Calfrac Well Services Ltd. says it is seeking advice on changes to its capital structure but doesn't know of any “material change” that would account for a 75.6 per cent increase in its share price on Tuesday.
In a news release after markets closed, the Calgary-based well completion company says it has retained Perella Weinberg Partners LP and Tudor, Pickering, Holt & Co., along with RBC Capital Markets, as financial advisers.
Calfrac's shares closed at 39.5 cents on Tuesday, up 17 cents on the day. Its stock has varied between 13 cents and $2.24 in the past 52 weeks.
The company specializes in hydraulic fracturing or fracking of wells, where liquids and chemicals are injected under pressure to break up tight rock formations deep underground and allow trapped oil and gas to be produced.
The current slump in drilling activity as energy demand falls due to measures to control the COVID-19 pandemic has forced the company to cut 70 per cent of its North American workforce, park about three-quarters of its equipment, halve capital spending plans and reduce salaries for management, directors and remaining staff.
The company said in April it will postpone its first-quarter financial report, normally published before May 15, until no later than June 25.
“Since Dec. 31, 2019, there has been a rapid and unforeseen deterioration in business conditions resulting from the COVID-19 global pandemic and the oil price war among OPEC+ members,” it said in an April 28 news release.
“It is difficult to predict how the COVID-19 pandemic will continue to affect the demand for Calfrac's services.”
© The Canadian Press