Labor shortage slows Calfrac Well Services fleet activation pace | The Canadian News

Calfrac Well Services Ltd says the widespread labor shortage is a challenge for the sector, even as a rebound in commodity prices helps fuel a recovery in the oil zone.

The Calgary-based company, which is one of the world’s largest hydraulic fracturing companies, with operations in western Canada, the United States, Russia and Argentina, reported Tuesday that its revenue doubled in the third quarter of 2021. compared to a year ago. .

Calfrac president Lindsay Link said the company also expects an increase in demand for its services in 2022, which is expected to drive improvements in operational and financial performance.

But he added that, for now, Calfrac will maintain its current fleet footprint, in part due to widespread labor shortages affecting the entire oil and gas sector.

“I think the job market is still very tight, and it’s definitely a factor,” Link said.

“I think everyone has read about the great resignation. . . We are not immune to that. But we are 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 it will by no means be easy. “

The oil services company said it lost $ 1.5 million or four cents per diluted share for the quarter ended Sept. 30, compared to a loss of $ 50 million or $ 17.20 per diluted share in the same quarter last year.

The loss came when revenue totaled $ 295.8 million, up from $ 127.8 million a year ago.

Calfrac reported higher activity in all operating divisions. The company’s active fracturing fleet count in North America increased more than 60 percent year-over-year, while the fracturing job count has more than doubled. Companywide, Calfrac’s active fracturing fleet count increased by nearly 50 percent and its fracturing job count increased by more than 130 percent.

However, Link said that despite 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 off debt in instead of reinvesting it in the growth of production.

“We believe the current market for our services is strong and getting stronger every day,” Link said in a conference call with analysts on Tuesday. “However, as the moderate rig count in the United States demonstrates, the recovery of oilfield service will be a more gradual journey than in previous 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.