Weatherford International PLC (NYSE:WFT) took another major step in deleveraging with the $500 million sale of its Russian and Venezuelan assets to Rosneft’ NK OAO (MCX:ROSN) (OTCMKTS:RNFTF), pushing its stock up 3% in trading today (currently $22.57). The deal is expected to close sometime in the third quarter this year, and it is another sign that the company is serious about divesting from its non-core assets and continuing to deleverage.

Weatherford International

Weatherford’s Russian and Venezuelan assets sold for ~9x 2013 EBITDA

“This sale is Weatherford’s second step in its efforts to divest its non-core businesses,” write Sterne Agee analysts Stephen D. Gengaro and Ivan Suleiman. “Weatherford is making extremely good progress toward divesting non-core businesses and deleveraging with the proceeds.”

Weatherford International PLC (NYSE:WFT)’s Russian operations accounted for $630 million in revenue and $40 million EBITDA last year while the Venezuelan rigs brought in $69 million revenue and $16 million EBITDA, making the sale worth about 9x EBITDA, which Gengaro and Suleiman consider to be fair value and considering the market’s reaction, it seems that others have reached the same conclusion.

Remaining 115 land drilling rigs to be spun off next year

But what’s just as important is that Weatherford International PLC (NYSE:WFT) is continuing to make good on its first quarter plans to divest from non-core assets and then to use the cash to repair its balance sheet.

Gengaro and Suleiman raised their price target from $18 to $27 back in April after Weatherford International PLC (NYSE:WFT) sold its non-core pipeline business to Baker Hughes Incorporated (NYSE:BHI) for $250 million in cash and retained working capital, and then beat 1Q14 EPS estimates even though core business operating margins of 15.1% were held back by the non-core operating margins of -5.8%. Weatherford has also cut back heavily on its workforce and is well on its way to the target of eliminating 7000 positions.

Weatherford International PLC (NYSE:WFT) is now planning to spin off its remaining 115 international land drilling rigs as a separate public company in 2015. Having already sold off 67 rigs between the Russian and Venezuelan assets could make the new company more attractive for investors since it is already more streamlined (most of the remaining rigs are in the Middle East), and Weatherford will be in a stronger position since its balance sheet will be in better shape.