##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549


Form 10-K


|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|   |  | For the fiscal year ended December 31, 2005                                                 
|OR
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-31339


Weatherford International Ltd.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                      
|------------------------------------------------------------------ |  | -------------------------------------
|Bermuda                                                            |  | 98-0371344                           
|(State or other jurisdiction of
    incorporation or organization) |  | (IRS Employer
    Identification No.)
|                                                                  
|515 Post Oak Boulevard
    Suite 600
    Houston, Texas            |  | 77027-3415                           
|(Address of principal executive offices)                           |  | (Zip Code)                           

Registrants telephone number, including area code:


(713) 693-4000


Securities registered pursuant to Section 12(b) of the
Act:


|                    |                                |  |                                           |  |                         | 
|------------------- | ------------------------------ |  | ----------------------------------------- |  | ----------------------- | 
|Title of each class |                                |  | Name of each exchange on which registered | 
|                    |                                |  |                                           | 
|                    | Common Shares, $1.00 Par Value |  |                                           |  | New York Stock Exchange | 

Securities registered pursuant to Section 12(g) of the
Act:


None


þ o


o þ


Note


þ o


S-K 10-K 10-K. o


12b-2


|                        |  |   |  |                   |  |   |  |                       |  |  
|----------------------- |  | - |  | ----------------- |  | - |  | --------------------- |  | -
|Large accelerated filer |  | þ |  | Accelerated Filer |  | o |  | Non-Accelerated Filer |  | o

12b-2 o þ






|               |                                |  |                              |  |             | 
|-------------- | ------------------------------ |  | ---------------------------- |  | ----------- | 
|Title of Class |                                |  | Outstanding at March 1, 2006 | 
|               |                                |  |                              | 
|               | Common Shares, $1.00 Par Value |  |                              |  | 348,806,463 | 

DOCUMENTS INCORPORATED BY REFERENCE


10-K










---

TABLE OF CONTENTS



|                                                                                                     |                                                                                               |  |  |  |  |  |  | 
|---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                                                                              
|                                                                                                     | Item 1. Business                                                                             
|                                                                                                     | Item 1A. Risk Factors                                                                        
|                                                                                                     | Item 1B. Unresolved SEC Comments                                                             
|                                                                                                     | Item 2. Properties                                                                           
|                                                                                                     | Item 3. Legal Proceedings                                                                    
|                                                                                                     | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II                                                                                             
|                                                                                                     | Item 5. Market for Registrants Common Equity and Related Shareholder Matters                
|                                                                                                     | Item 6. Selected Financial Data                                                              
|                                                                                                     | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                                                                     | Item 7A. Quantitative and Qualitative Disclosure About Market Risk                           
|                                                                                                     | Item 8. Financial Statements and Supplementary Data                                          
|INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE                                      
|MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING                                    
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                             
|WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES                                                     
|WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME                   
|WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY     
|WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS               
|WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS          
|                                                                                                     | Item 9. Changes in and Disagreement with Accountants on Accounting and Financial Disclosure  
|                                                                                                     | Item 9A. Controls and Procedures                                                             
|PART III                                                                                            
|                                                                                                     | Item 10. Directors and Executive Officers of the Registrant                                  
|                                                                                                     | Item 11. Executive Compensation                                                              
|                                                                                                     | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                                                                                     | Item 13. Certain Relationships and Related Transactions                                      
|                                                                                                     | Item 14. Principal Accountant Fees and Services                                              
|PART IV                                                                                             
|                                                                                                     | Item 15. Exhibits, Financial Statement Schedules                                             
|SCHEDULE II                                                                                         
|VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCES FOR THE THREE YEARS ENDED DECEMBER 31, 2005        
|SIGNATURES                                                                                          
|EXHIBIT INDEX                                                                                       
|Subsidiaries of Weatherford International Ltd.                                                      
|Consent of Ernst & Young LLP                                                                        
|Certification of CEO pursuant to Section 302                                                        
|Certification of CFO pursuant to Section 302                                                        
|Certification of CEO pursuant to Section 906                                                        
|Certification of CFO pursuant to Section 906                                                        



---



##### Table of Contents






PART I







|        |         
|------- | --------
|Item 1. | Business









| |   |                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Evaluation, Drilling & Intervention
    Services  This division provides performance
    drilling and evaluation services, well construction, drilling
    tools and intervention services.                   
|
| |  | Completion & Production Systems  This
    division provides completion systems, artificial lift systems,
    fracturing technologies and production optimization.                                             
|
| |  | Precision Drilling International  This
    division provides light, medium and heavy duty land drilling
    rigs, drilling and maintenance crews and supervisory personnel
    and camp and catering services.
|
| |  | Pipeline & Specialty Services  This
    division provides pipeline services.                                                                                                                                  







10-K, 10-Q, 8-K


1



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##### Table of Contents



References to Weatherford




Strategy








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Leveraging our worldwide infrastructure to provide existing
    product support, to accelerate the market penetration of the
    tools and technology acquired from Precision Drilling
    Corporation, and to introduce new products and services.                                                                                                                                                                                                                                                                  
|
| |  | Further developing and commercializing our production-enhancing
    products and services, such as our underbalanced, wireline and
    intervention services, production optimization systems and
    expandable technology. These products and services either help
    increase well productivity, lower development costs or both.
    They also allow us to capitalize on important secular trends
    such as the maturation of the worlds major hydrocarbon
    reserves and the growth of deepwater activity.
|
| |  | Continue enhancing our existing products and service offerings
    in our historical core market segments to maintain our leading
    position in the markets in which we operate.                                                                                                                                                                                                                                                                                                                                   

Markets










2



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##### Table of Contents











Evaluation, Drilling & Intervention Services
Division










| |                                           
| | ------------------------------------------
| | Performance Drilling & Evaluation Services

® ®


3



---



##### Table of Contents



Directional Drilling




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Measurement while drilling (MWD) and logging while
    drilling (LWD): MWD and LWD measure, respectively,
    wellbore trajectory and formation properties operating in
    real-time while the well is being drilled. We have three
    significant market differentiators in this sector: 1) The
    Hostile Environment Logging
    (HELtm)
    MWD system, specifically designed for deepwater and high
    temperature/high pressure environments. 2) The Precision
    EMpulsetm
    System, a combination electromagnetic and mud pulse downhole
    data communications system that provides drilling data in an
    environment where traditional signal transmissions were
    potentially not possible, such as underbalanced drilling.
    3) The
    PrecisionLWDtm
    system, which contains the latest generation measurement
    technology, which yields some of the fastest logging speeds,
    highest temperature and highest pressure ratings in the world.
    In 2005, we logged the worlds deepest offshore well at
    +34,000 feet and +29,000 psi, demonstrating that we have a
    system that can operate reliably in challenging environments.
|
| |  | Rotary steerable systems (RSS): The RSS allows
    wellbore trajectory to be controlled while drilling with
    continuous rotation of the drill string to the surface. These
    systems are crucial for enabling long, step-out, directional
    wells and for reducing completion-running complications due to
    abrupt hole-angle changes caused by conventional drilling
    methods. A key differentiator for us is the full range of rotary
    steerable systems, including the
    Revolution®
    system. The Revolution system is an automated downhole assembly
    that provides precise wellbore steering while maximizing rate of
    penetration. It is the worlds first, small
    point-the-bit
    43/4-inch
    rotary steerable system.                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Directional drilling services: These services including
    surveying and drilling motors plus associated equipment, along
    with experienced personnel for directional and horizontal
    drilling design and operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

state-of ®


Controlled Pressure
Drilling®






4



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##### Table of Contents





®








Drilling-with-casing (DwC tm Systems


Wireline Services








tm


5



---



##### Table of Contents



tm








Well Testing




Geoscience Services








| |                                          
| | -----------------------------------------
| | Well Construction & Intervention Services



Tubular Running Services


6



---



##### Table of Contents





Cementation Tools




| |   |                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Centralizer Placement Software  Software for
    calculating centralizer spacing and type for optimum standoff.                                                                                  
|
| |  | Centralizers  A comprehensive range of products for
    varying applications and well conditions.                                                                                                
|
| |  | LoDRAGtm
    and
    LoTORQtm
    Centralizers  Mechanical friction-reduction systems
    for extended reach drilling and underpressured conditions where
    differential sticking risk is high.
|
| |  | Flow Enhancement Tools  Tools that improve cement
    placement.                                                                                                                                 
|
| |  | Float Equipment  Drillable shoes and collars with
    float valves that provide higher flow rates.                                                                                               
|
| |  | Other Equipment  Cement baskets, guide shoes,
    retainers and bridge plugs, multiple stage tools and cementing
    plugs.                                                                      

Liner Systems


Solid Tubular Expandable Technologies tm tm


Drilling Tools


7



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##### Table of Contents









| |   |                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Drill pipe and related drill stem tools, drill collars, heavy
    weight pipe and drilling jars.                                                                    
|
| |  | Fishing and downhole tools such as milling tools, casing
    cutters, fishing jars, spears and overshots, stabilizers, power
    swivels and bottom hole assemblies.
|
| |  | Pressure control equipment such as blow-out preventers, high
    pressure valves, accumulators, adapters and choke and kill
    manifolds.                          
|
| |  | Tubular handling equipment such as elevators, spiders, slips,
    tongs and kelly spinners.                                                                         

Intervention Services


Fishing Services


Reentry Services tm tm


Thru-tubing Services tm




| |            
| | -----------
| | Competition

® ®


8



---



##### Table of Contents



Completion & Production Systems Division






| |                   
| | ------------------
| | Completion Systems



Cased Hole Completion Systems


Sand Screens




Expandable Sand Screens
(ESS tm tm


Production Chemical Systems tm




| |                        
| | -----------------------
| | Artificial Lift Systems



Progressing Cavity Pumps


9



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##### Table of Contents



Reciprocating Rod Lift Systems state-of ® ®


Gas Lift Systems


Electrical Submersible Pumps


Hydraulic Lift Systems


Other Lift Systems






| |                        
| | -----------------------
| | Fracturing Technologies





| |                        
| | -----------------------
| | Production Optimization



10



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##### Table of Contents







Well Optimization


Reservoir Optimization


®


Work Processes




| |            
| | -----------
| | Competition



Precision Drilling International




11



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##### Table of Contents







Pipeline and Specialty Services




Properties




|                                              |                           |           |  |         |          |  |  |        |  |                                 |        |  |                                                                                                                                                            
|--------------------------------------------- | ------------------------- | --------- |  | ------- | -------- |  |  | ------ |  | ------------------------------- | ------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|                                              |                           | Facility  |  |         | Property |  |  |        |  |                                
|                                              |                           | Size      |  |         | Size     |  |  |        |  | Principal Services and Products
|Location                                      |                           | (Sq. Ft.) |  |         | (Acres)  |  |  | Tenure |  | Offered or Manufactured        
|                                              |                           |           |  |         |          |  |  |        |  |                                
|Evaluation, Drilling & Intervention Services: |                           |           |  |         |          |  |  |        |  |                                 |        | 
|                                              | Pearland, Texas           |           |  | 261,927 |          |  |  | 60.64  |  |                                 | Owned  |  | Fishing, drilling equipment                                                                                                                                
|                                              | Hassi Messaoud, Algeria   |           |  | 200,229 |          |  |  | 19.99  |  |                                 | Leased |  | Fishing, liner hangers, underbalanced services                                                                                                             
|                                              | Houma, Louisiana          |           |  | 175,000 |          |  |  | 13.00  |  |                                 | Owned  |  | Cementing products                                                                                                                                         
|                                              | Houston,
    Texas(1)     |           |  | 173,000 |          |  |  | 18.19  |  |                                 | Owned  |  | Research and development                                                                                                                                   
|                                              | Forus,
    Norway(1)      |           |  | 153,654 |          |  |  | 11.40  |  |                                 | Leased |  | Downhole services, well installation services, drilling
    equipment, thru tubing, cementing, fishing, re-entry, well
    intervention, completion systems
|                                              | Nisku, Alberta, Canada    |           |  | 149,193 |          |  |  | 27.79  |  |                                 | Owned  |  | Drilling equipment, fishing, wireline, underbalanced services                                                                                              
|                                              | Perth,
    Australia(1)   |           |  | 120,878 |          |  |  | 2.77   |  |                                 | Leased |  | Well installation services, fishing, drilling equipment,
    completion systems                                                                            
|                                              | Neuquen,
    Argentina(1) |           |  | 107,639 |          |  |  | 3.70   |  |                                 | Leased |  | Well installation services, downhole and underbalanced services,
    fishing, cementing, drilling equipment                                                
|                                              | Benbrook, Texas           |           |  | 95,000  |          |  |  | 3.89   |  |                                 | Owned  |  | Product development                                                                                                                                        
|                                              | El Yopal, Colombia        |           |  | 85,078  |          |  |  | 2.61   |  |                                 | Owned  |  | Cementing, drilling equipment, fishing, tubulars                                                                                                           
|                                              | Ventura, California       |           |  | 81,355  |          |  |  | 4.53   |  |                                 | Leased |  | Power tong equipment, well service work-over equipment                                                                                                     
|                                              | Hadhramout, Yemen         |           |  | 80,000  |          |  |  | 8.20   |  |                                 | Leased |  | Liner hangers, downhole services, underbalanced services                                                                                                   
|                                              | Corpus Christi, Texas     |           |  | 78,262  |          |  |  | 8.20   |  |                                 | Owned  |  | Fishing, drilling equipment, rotating control heads                                                                                                        

12



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##### Table of Contents



|                                 |                                   |           |  |         |          |  |  |        |  |                                 |        |  |                                                                                                                      
|-------------------------------- | --------------------------------- | --------- |  | ------- | -------- |  |  | ------ |  | ------------------------------- | ------ |  | ---------------------------------------------------------------------------------------------------------------------
|                                 |                                   | Facility  |  |         | Property |  |  |        |  |                                
|                                 |                                   | Size      |  |         | Size     |  |  |        |  | Principal Services and Products
|Location                         |                                   | (Sq. Ft.) |  |         | (Acres)  |  |  | Tenure |  | Offered or Manufactured        
|                                 |                                   |           |  |         |          |  |  |        |  |                                
|                                 | Langenhagen,
    Germany(1)       |           |  | 71,834  |          |  |  | 3.41   |  |                                 | Leased |  | Power and mechanized equipment, control systems, cementing
    products, completion systems, research and development
|                                 | Darwin,
    Australia(1)          |           |  | 71,688  |          |  |  | 1.65   |  |                                 | Leased |  | Well installation services, fishing, drilling equipment,
    completion systems                                      
|                                 | Macaé, Brazil                     |           |  | 66,908  |          |  |  | 11.68  |  |                                 | Owned  |  | Well installation, downhole and underbalanced services and
    cementing, completion and artificial lift products    
|                                 | New Plymouth, New Zealand         |           |  | 60,257  |          |  |  | 33.08  |  |                                 | Owned  |  | Fishing services, inspection services, liner hangers, tubular
    running services, underbalanced systems            
|Completion & Production Systems: |                                   |           |  |         |          |  |  |        |  |                                 |        | 
|                                 | New Brighton, Minnesota           |           |  | 211,600 |          |  |  | 25.75  |  |                                 | Owned  |  | Water well and industrial screens                                                                                    
|                                 | Aberdeen, Scotland                |           |  | 148,379 |          |  |  | 8.67   |  |                                 | Leased |  | Expandable slotted tubulars                                                                                          
|                                 | Houston, Texas                    |           |  | 130,000 |          |  |  | 14.00  |  |                                 | Owned  |  | Sand screens                                                                                                         
|                                 | Woodward, Oklahoma                |           |  | 118,000 |          |  |  | 49.58  |  |                                 | Leased |  | Reciprocating rod and hydraulic lift                                                                                 
|                                 | Huntsville,
    Texas(1)          |           |  | 112,648 |          |  |  | 20.00  |  |                                 | Owned  |  | Liner hangers, packers, completion systems                                                                           
|                                 | Edmonton, Alberta, Canada         |           |  | 108,797 |          |  |  | 11.34  |  |                                 | Owned  |  | Reciprocating rod lift, progressing cavity pumps                                                                     
|                                 | Greenville, Texas                 |           |  | 108,300 |          |  |  | 26.43  |  |                                 | Owned  |  | Reciprocating rod lift, electric submersible pumps                                                                   
|                                 | Nisku, Alberta, Canada            |           |  | 104,000 |          |  |  | 7.40   |  |                                 | Owned  |  | Reciprocating rod lift                                                                                               
|                                 | Sao Leopoldo, Brazil              |           |  | 103,490 |          |  |  | 9.46   |  |                                 | Owned  |  | Progressing cavity pumps                                                                                             
|                                 | Brisbane, Australia               |           |  | 98,658  |          |  |  | 4.04   |  |                                 | Leased |  | Water well and industrial screens                                                                                    
|                                 | Colorado Springs, Colorado        |           |  | 94,000  |          |  |  | 60.62  |  |                                 | Owned  |  | Reciprocating rod lift, electrical submersible pumps                                                                 
|                                 | Leetsdale, Pennsylvania           |           |  | 92,559  |          |  |  | 4.00   |  |                                 | Leased |  | Drilling fluids, completion chemicals                                                                                
|                                 | Caxias do Sul,
    Brazil(1)      |           |  | 88,899  |          |  |  | 17.26  |  |                                 | Owned  |  | Packers, liner hangers                                                                                               
|                                 | Kingwood, Texas                   |           |  | 83,500  |          |  |  | 10.47  |  |                                 | Leased |  | Well optimization equipment                                                                                          
|                                 | Availles-en-Chatellerault, France |           |  | 79,793  |          |  |  | 11.58  |  |                                 | Leased |  | Screen fabrication                                                                                                   
|                                 | Scott, Louisiana                  |           |  | 79,713  |          |  |  | 15.59  |  |                                 | Owned  |  | Tools for flow control, cased hole, safety valves                                                                    
|                                 | Longview, Texas                   |           |  | 79,086  |          |  |  | 17.63  |  |                                 | Owned  |  | Reciprocating rod lift                                                                                               
|                                 | Lloydminster, Alberta, Canada     |           |  | 77,700  |          |  |  | 6.81   |  |                                 | Owned  |  | Progressing cavity pumps                                                                                             
|                                 | Rio Tercero, Argentina            |           |  | 77,611  |          |  |  | 7.11   |  |                                 | Owned  |  | Reciprocating rod and gas lift                                                                                       
|                                 | New Iberia,
    Louisiana(1)      |           |  | 69,804  |          |  |  | 18.80  |  |                                 | Owned  |  | Liner hangers, sand screens, completion systems                                                                      
|                                 | Rio de Janeiro, Brazil            |           |  | 67,823  |          |  |  | 2.70   |  |                                 | Leased |  | Pumping units                                                                                                        
|                                 | Newcastle, Australia              |           |  | 67,576  |          |  |  | 4.35   |  |                                 | Owned  |  | Mining and urethane screens                                                                                          
|Corporate:                       |                                   |           |  |         |          |  |  |        |  |                                 |        | 
|                                 | Houston, Texas                    |           |  | 254,438 |          |  |  |       |  |                                 | Leased |  | Corporate offices                                                                                                    






|    |                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------
|(1) | Facility is shared by both our Evaluation, Drilling &
    Intervention Services and Completion & Production
    Systems Divisions.

13



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##### Table of Contents



Other Business Data




| |              
| | -------------
| | Raw Materials





| |                      
| | ---------------------
| | Customers and Backlog







| |                                     
| | ------------------------------------
| | Research and Development and Patents









| |                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) LWD and MWD systems, such as our MFR
    multi-frequency resistivity logging tool, our density-neutron
    combination logging tool, and our electro-magnetic telemetry
    tool;                                                                                                     
|
| | (2) our underbalanced drilling products and services,
    including our Virtual Riser offshore pressure
    control system, Williams high pressure rotating heads, internal
    riser rotating control heads for deepwater drilling, and our
    Clearwater chemicals and foam technology;
|
| | (3) new generation wireline magnetic casing inspection tool
    and wireline oil-based borehole imager;                                                                                                                                                                                     
|
| | (4) our expandable slotted and solid tubular products, such
    as our ESS expandable sand screens, many of such
    products are sold pursuant to a license from Shell;                                                                                                                  
|
| | (5) tubular running systems, including our
    PowerScope tong positioning system and our
    StabMaster tubular positioning system;                                                                                                                                                    
|
| | (6) casing exit systems, including our QuickCut
    casing window milling system;                                                                                                                                                                                                         
|
| | (7) drilling with casing equipment and services including
    the DrillShoe and ReamerShoe casing
    shoes, and our new suite of drilling hazard mitigation services;                                                                                                                  
|
| | (8) sensing systems for intelligent completion systems,
    such as our fiber optic flow meter, our Clarion
    fiber optic seismic sensing system, and our Red Eye
    water/oil ratio meter; and                                                                                      

14



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##### Table of Contents





| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | (9) wellbore completion products, such as our
    Optimax subsurface safety valve and
    FracGuard composite bridge plug.





| |            
| | -----------
| | Seasonality





| |          
| | ---------
| | Insurance







| |                                             
| | --------------------------------------------
| | Federal Regulation and Environmental Matters







15



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##### Table of Contents





| |          
| | ---------
| | Employees



Forward-Looking Statements








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A downturn in market conditions could affect projected
    results. Any material changes in oil and natural gas supply
    and demand, oil and natural gas prices, rig count or other
    market trends would affect our results and would likely affect
    the forward-looking information we provided. The oil and natural
    gas industry is extremely volatile and subject to change based
    on political and economic factors outside our control. During
    2004 and 2005, worldwide drilling activity increased; however,
    if an extended regional and/or worldwide recession were to
    occur, it would result in lower demand and lower prices for oil
    and natural gas, which would adversely affect drilling and
    production activity and therefore would affect our revenues and
    income. We have assumed increases in worldwide demand will
    continue throughout 2006.                                                                                                                                                                                                                                                     
|
| |  | Availability of a skilled workforce could affect our
    projected results. Due to the high activity in the
    exploration and production and oilfield service industries there
    is an increasing shortage of available skilled labor. Our
    forward-looking statements assume we will be able to recruit and
    maintain a sufficient skilled workforce for activity levels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | Increases in the prices and availability of our raw materials
    could affect our results of operations. We use large amounts
    of raw materials for manufacturing our products. The price of
    these raw materials has a significant impact on our cost of
    producing products for sale or producing fixed assets used in
    our business. We have assumed that the prices of our raw
    materials will remain within a manageable range and will be
    readily available. If we are unable to attain necessary raw
    materials or if we are unable to minimize the impact of
    increased raw materials costs through our supply chain
    initiatives or by passing through these increases to our
    customers, our margins and results of operations could be
    adversely affected.                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Our long-term growth depends upon technological innovation
    and commercialization. Our ability to deliver our long-term
    growth strategy depends in part on the commercialization of new
    technology. A central aspect of our growth strategy is to
    innovate our products and services, to obtain technologically
    advanced products through internal research and development
    and/or acquisitions, to protect proprietary technology from
    unauthorized use and to expand the markets for new technology
    through leverage of our worldwide infrastructure. The key to our
    success will be our ability to commercialize the technology that
    we have acquired and demonstrate the enhanced value our
    technology brings to our customers operations. Our major
    technological advances include, but are not limited to, those
    related to underbalanced systems, expandable solid tubulars,
    expandable sand screens and intelligent well completion. Our
    forward-looking statements have assumed successful
    commercialization of, and above-average growth from, these new
    products and services.

16



---



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Nonrealization of expected benefits from our 2002 corporate
    reincorporation could affect our projected results. We have
    gained certain business, financial and strategic advantages as a
    result of our reincorporation, including improvements to our
    global tax position and cash flow. An inability to continue to
    realize expected benefits of the reincorporation in the
    anticipated time frame, or at all, would negatively affect the
    benefit of our corporate reincorporation.                                                                                                                                                                                                                                     
|
| |  | Nonrealization of expected benefits from our 2005 acquisition
    of Precision Energy Services and Precision Drilling
    International could affect our projected results. We expect
    to gain certain business, financial and strategic advantages as
    a result of this acquisition, including synergies and operating
    efficiencies. An inability to realize expected strategic
    advantages as a result of the acquisition, would negatively
    affect the anticipated benefits of the acquisition.                                                                                                                                                                                                                                    
|
| |  | The cyclical nature of or a prolonged downturn in our
    industry could affect the carrying value of our goodwill. As
    of December 31, 2005, we had approximately
    $2.8 billion of goodwill. Our estimates of the value of our
    goodwill could be reduced in the future as a result of various
    factors, some of which are beyond our control. Any reduction in
    the value of our goodwill may result in an impairment charge and
    therefore adversely affect our results.                                                                                                                                                                                                                                                         
|
| |  | Currency fluctuations could have a material adverse financial
    impact on our business. A material change 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 future changes in currencies.                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Adverse weather conditions in certain regions could aversely
    affect our operations. In the summer of 2005, the Gulf of
    Mexico suffered several significant hurricanes. These hurricanes
    and associated hurricane threats reduced the number of days on
    which we and our customers could operate, which resulted in
    lower revenues than we otherwise would have achieved. Similarly,
    an unusually warm Canadian winter or unusually rough weather in
    the North Sea could reduce our operations and revenues from
    those areas during the relevant period. Our forward-looking
    statements assume weather patterns in our primary areas of
    operations will not deviate significantly from historical
    patterns.
|
| |  | Political disturbances, war, or terrorist attacks and changes
    in global trade policies could adversely impact our
    operations. We have assumed there will be no material
    political disturbances or terrorist attacks and there will be no
    material changes in global trade policies. Any further military
    action undertaken by the U.S. or other countries could
    adversely affect our results of operations.                                                                                                                                                                                                                                                                                                                   

www.sec.gov.







|         |             
|-------- | ------------
|Item 1A. | Risk Factors



International
Exposure




17



---



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| |   |                                                                                        
| | - | ---------------------------------------------------------------------------------------
| |  | disruption of oil and natural gas exploration and production
    activities;           
|
| |  | restriction of the movement and exchange of funds;                                     
|
| |  | inhibition of our ability to collect receivables;                                      
|
| |  | enactment of additional or stricter U.S. government or
    international sanctions; and
|
| |  | limitation of our access to markets for periods of time.                               

Currency Exposure








| |                                      
| | -------------------------------------
| | Litigation and Environmental Exposure







| |                  
| | -----------------
| | Industry Exposure



18



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| |                   
| | ------------------
| | Terrorism Exposure





| |             
| | ------------
| | Tax Exposure





| |                                 
| | --------------------------------
| | Acquisition Integration Exposure







| |                            
| | ---------------------------
| | Drilling Industry Exposures







19



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##### Table of Contents





Bermuda Governance Risks














| |   |                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | directors to be removed only for cause;                                                                                                                                                                                          
|
| |  | restrictions on the time period in which directors may be
    nominated; and                                                                                                                                                     
|
| |  | the board of directors to determine the powers, preferences and
    rights and the qualifications, limitations and restrictions of
    our preference shares and to issue the preference shares without
    shareholder approval.








|         |                        
|-------- | -----------------------
|Item 1B. | Unresolved SEC Comments








|        |           
|------- | ----------
|Item 2. | Properties



20



---



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|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings












|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders






PART II







|        |                                                                          
|------- | -------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity and Related
    Shareholder Matters



|                              |                |       |   |       |     |  |   |       | 
|----------------------------- | -------------- | ----- | - | ----- | --- |  | - | ----- | 
|                              |                | Price |  
|                              |                |       |  
|                              |                | High  |   |       | Low | 
|                              |                |       |   |       |     | 
|Year ending December 31, 2005 |                |       |   |       |     |  |   |      
|                              | First Quarter  |       | $ | 30.66 |     |  | $ | 24.25 | 
|                              | Second Quarter |       |   | 30.23 |     |  |   | 23.82 | 
|                              | Third Quarter  |       |   | 35.68 |     |  |   | 28.55 | 
|                              | Fourth Quarter |       |   | 37.94 |     |  |   | 28.50 | 
|Year ending December 31, 2004 |                |       |   |       |     |  |   |      
|                              | First Quarter  |       | $ | 23.55 |     |  | $ | 17.91 | 
|                              | Second Quarter |       |   | 22.99 |     |  |   | 19.84 | 
|                              | Third Quarter  |       |   | 25.78 |     |  |   | 21.46 | 
|                              | Fourth Quarter |       |   | 27.62 |     |  |   | 24.33 | 







21



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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data



|                                                             |  |                                         |           |  |         |   |           |         |  |   |           |  |  |         |           |   |  |   |           | 
|------------------------------------------------------------ |  | --------------------------------------- | --------- |  | ------- | - | --------- | ------- |  | - | --------- |  |  | ------- | --------- | - |  | - | --------- | 
|                                                             |  | Year Ended December 31,                 |          
|                                                             |  |                                         |          
|                                                             |  | 2005(a)                                 |           |  | 2004(b) |   |           | 2003(c) |  |   | 2002(d)   |  |  | 2001(e) |          
|                                                             |  |                                         |           |  |         |   |           |         |  |   |           |  |  |         |          
|                                                             |  | (In thousands, except per share amount) |          
|Statements of Operations Data:                               |  |                                         |           |  |         |   |           |         |  |   |           |  |  |         |           |   |  |   |           | 
|Revenues                                                     |  | $                                       | 4,333,227 |  |         | $ | 3,131,774 |         |  | $ | 2,562,034 |  |  | $       | 2,288,424 |   |  | $ | 2,291,732 | 
|Operating Income                                             |  |                                         | 569,429   |  |         |   | 415,747   |         |  |   | 286,217   |  |  |         | 63,408    |   |  |   | 406,100   | 
|Income (Loss) From Continuing Operations                     |  |                                         | 466,209   |  |         |   | 337,299   |         |  |   | 147,243   |  |  |         | (6,959    | ) |  |   | 212,008   | 
|Basic Earnings (Loss) Per Share From Continuing Operations   |  |                                         | 1.55      |  |         |   | 1.26      |         |  |   | 0.58      |  |  |         | (0.03     | ) |  |   | 0.93      | 
|Diluted Earnings (Loss) Per Share From Continuing Operations |  |                                         | 1.47      |  |         |   | 1.17      |         |  |   | 0.56      |  |  |         | (0.03     | ) |  |   | 0.87      | 
|Balance Sheet Data:                                          |  |                                         |           |  |         |   |           |         |  |   |           |  |  |         |           |   |  |   |           | 
|Total Assets                                                 |  | $                                       | 8,580,304 |  |         | $ | 5,543,482 |         |  | $ | 4,994,324 |  |  | $       | 4,494,989 |   |  | $ | 4,296,362 | 
|Long-term Debt                                               |  |                                         | 632,071   |  |         |   | 1,404,431 |         |  |   | 1,379,611 |  |  |         | 1,513,907 |   |  |   | 1,499,794 | 
|Shareholders Equity                                         |  |                                         | 5,666,817 |  |         |   | 3,313,389 |         |  |   | 2,708,068 |  |  |         | 1,974,496 |   |  |   | 1,838,240 | 
|Cash Dividends Per Share                                     |  |                                         |          |  |         |   |          |         |  |   |          |  |  |         |          |   |  |   |          | 




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In August 2005, we acquired Precision Energy Services and
    Precision Drilling International for $942.7 million in cash
    and 52.0 million Weatherford common shares. In connection
    with the acquisition we recorded exit and restructuring charges
    of $114.2 million, $78.7 million net of tax. In
    August 2005, we settled our Zero Coupon Convertible Senior
    Debentures and expensed $4.7 million, $3.3 million net
    of tax, of unamortized issuance costs. In December 2005, we
    recorded a $115.5 million gain on the sale of our remaining
    shares of Universal common stock with no related income tax
    impact.
|   
|(b) |  | In 2004, we recorded a $77.6 million gain on the sale of
    Universal common stock. There was no income tax impact related
    to the sale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(c) |  | In August 2003, we incurred $20.9 million,
    $13.6 million net of taxes, of debt redemption expenses
    related to the early extinguishment of our Convertible Preferred
    Debentures.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(d) |  | In 2002, we recorded a $217.1 million non-cash write-down
    of our investment in Universal and a $15.4 million
    restructuring and asset impairment charge related to a
    rationalization of our businesses in light of industry
    conditions. The net after tax impact of these charges was
    $156.2 million.                                                                                                                                                                                                                                                                                                                             
|   
|(e) |  | The year ended December 31, 2001 reflects goodwill
    amortization, net of taxes, of $36.9 million. Effective
    January 1, 2002, we adopted Statement of Financial
    Accounting Standards No. 142 and ceased the amortization of
    goodwill.                                                                                                                                                                                                                                                                                                                                                                                                  

22



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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations





Overview




| |        
| | -------
| | General







| |                
| | ---------------
| | Industry Trends





|     |  |            |       |           |        |   |                |              |  |               |              |  |  |  |     | 
|---- |  | ---------- | ----- | --------- | ------ | - | -------------- | ------------ |  | ------------- | ------------ |  |  |  | --- | 
|     |  |            |       | Henry Hub |        |   | North American |              |  | International |             
|     |  | WTI Oil(1) |       |           | Gas(2) |   |                | Rig Count(3) |  |               | Rig Count(3) | 
|     |  |            |       |           |        |   |                |              |  |               |              | 
|2005 |  | $          | 61.04 |           |        | $ | 11.225         |              |  |               | 2,046        |  |  |  | 948 | 
|2004 |  |            | 43.45 |           |        |   | 6.149          |              |  |               | 1,686        |  |  |  | 869 | 
|2003 |  |            | 32.52 |           |        |   | 6.189          |              |  |               | 1,531        |  |  |  | 803 | 






|    |                                                                         
|--- | ------------------------------------------------------------------------
|(1) | Price per barrel as of December 31 
    Source: Applied Reasoning, Inc.
|   
|(2) | Price per MM/ BTU as of December 31 
    Source: Oil World             
|   
|(3) | Average rig count for December  Source: Baker
    Hughes Rig Count     



23



---



##### Table of Contents











| |                             
| | ----------------------------
| | Opportunities and Challenges









| |                      
| | ---------------------
| | 2006 and 2007 Outlook





| |   |                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------
| |  | North American rig activity will increase modestly, with an
    increase in unconventional hydrocarbon production activity.
|
| |  | The international markets will flourish, with the Eastern
    Hemisphere standing out as the strongest market.             
|
| |  | Technologies that improve productivity will do increasingly well
    in the upcoming years.                                

24



---



##### Table of Contents





Geographic Markets.


Pricing.


Business Segments.




Results of Operations








25



---



##### Table of Contents





| |                           
| | --------------------------
| | Comparative Financial Data

|                                                              |                                                 |                                   |           |           |      |   |           |           |   |   |           |           |  
|------------------------------------------------------------- | ----------------------------------------------- | --------------------------------- | --------- | --------- | ---- | - | --------- | --------- | - | - | --------- | --------- | -
|                                                              |                                                 | Year Ended December 31,           |          
|                                                              |                                                 |                                   |          
|                                                              |                                                 | 2005                              |           |           | 2004 |   |           | 2003      |  
|                                                              |                                                 |                                   |           |           |      |   |           |           |  
|                                                              |                                                 | (In thousands, except percentages |          
|                                                              |                                                 | and per share data)               |          
|Revenues:                                                     |                                                 |                                   |           |           |      |   |           |           |   |   |           |          
|                                                              | Evaluation, Drilling & Intervention Services    |                                   | $         | 2,428,382 |      |   | $         | 1,697,635 |   |   | $         | 1,446,836 |  
|                                                              | Completion & Production Systems                 |                                   |           | 1,722,884 |      |   |           | 1,358,479 |   |   |           | 1,068,430 |  
|                                                              | Other Operations                                |                                   |           | 181,961   |      |   |           | 75,660    |   |   |           | 46,768    |  
|                                                              |                                                 |                                   |           |           |      |   |           |           |  
|                                                              |                                                 |                                   | 4,333,227 |           |      |   | 3,131,774 |           |   |   | 2,562,034 |          
|Gross Profit %(a):                                            |                                                 |                                   |           |           |      |   |           |           |   |   |           |          
|                                                              | Evaluation, Drilling & Intervention Services(a) |                                   |           | 35.3      | %    |   |           | 33.9      | % |   |           | 32.1      | %
|                                                              | Completion & Production Systems                 |                                   |           | 28.8      |      |   |           | 27.3      |   |   |           | 26.7      |  
|                                                              | Other Operations                                |                                   |           | 16.6      |      |   |           | 34.3      |   |   |           | 25.3      |  
|                                                              |                                                 |                                   |           |           |      |   |           |           |  
|                                                              |                                                 |                                   | 31.9      |           |      |   | 31.1      |           |   |   | 29.8      |          
|Research and Development:                                     |                                                 |                                   |           |           |      |   |           |           |   |   |           |          
|                                                              | Evaluation, Drilling & Intervention Services    |                                   | $         | 56,909    |      |   | $         | 39,258    |   |   | $         | 41,150    |  
|                                                              | Completion & Production Systems                 |                                   |           | 48,828    |      |   |           | 42,462    |   |   |           | 40,443    |  
|                                                              | Other Operations                                |                                   |           | 1,625     |      |   |           | 1,832     |   |   |           | 846       |  
|                                                              |                                                 |                                   |           |           |      |   |           |           |  
|                                                              |                                                 |                                   | 107,362   |           |      |   | 83,552    |           |   |   | 82,439    |          
|Selling, General and Administrative Attributable to Segments: |                                                 |                                   |           |           |      |   |           |           |   |   |           |          
|                                                              | Evaluation, Drilling & Intervention Services    |                                   |           | 296,914   |      |   |           | 220,253   |   |   |           | 192,381   |  
|                                                              | Completion & Production Systems                 |                                   |           | 240,654   |      |   |           | 208,556   |   |   |           | 166,467   |  
|                                                              | Other Operations                                |                                   |           | 17,446    |      |   |           | 11,430    |   |   |           | 7,757     |  
|                                                              |                                                 |                                   |           |           |      |   |           |           |  
|                                                              |                                                 |                                   | 555,014   |           |      |   | 440,239   |           |   |   | 366,605   |          
|Corporate General and Administrative                          |                                                 |                                   | 77,142    |           |      |   | 55,889    |           |   |   | 42,202    |          
|Equity in Earnings of Unconsolidated Affiliates               |                                                 |                                   | (19,923   | )         |      |   | (22,405   | )         |   |   | (14,947   | )        
|Exit Costs and Restructuring Charges                          |                                                 |                                   | 93,581    |           |      |   |          |           |   |   |          |          
|Operating Income (Expense):                                   |                                                 |                                   |           |           |      |   |           |           |   |   |           |          
|                                                              | Evaluation, Drilling & Intervention Services    |                                   |           | 502,339   |      |   |           | 316,440   |   |   |           | 231,446   |  
|                                                              | Completion & Production Systems                 |                                   |           | 206,776   |      |   |           | 120,113   |   |   |           | 78,813    |  
|                                                              | Other Operations                                |                                   |           | 11,114    |      |   |           | 12,678    |   |   |           | 3,213     |  
|                                                              | Exit Costs and Restructuring Charges            |                                   |           | (93,581   | )    |   |           |          |   |   |           |          |  
|                                                              | Corporate                                       |                                   |           | (57,219   | )    |   |           | (33,484   | ) |   |           | (27,255   | )
|                                                              |                                                 |                                   |           |           |      |   |           |           |  
|                                                              |                                                 |                                   | 569,429   |           |      |   | 415,747   |           |   |   | 286,217   |          
|Gain on Sale of Universal Common Stock                        |                                                 |                                   | 115,456   |           |      |   | 77,642    |           |   |   |          |          
|Debt Redemption Expense                                       |                                                 |                                   | (4,733    | )         |      |   |          |           |   |   | (20,911   | )        
|Interest Income                                               |                                                 |                                   | 11,208    |           |      |   | 3,846     |           |   |   | 1,909     |          
|Interest Expense                                              |                                                 |                                   | (80,343   | )         |      |   | (63,562   | )         |   |   | (76,447   | )        
|Other, Net                                                    |                                                 |                                   | 15,175    |           |      |   | (2,926    | )         |   |   | 8,747     |          
|Effective Tax Rate                                            |                                                 |                                   | 25.4      | %         |      |   | 21.5      | %         |   |   | 25.9      | %        
|Income from Continuing Operations per Diluted Share           |                                                 | $                                 | 1.47      |           |      | $ | 1.17      |           |   | $ | 0.56      |          
|Income (Loss) from Discontinued Operation, Net of Taxes       |                                                 |                                   | 1,211     |           |      |   | (7,153    | )         |   |   | (3,891    | )        
|Net Income per Diluted Share                                  |                                                 |                                   | 1.47      |           |      |   | 1.15      |           |   |   | 0.54      |          
|Depreciation and Amortization                                 |                                                 |                                   | 334,338   |           |      |   | 255,884   |           |   |   | 232,417   |          




|    |                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes $20.7 million of inventory write-downs associated
    with our 2005 acquisition of Precision. Total Costs of Products
    and Services associated with the 2005 Exit and Restructuring
    Charge were $51.3 million (see page 28).

26



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##### Table of Contents





| |                                           
| | ------------------------------------------
| | Consolidated Revenues by Geographic Region

|                             |       |              |    |     |      |  |    |      |   |  |    |     |  
|---------------------------- | ----- | ------------ | -- | --- | ---- |  | -- | ---- | - |  | -- | --- | -
|                             |       | Year Ended   |   
|                             |       | December 31, |   
|                             |       |              |   
|                             |       | 2005         |    |     | 2004 |  |    | 2003 |  
|                             |       |              |    |     |      |  |    |      |  
|U.S.                         |       |              | 37 | %   |      |  | 36 | %    |   |  | 33 | %  
|Canada                       |       |              | 18 |     |      |  | 17 |      |   |  | 17 |    
|Latin America                |       |              | 10 |     |      |  | 10 |      |   |  | 10 |    
|Europe, CIS and West Africa  |       |              | 15 |     |      |  | 18 |      |   |  | 20 |    
|Middle East and North Africa |       |              | 12 |     |      |  | 12 |      |   |  | 12 |    
|Asia Pacific                 |       |              | 8  |     |      |  | 7  |      |   |  | 8  |    
|                             |       |              |    |     |      |  |    |      |  
|                             | Total |              |    | 100 | %    |  |    | 100  | % |  |    | 100 | %
|                             |       |              |    |     |      |  |    |      |  

Company Results




| |         
| | --------
| | Revenues







| |             
| | ------------
| | Gross Profit





27



---



##### Table of Contents





| |                         
| | ------------------------
| | Research and Development





| |                                     
| | ------------------------------------
| | Corporate General and Administrative





| |                                                
| | -----------------------------------------------
| | Equity in Earnings of Unconsolidated Affiliates





| |                                     
| | ------------------------------------
| | Exit Costs and Restructuring Charges



| |            
| | -----------
| | 2005 Charge









28



---



##### Table of Contents





|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |         |        |  |   |         |         | 
|---------------------------------- | ----- | -------------- | ------- | ------ | ------------ | - | ------ | ---------- |  | - | --------- | ----- |  | ----- | ------- | ------ |  | - | ------- | ------- | 
|                                   |       | Evaluation,    |         |        |              |   |        |            |  |   |          
|                                   |       | Drilling &     |         |        | Completion & |   |        |            |  |   |           |      
|                                   |       | Intervention   |         |        | Production   |   |        | Other      |  |   |           |       | 
|                                   |       | Services       |         |        | Systems      |   |        | Operations |  |   | Corporate |       |  | Total |        
|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |        
|                                   |       | (In thousands) |        
|Cost of Products                   |       | $              | 20,654  |        |              | $ | 3,191  |            |  | $ | 651       |       |  | $     |        |        |  | $ | 24,496  |        
|Cost of Services                   |       |                | 25,766  |        |              |   |       |            |  |   | 1,083     |       |  |       |        |        |  |   | 26,849  |        
|Research and Development           |       |                | 9,000   |        |              |   |       |            |  |   |          |       |  |       |        |        |  |   | 9,000   |        
|Selling General & Administrative   |       |                | 17,349  |        |              |   | 3,462  |            |  |   | 341       |       |  |       |        |        |  |   | 21,152  |        
|Corporate General & Administrative |       |                |        |        |              |   |       |            |  |   |          |       |  |       | 32,738  |        |  |   | 32,738  |        
|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |        
|                                   | Total |                |         | 72,769 |              |   |        | 6,653      |  |   |           | 2,075 |  |       |         | 32,738 |  |   |         | 114,235 | 
|Cash Payments                      |       |                | (18,560 | )      |              |   | (3,854 | )          |  |   |          |       |  |       | (2,752  | )      |  |   | (25,166 | )      
|Non-cash Utilization               |       |                | (52,289 | )      |              |   |       |            |  |   |          |       |  |       | (12,911 | )      |  |   | (65,200 | )      
|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |        
|Balance at December 31, 2005       |       | $              | 1,920   |        |              | $ | 2,799  |            |  | $ | 2,075     |       |  | $     | 17,075  |        |  | $ | 23,869  |        
|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |        



| |            
| | -----------
| | 2003 Charge



|                                                             |  |                |       |  |              |   |       |       |  |   |       | 
|------------------------------------------------------------ |  | -------------- | ----- |  | ------------ | - | ----- | ----- |  | - | ----- | 
|                                                             |  | Evaluation,    |       |  |              |   |      
|                                                             |  | Drilling &     |       |  | Completion & |   |       |      
|                                                             |  | Intervention   |       |  | Production   |   |       |      
|                                                             |  | Services       |       |  | Systems      |   |       | Total | 
|                                                             |  |                |       |  |              |   |       |       | 
|                                                             |  | (In thousands) |      
|Cost of Products                                             |  | $              | 2,398 |  |              | $ | 1,905 |       |  | $ | 4,303 | 
|Cost of Services                                             |  |                | 973   |  |              |   |      |       |  |   | 973   | 
|Research and Development                                     |  |                | 51    |  |              |   | 425   |       |  |   | 476   | 
|Selling, General and Administrative Attributable to Segments |  |                | 548   |  |              |   | 1,410 |       |  |   | 1,958 | 
|                                                             |  |                |       |  |              |   |       |       | 
|Total                                                        |  | $              | 3,970 |  |              | $ | 3,740 |       |  | $ | 7,710 | 
|                                                             |  |                |       |  |              |   |       |       | 





| |                                       
| | --------------------------------------
| | Gain on Sale of Universal Common Stock





| |                        
| | -----------------------
| | Debt Redemption Expense



29



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| |                
| | ---------------
| | Interest Income





| |                 
| | ----------------
| | Interest Expense





| |           
| | ----------
| | Other, Net





| |             
| | ------------
| | Income Taxes





Segment Results




| |                                                 
| | ------------------------------------------------
| | Evaluation, Drilling & Intervention
    Services





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start-up








| |                                
| | -------------------------------
| | Completion & Production Systems





31



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| |                 
| | ----------------
| | Other Operations







Discontinued Operation




32



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Liquidity and Capital Resources




| |                      
| | ---------------------
| | Historical Cash Flows



|                                                               |                                                      |               |        |        |      |   |        |       | 
|-------------------------------------------------------------- | ---------------------------------------------------- | ------------- | ------ | ------ | ---- | - | ------ | ----- | 
|                                                               |                                                      | Year Ended    |       
|                                                               |                                                      | December 31,  |       
|                                                               |                                                      |               |       
|                                                               |                                                      | 2005          |        |        | 2004 |  
|                                                               |                                                      |               |        |        |      |  
|                                                               |                                                      | (In millions) |       
|Net Cash Provided by Operating Activities                      |                                                      | $             | 503.1  |        |      | $ | 503.5  |      
|Acquisition of Businesses, Net of Cash Acquired                |                                                      |               | (991.1 | )      |      |   | (26.5  | )    
|Acquisition of Intellectual Property                           |                                                      |               | (13.4  | )      |      |   | (20.5  | )    
|Capital Expenditures                                           |                                                      |               | (526.6 | )      |      |   | (310.9 | )    
|Proceeds from Sale of Universal Common Stock                   |                                                      |               | 276.8  |        |      |   | 231.8  |      
|Proceeds from Sales of Assets                                  |                                                      |               | 15.9   |        |      |   | 23.6   |      
|Other Investing Activities                                     |                                                      |               | (16.5  | )      |      |   | (2.8   | )    
|Cash Paid for Redemption of Zero Coupon Convertible Debentures |                                                      |               | (348.8 | )      |      |   |       |      
|Repayment of Asset Securitization, Net                         |                                                      |               |       |        |      |   | (75.0  | )    
|Borrowings (Repayments), Net                                   |                                                      |               | 728.8  |        |      |   | (192.8 | )    
|Proceeds from Exercise of Stock Options                        |                                                      |               | 191.1  |        |      |   | 129.5  |      
|Other Financing Activities                                     |                                                      |               | (2.5   | )      |      |   | 1.5    |      
|                                                               |                                                      |               |        |        |      |  
|                                                               | Net Increase (Decrease) in Cash and Cash Equivalents |               | $      | (183.2 | )    |   | $      | 261.4 | 
|                                                               |                                                      |               |        |        |      |  



| |                     
| | --------------------
| | Sources of Liquidity

S-3




|                                         |  |               |         |  |            |                      |           |            |  |   |            |  |  |              |      |  |  |   |       | 
|---------------------------------------- |  | ------------- | ------- |  | ---------- | -------------------- | --------- | ---------- |  | - | ---------- |  |  | ------------ | ---- |  |  | - | ----- | 
|                                         |  |               |         |  |            | Uses of Availability |           |            | 
|                                         |  |               |         |  |            |                      |           |            | 
|                                         |  | Facility      |         |  | Expiration |                      |           | Commercial |  |   | Letters of |  |  |             
|Short-term Financing Facilities          |  | Amount        |         |  | Date       |                      |           | Paper      |  |   | Credit     |  |  | Availability |     
|                                         |  |               |         |  |            |                      |           |            |  |   |            |  |  |              |     
|                                         |  | (In millions) |        
|364-Day Revolving Credit
    Facility(1) |  | $             | 1,200.0 |  |            |                      | Aug 2006  |            |  | $ | 716.9      |  |  | $            |     |  |  | $ | 483.1 | 
|2003 Revolving Credit
    Facility(1)    |  |               | 500.0   |  |            |                      | May 2006  |            |  |   |           |  |  |              | 17.2 |  |  |   | 482.8 | 
|Canadian Facility                        |  |               | 17.2    |  |            |                      | July 2006 |            |  |   |           |  |  |              | 0.5  |  |  |   | 16.7  | 






|    |                            
|--- | ---------------------------
|(1) | Revolving Credit Facilities

364-Day 364-Day


33



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364-Day








| |                 
| | ----------------
| | Commercial Paper







| |                  
| | -----------------
| | Cash Requirements









34



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| |                        
| | -----------------------
| | Contractual Obligations



|                            |                                 |                        |   |           |        |  |     |         |  |     |       |       |         |       |   |      |  |  |   |       | 
|--------------------------- | ------------------------------- | ---------------------- | - | --------- | ------ |  | --- | ------- |  | --- | ----- | ----- | ------- | ----- | - | ---- |  |  | - | ----- | 
|                            |                                 | Payments Due by Period |  
|                            |                                 |                        |  
|                            |                                 |                        |   | Less than |        |  | 1-3 |         |  | 4-5 |       |       | After 5 |      
|Obligations and Commitments |                                 | Total                  |   |           | 1 Year |  |     | Years   |  |     | Years |       |         | Years |  
|                            |                                 |                        |   |           |        |  |     |         |  |     |       |       |         |       |  
|                            |                                 | (In millions)          |  
|Recorded Obligations:       |                                 |                        |   |           |        |  |     |         |  |     |       |       |         |       |   |      |  |  |   |      
|                            | Short-term debt                 |                        | $ | 741.5     |        |  | $   | 741.5   |  |     | $     |      |         |       | $ |     |  |  | $ |      | 
|                            | Senior notes(a)                 |                        |   | 800.0     |        |  |     | 200.0   |  |     |       |      |         |       |   |     |  |  |   | 600.0 | 
|                            | Other long-term debt            |                        |   | 29.3      |        |  |     | 9.2     |  |     |       | 16.9  |         |       |   | 3.2  |  |  |   |      | 
|Unrecorded Obligations:     |                                 |                        |   |           |        |  |     |         |  |     |       |       |         |       |   |      |  |  |   |      
|                            | Noncancellable operating leases |                        |   | 300.8     |        |  |     | 52.0    |  |     |       | 76.8  |         |       |   | 52.5 |  |  |   | 119.5 | 
|                            | Letters of credit               |                        |   | 115.2     |        |  |     | 93.7    |  |     |       | 18.9  |         |       |   | 0.3  |  |  |   | 2.3   | 
|                            |                                 |                        |   |           |        |  |     |         |  |     |       |       |         |       |  
|                            | Total contractual obligations   |                        | $ | 1,986.8   |        |  | $   | 1,096.4 |  |     | $     | 112.6 |         |       | $ | 56.0 |  |  | $ | 721.8 | 
|                            |                                 |                        |   |           |        |  |     |         |  |     |       |       |         |       |  






|    |  |                                                                                                                                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Amounts represent the expected cash payments for our total debt
    and do not include any unamortized discounts or deferred gains
    on terminated interest rate swap agreements.



| |                
| | ---------------
| | Short-term Debt





| |             
| | ------------
| | Senior Notes





5 8 5 8


1 4 1 4




| |                     
| | --------------------
| | Other Long-term Debt





| |                       
| | ----------------------
| | Derivative Instruments



35



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5 8








| |        
| | -------
| | Warrant

10-day




| |              
| | -------------
| | Pension Plans







| |                                          
| | -----------------------------------------
| | Zero Coupon Convertible Senior Debentures



364-Day


36



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| |                               
| | ------------------------------
| | Off Balance Sheet Arrangements



| |           
| | ----------
| | Guarantees

1 4 5 8 364-Day




| |                  
| | -----------------
| | Letters of Credit





| |                 
| | ----------------
| | Operating Leases



Related Party Agreements






Critical Accounting Policies and Estimates






| |                                                                              
| | -----------------------------------------------------------------------------
| | Business Combinations and Goodwill and Indefinite-Lived
    Intangible Assets





37



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| |                  
| | -----------------
| | Long-Lived Assets



|                                     |  |              |                          | 
|------------------------------------ |  | ------------ | ------------------------ | 
|                                     |  | Useful Lives |                         
|                                     |  |              |                         
|Buildings and leasehold improvements |  |              | 5-40 years or lease term | 
|Rental and service equipment         |  |              | 2-20 years               | 
|Machinery and other                  |  |              | 2-12 years               | 
|Intangible assets                    |  |              | 3-20 years               | 







| |               
| | --------------
| | Self Insurance



38



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| |                                  
| | ---------------------------------
| | Employee Stock-Based Compensation

Accounting for Stock
Based Compensation,




|     |  |            |       |   |               |  |     |          |  |  |           |  |  |  |      | 
|---- |  | ---------- | ----- | - | ------------- |  | --- | -------- |  |  | --------- |  |  |  | ---- | 
|     |  | Expected   |       |   | Risk-Free     |  |     | Expected |  |  |          
|     |  | Volatility |       |   | Interest Rate |  |     | Life     |  |  | Dividends | 
|     |  |            |       |   |               |  |     |          |  |  |           | 
|2004 |  |            | 48.17 | % |               |  | 3.9 | %        |  |  | 5.0       |  |  |  | None | 
|2005 |  |            | 38.88 | % |               |  | 4.4 | %        |  |  | 5.0       |  |  |  | None | 





|                        |  |                          |     | 
|----------------------- |  | ------------------------ | --- | 
|                        |  | 100 Basis Point Increase |    
|                        |  |                          |    
|                        |  | (In millions)            |    
|Expected volatility     |  | $                        | 0.5 | 
|Risk-free interest rate |  | $                        | 0.5 | 



| |                                          
| | -----------------------------------------
| | Pension and Other Postretirement Benefits

Employers Accounting for
Pensions, Employers
Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits Employers Accounting for
Postretirement Benefits Other than Pensions.




39



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|                                  |  |                               |      |   |                |   |     | 
|--------------------------------- |  | ----------------------------- | ---- | - | -------------- | - | --- | 
|                                  |  | Increase (Decrease) of Annual |     
|                                  |  | Pension Expense               |     
|                                  |  |                               |     
|                                  |  | 50 Basis Point                |      |   | 50 Basis Point |  
|                                  |  | Increase                      |      |   | Decrease       |  
|                                  |  |                               |      |   |                |  
|                                  |  | (In millions)                 |     
|Discount rate                     |  | $                             | (1.0 | ) |                | $ | 1.0 | 
|Expected long-term rate of return |  | $                             | (0.5 | ) |                | $ | 0.5 | 



| |             
| | ------------
| | Income Taxes

Accounting for Income Taxes.






| |                                            
| | -------------------------------------------
| | Valuation Allowance for Deferred Tax Assets



40



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New Accounting Pronouncements


Inventory
Costs  an amendment of ARB 43,
Chapter 4


Share-Based Payment













|         |                                                              
|-------- | -------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosure About Market
    Risk



41



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Foreign Currency Exchange Rates








Interest Rates






|                                |  |               |       |  |       |   |       |          |  |   |       |  |  |   |       | 
|------------------------------- |  | ------------- | ----- |  | ----- | - | ----- | -------- |  | - | ----- |  |  | - | ----- | 
|                                |  | December 31,  |      
|                                |  |               |      
|                                |  | 2005          |       |  | 2004  |  
|                                |  |               |       |  |       |  
|                                |  | Carrying      |       |  | Fair  |   |       | Carrying |  |   | Fair  | 
|                                |  | Amount        |       |  | Value |   |       | Amount   |  |   | Value | 
|                                |  |               |       |  |       |   |       |          |  |   |       | 
|                                |  | (In millions) |      
|65/8% Senior
    Notes due 2011 |  | $             | 358.1 |  |       | $ | 374.0 |          |  | $ | 359.2 |  |  | $ | 386.4 | 
|4.95% Senior Notes due 2013     |  |               | 256.0 |  |       |   | 244.5 |          |  |   | 256.7 |  |  |   | 249.4 | 





42



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Interest Rate Swaps




5 8


1 4 5 8


43



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|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data




INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULE


|                                                                                                                      |                                                  |      |    |     | 
|--------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | ---- | -- | --- | 
|                                                                                                                      |                                                  | Page |   
|                                                                                                                      |                                                  |      |   
|Managements Report on Internal Control Over Financial
    Reporting                                                  |                                                  |      | 45 |    
|Report of Independent Registered Public Accounting Firm on
    Internal Control over Financial Reporting              |                                                  |      | 46 |    
|Report of Independent Registered Public Accounting Firm                                                               |                                                  |      | 47 |    
|Consolidated Balance Sheets as of December 31, 2005 and 2004                                                          |                                                  |      | 48 |    
|Consolidated Statements of Income for each of the three years in
    the period ended December 31, 2005               |                                                  |      | 49 |    
|Consolidated Statements of Shareholders Equity for each of
    the three years in the period ended December 31, 2005 |                                                  |      | 50 |    
|Consolidated Statements of Cash Flows for each of the three
    years in the period ended December 31, 2005           |                                                  |      | 51 |    
|Notes to Consolidated Financial Statements                                                                            |                                                  |      | 52 |    
|Financial Statement Schedule II:                                                                                      |                                                  |      |    |    
|                                                                                                                      | Valuation and Qualifying Accounts and Allowances |      |    | 101 | 

44



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MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING


13a-15(f).




Internal Control-Integrated
Framework.






45



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


ON INTERNAL CONTROL OVER FINANCIAL REPORTING






















| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





46



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM












Accounting for Stock-Based
Compensation.






| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





47



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


|                                                |                                                                                                                 |                   |           |           |      |   |           |           |  
|----------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | ----------------- | --------- | --------- | ---- | - | --------- | --------- | -
|                                                |                                                                                                                 | December 31,      |          
|                                                |                                                                                                                 |                   |          
|                                                |                                                                                                                 | 2005              |           |           | 2004 |  
|                                                |                                                                                                                 |                   |           |           |      |  
|                                                |                                                                                                                 | (In thousands,    |          
|                                                |                                                                                                                 | except par value) |          
|ASSETS                                         
|Current Assets:                                 |                                                                                                                 |                   |           |           |      |   |           |          
|                                                | Cash and Cash Equivalents                                                                                       |                   | $         | 134,245   |      |   | $         | 317,439   |  
|                                                | Accounts Receivable, Net of Allowance for Uncollectible
    Accounts of $12,210 in 2005 and $15,910 in 2004     |                   |           | 1,259,990 |      |   |           | 742,291   |  
|                                                | Inventories                                                                                                     |                   |           | 890,121   |      |   |           | 679,607   |  
|                                                | Current Deferred Tax Assets                                                                                     |                   |           | 158,653   |      |   |           | 96,482    |  
|                                                | Other Current Assets                                                                                            |                   |           | 195,864   |      |   |           | 107,359   |  
|                                                |                                                                                                                 |                   |           |           |      |  
|                                                |                                                                                                                 |                   | 2,638,873 |           |      |   | 1,943,178 |          
|                                                |                                                                                                                 |                   |           |           |      |  
|Property, Plant and Equipment, at Cost:         |                                                                                                                 |                   |           |           |      |   |           |          
|                                                | Land, Buildings and Leasehold Improvements                                                                      |                   |           | 351,306   |      |   |           | 285,097   |  
|                                                | Rental and Service Equipment                                                                                    |                   |           | 2,361,188 |      |   |           | 1,743,906 |  
|                                                | Machinery and Other                                                                                             |                   |           | 1,248,105 |      |   |           | 812,151   |  
|                                                |                                                                                                                 |                   |           |           |      |  
|                                                |                                                                                                                 |                   | 3,960,599 |           |      |   | 2,841,154 |          
|                                                | Less: Accumulated Depreciation                                                                                  |                   |           | 1,593,362 |      |   |           | 1,463,972 |  
|                                                |                                                                                                                 |                   |           |           |      |  
|                                                |                                                                                                                 |                   | 2,367,237 |           |      |   | 1,377,182 |          
|                                                |                                                                                                                 |                   |           |           |      |  
|Goodwill                                        |                                                                                                                 |                   | 2,808,217 |           |      |   | 1,669,637 |          
|Equity Investments in Unconsolidated Affiliates |                                                                                                                 |                   | 36,990    |           |      |   | 170,202   |          
|Other Intangible Assets, Net                    |                                                                                                                 |                   | 621,365   |           |      |   | 294,593   |          
|Other Assets                                    |                                                                                                                 |                   | 107,622   |           |      |   | 88,690    |          
|                                                |                                                                                                                 |                   |           |           |      |  
|                                                |                                                                                                                 | $                 | 8,580,304 |           |      | $ | 5,543,482 |          
|                                                |                                                                                                                 |                   |           |           |      |  
|                                               
|LIABILITIES AND SHAREHOLDERS EQUITY           
|Current Liabilities:                            |                                                                                                                 |                   |           |           |      |   |           |          
|                                                | Short-term Borrowings and Current Portion of Long-term Debt                                                     |                   | $         | 954,766   |      |   | $         | 22,235    |  
|                                                | Accounts Payable                                                                                                |                   |           | 476,363   |      |   |           | 279,763   |  
|                                                | Accrued Salaries and Benefits                                                                                   |                   |           | 183,738   |      |   |           | 137,496   |  
|                                                | Foreign Income Taxes Payable                                                                                    |                   |           | 97,888    |      |   |           | 50,693    |  
|                                                | Other Current Liabilities                                                                                       |                   |           | 285,386   |      |   |           | 169,819   |  
|                                                |                                                                                                                 |                   |           |           |      |  
|                                                |                                                                                                                 |                   | 1,998,141 |           |      |   | 660,006   |          
|                                                |                                                                                                                 |                   |           |           |      |  
|Long-term Debt                                  |                                                                                                                 |                   | 632,071   |           |      |   | 830,853   |          
|Zero Coupon Convertible Senior Debentures       |                                                                                                                 |                   |          |           |      |   | 573,578   |          
|Deferred Tax Liabilities                        |                                                                                                                 |                   | 88,476    |           |      |   | 30,580    |          
|Other Liabilities                               |                                                                                                                 |                   | 194,799   |           |      |   | 135,076   |          
|Commitments and Contingencies                   |                                                                                                                 |                   |           |           |      |   |           |          
|Shareholders Equity:                           |                                                                                                                 |                   |           |           |      |   |           |          
|                                                | Common Shares, $1 Par Value, Authorized
    500,000 Shares, Issued 358,973 and 290,558 Shares,
    Respectively |                   |           | 358,973   |      |   |           | 290,558   |  
|                                                | Capital in Excess of Par Value                                                                                  |                   |           | 4,164,365 |      |   |           | 2,386,086 |  
|                                                | Treasury Shares, Net                                                                                            |                   |           | (152,111  | )    |   |           | (228,064  | )
|                                                | Retained Earnings                                                                                               |                   |           | 1,202,938 |      |   |           | 735,518   |  
|                                                | Accumulated Other Comprehensive Income                                                                          |                   |           | 92,652    |      |   |           | 129,291   |  
|                                                |                                                                                                                 |                   |           |           |      |  
|                                                |                                                                                                                 |                   | 5,666,817 |           |      |   | 3,313,389 |          
|                                                |                                                                                                                 |                   |           |           |      |  
|                                                |                                                                                                                 | $                 | 8,580,304 |           |      | $ | 5,543,482 |          
|                                                |                                                                                                                 |                   |           |           |      |  



48



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME


|                                                                                |                                                              |                                          |           |           |      |   |           |           |   |   |           |           |  
|------------------------------------------------------------------------------- | ------------------------------------------------------------ | ---------------------------------------- | --------- | --------- | ---- | - | --------- | --------- | - | - | --------- | --------- | -
|                                                                                |                                                              | Year Ended December 31,                  |          
|                                                                                |                                                              |                                          |          
|                                                                                |                                                              | 2005                                     |           |           | 2004 |   |           | 2003      |  
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|                                                                                |                                                              | (In thousands, except per share amounts) |          
|Revenues:                                                                       |                                                              |                                          |           |           |      |   |           |           |   |   |           |          
|                                                                                | Products                                                     |                                          | $         | 1,856,278 |      |   | $         | 1,531,391 |   |   | $         | 1,253,329 |  
|                                                                                | Services                                                     |                                          |           | 2,476,949 |      |   |           | 1,600,383 |   |   |           | 1,308,705 |  
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|                                                                                |                                                              |                                          | 4,333,227 |           |      |   | 3,131,774 |           |   |   | 2,562,034 |          
|Costs and Expenses:                                                             |                                                              |                                          |           |           |      |   |           |           |   |   |           |          
|                                                                                | Cost of Products                                             |                                          |           | 1,303,185 |      |   |           | 1,111,100 |   |   |           | 887,948   |  
|                                                                                | Cost of Services                                             |                                          |           | 1,647,437 |      |   |           | 1,047,652 |   |   |           | 911,570   |  
|                                                                                | Research and Development                                     |                                          |           | 107,362   |      |   |           | 83,552    |   |   |           | 82,439    |  
|                                                                                | Selling, General and Administrative Attributable to Segments |                                          |           | 555,014   |      |   |           | 440,239   |   |   |           | 366,605   |  
|                                                                                | Corporate General and Administrative                         |                                          |           | 77,142    |      |   |           | 55,889    |   |   |           | 42,202    |  
|                                                                                | Equity in Earnings of Unconsolidated Affiliates              |                                          |           | (19,923   | )    |   |           | (22,405   | ) |   |           | (14,947   | )
|                                                                                | Exit Costs and Restructuring Charges                         |                                          |           | 93,581    |      |   |           |          |   |   |           |          |  
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|                                                                                |                                                              |                                          | 3,763,798 |           |      |   | 2,716,027 |           |   |   | 2,275,817 |          
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|Operating Income                                                                |                                                              |                                          | 569,429   |           |      |   | 415,747   |           |   |   | 286,217   |          
|Other Income (Expense):                                                         |                                                              |                                          |           |           |      |   |           |           |   |   |           |          
|                                                                                | Gain on Sale of Universal Common Stock                       |                                          |           | 115,456   |      |   |           | 77,642    |   |   |           |          |  
|                                                                                | Interest Income                                              |                                          |           | 11,208    |      |   |           | 3,846     |   |   |           | 1,909     |  
|                                                                                | Interest Expense                                             |                                          |           | (80,343   | )    |   |           | (63,562   | ) |   |           | (76,447   | )
|                                                                                | Debt Redemption Expense                                      |                                          |           | (4,733    | )    |   |           |          |   |   |           | (20,911   | )
|                                                                                | Other, Net                                                   |                                          |           | 15,175    |      |   |           | (2,926    | ) |   |           | 8,747     |  
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|Income from Continuing Operations Before Income Taxes and
    Minority Interest |                                                              |                                          | 626,192   |           |      |   | 430,747   |           |   |   | 199,515   |          
|Provision for Income Taxes                                                      |                                                              |                                          | (159,166  | )         |      |   | (92,672   | )         |   |   | (51,608   | )        
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|Income from Continuing Operations Before Minority Interest                      |                                                              |                                          | 467,026   |           |      |   | 338,075   |           |   |   | 147,907   |          
|Minority Interest, Net of Taxes                                                 |                                                              |                                          | (817      | )         |      |   | (776      | )         |   |   | (664      | )        
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|Income from Continuing Operations                                               |                                                              |                                          | 466,209   |           |      |   | 337,299   |           |   |   | 147,243   |          
|Income (Loss) from Discontinued Operation, Net of Taxes                         |                                                              |                                          | 1,211     |           |      |   | (7,153    | )         |   |   | (3,891    | )        
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|Net Income                                                                      |                                                              | $                                        | 467,420   |           |      | $ | 330,146   |           |   | $ | 143,352   |          
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|Basic Earnings Per Share:                                                       |                                                              |                                          |           |           |      |   |           |           |   |   |           |          
|                                                                                | Income from Continuing Operations                            |                                          | $         | 1.55      |      |   | $         | 1.26      |   |   | $         | 0.58      |  
|                                                                                | Income (Loss) from Discontinued Operation                    |                                          |           | 0.01      |      |   |           | (0.03     | ) |   |           | (0.01     | )
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|                                                                                | Net Income                                                   |                                          | $         | 1.56      |      |   | $         | 1.23      |   |   | $         | 0.57      |  
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|Diluted Earnings Per Share:                                                     |                                                              |                                          |           |           |      |   |           |           |   |   |           |          
|                                                                                | Income from Continuing Operations                            |                                          | $         | 1.47      |      |   | $         | 1.17      |   |   | $         | 0.56      |  
|                                                                                | Income (Loss) from Discontinued Operation                    |                                          |           | 0.00      |      |   |           | (0.02     | ) |   |           | (0.02     | )
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|                                                                                | Net Income                                                   |                                          | $         | 1.47      |      |   | $         | 1.15      |   |   | $         | 0.54      |  
|                                                                                |                                                              |                                          |           |           |      |   |           |           |  
|Weighted Average Shares Outstanding:                                            |                                                              |                                          |           |           |      |   |           |           |   |   |           |          
|                                                                                | Basic                                                        |                                          |           | 300,336   |      |   |           | 268,000   |   |   |           | 253,048   |  
|                                                                                | Diluted                                                      |                                          |           | 322,286   |      |   |           | 297,368   |   |   |           | 263,522   |  



49



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##### Table of Contents






WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


|                                                                                                               |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |   |  |   |        |   |  |   |           |         |  
|-------------------------------------------------------------------------------------------------------------- | ----------------------------------------- | -------------------------------- | ------- | - | ---------- | - | --------- | ----------- |  | ----- | --------------- | ------- |  | ------ | -------- | ------- | ----- |  | -------- | ------------ |  | ------------- | -------- | - |  | - | ------ | - |  | - | --------- | ------- | -
|                                                                                                               |                                           |                                  |         |   |            |   |           | Accumulated |  |       | Treasury Shares |         |  |       
|                                                                                                               |                                           | Common                           |         |   | Capital in |   |           |             |  | Other |                 |         |  |        |          | Total   |      
|                                                                                                               |                                           | Shares                           |         |   | Excess of  |   |           | Retained    |  |       | Comprehensive   |         |  |        |          | Share   |       |  | Deferred |              |  | Shareholders |         
|                                                                                                               |                                           | $1 Par                           |         |   | Par Value  |   |           | Earnings    |  |       | Income (Loss)   |         |  | Shares |          |         | Value |  |          | Compensation |  |               | Equity   |  
|                                                                                                               |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |  
|                                                                                                               |                                           | (In thousands, except par value) |        
|Balance at December 31, 2002                                                                                   |                                           | $                                | 261,598 |   |            | $ | 1,856,903 |             |  | $     | 262,020         |         |  | $      | (147,900 | )       |       |  | (20,340  | )            |  | $             | (270,333 | ) |  | $ | 12,208 |   |  | $ | 1,974,496 |        
|Comprehensive Income:                                                                                          |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |   |  |   |        |   |  |   |           |        
|                                                                                                               | Net Income                                |                                  |         |  |            |   |           |            |  |       |                 | 143,352 |  |        |          |        |       |  |          |             |  |               |          |  |  |   |        |  |  |   |           | 143,352 |  
|                                                                                                               | Foreign Currency Translation Adjustment   |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | 170,987 |       |  |          |             |  |               |          |  |  |   |        |  |  |   |           | 170,987 |  
|                                                                                                               | Pension Liability Adjustment              |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | 898     |       |  |          |             |  |               |          |  |  |   |        |  |  |   |           | 898     |  
|                                                                                                               | Unrealized Loss on Derivative Instruments |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | (3,251  | )     |  |          |             |  |               |          |  |  |   |        |  |  |   |           | (3,251  | )
|                                                                                                               |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |  
|Comprehensive Income                                                                                           |                                           |                                  |        |   |            |   |          |             |  |       | 143,352         |         |  |        | 168,634  |         |       |  |         |              |  |               |         |   |  |   |       |   |  |   | 311,986   |        
|Shares Issued in Offering                                                                                      |                                           |                                  | 20,000  |   |            |   | 380,000   |             |  |       |                |         |  |        |         |         |       |  |         |              |  |               |         |   |  |   |       |   |  |   | 400,000   |        
|Stock Options Granted and Exercised                                                                            |                                           |                                  | 1,246   |   |            |   | 12,739    |             |  |       |                |         |  |        |         |         |       |  | 220      |              |  |               | 2,978    |   |  |   |       |   |  |   | 16,963    |        
|Tax Benefit of Options Exercised                                                                               |                                           |                                  |        |   |            |   | 4,402     |             |  |       |                |         |  |        |         |         |       |  |         |              |  |               |         |   |  |   |       |   |  |   | 4,402     |        
|Purchase of Treasury Shares for Executive Deferred Compensation
    Plan, Net of Distributions and Forfeitures |                                           |                                  |        |   |            |   |          |             |  |       |                |         |  |        |         |         |       |  | (96      | )            |  |               | (2,619   | ) |  |   | 2,840  |   |  |   | 221       |        
|                                                                                                               |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |  
|Balance at December 31, 2003                                                                                   |                                           |                                  | 282,844 |   |            |   | 2,254,044 |             |  |       | 405,372         |         |  |        | 20,734   |         |       |  | (20,216  | )            |  |               | (269,974 | ) |  |   | 15,048 |   |  |   | 2,708,068 |        
|Comprehensive Income:                                                                                          |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |   |  |   |        |   |  |   |           |        
|                                                                                                               | Net Income                                |                                  |         |  |            |   |           |            |  |       |                 | 330,146 |  |        |          |        |       |  |          |             |  |               |          |  |  |   |        |  |  |   |           | 330,146 |  
|                                                                                                               | Foreign Currency Translation Adjustment   |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | 109,750 |       |  |          |             |  |               |          |  |  |   |        |  |  |   |           | 109,750 |  
|                                                                                                               | Pension Liability Adjustment              |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | (1,457  | )     |  |          |             |  |               |          |  |  |   |        |  |  |   |           | (1,457  | )
|                                                                                                               | Realized Loss on Derivative Instruments   |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | 264     |       |  |          |             |  |               |          |  |  |   |        |  |  |   |           | 264     |  
|                                                                                                               |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |  
|Comprehensive Income                                                                                           |                                           |                                  |        |   |            |   |          |             |  |       | 330,146         |         |  |        | 108,557  |         |       |  |         |              |  |               |         |   |  |   |       |   |  |   | 438,703   |        
|Equity Awards Granted and Exercised                                                                            |                                           |                                  | 7,714   |   |            |   | 104,058   |             |  |       |                |         |  |        |         |         |       |  | 2,160    |              |  |               | 26,677   |   |  |   |       |   |  |   | 138,449   |        
|Tax Benefit of Options Exercised                                                                               |                                           |                                  |        |   |            |   | 27,984    |             |  |       |                |         |  |        |         |         |       |  |         |              |  |               |         |   |  |   |       |   |  |   | 27,984    |        
|Purchase of Treasury Shares for Executive Deferred Compensation
    Plan, Net of Distributions and Forfeitures |                                           |                                  |        |   |            |   |          |             |  |       |                |         |  |        |         |         |       |  | (32      | )            |  |               | (1,236   | ) |  |   | 1,421  |   |  |   | 185       |        
|                                                                                                               |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |  
|Balance at December 31, 2004                                                                                   |                                           |                                  | 290,558 |   |            |   | 2,386,086 |             |  |       | 735,518         |         |  |        | 129,291  |         |       |  | (18,088  | )            |  |               | (244,533 | ) |  |   | 16,469 |   |  |   | 3,313,389 |        
|Comprehensive Income:                                                                                          |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |   |  |   |        |   |  |   |           |        
|                                                                                                               | Net Income                                |                                  |         |  |            |   |           |            |  |       |                 | 467,420 |  |        |          |        |       |  |          |             |  |               |          |  |  |   |        |  |  |   |           | 467,420 |  
|                                                                                                               | Foreign Currency Translation Adjustment   |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | (23,856 | )     |  |          |             |  |               |          |  |  |   |        |  |  |   |           | (23,856 | )
|                                                                                                               | Pension Liability Adjustment              |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | (8,880  | )     |  |          |             |  |               |          |  |  |   |        |  |  |   |           | (8,880  | )
|                                                                                                               | Unrealized Loss on Derivative Instruments |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | (4,180  | )     |  |          |             |  |               |          |  |  |   |        |  |  |   |           | (4,180  | )
|                                                                                                               | Realized Loss on Derivative Instruments   |                                  |         |  |            |   |           |            |  |       |                 |        |  |        |          | 277     |       |  |          |             |  |               |          |  |  |   |        |  |  |   |           | 277     |  
|                                                                                                               |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |  
|Comprehensive Income (Loss)                                                                                    |                                           |                                  |        |   |            |   |          |             |  |       | 467,420         |         |  |        | (36,639  | )       |       |  |         |              |  |               |         |   |  |   |       |   |  |   | 430,781   |        
|Shares Issued in Acquisition                                                                                   |                                           |                                  | 52,000  |   |            |   | 1,346,020 |             |  |       |                |         |  |        |         |         |       |  |         |              |  |               |         |   |  |   |       |   |  |   | 1,398,020 |        
|Conversion of Zero Coupon Convertible Senior Debentures                                                        |                                           |                                  | 7,346   |   |            |   | 228,845   |             |  |       |                |         |  |        |         |         |       |  |         |              |  |               |         |   |  |   |       |   |  |   | 236,191   |        
|Equity Awards Granted, Vested and Exercised                                                                    |                                           |                                  | 9,069   |   |            |   | 130,907   |             |  |       |                |         |  |        |         |         |       |  | 6,064    |              |  |               | 74,971   |   |  |   |       |   |  |   | 214,947   |        
|Tax Benefit of Options Exercised                                                                               |                                           |                                  |        |   |            |   | 72,507    |             |  |       |                |         |  |        |         |         |       |  |         |              |  |               |         |   |  |   |       |   |  |   | 72,507    |        
|Purchase of Treasury Shares for Executive Deferred Compensation
    Plan, Net of Distributions and Forfeitures |                                           |                                  |        |   |            |   |          |             |  |       |                |         |  |        |         |         |       |  | 165      |              |  |               | (473     | ) |  |   | 1,455  |   |  |   | 982       |        
|                                                                                                               |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |  
|Balance at December 31, 2005                                                                                   |                                           | $                                | 358,973 |   |            | $ | 4,164,365 |             |  | $     | 1,202,938       |         |  | $      | 92,652   |         |       |  | (11,859  | )            |  | $             | (170,035 | ) |  | $ | 17,924 |   |  | $ | 5,666,817 |        
|                                                                                                               |                                           |                                  |         |   |            |   |           |             |  |       |                 |         |  |        |          |         |       |  |          |              |  |               |          |  



50



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##### Table of Contents






WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |          |          |          |          |          |         |         |  
|------------------------------------------------------------ | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | --------------------------- | -------------------------------------------------- | ---------- | -------- | ------- | -------- | -------- | -------- | -------- | -------- | -------- | ------- | ------- | -
|                                                             |                                                                                       | Year Ended December 31,                                                               |                            
|                                                             |                                                                                       |                                                                                       |                            
|                                                             |                                                                                       | 2005                                                                                  |                             |                                                    | 2004       |          |         | 2003     |         
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         
|                                                             |                                                                                       | (In thousands)                                                                        |                            
|Cash Flows From Operating Activities:                        |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |          |          |          |         
|                                                             | Net Income                                                                            |                                                                                       | $                           | 467,420                                            |            |          | $       | 330,146  |          |          | $        | 143,352  |         
|                                                             | Adjustments to Reconcile Net Income to Net Cash Provided by
    Operating Activities: |                                                                                       |                             |                                                    |            |          |         |          |          |          |          |          |         
|                                                             |                                                                                       | Depreciation and Amortization                                                         |                             |                                                    | 334,338    |          |         |          | 255,884  |          |          |          | 232,417  |        
|                                                             |                                                                                       | Gain on Sale of Universal Common Stock                                                |                             |                                                    | (115,456   | )        |         |          | (77,642  | )        |          |          |         |        
|                                                             |                                                                                       | (Gain) Loss on Sale of Assets, Net                                                    |                             |                                                    | 6,625      |          |         |          | 4,816    |          |          |          | (4,704   | )      
|                                                             |                                                                                       | (Income) Loss from Discontinued Operation                                             |                             |                                                    | (1,211     | )        |         |          | 7,153    |          |          |          | 3,891    |        
|                                                             |                                                                                       | Employee Stock-Based Compensation Expense                                             |                             |                                                    | 28,948     |          |         |          | 9,061    |          |          |          | 3,195    |        
|                                                             |                                                                                       | Equity in Earnings of Unconsolidated Affiliates                                       |                             |                                                    | (19,923    | )        |         |          | (22,405  | )        |          |          | (14,947  | )      
|                                                             |                                                                                       | Non-cash Portion of Exit Costs and Restructuring Charges                              |                             |                                                    | 65,200     |          |         |          |         |          |          |          |         |        
|                                                             |                                                                                       | Amortization of Original Issue Discount                                               |                             |                                                    | 11,432     |          |         |          | 16,828   |          |          |          | 16,334   |        
|                                                             |                                                                                       | Debt Redemption Expense                                                               |                             |                                                    | 4,733      |          |         |          |         |          |          |          | 20,911   |        
|                                                             |                                                                                       | Deferred Income Tax Provision (Benefit)                                               |                             |                                                    | 28,777     |          |         |          | (15,726  | )        |          |          | 30,615   |        
|                                                             |                                                                                       | Other, Net                                                                            |                             |                                                    | 6,873      |          |         |          | 6,181    |          |          |          | 2,532    |        
|                                                             |                                                                                       | Change in Operating Assets and Liabilities, Net of Effect of
    Businesses Acquired: |                             |                                                    |            |          |         |          |          |          |          |          |          |        
|                                                             |                                                                                       |                                                                                       | Accounts Receivable         |                                                    |            | (244,947 | )       |          |          | (109,248 | )        |          |          | (89,199 | )      
|                                                             |                                                                                       |                                                                                       | Inventories                 |                                                    |            | (150,762 | )       |          |          | (70,712  | )        |          |          | (54,256 | )      
|                                                             |                                                                                       |                                                                                       | Other Current Assets        |                                                    |            | 3,330    |         |          |          | 2,616    |          |          |          | (10,505 | )      
|                                                             |                                                                                       |                                                                                       | Accounts Payable            |                                                    |            | 31,419   |         |          |          | 42,927   |          |          |          | 53,042  |        
|                                                             |                                                                                       |                                                                                       | Accrued Current Liabilities |                                                    |            | 140,262  |         |          |          | 130,339  |          |          |          | (23,131 | )      
|                                                             |                                                                                       |                                                                                       | Other, Net                  |                                                    |            | (96,258  | )       |          |          | (14,077  | )        |          |          | (12,295 | )      
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         
|                                                             |                                                                                       |                                                                                       |                             | Net Cash Provided by Continuing Operations         |            |          | 500,800 |          |          |          | 496,141  |          |          |         | 297,252 |  
|                                                             |                                                                                       |                                                                                       |                             | Net Cash Provided (Used) by Discontinued Operation |            |          | 2,294   |          |          |          | 7,338    |          |          |         | (11,850 | )
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         
|                                                             |                                                                                       |                                                                                       |                             | Net Cash Provided by Operating Activities          |            |          | 503,094 |          |          |          | 503,479  |          |          |         | 285,402 |  
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         
|Cash Flows from Investing Activities:                        |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |          |          |          |         
|                                                             | Acquisitions of Businesses, Net of Cash Acquired                                      |                                                                                       |                             | (991,067                                           | )          |          |         | (26,464  | )        |          |          | (61,527  | )       
|                                                             | Capital Expenditures for Property, Plant and Equipment                                |                                                                                       |                             | (526,618                                           | )          |          |         | (310,868 | )        |          |          | (302,502 | )       
|                                                             | Acquisition of Intellectual Property                                                  |                                                                                       |                             | (13,423                                            | )          |          |         | (20,494  | )        |          |          | (20,072  | )       
|                                                             | Purchase of Equity Investment in Unconsolidated Affiliate                             |                                                                                       |                             | (16,424                                            | )          |          |         | (2,856   | )        |          |          | (6,144   | )       
|                                                             | Proceeds from Sale of Universal Common Stock                                          |                                                                                       |                             | 276,750                                            |            |          |         | 231,798  |          |          |          |         |         
|                                                             | Proceeds from Sale of Assets                                                          |                                                                                       |                             | 15,874                                             |            |          |         | 23,595   |          |          |          | 13,230   |         
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         
|                                                             |                                                                                       | Net Cash Used by Investing Activities                                                 |                             |                                                    | (1,254,908 | )        |         |          | (105,289 | )        |          |          | (377,015 | )      
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         
|Cash Flows From Financing Activities:                        |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |          |          |          |         
|                                                             | Proceeds from (Repayments on) Asset Securitization, Net                               |                                                                                       |                             |                                                   |            |          |         | (75,000  | )        |          |          | 6,051    |         
|                                                             | Borrowings of (Repayments on) Short-term Debt, Net                                    |                                                                                       |                             | 731,132                                            |            |          |         | (183,775 | )        |          |          | (156,054 | )       
|                                                             | Borrowings of Long-term Debt                                                          |                                                                                       |                             | 3,259                                              |            |          |         | 202      |          |          |          | 258,351  |         
|                                                             | Repayments on Long-term Debt                                                          |                                                                                       |                             | (5,633                                             | )          |          |         | (9,186   | )        |          |          | (12,296  | )       
|                                                             | Redemption of Convertible Debentures                                                  |                                                                                       |                             | (348,816                                           | )          |          |         |         |          |          |          | (412,563 | )       
|                                                             | Proceeds from Issuance of Common Shares                                               |                                                                                       |                             |                                                   |            |          |         |         |          |          |          | 400,000  |         
|                                                             | Proceeds from Exercise of Stock Options                                               |                                                                                       |                             | 191,127                                            |            |          |         | 129,549  |          |          |          | 13,972   |         
|                                                             | Other Financing Activities, Net                                                       |                                                                                       |                             | (960                                               | )          |          |         | (1,399   | )        |          |          | (2,823   | )       
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         
|                                                             |                                                                                       |                                                                                       |                             | Net Cash Provided (Used) by Financing Activities   |            |          | 570,109 |          |          |          | (139,609 | )        |          |         | 94,638  |  
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         
|Effect of Exchange Rate Changes on Cash and Cash Equivalents |                                                                                       |                                                                                       | (1,489                      | )                                                  |            |          | 2,776   |          |          |          | 4,220    |         
|Net Increase (Decrease) in Cash and Cash Equivalents         |                                                                                       |                                                                                       | (183,194                    | )                                                  |            |          | 261,357 |          |          |          | 7,245    |         
|Cash and Cash Equivalents at Beginning of Year               |                                                                                       |                                                                                       | 317,439                     |                                                    |            |          | 56,082  |          |          |          | 48,837   |         
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         
|Cash and Cash Equivalents at End of Year                     |                                                                                       | $                                                                                     | 134,245                     |                                                    |            | $        | 317,439 |          |          | $        | 56,082   |         
|                                                             |                                                                                       |                                                                                       |                             |                                                    |            |          |         |          |         



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|   |                                           
|-- | ------------------------------------------
|1. | Summary of Significant Accounting Policies



| |                            
| | ---------------------------
| | Principles of Consolidation





| |                     
| | --------------------
| | Nature of Operations





| |                      
| | ---------------------
| | Basis of Presentation









| |                 
| | ----------------
| | Use of Estimates



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                                 
| | ----------------------------------------------------------------
| | Accounts Receivable and Allowance for Uncollectible
    Accounts





| |                                
| | -------------------------------
| | Major Customers and Credit Risk





| |            
| | -----------
| | Inventories

first-in,




| |                              
| | -----------------------------
| | Property, Plant and Equipment



|                                     |  |              |                            | 
|------------------------------------ |  | ------------ | -------------------------- | 
|                                     |  | Estimated    |                           
|                                     |  | Useful Lives |                           
|                                     |  |              |                           
|Buildings and leasehold improvements |  |              | 5 - 40 years or lease term | 
|Rental and service equipment         |  |              | 2 - 20 years               | 
|Machinery and other                  |  |              | 2 - 12 years               | 



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                  
| | -----------------
| | Long-Lived Assets

Accounting for the
Impairment or Disposal of Long-Lived Assets




| |                                                
| | -----------------------------------------------
| | Goodwill and Indefinite-Lived Intangible Assets





| |                  
| | -----------------
| | Intangible Assets





| |                                         
| | ----------------------------------------
| | Pension and Postretirement Benefit Plans



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                           
| | --------------------------
| | Environmental Expenditures





| |                                 
| | --------------------------------
| | Derivative Financial Instruments

Accounting for Derivative Instruments
and Hedging Activities,




| |                 
| | ----------------
| | Foreign Currency



non-U.S.




| |              
| | -------------
| | Stock Options

Accounting for Stock-Based
Compensation Accounting for Stock Issued to
Employees.


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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                            |                                                                                                                   |                                          |   |         |      |  |   |         |   |  |   |         |  
|--------------------------- | ----------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                            |                                                                                                                   | Year Ended December 31,                  |  
|                            |                                                                                                                   |                                          |  
|                            |                                                                                                                   | 2005                                     |   |         | 2004 |  |   | 2003    |  
|                            |                                                                                                                   |                                          |   |         |      |  |   |         |  
|                            |                                                                                                                   | (In thousands, except per share amounts) |  
|Net Income:                 |                                                                                                                   |                                          |   |         |      |  |   |         |   |  |   |        
|                            | As reported                                                                                                       |                                          | $ | 467,420 |      |  | $ | 330,146 |   |  | $ | 143,352 |  
|                            | Employee stock-based compensation expense included in reported
    net income, net of income tax benefit          |                                          |   | 18,816  |      |  |   | 5,890   |   |  |   | 2,342   |  
|                            | Pro forma compensation expense, determined under fair value
    methods for all awards, net of income tax benefit |                                          |   | (29,745 | )    |  |   | (26,911 | ) |  |   | (34,073 | )
|                            |                                                                                                                   |                                          |   |         |      |  |   |         |  
|                            | Pro forma                                                                                                         |                                          | $ | 456,491 |      |  | $ | 309,125 |   |  | $ | 111,621 |  
|                            |                                                                                                                   |                                          |   |         |      |  |   |         |  
|Basic earnings per share:   |                                                                                                                   |                                          |   |         |      |  |   |         |   |  |   |        
|                            | As reported                                                                                                       |                                          | $ | 1.56    |      |  | $ | 1.23    |   |  | $ | 0.57    |  
|                            | Pro forma                                                                                                         |                                          |   | 1.52    |      |  |   | 1.15    |   |  |   | 0.44    |  
|Diluted earnings per share: |                                                                                                                   |                                          |   |         |      |  |   |         |   |  |   |        
|                            | As reported                                                                                                       |                                          | $ | 1.47    |      |  | $ | 1.15    |   |  | $ | 0.54    |  
|                            | Pro forma                                                                                                         |                                          |   | 1.44    |      |  |   | 1.08    |   |  |   | 0.42    |  



|     |  |                         |      |  |            |  |      |               |  |  |               |   |  |  |     | 
|---- |  | ----------------------- | ---- |  | ---------- |  | ---- | ------------- |  |  | ------------- | - |  |  | --- | 
|     |  | Year Ended December 31, |     
|     |  |                         |     
|     |  | Dividend                |      |  | Expected   |  |      | Risk Free     |  |  | Expected Life |  
|     |  | Yield                   |      |  | Volatility |  |      | Interest Rate |  |  | (In Years)    |  
|     |  |                         |      |  |            |  |      |               |  |  |               |  
|2005 |  |                         | None |  |            |  | 38.9 | %             |  |  | 4.4           | % |  |  | 5.0 | 
|2004 |  |                         | None |  |            |  | 48.2 |               |  |  | 3.9           |   |  |  | 5.0 | 
|2003 |  |                         | None |  |            |  | 56.6 |               |  |  | 3.0           |   |  |  | 4.5 | 



| |                            
| | ---------------------------
| | Accounting for Income Taxes





| |                    
| | -------------------
| | Revenue Recognition





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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                   
| | ------------------
| | Earnings Per Share







|                                            |                                         |                         |         |        |      |  |         |        |  |  |         |       | 
|------------------------------------------- | --------------------------------------- | ----------------------- | ------- | ------ | ---- |  | ------- | ------ |  |  | ------- | ----- | 
|                                            |                                         | Year Ended December 31, |        
|                                            |                                         |                         |        
|                                            |                                         | 2005                    |         |        | 2004 |  |         | 2003   | 
|                                            |                                         |                         |         |        |      |  |         |        | 
|                                            |                                         | (In thousands)          |        
|Basic weighted average shares outstanding   |                                         |                         | 300,336 |        |      |  | 268,000 |        |  |  | 253,048 |      
|Dilutive effect of:                         |                                         |                         |         |        |      |  |         |        |  |  |         |      
|                                            | Warrant                                 |                         |         | 1,497  |      |  |         | 1,950  |  |  |         | 2,180 | 
|                                            | Stock option and restricted share plans |                         |         | 8,476  |      |  |         | 9,224  |  |  |         | 8,294 | 
|                                            | Convertible debentures                  |                         |         | 11,977 |      |  |         | 18,194 |  |  |         |      | 
|                                            |                                         |                         |         |        |      |  |         |        | 
|Diluted weighted average shares outstanding |                                         |                         | 322,286 |        |      |  | 297,368 |        |  |  | 263,522 |      
|                                            |                                         |                         |         |        |      |  |         |        | 



| |                              
| | -----------------------------
| | New Accounting Pronouncements

Inventory
Costs  an amendment of ARB 43 Chapter 4


Share-Based Payment


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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|   |                      
|-- | ---------------------
|2. | Business Combinations









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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                         |                                  |                 |           |           | 
|---------------------------------------- | -------------------------------- | --------------- | --------- | --------- | 
|                                         |                                  | August 31, 2005 |          
|                                         |                                  |                 |          
|                                         |                                  | (In thousands)  |          
|                                         |                                  | (Unaudited)     |          
|Cash and Cash Equivalents                |                                  | $               | 61,471    |          
|Accounts Receivable                      |                                  |                 | 273,405   |          
|Other Current Assets                     |                                  |                 | 24,678    |          
|Inventories                              |                                  |                 | 89,912    |          
|Property, Plant and Equipment            |                                  |                 | 806,366   |          
|Goodwill                                 |                                  |                 | 1,073,737 |          
|Intangible Assets                        |                                  |                 | 349,290   |          
|Accounts Payable and Accrued Liabilities |                                  |                 | (157,905  | )        
|Income Taxes Payable                     |                                  |                 | (23,435   | )        
|Other Current Liabilities                |                                  |                 | (50,229   | )        
|Deferred Tax Liabilities                 |                                  |                 | (93,374   | )        
|Other Liabilities                        |                                  |                 | (13,175   | )        
|                                         |                                  |                 |          
|                                         | Total Preliminary Purchase Price |                 | $         | 2,340,741 | 
|                                         |                                  |                 |          





|                                                      |  |                           |           |  |      |   |           | 
|----------------------------------------------------- |  | ------------------------- | --------- |  | ---- | - | --------- | 
|                                                      |  | Twelve Months Ended       |          
|                                                      |  | December 31,              |          
|                                                      |  |                           |          
|                                                      |  | 2005                      |           |  | 2004 |  
|                                                      |  |                           |           |  |      |  
|                                                      |  | (In thousands, except per |          
|                                                      |  | share amounts)            |          
|                                                      |  | (Unaudited)               |          
|Revenues                                              |  | $                         | 5,077,127 |  |      | $ | 4,034,470 | 
|Income from continuing operations                     |  |                           | 482,598   |  |      |   | 340,554   | 
|Net income                                            |  |                           | 483,809   |  |      |   | 333,401   | 
|Basic earnings per share from continuing operations   |  |                           | 1.44      |  |      |   | 1.06      | 
|Diluted earnings per share from continuing operations |  |                           | 1.37      |  |      |   | 1.01      | 

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |             
|-- | ------------
|3. | Dispositions





|                                                            |  |                         |        |  |      |   |        |      |  |   |        |  
|----------------------------------------------------------- |  | ----------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | -
|                                                            |  | Year Ended December 31, |       
|                                                            |  |                         |       
|                                                            |  | 2005                    |        |  | 2004 |   |        | 2003 | 
|                                                            |  |                         |        |  |      |   |        |      | 
|                                                            |  | (In thousands)          |       
|Revenues                                                    |  | $                       | 20,794 |  |      | $ | 39,356 |      |  | $ | 29,374 |  
|                                                            |  |                         |        |  |      |   |        |      | 
|Income (Loss) Before Income Taxes                           |  | $                       | 777    |  |      | $ | (4,741 | )    |  | $ | (4,898 | )
|(Provision) Benefit for Income Taxes                        |  |                         | 434    |  |      |   | (2,412 | )    |  |   | 1,007  |  
|                                                            |  |                         |        |  |      |   |        |      | 
|Net Income (Loss) from Discontinued Operation, Net of Taxes |  | $                       | 1,211  |  |      | $ | (7,153 | )    |  | $ | (3,891 | )
|                                                            |  |                         |        |  |      |   |        |      | 



|                                                                 |                                                 |                   |        |        | 
|---------------------------------------------------------------- | ----------------------------------------------- | ----------------- | ------ | ------ | 
|                                                                 |                                                 | December 31, 2004 |       
|                                                                 |                                                 |                   |       
|                                                                 |                                                 | (In thousands)    |       
|Accounts Receivable, Net of Allowance for Uncollectible Accounts |                                                 | $                 | 1,759  |       
|Inventories                                                      |                                                 |                   | 9,533  |       
|Other Current Assets                                             |                                                 |                   | 1,158  |       
|                                                                 |                                                 |                   |       
|                                                                 | Current Assets from Discontinued Operation      |                   |        | 12,450 | 
|                                                                 |                                                 |                   |       
|Property, Plant and Equipment, Net                               |                                                 |                   | 175    |       
|Other Assets                                                     |                                                 |                   | 131    |       
|                                                                 |                                                 |                   |       
|                                                                 | Long-term Assets from Discontinued Operation    |                   |        | 306    | 
|                                                                 |                                                 |                   |       
|                                                                 |                                                 | $                 | 12,756 |       
|                                                                 |                                                 |                   |       
|Accounts Payable                                                 |                                                 | $                 | 7,567  |       
|Other Current Liabilities                                        |                                                 |                   | 4,121  |       
|                                                                 |                                                 |                   |       
|                                                                 | Current Liabilities from Discontinued Operation |                   | $      | 11,688 | 
|                                                                 |                                                 |                   |       

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                                                                      
|-- | ---------------------------------------------------------------------
|4. | Exit Costs, Severance, Restructuring and Asset Impairment
    Charges



| |                                          
| | -----------------------------------------
| | 2005 Exit Costs and Restructuring Charges











|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |         |        |  |   |         |         | 
|---------------------------------- | ----- | -------------- | ------- | ------ | ------------ | - | ------ | ---------- |  | - | --------- | ----- |  | ----- | ------- | ------ |  | - | ------- | ------- | 
|                                   |       | Evaluation,    |         |        |              |   |        |            |  |   |          
|                                   |       | Drilling &     |         |        | Completion & |   |        |            |  |   |           |      
|                                   |       | Intervention   |         |        | Production   |   |        | Other      |  |   |           |       | 
|                                   |       | Services       |         |        | Systems      |   |        | Operations |  |   | Corporate |       |  | Total |        
|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |        
|                                   |       | (In thousands) |        
|Cost of Products                   |       | $              | 20,654  |        |              | $ | 3,191  |            |  | $ | 651       |       |  | $     |        |        |  | $ | 24,496  |        
|Cost of Services                   |       |                | 25,766  |        |              |   |       |            |  |   | 1,083     |       |  |       |        |        |  |   | 26,849  |        
|Research and Development           |       |                | 9,000   |        |              |   |       |            |  |   |          |       |  |       |        |        |  |   | 9,000   |        
|Selling General & Administrative   |       |                | 17,349  |        |              |   | 3,462  |            |  |   | 341       |       |  |       |        |        |  |   | 21,152  |        
|Corporate General & Administrative |       |                |        |        |              |   |       |            |  |   |          |       |  |       | 32,738  |        |  |   | 32,738  |        
|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |        
|                                   | Total |                |         | 72,769 |              |   |        | 6,653      |  |   |           | 2,075 |  |       |         | 32,738 |  |   |         | 114,235 | 
|Cash Payments                      |       |                | (18,560 | )      |              |   | (3,854 | )          |  |   |          |       |  |       | (2,752  | )      |  |   | (25,166 | )      
|Non-cash Utilization               |       |                | (52,289 | )      |              |   |       |            |  |   |          |       |  |       | (12,911 | )      |  |   | (65,200 | )      
|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |        
|Balance at December 31, 2005       |       | $              | 1,920   |        |              | $ | 2,799  |            |  | $ | 2,075     |       |  | $     | 17,075  |        |  | $ | 23,869  |        
|                                   |       |                |         |        |              |   |        |            |  |   |           |       |  |       |        

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                      
| | ---------------------
| | 2003 Severance Charge



|                                                             |  |                |       |  |              |   |       |       |  |   |       | 
|------------------------------------------------------------ |  | -------------- | ----- |  | ------------ | - | ----- | ----- |  | - | ----- | 
|                                                             |  | Evaluation,    |       |  |              |   |      
|                                                             |  | Drilling &     |       |  | Completion & |   |       |      
|                                                             |  | Intervention   |       |  | Production   |   |       |      
|                                                             |  | Services       |       |  | Systems      |   |       | Total | 
|                                                             |  |                |       |  |              |   |       |       | 
|                                                             |  | (In thousands) |      
|Cost of Products                                             |  | $              | 2,398 |  |              | $ | 1,905 |       |  | $ | 4,303 | 
|Cost of Services                                             |  |                | 973   |  |              |   |      |       |  |   | 973   | 
|Research and Development                                     |  |                | 51    |  |              |   | 425   |       |  |   | 476   | 
|Selling, General and Administrative Attributable to Segments |  |                | 548   |  |              |   | 1,410 |       |  |   | 1,958 | 
|                                                             |  |                |       |  |              |   |       |       | 
|Total                                                        |  | $              | 3,970 |  |              | $ | 3,740 |       |  | $ | 7,710 | 
|                                                             |  |                |       |  |              |   |       |       | 





|   |                      
|-- | ---------------------
|5. | Universal Compression









|   |                      
|-- | ---------------------
|6. | Cash Flow Information



| |                                     
| | ------------------------------------
| | Cash Equivalents and Restricted Cash





| |                    
| | -------------------
| | Non-cash Activities





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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                     
| | --------------------
| | Investing Activities



|                                                      |  |                         |            |   |      |   |         |      |  |   |         |  
|----------------------------------------------------- |  | ----------------------- | ---------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                      |  | Year Ended December 31, |           
|                                                      |  |                         |           
|                                                      |  | 2005                    |            |   | 2004 |   |         | 2003 | 
|                                                      |  |                         |            |   |      |   |         |      | 
|                                                      |  | (In thousands)          |           
|Fair value of assets, net of cash acquired            |  | $                       | 1,577,864  |   |      | $ | 17,293  |      |  | $ | 49,956  |  
|Goodwill                                              |  |                         | 1,170,141  |   |      |   | 20,833  |      |  |   | 21,670  |  
|Consideration paid related to prior year acquisitions |  |                         | 3,935      |   |      |   | 4,142   |      |  |   | 5,117   |  
|Total liabilities                                     |  |                         | (362,853   | ) |      |   | (15,804 | )    |  |   | (15,216 | )
|Common Shares issued                                  |  |                         | (1,398,020 | ) |      |   |        |      |  |   |        |  
|                                                      |  |                         |            |   |      |   |         |      | 
|Cash consideration, net of cash acquired              |  | $                       | 991,067    |   |      | $ | 26,464  |      |  | $ | 61,527  |  
|                                                      |  |                         |            |   |      |   |         |      | 



| |                                   
| | ----------------------------------
| | Supplemental Cash Flow Information



|                                  |  |                         |         |  |      |   |        |      |  |   |        | 
|--------------------------------- |  | ----------------------- | ------- |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                  |  | Year Ended December 31, |        
|                                  |  |                         |        
|                                  |  | 2005                    |         |  | 2004 |   |        | 2003 | 
|                                  |  |                         |         |  |      |   |        |      | 
|                                  |  | (In thousands)          |        
|Interest paid                     |  | $                       | 68,614  |  |      | $ | 69,296 |      |  | $ | 68,062 | 
|Income taxes paid, net of refunds |  |                         | 114,198 |  |      |   | 91,059 |      |  |   | 58,258 | 



|   |            
|-- | -----------
|7. | Inventories



|                                       |  |                |         |  |      |   |         | 
|-------------------------------------- |  | -------------- | ------- |  | ---- | - | ------- | 
|                                       |  | December 31,   |        
|                                       |  |                |        
|                                       |  | 2005           |         |  | 2004 |  
|                                       |  |                |         |  |      |  
|                                       |  | (In thousands) |        
|Raw materials, components and supplies |  | $              | 259,047 |  |      | $ | 167,569 | 
|Work in process                        |  |                | 63,491  |  |      |   | 49,701  | 
|Finished goods                         |  |                | 567,583 |  |      |   | 462,337 | 
|                                       |  |                |         |  |      |  
|                                       |  | $              | 890,121 |  |      | $ | 679,607 | 
|                                       |  |                |         |  |      |  





|   |         
|-- | --------
|8. | Goodwill



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |                                        |                |           |         |              |   |         |            |   |   |         |         |  |   |           |           |  
|----------------------- | -------------------------------------- | -------------- | --------- | ------- | ------------ | - | ------- | ---------- | - | - | ------- | ------- |  | - | --------- | --------- | -
|                        |                                        | Evaluation,    |           |         |              |   |         |            |  
|                        |                                        | Drilling &     |           |         | Completion   |   |         |            |   |  
|                        |                                        | Intervention   |           |         | & Production |   |         | Other      |   |   |        
|                        |                                        | Services       |           |         | Systems      |   |         | Operations |   |   | Total   |        
|                        |                                        |                |           |         |              |   |         |            |   |   |         |        
|                        |                                        | (In thousands) |          
|As of December 31, 2003 |                                        | $              | 831,097   |         |              | $ | 750,994 |            |   | $ | 19,120  |         |  | $ | 1,601,211 |          
|                        | Goodwill acquired during period        |                |           | 7,973   |              |   |         | 12,860     |   |   |         |        |  |   |           | 20,833    |  
|                        | Impairment charge                      |                |           |        |              |   |         | (2,775     | ) |   |         |        |  |   |           | (2,775    | )
|                        | Disposals                              |                |           | (2,200  | )            |   |         |           |   |   |         |        |  |   |           | (2,200    | )
|                        | Purchase price and other adjustments   |                |           | (4,231  | )            |   |         | (4,023     | ) |   |         |        |  |   |           | (8,254    | )
|                        | Impact of foreign currency translation |                |           | 20,165  |              |   |         | 40,657     |   |   |         |        |  |   |           | 60,822    |  
|                        |                                        |                |           |         |              |   |         |            |   |   |         |        
|As of December 31, 2004 |                                        |                | 852,804   |         |              |   | 797,713 |            |   |   | 19,120  |         |  |   | 1,669,637 |          
|                        |                                        |                |           |         |              |   |         |            |   |   |         |        
|                        | Goodwill acquired during period        |                |           | 792,170 |              |   |         | 25,683     |   |   |         | 352,288 |  |   |           | 1,170,141 |  
|                        | Disposals                              |                |           |        |              |   |         | (4,179     | ) |   |         |        |  |   |           | (4,179    | )
|                        | Purchase price and other adjustments   |                |           | (10,653 | )            |   |         | 2,665      |   |   |         |        |  |   |           | (7,988    | )
|                        | Impact of foreign currency translation |                |           | (6,793  | )            |   |         | (12,601    | ) |   |         |        |  |   |           | (19,394   | )
|                        |                                        |                |           |         |              |   |         |            |   |   |         |        
|As of December 31, 2005 |                                        | $              | 1,627,528 |         |              | $ | 809,281 |            |   | $ | 371,408 |         |  | $ | 2,808,217 |          
|                        |                                        |                |           |         |              |   |         |            |   |   |         |        



|   |                             
|-- | ----------------------------
|9. | Other Intangible Assets, Net



|                                                 |  |                   |         |  |                   |   |          |     |  |          |         |  |             |              |         |  |     |   |         |   |  |   |         | 
|------------------------------------------------ |  | ----------------- | ------- |  | ----------------- | - | -------- | --- |  | -------- | ------- |  | ----------- | ------------ | ------- |  | --- | - | ------- | - |  | - | ------- | 
|                                                 |  | December 31, 2005 |         |  | December 31, 2004 |  
|                                                 |  |                   |         |  |                   |  
|                                                 |  | Gross             |         |  |                   |   | Gross    |     |  |         
|                                                 |  | Carrying          |         |  | Accumulated       |   |          |     |  | Carrying |         |  | Accumulated |              |         | 
|                                                 |  | Amount            |         |  | Amortization      |   |          | Net |  |          | Amount  |  |             | Amortization |         |  | Net |  
|                                                 |  |                   |         |  |                   |   |          |     |  |          |         |  |             |              |         |  |     |  
|                                                 |  | (In thousands)    |        
|Acquired technology                              |  | $                 | 281,350 |  |                   | $ | (6,501   | )   |  | $        | 274,849 |  |             | $            |        |  |     | $ |        |   |  | $ |        | 
|Licenses                                         |  |                   | 205,232 |  |                   |   | (48,164  | )   |  |          | 157,068 |  |             |              | 203,728 |  |     |   | (36,549 | ) |  |   | 167,179 | 
|Patents                                          |  |                   | 116,590 |  |                   |   | (33,028  | )   |  |          | 83,562  |  |             |              | 107,630 |  |     |   | (26,609 | ) |  |   | 81,021  | 
|Customer relationships                           |  |                   | 43,000  |  |                   |   | (717     | )   |  |          | 42,283  |  |             |              |        |  |     |   |        |   |  |   |        | 
|Customer contracts                               |  |                   | 22,450  |  |                   |   | (961     | )   |  |          | 21,489  |  |             |              |        |  |     |   |        |   |  |   |        | 
|Covenants not to compete                         |  |                   | 22,333  |  |                   |   | (19,942  | )   |  |          | 2,391   |  |             |              | 21,986  |  |     |   | (17,625 | ) |  |   | 4,361   | 
|Other                                            |  |                   | 13,277  |  |                   |   | (6,175   | )   |  |          | 7,102   |  |             |              | 12,923  |  |     |   | (4,392  | ) |  |   | 8,531   | 
|                                                 |  |                   |         |  |                   |   |          |     |  |          |         |  |             |              |         |  |     |  
|Total finite-lived intangible assets             |  |                   | 704,232 |  |                   |   | (115,488 | )   |  |          | 588,744 |  |             |              | 346,267 |  |     |   | (85,175 | ) |  |   | 261,092 | 
|Intangible assets with an indefinite useful life |  |                   | 32,621  |  |                   |   |         |     |  |          | 32,621  |  |             |              | 33,501  |  |     |   |        |   |  |   | 33,501  | 
|                                                 |  |                   |         |  |                   |   |          |     |  |          |         |  |             |              |         |  |     |  
|                                                 |  | $                 | 736,853 |  |                   | $ | (115,488 | )   |  | $        | 621,365 |  |             | $            | 379,768 |  |     | $ | (85,175 | ) |  | $ | 294,593 | 
|                                                 |  |                   |         |  |                   |   |          |     |  |          |         |  |             |              |         |  |     |  



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|     |  |   |        | 
|---- |  | - | ------ | 
|2006 |  | $ | 45,794 | 
|2007 |  |   | 43,440 | 
|2008 |  |   | 41,323 | 
|2009 |  |   | 40,458 | 
|2010 |  |   | 40,259 | 



|    |                
|--- | ---------------
|10. | Short-term Debt

|                                                                                        |  |                |         |   |      |   |        |  
|--------------------------------------------------------------------------------------- |  | -------------- | ------- | - | ---- | - | ------ | -
|                                                                                        |  | December 31,   |        
|                                                                                        |  |                |        
|                                                                                        |  | 2005           |         |   | 2004 |  
|                                                                                        |  |                |         |   |      |  
|                                                                                        |  | (In thousands) |        
|364-Day revolving credit facility                                                       |  | $              |        |   |      | $ |       |  
|2003 Revolving credit facility                                                          |  |                |        |   |      |   |       |  
|Commercial Paper Program                                                                |  |                | 716,927 |   |      |   |       |  
|Short-term bank loans                                                                   |  |                | 24,596  |   |      |   | 11,072 |  
|                                                                                        |  |                |         |   |      |  
|                                                                                        |  | $              | 741,523 |   |      | $ | 11,072 |  
|                                                                                        |  |                |         |   |      |  
|Weighted average interest rate on short-term borrowings
    outstanding during the year |  |                | 4.36    | % |      |   | 2.79   | %

364-Day (364-Day


364-Day


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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






364-Day










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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |               
|--- | --------------
|11. | Long-term Debt

|                                                              |  |                |         |  |      |   |         | 
|------------------------------------------------------------- |  | -------------- | ------- |  | ---- | - | ------- | 
|                                                              |  | December 31,   |        
|                                                              |  |                |        
|                                                              |  | 2005           |         |  | 2004 |  
|                                                              |  |                |         |  |      |  
|                                                              |  | (In thousands) |        
|4.95% Senior Notes due 2013                                   |  | $              | 256,029 |  |      | $ | 256,659 | 
|65/8% Senior
    Notes due 2011                               |  |                | 358,057 |  |      |   | 359,171 | 
|71/4% Senior
    Notes due 2006                               |  |                | 201,892 |  |      |   | 206,629 | 
|Foreign bank and other debt denominated in foreign currencies |  |                | 11,204  |  |      |   | 9,771   | 
|Capital lease obligations                                     |  |                | 12,935  |  |      |   | 4,861   | 
|Other                                                         |  |                | 5,197   |  |      |   | 4,925   | 
|                                                              |  |                |         |  |      |  
|                                                              |  |                | 845,314 |  |      |   | 842,016 | 
|Less amounts due in one year                                  |  |                | 213,243 |  |      |   | 11,163  | 
|                                                              |  |                |         |  |      |  
|Long-term debt                                                |  | $              | 632,071 |  |      | $ | 830,853 | 
|                                                              |  |                |         |  |      |  



|           |  |   |         | 
|---------- |  | - | ------- | 
|2006       |  | $ | 213,243 | 
|2007       |  |   | 13,434  | 
|2008       |  |   | 8,151   | 
|2009       |  |   | 5,155   | 
|2010       |  |   | 3,324   | 
|Thereafter |  |   | 602,007 | 
|           |  |   |        
|           |  | $ | 845,314 | 
|           |  |   |        



| |                   
| | ------------------
| | 4.95% Senior Notes





| |                       
| | ----------------------
| | 65/8% Senior
    Notes

5 8 5 8 5 8




| |                       
| | ----------------------
| | 71/4% Senior
    Notes

1 4 1 4 1 4


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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




5 8




|    |                       
|--- | ----------------------
|12. | Derivative Instruments



| |                    
| | -------------------
| | Interest Rate Swaps







| |                
| | ---------------
| | Cash Flow Hedge







| |                             
| | ----------------------------
| | Other Derivative Instruments



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                          
|--- | -----------------------------------------
|13. | Zero Coupon Convertible Senior Debentures







|    |                                                                
|--- | ---------------------------------------------------------------
|14. | 5% Convertible Subordinated Preferred Equivalent
    Debentures





|    |                     
|--- | --------------------
|15. | Shareholders Equity



| |                  
| | -----------------
| | Authorized Shares





| |            
| | -----------
| | Share Split





| |                         
| | ------------------------
| | Share Repurchase Program





| |                               
| | ------------------------------
| | Precision Division Acquisition



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |        
| | -------
| | Warrant

10-day




|    |                   
|--- | ------------------
|16. | Compensation Plans



| |                   
| | ------------------
| | Stock Option Plans







|                                       |            |           |            |             |                   |          |                 |                |  |   |       |       | 
|-------------------------------------- | ---------- | --------- | ---------- | ----------- | ----------------- | -------- | --------------- | -------------- |  | - | ----- | ----- | 
|                                       |            |           |            |             |                   | Weighted |                
|                                       |            |           |            |             |                   | Average  |                
|                                       |            |           |            |             |                   | Exercise |                
|                                       |            | Number of |            |             | Range of Exercise |          |                 | Price Per      | 
|                                       |            | Shares    |            |             | Prices            |          |                 | Share          | 
|                                       |            |           |            |             |                   |          |                 |                | 
|Options outstanding, December 31, 2002 |            |           | 40,346,884 |             |                   |          | $ 2.21 - $26.84 |                |  | $ | 12.93 |      
|                                       | Granted    |           |            | 1,460,000   |                   |          |                 | 15.88 -  21.58 |  |   |       | 18.46 | 
|                                       | Exercised  |           |            | (1,465,852  | )                 |          |                 | 4.06 -  18.38  |  |   |       | 9.53  | 
|                                       | Terminated |           |            | (1,207,750  | )                 |          |                 | 11.89 -  23.75 |  |   |       | 14.29 | 
|                                       |            |           |            |             |                   |          |                 |                | 
|Options outstanding, December 31, 2003 |            |           | 39,133,282 |             |                   |          | 2.21 -  26.84   |                |  |   | 13.22 |      
|                                       | Granted    |           |            | 291,200     |                   |          |                 | 19.97 -  23.78 |  |   |       | 20.95 | 
|                                       | Exercised  |           |            | (9,874,320  | )                 |          |                 | 2.21 -  24.68  |  |   |       | 12.92 | 
|                                       | Terminated |           |            | (1,081,500  | )                 |          |                 | 11.89 -  23.78 |  |   |       | 14.23 | 
|                                       |            |           |            |             |                   |          |                 |                | 
|Options outstanding, December 31, 2004 |            |           | 28,468,662 |             |                   |          | 2.69 -  26.84   |                |  |   | 13.30 |      
|                                       | Granted    |           |            | 120,000     |                   |          |                 | 33.84 -  35.63 |  |   |       | 34.13 | 
|                                       | Exercised  |           |            | (14,478,178 | )                 |          |                 | 2.69 -  26.35  |  |   |       | 13.03 | 
|                                       | Terminated |           |            | (170,150    | )                 |          |                 | 11.89 -  22.81 |  |   |       | 15.52 | 
|                                       |            |           |            |             |                   |          |                 |                | 
|Options outstanding, December 31, 2005 |            |           | 13,940,334 |             |                   |          | 5.81 -  35.63   |                |  |   | 13.72 |      
|                                       |            |           |            |             |                   |          |                 |                | 

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                         |  |                     |            |             |                     |  |           |       |  |   |             |             |  |      |            |  |       |  |      |  |  |   |       | 
|------------------------ |  | ------------------- | ---------- | ----------- | ------------------- |  | --------- | ----- |  | - | ----------- | ----------- |  | ---- | ---------- |  | ----- |  | ---- |  |  | - | ----- | 
|                         |  | Options Outstanding |            |             | Options Exercisable | 
|                         |  |                     |            |             |                     | 
|                         |  |                     |            | Weighted    |                     |  | Weighted  |       |  |   |             | Weighted    |  |      | Weighted   | 
|                         |  |                     |            | Average     |                     |  | Average   |       |  |   |             | Average     |  |      | Average    | 
|                         |  |                     |            | Remaining   |                     |  | Exercise  |       |  |   |             | Remaining   |  |      | Exercise   | 
|                         |  |                     |            | Contractual |                     |  | Price Per |       |  |   |             | Contractual |  |      | Price Per  | 
|Range of Exercise Prices |  | Outstanding         |            |             | Life                |  |           | Share |  |   | Exercisable |             |  | Life |            |  | Share | 
|                         |  |                     |            |             |                     |  |           |       |  |   |             |             |  |      |            |  |       | 
|$ 5.81-$9.87             |  |                     | 1,556,280  |             |                     |  | 5.95      |       |  | $ | 6.83        |             |  |      | 1,556,280  |  |       |  | 5.95 |  |  | $ | 6.83  | 
|10.31-14.89              |  |                     | 7,735,512  |             |                     |  | 9.51      |       |  |   | 11.89       |             |  |      | 7,485,512  |  |       |  | 9.51 |  |  |   | 11.88 | 
|15.13-19.97              |  |                     | 3,915,842  |             |                     |  | 8.76      |       |  |   | 18.13       |             |  |      | 2,845,176  |  |       |  | 8.03 |  |  |   | 18.14 | 
|20.03-23.65              |  |                     | 599,000    |             |                     |  | 9.42      |       |  |   | 22.17       |             |  |      | 435,800    |  |       |  | 8.87 |  |  |   | 22.16 | 
|26.35-35.63              |  |                     | 133,700    |             |                     |  | 12.11     |       |  |   | 33.38       |             |  |      | 13,700     |  |       |  | 8.13 |  |  |   | 26.77 | 
|                         |  |                     |            |             |                     |  |           |       |  |   |             |             |  |      |            |  |       | 
|5.81-35.63               |  |                     | 13,940,334 |             |                     |  | 8.92      |       |  |   | 13.72       |             |  |      | 12,336,468 |  |       |  | 8.69 |  |  |   | 13.07 | 
|                         |  |                     |            |             |                     |  |           |       |  |   |             |             |  |      |            |  |       | 





| |                      
| | ---------------------
| | Restricted Share Plan









| |                                     
| | ------------------------------------
| | Executive Deferred Compensation Plan





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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                      
| | -------------------------------------
| | Retirement and Employee Benefit Plans









|                                        |  |                         |         |   |               |   |         |               |  |   |               |   |  |   |        |  
|--------------------------------------- |  | ----------------------- | ------- | - | ------------- | - | ------- | ------------- |  | - | ------------- | - |  | - | ------ | -
|                                        |  | Year Ended December 31, |        
|                                        |  |                         |        
|                                        |  | 2005                    |         |   | 2004          |  
|                                        |  |                         |         |   |               |  
|                                        |  | United States           |         |   | International |   |         | United States |  |   | International |  
|                                        |  |                         |         |   |               |   |         |               |  |   |               |  
|                                        |  | (In thousands)          |        
|Benefit obligation at beginning of year |  | $                       | 63,019  |   |               | $ | 84,239  |               |  | $ | 42,673        |   |  | $ | 60,177 |  
|Service cost                            |  |                         | 2,417   |   |               |   | 8,573   |               |  |   | 1,763         |   |  |   | 6,698  |  
|Interest cost                           |  |                         | 3,398   |   |               |   | 4,941   |               |  |   | 2,568         |   |  |   | 3,685  |  
|Plan participants contributions        |  |                         |        |   |               |   | 2,341   |               |  |   |              |   |  |   | 2,137  |  
|Business combinations                   |  |                         | 2,701   |   |               |   | 34,407  |               |  |   |              |   |  |   |       |  
|Amendments                              |  |                         | 4,753   |   |               |   | (5,976  | )             |  |   |              |   |  |   | 5,882  |  
|Curtailments                            |  |                         | 7,450   |   |               |   | (2,385  | )             |  |   |              |   |  |   |       |  
|Settlements                             |  |                         | (14,334 | ) |               |   | (3,460  | )             |  |   |              |   |  |   |       |  
|Actuarial loss                          |  |                         | 13,605  |   |               |   | 14,510  |               |  |   | 17,294        |   |  |   | 1,800  |  
|Currency fluctuations                   |  |                         |        |   |               |   | (9,587  | )             |  |   |              |   |  |   | 7,288  |  
|Benefits paid                           |  |                         | (1,144  | ) |               |   | (2,720  | )             |  |   | (1,279        | ) |  |   | (3,428 | )
|                                        |  |                         |         |   |               |   |         |               |  |   |               |  
|Benefit obligation at end of year       |  | $                       | 81,865  |   |               | $ | 124,883 |               |  | $ | 63,019        |   |  | $ | 84,239 |  
|                                        |  |                         |         |   |               |   |         |               |  |   |               |  

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                               |  |                         |         |   |               |   |         |               |  |   |               |   |  |   |         |  
|---------------------------------------------- |  | ----------------------- | ------- | - | ------------- | - | ------- | ------------- |  | - | ------------- | - |  | - | ------- | -
|                                               |  | Year Ended December 31, |        
|                                               |  |                         |        
|                                               |  | 2005                    |         |   | 2004          |  
|                                               |  |                         |         |   |               |  
|                                               |  | United States           |         |   | International |   |         | United States |  |   | International |  
|                                               |  |                         |         |   |               |   |         |               |  |   |               |  
|                                               |  | (In thousands)          |        
|Fair value of plan assets at beginning of year |  | $                       | 10,075  |   |               | $ | 56,554  |               |  | $ | 10,404        |   |  | $ | 41,133  |  
|Actual return on plan assets                   |  |                         | 535     |   |               |   | 12,546  |               |  |   | 869           |   |  |   | 4,490   |  
|Employer contribution                          |  |                         | 234     |   |               |   | 9,015   |               |  |   | 81            |   |  |   | 7,069   |  
|Plan participants contributions               |  |                         |        |   |               |   | 2,337   |               |  |   |              |   |  |   | 2,137   |  
|Business combinations                          |  |                         | 2,450   |   |               |   | 23,824  |               |  |   |              |   |  |   |        |  
|Settlements                                    |  |                         |        |   |               |   | (3,363  | )             |  |   |              |   |  |   |        |  
|Currency fluctuations                          |  |                         |        |   |               |   | (7,304  | )             |  |   |              |   |  |   | 4,573   |  
|Benefits paid                                  |  |                         | (1,144  | ) |               |   | (2,338  | )             |  |   | (1,279        | ) |  |   | (2,848  | )
|                                               |  |                         |         |   |               |   |         |               |  |   |               |  
|Fair value of plan assets at end of year       |  |                         | 12,150  |   |               |   | 91,271  |               |  |   | 10,075        |   |  |   | 56,554  |  
|                                               |  |                         |         |   |               |   |         |               |  |   |               |  
|Funded status                                  |  |                         | (69,715 | ) |               |   | (33,612 | )             |  |   | (52,944       | ) |  |   | (27,685 | )
|Unrecognized net loss                          |  |                         | 30,624  |   |               |   | 11,054  |               |  |   | 21,610        |   |  |   | 7,379   |  
|Unrecognized prior service cost/(benefit)      |  |                         | 21,242  |   |               |   | (1,507  | )             |  |   | 25,210        |   |  |   | 5,030   |  
|Unrecognized transition asset                  |  |                         |        |   |               |   | (27     | )             |  |   |              |   |  |   | (35     | )
|                                               |  |                         |         |   |               |   |         |               |  |   |               |  
|Net amount recognized                          |  | $                       | (17,849 | ) |               | $ | (24,092 | )             |  | $ | (6,124        | ) |  | $ | (15,311 | )
|                                               |  |                         |         |   |               |   |         |               |  |   |               |  



|                                       |  |                         |         |   |               |   |         |               |  |   |               |   |  |   |         |  
|-------------------------------------- |  | ----------------------- | ------- | - | ------------- | - | ------- | ------------- |  | - | ------------- | - |  | - | ------- | -
|                                       |  | Year Ended December 31, |        
|                                       |  |                         |        
|                                       |  | 2005                    |         |   | 2004          |  
|                                       |  |                         |         |   |               |  
|                                       |  | United States           |         |   | International |   |         | United States |  |   | International |  
|                                       |  |                         |         |   |               |   |         |               |  |   |               |  
|                                       |  | (In thousands)          |        
|Prepaid benefit cost                   |  | $                       |        |   |               | $ | 187     |               |  | $ |              |   |  | $ | 308     |  
|Accrued benefit cost                   |  |                         | (51,782 | ) |               |   | (34,181 | )             |  |   | (32,661       | ) |  |   | (24,535 | )
|Intangible asset                       |  |                         | 21,018  |   |               |   | 36      |               |  |   | 20,518        |   |  |   | 4,983   |  
|Accumulated other comprehensive income |  |                         | 12,915  |   |               |   | 9,866   |               |  |   | 6,019         |   |  |   | 3,933   |  
|                                       |  |                         |         |   |               |   |         |               |  |   |               |  
|Net amount recognized                  |  | $                       | (17,849 | ) |               | $ | (24,092 | )             |  | $ | (6,124        | ) |  | $ | (15,311 | )
|                                       |  |                         |         |   |               |   |         |               |  |   |               |  





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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                        |                                |                |   |        |               |  |   |               |  |  |               |        |  |  |   |        | 
|----------------------------------------------------------------------- | ------------------------------ | -------------- | - | ------ | ------------- |  | - | ------------- |  |  | ------------- | ------ |  |  | - | ------ | 
|                                                                        |                                | 2005           |   |        | 2004          | 
|                                                                        |                                |                |   |        |               | 
|                                                                        |                                | United States  |   |        | International |  |   | United States |  |  | International |       
|                                                                        |                                |                |   |        |               |  |   |               |  |  |               |       
|                                                                        |                                | (In thousands) |  
|Plans with projected benefit obligation in excess of plan assets:       |                                |                |   |        |               |  |   |               |  |  |               |        |  |  |   |       
|                                                                        | Projected benefit obligation   |                | $ | 81,865 |               |  | $ | 124,195       |  |  | $             | 63,019 |  |  | $ | 83,169 | 
|                                                                        | Fair value of plan assets      |                |   | 12,150 |               |  |   | 90,354        |  |  |               | 10,075 |  |  |   | 55,461 | 
|Plans with accumulated benefit obligation in excess of plan
    assets: |                                |                |   |        |               |  |   |               |  |  |               |        |  |  |   |       
|                                                                        | Accumulated benefit obligation |                |   | 62,892 |               |  |   | 110,657       |  |  |               | 42,586 |  |  |   | 62,906 | 
|                                                                        | Fair value of plan assets      |                |   | 12,150 |               |  |   | 77,645        |  |  |               | 10,075 |  |  |   | 40,873 | 



|                                              |  |                |        |   |               |   |        |               |  |   |               |   |  |               |        |   |               |   |        |   |  |   |        |  
|--------------------------------------------- |  | -------------- | ------ | - | ------------- | - | ------ | ------------- |  | - | ------------- | - |  | ------------- | ------ | - | ------------- | - | ------ | - |  | - | ------ | -
|                                              |  | 2005           |        |   | 2004          |   |        | 2003          | 
|                                              |  |                |        |   |               |   |        |               | 
|                                              |  | United States  |        |   | International |   |        | United States |  |   | International |   |  | United States |        |   | International |  
|                                              |  |                |        |   |               |   |        |               |  |   |               |   |  |               |        |   |               |  
|                                              |  | (In thousands) |       
|Service cost                                  |  | $              | 2,417  |   |               | $ | 8,573  |               |  | $ | 1,763         |   |  | $             | 6,698  |   |               | $ | 576    |   |  | $ | 5,242  |  
|Interest cost                                 |  |                | 3,398  |   |               |   | 4,941  |               |  |   | 2,568         |   |  |               | 3,685  |   |               |   | 1,392  |   |  |   | 2,489  |  
|Expected return on plan assets                |  |                | (802   | ) |               |   | (4,018 | )             |  |   | (899          | ) |  |               | (2,996 | ) |               |   | (1,032 | ) |  |   | (1,944 | )
|Amortization of transition obligation (asset) |  |                |       |   |               |   | (3     | )             |  |   |              |   |  |               | (4     | ) |               |   |       |   |  |   | 25     |  
|Amortization of prior service cost            |  |                | 2,457  |   |               |   | 323    |               |  |   | 2,629         |   |  |               | 13     |   |               |   | 876    |   |  |   | 13     |  
|Settlements/curtailments                      |  |                | 17,432 |   |               |   | (2,385 | )             |  |   |              |   |  |               |       |   |               |   | 25     |   |  |   |       |  
|Amortization of loss                          |  |                | 1,140  |   |               |   | 11     |               |  |   | 166           |   |  |               | 589    |   |               |   | 21     |   |  |   | 1,035  |  
|                                              |  |                |        |   |               |   |        |               |  |   |               |   |  |               |        |   |               |  
|Net periodic benefit cost                     |  | $              | 26,042 |   |               | $ | 7,442  |               |  | $ | 6,227         |   |  | $             | 7,985  |   |               | $ | 1,858  |   |  | $ | 6,860  |  
|                                              |  |                |        |   |               |   |        |               |  |   |               |   |  |               |        |   |               |  







|                               |                     |                         |  |              |      |  |  |              | 
|------------------------------ | ------------------- | ----------------------- |  | ------------ | ---- |  |  | ------------ | 
|                               |                     | Year Ended December 31, | 
|                               |                     |                         | 
|                               |                     | 2005                    |  |              | 2004 | 
|                               |                     |                         |  |              |      | 
|Discount rate:                 |                     |                         |  |              |      |  |  |             
|                               | United States plans |                         |  | 5.25 - 5.50% |      |  |  | 5.25 - 5.75% | 
|                               | International plans |                         |  | 2.00 - 5.80  |      |  |  | 1.80 - 7.00  | 
|Rate of compensation increase: |                     |                         |  |              |      |  |  |             
|                               | United States plans |                         |  | 6.00         |      |  |  | 4.00         | 
|                               | International plans |                         |  | 2.25 - 6.08  |      |  |  | 2.50 - 6.85  | 

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                |                     |                         |  |               |      |  |  |             |  |  |  |              | 
|------------------------------- | ------------------- | ----------------------- |  | ------------- | ---- |  |  | ----------- |  |  |  | ------------ | 
|                                |                     | Year Ended December 31, | 
|                                |                     |                         | 
|                                |                     | 2005                    |  |               | 2004 |  |  | 2003        | 
|                                |                     |                         |  |               |      |  |  |             | 
|Discount rate:                  |                     |                         |  |               |      |  |  |             |  |  |  |             
|                                | United States plans |                         |  | 5.25% - 5.75% |      |  |  | 6.00%       |  |  |  | 6.00 - 6.75% | 
|                                | International plans |                         |  | 1.80 - 6.00   |      |  |  | 1.80 - 7.00 |  |  |  | 4.80 - 7.00  | 
|Expected return on plan assets: |                     |                         |  |               |      |  |  |             |  |  |  |             
|                                | United States plans |                         |  | 8.00          |      |  |  | 8.00        |  |  |  | 8.00         | 
|                                | International plans |                         |  | 4.00 - 7.00   |      |  |  | 4.00 - 8.00 |  |  |  | 6.27 - 8.00  | 
|Rate of compensation increase:  |                     |                         |  |               |      |  |  |             |  |  |  |             
|                                | United States plans |                         |  | 4.00          |      |  |  | 3.00        |  |  |  | 3.00         | 
|                                | International plans |                         |  | 2.25 - 6.85   |      |  |  | 2.75 - 7.50 |  |  |  | 3.25 - 8.28  | 





|                |  |               |     |   |               |  |     |               |  |  |               |   |  |  |     |  
|--------------- |  | ------------- | --- | - | ------------- |  | --- | ------------- |  |  | ------------- | - |  |  | --- | -
|                |  | 2005          |     |   | 2004          | 
|                |  |               |     |   |               | 
|                |  | United States |     |   | International |  |     | United States |  |  | International |  
|                |  |               |     |   |               |  |     |               |  |  |               |  
|Equity          |  |               | 58  | % |               |  | 77  | %             |  |  | 61            | % |  |  | 90  | %
|Debt securities |  |               | 41  |   |               |  | 18  |               |  |  | 38            |   |  |  | 7   |  
|Other           |  |               | 1   |   |               |  | 5   |               |  |  | 1             |   |  |  | 3   |  
|                |  |               |     |   |               |  |     |               |  |  |               |  
|Total           |  |               | 100 | % |               |  | 100 | %             |  |  | 100           | % |  |  | 100 | %
|                |  |               |     |   |               |  |     |               |  |  |               |  







|            |  |               |        |  |               |   |        | 
|----------- |  | ------------- | ------ |  | ------------- | - | ------ | 
|            |  | United States |        |  | International |  
|            |  |               |        |  |               |  
|2006        |  | $             | 10,769 |  |               | $ | 1,865  | 
|2007        |  |               | 1,050  |  |               |   | 1,564  | 
|2008        |  |               | 1,386  |  |               |   | 2,267  | 
|2009        |  |               | 2,335  |  |               |   | 2,678  | 
|2010        |  |               | 2,128  |  |               |   | 1,593  | 
|2011 - 2015 |  |               | 15,399 |  |               |   | 22,637 | 

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |             
|--- | ------------
|17. | Income Taxes



|         |  |                         |         |  |      |   |         |      |  |   |         | 
|-------- |  | ----------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|         |  | Year Ended December 31, |        
|         |  |                         |        
|         |  | 2005                    |         |  | 2004 |   |         | 2003 | 
|         |  |                         |         |  |      |   |         |      | 
|         |  | (In thousands)          |        
|Domestic |  | $                       | 94,016  |  |      | $ | 50,141  |      |  | $ | 24,348  | 
|Foreign  |  |                         | 532,176 |  |      |   | 380,606 |      |  |   | 175,167 | 
|         |  |                         |         |  |      |   |         |      | 
|         |  | $                       | 626,192 |  |      | $ | 430,747 |      |  | $ | 199,515 | 
|         |  |                         |         |  |      |   |         |      | 



|          |                                     |                         |          |          |          |   |         |          |          |   |         |         |         |  
|--------- | ----------------------------------- | ----------------------- | -------- | -------- | -------- | - | ------- | -------- | -------- | - | ------- | ------- | ------- | -
|          |                                     | Year Ended December 31, |         
|          |                                     |                         |         
|          |                                     | 2005                    |          |          | 2004     |   |         | 2003     |         
|          |                                     |                         |          |          |          |   |         |          |         
|          |                                     | (In thousands)          |         
|Current:  |                                     |                         |          |          |          |   |         |          |          |   |         |        
|          | U.S. federal and state income taxes |                         | $        | 605      |          |   | $       | 388      |          |   | $       | (159    | )      
|          | Foreign                             |                         |          | (130,994 | )        |   |         | (108,786 | )        |   |         | (20,834 | )      
|          |                                     |                         |          |          |          |   |         |          |         
|          |                                     | Total current           |          |          | (130,389 | ) |         |          | (108,398 | ) |         |         | (20,993 | )
|          |                                     |                         |          |          |          |   |         |          |         
|Deferred: |                                     |                         |          |          |          |   |         |          |          |   |         |        
|          | U.S. federal                        |                         |          | (48,465  | )        |   |         | (1,458   | )        |   |         | 15,992  |        
|          | Foreign                             |                         |          | 19,688   |          |   |         | 17,184   |          |   |         | (46,607 | )      
|          |                                     |                         |          |          |          |   |         |          |         
|          |                                     | Total deferred          |          |          | (28,777  | ) |         |          | 15,726   |   |         |         | (30,615 | )
|          |                                     |                         |          |          |          |   |         |          |         
|          |                                     | $                       | (159,166 | )        |          | $ | (92,672 | )        |          | $ | (51,608 | )      
|          |                                     |                         |          |          |          |   |         |          |         



|                                                            |  |                         |          |   |      |   |          |      |  |   |         |  
|----------------------------------------------------------- |  | ----------------------- | -------- | - | ---- | - | -------- | ---- |  | - | ------- | -
|                                                            |  | Year Ended December 31, |         
|                                                            |  |                         |         
|                                                            |  | 2005                    |          |   | 2004 |   |          | 2003 | 
|                                                            |  |                         |          |   |      |   |          |      | 
|                                                            |  | (In thousands)          |         
|Statutory federal income tax rate                           |  | $                       | (219,167 | ) |      | $ | (150,762 | )    |  | $ | (69,830 | )
|Effect of state income tax, net and alternative minimum tax |  |                         | (191     | ) |      |   | 252      |      |  |   | 319     |  
|Effect of domestic non-deductible expenses                  |  |                         | 6,568    |   |      |   | (2,076   | )    |  |   | (380    | )
|Change in valuation allowance                               |  |                         | (17,223  | ) |      |   | 1,161    |      |  |   | (6,873  | )
|Effect of foreign income tax, net                           |  |                         | 66,923   |   |      |   | 60,933   |      |  |   | 19,911  |  
|Change in income tax reserve                                |  |                         | 8,744    |   |      |   |         |      |  |   |        |  
|Other                                                       |  |                         | (4,820   | ) |      |   | (2,180   | )    |  |   | 5,245   |  
|                                                            |  |                         |          |   |      |   |          |      | 
|                                                            |  | $                       | (159,166 | ) |      | $ | (92,672  | )    |  | $ | (51,608 | )
|                                                            |  |                         |          |   |      |   |          |      | 



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                          |                                                       |                                |         |          |          |   |        |         |         |  
|------------------------- | ----------------------------------------------------- | ------------------------------ | ------- | -------- | -------- | - | ------ | ------- | ------- | -
|                          |                                                       | December 31,                   |        
|                          |                                                       |                                |        
|                          |                                                       | 2005                           |         |          | 2004     |  
|                          |                                                       |                                |         |          |          |  
|                          |                                                       | (In thousands)                 |        
|Deferred tax assets:      |                                                       |                                |         |          |          |   |        |        
|                          | Domestic and foreign operating losses                 |                                | $       | 57,458   |          |   | $      | 52,296  |        
|                          | Accrued liabilities and reserves                      |                                |         | 137,457  |          |   |        | 82,180  |        
|                          | Tax credits                                           |                                |         | 70,489   |          |   |        | 54,055  |        
|                          | Unremitted foreign earnings                           |                                |         | 5,355    |          |   |        | 7,898   |        
|                          | Other differences between financial and tax basis     |                                |         | 33,683   |          |   |        | 1,238   |        
|                          | Differences between financial and tax basis inventory |                                |         | 22,735   |          |   |        | 14,853  |        
|                          | Valuation allowance                                   |                                |         | (44,003  | )        |   |        | (27,823 | )      
|                          |                                                       |                                |         |          |          |  
|                          |                                                       | Total deferred tax assets      |         |          | 283,174  |   |        |         | 184,697 |  
|                          |                                                       |                                |         |          |          |  
|Deferred tax liabilities: |                                                       |                                |         |          |          |   |        |        
|                          | Property, plant and equipment                         |                                |         | (128,850 | )        |   |        | (65,385 | )      
|                          | Goodwill and other intangibles                        |                                |         | (30,972  | )        |   |        | (18,545 | )      
|                          | Other differences between financial and tax basis     |                                |         | (7,690   | )        |   |        | (1,175  | )      
|                          |                                                       |                                |         |          |          |  
|                          |                                                       | Total deferred tax liabilities |         |          | (167,512 | ) |        |         | (85,105 | )
|                          |                                                       |                                |         |          |          |  
|Net deferred tax assets   |                                                       | $                              | 115,662 |          |          | $ | 99,592 |        
|                          |                                                       |                                |         |          |          |  









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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |                                       
|--- | --------------------------------------
|18. | Disputes, Litigation and Contingencies



| |                              
| | -----------------------------
| | Litigation and Other Disputes





| |          
| | ---------
| | Insurance





|    |            
|--- | -----------
|19. | Commitments



| |                 
| | ----------------
| | Operating Leases



|           |  |   |         | 
|---------- |  | - | ------- | 
|2006       |  | $ | 51,948  | 
|2007       |  |   | 42,129  | 
|2008       |  |   | 34,681  | 
|2009       |  |   | 28,518  | 
|2010       |  |   | 24,020  | 
|Thereafter |  |   | 119,504 | 
|           |  |   |        
|           |  | $ | 300,800 | 
|           |  |   |        



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                           
|--- | --------------------------
|20. | Related Party Transactions



5 8












|    |                    
|--- | -------------------
|21. | Segment Information



| |                    
| | -------------------
| | Geographic Segments



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                             |  |                                      |           |  |                   |   |           |      |  |   |           |  |  |      |           |  |      |   |           |  |  |   |           | 
|---------------------------- |  | ------------------------------------ | --------- |  | ----------------- | - | --------- | ---- |  | - | --------- |  |  | ---- | --------- |  | ---- | - | --------- |  |  | - | --------- | 
|                             |  | Revenues from Unaffiliated Customers |           |  | Long-lived Assets |  
|                             |  |                                      |           |  |                   |  
|                             |  | 2005                                 |           |  | 2004              |   |           | 2003 |  |   | 2005      |  |  | 2004 |           |  | 2003 |  
|                             |  |                                      |           |  |                   |   |           |      |  |   |           |  |  |      |           |  |      |  
|                             |  | (In thousands)                       |          
|United States                |  | $                                    | 1,609,209 |  |                   | $ | 1,140,974 |      |  | $ | 855,321   |  |  | $    | 1,306,406 |  |      | $ | 1,761,501 |  |  | $ | 1,832,172 | 
|Canada                       |  |                                      | 791,496   |  |                   |   | 528,581   |      |  |   | 442,562   |  |  |      | 1,515,520 |  |      |   | 534,286   |  |  |   | 488,991   | 
|Latin America                |  |                                      | 423,974   |  |                   |   | 301,392   |      |  |   | 246,402   |  |  |      | 423,490   |  |      |   | 171,570   |  |  |   | 170,643   | 
|Europe, CIS and West Africa  |  |                                      | 659,308   |  |                   |   | 556,112   |      |  |   | 501,825   |  |  |      | 1,376,412 |  |      |   | 730,944   |  |  |   | 716,251   | 
|Middle East and North Africa |  |                                      | 519,826   |  |                   |   | 376,054   |      |  |   | 302,430   |  |  |      | 902,904   |  |      |   | 234,840   |  |  |   | 191,232   | 
|Asia Pacific                 |  |                                      | 329,414   |  |                   |   | 228,661   |      |  |   | 213,494   |  |  |      | 369,604   |  |      |   | 129,377   |  |  |   | 135,282   | 
|                             |  |                                      |           |  |                   |   |           |      |  |   |           |  |  |      |           |  |      |  
|                             |  | $                                    | 4,333,227 |  |                   | $ | 3,131,774 |      |  | $ | 2,562,034 |  |  | $    | 5,894,336 |  |      | $ | 3,562,518 |  |  | $ | 3,534,571 | 
|                             |  |                                      |           |  |                   |   |           |      |  |   |           |  |  |      |           |  |      |  



| |                   
| | ------------------
| | Reporting Segments









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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |                                                        |                |   |           |              |  |   |            |  |  |              |         |  |       |   |         |   |  |   |           | 
|---- | ------------------------------------------------------ | -------------- | - | --------- | ------------ |  | - | ---------- |  |  | ------------ | ------- |  | ----- | - | ------- | - |  | - | --------- | 
|     |                                                        | Evaluation,    |   |           |              |  |   |            |  |  |             
|     |                                                        | Drilling &     |   |           | Completion & |  |   |            |  |  |              |        
|     |                                                        | Intervention   |   |           | Production   |  |   | Other      |  |  |              |         | 
|     |                                                        | Services       |   |           | Systems      |  |   | Operations |  |  | Corporate(a) |         |  | Total |  
|     |                                                        |                |   |           |              |  |   |            |  |  |              |         |  |       |  
|     |                                                        | (In thousands) |  
|2005 |                                                        |                |   |           |              |  |   |            |  |  |              |         |  |       |   |         |   |  |   |          
|     | Revenues from unaffiliated customers                   |                | $ | 2,428,382 |              |  | $ | 1,722,884  |  |  | $            | 181,961 |  |       | $ |        |   |  | $ | 4,333,227 | 
|     | Depreciation and amortization                          |                |   | 235,099   |              |  |   | 78,826     |  |  |              | 17,960  |  |       |   | 2,453   |   |  |   | 334,338   | 
|     | Operating income (loss)(b)                             |                |   | 450,224   |              |  |   | 200,123    |  |  |              | 9,039   |  |       |   | (89,957 | ) |  |   | 569,429   | 
|     | Total assets                                           |                |   | 4,890,468 |              |  |   | 2,300,624  |  |  |              | 966,468 |  |       |   | 422,744 |   |  |   | 8,580,304 | 
|     | Capital expenditures for property, plant and equipment |                |   | 346,113   |              |  |   | 104,210    |  |  |              | 56,940  |  |       |   | 19,341  |   |  |   | 526,604   | 
|2004 |                                                        |                |   |           |              |  |   |            |  |  |              |         |  |       |   |         |   |  |   |          
|     | Revenues from unaffiliated customers                   |                | $ | 1,697,635 |              |  | $ | 1,358,479  |  |  | $            | 75,660  |  |       | $ |        |   |  | $ | 3,131,774 | 
|     | Depreciation and amortization                          |                |   | 177,468   |              |  |   | 68,621     |  |  |              | 7,326   |  |       |   | 2,469   |   |  |   | 255,884   | 
|     | Operating income (loss)                                |                |   | 316,440   |              |  |   | 120,113    |  |  |              | 12,678  |  |       |   | (33,484 | ) |  |   | 415,747   | 
|     | Total assets                                           |                |   | 2,647,441 |              |  |   | 2,055,148  |  |  |              | 98,825  |  |       |   | 729,312 |   |  |   | 5,530,726 | 
|     | Capital expenditures for property, plant and equipment |                |   | 194,139   |              |  |   | 87,395     |  |  |              | 5,378   |  |       |   | 23,918  |   |  |   | 310,830   | 
|2003 |                                                        |                |   |           |              |  |   |            |  |  |              |         |  |       |   |         |   |  |   |          
|     | Revenues from unaffiliated customers                   |                | $ | 1,446,836 |              |  | $ | 1,068,430  |  |  | $            | 46,768  |  |       | $ |        |   |  | $ | 2,562,034 | 
|     | Depreciation and amortization                          |                |   | 167,819   |              |  |   | 55,817     |  |  |              | 6,262   |  |       |   | 2,519   |   |  |   | 232,417   | 
|     | Operating income (loss)                                |                |   | 231,446   |              |  |   | 78,813     |  |  |              | 3,213   |  |       |   | (27,255 | ) |  |   | 286,217   | 
|     | Total assets                                           |                |   | 2,486,243 |              |  |   | 1,878,750  |  |  |              | 78,574  |  |       |   | 517,668 |   |  |   | 4,961,235 | 
|     | Capital expenditures for property, plant and equipment |                |   | 159,454   |              |  |   | 94,064     |  |  |              | 4,157   |  |       |   | 44,712  |   |  |   | 302,387   | 






|    |                                                          
|--- | ---------------------------------------------------------
|(a) | Includes Equity in Earnings of Unconsolidated Affiliates.



|    |  |                                                                                                                                                                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Includes Exit Costs and Restructuring Charges of $72,769,
    $6,653, $2,075 and $32,738 in Evaluation, Drilling &
    Intervention Services, Completion & Production Systems,
    Other Operations and Corporate, respectively. (See Note 4).



|    |                                   
|--- | ----------------------------------
|22. | Consolidating Financial Statements



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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




364-Day 1 4 5 8 364-Day




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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Balance Sheet


December 31, 2005


|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |             |   |  |   |           |           | 
|----------------------------------------------- | ----------------------------------------------------------- | -------------- | --------- | ------- | ------ | ----- | --------- | ------------ |  | - | ------------ | --------- |  | ------------- | ----------- | - |  | - | --------- | --------- | 
|                                                |                                                             |                |           |         |        | Other |           |              |  |   |             
|                                                |                                                             | Parent         |           |         | Issuer |       |           | Subsidiaries |  |   | Eliminations |           |  | Consolidation |            
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             | (In thousands) |          
|ASSETS                                         
|Current Assets:                                 |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |             |   |  |   |           |          
|                                                | Cash and Cash Equivalents                                   |                | $         | 124     |        |       | $         | 3,172        |  |   | $            | 130,949   |  |               | $           |  |  |   | $         | 134,245   | 
|                                                | Other Current Assets                                        |                |           | 952     |        |       |           | 1,179        |  |   |              | 2,502,497 |  |               |             |  |  |   |           | 2,504,628 | 
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             |                | 1,076     |         |        |       | 4,351     |              |  |   | 2,633,446    |           |  |               |            |   |  |   | 2,638,873 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|Equity Investments in Unconsolidated Affiliates |                                                             |                |          |         |        |       |          |              |  |   | 36,990       |           |  |               |            |   |  |   | 36,990    |          
|Equity Investments in Affiliates                |                                                             |                | 8,029,938 |         |        |       | 2,602,236 |              |  |   | 12,368,520   |           |  |               | (23,000,694 | ) |  |   |          |          
|Shares Held in Parent                           |                                                             |                |          |         |        |       | 152,111   |              |  |   |             |           |  |               | (152,111    | ) |  |   |          |          
|Intercompany Receivables, Net                   |                                                             |                | 180,959   |         |        |       | 1,741,011 |              |  |   |             |           |  |               | (1,921,970  | ) |  |   |          |          
|Other Assets                                    |                                                             |                | 43,493    |         |        |       | 10,366    |              |  |   | 5,850,582    |           |  |               |            |   |  |   | 5,904,441 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             | $              | 8,255,466 |         |        | $     | 4,510,075 |              |  | $ | 20,889,538   |           |  | $             | (25,074,775 | ) |  | $ | 8,580,304 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                               
|LIABILITIES AND SHAREHOLDERS EQUITY           
|Current Liabilities:                            |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |             |   |  |   |           |          
|                                                | Short-term Borrowings and Current Portion of Long-term Debt |                | $         | 717,628 |        |       | $         | 206,118      |  |   | $            | 31,020    |  |               | $           |  |  |   | $         | 954,766   | 
|                                                | Accounts Payable and Other Current Liabilities              |                |           | 4,002   |        |       |           | 7,770        |  |   |              | 1,031,603 |  |               |             |  |  |   |           | 1,043,375 | 
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             |                | 721,630   |         |        |       | 213,888   |              |  |   | 1,062,623    |           |  |               |            |   |  |   | 1,998,141 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|Long-term Debt                                  |                                                             |                | 255,329   |         |        |       | 357,449   |              |  |   | 19,293       |           |  |               |            |   |  |   | 632,071   |          
|Intercompany Payables, Net                      |                                                             |                |          |         |        |       |          |              |  |   | 1,921,970    |           |  |               | (1,921,970  | ) |  |   |          |          
|Other Long-term Liabilities                     |                                                             |                | 46,792    |         |        |       | 80,231    |              |  |   | 156,252      |           |  |               |            |   |  |   | 283,275   |          
|Shareholders Equity                            |                                                             |                | 7,231,715 |         |        |       | 3,858,507 |              |  |   | 17,729,400   |           |  |               | (23,152,805 | ) |  |   | 5,666,817 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             | $              | 8,255,466 |         |        | $     | 4,510,075 |              |  | $ | 20,889,538   |           |  | $             | (25,074,775 | ) |  | $ | 8,580,304 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Balance Sheet


December 31, 2004


|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |             |   |  |   |           |           | 
|----------------------------------------------- | ----------------------------------------------------------- | -------------- | --------- | ------- | ------ | ----- | --------- | ------------ |  | - | ------------ | --------- |  | ------------- | ----------- | - |  | - | --------- | --------- | 
|                                                |                                                             |                |           |         |        | Other |           |              |  |   |             
|                                                |                                                             | Parent         |           |         | Issuer |       |           | Subsidiaries |  |   | Eliminations |           |  | Consolidation |            
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             | (In thousands) |          
|ASSETS                                         
|Current Assets:                                 |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |             |   |  |   |           |          
|                                                | Cash and Cash Equivalents                                   |                | $         | 138,979 |        |       | $         | 74,053       |  |   | $            | 104,407   |  |               | $           |  |  |   | $         | 317,439   | 
|                                                | Other Current Assets                                        |                |           | 1,149   |        |       |           | 52,900       |  |   |              | 1,571,690 |  |               |             |  |  |   |           | 1,625,739 | 
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             |                | 140,128   |         |        |       | 126,953   |              |  |   | 1,676,097    |           |  |               |            |   |  |   | 1,943,178 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|Equity Investments in Unconsolidated Affiliates |                                                             |                | 151,798   |         |        |       |          |              |  |   | 18,404       |           |  |               |            |   |  |   | 170,202   |          
|Equity Investments in Affiliates                |                                                             |                | 3,837,607 |         |        |       | 1,752,753 |              |  |   | 6,763,091    |           |  |               | (12,353,451 | ) |  |   |          |          
|Shares Held in Parent                           |                                                             |                |          |         |        |       | 228,064   |              |  |   |             |           |  |               | (228,064    | ) |  |   |          |          
|Intercompany Receivables, Net                   |                                                             |                |          |         |        |       | 2,366,608 |              |  |   |             |           |  |               | (2,366,608  | ) |  |   |          |          
|Other Assets                                    |                                                             |                | 34,026    |         |        |       | 7,379     |              |  |   | 3,388,697    |           |  |               |            |   |  |   | 3,430,102 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             | $              | 4,163,559 |         |        | $     | 4,481,757 |              |  | $ | 11,846,289   |           |  | $             | (14,948,123 | ) |  | $ | 5,543,482 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                               
|LIABILITIES AND SHAREHOLDERS EQUITY           
|Current Liabilities:                            |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |             |   |  |   |           |          
|                                                | Short-term Borrowings and Current Portion of Long-term Debt |                | $         | 669     |        |       | $         | 6,115        |  |   | $            | 15,451    |  |               | $           |  |  |   | $         | 22,235    | 
|                                                | Accounts Payable and Other Current Liabilities              |                |           | 4,645   |        |       |           | 7,578        |  |   |              | 625,548   |  |               |             |  |  |   |           | 637,771   | 
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             |                | 5,314     |         |        |       | 13,693    |              |  |   | 640,999      |           |  |               |            |   |  |   | 660,006   |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|Long-term Debt                                  |                                                             |                | 255,989   |         |        |       | 1,133,263 |              |  |   | 15,179       |           |  |               |            |   |  |   | 1,404,431 |          
|Intercompany Payables, Net                      |                                                             |                | 50,978    |         |        |       |          |              |  |   | 2,315,630    |           |  |               | (2,366,608  | ) |  |   |          |          
|Other Long-term Liabilities                     |                                                             |                | 28,727    |         |        |       | 68,998    |              |  |   | 67,931       |           |  |               |            |   |  |   | 165,656   |          
|Shareholders Equity                            |                                                             |                | 3,822,551 |         |        |       | 3,265,803 |              |  |   | 8,806,550    |           |  |               | (12,581,515 | ) |  |   | 3,313,389 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            
|                                                |                                                             | $              | 4,163,559 |         |        | $     | 4,481,757 |              |  | $ | 11,846,289   |           |  | $             | (14,948,123 | ) |  | $ | 5,543,482 |          
|                                                |                                                             |                |           |         |        |       |           |              |  |   |              |           |  |               |            

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Operations


Year Ended December 31, 2005


|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |          |          |   |   |            |         |  
|-------------------------------------------------------------------------------------- | --------------------------------------- | -------------- | ------- | ------- | ------ | ----- | ------- | ------------ | - | - | ------------ | ------- | - | ------------- | -------- | -------- | - | - | ---------- | ------- | -
|                                                                                       |                                         |                |         |         |        | Other |         |              |   |   |             
|                                                                                       |                                         | Parent         |         |         | Issuer |       |         | Subsidiaries |   |   | Eliminations |         |   | Consolidation |         
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|                                                                                       |                                         | (In thousands) |        
|Revenues                                                                               |                                         | $              |        |         |        | $     |        |              |   | $ | 4,333,227    |         |   | $             |         |          |   | $ | 4,333,227  |        
|Costs and Expenses                                                                     |                                         |                | (16,524 | )       |        |       | (912    | )            |   |   | (3,766,285   | )       |   |               |         |          |   |   | (3,783,721 | )      
|Equity in Earnings of Unconsolidated Affiliates                                        |                                         |                | 9,496   |         |        |       |        |              |   |   | 10,427       |         |   |               |         |          |   |   | 19,923     |        
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Operating Income (Loss)                                                                |                                         |                | (7,028  | )       |        |       | (912    | )            |   |   | 577,369      |         |   |               |         |          |   |   | 569,429    |        
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Other Income (Expense):                                                                |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |          |          |   |   |            |        
|                                                                                       | Gain on Sale of Universal Common Stock  |                |         | 115,456 |        |       |         |             |   |   |              |        |   |               |          |         |   |   |            | 115,456 |  
|                                                                                       | Debt Redemption Expense                 |                |         |        |        |       |         | (4,733       | ) |   |              |        |   |               |          |         |   |   |            | (4,733  | )
|                                                                                       | Interest Expense, Net                   |                |         | (22,953 | )      |       |         | (43,324      | ) |   |              | (2,858  | ) |               |          |         |   |   |            | (69,135 | )
|                                                                                       | Intercompany Charges, Net               |                |         | (35,500 | )      |       |         | 104,146      |   |   |              | (68,646 | ) |               |          |         |   |   |            |        |  
|                                                                                       | Equity in Earnings (Loss) of Affiliates |                |         | 411,695 |        |       |         | 376,282      |   |   |              |        |   |               |          | (787,977 | ) |   |            |        |  
|                                                                                       | Other, Net                              |                |         | 6,102   |        |       |         | (315         | ) |   |              | 9,388   |   |               |          |         |   |   |            | 15,175  |  
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Income (Loss) from Continuing Operations Before Income Taxes and
    Minority Interest |                                         |                | 467,772 |         |        |       | 431,144 |              |   |   | 515,253      |         |   |               | (787,977 | )        |   |   | 626,192    |        
|Provision for Income Taxes                                                             |                                         |                | (352    | )       |        |       | (19,449 | )            |   |   | (139,365     | )       |   |               |         |          |   |   | (159,166   | )      
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Income (Loss) from Continuing Operations Before Minority Interest                      |                                         |                | 467,420 |         |        |       | 411,695 |              |   |   | 375,888      |         |   |               | (787,977 | )        |   |   | 467,026    |        
|Minority Interest, Net                                                                 |                                         |                |        |         |        |       |        |              |   |   | (817         | )       |   |               |         |          |   |   | (817       | )      
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Income (Loss) from Continuing Operations                                               |                                         |                | 467,420 |         |        |       | 411,695 |              |   |   | 375,071      |         |   |               | (787,977 | )        |   |   | 466,209    |        
|Income from Discontinued Operation, Net of Taxes                                       |                                         |                |        |         |        |       |        |              |   |   | 1,211        |         |   |               |         |          |   |   | 1,211      |        
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Net Income (Loss)                                                                      |                                         | $              | 467,420 |         |        | $     | 411,695 |              |   | $ | 376,282      |         |   | $             | (787,977 | )        |   | $ | 467,420    |        
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Operations


Year Ended December 31, 2004


|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |          |          |   |   |            |         |  
|-------------------------------------------------------------------------------------- | --------------------------------------- | -------------- | ------- | ------- | ------ | ----- | ------- | ------------ | - | - | ------------ | ------- | - | ------------- | -------- | -------- | - | - | ---------- | ------- | -
|                                                                                       |                                         |                |         |         |        | Other |         |              |   |   |             
|                                                                                       |                                         | Parent         |         |         | Issuer |       |         | Subsidiaries |   |   | Eliminations |         |   | Consolidation |         
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|                                                                                       |                                         | (In thousands) |        
|Revenues                                                                               |                                         | $              |        |         |        | $     |        |              |   | $ | 3,131,774    |         |   | $             |         |          |   | $ | 3,131,774  |        
|Costs and Expenses                                                                     |                                         |                | (3,662  | )       |        |       | (1,490  | )            |   |   | (2,733,280   | )       |   |               |         |          |   |   | (2,738,432 | )      
|Equity in Earnings of Unconsolidated Affiliates                                        |                                         |                | 18,567  |         |        |       |        |              |   |   | 3,838        |         |   |               |         |          |   |   | 22,405     |        
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Operating Income (Loss)                                                                |                                         |                | 14,905  |         |        |       | (1,490  | )            |   |   | 402,332      |         |   |               |         |          |   |   | 415,747    |        
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Other Income (Expense):                                                                |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |          |          |   |   |            |        
|                                                                                       | Gain on Sale of Universal Common Stock  |                |         | 77,642  |        |       |         |             |   |   |              |        |   |               |          |         |   |   |            | 77,642  |  
|                                                                                       | Interest Expense, Net                   |                |         | (11,839 | )      |       |         | (43,720      | ) |   |              | (4,157  | ) |               |          |         |   |   |            | (59,716 | )
|                                                                                       | Intercompany Charges, Net               |                |         | (31,297 | )      |       |         | 90,547       |   |   |              | (59,250 | ) |               |          |         |   |   |            |        |  
|                                                                                       | Equity in Earnings (Loss) of Affiliates |                |         | 281,281 |        |       |         | 283,320      |   |   |              |        |   |               |          | (564,601 | ) |   |            |        |  
|                                                                                       | Other, Net                              |                |         | (720    | )      |       |         | 340          |   |   |              | (2,546  | ) |               |          |         |   |   |            | (2,926  | )
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Income (Loss) from Continuing Operations Before Income Taxes and
    Minority Interest |                                         |                | 329,972 |         |        |       | 328,997 |              |   |   | 336,379      |         |   |               | (564,601 | )        |   |   | 430,747    |        
|(Provision) Benefit for Income Taxes                                                   |                                         |                | 174     |         |        |       | (47,716 | )            |   |   | (45,130      | )       |   |               |         |          |   |   | (92,672    | )      
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Income (Loss) from Continuing Operations Before Minority Interest                      |                                         |                | 330,146 |         |        |       | 281,281 |              |   |   | 291,249      |         |   |               | (564,601 | )        |   |   | 338,075    |        
|Minority Interest, Net                                                                 |                                         |                |        |         |        |       |        |              |   |   | (776         | )       |   |               |         |          |   |   | (776       | )      
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Income (Loss) from Continuing Operations                                               |                                         |                | 330,146 |         |        |       | 281,281 |              |   |   | 290,473      |         |   |               | (564,601 | )        |   |   | 337,299    |        
|Loss from Discontinued Operation, Net of Taxes                                         |                                         |                |        |         |        |       |        |              |   |   | (7,153       | )       |   |               |         |          |   |   | (7,153     | )      
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         
|Net Income (Loss)                                                                      |                                         | $              | 330,146 |         |        | $     | 281,281 |              |   | $ | 283,320      |         |   | $             | (564,601 | )        |   | $ | 330,146    |        
|                                                                                       |                                         |                |         |         |        |       |         |              |   |   |              |         |   |               |         

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Operations


Year Ended December 31, 2003


|                                                                                       |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |         |         |   |   |            |         |  
|-------------------------------------------------------------------------------------- | -------------------------------- | -------------- | ------- | ------ | ------ | ----- | ------- | ------------ | - | - | ------------ | -------- | - | ------------- | ------- | ------- | - | - | ---------- | ------- | -
|                                                                                       |                                  |                |         |        |        | Other |         |              |   |   |             
|                                                                                       |                                  | Parent         |         |        | Issuer |       |         | Subsidiaries |   |   | Eliminations |          |   | Consolidation |        
|                                                                                       |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |        
|                                                                                       |                                  | (In thousands) |        
|Revenues                                                                               |                                  | $              |        |        |        | $     |        |              |   | $ | 2,562,034    |          |   | $             |        |         |   | $ | 2,562,034  |        
|Costs and Expenses                                                                     |                                  |                |        |        |        |       | (670    | )            |   |   | (2,290,094   | )        |   |               |        |         |   |   | (2,290,764 | )      
|Equity in Earnings of Unconsolidated Affiliates                                        |                                  |                | 11,556  |        |        |       |        |              |   |   | 3,391        |          |   |               |        |         |   |   | 14,947     |        
|                                                                                       |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |        
|Operating Income (Loss)                                                                |                                  |                | 11,556  |        |        |       | (670    | )            |   |   | 275,331      |          |   |               |        |         |   |   | 286,217    |        
|                                                                                       |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |        
|Other Income (Expense):                                                                |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |         |         |   |   |            |        
|                                                                                       | Interest Expense, Net            |                |         | (7,232 | )      |       |         | (61,068      | ) |   |              | (6,238   | ) |               |         |        |   |   |            | (74,538 | )
|                                                                                       | Intercompany Charges, Net        |                |         | 90,100 |        |       |         | 128,855      |   |   |              | (218,955 | ) |               |         |        |   |   |            |        |  
|                                                                                       | Debt Redemption Expense          |                |         |       |        |       |         | (20,911      | ) |   |              |         |   |               |         |        |   |   |            | (20,911 | )
|                                                                                       | Equity in Earnings of Affiliates |                |         | 52,178 |        |       |         | 40,214       |   |   |              |         |   |               |         | (92,392 | ) |   |            |        |  
|                                                                                       | Other, Net                       |                |         | 1,574  |        |       |         | 1,030        |   |   |              | 6,143    |   |               |         |        |   |   |            | 8,747   |  
|                                                                                       |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |        
|Income (Loss) from Continuing Operations Before Income Taxes and
    Minority Interest |                                  |                | 148,176 |        |        |       | 87,450  |              |   |   | 56,281       |          |   |               | (92,392 | )       |   |   | 199,515    |        
|Provision for Income Taxes                                                             |                                  |                | (4,824  | )      |        |       | (35,272 | )            |   |   | (11,512      | )        |   |               |        |         |   |   | (51,608    | )      
|                                                                                       |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |        
|Income (Loss) from Continuing Operations Before Minority Interest                      |                                  |                | 143,352 |        |        |       | 52,178  |              |   |   | 44,769       |          |   |               | (92,392 | )       |   |   | 147,907    |        
|Minority Interest, Net                                                                 |                                  |                |        |        |        |       |        |              |   |   | (664         | )        |   |               |        |         |   |   | (664       | )      
|                                                                                       |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |        
|Income (Loss) from Continuing Operations                                               |                                  |                | 143,352 |        |        |       | 52,178  |              |   |   | 44,105       |          |   |               | (92,392 | )       |   |   | 147,243    |        
|Loss from Discontinued Operation, Net of Taxes                                         |                                  |                |        |        |        |       |        |              |   |   | (3,891       | )        |   |               |        |         |   |   | (3,891     | )      
|                                                                                       |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |        
|Net Income (Loss)                                                                      |                                  | $              | 143,352 |        |        | $     | 52,178  |              |   | $ | 40,214       |          |   | $             | (92,392 | )       |   | $ | 143,352    |        
|                                                                                       |                                  |                |         |        |        |       |         |              |   |   |              |          |   |               |        

88



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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Cash Flows


Year Ended December 31, 2005


|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |   |          |         |   |          |          |            |         | 
|------------------------------------------------------------ | --------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | ------------------------------------------------- | -------- | -------- | -------- | ------- | ------------ | -------- | -------- | ------------ | -------- | ---------- | ------------- | - | -------- | ------- | - | -------- | -------- | ---------- | ------- | 
|                                                             |                                                                                                     |                                                          |                                                   |          |          | Other    |         |              |          |          |             
|                                                             |                                                                                                     | Parent                                                   |                                                   |          | Issuer   |          |         | Subsidiaries |          |          | Eliminations |          |            | Consolidation |  
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  
|                                                             |                                                                                                     | (In thousands)                                           |                                                  
|Cash Flows from Operating Activities:                        |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |   |          |         |   |          |         
|                                                             | Net Income (Loss)                                                                                   |                                                          | $                                                 | 467,420  |          |          | $       | 411,695      |          |          | $            | 376,282  |            |               | $ | (787,977 | )       |   | $        | 467,420  |           
|                                                             | Adjustments to Reconcile Net Income (Loss) to Net Cash Provided
    (Used) by Operating Activities: |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |   |          |         |   |          |          |           
|                                                             |                                                                                                     | Equity in Earnings of Unconsolidated Affiliates          |                                                   |          | (9,496   | )        |         |              |         |          |              |          | (10,427    | )             |   |          |        |   |          |          | (19,923    | )      
|                                                             |                                                                                                     | Gain on Sale of Universal Common Stock                   |                                                   |          | (115,456 | )        |         |              |         |          |              |          |           |               |   |          |        |   |          |          | (115,456   | )      
|                                                             |                                                                                                     | Non-cash Portion of Exit Costs and Restructuring Charges |                                                   |          | 8,191    |          |         |              |         |          |              |          | 57,009     |               |   |          |        |   |          |          | 65,200     |        
|                                                             |                                                                                                     | Charges from Parent or Subsidiary                        |                                                   |          | 35,500   |          |         |              | (104,146 | )        |              |          | 68,646     |               |   |          |        |   |          |          |           |        
|                                                             |                                                                                                     | Equity in (Earnings) Loss of Affiliates                  |                                                   |          | (411,695 | )        |         |              | (376,282 | )        |              |          |           |               |   |          | 787,977 |   |          |          |           |        
|                                                             |                                                                                                     | Deferred Income Tax Provision                            |                                                   |          |         |          |         |              | 19,839   |          |              |          | 8,938      |               |   |          |        |   |          |          | 28,777     |        
|                                                             |                                                                                                     | Other Adjustments                                        |                                                   |          | (163,275 | )        |         |              | (177,042 | )        |              |          | 415,099    |               |   |          |        |   |          |          | 74,782     |        
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  
|                                                             |                                                                                                     |                                                          | Net Cash Provided (Used) by Continuing Operations |          |          | (188,811 | )       |              |          | (225,936 | )            |          |            | 915,547       |   |          |         |  |          |          |            | 500,800 | 
|                                                             |                                                                                                     |                                                          | Net Cash Provided by Discontinued Operation       |          |          |         |         |              |          |         |              |          |            | 2,294         |   |          |         |  |          |          |            | 2,294   | 
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  
|                                                             |                                                                                                     |                                                          | Net Cash Provided (Used) by Operating Activities  |          |          | (188,811 | )       |              |          | (225,936 | )            |          |            | 917,841       |   |          |         |  |          |          |            | 503,094 | 
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  
|Cash Flows from Investing Activities:                        |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |   |          |         |   |          |         
|                                                             | Acquisition of Businesses, Net of Cash Acquired                                                     |                                                          |                                                   |         |          |          |         |             |          |          |              | (991,067 | )          |               |   |         |         |   |          | (991,067 | )         
|                                                             | Capital Expenditures for Property, Plant and Equipment                                              |                                                          |                                                   |         |          |          |         |             |          |          |              | (526,618 | )          |               |   |         |         |   |          | (526,618 | )         
|                                                             | Acquisition of Intellectual Property                                                                |                                                          |                                                   |         |          |          |         |             |          |          |              | (13,423  | )          |               |   |         |         |   |          | (13,423  | )         
|                                                             | Proceeds from Sale of Universal Common Stock                                                        |                                                          |                                                   | 276,750  |          |          |         |             |          |          |              |         |            |               |   |         |         |   |          | 276,750  |           
|                                                             | Proceeds from Sale of Assets                                                                        |                                                          |                                                   |         |          |          |         |             |          |          |              | 15,874   |            |               |   |         |         |   |          | 15,874   |           
|                                                             | Other Investing Activities, Net                                                                     |                                                          |                                                   |         |          |          |         |             |          |          |              | (16,424  | )          |               |   |         |         |   |          | (16,424  | )         
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  
|                                                             |                                                                                                     | Net Cash Provided (Used) by Investing Activities         |                                                   |          | 276,750  |          |         |              |         |          |              |          | (1,531,658 | )             |   |          |        |   |          |          | (1,254,908 | )      
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  
|Cash Flows from Financing Activities:                        |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |   |          |         |   |          |         
|                                                             | Borrowings from Short-term Debt, Net                                                                |                                                          |                                                   | 716,927  |          |          |         | 1,885        |          |          |              | 12,320   |            |               |   |         |         |   |          | 731,132  |           
|                                                             | Borrowings from (Repayments on) Long-term Debt, Net                                                 |                                                          |                                                   |         |          |          |         | 1,736        |          |          |              | (4,110   | )          |               |   |         |         |   |          | (2,374   | )         
|                                                             | Redemption of Convertible Debentures                                                                |                                                          |                                                   |         |          |          |         | (348,816     | )        |          |              |         |            |               |   |         |         |   |          | (348,816 | )         
|                                                             | Proceeds from Exercise of Stock Options                                                             |                                                          |                                                   |         |          |          |         | 191,127      |          |          |              |         |            |               |   |         |         |   |          | 191,127  |           
|                                                             | Borrowings (Repayments) Between Subsidiaries, Net                                                   |                                                          |                                                   | (943,721 | )        |          |         | 309,596      |          |          |              | 634,125  |            |               |   |         |         |   |          |         |           
|                                                             | Other Financing Activities, Net                                                                     |                                                          |                                                   |         |          |          |         | (473         | )        |          |              | (487     | )          |               |   |         |         |   |          | (960     | )         
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  
|                                                             |                                                                                                     | Net Cash Provided (Used) by Financing Activities         |                                                   |          | (226,794 | )        |         |              | 155,055  |          |              |          | 641,848    |               |   |          |        |   |          |          | 570,109    |        
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  
|Effect of Exchange Rate Changes on Cash and Cash Equivalents |                                                                                                     |                                                          |                                                  |          |          |          |        |              |          |          | (1,489       | )        |            |               |  |          |         |   | (1,489   | )       
|Net Increase (Decrease) in Cash and Cash Equivalents         |                                                                                                     |                                                          | (138,855                                          | )        |          |          | (70,881 | )            |          |          | 26,542       |          |            |               |  |          |         |   | (183,194 | )       
|Cash and Cash Equivalents at Beginning of Year               |                                                                                                     |                                                          | 138,979                                           |          |          |          | 74,053  |              |          |          | 104,407      |          |            |               |  |          |         |   | 317,439  |         
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  
|Cash and Cash Equivalents at End of Year                     |                                                                                                     | $                                                        | 124                                               |          |          | $        | 3,172   |              |          | $        | 130,949      |          |            | $             |  |          |         | $ | 134,245  |         
|                                                             |                                                                                                     |                                                          |                                                   |          |          |          |         |              |          |          |              |          |            |               |  

89



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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Cash Flows


Year Ended December 31, 2004


|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |   |          |         |   |         |          |          |         | 
|------------------------------------------------------------ | --------------------------------------------------------------------------------------------------- | ------------------------------------------------ | ------------------------------------------------- | -------- | -------- | ------- | ------ | ------------ | -------- | ------- | ------------ | -------- | -------- | ------------- | - | -------- | ------- | - | ------- | -------- | -------- | ------- | 
|                                                             |                                                                                                     |                                                  |                                                   |          |          | Other   |        |              |          |         |             
|                                                             |                                                                                                     | Parent                                           |                                                   |          | Issuer   |         |        | Subsidiaries |          |         | Eliminations |          |          | Consolidation |  
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     | (In thousands)                                   |                                                  
|Cash Flows from Operating Activities:                        |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |   |          |         |   |         |         
|                                                             | Net Income (Loss)                                                                                   |                                                  | $                                                 | 330,146  |          |         | $      | 281,281      |          |         | $            | 283,320  |          |               | $ | (564,601 | )       |   | $       | 330,146  |         
|                                                             | Adjustments to Reconcile Net Income (Loss) to Net Cash Provided
    (Used) by Operating Activities: |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |   |          |         |   |         |          |         
|                                                             |                                                                                                     | Equity in Earnings of Unconsolidated Affiliates  |                                                   |          | (18,567  | )       |        |              |         |         |              |          | (3,838   | )             |   |          |        |   |         |          | (22,405  | )      
|                                                             |                                                                                                     | Gain on Sale of Universal Common Stock           |                                                   |          | (77,642  | )       |        |              |         |         |              |          |         |               |   |          |        |   |         |          | (77,642  | )      
|                                                             |                                                                                                     | Charges from Parent or Subsidiary                |                                                   |          | 31,297   |         |        |              | (90,547  | )       |              |          | 59,250   |               |   |          |        |   |         |          |         |        
|                                                             |                                                                                                     | Equity in (Earnings) Loss of Affiliates          |                                                   |          | (281,281 | )       |        |              | (283,320 | )       |              |          |         |               |   |          | 564,601 |   |         |          |         |        
|                                                             |                                                                                                     | Deferred Income Tax Provision (Benefit)          |                                                   |          | (686     | )       |        |              | 15,786   |         |              |          | (30,826  | )             |   |          |        |   |         |          | (15,726  | )      
|                                                             |                                                                                                     | Other Adjustments                                |                                                   |          | 117,186  |         |        |              | 5,131    |         |              |          | 159,451  |               |   |          |        |   |         |          | 281,768  |        
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     |                                                  | Net Cash Provided (Used) by Continuing Operations |          |          | 100,453 |        |              |          | (71,669 | )            |          |          | 467,357       |   |          |         |  |         |          |          | 496,141 | 
|                                                             |                                                                                                     |                                                  | Net Cash Provided by Discontinued Operation       |          |          |        |        |              |          |        |              |          |          | 7,338         |   |          |         |  |         |          |          | 7,338   | 
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     |                                                  | Net Cash Provided (Used) by Operating Activities  |          |          | 100,453 |        |              |          | (71,669 | )            |          |          | 474,695       |   |          |         |  |         |          |          | 503,479 | 
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  
|Cash Flows from Investing Activities:                        |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |   |          |         |   |         |         
|                                                             | Acquisition of Businesses, Net of Cash Acquired                                                     |                                                  |                                                   |         |          |         |        |             |          |         |              | (26,464  | )        |               |   |         |         |   |         | (26,464  | )       
|                                                             | Capital Expenditures for Property, Plant and Equipment                                              |                                                  |                                                   |         |          |         |        |             |          |         |              | (310,868 | )        |               |   |         |         |   |         | (310,868 | )       
|                                                             | Acquisition of Intellectual Property                                                                |                                                  |                                                   |         |          |         |        |             |          |         |              | (20,494  | )        |               |   |         |         |   |         | (20,494  | )       
|                                                             | Proceeds from Sale of Assets                                                                        |                                                  |                                                   |         |          |         |        |             |          |         |              | 23,595   |          |               |   |         |         |   |         | 23,595   |         
|                                                             | Proceeds from Sale of Universal Common Stock                                                        |                                                  |                                                   | 231,798  |          |         |        |             |          |         |              |         |          |               |   |         |         |   |         | 231,798  |         
|                                                             | Other Investing Activities, Net                                                                     |                                                  |                                                   |         |          |         |        |             |          |         |              | (2,856   | )        |               |   |         |         |   |         | (2,856   | )       
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     | Net Cash Provided (Used) by Investing Activities |                                                   |          | 231,798  |         |        |              |         |         |              |          | (337,087 | )             |   |          |        |   |         |          | (105,289 | )      
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  
|Cash Flows from Financing Activities:                        |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |   |          |         |   |         |         
|                                                             | Repayments on Asset Securitization, Net                                                             |                                                  |                                                   |         |          |         |        | (75,000      | )        |         |              |         |          |               |   |         |         |   |         | (75,000  | )       
|                                                             | Repayments on Short-term Debt, Net                                                                  |                                                  |                                                   | (144,000 | )        |         |        |             |          |         |              | (39,775  | )        |               |   |         |         |   |         | (183,775 | )       
|                                                             | Repayments on Long-term Debt, Net                                                                   |                                                  |                                                   |         |          |         |        | (1,118       | )        |         |              | (7,866   | )        |               |   |         |         |   |         | (8,984   | )       
|                                                             | Proceeds from Exercise of Stock Options                                                             |                                                  |                                                   |         |          |         |        | 129,549      |          |         |              |         |          |               |   |         |         |   |         | 129,549  |         
|                                                             | Borrowings (Repayments) between Subsidiaries, Net                                                   |                                                  |                                                   | (50,854  | )        |         |        | 90,568       |          |         |              | (39,714  | )        |               |   |         |         |   |         |         |         
|Other Financing Activities, Net                              |                                                                                                     |                                                  |                                                  |          |          |         | (1,236 | )            |          |         | (163         | )        |          |               |  |          |         |   | (1,399  | )       
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     | Net Cash Provided (Used) by Financing Activities |                                                   |          | (194,854 | )       |        |              | 142,763  |         |              |          | (87,518  | )             |   |          |        |   |         |          | (139,609 | )      
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  
|Effect of Exchange Rate Changes on Cash and Cash Equivalents |                                                                                                     |                                                  |                                                  |          |          |         |       |              |          |         | 2,776        |          |          |               |  |          |         |   | 2,776   |         
|Net Increase in Cash and Cash Equivalents                    |                                                                                                     |                                                  | 137,397                                           |          |          |         | 71,094 |              |          |         | 52,866       |          |          |               |  |          |         |   | 261,357 |         
|Cash and Cash Equivalents at Beginning of Year               |                                                                                                     |                                                  | 1,582                                             |          |          |         | 2,959  |              |          |         | 51,541       |          |          |               |  |          |         |   | 56,082  |         
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  
|Cash and Cash Equivalents at End of Year                     |                                                                                                     | $                                                | 138,979                                           |          |          | $       | 74,053 |              |          | $       | 104,407      |          |          | $             |  |          |         | $ | 317,439 |         
|                                                             |                                                                                                     |                                                  |                                                   |          |          |         |        |              |          |         |              |          |          |               |  

90



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##### Table of Contents



WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Condensed Consolidating Statement of Cash Flows


Year Ended December 31, 2003


|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |   |          |          |   |        |          |          |         |  
|------------------------------------------------------------ | --------------------------------------------------------------------------------------------------- | ------------------------------------------------ | ------------------------------------------------- | -------- | -------- | ------ | ----- | ------------ | -------- | ------- | ------------ | -------- | -------- | ------------- | - | -------- | -------- | - | ------ | -------- | -------- | ------- | -
|                                                             |                                                                                                     |                                                  |                                                   |          |          | Other  |       |              |          |         |             
|                                                             |                                                                                                     | Parent                                           |                                                   |          | Issuer   |        |       | Subsidiaries |          |         | Eliminations |          |          | Consolidation |  
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     | (In thousands)                                   |                                                  
|Cash Flows from Operating Activities:                        |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |   |          |          |   |        |         
|                                                             | Net Income (Loss)                                                                                   |                                                  | $                                                 | 143,352  |          |        | $     | 52,178       |          |         | $            | 40,214   |          |               | $ | (92,392  | )        |   | $      | 143,352  |         
|                                                             | Adjustments to Reconcile Net Income (Loss) to Net Cash Provided
    (Used) by Operating Activities: |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |   |          |          |   |        |          |         
|                                                             |                                                                                                     | Equity in Earnings of Unconsolidated Affiliates  |                                                   |          | (11,556  | )      |       |              |         |         |              |          | (3,391   | )             |   |          |         |   |        |          | (14,947  | )      
|                                                             |                                                                                                     | Equity in (Earnings) Loss of Affiliates          |                                                   |          | (52,178  | )      |       |              | (40,214  | )       |              |          |         |               |   |          | 92,392   |   |        |          |         |        
|                                                             |                                                                                                     | Charges from Parent or Subsidiary                |                                                   |          | (90,100  | )      |       |              | (128,855 | )       |              |          | 218,955  |               |   |          |         |   |        |          |         |        
|                                                             |                                                                                                     | Debt Redemption Expense                          |                                                   |          |         |        |       |              | 20,911   |         |              |          |         |               |   |          |         |   |        |          | 20,911   |        
|                                                             |                                                                                                     | Deferred Income Tax Provision                    |                                                   |          | 206      |        |       |              | 15,425   |         |              |          | 14,984   |               |   |          |         |   |        |          | 30,615   |        
|                                                             |                                                                                                     | Other Adjustments                                |                                                   |          | 7,410    |        |       |              | 326,019  |         |              |          | (216,108 | )             |   |          |         |   |        |          | 117,321  |        
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     |                                                  | Net Cash Provided (Used) by Continuing Operations |          |          | (2,866 | )     |              |          | 245,464 |              |          |          | 54,654        |   |          |          |  |        |          |          | 297,252 |  
|                                                             |                                                                                                     |                                                  | Net Cash Used by Discontinued Operation           |          |          |       |       |              |          |        |              |          |          | (11,850       | ) |          |          |  |        |          |          | (11,850 | )
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     |                                                  | Net Cash Provided (Used) by Operating Activities  |          |          | (2,866 | )     |              |          | 245,464 |              |          |          | 42,804        |   |          |          |  |        |          |          | 285,402 |  
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  
|Cash Flows from Investing Activities:                        |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |   |          |          |   |        |         
|                                                             | Acquisition of Businesses, Net of Cash Acquired                                                     |                                                  |                                                   |         |          |        |       |             |          |         |              | (61,527  | )        |               |   |         |          |   |        | (61,527  | )       
|                                                             | Capital Expenditures for Property, Plant and Equipment                                              |                                                  |                                                   |         |          |        |       |             |          |         |              | (302,502 | )        |               |   |         |          |   |        | (302,502 | )       
|                                                             | Acquisition of Intellectual Property                                                                |                                                  |                                                   |         |          |        |       |             |          |         |              | (20,072  | )        |               |   |         |          |   |        | (20,072  | )       
|                                                             | Proceeds from Sale of Assets                                                                        |                                                  |                                                   |         |          |        |       |             |          |         |              | 13,230   |          |               |   |         |          |   |        | 13,230   |         
|                                                             | Capital Contribution to Subsidiary                                                                  |                                                  |                                                   | (412,730 | )        |        |       |             |          |         |              |         |          |               |   | 412,730  |          |   |        |         |         
|                                                             | Other Investing Activities, Net                                                                     |                                                  |                                                   |         |          |        |       |             |          |         |              | (6,144   | )        |               |   |         |          |   |        | (6,144   | )       
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     | Net Cash Provided (Used) by Investing Activities |                                                   |          | (412,730 | )      |       |              |         |         |              |          | (377,015 | )             |   |          | 412,730  |   |        |          | (377,015 | )      
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  
|Cash Flows from Financing Activities:                        |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |   |          |          |   |        |         
|                                                             | Proceeds From Asset Securitization, Net                                                             |                                                  |                                                   |         |          |        |       | 6,051        |          |         |              |         |          |               |   |         |          |   |        | 6,051    |         
|                                                             | Borrowings from (Repayments on) Short-term Debt, Net                                                |                                                  |                                                   | 144,000  |          |        |       | (221,038     | )        |         |              | (79,016  | )        |               |   |         |          |   |        | (156,054 | )       
|                                                             | Borrowings from (Repayments on) Long-term Debt, Net                                                 |                                                  |                                                   | 247,902  |          |        |       |             |          |         |              | (1,847   | )        |               |   |         |          |   |        | 246,055  |         
|                                                             | Redemption of Convertible Debentures                                                                |                                                  |                                                   |         |          |        |       | (412,563     | )        |         |              |         |          |               |   |         |          |   |        | (412,563 | )       
|                                                             | Proceeds from Issuance of Common Shares                                                             |                                                  |                                                   | 400,000  |          |        |       |             |          |         |              |         |          |               |   |         |          |   |        | 400,000  |         
|                                                             | Proceeds from Exercise of Stock Options                                                             |                                                  |                                                   |         |          |        |       | 13,972       |          |         |              |         |          |               |   |         |          |   |        | 13,972   |         
|                                                             | Borrowings (Repayments) Between Subsidiaries, Net                                                   |                                                  |                                                   | (370,466 | )        |        |       | 370,478      |          |         |              | (12      | )        |               |   |         |          |   |        |         |         
|                                                             | Proceeds from Capital Contribution                                                                  |                                                  |                                                   |         |          |        |       |             |          |         |              | 412,730  |          |               |   | (412,730 | )        |   |        |         |         
|                                                             | Other Financing Activities, Net                                                                     |                                                  |                                                   | (4,258   | )        |        |       | (2,619       | )        |         |              | 4,054    |          |               |   |         |          |   |        | (2,823   | )       
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  
|                                                             |                                                                                                     | Net Cash Provided (Used) by Financing Activities |                                                   |          | 417,178  |        |       |              | (245,719 | )       |              |          | 335,909  |               |   |          | (412,730 | ) |        |          | 94,638   |        
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  
|Effect of Exchange Rate Changes on Cash and Cash Equivalents |                                                                                                     |                                                  |                                                  |          |          |        |      |              |          |         | 4,220        |          |          |               |  |          |          |   | 4,220  |         
|Net Increase (Decrease) in Cash and Cash Equivalents         |                                                                                                     |                                                  | 1,582                                             |          |          |        | (255  | )            |          |         | 5,918        |          |          |               |  |          |          |   | 7,245  |         
|Cash and Cash Equivalents at Beginning of Year               |                                                                                                     |                                                  |                                                  |          |          |        | 3,214 |              |          |         | 45,623       |          |          |               |  |          |          |   | 48,837 |         
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  
|Cash and Cash Equivalents at End of Year                     |                                                                                                     | $                                                | 1,582                                             |          |          | $      | 2,959 |              |          | $       | 51,541       |          |          | $             |  |          |          | $ | 56,082 |         
|                                                             |                                                                                                     |                                                  |                                                   |          |          |        |       |              |          |         |              |          |          |               |  

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WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                     
|--- | ------------------------------------
|23. | Quarterly Financial Data (Unaudited)



|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |   |           |      |  |   |           |       |  
|---- | ----------------------------------------- | ---------------------------------------- | - | ------- | -------- | - | - | -------- | ----- | - | -------- | --------- | ---- | ----- | - | --------- | ---- |  | - | --------- | ----- | -
|     |                                           | 1st Qtr.                                 |   |         | 2nd Qtr. |   |   | 3rd Qtr. |       |   | 4th Qtr. |           |      | Total |  
|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |  
|     |                                           | (In thousands, except per share amounts) |  
|2005 |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |   |           |      |  |   |          
|     | Revenues                                  |                                          | $ | 857,706 |          |   | $ | 937,295  |       |   | $        | 1,076,816 |      |       | $ | 1,461,410 |      |  | $ | 4,333,227 |      
|     | Gross Profit                              |                                          |   | 274,970 |          |   |   | 303,076  |       |   |          | 328,843   |      |       |   | 475,716   |      |  |   | 1,382,605 |      
|     | Income from Continuing Operations         |                                          |   | 80,435  |          |   |   | 94,725   |       |   |          | 47,299    |      |       |   | 243,750   |      |  |   | 466,209   |      
|     | Income from Discontinued Operation        |                                          |   | 161     |          |   |   | 463      |       |   |          | 587       |      |       |   |          |      |  |   | 1,211     |      
|     | Net Income                                |                                          |   | 80,596  |          |   |   | 95,188   |       |   |          | 47,886    |      |       |   | 243,750   |      |  |   | 467,420   |      
|     | Basic Earnings Per Share:                 |                                          |   |         |          |   |   |          |       |   |          |           |      |       |   |           |      |  |   |           |      
|     |                                           | Continuing Operations                    |   | $       | 0.29     |   |   | $        | 0.34  |   |          | $         | 0.16 |       |   | $         | 0.70 |  |   | $         | 1.55  |  
|     |                                           | Discontinued Operation                   |   |         | 0.00     |   |   |          | 0.00  |   |          |           | 0.00 |       |   |           | 0.00 |  |   |           | 0.01  |  
|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |  
|     | Net Income                                |                                          | $ | 0.29    |          |   | $ | 0.34     |       |   | $        | 0.16      |      |       | $ | 0.70      |      |  | $ | 1.56      |      
|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |  
|     | Diluted Earnings Per Share:               |                                          |   |         |          |   |   |          |       |   |          |           |      |       |   |           |      |  |   |           |      
|     |                                           | Continuing Operations                    |   | $       | 0.27     |   |   | $        | 0.32  |   |          | $         | 0.15 |       |   | $         | 0.69 |  |   | $         | 1.47  |  
|     |                                           | Discontinued Operation                   |   |         | 0.00     |   |   |          | 0.00  |   |          |           | 0.00 |       |   |           | 0.00 |  |   |           | 0.00  |  
|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |  
|     | Net Income                                |                                          | $ | 0.27    |          |   | $ | 0.32     |       |   | $        | 0.15      |      |       | $ | 0.69      |      |  | $ | 1.47      |      
|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |  
|2004 |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |   |           |      |  |   |          
|     | Revenues                                  |                                          | $ | 712,640 |          |   | $ | 742,188  |       |   | $        | 794,341   |      |       | $ | 882,605   |      |  | $ | 3,131,774 |      
|     | Gross Profit                              |                                          |   | 215,150 |          |   |   | 224,759  |       |   |          | 255,062   |      |       |   | 278,051   |      |  |   | 973,022   |      
|     | Income from Continuing Operations         |                                          |   | 53,500  |          |   |   | 81,032   |       |   |          | 69,838    |      |       |   | 132,929   |      |  |   | 337,299   |      
|     | Income (Loss) from Discontinued Operation |                                          |   | (895    | )        |   |   | (7,143   | )     |   |          | 259       |      |       |   | 626       |      |  |   | (7,153    | )    
|     | Net Income                                |                                          |   | 52,605  |          |   |   | 73,889   |       |   |          | 70,097    |      |       |   | 133,555   |      |  |   | 330,146   |      
|     | Basic Earnings (Loss) Per Share:          |                                          |   |         |          |   |   |          |       |   |          |           |      |       |   |           |      |  |   |           |      
|     |                                           | Continuing Operations                    |   | $       | 0.20     |   |   | $        | 0.30  |   |          | $         | 0.26 |       |   | $         | 0.49 |  |   | $         | 1.26  |  
|     |                                           | Discontinued Operation                   |   |         | (0.00    | ) |   |          | (0.02 | ) |          |           | 0.00 |       |   |           | 0.00 |  |   |           | (0.03 | )
|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |  
|     | Net Income                                |                                          | $ | 0.20    |          |   | $ | 0.28     |       |   | $        | 0.26      |      |       | $ | 0.49      |      |  | $ | 1.23      |      
|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |  
|     | Diluted Earnings (Loss) Per Share:        |                                          |   |         |          |   |   |          |       |   |          |           |      |       |   |           |      |  |   |           |      
|     |                                           | Continuing Operations                    |   | $       | 0.19     |   |   | $        | 0.28  |   |          | $         | 0.24 |       |   | $         | 0.45 |  |   | $         | 1.17  |  
|     |                                           | Discontinued Operation                   |   |         | (0.00    | ) |   |          | (0.02 | ) |          |           | 0.00 |       |   |           | 0.00 |  |   |           | (0.02 | )
|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |  
|     | Net Income                                |                                          | $ | 0.19    |          |   | $ | 0.26     |       |   | $        | 0.24      |      |       | $ | 0.45      |      |  | $ | 1.15      |      
|     |                                           |                                          |   |         |          |   |   |          |       |   |          |           |      |       |  



|    |                 
|--- | ----------------
|24. | Subsequent Event



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|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreement with Accountants on Accounting
    and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Evaluation of disclosure controls and procedures.


10-K, 13a-15(e) 15d-15(e)


Changes in internal controls.




Internal controls over financial reporting.









PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant

10-K


www.weatherford.com







|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

10-K







|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management

10-K


Equity Compensation Plan Information




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| |  |                                                                                                                      
| |  | ---------------------------------------------------------------------------------------------------------------------
| |  | stock units as well as the number of shares remaining available
    for issuance under our equity compensation plans.

|                                                          |       |                                     |        |          |                  |                  |                     |                     |  |  |       |       | 
|--------------------------------------------------------- | ----- | ----------------------------------- | ------ | -------- | ---------------- | ---------------- | ------------------- | ------------------- |  |  | ----- | ----- | 
|                                                          |       |                                     |        |          |                  | Number of Shares |                    
|                                                          |       |                                     |        | Weighted |                  |                  | Remaining Available |                    
|                                                          |       | Number of Shares to                 |        |          | Average Exercise |                  |                     | for Future Issuance | 
|                                                          |       | be Issued Upon                      |        |          | Price of         |                  |                     | Under Equity        | 
|                                                          |       | Exercise of                         |        |          | Outstanding      |                  |                     | Compensation Plans  | 
|                                                          |       | Outstanding                         |        |          | Options,         |                  |                     | (Excluding Shares   | 
|                                                          |       | Options, Warrants                   |        |          | Warrants and     |                  |                     | Reflected in the    | 
|                                                          |       | and Rights                          |        |          | Rights           |                  |                     | First Column)       | 
|                                                          |       |                                     |        |          |                  |                  |                     |                     | 
|                                                          |       | (in thousands, except share prices) |       
|Plan Category:                                            |       |                                     |        |          |                  |                  |                     |                     |  |  |       |      
|Equity compensation plans approved by shareholders        |       |                                     | 126    |          |                  | $                | 12.33               |                     |  |  |      |      
|Equity compensation plans not approved by shareholders(a) |       |                                     | 27,342 |          |                  | $                | 22.29               |                     |  |  | 2,569 |      
|                                                          |       |                                     |        |          |                  |                  |                     |                     | 
|                                                          | Total |                                     |        | 27,468   |                  |                  | $                   | 22.24               |  |  |       | 2,569 | 
|                                                          |       |                                     |        |          |                  |                  |                     |                     | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(a) |  | The Weatherford International, Inc. 1998 Employee Stock Option
    Plan, as amended (the Plan), is administered by the
    Compensation Committee of the Board of Directors, and all
    employees are eligible to receive options under the Plan. The
    Plan provides for the grant of nonqualified options to purchase
    Common Shares of Weatherford International Ltd. The price at
    which shares may be purchased is based on the market price of
    the shares and cannot be less than the aggregate par value of
    the shares on the date the option was granted. Unless otherwise
    provided in an option agreement, no option may be exercised
    after one day less than 10 years from the date of vesting.
    Options generally become fully exercisable after three to four
    years from the date of grant, subject to earlier vesting in the
    event of the death, disability or retirement of the employee or
    in the event of a change of control of the Company. The Plan
    provides for the grant of options to purchase up to
    44,000,000 shares. As of December 31, 2005, there were
    options to purchase an aggregate of 11,932,942 Common Shares
    outstanding under this Plan, of which options to purchase an
    aggregate of 10,329,076 Common Shares were vested.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On September 8, 1998, July 5, 2000, and
    September 26, 2001, the Company granted to each of its
    directors other than Mr. Duroc-Danner an option or warrant
    to purchase 187,264, 120,000 and 120,000 Common Shares,
    respectively, at a purchase price per share equal to $5.8075,
    $18.375 and $11.885, respectively, which was the fair market
    value of our Common Shares as of the day we granted the options
    or warrant. The options and warrants were issued under
    agreements between us and the directors. Each option or warrant
    is exercisable for a period of ten years from the date which it
    becomes fully exercisable. The options and warrant granted on
    September 8, 1998 and July 5, 2000 become fully
    exercisable three years from the date of grant, and the options
    and warrant granted on September 26, 2001 become fully
    exercisable four years from the date of grant, in each case
    subject to earlier vesting in the event of the death, disability
    or retirement of the optionee or warrantholder or a change of
    control of the Company. Under these agreements there were
    options and warrants to purchase an aggregate of 1,881,792
    Common Shares outstanding as of December 31, 2005, all of
    which are fully vested.
|
| | Under our Non-Employee Director Deferred Compensation Plan, each
    non-employee director may elect to defer up to 7.5% of any fees
    paid by the Company. The deferred fees are converted into
    non-monetary units representing Common Shares that could have
    been purchased with the deferred fees based on the average of
    the high and low market price of the Common Shares on the last
    day of the month in which fees were deferred. If a non-employee
    director elects to defer at least 5% of his fees, the Company
    will make an additional contribution to the directors
    account equal to the sum of (1) 7.5% of the directors
    fees plus (2) the amount of fees deferred by the director.
    The non-employee directors are fully vested at all times. The
    Companys directors may generally determine when
    distributions will be made from the plan. The amount of the
    distribution will be a number of Common Shares equal to the
    number of units at the time of distribution. Distributions are
    made in Common Shares. As of December 31, 2005, there were
    57,782 deferred units outstanding under this plan.                                                                                                                                      

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company established its Foreign Executive Deferred
    Compensation Stock Ownership Plan for key foreign employees.
    Under the Companys Foreign Executive Deferred Compensation
    Stock Ownership Plan, the Company contributes 15% of each
    participants total salary, bonus and commission
    compensation each year. The Companys contributions vest
    over a five-year period on the basis of 20% per year for
    each year of service. Under the Foreign Executive Deferred
    Compensation Stock Ownership Plan, the Companys
    contributions are converted into non-monetary units equal to the
    number of Common Shares that could have been purchased with the
    amounts contributed based on the average closing price of the
    Common Shares for each day of the month in which contributions
    are made. Distributions are made under the Foreign Executive
    Deferred Compensation Stock Ownership Plan after a participant
    retires, becomes disabled or dies or after his employment is
    terminated. Distributions under the Foreign Executive Deferred
    Compensation Stock Ownership Plan are made in a number of Common
    Shares equal to the number of units allocated to the
    participants account at the time of distribution. As of
    December 31, 2005, there were 117,806 deferred units
    outstanding under this plan.
|
| | On February 28, 2002, the Company issued Shell Technology
    Ventures Inc. a warrant to purchase up to 6,464,428 Common
    Shares at a price of $30.00 per share. The warrant has a
    nine-year exercisable life beginning one year after the issue
    date. The warrant holder may exercise the warrant and settlement
    may occur through physical delivery, net share settlement, net
    cash settlement or a combination thereof. The warrant also may
    be converted into Common Shares at any time after the third
    anniversary of the issue date. The number of Common Shares
    issuable upon conversion would be equal to the value of the
    warrant determined by the Black-Scholes option pricing model
    divided by the average of the closing price of Common Shares for
    the 10-day period prior
    to the date of conversion. Any shares received upon such
    conversion are non-transferable for two years.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | In 2003, the Companys Board of Directors approved a
    restricted share plan that allows for the grant of up to
    7,670,000 of our Common Shares to key employees and directors of
    the Company. Restricted shares are subject to forfeiture
    restrictions that generally lapse after a specified period from
    the date of grant and are subject to earlier vesting in the
    event of death, retirement or a change in control. As of
    December 31, 2005 there were 7,439,732 shares granted
    under this plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                






|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions

10-K







|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services

10-K





PART IV







|         |                                        
|-------- | ---------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules









95



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|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | - | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 2 | .1          |  | Stock Purchase Agreement dated June 6, 2005 by and between
    Precision Drilling Corporation and Weatherford International
    Ltd. (incorporated by reference to Exhibit 2.1 to Amendment
    No. 1 to the Registrants Current Report on
    Form 8-K dated June 6, 2005 on Form 8-K/ A (File
    No. 1-31339) filed June 9, 2005).                                                                                                                                                                                                                                                                                         
|        | 2 | .2          |  | Agreement and Plan of Merger dated May 8, 2002, among
    Weatherford International, Inc., Weatherford Merger, Inc.,
    Weatherford International Ltd. and Weatherford
    U.S. Holdings LLC (incorporated by reference to
    Exhibit 2.1 to Amendment No. 1 to the Registration
    Statement on Form S-4 (Reg. No. 333-85644) filed on
    May 22, 2002).                                                                                                                                                                                                                                                                  
|        | 3 | .1          |  | Memorandum of Association of Weatherford International Ltd.
    (incorporated by reference to Annex II to the proxy
    statement/ prospectus included in Amendment No. 1 to the
    Registration Statement on Form S-4 (Reg.
    No. 333-85644) filed on May 22, 2002).                                                                                                                                                                                                                                                                                                                                                       
|        | 3 | .2          |  | Memorandum of Increase of Share Capital of Weatherford
    International Ltd. (incorporated by reference to Annex II
    to the proxy statement/ prospectus included in Amendment
    No. 1 to the Registration Statement on Form S-4 (Reg.
    No. 333-85644) filed on May 22, 2002).                                                                                                                                                                                                                                                                                                                                         
|        | 3 | .3          |  | Bye-laws of Weatherford International Ltd. (incorporated by
    reference to Annex III to the proxy statement/ prospectus
    included in Amendment No. 1 to the Registration Statement
    on Form S-4 (Reg. No. 333-85644) filed on May 22,
    2002).                                                                                                                                                                                                                                                                                                                                                                       
|        | 4 | .1          |  | See Exhibits 3.1, 3.2 and 3.3 for provisions of the
    Memorandum of Association and Bye-laws of Weatherford
    International Ltd. defining the rights of holders of common
    shares.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 4 | .2          |  | Guarantee, dated as of October 25, 2005, of Weatherford
    International, Inc. for the benefit of holders of any notes
    issued by Weatherford International Ltd., from time to time
    pursuant to the Issuing and Paying Agent Agreement, dated as of
    October 25, 2005, between Weatherford International Ltd.,
    Weatherford International, Inc. and JPMorgan Chase Bank,
    National Association (incorporated by reference to
    Exhibit 4.1 to the Registrants Current Report on
    Form 8-K (File No. 1-31339) filed October 31,
    2005).                                                               
|        | 4 | .3          |  | Registration Rights, Standstill and Voting Agreement dated
    August 31, 2005, between Weatherford International Ltd. and
    Precision Drilling Corporation (incorporated by reference to
    Exhibit 4.1 to the Registrants Current Report on
    Form 8-K (File No. 1-31339) filed September 7,
    2005).                                                                                                                                                                                                                                                                                                                
|        | 4 | .4          |  | 364-Day Revolving Credit Agreement, dated as of August 25,
    2005, among Weatherford International Ltd. and Weatherford
    Liquidity Management Hungary Limited Liability Company, as
    Borrowers, Weatherford International, Inc., as Guarantor, and
    UBS AG, Bank of America, N.A. and Morgan Stanley Senior Funding,
    Inc. (including form of Promissory Note thereunder)
    (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed August 29, 2005).                                                                                        
|        | 4 | .5          |  | Credit Agreement dated May 14, 2003, among Weatherford
    International Ltd., Weatherford International, Inc., JPMorgan
    Chase Bank, as Administrative Agent, BankOne, NA and Wells Fargo
    Bank, Texas, N.A., as Co-Syndication Agents, ABN-AMRO Bank,
    N.V., and The Bank of Nova Scotia, as Co- Documentation agents,
    and Wachovia Bank, National Association, Suntrust Bank, Royal
    Bank of Canada and Deutsche Bank AG New York Branch, as
    co-Managing Agents (incorporated by reference to
    Exhibit 4.1 to the Registrants Current Report on
    Form 8-K (File No. 1-31339) filed July 1, 2003).
|        | 4 | .6          |  | Amended and Restated Credit Agreement dated as of
    January 14, 2005, among Weatherford International Ltd.,
    Weatherford International, Inc., Weatherford Liquidity
    Management Hungary Limited Liability Company, JPMorgan Chase
    Bank as Administrative Agent, and the other Lenders party
    thereto (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1- 31339) filed January 20, 2005).                                                                                                                                                              
|        | 4 | .7          |  | Indenture, dated October 1, 2003, among Weatherford
    International Ltd., Weatherford International, Inc., and
    Deutsche Bank Trust Company Americas (incorporated by reference
    to Exhibit 4.1 to the Registrants Current Report on
    Form 8-K (File No. 1-31339) filed October 2,
    2003).                                                                                                                                                                                                                                                                                                                      

96



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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 4  | .8          |  | Officers Certificate dated as of October 7, 2003
    (incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 7, 2003).                                                                                                                                                                                                                                                                                                            
|        | 4  | .9          |  | Indenture dated May 17, 1996, between Weatherford Enterra,
    Inc. and Bank of Montreal Trust Company, as Trustee
    (incorporated by reference to Exhibit 4.1 to Weatherford
    Enterra, Inc.s Current Report on Form 8-K (File
    No. 1-7867) filed May 31, 1996).                                                                                                                                                                                                                                    
|        | 4  | .10         |  | First Supplemental Indenture dated and effective as of
    May 27, 1998, by and among EVI Weatherford, Inc., the
    successor by merger to Weatherford Enterra, Inc., and Bank of
    Montreal Trust Company, as Trustee (incorporated by reference to
    Exhibit No. 4.1 to the Registrants Current
    Report on Form 8-K (File No. 1-13086) filed
    June 2, 1998).                                                                                                                                   
|        | 4  | .11         |  | Second Supplemental Indenture dated June 30, 2000, between
    Weatherford International, Inc. and The Bank of New York, as
    successor trustee to Bank of Montreal Trust (including form of
    Debenture) (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1- 13086) filed July 10, 2000).                                                                                                                                                     
|        | 4  | .12         |  | Third Supplemental Indenture dated November 16, 2001,
    between Weatherford International, Inc. and The Bank of New
    York, as Trustee (incorporated by reference to Exhibit 4.11
    to the Registration Statement on Form S-3 (Reg.
    No. 333-73770) filed November 20, 2001).                                                                                                                                                                                                                       
|        | 4  | .13         |  | Fourth Supplemental Indenture dated June 26, 2002, among
    Weatherford International, Inc., Weatherford International Ltd.
    and The Bank of New York (as successor in interest to Bank of
    Montreal Trust Company) (incorporated by reference to
    Exhibit 4.7 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2002 (File
    No. 1-13086) filed August 14, 2002).                                                                                            
|        | 4  | .14         |  | Convertible Debenture Guarantee Agreement dated June 26,
    2002, between Weatherford International Ltd. and JP Morgan Chase
    Bank (incorporated by reference to Exhibit 4.8 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2002 (File No. 1-13086) filed
    August 14, 2002).                                                                                                                                                                                
|        | 4  | .15         |  | Form of global note for 4.95% Senior Notes due 2013
    (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 7, 2003).                                                                                                                                                                                                                                                                                                          
|        | 4  | .16         |  | Form of Weatherford Enterra, Inc.s
    71/4% Senior
    Notes due May 15, 2006 (incorporated by reference to
    Exhibit 4.2 to Weatherford Enterra, Inc.s Current
    Report on Form 8-K (File No. 1-7867) filed
    May 31, 1996).                                                                                                                                                                                                                                                                       
|        | 4  | .17         |  | Form of global note for 5.50% Senior Notes due 2016
    (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 001-31339) filed February 17, 2006).                                                                                                                                                                                                                                                                                                      
|        | 4  | .18         |  | Officers Certificate dated as of February 17, 2006
    (incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on Form 8-K (File
    No. 001-31339) filed February 17, 2006).                                                                                                                                                                                                                                                                                                      
|        | 10 | .1          |  | Issuing and Paying Agent Agreement, dated as of October 25,
    2005, among Weatherford International Ltd., Weatherford
    International, Inc. and JPMorgan Chase Bank, National
    Association (incorporated by reference to Exhibit 10.1 to
    the Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 31, 2005).                                                                                                                                                              
|        | 10 | .2          |  | Commercial Paper Dealer Agreement, dated as of October 25,
    2005, among Weatherford International Ltd., Weatherford
    International, Inc. and J. P. Morgan Securities Inc.
    (incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 31, 2005).                                                                                                                                                                            
|        | 10 | .3          |  | Commercial Paper Dealer Agreement, dated as of October 25,
    2005, among Weatherford International Ltd., Weatherford
    International, Inc. and Goldman, Sachs & Co.
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 31, 2005).                                                                                                                                                                                    
|        | 10 | .4          |  | Commercial Paper Dealer Agreement, dated as of October 25,
    2005, among Weatherford International Ltd., Weatherford
    International, Inc. and Merrill Lynch Money Markets Inc. (for
    notes with maturities up to 270 days) and Merrill Lynch,
    Pierce, Fenner & Smith Incorporated, (for notes with
    maturities over 270 days up to 397 days) (incorporated
    by reference to Exhibit 10.4 to the Registrants
    Current Report on Form 8-K (File No. 1-31339) filed
    October 31, 2005).

97



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|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                             
|------- | --- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | 10  | .6          |  | Amended and Restated Registration Rights Agreement, dated as of
    March 23, 2004, between Weatherford International Ltd. and
    Universal Compression Holdings, Inc. (incorporated by reference
    to Exhibit 10.1 to the Registration Statement on
    Form S-3 of Universal Compression Holdings, Inc. (Reg.
    No. 333-114145) filed April 2, 2004).
|        | 10  | .8          |  | Amendment to Preferred Supplier Agreement dated April 14,
    2003 (incorporated by reference to Exhibit 10.1 to the
    Grant Prideco Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2003 (File No. 1-15423), filed
    May 15, 2003).                                                                                                  
|        | *10 | .9          |  | Weatherford Enterra, Inc. 1991 Stock Option Plan, as amended and
    restated (incorporated by reference to Exhibit 10.4 to
    Weatherford Enterra, Inc.s Annual Report on Form 10-K
    for the year ended December 31, 1996 (File 1-7867)
    filed March 23, 1997).                                                                                    
|        | *10 | .10         |  | 2004 Weatherford Variable Compensation Plan, Including Form of
    Award Letter (incorporated by reference to Exhibit 10.1 to
    the Registrants Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2004 (File No. 1-31339)
    filed November 9, 2004).                                                                               
|        | *10 | .11         |  | Weatherford Variable Compensation Plan (incorporated by
    reference to Exhibit 10.1 to the Registrants Current
    Report on Form 8-K (File No. 1-31339) filed
    January 25, 2005).                                                                                                                                                                    
|        | *10 | .12         |  | Weatherford International Ltd. Restricted Share Plan, including
    form of agreement for officers and non-officers (incorporated by
    reference to Exhibit 10.2 to Amendment No. 1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2004 on Form 10-Q/A (File
    No. 1-31339) filed September 15, 2004).       
|        | *10 | .13         |  | Weatherford International, Inc. Executive Deferred Compensation
    Stock Ownership Plan and Related Trust Agreement
    (incorporated by reference to Exhibit 10.5 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2003 (File No. 1-31339) filed
    August 14, 2003).                                            
|        | *10 | .14         |  | Weatherford International Ltd. Nonqualified Executive Retirement
    Plan (incorporated by reference to Exhibit 10.3 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2003 (File No. 1-31339) filed
    August 14, 2003).                                                                                           
|        | *10 | .15         |  | Weatherford International, Inc. Foreign Executive Deferred
    Compensation Stock Plan (incorporated by reference to
    Exhibit 10.4 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2003 (File
    No. 1-31339) filed August 14, 2003).                                                                              
|        | *10 | .16         |  | Weatherford International Incorporated Non-Employee Director
    Retirement Plan.                                                                                                                                                                                                                                                                           
|        | *10 | .17         |  | Weatherford International, Inc. Non-Employee Director Deferred
    Compensation Plan (incorporated by reference to
    Exhibit 10.5 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2000 (File
    No. 1-13086) filed May 15, 2000).                                                                                  
|        | *10 | .18         |  | Trust under Weatherford International Ltd. Nonqualified
    Executive Retirement Plan dated March 23, 2004
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2004 (File No. 1-31339) filed
    May 6, 2004).                                                         
|        | *10 | .19         |  | Energy Ventures, Inc. 1991 Non-Employee Director Stock Option
    Plan and Form of Agreement (incorporated by reference to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 1991 (File No. 1-13086) filed
    August 8, 1991).                                                                                         
|        | *10 | .20         |  | Energy Ventures, Inc. 1992 Employee Stock Option Plan, as
    amended (incorporated by reference to Exhibit 4.7 to the
    Registration Statement on Form S-8 (Reg.
    No. 333-13531) filed October 4, 1997).                                                                                                                                              
|        | *10 | .21         |  | Amended and Restated Non-Employee Director Stock Option Plan
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 1995 (File No. 1-13086) filed
    August 12, 1995).                                                                                                    
|        | *10 | .22         |  | General Amendment of Employee Stock Option Programs of
    Weatherford International, Inc. dated May 9, 2003
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2003 (File No. 1-31339) filed
    August 14, 2003).                                                    
|        | *10 | .23         |  | General Amendment of Directors Stock Option Plans and
    Agreements dated May 9, 2003 (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2003 (File
    No. 1-31339) filed August 14, 2003).                                                                             

98



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|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | --- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | *10 | .24         |  | Weatherford International, Inc. 1998 Employee Stock Option Plan,
    as amended, including form of agreement for officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | *10 | .25         |  | Amendment to Stock Option Programs (incorporated by reference to
    Exhibit 4.19 to the Registrants Registration
    Statement on Form S-8 (Reg. No. 333-36598) filed
    May 19, 2000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | *10 | .26         |  | Employment Agreement, dated as of December 1, 2005, between
    Weatherford International Ltd. and Hazel A. Brown (incorporated
    by reference to Exhibit 10.2 to the Registrants
    Current Report on Form 8-K (File No. 1-31339) filed
    December 2, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | *10 | .27         |  | Employment Agreement, dated as of September 29, 2005,
    between Weatherford International Ltd. and Andrew P. Becnel
    (incorporated by reference to Exhibit 10.4 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 5, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | *10 | .28         |  | Employment Agreement, dated as of September 1, 2005,
    between Weatherford International Ltd. and John R. King
    (incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed September 7, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | *10 | .29         |  | Employment Agreement, dated as of September 1, 2005,
    between Weatherford International Ltd. and Ian E. Kelly
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed September 7, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | *10 | .30         |  | Employment Agreements dated August 1, 2003, between
    Weatherford International Ltd. and each of M. David Colley, E.
    Lee Colley III, Bernard J. Duroc-Danner, Stuart E.
    Ferguson, Burt M. Martin, Keith R. Morley, Jon R. Nicholson and
    Lisa W. Rodriguez (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended September 30, 2003
    (File No. 1-31339) filed November 6, 2003).                                                                                                                                                                                                                                                                                                                                                                                      
|        | *10 | .31         |  | Employment Agreement dated as of June 15, 1998, between EVI
    Weatherford, Inc. and Philip Burguieres (incorporated by
    reference to Exhibit No. 10.9 to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    June 30, 1998 (File No. 1-13086) filed August 14,
    1998).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | *10 | .32         |  | Amendment to Employment Agreement dated October 16, 2000,
    between Philip Burguieres and Weatherford International, Inc.
    (incorporated by reference to Exhibit 10.41 to Annual
    Report on Form 10-K for the year ended December 31,
    2000 (File No. 1-13086) filed March 23, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | *10 | .33         |  | Indemnification Agreement, dated as of December 1, 2005,
    between Weatherford International Ltd. and Hazel A. Brown
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed December 2, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | *10 | .34         |  | Indemnification Agreement, dated as of September 29, 2005,
    between Weatherford International Ltd. and John R. King
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 5, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | *10 | .35         |  | Indemnification Agreement, dated as of September 29, 2005,
    between Weatherford International Ltd. and Ian E. Kelly
    (incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 5, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | *10 | .36         |  | Indemnification Agreement, dated as of September 29, 2005,
    between Weatherford International Ltd. and Andrew P. Becnel
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 5, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | *10 | .37         |  | Indemnification Agreements with Robert K. Moses, Jr.
    (incorporated by reference to Exhibit 10.10 to Weatherford
    Enterra, Inc.s Annual Report on Form 10-K for the
    year ended December 31, 1987 (File No. 1-7867));
    Philip Burguieres (incorporated by reference to
    Exhibit 10.4 to Weatherford Enterra, Inc.s Quarterly
    Report on Form 10-Q for the quarter ended June 30,
    1991 (File No. 1-7867)); William E. Macaulay (incorporated
    by reference to Exhibit 10.2 to Weatherford Enterra,
    Inc.s Quarterly Report on Form 10-Q for the quarter
    ended September 30, 1995 (File No. 1-7867)); and Jon
    Nicholson (incorporated by reference to Exhibit 10.2 to
    Weatherford Enterra, Inc.s Annual Report on Form 10-K
    for the year ended December 31, 1996 (File No. 1-7867)
    filed March 24, 1997).

99



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|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- | --- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | *10 | .38         |  | Indemnification Agreements with each of Bernard J. Duroc-Danner,
    Gary L. Warren, Burt M. Martin, Lisa W. Rodriguez, E. Lee
    Colley III, Donald R. Galletly, Jon R. Nicholson, James N.
    Parmigiano, Stuart E. Ferguson, David J. Butters, Robert A.
    Rayne, Robert K. Moses, Jr., Philip Burguieres, Robert B.
    Millard, William E. Macaulay and Sheldon B. Lubar (incorporated
    by reference to Exhibit 10.1 to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2002 (File No. 1-13086) filed
    November 13, 2002).
|        | *10 | .39         |  | Form of Stock Option Agreement for Non-Employee Directors dated
    September 8, 1998 (incorporated by reference to
    Exhibit 10.23 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 1998 (File
    No. 1-13086) filed March 31, 1999).                                                                                                                                                                                                                                                                                                         
|        | *10 | .40         |  | Form of Amendment to Stock Option Agreements dated
    September 8, 1998 for Non-Employee Directors (incorporated
    by reference to Exhibit 4.17 to the Registration Statement
    on Form S-8 (Reg. No. 333-36598) filed May 9,
    2000).                                                                                                                                                                                                                                                                                                                                       
|        | *10 | .41         |  | Form of Stock Option Agreement for Non-employee Directors dated
    July 5, 2000 (incorporated by reference to
    Exhibit 4.16 to the Registration Statement on Form S-8
    (Reg. No. 333-48322) filed October 20, 2000).                                                                                                                                                                                                                                                                                                                                                         
|        | *10 | .42         |  | Form of Stock Option Agreement for Non-employee Directors dated
    September 26, 2001 (incorporated by reference to
    Exhibit 4.19 to the Registration Statement on Form S-8
    (Reg. No. 333-81678) filed January 30, 2002).                                                                                                                                                                                                                                                                                                                                                   
|        | *10 | .43         |  | Assumption and General Amendment of Directors Stock Option
    and Benefit Programs and General Amendment of Employee Stock
    Option and Benefit Programs of Weatherford International, Inc.
    dated June 26, 2002 (incorporated by reference to
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2002 (File
    No. 1-13086) filed August 14, 2002).                                                                                                                                                                     
|        | *10 | .44         |  | Form of Warrant Agreement with Robert K. Moses, Jr. dated
    September 8, 1998 (incorporated by reference to
    Exhibit 10.24 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 1998 (File
    No. 1-13086) filed March 31, 1999).                                                                                                                                                                                                                                                                                                               
|        | *10 | .45         |  | Form of Amendment to Warrant Agreement with Robert K.
    Moses, Jr. dated September 8, 1998 (incorporated by
    reference to Exhibit 4.18 to the Registration Statement on
    Form S-8 (Reg. No. 333-36598) filed May 9, 2000).                                                                                                                                                                                                                                                                                                                                                  
|        | *10 | .46         |  | Form of Warrant Agreement with Robert K. Moses, Jr. dated
    July 5, 2000 (incorporated by reference to
    Exhibit 4.17 to the Registration Statement on Form S-8
    (Reg. No. 333-48322) filed October 20, 2000).                                                                                                                                                                                                                                                                                                                                                               
|        | *10 | .47         |  | Form of Warrant Agreement with Robert K. Moses dated
    September 26, 2001 (incorporated by reference to
    Exhibit 4.20 to the Registration Statement on Form S-8
    (Reg. No. 333-81676) filed January 30, 2002).                                                                                                                                                                                                                                                                                                                                                              
|        | 10  | .48         |  | License Agreement among Shell Technology Ventures Inc.,
    Weatherford/ Lamb, Inc. and Weatherford International, Inc.
    dated March 1, 2002, as amended on April 29, 2002
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2002 (File No. 1-13086) filed
    May 15, 2002).                                                                                                                                                                                                             
|        | 10  | .49         |  | Framework Agreement between Shell Technology Ventures Limited
    and Weatherford International, Inc. dated March 1, 2002, as
    amended on April 19, 2002 (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2002 (File
    No. 1-13086) filed May 15, 2002).                                                                                                                                                                                                                                   
|        | 10  | .50         |  | Promissory Note to Shell Technology Ventures Inc. dated
    February 28, 2002 (incorporated by reference to
    Exhibit 10.3 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2002 (File
    No. 1-13086) filed May 15, 2002).                                                                                                                                                                                                                                                                                                                 
|        | 10  | .51         |  | Warrant Agreement between Shell Technology Ventures Inc. and
    Weatherford International, Inc. dated February 28, 2002
    (incorporated by reference to Exhibit 10.4 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2002 (File No. 1-13086) filed
    May 15, 2002).                                                                                                                                                                                                                                                                  
|        | 10  | .52         |  | Agreement dated August 31, 2005, between Weatherford
    International Ltd. and Precision Drilling Corporation
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed September 7, 2005).                                                                                                                                                                                                                                                                                                                   

100



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|        |     |             |  |                                                                                                        
|------- | --- | ----------- |  | -------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | 21 | .1          |  | Subsidiaries of Weatherford International Ltd.                                                         
|        | 23 | .1          |  | Consent of Ernst & Young LLP.                                                                          
|        | 31 | .1          |  | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|        | 31 | .2          |  | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|        | 32 | .1          |  | Certification of Chief Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.
|        | 32 | .2          |  | Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.






|  |                                                         
|- | --------------------------------------------------------
|* | Management contract or compensatory plan or arrangement.



|  |                
|- | ---------------
| | Filed herewith.

S-K, 10-K














SCHEDULE II


WEATHERFORD INTERNATIONAL LTD. AND SUBSIDIARIES








VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCES


FOR THE THREE YEARS ENDED DECEMBER 31, 2005


|                              |                                                 |                |   |           |            |  |   |             |  |  |            |            |  |        |   |        |   |  |   |        | 
|----------------------------- | ----------------------------------------------- | -------------- | - | --------- | ---------- |  | - | ----------- |  |  | ---------- | ---------- |  | ------ | - | ------ | - |  | - | ------ | 
|                              |                                                 |                |   | Additions |            |  |   |             | 
|                              |                                                 |                |   |           |            |  |   |             | 
|                              |                                                 | Balance at     |   |           | Charged to |  |   |             |  |  |            | Balance at | 
|                              |                                                 | Beginning      |   |           | Costs and  |  |   |             |  |  |            | End of     | 
|Description                   |                                                 | of Period      |   |           | Expenses   |  |   | Collections |  |  | Deductions |            |  | Period |  
|                              |                                                 |                |   |           |            |  |   |             |  |  |            |            |  |        |  
|                              |                                                 | (In thousands) |  
|Year Ended December 31, 2005: |                                                 |                |   |           |            |  |   |             |  |  |            |            |  |        |   |        |   |  |   |       
|                              | Allowance for uncollectible accounts receivable |                | $ | 15,910    |            |  | $ | 3,291       |  |  | $          | 824        |  |        | $ | (7,815 | ) |  | $ | 12,210 | 
|Year Ended December 31, 2004: |                                                 |                |   |           |            |  |   |             |  |  |            |            |  |        |   |        |   |  |   |       
|                              | Allowance for uncollectible accounts receivable |                | $ | 16,728    |            |  | $ | 3,138       |  |  | $          | 2,491      |  |        | $ | (6,447 | ) |  | $ | 15,910 | 
|Year Ended December 31, 2003: |                                                 |                |   |           |            |  |   |             |  |  |            |            |  |        |   |        |   |  |   |       
|                              | Allowance for uncollectible accounts receivable |                | $ | 18,088    |            |  | $ | 3,689       |  |  | $          | 1,753      |  |        | $ | (6,802 | ) |  | $ | 16,728 | 



101



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##### Table of Contents






SIGNATURES






| |                               
| | ------------------------------
| | WEATHERFORD INTERNATIONAL LTD.



| |     |                            
| | --- | ---------------------------
| | By: | /s/ Bernard J. Duroc-Danner

| |                                    
| | -----------------------------------
| |                                    
| | Bernard J. Duroc-Danner            
| | President, Chief Executive Officer,
| | Chairman of the Board and Director 
| | (Principal Executive Officer)      



|                                                       |  |                                                                                                          |  |               |  | 
|------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------- |  | ------------- |  | 
|Signatures                                             |  | Title                                                                                                    |  | Date         
|                                                       |  |                                                                                                          |  |              
|                                                      
|/s/ Bernard J.
    Duroc-DannerBernard J. Duroc-Danner |  | President, Chief Executive Officer, Chairman of the Board and
    Director (Principal Executive Officer) |  | March 9, 2006
|                                                      
|/s/ Lisa W. RodriguezLisa W. Rodriguez                 |  | Senior Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer)       |  | March 9, 2006
|                                                      
|/s/ Nicholas F. BradyNicholas F. Brady                 |  | Director                                                                                                 |  | March 9, 2006
|                                                      
|/s/ David J. ButtersDavid J. Butters                   |  | Director                                                                                                 |  | March 9, 2006
|                                                      
|/s/ Sheldon B. LubarSheldon B. Lubar                   |  | Director                                                                                                 |  | March 9, 2006
|                                                      
|/s/ William E. MacaulayWilliam E. Macaulay             |  | Director                                                                                                 |  | March 9, 2006
|                                                      
|/s/ Robert B. MillardRobert B. Millard                 |  | Director                                                                                                 |  | March 9, 2006
|                                                      
|/s/ Robert K.
    Moses, Jr.Robert K. Moses, Jr.       |  | Director                                                                                                 |  | March 9, 2006
|                                                      
|/s/ Robert A. RayneRobert A. Rayne                     |  | Director                                                                                                 |  | March 9, 2006

102



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##### Table of Contents






EXHIBIT INDEX


|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | - | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 2 | .1          |  | Stock Purchase Agreement dated June 6, 2005 by and between
    Precision Drilling Corporation and Weatherford International
    Ltd. (incorporated by reference to Exhibit 2.1 to Amendment
    No. 1 to the Registrants Current Report on
    Form 8-K dated June 6, 2005 on Form 8-K/ A (File
    No. 1-31339) filed June 9, 2005).                                                                                                                                                                                                                                                                                         
|        | 2 | .2          |  | Agreement and Plan of Merger dated May 8, 2002, among
    Weatherford International, Inc., Weatherford Merger, Inc.,
    Weatherford International Ltd. and Weatherford
    U.S. Holdings LLC (incorporated by reference to
    Exhibit 2.1 to Amendment No. 1 to the Registration
    Statement on Form S-4 (Reg. No. 333-85644) filed on
    May 22, 2002).                                                                                                                                                                                                                                                                  
|        | 3 | .1          |  | Memorandum of Association of Weatherford International Ltd.
    (incorporated by reference to Annex II to the proxy
    statement/ prospectus included in Amendment No. 1 to the
    Registration Statement on Form S-4 (Reg.
    No. 333-85644) filed on May 22, 2002).                                                                                                                                                                                                                                                                                                                                                       
|        | 3 | .2          |  | Memorandum of Increase of Share Capital of Weatherford
    International Ltd. (incorporated by reference to Annex II
    to the proxy statement/ prospectus included in Amendment
    No. 1 to the Registration Statement on Form S-4 (Reg.
    No. 333-85644) filed on May 22, 2002).                                                                                                                                                                                                                                                                                                                                         
|        | 3 | .3          |  | Bye-laws of Weatherford International Ltd. (incorporated by
    reference to Annex III to the proxy statement/ prospectus
    included in Amendment No. 1 to the Registration Statement
    on Form S-4 (Reg. No. 333-85644) filed on May 22,
    2002).                                                                                                                                                                                                                                                                                                                                                                       
|        | 4 | .1          |  | See Exhibits 3.1, 3.2 and 3.3 for provisions of the
    Memorandum of Association and Bye-laws of Weatherford
    International Ltd. defining the rights of holders of common
    shares.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 4 | .2          |  | Guarantee, dated as of October 25, 2005, of Weatherford
    International, Inc. for the benefit of holders of any notes
    issued by Weatherford International Ltd., from time to time
    pursuant to the Issuing and Paying Agent Agreement, dated as of
    October 25, 2005, between Weatherford International Ltd.,
    Weatherford International, Inc. and JPMorgan Chase Bank,
    National Association (incorporated by reference to
    Exhibit 4.1 to the Registrants Current Report on
    Form 8-K (File No. 1-31339) filed October 31,
    2005).                                                               
|        | 4 | .3          |  | Registration Rights, Standstill and Voting Agreement dated
    August 31, 2005, between Weatherford International Ltd. and
    Precision Drilling Corporation (incorporated by reference to
    Exhibit 4.1 to the Registrants Current Report on
    Form 8-K (File No. 1-31339) filed September 7,
    2005).                                                                                                                                                                                                                                                                                                                
|        | 4 | .4          |  | 364-Day Revolving Credit Agreement, dated as of August 25,
    2005, among Weatherford International Ltd. and Weatherford
    Liquidity Management Hungary Limited Liability Company, as
    Borrowers, Weatherford International, Inc., as Guarantor, and
    UBS AG, Bank of America, N.A. and Morgan Stanley Senior Funding,
    Inc. (including form of Promissory Note thereunder)
    (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed August 29, 2005).                                                                                        
|        | 4 | .5          |  | Credit Agreement dated May 14, 2003, among Weatherford
    International Ltd., Weatherford International, Inc., JPMorgan
    Chase Bank, as Administrative Agent, BankOne, NA and Wells Fargo
    Bank, Texas, N.A., as Co-Syndication Agents, ABN-AMRO Bank,
    N.V., and The Bank of Nova Scotia, as Co- Documentation agents,
    and Wachovia Bank, National Association, Suntrust Bank, Royal
    Bank of Canada and Deutsche Bank AG New York Branch, as
    co-Managing Agents (incorporated by reference to
    Exhibit 4.1 to the Registrants Current Report on
    Form 8-K (File No. 1-31339) filed July 1, 2003).
|        | 4 | .6          |  | Amended and Restated Credit Agreement dated as of
    January 14, 2005, among Weatherford International Ltd.,
    Weatherford International, Inc., Weatherford Liquidity
    Management Hungary Limited Liability Company, JPMorgan Chase
    Bank as Administrative Agent, and the other Lenders party
    thereto (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1- 31339) filed January 20, 2005).                                                                                                                                                              
|        | 4 | .7          |  | Indenture, dated October 1, 2003, among Weatherford
    International Ltd., Weatherford International, Inc., and
    Deutsche Bank Trust Company Americas (incorporated by reference
    to Exhibit 4.1 to the Registrants Current Report on
    Form 8-K (File No. 1-31339) filed October 2,
    2003).                                                                                                                                                                                                                                                                                                                      
|        | 4 | .8          |  | Officers Certificate dated as of October 7, 2003
    (incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 7, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                              



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 4  | .9          |  | Indenture dated May 17, 1996, between Weatherford Enterra,
    Inc. and Bank of Montreal Trust Company, as Trustee
    (incorporated by reference to Exhibit 4.1 to Weatherford
    Enterra, Inc.s Current Report on Form 8-K (File
    No. 1-7867) filed May 31, 1996).                                                                                                                                                                                                                                    
|        | 4  | .10         |  | First Supplemental Indenture dated and effective as of
    May 27, 1998, by and among EVI Weatherford, Inc., the
    successor by merger to Weatherford Enterra, Inc., and Bank of
    Montreal Trust Company, as Trustee (incorporated by reference to
    Exhibit No. 4.1 to the Registrants Current
    Report on Form 8-K (File No. 1-13086) filed
    June 2, 1998).                                                                                                                                   
|        | 4  | .11         |  | Second Supplemental Indenture dated June 30, 2000, between
    Weatherford International, Inc. and The Bank of New York, as
    successor trustee to Bank of Montreal Trust (including form of
    Debenture) (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1- 13086) filed July 10, 2000).                                                                                                                                                     
|        | 4  | .12         |  | Third Supplemental Indenture dated November 16, 2001,
    between Weatherford International, Inc. and The Bank of New
    York, as Trustee (incorporated by reference to Exhibit 4.11
    to the Registration Statement on Form S-3 (Reg.
    No. 333-73770) filed November 20, 2001).                                                                                                                                                                                                                       
|        | 4  | .13         |  | Fourth Supplemental Indenture dated June 26, 2002, among
    Weatherford International, Inc., Weatherford International Ltd.
    and The Bank of New York (as successor in interest to Bank of
    Montreal Trust Company) (incorporated by reference to
    Exhibit 4.7 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2002 (File
    No. 1-13086) filed August 14, 2002).                                                                                            
|        | 4  | .14         |  | Convertible Debenture Guarantee Agreement dated June 26,
    2002, between Weatherford International Ltd. and JP Morgan Chase
    Bank (incorporated by reference to Exhibit 4.8 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2002 (File No. 1-13086) filed
    August 14, 2002).                                                                                                                                                                                
|        | 4  | .15         |  | Form of global note for 4.95% Senior Notes due 2013
    (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 7, 2003).                                                                                                                                                                                                                                                                                                          
|        | 4  | .16         |  | Form of Weatherford Enterra, Inc.s
    71/4% Senior
    Notes due May 15, 2006 (incorporated by reference to
    Exhibit 4.2 to Weatherford Enterra, Inc.s Current
    Report on Form 8-K (File No. 1-7867) filed
    May 31, 1996).                                                                                                                                                                                                                                                                       
|        | 4  | .17         |  | Form of global note for 5.50% Senior Notes due 2016
    (incorporated by reference to Exhibit 4.1 to the
    Registrants Current Report on Form 8-K (File
    No. 001-31339) filed February 17, 2006).                                                                                                                                                                                                                                                                                                      
|        | 4  | .18         |  | Officers Certificate dated as of February 17, 2006
    (incorporated by reference to Exhibit 4.2 to the
    Registrants Current Report on Form 8-K (File
    No. 001-31339) filed February 17, 2006).                                                                                                                                                                                                                                                                                                      
|        | 10 | .1          |  | Issuing and Paying Agent Agreement, dated as of October 25,
    2005, among Weatherford International Ltd., Weatherford
    International, Inc. and JPMorgan Chase Bank, National
    Association (incorporated by reference to Exhibit 10.1 to
    the Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 31, 2005).                                                                                                                                                              
|        | 10 | .2          |  | Commercial Paper Dealer Agreement, dated as of October 25,
    2005, among Weatherford International Ltd., Weatherford
    International, Inc. and J. P. Morgan Securities Inc.
    (incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 31, 2005).                                                                                                                                                                            
|        | 10 | .3          |  | Commercial Paper Dealer Agreement, dated as of October 25,
    2005, among Weatherford International Ltd., Weatherford
    International, Inc. and Goldman, Sachs & Co.
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 31, 2005).                                                                                                                                                                                    
|        | 10 | .4          |  | Commercial Paper Dealer Agreement, dated as of October 25,
    2005, among Weatherford International Ltd., Weatherford
    International, Inc. and Merrill Lynch Money Markets Inc. (for
    notes with maturities up to 270 days) and Merrill Lynch,
    Pierce, Fenner & Smith Incorporated, (for notes with
    maturities over 270 days up to 397 days) (incorporated
    by reference to Exhibit 10.4 to the Registrants
    Current Report on Form 8-K (File No. 1-31339) filed
    October 31, 2005).
|        | 10 | .6          |  | Amended and Restated Registration Rights Agreement, dated as of
    March 23, 2004, between Weatherford International Ltd. and
    Universal Compression Holdings, Inc. (incorporated by reference
    to Exhibit 10.1 to the Registration Statement on
    Form S-3 of Universal Compression Holdings, Inc. (Reg.
    No. 333-114145) filed April 2, 2004).                                                                                                                                                 



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##### Table of Contents



|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                      
|------- | --- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | 10  | .8          |  | Amendment to Preferred Supplier Agreement dated April 14,
    2003 (incorporated by reference to Exhibit 10.1 to the
    Grant Prideco Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2003 (File No. 1-15423), filed
    May 15, 2003).                                                                                           
|        | *10 | .9          |  | Weatherford Enterra, Inc. 1991 Stock Option Plan, as amended and
    restated (incorporated by reference to Exhibit 10.4 to
    Weatherford Enterra, Inc.s Annual Report on Form 10-K
    for the year ended December 31, 1996 (File 1-7867)
    filed March 23, 1997).                                                                             
|        | *10 | .10         |  | 2004 Weatherford Variable Compensation Plan, Including Form of
    Award Letter (incorporated by reference to Exhibit 10.1 to
    the Registrants Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2004 (File No. 1-31339)
    filed November 9, 2004).                                                                        
|        | *10 | .11         |  | Weatherford Variable Compensation Plan (incorporated by
    reference to Exhibit 10.1 to the Registrants Current
    Report on Form 8-K (File No. 1-31339) filed
    January 25, 2005).                                                                                                                                                             
|        | *10 | .12         |  | Weatherford International Ltd. Restricted Share Plan, including
    form of agreement for officers and non-officers (incorporated by
    reference to Exhibit 10.2 to Amendment No. 1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2004 on Form 10-Q/A (File
    No. 1-31339) filed September 15, 2004).
|        | *10 | .13         |  | Weatherford International, Inc. Executive Deferred Compensation
    Stock Ownership Plan and Related Trust Agreement
    (incorporated by reference to Exhibit 10.5 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2003 (File No. 1-31339) filed
    August 14, 2003).                                     
|        | *10 | .14         |  | Weatherford International Ltd. Nonqualified Executive Retirement
    Plan (incorporated by reference to Exhibit 10.3 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2003 (File No. 1-31339) filed
    August 14, 2003).                                                                                    
|        | *10 | .15         |  | Weatherford International, Inc. Foreign Executive Deferred
    Compensation Stock Plan (incorporated by reference to
    Exhibit 10.4 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2003 (File
    No. 1-31339) filed August 14, 2003).                                                                       
|        | *10 | .16         |  | Weatherford International Incorporated Non-Employee Director
    Retirement Plan.                                                                                                                                                                                                                                                                    
|        | *10 | .17         |  | Weatherford International, Inc. Non-Employee Director Deferred
    Compensation Plan (incorporated by reference to
    Exhibit 10.5 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2000 (File
    No. 1-13086) filed May 15, 2000).                                                                           
|        | *10 | .18         |  | Trust under Weatherford International Ltd. Nonqualified
    Executive Retirement Plan dated March 23, 2004
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2004 (File No. 1-31339) filed
    May 6, 2004).                                                  
|        | *10 | .19         |  | Energy Ventures, Inc. 1991 Non-Employee Director Stock Option
    Plan and Form of Agreement (incorporated by reference to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 1991 (File No. 1-13086) filed
    August 8, 1991).                                                                                  
|        | *10 | .20         |  | Energy Ventures, Inc. 1992 Employee Stock Option Plan, as
    amended (incorporated by reference to Exhibit 4.7 to the
    Registration Statement on Form S-8 (Reg.
    No. 333-13531) filed October 4, 1997).                                                                                                                                       
|        | *10 | .21         |  | Amended and Restated Non-Employee Director Stock Option Plan
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 1995 (File No. 1-13086) filed
    August 12, 1995).                                                                                             
|        | *10 | .22         |  | General Amendment of Employee Stock Option Programs of
    Weatherford International, Inc. dated May 9, 2003
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2003 (File No. 1-31339) filed
    August 14, 2003).                                             
|        | *10 | .23         |  | General Amendment of Directors Stock Option Plans and
    Agreements dated May 9, 2003 (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2003 (File
    No. 1-31339) filed August 14, 2003).                                                                      
|        | *10 | .24         |  | Weatherford International, Inc. 1998 Employee Stock Option Plan,
    as amended, including form of agreement for officers.                                                                                                                                                                                                                           
|        | *10 | .25         |  | Amendment to Stock Option Programs (incorporated by reference to
    Exhibit 4.19 to the Registrants Registration
    Statement on Form S-8 (Reg. No. 333-36598) filed
    May 19, 2000).                                                                                                                                                           



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##### Table of Contents



|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | --- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | *10 | .26         |  | Employment Agreement, dated as of December 1, 2005, between
    Weatherford International Ltd. and Hazel A. Brown
    (incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed December 2, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | *10 | .27         |  | Employment Agreement, dated as of September 29, 2005,
    between Weatherford International Ltd. and Andrew P. Becnel
    (incorporated by reference to Exhibit 10.4 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 5, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | *10 | .28         |  | Employment Agreement, dated as of September 1, 2005,
    between Weatherford International Ltd. and John R. King
    (incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed September 7, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | *10 | .29         |  | Employment Agreement, dated as of September 1, 2005,
    between Weatherford International Ltd. and Ian E. Kelly
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed September 7, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | *10 | .30         |  | Employment Agreements dated August 1, 2003, between
    Weatherford International Ltd. and each of M. David Colley,
    E. Lee Colley III, Bernard J. Duroc-Danner,
    Stuart E. Ferguson, Burt M. Martin, Keith R.
    Morley, Jon R. Nicholson and Lisa W. Rodriguez
    (incorporated by reference to Exhibit 10.2 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2003 (File No. 1-31339)
    filed November 6, 2003).                                                                                                                                                                                                                                                                                                                                                                                  
|        | *10 | .31         |  | Employment Agreement dated as of June 15, 1998, between EVI
    Weatherford, Inc. and Philip Burguieres (incorporated by
    reference to Exhibit No. 10.9 to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    June 30, 1998 (File No. 1-13086) filed August 14,
    1998).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | *10 | .32         |  | Amendment to Employment Agreement dated October 16, 2000,
    between Philip Burguieres and Weatherford International, Inc.
    (incorporated by reference to Exhibit 10.41 to Annual
    Report on Form 10-K for the year ended December 31,
    2000 (File No. 1-13086) filed March 23, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | *10 | .33         |  | Indemnification Agreement, dated as of December 1, 2005,
    between Weatherford International Ltd. and Hazel A. Brown
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed December 2, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | *10 | .34         |  | Indemnification Agreement, dated as of September 29, 2005,
    between Weatherford International Ltd. and John R. King
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 5, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | *10 | .35         |  | Indemnification Agreement, dated as of September 29, 2005,
    between Weatherford International Ltd. and Ian E. Kelly
    (incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 5, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | *10 | .36         |  | Indemnification Agreement, dated as of September 29, 2005,
    between Weatherford International Ltd. and Andrew P. Becnel
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed October 5, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | *10 | .37         |  | Indemnification Agreements with Robert K. Moses, Jr.
    (incorporated by reference to Exhibit 10.10 to Weatherford
    Enterra, Inc.s Annual Report on Form 10-K for the
    year ended December 31, 1987 (File No. 1-7867));
    Philip Burguieres (incorporated by reference to
    Exhibit 10.4 to Weatherford Enterra, Inc.s Quarterly
    Report on Form 10-Q for the quarter ended June 30,
    1991 (File No. 1-7867)); William E. Macaulay (incorporated
    by reference to Exhibit 10.2 to Weatherford Enterra,
    Inc.s Quarterly Report on Form 10-Q for the quarter
    ended September 30, 1995 (File No. 1-7867)); and Jon
    Nicholson (incorporated by reference to Exhibit 10.2 to
    Weatherford Enterra, Inc.s Annual Report on Form 10-K
    for the year ended December 31, 1996 (File No. 1-7867)
    filed March 24, 1997).
|        | *10 | .38         |  | Indemnification Agreements with each of Bernard J. Duroc-Danner,
    Gary L. Warren, Burt M. Martin, Lisa W. Rodriguez, E. Lee
    Colley III, Donald R. Galletly, Jon R. Nicholson, James N.
    Parmigiano, Stuart E. Ferguson, David J. Butters, Robert A.
    Rayne, Robert K. Moses, Jr., Philip Burguieres, Robert B.
    Millard, William E. Macaulay and Sheldon B. Lubar (incorporated
    by reference to Exhibit 10.1 to the Registrants
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2002 (File No. 1-13086) filed
    November 13, 2002).                                                                                                                                                                                                                                                                       
|        | *10 | .39         |  | Form of Stock Option Agreement for Non-Employee Directors dated
    September 8, 1998 (incorporated by reference to
    Exhibit 10.23 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 1998 (File
    No. 1-13086) filed March 31, 1999).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                



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##### Table of Contents



|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|------- | --- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|        |     |            
|        | *10 | .40         |  | Form of Amendment to Stock Option Agreements dated
    September 8, 1998 for Non-Employee Directors (incorporated
    by reference to Exhibit 4.17 to the Registration Statement
    on Form S-8 (Reg. No. 333-36598) filed May 9,
    2000).                                                                                                                                                                  
|        | *10 | .41         |  | Form of Stock Option Agreement for Non-employee Directors dated
    July 5, 2000 (incorporated by reference to
    Exhibit 4.16 to the Registration Statement on Form S-8
    (Reg. No. 333-48322) filed October 20, 2000).                                                                                                                                                                                    
|        | *10 | .42         |  | Form of Stock Option Agreement for Non-employee Directors dated
    September 26, 2001 (incorporated by reference to
    Exhibit 4.19 to the Registration Statement on Form S-8
    (Reg. No. 333-81678) filed January 30, 2002).                                                                                                                                                                              
|        | *10 | .43         |  | Assumption and General Amendment of Directors Stock Option
    and Benefit Programs and General Amendment of Employee Stock
    Option and Benefit Programs of Weatherford International, Inc.
    dated June 26, 2002 (incorporated by reference to
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2002 (File
    No. 1-13086) filed August 14, 2002).
|        | *10 | .44         |  | Form of Warrant Agreement with Robert K. Moses, Jr. dated
    September 8, 1998 (incorporated by reference to
    Exhibit 10.24 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 1998 (File
    No. 1-13086) filed March 31, 1999).                                                                                                                                          
|        | *10 | .45         |  | Form of Amendment to Warrant Agreement with Robert K.
    Moses, Jr. dated September 8, 1998 (incorporated by
    reference to Exhibit 4.18 to the Registration Statement on
    Form S-8 (Reg. No. 333-36598) filed May 9, 2000).                                                                                                                                                                             
|        | *10 | .46         |  | Form of Warrant Agreement with Robert K. Moses, Jr. dated
    July 5, 2000 (incorporated by reference to
    Exhibit 4.17 to the Registration Statement on Form S-8
    (Reg. No. 333-48322) filed October 20, 2000).                                                                                                                                                                                          
|        | *10 | .47         |  | Form of Warrant Agreement with Robert K. Moses dated
    September 26, 2001 (incorporated by reference to
    Exhibit 4.20 to the Registration Statement on Form S-8
    (Reg. No. 333-81676) filed January 30, 2002).                                                                                                                                                                                         
|        | 10  | .48         |  | License Agreement among Shell Technology Ventures Inc.,
    Weatherford/ Lamb, Inc. and Weatherford International, Inc.
    dated March 1, 2002, as amended on April 29, 2002
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2002 (File No. 1-13086) filed
    May 15, 2002).                                        
|        | 10  | .49         |  | Framework Agreement between Shell Technology Ventures Limited
    and Weatherford International, Inc. dated March 1, 2002, as
    amended on April 19, 2002 (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2002 (File
    No. 1-13086) filed May 15, 2002).                                                              
|        | 10  | .50         |  | Promissory Note to Shell Technology Ventures Inc. dated
    February 28, 2002 (incorporated by reference to
    Exhibit 10.3 to the Registrants Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2002 (File
    No. 1-13086) filed May 15, 2002).                                                                                                                                            
|        | 10  | .51         |  | Warrant Agreement between Shell Technology Ventures Inc. and
    Weatherford International, Inc. dated February 28, 2002
    (incorporated by reference to Exhibit 10.4 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2002 (File No. 1-13086) filed
    May 15, 2002).                                                                                             
|        | 10  | .52         |  | Agreement dated August 31, 2005, between Weatherford
    International Ltd. and Precision Drilling Corporation
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on Form 8-K (File
    No. 1-31339) filed September 7, 2005).                                                                                                                                              
|        | 21 | .1          |  | Subsidiaries of Weatherford International Ltd.                                                                                                                                                                                                                                                                                                                                                                 
|        | 23 | .1          |  | Consent of Ernst & Young LLP.                                                                                                                                                                                                                                                                                                                                                                                  
|        | 31 | .1          |  | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                        
|        | 31 | .2          |  | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                        
|        | 32 | .1          |  | Certification of Chief Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                        
|        | 32 | .2          |  | Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                        






|  |                                                         
|- | --------------------------------------------------------
|* | Management contract or compensatory plan or arrangement.



|  |                
|- | ---------------
| | Filed herewith.



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##### Table of Contents



10-K