Well fracking companies say oilfield services prices still too low for profits

CALGARY – The two largest publicly traded Canadian oilfield fracking companies say prices for their services continue to be unsustainably low despite rising activity spurred by higher oil and gas prices.

Calfrac Well Services (TSX:CFW) and Trican Well Service (TSX:TCW), both based in Calgary, say they don’t expect a return to normal pricing levels until the second half of this year.

The companies work for oil and gas producers to provide well completion services such as fracking, where liquids and chemicals are injected under high pressure to break up tight underground formations and allow oil and gas to be produced into a well.

Calfrac and Trican laid off thousands of workers over the past two years and now report they are having trouble finding staff to man equipment as it returns to the field.

Calfrac says it experienced a 33 per cent plunge in revenue to $193 million in the fourth quarter ended Dec. 31 compared with the same period of 2015, while Trican says its revenue fell 27 per cent to $115 million.

Both companies say revenue for all of 2016 fell by 50 per cent compared with 2015.

Calfrac reported an operating loss of $18 million in the fourth quarter of 2016 versus an operating gain of $5.7 million in the fourth quarter of 2015. Trican had an operating loss of $7.4 million versus the year-earlier gain of $15 million.

Trican said it had net income of $57 million in the fourth quarter and a loss of $16.5 million in the same period a year earlier.

Calfrac posted a fourth-quarter net loss of $61 million versus a loss of $141 million in the same period of 2015.