Calfrac Announces Fourth Quarter Results
Calfrac Well Services Ltd. announces its financial and operating results for the three months and year ended December 31, 2013.
CEO’s MESSAGE
I am pleased to present Calfrac’s operating and financial highlights for 2013 and to discuss our prospects for 2014. During the fourth quarter, our Company:
- completed the acquisition of the operating assets of Mission Well Services, LLC (“Mission”), a privately-held hydraulic fracturing and coiled tubing services provider focused in the Eagle Ford shale play of Texas;
- experienced strong equipment utilization in the unconventional natural gas resource plays of the United States;
- began executing on its pressure pumping services contract with YPF S.A., the largest operator in Argentina; and
- announced a 2014 capital program of $120.0 million, which focuses on maintenance and support capital, further investment in logistics equipment and international growth.
Financial Highlights
For the three months ended December 31, 2013, the Company recorded:
- revenue of $463.0 million, an increase of 26 percent from the fourth quarter of 2012 driven primarily by the commencement of fracturing operations in the Eagle Ford shale play combined with increased activity in the Niobrara and Marcellus shale plays in the United States, higher fracturing activity in Russia due to an expanded customer base and increased demand for horizontal multi-stage fracturing operations, and the significant increase in fracturing activity in Argentina;
- operating income of $57.4 million versus $43.2 million in the same quarter of 2012, mainly due to higher equipment utilization in the United States offset partially by the effects of the competitive pricing environment in Canada; and
- net income attributable to shareholders of Calfrac of $11.8 million or $0.25 per share diluted, including a $1.5 million foreign exchange gain, compared to net income of $11.2 million or $0.25 per share diluted in the fourth quarter of 2012, which included a foreign exchange gain of $3.8 million.
For the year ended December 31, 2013, the Company:
- generated revenue of $1.6 billion, a 2 percent decrease from 2012 driven primarily by competitive pricing pressure in western Canada and the United States and lower fracturing activity in Mexico, offset partially by higher multi-stage fracturing activity in Western Siberia, and the commencement of fracturing operations in Argentina and the Eagle Ford shale play in Texas during the second and fourth quarters of 2013, respectively;
- reported operating income of $188.1 million versus $257.0 million in 2012, a decrease of 27 percent, mainly as a result of competitive pricing and a decline in activity in Canada and lower equipment utilization in Mexico; and
- reported net income attributable to shareholders of Calfrac of $27.9 million or $0.61 per share diluted, including a foreign exchange loss of $1.2 million, compared to net income of $97.1 million or $2.17 per share diluted, which included a $8.3 million foreign exchange gain, in 2012.
Russia
Equipment utilization for Calfrac’s Russian operations continued to be positively impacted by the increase in horizontal multi-stage fracturing activity in Western Siberia. While this technology is still in the early stages of development, the Company remains optimistic that it will gain further acceptance and be a driver of future growth in operating and financial performance in Russia. While equipment utilization remained high in the fourth quarter, Calfrac’s financial results were lower on a quarter-over-quarter basis due to the higher cost structure resulting from the onset of winter operating conditions. Late in the third quarter, a new district was opened in the Usinsk region and the Russian fleet was increased to six fracturing spreads. The Company successfully completed its first stimulation treatment in this region during the fourth quarter.
