0-5.0%
Assumed expected long-term rate of
return on plan assets............ 8.0% 8.0% 8.0% 8.0%

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) COMMITMENTS AND CONTINGENCIES --

Aggregate minimum rental commitments under noncancelable operating leases
with lease terms in excess of one year as of December 31, 1995 were as follows
(in thousands):

1996................................. $ 11,570
1997................................. 7,363
1998................................. 6,255
1999................................. 5,490
2000................................. 4,345
Thereafter........................... 27,467
---------
$ 62,490
=========

The Company incurred total rental expense under operating leases of
$14,069,000, $15,329,000 and $13,689,000 in 1995, 1994 and 1993, respectively.

The Company is involved in certain claims and lawsuits arising in the
normal course of business. In the opinion of management, the likelihood that
uninsured losses, if any, resulting from the ultimate resolution of these
matters will have a material adverse effect on the financial position, results
of operations or liquidity of the Company is remote.

(9) SEGMENT INFORMATION --

The Company is a diversified international energy service and
manufacturing company that provides a variety of services and equipment to the
exploration, production and transmission sectors of the oil and gas industry.
The Company operates in four industry segments -- oilfield services, energy
products and services, gas compression and pipeline services. Revenues by
industry segment and geographic area include both revenues from unaffiliated
customers and intersegment revenues from related companies. The price at which
intercompany sales are made is generally based on the selling price to
unaffiliated customers less a discount or the direct product cost plus a
mark-up. Indirect expenses have been allocated to industry segments in
proportion to outside revenues.

Export sales from the United States to unaffiliated customers in other
geographic areas were as follows (in thousands):

1995 1994 1993
--------- --------- ---------
Europe/Commonwealth of Independent
States............................. $ 10,904 $ 16,443 $ 8,014
Canada............................... 14,729 10,557 12,396
Africa............................... 17,792 9,605 820
Middle East.......................... 3,843 4,209 7,215
Asia-Pacific......................... 11,242 17,047 10,943
Latin America........................ 5,552 4,969 6,422
Other................................ 1,403 381 3,578
--------- --------- ---------
$ 65,465 $ 63,211 $ 49,388
========= ========= =========

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Information with respect to industry and geographic segments follows (in
thousands):

<TABLE>
<CAPTION>
CORPORATE
OILFIELD ENERGY PRODUCTS GAS PIPELINE AND
SERVICES AND SERVICES COMPRESSION SERVICES ELIMINATIONS CONSOLIDATED
-------- --------------- ----------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
1995:
Outside revenues..................... $470,548 $ 225,422 $ 94,386 $68,551 $ -- $ 858,907
Intersegment revenues................ -- 20,586 -- -- (20,586) --
Acquisition-related costs and other
unusual charges.................... 31,715 22,694 -- 4,762 29,011 88,182
Operating income (loss).............. 41,214 (14,210) 7,788 3,602 (38,212) 182
Identifiable assets.................. 545,688 172,770 434,146 41,940 64,316 1,258,860
Depreciation and amortization........ 65,560 8,636 14,421 5,610 1,730 95,957
Capital expenditures................. 84,968 6,171 16,246 3,098 142 110,625
1994:
Outside revenues..................... $423,381 $ 143,757 $ 46,145 $63,466 $ -- $ 676,749
Intersegment revenues................ -- 11,748 -- -- (11,748) --
Acquisition-related costs............ 2,500 -- -- -- -- 2,500
Operating income (loss).............. 52,665 16,668 4,047 (2,237 ) (5,439) 65,704
Identifiable assets.................. 587,454 193,055 267,988 60,890 44,583 1,153,970
Depreciation and amortization........ 54,605 4,532 4,969 5,088 1,843 71,037
Capital expenditures................. 94,722 5,011 10,857 3,266 162 114,018
1993:
Outside revenues..................... $358,048 $ 92,164 $ -- $50,279 $ -- $ 500,491
Intersegment revenues................ -- 10,779 -- -- (10,779) --
Acquisition-related costs............ 4,000 -- -- -- -- 4,000
Operating income (loss).............. 44,743 10,726 -- 2,019 (7,817) 49,671
Identifiable assets.................. 429,105 80,972 -- 57,376 68,149 635,602
Depreciation and amortization........ 41,266 2,872 -- 4,920 1,391 50,449
Capital expenditures................. 56,988 3,681 -- 3,004 84 63,757
</TABLE>
<TABLE>
<CAPTION>
CORPORATE
UNITED OTHER AND
STATES CANADA EUROPE AFRICA INTERNATIONAL ELIMINATIONS
-------- -------- -------- ------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
1995:
Outside revenues..................... $471,672 $106,491 $110,065 $57,450 $ 113,229 $ --
Intersegment revenues................ 10,091 167 6,049 -- 1,638 (17,945)
Acquisition-related costs and other
unusual charges.................... 43,276 2,850 4,302 624 8,119 29,011
Operating income (loss).............. 5,745 11,382 3,088 13,912 4,267 (38,212)
Identifiable assets.................. 790,625 73,368 141,673 40,299 148,579 64,316
Capital expenditures................. 59,474 9,953 9,605 5,655 25,796 142

1994:
Outside revenues..................... $383,076 $ 75,809 $ 84,830 $41,574 $ 91,460 $ --
Intersegment revenues................ 17,499 287 5,104 -- 1,372 (24,262)
Acquisition-related costs............ 2,500 -- -- -- -- --
Operating income (loss).............. 28,924 15,502 3,023 11,204 12,490 (5,439)
Identifiable assets.................. 706,175 89,462 125,365 38,708 149,677 44,583
Capital expenditures................. 68,903 8,989 12,309 1,581 22,099 137

1993:
Outside revenues..................... $285,163 $ 25,811 $ 73,291 $38,168 $ 78,058 $ --
Intersegment revenues................ 8,383 675 7,982 115 1,375 (18,530)
Acquisition-related costs............ 4,000 -- -- -- -- --
Operating income (loss).............. 17,996 4,920 5,607 6,726 22,239 (7,817)
Identifiable assets.................. 324,730 35,943 65,975 30,526 110,279 68,149
Capital expenditures................. 33,161 2,312 9,521 2,835 15,854 74
</TABLE>
CONSOLIDATED
------------
1995:
Outside revenues..................... $ 858,907
Intersegment revenues................ --
Acquisition-related costs and other
unusual charges.................... 88,182
Operating income (loss).............. 182
Identifiable assets.................. 1,258,860
Capital expenditures................. 110,625
1994:
Outside revenues..................... $ 676,749
Intersegment revenues................ --
Acquisition-related costs............ 2,500
Operating income (loss).............. 65,704
Identifiable assets.................. 1,153,970
Capital expenditures................. 114,018
1993:
Outside revenues..................... $ 500,491
Intersegment revenues................ --
Acquisition-related costs............ 4,000
Operating income (loss).............. 49,671
Identifiable assets.................. 635,602
Capital expenditures................. 63,757

WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(10) UNAUDITED QUARTERLY FINANCIAL DATA (IN THOUSANDS EXCEPT PER SHARE
AMOUNTS)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER(1) QUARTER QUARTER(2) YEAR(3)
-------- ---------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
1995:
Revenues........................ $219,289 $ 211,079 $220,375 $ 208,164 $ 858,907
Gross profit.................... 61,898 55,239 62,456 53,968 233,561
Acquisition-related costs and
other
unusual charges.............. -- 28,282 -- 59,900 88,182
Operating income (loss)......... 24,324 (9,163) 25,227 (40,206) 182
Income (loss) before income
taxes
and minority interests....... 20,580 (12,902) 21,352 (43,984) (14,954)
Net income (loss)............... 14,439 (3,145) 13,148 (35,000) (10,558)
Net income (loss) per share..... $ 0.29 $ (0.06) $ 0.26 $ (0.68) $ (0.21)
1994:
Revenues........................ $138,282 $ 135,395 $181,624 $ 221,448 $ 676,749
Gross profit.................... 40,581 38,040 52,310 57,685 188,616
Acquisition-related costs....... -- -- 2,500 -- 2,500
Operating income................ 14,668 15,246 17,801 17,989 65,704
Income before income taxes
and minority interests....... 14,419 14,316 15,753 14,328 58,816
Net income...................... 10,291 10,720 10,604 10,362 41,977
Net income per share............ $ 0.25 $ 0.26 $ 0.23 $ 0.20 $ 0.94
</TABLE>
- ------------
(1) Includes unusual charges in 1995 of $28,282,000, or $0.24 per common
share. See Note 3.

(2) Includes acquisition-related costs in 1995 of $59,900,000, or $0.93 per
common share. See Note 3.

(3) Includes acquisition-related costs and other unusual charges in 1995 of
$88,182,000, or $1.17 per common share. See Note 3. Due to changes in the
weighted average common shares outstanding, the sums of the quarterly per
share amounts for 1995 do not equal earnings per share for the year.

(11) RELATED PARTY TRANSACTIONS The Company provides management services
under various gas compressor system fleet rental agency agreements with five
limited partnerships and two Subchapter S corporations. Certain of the
partners of the limited partnerships and shareholders and officers of the
Subchapter S corporations are employees of the Company. The Company recorded
management fee income under these agency agreements totaling $1,104,000 and
$386,000 during 1995 and 1994, respectively. Since the date of the Total
Energy acquisition (see Note 2), the limited partnerships and Subchapter S
corporations earned net revenues under these agency agreements, after
deducting the management fees, of $859,000 and $299,000 during 1995 and 1994,
respectively.

(12) ALLOWANCE FOR DOUBTFUL ACCOUNTS Activity in the Company's allowance
for doubtful accounts, deducted from receivables in the consolidated balance
sheets, was as follows (in thousands):

1995 1994 1993
--------- --------- ---------
Balance at beginning of year......... $ 11,240 $ 11,747 $ 6,301
Additions charged to costs and
expenses........................... 6,499 2,702 2,603
Deductions for uncollectible
receivables written off............ (1,878) (3,437) (1,085)
Acquired businesses.................. -- 164 3,945
Translation and other, net........... 81 64 (17)
--------- --------- ---------
$ 15,942 $ 11,240 $ 11,747
========= ========= =========

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE MATTERS.

None.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

For certain information concerning directors of the Company, reference is
made to the information included under the caption "Election of Directors"
included in the definitive Proxy Statement, which relates to the Annual
Meeting of Stockholders of the Company to be held on May 17, 1996 (the "Proxy
Statement"), to be filed within 120 days after the close of the fiscal year,
which information is incorporated herein by such reference. For certain
information concerning executive officers of the Company, see the caption
"Executive Officers" in Item 1 elsewhere in this Report.

ITEM 11. EXECUTIVE COMPENSATION.

For information concerning this Item, reference is made to the caption
"Executive Compensation and Other Matters" in the Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

For information concerning this Item, reference is made to the caption
"Ownership of Company Stock" in the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

For information concerning this Item, reference is made to the caption
"Executive Compensation and Other Matters" in the Proxy Statement.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) 1. Consolidated Financial Statements of Weatherford Enterra, Inc.
and Subsidiaries:

Report of Arthur Andersen LLP, Independent Public Accountants, dated
February 29, 1996.

Consolidated Balance Sheets -- December 31, 1995 and 1994.

Consolidated Statements of Income for Each of the Three Years in the
Period Ended December 31, 1995.

Consolidated Statements of Stockholders' Equity for Each of the
Three Years in the Period Ended December 31, 1995.

Consolidated Statements of Cash Flows for Each of the Three Years in
the Period Ended December 31, 1995.

Notes to Consolidated Financial Statements.

2. Exhibits:

2.1 -- Amended and Restated Assets Purchase Agreement among Homco
International, Inc., A-1 Bit and Tool Co., Inc., A-1 Bit and
Tool Company B.V., A-1 Bit and Tool Company A/S, A-1 Bit and
Tool Company GmbH, A-1 Bit and Tool Company Pte., Ltd., Homco
Arabian Gulf, Inc., Homco International, Inc., W.R. Grace &
Company and Weatherford International Incorporated
(incorporated by reference to Exhibit 2.2 to the Company's
Form 10-K Annual Report for the year ended December 31, 1992
(File No. 1-7867)).

2.2 -- Agreement and Plan of Merger dated as of June 23, 1995, as
amended by Amendment No. 1 to Agreement and Plan of Merger
dated as of August 28, 1995, between Weatherford International
Incorporated and Enterra Corporation (incorporated by
reference to Exhibit 2.1 to the Company's Registration
Statement on Form S-4 (Registration No. 33-62195)).

2.3 -- Amendment No. 2 to Agreement and Plan of Merger dated as of
October 5, 1995, between Weatherford International
Incorporated and Enterra Corporation (incorporated by
reference to Exhibit 2.2 to the Company's Current Report on
Form 8-K dated October 5, 1995 (File No. 1-7867)).

2.4 -- Agreement dated as of September 20, 1995, among Zapata
Corporation, Energy Industries, Inc., Zapata Energy
Industries, L.P., Enterra Corporation and Enterra Compression
Company (incorporated by reference to Exhibit 2 to Enterra
Corporation's Current Report on Form 8-K dated October 2, 1995
(File No. 1-8153)).

3.1 -- Corrected Restated Certificate of Incorporation of the
Company.

3.2 -- Bylaws of the Company, as amended through March 17, 1994
(incorporated by reference to Exhibit 3.1 to the Company's
Current Report on Form 8-K dated April 28, 1994 (File No.
1-7867)).

4.1 -- Credit Agreement dated as of October 5, 1995 among Weatherford
Enterra, Inc., Weatherford Enterra U.S., Inc.,
Weatherford/Lamb, Inc., Bank of America Illinois, as
Documentation Agent, Texas Commerce Bank National Association,
as Administrative Agent, Credit Lyonnais New York Branch, ABN
Amro Bank, N.V., Bank of Montreal, First Interstate Bank of
Texas, N.A., Arab Banking Corporation (B.S.C.) and the
financial institutions listed on the signature pages thereto
(incorporated by reference to Exhibit 4.1 to the Company's
Form 10-Q Quarterly Report for the quarter ended September 30,
1995 (File No. 1-7867)).

4.2 -- First Amendment to Credit Agreement dated as of December 29,
1995 among Weatherford Enterra, Inc., Weatherford Enterra,
U.S., Inc. Weatherford/Lamb, Inc., Weatherford Enterra U.S.,
Limited Partnership, Bank of America Illinois, as
Documentation Agent, Texas Commerce Bank National Association,
as Administrative Agent, Credit Lyonnais New York Branch, ABN
Amro Bank, N.V., Bank of Montreal, First Interstate Bank of
Texas, N.A., Arab Banking Corporation (B.S.C.) and the
financial institutions listed on the signature pages thereto.

4.3 -- Agreement dated as of June 23, 1995, as amended as of August
28, 1995, among Weatherford International Incorporated and
American Gas & Oil Investors, Limited Partnership, AmGO II,
Limited Partnership, AmGO III, Limited Partnership, First
Reserve Secured Energy Assets Fund, Limited Partnership, First
Reserve Fund V, Limited Partnership, First Reserve Fund V-2,
Limited Partnership, and First Reserve Fund VI, Limited
Partnership (collectively, the "First Reserve Funds"), and
First Reserve Corporation (incorporated by reference to
Exhibit 4.6 to the Company's Registration Statement on Form
S-4 (Registration No. 33-62195)).

*10.1-- 1987 Stock Option Plan (incorporated by reference to Exhibit
10.1 to the Company's Form 10-K Annual Report for the year
ended December 31, 1994 (File No. 1-7867)).

*10.2-- 1991 Stock Option Plan (incorporated by reference to Exhibit
10.2 to the Company's Form 10-K Annual Report for the year
ended December 31, 1994 (File No. 1-7867)).

*10.3-- Stock Appreciation Rights Plan (incorporated by reference to
Exhibit 10.5 to the Company's Form 10-K Annual Report for the
year ended December 31, 1990 (File No. 1-7867)) and First
Amendment to Stock Appreciation Rights plan (incorporated by
reference to Exhibit 10.3 to the Company's Form 10-K Annual
Report for the year ended December 31, 1994 (File No.
1-7867)).

*10.4-- Change of Control Agreements with Philip Burguieres, James
R. Burke, M.E. Eagles, Norman W. Nolen and H. Suzanne Thomas
(incorporated by reference to Exhibit 10.5 to the Company's
Form 10-K Annual Report for the year ended December 31, 1993
(File No. 1-7867)); James D. Green, Jon Nicholson and Weldon
W. Walker (incorporated by reference to Exhibit 10.4 to the
Company's Form 10-K Annual Report for the year ended December
31, 1994 (File No. 1-7867)); Philip D. Gardner, Robert A.
Seekely and F. Thomas Tilton (incorporated by reference to
Exhibit 10.1 to the Company's Form 10-Q Quarterly Report for
the quarter ended March 31, 1995 (File No. 1-7867)); and
Steven C. Grant (incorporated by reference to Exhibit 10.1 to
the Company's Form 10-Q Quarterly Report for the quarter ended
September 30, 1995 (File No. 1-7867); First Amendment to
Change of Control Agreements with Philip Burguieres, James R.
Burke, M.E. Eagles, Norman W. Nolen, H. Suzanne Thomas, James
D. Green, Jon Nicholson and Weldon W. Walker (incorporated by
reference to Exhibit 10.2 to the Company's Form 10-Q Quarterly
Report for the quarter ended March 31, 1995 (File No.
1-7867)); and Philip D. Gardner, Robert A. Seekely and F.
Thomas Tilton (incorporated by reference to Exhibit 10.2 to
the Company's Registration Statement on Form S-4 (Registration
No. 33-62195)); and Second Amendment to Change of Control
Agreements with Philip Burguieres, James R. Burke, M. E.
Eagles, Norman W. Nolen, H. Suzanne Thomas, James D. Green,
Jon Nicholson and Weldon W. Walker (incorporated by reference
to Exhibit 10.1 to the Company's Registration Statement on
Form S-4 (Registration No. 33-62195)).

*10.5-- Restricted Stock Incentive Plan, as amended December 13,
1990 (incorporated by reference to Exhibit 10.9 to the
Company's Form 10-K Annual Report for the year ended December
31, 1990 (File No. 1-7867)).

*10.6-- Indemnification Agreements with Thomas N. Amonett, William
E. Greehey, Robert K. Moses, Jr. and H. Suzanne Thomas
(incorporated by reference to Exhibit 10.10 to the Company's
Form 10-K Annual Report for the year ended December 31, 1987
(File No. 1-7867)); Philip Burguieres and Norman W. Nolen
(incorporated by reference to Exhibit 10.4 to the Company's
Form 10-Q Quarterly Report for the quarter ended June 30, 1991
(File No. 1-7867)); James R. Burke and John W. Johnson
(incorporated by reference to Exhibit 10.9 to the Company's
Form 10-K Annual Report for the year ended December 31, 1991
(File No. 1-7867)); M.E. Eagles (incorporated by reference to
Exhibit 10.8 to the Company's Form 10-K Annual Report for the
year ended December 31, 1992 (File No. 1-7867)); Weldon W.
Walker (incorporated by reference to Exhibit 10.7 to the
Company's Form 10-K Annual Report for the year ended December
31, 1994 (File No. 1-7867)); and John A. Hill, William E.
Macaulay, Robert L. Parker, Sr., R. Rudolph Reinfrank, Roger
M. Widmann and Steven C. Grant (incorporated by reference to
Exhibit 10.2 to the Company's Form 10-Q Quarterly Report for
the quarter ended September 30, 1995 (File No. 1-7867)).

*10.7-- Supplemental Executive Retirement Plan (incorporated by
reference to Exhibit 10.10 to the Company's Form 10-K Annual
Report for the year ended December 31, 1992 (File No.
1-7867)).

*10.8-- Executive Incentive Stock Bonus Plan, as amended December
31, 1992 (incorporated by reference to Exhibit 10.11 to the
Company's Form 10-K Annual Report for the year ended December
31, 1992 (File No. 1-7867)).

*10.9-- Non-Employee Director Retirement Plan (incorporated by
reference to Exhibit 10.12 to the Company's Form 10-K Annual
Report for the year ended December 31, 1992 (File No.
1-7867)).

*10.10-- Supplemental Savings Plan (incorporated by reference to
Exhibit 10.11 to the Company's Form 10-K Annual Report for the
year ended December 31, 1994 (File No. 1-7867)).

*10.11-- Deferred Compensation Plan for Non-Employee Directors
(incorporated by reference to Exhibit 10.12 to the Company's
Form 10-K Annual Report for the year ended December 31, 1994
(File No. 1-7867)).

*10.12-- Non-Employee Director Stock Option Plan (incorporated by
reference to Exhibit 10.13 to the Company's Form 10-K Annual
Report for the year ended December 31, 1994 (File No.
1-7867)).

*10.13-- Consulting Agreement dated October 5, 1995 between
Weatherford Enterra, Inc. and D. Dale Wood (incorporated by
reference to Exhibit 10.3 to the Company's Form 10-Q Quarterly
Report for the quarter ended September 30, 1995 (File No.
1-7867)).

22 -- Subsidiaries of the Company

24 -- Consent of Independent Public Accountants

27.1 -- Article 5 Financial Data Schedule

27.2 -- Article 5 Restated Financial Data Schedule

* Management contract or compensatory plan or arrangement

The Company will furnish to the Commission upon request a copy of each
other instrument with respect to the long-term debt of the Company and its
subsidiaries that defines the rights of holders of such debt or includes
provisions that provide for cross default under such instruments.

The Company will furnish a copy of any exhibit described above to the
beneficial holder of its securities upon receipt of a written request
therefor, provided that such request sets forth a good faith representation
that as of March 29, 1996, the record date for the Company's 1996 Annual
Meeting of Stockholders, such beneficial holder is entitled to vote at such
meeting, and provided further that such holder pays to the Company a fee
compensating the Company for its reasonable expenses in furnishing such
exhibits.

(b) Reports on Form 8-K:

A report on Form 8-K dated October 5, 1995 was filed on October 16,
1995 by the Company reporting the completion of the Enterra Merger.

A report on Form 8-K dated December 15, 1995 was filed on December
29, 1995 by the Company reporting the completion of the acquisition by
the Company of the assets of Energy Industries. Amendment No. 1 to Form
8-K on Form 8-K/A dated December 15, 1995 was filed on February 27, 1996
by the Company reporting the audited historical financial statements of
Energy Industries and the pro forma financial statements of the Company
including Energy Industries.

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON MARCH 20,
1996.

WEATHERFORD ENTERRA, INC.

By: PHILIP BURGUIERES
PHILIP BURGUIERES
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.

SIGNATURE TITLE DATE
----------------- ------------------------------------ --------------
PHILIP BURGUIERES Chairman of the Board, President and March 20, 1996
(PHILIP BURGUIERES) Chief Executive Officer (Principal
Executive Officer)

NORMAN W. NOLEN Senior Vice President, Chief March 20, 1996
(NORMAN W. NOLEN) Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)

THOMAS N. AMONETT Director March 20, 1996
(THOMAS N. AMONETT)

WILLIAM E. GREEHEY Director March 20, 1996
(WILLIAM E. GREEHEY)

JOHN A. HILL Director March 20, 1996
(JOHN A. HILL)

JOHN W. JOHNSON Director March 20, 1996
(JOHN W. JOHNSON)

WILLIAM E. MACAULAY Director March 20, 1996
(WILLIAM E. MACAULAY)

ROBERT K. MOSES, JR. Director March 20, 1996
(ROBERT K. MOSES, JR.)

ROBERT L. PARKER SR. Director March 20, 1996
(ROBERT L. PARKER, SR.)

R. RUDOLPH REINFRANK Director March 20, 1996
(R. RUDOLPH REINFRANK)

ROGER M. WIDMANN Director March 20, 1996
(ROGER M. WIDMANN)

CORRECTED RESTATED CERTIFICATE OF INCORPORATION

WEATHERFORD ENTERRA, INC.

WEATHERFORD ENTERRA, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, does
hereby certify that a Restated Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware on October 5, 1995 and that said
Restated Certificate requires correction as permitted by Section 103 of the
General Corporation Law of the State of Delaware.

The inaccuracy or defect of the Restated Certificate to be corrected is
as follows: The corporate action referred to in Article FOURTH fails to set
forth the effective time of the reverse stock split with respect to the
Corporation's Common Stock issued and outstanding immediately prior to the
effective time. This Certificate sets forth the Corrected Restated Certificate
of Incorporation:

RESTATED CERTIFICATE OF INCORPORATION

WEATHERFORD ENTERRA, INC.
(Originally incorporated on December 14, 1970
under the name Dixel Industries Incorporated)

FIRST: The name of the Corporation is Weatherford Enterra,
Inc.

SECOND: The registered office of the Corporation in the State of
Delaware is located at 1013 Centre Road, in the City of Wilmington, County of
New Castle. The name and address of its registered agent is The Prentice-Hall
Corporation System, Inc., 1013 Centre Road, Wilmington, Delaware.

THIRD: The nature of the business, objects and purposes to be
transacted, promoted or carried on by the Corporation are:

To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal
in and with goods, wares and merchandise and personal property of every class
and description;

To acquire, and pay for in cash, stock or bonds of this Corporation or
otherwise, the goodwill, rights, assets and property, and to undertake or assume
the whole or any part of the obligations or liabilities of any person,
partnership, trust, joint stock company, syndicate, firm, association or
corporation;

To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trademarks and trade names, relating to
or useful in connection with any business of this Corporation;

To acquire by purchase, subscription or otherwise, and to receive,
hold, own, sell, assign, exchange, transfer, mortgage, pledge or otherwise
dispose of or deal in and with any of the shares of the capital stock, or any
voting trust certificates in respect of the shares of capital stock, scrip,
warrants, rights, bonds, debentures, notes, trust receipts and other securities,
obligations, chosen in action and evidences of indebtedness or interest issued
or created by any corporations, joint stock companies, syndicates, associations,
firms, trusts or persons, public or private, or by the government of the United
States of America, or by any foreign government, or by any state, territory,
province, municipality or other political subdivision or by any governmental
agency, and as owner thereof to possess and exercise all the rights, powers and
privileges of ownership, including the right to execute consents and vote
thereon, and to do any and all acts and things necessary or advisable for the
preservation, protection, improvement and enhancement in value thereof;

To borrow or raise moneys for any of the purposes of the Corporation
and, from time to time without limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable instruments
and evidences of indebtedness, and to secure the payment of any thereof and of
the interest thereon by mortgage upon or pledge, conveyance or assignment in
trust of the whole or any part of the property of the Corporation, whether at
the time owned or thereafter acquired, and to sell, pledge or otherwise dispose
of such bonds or other obligations of the Corporation for its corporate
purposes;

To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and
otherwise deal in and with, real or personal property, or any interest therein,
wherever situated, and to sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, all or any of the Corporation's property and
assets, or any interest therein, wherever situated; and

To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.

The business and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this Restated
Certificate of Incorporation, but the business and purposes specified in each of
the foregoing clauses of this article shall be regarded as independent business
and purposes.

FOURTH: The total number of shares of stock of all classes which the
Corporation shall have authority to issue is 81,000,000, of which 1,000,000
shares of the par value of $1 each shall be designated Serial Preferred Stock
(the "Serial Preferred Stock"), and of which 80,000,000 shares of the par value
of $.10 each shall be

designated Common Stock (the "Common Stock"). A statement of all powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, in respect of the Serial Preferred Stock and the Common Stock is as
follows:

A. REVERSE STOCK SPLIT

Effective as of 12:15 p.m. on October 5, 1995 (the "Effective Time"),
each two shares of Common Stock issued and outstanding immediately prior to the
Effective Time shall automatically be changed and converted, without any action
on the part of the holder thereof, into one share of Common Stock and, in lieu
of interests in a fraction of a share of Common Stock, each holder whose
aggregate holdings of Common Stock prior to the Effective Time amounted to a
number of shares not evenly divisible by two shall be entitled to receive for
such interest in a fraction of a share of Common Stock, and at the Effective
Time such interest in a fraction of a share of Common Stock shall be converted
into the right to receive, upon the surrender of the stock certificates formerly
representing shares of Common Stock, an amount in cash equal to $12.88 for such
interest in a fraction of a share of Common Stock.

B. SERIAL PREFERRED STOCK

(1) Shares of Serial Preferred Stock may be issued from time to
time in one or more series, each such series to have
distinctive serial designations, as shall hereafter be
determined in the resolution or resolutions providing for the
issue of such Preferred Stock from time to time adopted by the
Board of Directors pursuant to authority so to do, which is
hereby vested in the Board of Directors.

(2) Each series of Preferred Stock

(a) may have such number of shares;

(b) may have such voting powers, full or limited, or may
be without voting powers;

(d) may be entitled to receive dividends (which may be
cumulative or noncumulative), at such rate or rates,
on such conditions, from such date or dates, and at
such times, and payable in preference to, or in such
relation to, the dividends payable on any other class
or classes or series of stock;

(e) may have such rights upon the dissolution of, or upon
any distribution of the assets of, the Corporation;

(f) may be made convertible into, or exchangeable for,
shares of any other class or classes or of any other
series of the same or any other class or classes of
stock of the Corporation at such price or prices or
at such rates of exchange, and with such adjustments;

(g) may be entitled to the benefit of a sinking fund or
purchase fund to be applied to the purchase or
redemption of shares of such series in such amount or
amounts;

(h) may be entitled to the benefit of conditions and
restrictions upon the creation of indebtedness of the
Corporation or any subsidiary, upon the issue of any
additional stock (including additional shares of such
series or of any other series) and upon the payment
of dividends or the making of other distributions on
and the purchase, redemption or other acquisition by
the Corporation or any subsidiary of any outstanding
stock of the Corporation; and

(i) may have such other relative, participating, optional
or other special rights, and qualifications,
limitations or restrictions thereof;

as shall be stated in said resolution or resolutions providing
for the issue of such Serial Preferred Stock. Except where
otherwise set forth in the resolution or resolutions adopted
by the Board of Directors providing for the issue of any
series of Serial Preferred Stock, the number of shares
comprising such series may be increased or decreased (but not
below the number of shares then outstanding) from time to time
by like action of the Board of Directors.

(3) Shares of any series of Serial Preferred Stock which have been
redeemed (whether through the operation of a sinking fund or
otherwise) or purchased by the Corporation, or which, if
convertible or exchangeable, have been converted into or
exchanged for shares of stock of any other class or classes
shall have the status of authorized and unissued shares of
Serial Preferred Stock and may be reissued as a part of the
series of which they were originally a part or may be
reclassified and reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board
of Directors or as part of any other series of Serial
Preferred Stock, all subject to the conditions or restrictions
on issuance set forth in the resolution or resolutions adopted
by the Board of Directors providing for the issue of any
series of Serial Preferred Stock and to any filing required by
law.

C. COMMON STOCK

(1) Except as otherwise provided by law or by the resolution or
resolutions of the Board of Directors providing for the issue
of any series of the Serial Preferred Stock, the Common Stock
shall have the exclusive right to vote for the election of
directors and for all other purposes, each holder of the
Common Stock being entitled to one vote for each share held.

(2) Subject to all of the rights of the Serial Preferred Stock or
any series thereof, the holders of the Common Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends
payable in cash, stock or otherwise.

(3) Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, and after the
holders of the Serial Preferred Stock of each series shall
have been paid in full the amounts to which they respectively
shall be entitled, or a sum sufficient for such payments in
full shall have been set aside, the remaining net assets of
the Corporation shall be distributed pro rata to the holders
of the Common Stock in accordance with their respective rights
and interests, to the exclusion of the holders of the Serial
Preferred Stock.

D. GENERAL PROVISIONS

(1) Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly
called annual or special meeting of stockholders of the
Corporation and may not be effected by any consent in writing
by such stockholders. Special meetings of stockholders of the
Corporation may be called only by the Board of Directors
pursuant to a resolution approved by a majority of the entire
Board of Directors, upon not less than thirty nor more than
sixty days written notice. Notwithstanding anything contained
in this Restated Certificate of Incorporation to the contrary,
the affirmative vote of the holders of at least 80% of the
voting power of all of the shares of the Corporation entitled
to vote for the election of directors shall be required to
amend or repeal, or to adopt any provision inconsistent with,
this paragraph (1), Section D of Article FOURTH.

(2) No stockholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of
stock of the Corporation, whether now or hereafter authorized,
or any bonds, debentures or other securities convertible into
stock, but such additional shares of stock or other securities
convertible into stock may be issued or disposed of by the
Board of Directors to such persons on such terms as, in its
discretion, it shall deem advisable.

FIFTH: The Corporation is to have perpetual existence.

SIXTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized:

(1) To make, alter or repeal the by-laws of the Corporation, in
the manner and subject to any limitations contained in such
by-laws, to the extent such action is not inconsistent with
the provisions of this Restated Certificate of Incorporation.

(2) To authorize and cause to be executed mortgages and liens upon
the real and personal property of the Corporation.

(3) To set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper
purpose and to abolish any such reserve in the manner in which
it was created.

(4) By a majority of the whole Board of Directors, to designate
one or more committees, each committee to consist of two or
more of the directors of the Corporation. The Board of
Directors may designate one or more directors as alternate
members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. Any such
committee, to the extent provided in the resolution or in the
by-laws of the Corporation, shall have and may exercise the
powers of the Board of Directors in the management of the
business and affairs of the Corporation and may authorize the
seal of the Corporation to be affixed to all papers which may
require it; provided, however, the by-laws may provide that in
the absence or disqualification of any member of such
committee or committees the member or members thereof present
at any meeting and not disqualified from voting, whether or
not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting
in the place of any such absent or disqualified member.

(5) When and as authorized by the affirmative vote of the holders
of a majority of the stock issued and outstanding having
voting power given at a stockholders meeting duly called upon
such notice as is required by statute, this Restated
Certificate of Incorporation or the by-laws of the
Corporation, to sell, lease or exchange all or substantially
all the property and assets of the Corporation, including its
goodwill and its corporate franchises, upon such terms and
conditions and for such consideration, which may consist in
whole or in part of money or property, including securities of
any other corporation or corporations, as the Board of
Directors shall deem expedient and for the best interests of
the Corporation; provided, however, that to the extent any
such sale, lease or exchange would constitute a "Business
Combination" as defined in Article ELEVENTH of this Restated
Certificate of Incorporation, the provisions of such Article
ELEVENTH shall control and no such sale, lease or exchange
shall be made except upon compliance with and pursuant to the
applicable terms and provisions of such Article ELEVENTH.

SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement

and the said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of this
Corporation, as the case may be, and also on this Corporation.

EIGHTH: Meetings of stockholders may be held within or without the
State of Delaware, as the by-laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the by-laws of the Corporation. Elections of
directors need not be by written ballot unless the by-laws of the Corporation
shall so provide.

NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation, in
the manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation; provided, however,
that to the extent that any provision of this Restated Certificate of
Incorporation requires for approval of any such amendment, alteration, change or
repeal the approving vote of a greater percentage of the capital stock of the
Corporation having voting power with respect to such action than the percentage
required by statute, then such provision shall be controlling and no such action
shall be taken except upon a vote meeting the greater percentage requirements of
such provision.

TENTH: Board of Directors.

A. NUMBER, ELECTION AND TERMS. The business and affairs of the
Corporation shall be managed by a Board of Directors consisting of not
less than six nor more than fifteen persons. The exact number of
directors within the minimum and maximum limitations specified in the
preceding sentence shall be fixed from time to time by the Board of
Directors pursuant to a resolution adopted by a majority of the entire
Board of Directors. At the 1983 annual meeting of stockholders, the
directors shall be divided into three classes, as nearly equal in
number as possible, with the term of office of the first class to
expire at the 1984 annual meeting of stockholders, the term of office
of the second class to expire at the 1985 annual meeting of
stockholders and the term of office of the third class to expire at the
1986 annual meeting of stockholders. At each annual meeting of
stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall
be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election.

B. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Subject to the rights of
the holders of any series of Serial Preferred Stock then outstanding,
newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement,
disqualification, removal from office or other cause shall be filled by
a majority vote of the directors then in office, and directors so
chosen shall hold office for a term expiring at the annual meeting of
stockholders at which the term of the class to which they have been
elected expires. No decrease in the

number of directors constituting the Board of Directors shall shorten
the term of any incumbent director.

C. REMOVAL. Subject to the rights of the holders of any series of Serial
Preferred Stock then outstanding, any director or the entire Board of
Directors, may be removed from office at any time, but only for cause
and only by the affirmative vote of the holders of at least 80% of the
voting power of all of the shares of the Corporation entitled to vote
for the election of directors.

D. AMENDMENT, REPEAL, ETC. Notwithstanding anything contained in this
Restated Certificate of Incorporation to the contrary, the affirmative
vote of the holders of at least 80% of the voting power of all the
shares of the Corporation entitled to vote for the election of
directors shall be required to amend or repeal, or to adopt any
provision inconsistent with, this Article TENTH.

E. LIMITATION OF LIABILITY. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law,
as the same exists or hereafter may be amended, or (iv) for any
transaction from which the director derived an improper personal
benefit. This section shall not eliminate or limit the liability of a
director for any act or omission occurring prior to the effective date
of the amendment adding this section to the Company's Restated
Certificate of Incorporation. Any repeal or modification of this
section by the stockholders of the Company shall be prospective only,
and shall not adversely affect any limitation on the personal liability
of a director of the Corporation existing at the time of such repeal or
modification. If the Delaware General Corporation Law hereafter is
amended to authorize the further elimination or limitation of the
personal liability of directors, then the liability of each director of
the Corporation, in addition to the limitation on personal liability
provided herein, shall be limited to the fullest extent permitted by
the amended Delaware General Corporation Law.

ELEVENTH: Vote Required for Certain Business Combinations.

A. HIGHER VOTE REQUIRED FOR APPROVAL OF CERTAIN BUSINESS COMBINATIONS.

(1) HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS. In addition to
any affirmative vote required by law or this Restated
Certificate of Incorporation, and except as otherwise
expressly provided in paragraph B of this Article ELEVENTH:

(a) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any
Interested Stockholder (as hereinafter defined) or
(ii) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such
merger or

consolidation would be, an Affiliate (as hereinafter
defined) of an Interested Stockholder; or

(b) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series
of transactions) to or with any Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate Fair Market Value (as
hereinafter defined) of $1,000,000 or more; or

(c) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of
transactions) of any securities of the Corporation or
any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange
for cash, securities or other property (or a
combination thereof) having an aggregate Fair Market
Value of $1,000,000 or more; or

(d) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation
proposed by or on behalf of an Interested Stockholder
or any Affiliate of any Interested Stockholder; or

(e) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder or any
Affiliate of any Interested Stockholder;

shall require the affirmative vote of the holders of at least
80% of the voting power of the then outstanding shares of
capital stock of the Corporation entitled to vote generally in
the election of directors (the "Voting Stock"), voting
together as a single class (it being understood that for
purposes of this Article ELEVENTH, each share of the Voting
Stock shall have the number of votes granted to it pursuant to
Article FOURTH of this Restated Certificate of Incorporation,
including any resolution of the Board of Directors providing
for the designation of any series of the Serial Preferred
Stock). Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that
a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.

(2) DEFINITION OF "BUSINESS COMBINATION." The term "Business
Combination" as used in this Article ELEVENTH shall mean any
transaction which is

referred to in any one or more of clauses (a) through (e) of
such paragraph (1) of this paragraph A.

B. WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of paragraph A of this
Article ELEVENTH shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such
affirmative vote as is required by law and any other provisions of this
Restated Certificate of Incorporation, if all of the conditions
specified in either of the following paragraphs (1) and (2) are met:

(1) APPROVAL BY CONTINUING DIRECTORS. The Business Combination
shall have been approved by a majority of the Continuing
Directors (as hereinafter defined.)

(2) PRICE AND PROCEDURE REQUIREMENTS. All of the following
conditions shall have been met:

(a) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the
Business Combination of consideration other than cash
to be received per share by holders of Common Stock
in such Business Combination shall be at least equal
to the highest of the following:

(i) (if applicable) the highest per share price
(including any brokerage commissions,
transfer taxes and soliciting dealers fees)
paid by the Interested Stockholder for any
shares of Common Stock acquired by it (A)
within the two-year period immediately prior
to the first public announcement of the
proposal of the Business Combination (the
"Announcement Date") or (B) in the
transaction in which it became an Interested
Stockholder, whichever is higher;

(ii) the Fair Market Value per share of Common
Stock on the Announcement Date or on the
date on which the Interested Stockholder
became an Interested Stockholder (such
latter date is referred to in this Article
ELEVENTH as the "Determination Date"),
whichever is higher; and

(iii) (if applicable) the price per share equal to
the Fair Market Value per share of Common
Stock determined pursuant to subparagraph
B(2)(a)(ii) above, multiplied by the ratio
of (A) the highest per share price
(including any brokerage commissions,
transfer taxes and soliciting dealers fees)
paid by the Interested Stockholder for any
shares of Common Stock acquired by it within
the two-year period immediately prior to the
Announcement Date to (B) the Fair Market
Value per share of Common Stock on the first
day in such two-year period upon which the
Interested Stockholder acquired any shares
of Common Stock.

(b) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the
Business Combination of consideration other than cash
to be received per share by holders of shares of any
other class of outstanding Voting Stock (other than
Institutional Voting Stock, as hereinafter defined)
shall be at least equal to the highest of the
following (it being intended that the requirements of
this subparagraph (B)(2)(b) shall be required to be
met with respect to every class of outstanding Voting
Stock (other than Institutional Voting Stock)),
whether or not the Interested Stockholder has
previously acquired any shares of a particular class
of Voting Stock:

(i) (if applicable) the highest per share price
(including any brokerage commissions,
transfer taxes and soliciting dealers fees)
paid by the Interested Stockholder for any
shares of such class of Voting Stock
acquired by it (A) within the two-year
period immediately prior to the Announcement
Date or (B) in the transaction in which it
became an Interested Stockholder, whichever
is higher;

(ii) (if applicable) the highest preferential
amount per share to which the holders of
shares of such class of Voting Stock are
entitled in the event of any voluntary or
involuntary liquidation, dissolution or
winding up of the Corporation;

(iii) the Fair Market Value per share of such
class of Voting Stock on the Announcement
Date or on the Determination Date, whichever
is higher; and

(iv) (if applicable) the price per share equal to
the Fair Market Value per share of such
class of Voting Stock determined pursuant to
subparagraph B(2)(a)(iii) above, multiplied
by the ratio of (A) the highest per share
price (including any brokerage commissions,
transfer taxes and soliciting dealers fees)
paid by the Interested Stockholder for any
shares of such class of Voting Stock
acquired by it within the two-year period
immediately prior to the Announcement Date
to (B) the Fair Market Value per share of
such class of Voting Stock on the first day
in such two-year period upon which the
Interested Stockholder acquired any shares
of such class of Voting Stock.

(c) The consideration to be received by holders of a
particular class of outstanding Voting Stock
(including Common Stock) shall be in cash or in the
same form as the Interested Stockholder has
previously paid for shares of such class of Voting
Stock. If the Interested Stockholder has paid for
shares of any class of Voting Stock with varying
forms of consideration, the form of consideration for
such class of Voting Stock shall be either cash or

the form used to acquire the largest number of shares
of such class of Voting Stock previously acquired by
it.

(d) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation
of such Business Combination: (i) except as approved
by a majority of the Continuing Directors, there
shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends
(whether or not cumulative) on the outstanding Serial
Preferred Stock; (ii) there shall have been (A) no
reduction in the annual rate of dividends paid on the
Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved
by a majority of the Continuing Directors, and (B)
any increase in such annual rate of dividends as
necessary to reflect any reclassification (including
any reverse stock split), recapitalization,
reorganization or any similar transaction which has
the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure so to
increase such annual rate is approved by a majority
of the Continuing Directors; and (iii) such
Interested Stockholder shall not have become the
beneficial owner of any additional shares of Voting
Stock except as part of the transaction which results
in such Interested Stockholder becoming an Interested
Stockholder.

(e) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder
shall not have received the benefit, directly or
indirectly (except proportionately as a stockholder),
of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in
anticipation of or in connection with such Business
Combination or otherwise.

(f) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934
and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or
regulations) shall be mailed to public stockholders
of the Corporation at least 30 days prior to the
consummation of such Business Combination (whether or
not such proxy or information statement is required
to be mailed pursuant to such Act or subsequent
provisions).

C. CERTAIN DEFINITIONS. For the purposes of this Article ELEVENTH:

(1) A "person" shall mean any individual, firm, corporation or
other entity.

(2) "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:

(a) is the beneficial owner, directly or indirectly, of
more than 20% of the voting power of the outstanding
Voting Stock; or

(b) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the
date in question was the beneficial owner, directly
or indirectly, of 20% or more of the voting power of
the then outstanding Voting Stock; or

(c) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within
the two-year period immediately prior to the date in
question beneficially owned by any Interested
Stockholder, if such assignment or succession shall
have occurred in the course of a transaction or
series of transactions not involving a public
offering within the meaning of the Securities Act of
1933.

(3) A person shall be a "beneficial owner" of any Voting Stock:

(a) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially
owns, directly or indirectly; or

(b) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or
understanding; or

(c) which are beneficially owned, directly or indirectly,
by any other person with which such person or any of
its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares
of Voting Stock.

(4) For purposes of subparagraph (2) of this paragraph C, the
number of shares of Voting Stock deemed to be outstanding
shall include shares deemed owned through application of
subparagraph (3) of this paragraph C but shall not include any
other shares of Voting Stock which may be issuable pursuant to
any agreement, arrangement or understanding, or upon exercise
of conversion rights, warrants or options, or otherwise.

(5) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on May 27, 1983.

(6) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by
the Corporation; provided, however, that for the purposes of
the definition of Interested

Stockholder set forth in subparagraph (2) of this paragraph C,
the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned, directly
or indirectly, by the Corporation.

(7) "Continuing Director" means any member of the Board of
Directors of the Corporation (the "Board") who is unaffiliated
with the Interested Stockholder and was a member of the Board
prior to the time that the Interested Stockholder became an
Interested Stockholder, and any successor of a Continuing
Director who is unaffiliated with the Interested Stockholder
and is recommended to succeed a Continuing Director by a
majority of Continuing Directors then on the Board.

(8) "Fair Market Value" means: (a) in the case of stock, the
highest closing sales price during the 30-day period
immediately preceding the date in question of a share of such
stock on the Composite Tape for New York Stock Exchange Listed
Stocks, or, if such stock is not quoted on the Composite Tape
for the New York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange
Act of 1934 on which such stock is listed, or, if such stock
is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the
30-day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations
System or any system then in use, or if no such quotations are
available, the fair market value on the date in question of a
share of such stock as determined by the Board of Directors in
good faith; and (b) in the case of property other than cash or
stock, the fair market value of such property on the date in
question as determined by the Board of Directors in good
faith.

(9) "Institutional Voting Stock" shall mean any class of Voting
Stock which was issued to and continues to be held solely by
one or more insurance companies, pension funds, commercial
banks, savings banks or similar financial institutions or
institutional investors.

(10) In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than
cash" as used in subparagraphs (2)(a) and (b) of paragraph B
of this Article ELEVENTH shall include the shares of Common
Stock and/or the shares of any other class of outstanding
Voting Stock retained by the holders of such shares.

D. DETERMINATION BY DIRECTORS. Notwithstanding anything to the contrary
in this Article ELEVENTH, the directors of the Corporation shall have
the power to determine for the purposes of this Article ELEVENTH, on
the basis of information known to them after reasonable inquiry, (1)
whether a person is an Interested Stockholder, (2) the number of shares
of Voting Stock beneficially owned by any person, (3) whether a person
is an Affiliate or Associate of another, (4) whether a class of Voting
Stock is Institutional Voting Stock, and (5) whether the assets which
are the subject of any Business Combination have,

or the consideration to be received for the issuance or transfer of
securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $1,000,000 or more.

E. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED STOCKHOLDERS. Nothing
contained in this Article ELEVENTH shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.

F. AMENDMENT, REPEAL, ETC. Notwithstanding any other provisions of this
Restated Certificate of Incorporation or the by-laws of the Corporation
(and notwithstanding the fact that a lesser percentage may be specified
by law, this Restated Certificate of Incorporation or the by-laws of
the Corporation), the affirmative vote of the holders of 80% or more of
the voting power of the shares of the then outstanding Voting Stock,
voting together as a single class, shall be required to amend or
repeal, or adopt any provisions inconsistent with, this Article
ELEVENTH of this Restated Certificate of Incorporation.

IN WITNESS WHEREOF, the Corporation has caused this Corrected Restated
Certificate of Incorporation to be signed by its duly authorized officer on this
18th day of January, 1996.

WEATHERFORD ENTERRA, INC.

By: /S/ H. SUZANNE THOMAS
H. Suzanne Thomas
Senior Vice President, Secretary
and General Counsel

FIRST AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment") is
entered into as of December 29, 1995, among WEATHERFORD ENTERRA, INC., a
Delaware corporation (the "COMPANY"), WEATHERFORD ENTERRA U.S., INC., a Delaware
corporation ("WUSI"), WEATHERFORD/LAMB, INC., a Delaware corporation ("WLI"),
WEATHERFORD ENTERRA U.S., LIMITED PARTNERSHIP, a Louisiana limited partnership
("W/E, L.P."), the several financial institutions party to this First Amendment
(collectively, the "BANKS"; individually, a "BANK"), BANK OF AMERICA ILLINOIS,
as the documentation agent for the Banks (the "DOCUMENTATION AGENT"), TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, as the administrative agent for the Banks
(the "ADMINISTRATIVE AGENT"; together with the Documentation Agent, the
"AGENTS"), CREDIT LYONNAIS NEW YORK BRANCH, as the senior co-agent and ABN AMRO
BANK, N.V., BANK OF MONTREAL, FIRST INTERSTATE BANK OF TEXAS, N.A. and ARAB
BANKING CORPORATION (B.S.C.), as the co-agents. Capitalized terms which are used
herein without definition and which are defined in the Credit Agreement referred
to below shall have the meanings ascribed to them in the Credit Agreement.

WHEREAS, the Company, the Banks, the Agents and the Co-Agents are
parties to a certain Credit Agreement dated as of October 5, 1995 (as at any
time amended, modified or supplemented and in effect from time to time, the
"CREDIT AGREEMENT"); and

WHEREAS, WUSI is transferring substantially all of its assets to W/E,
L.P., whose sole general partner is WUSI and whose sole limited partner is
CRC-Evans Automatic Welding Limited, a Delaware corporation which is a
wholly-owned subsidiary of WUSI;

WHEREAS, the Company, the Banks, the Agents and the co-agents wish to
amend the Credit Agreement to add W/E, L.P. as a Revolving Loan Borrower and to
amend certain other terms of the Credit Agreement; and

WHEREAS, pursuant to SECTION 6.13 of the Credit Agreement W/E, L.P.
will execute a Guaranty;

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agrees as
follows:

SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT.

(a) AMENDMENTS TO ARTICLE I.

(i) The definition of "Revolving Loan Borrowers"
set forth in ARTICLE I of the Credit Agreement is hereby
amended to read as follows:

"REVOLVING LOAN BORROWERS" means each of the Company,
WUSI, WLI and W/E, L.P.

(ii) The following new definition is hereby
added:

"W/E, L.P." means Weatherford Enterra U.S., Limited
Partnership, a Louisiana limited partnership whose sole
general partner is WUSI and whose sole limited partner is
CRC-Evans Automatic Welding Limited, a Delaware corporation
which is wholly-owned by WUSI.

(b) AMENDMENTS TO ARTICLE V. ARTICLE V of the Credit
Agreement is hereby amended in the following respects:

(i) SECTION 5.01(A) is hereby amended by adding
(A) the following words after the word "corporation": "or
partnership, as applicable", and (B) the following words after
the word "incorporation": "or organization, as applicable";
and

(ii) SECTION 5.01(C) is hereby amended by adding
the following words after the word "corporation": "or
partnership, as applicable"; and

(iii) SECTION 5.02 is hereby amended by adding the
following words after the word "corporate" in line 4: "or
partnership, as applicable".

(i) SECTIONS 6.04(A) and 6.04(B) are hereby
amended by adding (A) the following words after the word
"corporate" each time it appears: "(or partnership, as
applicable)", and (B) the following words after the word
"incorporation" each time it appears: "or organization".

(ii) SECTION 6.13 is hereby amended by adding the
following words after the word "incorporated": "or organized".

(d) AMENDMENTS TO ARTICLE VII.

(i) SECTION 7.01(A) of the Credit Agreement is hereby
amended by adding the following words after the words
"SCHEDULE 7.01,": "including any such Liens which continue on
such property following a transfer of such property in cases
where such transfer is permitted by SECTION 7.02(D)"; and

(ii) SECTION 7.02 of the Credit Agreement is hereby
amended by redesignating SUBSECTION 7.02(D) to be SUBSECTION
7.02(E) and adding a new SUBSECTION 7.02(D) to read as
follows:

- 2 -

"(d) dispositions of assets by the Company, a
Borrower or any of their respective Subsidiaries to the
Company or any Guarantor;"

SECTION 2. ADDITIONAL BORROWER.

(a) W/E, L.P. hereby agrees to be a Revolving Loan
Borrower as defined in the Credit Agreement. W/E, L.P. confirms that
the representations and warranties in ARTICLE V of the Credit Agreement
are true and correct as to W/E, L.P. as of the date hereof, except such
representations and warranties which expressly refer to an earlier
date.

(b) W/E, L.P. hereby agrees to perform all the
obligations of a Revolving Loan Borrower under, and to be bound in all
respects by the terms of, the Credit Agreement, including without
limitation SECTION 10.14 thereof, as if the undersigned were a
signatory party thereto.

SECTION 3. GUARANTY OF CRC-EVANS AUTOMATIC WELDING LIMITED. Pursuant to
SECTION 6.13 of the Credit Agreement, no later than January 29, 1996, the
Company will cause CRC-Evans Automatic Welding Limited to execute and deliver to
the Administrative Agent a Guaranty substantially in the form of EXHIBIT B-2 to
the Credit Agreement and to furnish to the Administrative Agent a written
opinion of counsel for CRC-Evans Automatic Welding Limited substantially in the
form of EXHIBITS G-1 and G-2 of the Credit Agreement.

SECTION 4. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers and
each of the Guarantors represent and warrant to the Agents and to each of the
Banks that:

(a) This First Amendment, the Credit Agreement as amended
hereby, and each Guaranty have been duly authorized, executed and
delivered by the Borrowers and the Guarantors who are parties thereto
and constitute their legal, valid and binding obligations enforceable
in accordance with their respective terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting creditors' rights
generally and to general principles of equity).

(b) The representations and warranties set forth in
ARTICLE V of the Credit Agreement are true and correct in all material
respects before and after giving effect to this First Amendment with the
same effect as if made on the date hereof, except to the extent such
representations and warranties expressly related to an earlier date, in
which case they were true and correct in all material respects on and as
of such earlier date.

(c) As of the date hereof, at the time of and immediately
after giving effect to this First Amendment, no Default or Event of
Default has occurred and is continuing.

- 3 -

SECTION 5. CONDITIONS OF EFFECTIVENESS. This First Amendment shall be
effective on the date (the "Effective Date") of the delivery by the Borrowers
and the Guarantors to the Administrative Agent of the following:

(a) this First Amendment, signed by the Company, the
Borrowers, the Guarantors, the Agents, the co-agents and each of the
Banks;

(b) A Revolving Note executed by W/E, L.P. payable to
each Bank, in the form attached as EXHIBIT E to the Credit Agreement;

(d) with respect to W/E, L.P.:

(i) a copy of the partnership agreement of W/E,
L.P., certified by the Secretary of W/E, L.P.;

(ii) copies of the resolutions of the board of
directors of Weatherford Enterra U.S., Inc., as the sole
general partner of W/E, L.P., authorizing WUSI to execute the
partnership agreement of W/E, L.P., certified by the Secretary
or Assistant Secretary of WUSI; and copies of resolutions of
the board of directors of W/E, L.P., authorizing the execution
and delivery of this First Amendment, Revolving Notes and a
Guaranty, together with specimen signatures of the officers
executing this First Amendment, Revolving Notes and such
Guaranty, certified by the Secretary or Assistant Secretary of
W/E, L.P.;

(iii) a Certificate issued by the Secretary of
State of Louisiana, certifying the filing of the Articles of
Partnership of W/E, L.P.; and

(iv) a copy of W/E, L.P.'s Application for
Registration to Qualify to do Business in Texas, submitted to
the Texas Secretary of State;

(e) a letter confirming that The Prentice-Hall
Corporation System, Inc. has accepted appointment by W/E, L.P. as its
agent for service of process in New York;

(f) legal opinions of Texas, New York and Louisiana
counsel for W/E, L.P., substantially in the form of Exhibits A, B and C
attached hereto; and

(g) the fees and expenses payable to the Agents pursuant
to SECTION 10.04(A) of the Credit Agreement, in connection with this
First Amendment.

SECTION 6. EFFECT OF AMENDMENT. This First Amendment (i) except
as expressly provided herein, shall not be deemed to be a consent to the
modification or waiver of any

- 4 -

other term or condition of the Credit Agreement or of any of the instruments or
agreements referred to therein and (ii) shall not prejudice any right or rights
which the Administrative Agent or the Banks may now have under or in connection
with the Credit Agreement, as amended by this First Amendment. Except as
otherwise expressly provided by this First Amendment, all of the terms,
conditions and provisions of the Credit Agreement shall remain the same. It is
declared and agreed by each of the parties hereto that the Credit Agreement, as
amended hereby, shall continue in full force and effect, and that this First
Amendment and such Credit Agreement shall be read and construed as one
instrument.

SECTION 7. GUARANTIES. Each of the Guarantors hereby consents to and
accepts the terms and conditions of this First Amendment, agrees to be bound by
the terms and conditions hereof, and ratifies and confirms that its Guaranty
executed and delivered in connection with the Credit Agreement is and remains in
full force and effect.

SECTION 8. MISCELLANEOUS This First Amendment shall for all purposes be
construed in accordance with and governed by the laws of the State of New York.
The captions in this First Amendment are for convenience of reference only and
shall not define or limit the provisions hereof. This First Amendment may be
executed in separate counterparts, each of which when so executed and delivered
shall be an original, but all of which together shall constitute one instrument.
In proving this First Amendment, it shall not be necessary to produce or account
for more than one such counterpart.

NO ORAL AGREEMENTS. THE CREDIT AGREEMENT (AS AMENDED BY THIS FIRST
AMENDMENT) AND THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

- 5 -

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the date and year first above written.

WEATHERFORD ENTERRA, INC.

By: /s/ NORMAN W. NOLEN
Norman W. Nolen
Senior Vice President, Chief
Financial Officer and Treasurer

WEATHERFORD ENTERRA U.S., INC.

By: /s/ NORMAN W. NOLEN
Norman W. Nolen
Senior Vice President, Chief
Financial Officer and Treasurer

WEATHERFORD/LAMB, INC.

By: /s/ NORMAN W. NOLEN
Norman W. Nolen
Senior Vice President, Chief
Financial Officer and Treasurer

WEATHERFORD ENTERRA U.S.,
LIMITED PARTNERSHIP

By: /s/ H. SUZANNE THOMAS
Name: H. Suzanne Thomas
Title: Senior Vice President
and Secretary

- 6 -

BANK OF AMERICA ILLINOIS,
as Documentation Agent and as a
Bank

By: /s/ JOHN M. ROBINSON
Name: John M. Robinson
Title: Managing Director

TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
as Administrative Agent and as
a Bank

By: /s/ MONA M. FOCH
Name: Mona M. Foch
Title: Vice President

CREDIT LYONNAIS NEW YORK
BRANCH, as Senior Co-Agent and
as a Bank

By: /s/ ALAIN PAPIASSE
Name: Alain Papiasse
Title: Executive Vice President

ABN AMRO BANK N.V.,
as Co-Agent and as a Bank

By: /s/ W. BRYAN CHAPMAN
Name: W. Bryan Chapman
Title: Vice President

By: /s/ H. GENE SHIELS
Name: H. Gene Shiels
Title: Vice President

BANK OF MONTREAL, as
Co-Agent and as a Bank

By: /s/ DONALD G. SKIPPER
Name: Donald G. Skipper
Title: Director

- 7 -

FIRST INTERSTATE BANK OF
TEXAS, N.A., as Co-Agent and as
a Bank

By: /s/ FRANK W. SCHAGEMAN
Name: Frank W. Schageman
Title: Vice President

ARAB BANKING CORPORATION
(B.S.C.), as Co-Agent and as a
Bank

By: /s/ STEPHEN A. PLAUCHE
Name: Stephen A. Plauche
Title: Vice President

THE BANK OF NEW YORK

By: /s/ ALAN F. LYSTER, JR.
Name: Alan F. Lyster, Jr.
Title: Vice President

THE BANK OF NOVA SCOTIA

By: /s/ F.C.H. ASHBY
Name: F.C.H. Ashby
Title: Senior Manager
Loan Operations

FIRST NATIONAL BANK OF
COMMERCE

By: /s/ J. CHARLES FREEL, JR.
Name: J. Charles Freel, Jr.
Title: Vice President

THE FUJI BANK, LIMITED

By: /s/ DAVID L. KELLEY
Name: David L. Kelley
Title: Vice President &
Senior Manager

- 8 -

THE MITSUBISHI BANK, LIMITED

By: /s/ SHOJI HONDA
Name: Shoji Honda
Title: General Manager

NATIONSBANK OF TEXAS, N.A.

By: /s/ W. KEITH BUCHANAN
Name: W. Keith Buchanan
Title: Vice President

THE YASUDA TRUST AND
BANKING COMPANY, LIMITED

By: /s/ GERALD GILL
Name: Gerald Gill
Title: Vice President

- 9 -

WEATHERFORD ENTERRA, INC.

SUBSIDIARIES AND AFFILIATES
(December 31, 1995)
<TABLE>

JURISDICTION % OF COMPANY OWNERSHIP
NAME OF INCORPORATION (DIRECT OR INDIRECT)
---- ---------------- -----------------------
<S> <C> <C>
A-1 Bit & Tool Co., B.V. Netherlands 100% by W/Eurasia B.V.
Amco Internacional de Mexico, S.A. de C.V. Mexico 100% by T-LOR
Barber Industries, Inc. (now known as Weatherford Delaware 100% by Barber
International, Inc.)
Barber Industries Ltd. (now known as Canada 100% by WE/Canada
500564 Alberta Ltd.) ("Barber")
Bit & Tool A-1 S.r.l. Italy 100% by WEMESPA
CanaRoss Limited Russia 50% by PAT (Cyprus)
CRC-Evans Automatic Welding, Inc. ("CRC-Evans Welding") Texas 100% by CRC-Evans
CRC-Evans Automatic Welding Limited Delaware 100% by WUSI
CRC-Evans Canada Ltd. Canada 100% by WE/Canada
CRC-Evans Holland B.V. Netherlands 100% by CRC-Evans
CRC-Evans Limited Delaware 100% by CRC-Evans
CRC-Evans Pipeline Equipment, Inc. Texas 100% by CRC-Evans
CRC-Evans Pipeline International (UK) Limited ("CRC-Evans Ltd.") United Kingdom 100% by W/Eurasia Ltd.
CRC-Evans Pipeline International, Inc. ("CRC-Evans") Delaware 100% by WEI
CRC-Evans Rehabilitation Systems, Inc. ("CRC-Rehab.") Delaware 100% by CRC-Evans
CRC-Evans Services Limited United Kingdom 100% by W/Eurasia Ltd.
CUPS System, Inc. Delaware 100% by CRC-Rehab.
EMI-Elettro Magnetica Ispezioni Italia S.r.l. Italy 100% by WEMESPA
Energy Tools, Inc. Louisiana 100% by WUSI
Enterra (Thailand) Ltd. Thailand 100% by WEI
Enterra (U.K.) Limited United Kingdom 100% by OFRH
Enterra Colombia Limited British Virgin Islands 100% by EOFS
Enterra Compression Company ("E/Compression") Delaware 100% by EPEG
Enterra Compression Investment Company ("E/Investment") Delaware 100% by E/Compression
Enterra Corporation Nevada 100% by WEI
Enterra de Mexico S.A. de C.V. Mexico 100% by WUSI
Enterra International Limited United Kingdom 100% by OFRH
Enterra Norway AS Norway 100% by WEI
Enterra Oil Field Services, Ltd. ("EOFS") Bermuda 100% by WUSI
Enterra Oilfield Rentals (Malaysia) Sdn. Bhd. Malaysia 100% by E/Singapore
Enterra Oilfield Rentals Limited Hong Kong 100% by WEI
Enterra Oilfield Rentals Pte. Ltd. ("E/Singapore") Singapore 100% by OFRH
Enterra Oilfield Rentals Pty. Ltd. Australia 100% by OFRH
Enterra Patco Oilfield Products Incorporated Texas 100% by WEI
Enterra Patco Oilfield Products Limited Canada 10% by WE/Canada
Enterra Petroleum Equipment Group, Inc. ("EPEG") Delaware 100% by WEI
Enterra Petroleum Equipment Group (UK) Ltd. United Kingdom 100% by W/Eurasia Ltd.
Enterra Quality Drilling Tools Pte. Ltd. Singapore 100% by E/Singapore
Enterra Rental and Fishing Company Delaware 100% by WUSI
European Material Inspection (EMI) B.V. Netherlands 100% by W/Eurasia B.V.
Evline Corp. Oklahoma 100% by WEI

- 1 -

Homco Arabian Gulf, Inc. Delaware 100% by WUSI
Homco Oilfield Services Limited United Kingdom 100% by W/Eurasia Ltd.
Inversiones Papershell Venezolana, S.A. Venezuela 100% by T-LOR
Keltic Oil Tools Limited United Kingdom 100% by OFRH
LRJV Incorporated California 100% by WEI
Lynx Tool Company Inc. Colorado 100% by WUSI
Nana Test, Inc. Alaska 100% by TEST
Norvac Systems, Inc. Delaware 100% by CRC-Evans
Offshore Pipeline Services Limited United Kingdom 45% by CRC-Evans Ltd.
Oil Field Rental Holdings Limited ("OFRH") United Kingdom 100% by W/Eurasia Ltd.
Oil Field Rental Manufacturing Services Incorporated Texas 100% by WUSI
PETCO Fishing & Rental Tools (U.K.) Ltd. United Kingdom 100% by W/Eurasia Ltd.
PIM Pipeline Services, Inc. Delaware 100% by CRC-Evans
Pipeline Induction Heat Limited United Kingdom 91.67% by CRC-Evans Ltd.
Pipetex Limited United Kingdom 100% by CRC-Evans Ltd.
Ported Tools, Inc. Louisiana 100% by WUSI
Positive Action Tool Western (Cyprus) Limited ("PAT/Cyprus") Cyprus 100% by WE/Canada
Reamco, Inc. Oklahoma 100% by EPEG
Siciliano Interior Systems Co. Pennsylvania 100% by WEI
ServiciosTec LDC Cayman Islands 100% by EOFS
Stabil Drill Specialties Incorporated Texas 100% by EPEG
Technical Oil Services Limited British Virgin Islands 100% by EOFS
Test International E.C. Bahrain 100% by TEST
Texas Reamer, Inc. Oklahoma 100% by EPEG
Total Engineering Services Team, Inc. ("TEST") Louisiana 100% by EPEG
Triumph-LOR International, Inc. ("T-LOR") Texas 100% by WUSI
Watson Packer, Inc. Texas 50.85% by EPEG
Weatherford Abu Dhabi, Limited ("W/Abu Dhabi") Cayman Islands 100% by WLI
Weatherford/Al-Rushaid Ltd. Saudi Arabia 49% by W/Overseas Products, Ltd.
Weatherford Australia Pty. Limited Australia 100% by WLI
Weatherford/Bin Hamoodah Abu Dhabi, UAE 49% by W/Abu Dhabi
Weatherford East Europe Service GmbH Germany 100% by W/Holding
Weatherford Enterra Canada Ltd. ("WE/Canada") Canada 100% by WLI
Weatherford Enterra S.A. Argentina 100% by WLI
Weatherford Enterra Compression Company, L.P. Texas 99% by E/Investment &
1% by E/Compression
Weatherford Enterra U.S., Limited Partnership Louisiana 99% by CRC-Evans Welding &
1% by WUSI
Weatherford Espana, S.A. Spain 100% by W/Holding
Weatherford Eurasia B.V. ("W/Eurasia B.V.") Netherlands 100% by WLI
Weatherford Eurasia Ltd. ("W/Eurasia Ltd.") United Kingdom 99.9% by WLI & .1% by WEI
Weatherford France, S.A. France 100% by WII
Weatherford Holding GmbH ("W/Holding") Germany 100% by WLI
Weatherford, Inc. Panama 100% by WLI
Weatherford Inspection Services AS Norway 100% by W/Norge
Weatherford International, Inc. (formerly Barber Industries, Inc.) Delaware 100% by Barber
Weatherford Ireland Limited Ireland 50% by W/U.K. & 50% by WLI
Weatherford/Lamb, Inc. Delaware 100% by WEI
Weatherford Latin America S.A. Panama 100% by WLI
Weatherford (Malaysia) Sdn. Bhd. Malaysia 40% by WLI

- 2 -

Weatherford Mediterranea S.p.A. ("WEMESPA") Italy 100% by W/Eurasia B.V.
Weatherford de Mexico, S.A. de C.V. Mexico 99.9% by WLI & .1% by WII
Weatherford Nigeria Ltd. Nigeria 60% by WLI
Weatherford Norge A/S ("W/Norge") Norway 100% by W/Eurasia B.V.
Weatherford Oil Tool Ges.m.b.H. Austria 95% by WLI & 5% by WII
Weatherford Oil Tool GmbH Germany 100% by W/Holding
Weatherford Oil Tool Middle East Limited British Virgin Islands 100% by WLI
Weatherford Oil Tool Nederland B.V. Netherlands 100% by W/Eurasia B.V.
Weatherford Oil Tool (Private) Limited Singapore 100% by WLI
Weatherford Overseas Products, Limited Cayman Islands 100% by WLI
Weatherford Overseas Services, Limited Cayman Islands 100% by WLI
Weatherford QAF (B) Sdn. Bhd. Brunei 50% by WLI
Weatherford (Saudi Arabia), Ltd. Saudi Arabia 49% by W/Overseas Services, Ltd.
Weatherford Services, S.A. Panama 100% by W/Holding
Weatherford (U.K.) Limited United Kingdom 100% by W/Eurasia Ltd.
Weatherford U.S., Inc. ("WUSI") Delaware 100% by WEI
Weatherford Venezuela, S.A. Venezuela 100% by WLI
Whiting Oilfield Rental, Inc. Texas 100% by WUSI
WI Products and Equipment, Inc. Cayman Islands 100% by WLI
World Wide Leasing LDC Cayman Islands 99% by EOFS & 1% by WUSI
</TABLE>

- 3 -

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our report dated February 29, 1996, on the December 31, 1995 consolidated
financial statements, included in this Form 10-K, into the
Company's previously filed Registration Statement File Numbers 33-18187,
33-30522, 33-43131, 2-88509, 33-54842, 33-54844, 33-54846, 33-54848, 33-54850,
33-62253, 33-63215, 33-80068, 33-84076 and 33-84074.

/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP

Houston, Texas
March 20, 1996

<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THIS FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 32,800
<SECURITIES> 0
<RECEIVABLES> 247,067
<ALLOWANCES> 15,942
<INVENTORY> 165,383
<CURRENT-ASSETS> 463,362
<PP&E> 1,181,570
<DEPRECIATION> 667,025
<TOTAL-ASSETS> 1,258,860
<CURRENT-LIABILITIES> 195,982
<BONDS> 0
0
0
<COMMON> 5,099
<OTHER-SE> 725,744
<TOTAL-LIABILITY-AND-EQUITY> 1,258,860
<SALES> 858,907
<TOTAL-REVENUES> 858,907
<CGS> 625,346
<TOTAL-COSTS> 625,346
<OTHER-EXPENSES> 233,379
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,217
<INCOME-PRETAX> (14,954)
<INCOME-TAX> (4,616)
<INCOME-CONTINUING> (10,558)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,558)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)

</TABLE>

<ARTICLE> 5
<LEGEND>
THE RESTATED FINANCIAL DATA SCHEDULE REFLECTS THE COMPANY'S MERGER WITH ENTERRA
CORPORATION ACCOUNTED FOR A POOLING OF INTERESTS AND CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THIS FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000

<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-31-1995 JUN-30-1995 SEP-30-1995
<CASH> 19,389 20,131 31,453
<SECURITIES> 0 0 0
<RECEIVABLES> 245,826 250,361 251,853
<ALLOWANCES> 12,130 12,283 12,771
<INVENTORY> 156,278 155,009 150,591
<CURRENT-ASSETS> 435,790 445,589 455,119
<PP&E> 1,108,023 1,108,813 1,109,037
<DEPRECIATION> 644,331 653,396 652,937
<TOTAL-ASSETS> 1,141,888 1,137,723 1,147,007
<CURRENT-LIABILITIES> 170,142 172,547 180,544
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 5,062 5,067 5,088
<OTHER-SE> 742,792 742,938 761,159
<TOTAL-LIABILITY-AND-EQUITY> 1,141,888 1,137,723 1,147,007
<SALES> 219,289 430,368 650,743
<TOTAL-REVENUES> 219,289 430,368 650,743
<CGS> 157,391 313,231 471,150
<TOTAL-COSTS> 157,391 313,231 471,150
<OTHER-EXPENSES> 37,574 101,976 139,205
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 4,111 8,255 12,751
<INCOME-PRETAX> 20,580 7,678 29,030
<INCOME-TAX> 6,168 (3,305) 4,373
<INCOME-CONTINUING> 14,439 11,294 24,442
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 14,439 11,294 24,442
<EPS-PRIMARY> .29 .22 .48
<EPS-DILUTED> .29 .22 .48

</TABLE>