Calfrac Well Services Ltd says widespread labour shortages are a challenge for the sector even as a rally in commodity prices helps drive a recovery in the oilpatch.
The Calgary-based company – which is one of the largest hydraulic fracturing companies in the world, with operations in Western Canada, the United States, Russia, and Argentina – reported Tuesday its revenues doubled in the third quarter of 2021 compared with a year ago.
Calfrac president Lindsay Link said the company is also expecting an increase in the demand for its services in 2022, which is expected to drive improvements in operating and financial performance.
But he added, for now, Calfrac will maintain its current fleet footprint, in part due to widespread labour shortage issues affecting the entire oil and gas sector.
“I think the labour market is still continuing to be very tight, and it’s definitely a factor,'' Link said.
“I think everyone has read about the great resignation . . . We're not immune to that. But we're still a very good industry to work in. I think we just need to get the active recruiting machine back up and running for that, but by no means will it ever be easy.”
The oilfield services company said it lost $1.5 million or four cents per diluted share for the quarter ended Sept. 30, compared with a loss of $50 million or $17.20 per diluted share in the same quarter last year.
The loss came as revenue totalled $295.8 million, up from $127.8 million a year ago.
Calfrac reported higher activity in all operating divisions. The company’s North American active fracturing fleet count increased over 60 per cent year-over-year, while its fracturing job count has more than doubled. On a companywide basis, Calfrac's active fracturing fleet count increased by almost 50 per cent and its fracturing job count increased over 130 per cent.
However, Link said in spite of this year's dramatic improvement in commodity prices, many oil and gas producers remain cautious, opting to return excess cash flow to shareholders and pay down debt instead of reinvesting it in production growth.
“We think that the current market for our services is strong and strengthening every day,” Link said on a conference call with analysts Tuesday. “However, as evidenced by the tempered rig count in the United States, the oilfield service recovery will be a more gradual journey than in past cycles.''
Calfrac underwent a recapitalization plan late last year that saw holders of its senior unsecured notes swap debt for shares, leaving existing shareholders with a reduced stake in the company.
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