Photographer: Rachel Woolf/Bloomberg

Calgary Fracking-Sand Supplier Source Energy Said to Weigh IPO

  • Canadian company said to seek valuation of about C$1 billion
  • Move to go public comes amid improvement in oil services

Source Energy Services Canada LP, the country’s largest distributor of fracking sand, is weighing an initial public offering, according to people familiar with the matter.

The Calgary-based company, which is backed by private equity firm TriWest Capital Partners, could seek a valuation of about C$1 billion ($760 million) in a listing, said the people, who asked not to be identified because the matter isn’t public. TriWest originally invested in Source Energy in 2013, according to its website.

Representatives for Source and Calgary-based TriWest didn’t immediately respond to requests for comment.

Source Energy is hoping to capitalize on a turnaround in oilfield services as North America’s fracking industry begins to improve on higher crude prices, the people said.

Texas-based oilfield services company ProPetro Services Inc., whose hydraulic fracturing fleet focuses on Permian Basin operating conditions, filed for a U.S. IPO Wednesday.

West Texas Intermediate crude has jumped 16 percent since OPEC agreed to cut output in late November to help ease a global glut. Prices have held above $50 a barrel for the past seven weeks, encouraging oil explorers to increase drilling in a boon for the fracking industry.

Hydraulic fracturing is a technique that blasts water, sand and chemicals underground to release trapped hydrocarbons. Source Energy supplies and distributes fracking sand and has operations in Western Canada, North Dakota and Texas, according to its website.

The total number of drilling rigs working in the U.S. and Canada has more than doubled to 1,072 from a low of 447 in May on the back of improved crude prices, according to Baker Hughes Inc. 

The increase in the number of rigs, and more sand being used in each well, has seen the price per ton of fracking sand in certain regions spike as much as 50 percent to about $30, according to a recent note from Judson Bailey, an analyst with Wells Fargo Securities.

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