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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-83739
PROSPECTUS
105,000 SHARES
WEATHERFORD INTERNATIONAL, INC.
COMMON STOCK
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The selling stockholders of Weatherford International, Inc. listed on page
9 may offer and resell up to 105,000 shares of our common stock under this
prospectus. We will not receive any of the proceeds from sales of shares by the
selling stockholders.
Our common stock is traded on the New York Stock Exchange under the symbol
"WFT". On August 6, 1999, the last reported sales price for our common stock on
the New York Stock Exchange was $37.94 per share.
The selling stockholders may sell these shares from time to time on the New
York Stock Exchange or otherwise. They may sell the shares at prevailing market
prices or at prices negotiated with buyers. The selling stockholders will be
responsible for their legal fees and any commissions or discounts due to brokers
or dealers. The amount of those commissions or discounts will be negotiated
before the sales. We will pay all of the other offering expenses.
Our principal executive offices are located at 515 Post Oak Boulevard,
Suite 600, Houston, Texas 77027. Our telephone number is (713) 693-4000.
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INVESTING IN THESE SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 6.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is August 9, 1999.
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
NEITHER WE NOR THE SELLING STOCKHOLDERS HAVE AUTHORIZED ANYONE TO PROVIDE YOU
WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THE SELLING
STOCKHOLDERS ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON
STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. UNDER NO
CIRCUMSTANCES SHOULD THE DELIVERY TO YOU OF THIS PROSPECTUS OR ANY SALE MADE
PURSUANT TO THIS PROSPECTUS CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME AFTER THE DATE OF THIS
PROSPECTUS. IN THIS PROSPECTUS, WHEN WE REFER TO WEATHERFORD AND USE PHRASES
SUCH AS "WE" AND "US", WE ARE GENERALLY REFERRING TO WEATHERFORD INTERNATIONAL,
INC. AND ITS SUBSIDIARIES AS A WHOLE OR ON A DIVISION BASIS DEPENDING ON THE
CONTEXT IN WHICH THE STATEMENTS ARE MADE.
TABLE OF CONTENTS
<TABLE>
<S> <C>
WHERE YOU CAN FIND MORE INFORMATION......................... 2
FORWARD-LOOKING STATEMENTS.................................. 4
RISK FACTORS................................................ 6
SELLING STOCKHOLDERS........................................ 9
PLAN OF DISTRIBUTION........................................ 9
LEGAL MATTERS............................................... 10
EXPERTS..................................................... 10
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934. You may inspect those reports, proxy statements
and other information at the Public Reference Section of the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and the
Regional Offices of the SEC at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, New York, New York
10048. Please call the SEC at 1-800-SEC-0300 for further information on the
public reference rooms. You may also obtain copies of those materials from the
Public Reference Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
The SEC maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding us. You can also inspect and copy those reports,
proxy and information statements and other information at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, on which
our common stock is listed.
We have filed with the SEC a registration statement on Form S-3 covering
the shares offered by this prospectus. This prospectus is only a part of the
registration statement and does not contain all of the information in the
registration statement. For further information on us and the common stock being
offered, please review the registration statement and the exhibits that are
filed with it. Statements made in this prospectus that describe documents may
not necessarily be complete. We recommend that you review the documents that we
have filed with the registration statement to obtain a more complete
understanding of those documents.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information in this prospectus. This prospectus
incorporates by reference the documents set forth below that we previously filed
with the SEC. These documents contain important information about us.
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The following documents that we have filed with the SEC (File No.1-13086)
are incorporated by reference into this prospectus:
- Our Annual Report on Form 10-K for the year ended December 31, 1998;
- Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
- Our Current Report on Form 8-K dated February 4, 1999;
- Our Current Report on Form 8-K dated February 18, 1999;
- Our Current Report on Form 8-K dated April 29, 1999;
- Our Current Report on Form 8-K dated May 21, 1999;
- Our Current Report on Form 8-K dated July 21, 1999; and
- The description of our common stock contained in our Registration
Statement on Form 8-A (filed May 19, 1994) and as amended by our
Registration Statement on Form S-4, as amended (Registration No.
333-58741), including any amendment or report filed for the purpose of
updating such description.
All documents that we file pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 after the date of this prospectus will be
deemed to be incorporated in this prospectus by reference and will be a part of
this prospectus from the date of the filing of the document. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this prospectus will be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained in this prospectus or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference in this prospectus modifies or supersedes that
statement. Any statement that is modified or superseded will not constitute a
part of this prospectus, except as modified or superseded.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus has been delivered, upon written or
oral request, a copy of any or all of the documents incorporated by reference in
this prospectus, other than the exhibits to those documents, unless the exhibits
are specifically incorporated by reference into the information that this
prospectus incorporates. You should direct a request for copies to us at 515
Post Oak Boulevard, Suite 600, Houston, Texas 77027, Attention: Secretary
(telephone number: (713) 693-4000). If you have any other questions regarding
us, please contact our Investor Relations Department in writing (515 Post Oak
Blvd., Suite 600, Houston, Texas 77027) or by telephone ((713) 693-4000) or
visit our website at www.weatherford.com.
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FORWARD-LOOKING STATEMENTS
This prospectus and our other filings with the SEC and public releases
contain statements relating to our future results, including certain projections
and business trends. We believe these statements constitute "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of 1995.
Certain risks and uncertainties may cause actual results to be materially
different from projected results contained in forward-looking statements in this
prospectus and in our other disclosures. These risks and uncertainties include,
but are not limited to, the following:
A FURTHER DOWNTURN IN MARKET CONDITIONS COULD AFFECT PROJECTED RESULTS.
Any unexpected material changes in oil and gas prices or other market
trends would likely affect the forward-looking information contained in this
prospectus. Our estimates as to future results and industry trends make
assumptions regarding the future prices of oil and gas and their effect on the
demand and pricing of our products and services. In analyzing the market and its
impact on us for 1999, we have made the following assumptions:
- The recent increase in the price of oil will not have an immediate
favorable impact on our business.
- Average natural gas prices for 1999 will remain at or near their current
levels.
- World demand for oil will be up only marginally or flat.
- North American and international rig counts will remain at their current
low levels.
- Future growth in the industry will be dependent on technological advances
that can reduce the costs of exploration and production, and
technological improvements in tools used for re-entry, thru-tubing and
extended reach drilling as well as artificial lift technologies will be
important to our future.
We have based these assumptions on various macro-economic factors, and
actual market conditions could vary materially from those assumed.
A CONTINUATION OF THE LOW RIG COUNT COULD ADVERSELY AFFECT THE DEMAND FOR OUR
PRODUCTS AND SERVICES.
Our operations were materially affected by the decline in the rig count
during 1998 and 1999 to date. Although the North American and international rig
counts are at historical or near historical lows, a continuation of the rig
count at its current level for a prolonged period of time would adversely affect
our results as demand for oil related products and services would continue to
fall because of the uncertainty relating to the future prices. In addition, any
further material declines in the current worldwide rig count or drilling
activity would likely further reduce the demand for our drilling products and
services. Our forward-looking statements regarding our drilling products assume
there will not be any further material declines in the worldwide rig count, in
particular the foreign rig count.
PROJECTED COST SAVINGS COULD BE INSUFFICIENT.
During 1998 and 1999 to date, we implemented a number of programs intended
to reduce costs and align our cost structure with the current market
environment. Our forward-looking statements regarding cost savings and their
impact on our business assume these measures will generate the savings expected.
However, if the markets continue to decline, we may have to take additional
actions to achieve the desired savings.
WEATHERFORD'S SUCCESS IS DEPENDENT UPON TECHNOLOGICAL ADVANCES.
Our ability to succeed with our long-term growth strategy is dependent on
the technological competitiveness of our product and service offerings. A
central aspect of our growth strategy is to enhance the technology of our
products and services, to expand the markets for many of our products through
the
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leverage of our worldwide infrastructure and to enter new markets and expand in
existing markets with technologically advanced value-added products. Our
forward-looking statements have assumed only a small amount of near-term growth
from these new products and services.
UNEXPECTED YEAR 2000 PROBLEMS COULD HAVE AN ADVERSE FINANCIAL IMPACT.
We have not fully determined the impact of Year 2000 on our systems and
products. It is possible that unexpected problems associated with the Year 2000
could arise during the implementation of our Year 2000 program that could have a
material adverse effect on our business, financial condition and results of
operations. We are currently in the strategy development, implementation and
testing phases of our Year 2000 program and expect it to be completed by the
fourth quarter of 1999.
ECONOMIC DOWNTURN IN ASIA AND SOUTH AMERICA COULD ADVERSELY AFFECT DEMAND FOR
PRODUCTS AND SERVICES.
The economic downturn in Asia has begun to affect the economies in other
regions of the world, including South America and the Former Soviet Union. To
date, the economies in the United States and Europe have not been materially
affected. If the United States or European economies were to begin to decline or
if the economies of South America or Asia were to experience further material
problems, the demand and price for oil and gas and our products and services
could fall further and adversely affect our revenues and income. We have assumed
that a worldwide recession will not occur as a result of the economic downturn
in Asia and South America. A material decline in the Chinese economy or
devaluation of its currency could cause further deterioration to the Asian and
world economies.
CURRENCY FLUCTUATIONS COULD HAVE A MATERIAL ADVERSE FINANCIAL IMPACT.
A material decline in currency rates in our markets could affect our future
results as well as affect the carrying values of our assets. World currencies
have been subject to much volatility. Our forward-looking statements assume no
material impact from changes in currencies.
CHANGES IN GLOBAL TRADE POLICIES COULD ADVERSELY IMPACT OPERATIONS.
Changes in global trade policies in our markets could impact our operations
in these markets. We have assumed that there will be no material changes in
global trading policies.
UNEXPECTED LITIGATION AND LEGAL DISPUTES COULD HAVE A MATERIAL ADVERSE FINANCIAL
IMPACT.
If we experience unexpected litigation or unexpected results in our
existing litigation having a material effect on results, the accuracy of the
forward-looking statements would be affected. Our forward-looking statements
assume that there will be no such unexpected litigation or results.
Finally, our future results will depend upon various other risks and
uncertainties, including, but not limited to, those detailed in our other
filings with the SEC. For additional information regarding risks and
uncertainties, see our other current year filings with the SEC under the
Securities Exchange Act of 1934 and the Securities Act of 1933. We will
generally update our assumptions in our filings as circumstances require.
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RISK FACTORS
An investment in our common stock involves various risks. When considering
your investment in our company you should consider carefully the following
factors, together with the information described elsewhere in this prospectus.
CONTINUED LOW PRICES FOR OIL WILL ADVERSELY AFFECT THE DEMAND FOR OUR PRODUCTS
AND SERVICES.
Low oil prices adversely affect demand throughout the oil and natural gas
industry, including the demand for our products and services. As prices decline,
we are affected in two significant ways. First, the funds available to our
customers for the purchase of goods and services declines. Second, exploration
and drilling activity declines as marginally profitable projects become
uneconomic and either are delayed or eliminated. Accordingly, as long as oil
prices remain low, our revenues and income will be adversely affected. The
current market conditions have affected our business in various ways. Our
artificial lift business, which is heavily dependent on North American
production, experienced continuous declines in revenue throughout 1998 and the
first quarter of 1999. Our drilling products division has experienced a
significant decline in new orders of drill pipe and other drill stem products
and tubular sales have fallen as completion activity slowed and tubular
distributors reduced inventories. Sales in 1999 for our drill stem products
could be down by more than 50% from 1998. The level of decline will be dependent
on the timing of any increase of drilling activity and the amount of time it
takes for our customers' drill pipe and other tubular inventories to be reduced.
Our completion and oilfield services business has experienced declines in line
with the general reduction in industry activity, with the greatest declines
occurring in the United States markets. Our compression services business has
only been marginally affected by the recent declines in market conditions
because its business is based on levels of natural gas development and
production, which has been more stable than oil production.
Our businesses will continue to be affected by industry conditions,
including those conditions and factors described under "Forward-Looking
Statements".
CUSTOMER CREDIT RISKS
Substantially all of our customers are engaged in the energy industry. This
concentration of customers may impact our overall exposure to credit risk,
either positively or negatively, in that customers may be similarly affected by
changes in economic and industry conditions. Many of our customers have slowed
the payment of their accounts in light of current industry conditions and others
have experienced greater financial difficulties in meeting their payment terms.
We perform ongoing credit evaluations of our customers and do not generally
require collateral in support of our trade receivables. We maintain reserves for
potential credit losses, and actual losses have historically been within our
expectations.
DISRUPTIONS IN FOREIGN OPERATIONS COULD ADVERSELY AFFECT OUR INCOME
Like most multinational oilfield service companies, we have 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, that are inherently subject to risks of war, local economic
conditions, political disruption, civil disturbance and policies that may:
- disrupt our operations and oil and gas exploration and production
activities;
- restrict the movement of funds;
- lead to U.S. government or international sanctions; and
- 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 resumed eventually in
relation to market forces. Certain areas, including the
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CIS, Algeria, Nigeria, parts of the Middle East, the Asia-Pacific region and
Latin America, have been subjected to political disruption which has negatively
impacted results of operations following such events.
Disruptions may occur in our foreign operations, and losses may occur that
will not be covered by insurance. Drill pipe and other products are manufactured
for us by Oil Country Tubular Limited in India under a long-term exclusive
manufacturing arrangement. Although we have sought to minimize the risks of this
operation through a manufacturing versus ownership arrangement, we are providing
OCTL with a substantial amount of raw materials, inventory and working capital
for the products it manufactures for us. Our Indian operations have been
adversely affected by the downturn of the economies in the eastern hemisphere.
Operations in India are subject to various political and economic risks as well
as financial risks with respect to OCTL. We have recently substantially
curtailed our operations in India and we expect these operations to continue to
be curtailed through the end of 1999. A termination or complete shutdown of this
operation in light of current market conditions or political factors could have
an adverse effect on our income and results.
OUR PRODUCTS AND SERVICES ARE SUBJECT TO OPERATIONAL, LITIGATION AND
ENVIRONMENTAL RISKS
Our products are used for the exploration and production of oil and natural
gas. These operations are subject to hazards inherent in the oil and gas
industry that can cause personal injury or loss of life, damage to or
destruction of property, equipment, the environment and marine life, and
suspension of operations. These hazards include fires, explosions, craterings,
blowouts and oil spills. Litigation arising from an accident at a location where
our products or services are used or provided may result in our being named as a
defendant in lawsuits asserting potentially large claims.
In the ordinary course of business, we become the subject of various claims
and litigation. We maintain insurance to cover many of our potential losses and
we are subject to various self-retentions and deductibles with respect to our
insurance. Although we are subject to various ongoing items of litigation, we do
not believe that any of the items of litigation that we are currently subject to
will result in any material uninsured losses to us. It is, however, possible
that an unexpected judgment could be rendered against us in cases in which we
could be uninsured and beyond the amounts that we currently have reserved or
anticipate incurring for that matter.
We are also subject to various federal, state and local laws and
regulations relating to the energy industry in general and the environment in
particular. Environmental laws have in recent years become more stringent and
have generally sought to impose greater liability on a larger number of
potentially responsible parties. While we are not currently aware of any
situation involving an environmental claim that would likely have a material
adverse effect on our business, it is always possible that an environmental
claim with respect to one or more of our current businesses or a business or
property that one of our predecessors owned or used could arise that could
involve the expenditure of a material amount of funds.
CURRENCY DEVALUATION AND FLUCTUATION RISKS
A single European currency ("the Euro") was introduced on January 1, 1999,
at which time the conversion rates between legacy currencies and the Euro were
set for 11 participating member countries. However, the legacy currencies in
those countries will continue to be used as legal tender through January 1,
2002. Thereafter, the legacy currencies will be canceled, and the Euro bills and
coins will be used in the 11 participating countries. We are currently
evaluating the effect of the Euro on our consolidated financial statements and
our business operations; however, we do not foresee that the transition to the
Euro will have a significant impact.
Over 50% of our net assets are located outside the United States and are
carried on our books in local currencies. Changes in those currencies in
relation to the U.S. dollar result in translation adjustments which are
reflected as accumulated other comprehensive loss in the stockholders' equity on
our balance sheet.
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OUR COMMON STOCK HAS FLUCTUATED HISTORICALLY
Historically, and in recent months in particular, the market price of
common stock of companies engaged in the oil and gas industry has been highly
volatile. Likewise, the market price of our common stock has varied
significantly in the past. News announcements and changes in oil and natural gas
prices, changes in the demand for oil and natural gas exploration and changes in
the supply and demand for oil and natural gas have all been factors that have
affected the price of our common stock.
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SELLING STOCKHOLDERS
This prospectus is part of a registration statement that we filed pursuant
to registration rights granted to the selling stockholders under an agreement we
entered into in connection with the acquisition by our Drilling Products
Division of certain of the assets of Texas Pup, Inc.
Pursuant to the terms of the acquisition agreement, we will pay all
expenses of registering the shares under the Securities Act of 1933, including
all registration and filing fees, printing expenses and the fees and
disbursements of our counsel and accountants. The agreement also provides that
we will indemnify the selling stockholders against certain civil liabilities,
including liabilities under the Securities Act of 1933, or will contribute to
payments the selling stockholders may be required to make in respect thereof.
The selling stockholders will pay all fees and disbursements of their counsel
and all brokerage fees, commissions and expenses for any shares that they sell.
We expect to withdraw registration of any unsold shares on or shortly after July
7, 2000, when we expect the shares will be eligible for public sale pursuant to
the exemption from registration provided by Rule 144 under the Securities Act of
1933.
The following table sets forth the beneficial ownership of common stock by
each selling stockholder as of July 26, 1999, all of which may be sold pursuant
to this prospectus:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME OF SELLING STOCKHOLDER SHARES OWNED(1) OUTSTANDING SHARES
- --------------------------- --------------- ------------------
<S> <C> <C>
Patrick E. Hosford(2)................................ 71,085 *
Colleen L. Hosford(3)................................ 17,430 *
Bruce E. Hosford(4).................................. 16,485 *
</TABLE>
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* Less than 1%
(1) Because the selling stockholders may offer all or a portion of the shares
pursuant to this prospectus, we cannot estimate to the number of shares of
our common stock that the selling stockholders will hold upon termination of
any sales.
(2) 7,108 of the shares beneficially owned by Patrick E. Hosford are currently
held in escrow.
(3) 1,743 of the shares beneficially owned by Colleen L. Hosford are currently
held in escrow.
(4) 1,649 of the shares beneficially owned by Bruce E. Hosford are currently
held in escrow.
We currently employ Patrick E. Hosford, a shareholder, officer and director
of Texas Pup, Inc., at an annual base salary of $125,000. Within the past three
years, none of the selling stockholders has held any position, office or other
material relationship with us or any of our predecessors or affiliates, except
as noted above.
PLAN OF DISTRIBUTION
The shares offered under this prospectus may be sold by the selling
stockholders from the date of this prospectus until July 7, 2000. The selling
stockholders may sell the shares on the New York Stock Exchange or otherwise, at
market prices or at negotiated prices. They may sell shares by one or a
combination of the following:
- a block trade in which a broker or dealer will attempt to sell the shares
as agent, but may position and resell a portion of the block as principal
to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by the broker or
dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which a broker
solicits purchasers; and
- privately negotiated transactions.
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Brokers or dealers engaged by the selling stockholders may arrange for
other brokers or dealers to participate in sales of shares. Brokers or dealers
will receive commissions or discounts from selling stockholders in amounts to be
negotiated prior to the sale. The selling stockholders and any broker-dealers
that participate in the distribution may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933, and any proceeds or commissions
received by them or any profits on the resale of shares sold by broker-dealers,
may be deemed to be underwriting discounts and commissions.
When any of the selling stockholders notifies us of a particular offering
of common stock under this prospectus, we will file a prospectus supplement, if
required by the Securities Act of 1933, setting forth:
- the number of shares being offered and the terms of the offering,
including the purchase price;
- the name of each of the participating broker-dealers or agents;
- the purchase price paid for the shares purchased from the selling
stockholders; and
- any items constituting compensation from the selling stockholders.
We will not receive any of the proceeds from the sale of the shares offered
by this prospectus.
LEGAL MATTERS
Curtis W. Huff, our Senior Vice President, General Counsel and Secretary,
has advised us with respect to the validity of the shares of common stock
offered by this prospectus. Pursuant to agreements between us and Mr. Huff, Mr.
Huff holds 56,250 restricted shares of common stock and options to purchase
200,000 shares of common stock.
EXPERTS
The consolidated financial statements of Weatherford International, Inc.
and the related consolidated financial statement schedule as of December 31,
1998 and 1997 and for each of the three years in the period ended December 31,
1998, incorporated by reference in this prospectus and elsewhere in the
registration statement, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated by reference in reliance upon the authority of Arthur Andersen LLP
as experts in giving said reports.
Ernst & Young LLP, independent auditors, have audited Dailey International
Inc.'s consolidated balance sheets as of December 31, 1998 and 1997, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the year ended December 31, 1998, the eight month period ended
December 31, 1997 and for each of the two years in the period ended April
30,1997, as set forth in their report, which is incorporated by reference in
this prospectus and elsewhere in the registration statement. These financial
statements are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
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