Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on TRICAN WELL SERVICE LTD. We currently have 23 research reports from 1 professional analysts.
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TRICAN WELL SERVICE LTD
TRICAN WELL SERVICE LTD
Positive Trends for Canadian Pressure Pumping
31 Aug 16
WCSB pressure pumping supply and demand is poised to benefit from an increase in stages per well and proppant per well. We believe this could cause supply and demand to tighten more quickly than anticipated in an activity recovery. Higher service intensity has been particularly evident in the Montney and Duvernay, where stages per well have generated a 2012-1Q16 CAGR of 23% and 44%, respectively, and a proppant per well CAGR of 39% and 62%. Our investment bias is towards Trican given it is the largest pure play Canadian pressure pumper, with excess equipment and a discounted valuation relative to its peers.
Announces Transactions to Improve Balance Sheet
21 Jun 16
Trican announced an equity issuance on June 1st totaling $69 mm (including the over-allotment), which resulted in the issuance of ~43.1 mm shares, or 28% of the outstanding share count as at March 31, 2016. The offering price was $1.60/share or an 8.6% discount to the halt price on June 1st. The Company concurrently announced the sale of its Completion Tools business to National Oilwell Varco Ltd. (NOV-N, not covered). The sale price was $53.5 mm, which was comprised of $30 mm cash and C$23.5 mm of NOV shares. We estimate 2016e year-end exit net debt of $159 mm, down from our prior estimate of $283 mm. The Company also received covenant relief, and we expect it to remain in compliance for the duration of our forecast. The changes to our operational forecasts are minimal. We have decreased 2016e EBITDAS to a loss of $31 mm (prior: -$30 mm) and 2017e EBITDAS to $47 mm from $50 mm.
06 May 16
Trican reported negative adjusted 1Q16 EBITDAS of $16 mm and EBITDAS of negative $26 mm. Comparisons to our estimates are not meaningful given the discontinuation of U.S. operations in the quarter. Canadian operating margins of negative 8.6% were much lower than our expectation of negative 1.4%. We believe this is important when considering the turnaround in profitability needed in 3Q16e for Trican to remain in compliance with its covenants. The risk of the Company having to use its equity cure provision has increased materially due to potential covenant violations as early as 3Q16e, absent a rebound in profitability or additional asset sales (both of which are possible).
1Q16 RESULTS MARRED BY ONE-TIME EVENTS
04 May 16
Trican's results were marred by one-time costs related to severance and professional fees ($10.6 mm) as well as the U.S. pressure pumping business being moved to discontinued operations. We believe the most important data for investors is the performance of the Canadian operations as that is what Trican will largely consist of moving forward. Consolidated results can be found at the end of this document. We believe the primary focus on the conference call tomorrow will be on the Company's ability to remain in compliance with its covenants in 3Q16e or whether further asset sales or use of the equity cure provision will need to be executed.
TRICAN WELL SERVICE LTD. ANNOUNCES RETIREMENT OF PRESIDENT AND COO
02 May 16
Trican has announced that Mr. Don Luft, President and COO will be retiring from his role effective May 3, 2016. Additionally, Mr. Luft will not stand for reelection as a Director of the Company at the upcoming AGM. Recall, Mr. Luft was one of the early instrumental players in transforming Trican from a private entity into a successful public company in 1996, and in the success and growth of the company since that time.
1Q16e Preview and Commodity Update – All Is Quiet on the Western Front
13 Apr 16
We are updating our oilfield industry forecasts post the release of FirstEnergy’s new commodity price forecast for crude oil and natural gas on March 24, 2016. We have updated our 2016e Canadian well count/drilling days forecast to 3,209/37,335 from 3,800/43,325. In 2017e, we have left our forecast unchanged at 6,200 wells/70,200 days. In the U.S., our 2016e rig count forecast is now 482 (prior: 610) and 2017e is 675 (prior: 775). Data for 1Q16e came in weaker than our prior forecast anticipated, and we have lowered our estimates across our coverage universe accordingly. We are currently below 1Q16 consensus for 15 of 18 companies in our coverage universe, but the percentages are misleading given the absolute size of EBITDAS being earned this quarter.
Strong trading leads to upgrades
22 Mar 17
On the back of today’s positive trading update and slightly upgraded profit forecasts for FY2017, FY2018 and FY2019 we have reviewed our DCF analysis. This has led to an increased DCF valuation per share of 1500p (from 1200p) which we have made our new target price (from 1200p). Both TFP and JC Paper have contributed to the upgrades shown in the table below as have favourable currency movements. With the potential for further upgrades due to capitalising 3DP costs to come we maintain our Add recommendation.
Small Cap Breakfast
21 Mar 17
First Sentinel—Investment company expecting NEX admission/introduction on 24 March. £636k raised pre-IPO. BioPharma Credit—Expected Gross Initial Acquisition Proceeds now c.$338m. Gross Cash Proceeds capped at $423m with placing and open offer. Results expected 23 March with admission now due 30 march. Tufton Oceanic Assets- The Company intends to invest in a diversified portfolio of second hand commercial sea-going vessels where the Investment Manager believes that an attractive opportunity exists in shipping. $150m raise. Admission 3 April.
Bang to rights
21 Mar 17
Tullow unexpectedly announced a US$750m rights issue on Friday at a 45.2% discount to the previous close. While this step confirms our investment thesis, the scale of the discount and the timing look like a slap in the face for investors and/or indicative of a weaker financial position than we are modelling. We publish revised estimates to reflect the impact of the issue and cut our Target Price to 215p per share (from 245p). We maintain our Hold recommendation.
Panmure Morning Note 22-03-2017
22 Mar 17
Acacia Mining and Endeavour Mining confirmed merger talks have now ended with Endeavour claiming an inability to “create adequate value for Endeavour shareholders”, most likely, we believe, given the disappointing ruling from the Tanzanian government on copper-gold concentrate sales. We were positive on the merger and believed a credible London listed Pan-African producer capable of challenging Randgold, would have been established. We make no change to our Hold recommendation today, and expect the shares to be marked lower in early trade.