Calgary’s Calfrac, CWC Bullish on Upstream Oil, Gas Activity

On the news of a strong second quarter, the management teams of Calgary’s Calfrac Well Services Ltd. and CWC Energy Services Corp. separately voiced optimism for the oilfield services (OFS) sector’s ongoing recovery from the Covid-19 field activity slump.

Calfrac’s management predicted “strong utilization” of its Canadian and U.S. crews and equipment.

CWC’s management told investors, “Discussion about energy security is on the top of many governmental agendas, which should bode well for North American oil and gas activity and oilfield service companies for the foreseeable future.”

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Both OFS firms reported strong recoveries in 2Q2022 from the lull inflicted by the fading Covid-19 pandemic.

In the United States, working Calfrac hydraulic fracturing crews more than doubled to nine as of May from four at the start of the year. 

Calfrac’s U.S. contract revenue jumped to C$193.8 million in 2Q2022 from C$86.7 million in 2Q2021.

CWC drilling rigs employed in the United States grew more than seven-fold to 15 in 2Q2022 from two in the year-ago period. The expanded American rig fleet posted second quarter revenue of C$14.9 million, up from C$2.1 million a year earlier.

In Canada, four Calfrac crews scored a contract revenue increase to C$71 million in 2Q2022 from C$50.8 million in 2Q2021. Field jobs grew by 31%. “Robust demand” is emerging for the rest of this year and into 2023, according to the firm.

Revenue earned by CWC’s seven Canadian drilling rigs grew six-fold to C$7.8 million in 2Q2022 from C$1.3 million in 2Q2021. The firm also secured a toehold in a budding industry sideline by drilling the first Alberta lithium well in a trial of using oil and gas field methods to produce an essential for electric vehicle batteries.

Calfrac cut its losses to C$6.8 million (minus 18 cents/share) in 2Q2022 from C$35.5 million (minus 95 cents) in the year-prior period. 

CWC reported 2Q2022 earnings of C$2.7 million (1 cent/share), reversing a 2Q2021 loss of C$759,000.