Market applauds Calfrac capital plan boost, Well completion company to expand in Argentina, Canada, U.S. by Dan Healing, July 4, 2014, Calgary Herald
Shares in Calfrac Well Services Ltd. continued to rise Friday after it more than doubled its capital spending program for 2014. The well completion company said Thursday morning it would add $210 million to its $150-million capital plan, enough to make it unlikely it could all be spent before the end of the year and therefore would continue into 2015. The company headed by chief executive Fernando Aguilar said it was making the change to address “significantly improved customer demand in the United States, Canada and Argentina.”
It plans to add two hydraulic fracturing fleets totalling 80,000 horsepower in the United States, a 35,000 h.p. fleet for Canada and a 40,000 h.p. fracturing fleet to operate in the Vaca Muerta shale play in Argentina.
In addition, two new twin cementing units will be constructed for Argentina.
“Argentina is one of the most profitable regions for Calfrac, and the 40,000 h.p. addition to the existing 68,000 h.p. in country, plus the two new cementing units, should provide further growth.”
“Although Calfrac’s balance sheet remains quite levered, we believe the company will be able to manage leverage ratios down through 2015, with further free cash coming in 2016 as this investment sees a full year of cash flow,” he wrote.
Calfrac is the second-largest publicly traded completion company in Calgary. [Emphasis added]