Calfrac Well Services Q2 revenue misses estimates on lower activity, pricing

Overview

• Calfrac Q2 revenue declines 6% yr/yr, missing analyst expectations

• Adjusted EBITDA rises 18% yr/yr, driven by Argentina performance

• Co amends revolving credit facility, adds $120 mln term loan

Outlook

• Company expects lower oil-weighted completion activity in North America

• Calfrac anticipates higher natural gas completions in North America

• Company sees reduced activity in Argentina's Vaca Muerta due to budget limits

• Calfrac expects high demand for dual-fuel fracturing fleets in North America

Result Drivers

• ARGENTINA GROWTH - Revenue increase driven by expanded operations in Vaca Muerta shale play with second fracturing fleet

• NORTH AMERICA DECLINE - Lower activity and pricing led to reduced revenue in North American operations

• CREDIT FACILITY AMENDMENT - Amended revolving credit facility to include $120 mln term loan for financial flexibility

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil related services and equipment peer group is "buy"

• Wall Street's median 12-month price target for Calfrac Well Services Ltd is C$4.00, about 6.3% above its August 7 closing price of C$3.75

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 11 three months ago

Press Release: ID:nGNX5Vd63X