Trican is hiring for all its service lines and at all its bases from Estevan, Saskatchewan to Fort St. John, B.C. as it works to activate equipment to meet increased drilling activity, and while the company says the process has been difficult, it is confident it will meet its targets.
“Hiring qualified personnel to activate parked equipment continues to be the most significant challenge to meeting customer demand,” Trican said in announcing its first quarter 2017 results on Wednesday.
The company increased its headcount as it expanded fracturing capacity during the period and added six additional cementing crews compared to end of 2016.
“With the current commodity price environment, we believe that demand is sufficient that two more fracturing crews can be added in the third quarter, with the possibility for a third crew to be activated during the fourth quarter of 201,7 which would represent the activation of approximately 50 percent of our currently parked fracturing equipment,” Trican says.
“If activity levels remain high and sufficient personnel are recruited, we could potentially have our entire fracturing fleet activated in the next twelve months.”
But while demand may be increasing, many of Trican’s existing contracts are under “legacy agreements” with long-term clients that are “below leading edge pricing in the industry.”
“Approximately 80 percent of our pricing agreements are negotiated quarterly and we are currently in discussions with most of our clients regarding second half work programs and pricing,” the company says.
“Pricing improvements will be required to cover cost increases in our business as well as return our business to sustainable profitability levels.”
Trican’s revenue increased to $149.4 million in the first quarter of 2017, compared to $99.8 million in the first quarter of 2016.
The company recorded a net loss of $48.9 million in the first quarter, compared to a net loss of $42.5 million in the same period of last year.