Baker Hughes expects to record a pre-tax gain of approximately $1.74 billion (approximately $1.05 billion, net of tax). Cash proceeds, net of tax, are expected to be approximately $1.8 billion. Schlumberger now has full ownership of WesternGeco. WesternGeco is the world's largest seismic company and provides underground data to identify potentially commercial oil and gas reservoirs. Its first-quarter revenue was $530 million, up 40% from the same period last year, and it currently has an $887-million backlog. Chad Deaton, Baker Hughes chairman and chief executive, says, "We have been pleased with the results from WesternGeco over the last several quarters and with the performance of the WesternGeco management team. However, the $2.4-billion sales price provides us with an excellent point to exit our minority ownership position. We remain excited about the growth in the global market for our products and services that we see continuing for the next several years." Approximately 50% of the purchase price was funded from Schlumberger's cash and short-term investments, and the remaining 50% was financed through existing Schlumberger credit facilities. Baker Hughes plans to use the net cash proceeds to repurchase up to $1.8 billion of stock. Baker Hughes was advised by Goldman, Sachs & Co.
Recommended Reading
Venture Global Gets FERC Nod to Process Gas for LNG
2024-04-23 - Venture Global’s massive export terminal will change natural gas flows across the Gulf of Mexico but its Plaquemines LNG export terminal may still be years away from delivering LNG to long-term customers.
Williams Cos. Blasts Energy Transfer’s FERC Filing
2024-05-15 - In response to Energy Transfer, Williams says the rival’s action is “lawfare” to delay the company’s Louisiana Energy Gateway project.
Watson: Implications of LNG Pause
2024-03-07 - Critical questions remain for LNG on the heels of the Biden administration's pause on LNG export permits to non-Free Trade Agreement countries.
US Asks Venture Global LNG to Justify Filing of Confidential Documents
2024-03-13 - The FERC request comes days after Venture Global LNG customers had challenged the company's request for a one-year extension of its startup and urged the regulator to make Venture Global release the confidential commissioning documents.
Despite LNG Permitting Risks, Cheniere Expansions Continue
2024-02-28 - U.S.-based Cheniere Energy expects the U.S. market, which exported 86 million tonnes per annum (mtpa) of LNG in 2023, will be the first to surpass the 200 mtpa mark—even taking into account a recent pause on approvals related to new U.S. LNG projects.