And then there were two.
Southeast Saskatchewan had seven frac operators a few years ago. The oil downturn that began in 2014 took that down to three. On March 22, it was reduced to two.
Trican Well Services announced it would acquire all of the issued and outstanding shares of Canyon Technical Services in an all-share transaction. Canyon shareholders will receive 1.7 shares of Trican for each of their Canyon shares, resulting in a 32 per cent premium over Canyon’s March 21 closing price. The value is $6.63 per share. The deal is valued at $637 million.
Current Trican shareholders will make up 56 per cent of the ownership once the deal is complete, with Canyon shareholders making up 44 per cent.
Both Trican and Canyon have operations based in Estevan. Canyon was one of the first businesses to move into the still-largely vacant Glen Petterson Industrial Park on the city’s northeast corner. Trican’s operations are on the east side of Estevan, in a larger facility which includes cement operations.
Trican had opened a base in Brandon, Manitoba, but the downturn resulted it those operations being consolidated back to Estevan in 2016.
The deal is expected to close the second half of 2017, subject to court and regulatory approvals. The deal is expected to result in approximately $20 million in pre-tax synergies.
"This combination with Canyon will create a Western Canadian based leading energy services firm that has the asset base, efficient cost structure and financial capacity to create value for all of our combined stakeholders," said Dale Dusterhoft, Trican's president and chief executive officer. "We have always held Canyon in very high regard and look forward to welcoming the Canyon employees to the Trican family. Our companies have a shared base of values and an alignment on our commitment to safety, service, technology and operational excellence."
The combination will result in a “high quality, modern fleet” with approximately 675,000 horsepower. Their product lines will include cementing, coiled tubing, acid, nitrogen, fluid management, industrial and pipeline services.
Trican’s press release noted their available horsepower is fully contracted, and frac jobs have increased in intensity and job size.
The move is a big reversal from shrinkage to growth for Trican. It had pulled back extensively in the downturn, selling off its Russian and American operations. The U.S. pressure pumping business was sold in March 2016.
Prior to the downturn Baker Hughes, Halliburton, Calfrac, Millennium Stimulation, Trican and Canyon had frac operations in Estevan and Bienfait, while Element Technical Services continues to operate out of Carlyle.
