Gold prices tick higher on fresh US tariff threats, Fed rate cut hopes
Trican Well Service Ltd reported robust financial results for Q1 2025, with revenue reaching $259.1 million and adjusted EBITDA standing at $61.3 million. The company also generated a positive earnings per share (EPS) of $0.17, supported by a strong free cash flow of $43 million. According to InvestingPro analysis, Trican’s stock is currently fairly valued, with a market capitalization of $594 million and an attractive P/E ratio of 12.4x. Despite these solid figures, Trican’s stock price remained unchanged in the immediate aftermath of the announcement.
Key Takeaways
- Trican achieved a revenue of $259.1 million in Q1 2025.
- The company reported a strong free cash flow of $43 million.
- Trican maintained its dividend at $0.05 per share.
- The company is investing in technology modernization, including a $10 million commitment in 2025.
- Trican’s cementing division achieved a 75% market share in the Duvernay play.
Company Performance
Trican Well Service delivered a solid performance in Q1 2025, with revenue reaching $259.1 million. The company’s focus on operational efficiency and strategic investments in technology modernization contributed to its positive earnings. The adjusted EBITDA was $61.3 million, representing 24% of revenues. InvestingPro data shows the company maintains a strong financial health score of 2.81 (rated as GOOD), with a healthy current ratio of 1.45. Trican’s performance was supported by its leading market position in cementing and logistics. For detailed insights and more exclusive metrics, check out Trican’s comprehensive Pro Research Report, available to InvestingPro subscribers.
Financial Highlights
- Revenue: $259.1 million in Q1 2025
- Adjusted EBITDA: $61.3 million, 24% of revenues
- Earnings per share: $0.17
- Free cash flow: $43 million
- Capital Expenditure: $12.5 million
Outlook & Guidance
Trican Well Service remains optimistic about its future prospects, projecting activity levels in 2025 to be similar to 2024. The company is targeting a 20% return on invested capital and plans to continue focusing on generating free cash flow. Trican is also exploring the use of 100% natural gas in field operations and monitoring potential tariff impacts on sand and coil.
Executive Commentary
CEO Brad Fedora emphasized the company’s commitment to building a resilient and sustainable business. "We want to build a resilient, sustainable and differentiated company that everybody is proud to work at," he stated. Fedora also highlighted the strength of the Montney play, describing it as "one of the best plays, if not the best play in North America."
Risks and Challenges
- Potential tariff impacts on sand and coil could affect costs.
- Fluctuating oil and gas prices may influence future activity levels.
- Program delays could impact the company’s operational plans.
- The integration of new technology systems may present challenges.
- Competition within the industry remains a factor to watch.
Trican Well Service’s Q1 2025 earnings call showcased the company’s strong financial performance and strategic initiatives, positioning it well for future growth.
Full transcript - Trican Well Service Ltd (TCW) Q1 2025:
Conference Operator: Good morning, ladies and gentlemen. Welcome to Trican Well Services First Quarter twenty twenty five Earnings Results Conference Call and Webcast. As a reminder, this conference call is being recorded. I would now like to turn the meeting over to Mr. Brad Fedora, President and Chief Executive Officer of Trican Well Service Limited.
Please go ahead, Mr. Fedora.
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: Good morning. Thanks, everyone, for joining the call. Scott, our CFO, will give an overview and will start by giving an overview of the quarterly results, and then I’ll provide some comments with respect to the quarter and our current operating conditions and what the rest of the year looks like. And then we’ll take some questions from listeners. As usual, several members of our team are here with us in the room today and are available to answer any questions.
I’ll now turn
Scott, Chief Financial Officer, Trican Well Services Limited: the call over to Scott. Thanks, Brad. Before we begin, I’d like to remind everyone that this conference call may contain forward looking statements and other information based on current expectations or results for the company. Certain material factors or assumptions that were applied in drawing conclusions or making projections are reflected in the forward looking information section of our MD and A for Q1 twenty twenty five. A number of business risks and uncertainties could cause actual results to differ materially from these forward looking statements and our financial outlook.
Please refer to our 2024 annual information form for the year ended 12/31/2024, for a more complete description of business risks and uncertainties facing Trican. This document is available both on our website and on SEDAR. During this call, we will refer to several common industry terms and use certain non GAAP measures, which are more fully described in our Q1 twenty twenty five MD and A and in our Q4 twenty twenty four MD and A. Our quarterly results were released after close of market last night and are available both on SEDAR and our website. So with that, a brief summary of the quarter.
My comments will draw comparisons mostly to the first quarter of last year, and I’ll provide some additional commentary about our quarterly activity and our expectations going forward. Trek end results for the quarter compared to last year’s Q1 were not quite as strong, mainly due to more competitive pricing environment combined with some inflationary cost pressures faced in the quarter. Our schedule is always subject to client readiness and weather conditions, which serve to defer certain customer programs into Q2 of twenty twenty five. On the cost side, we felt the effects of foreign exchange fluctuations and rail surcharges during the quarter. Revenue for the quarter was $259,100,000 with adjusted EBITDA of $61,300,000 or 24% of revenues, not quite as strong as the adjusted EBITDA of $72,800,000 or 27% of revenues we generated in Q1 twenty twenty four, but still solid in this environment.
Adjusted EBITDAS for the quarter came in at $62,300,000 or 24% of revenues. To arrive at EBITDAS, we add back the effects of cash settled share based compensation recognized in the quarter to more clearly show the results of our operations and remove some of the financial noise associated with changes in our share price as we mark to market these items. On a consolidated basis, we generated positive earnings of $31,900,000 in the quarter, which translates to $0.17 per share on both a fully a basic and a fully diluted basis. Trican generated free cash flow of $43,000,000 during the quarter. Our definition of free cash flow is essentially EBITDAS less non discretionary cash expenditures, which include maintenance capital, interest, current taxes and cash settled stock based comp.
You can see the details of this in our non GAAP measures section of our MD and A. CapEx for the quarter totaled $12,500,000 split between maintenance capital of about $8,800,000 and upgrade capital of $3,700,000 Our upgrade capital was dedicated mainly to the electrification of our fourth set of ancillary frac support equipment and ongoing investments to maintain the productive capability of our active equipment. For 2025, we have an approved capital budget of $70,200,000 which will be focused on a mixture of ongoing maintenance capital and targeted growth initiatives, including that four set of electric ancillary frac support equipment, further investments in our logistics fleet and our supporting infrastructure. As we mentioned in our last call, Trican is undertaking a significant technology modernization initiative, starting with our base financial system and implementing an integrated ERP platform. We’re modernizing our technology platform to enhance operational efficiency, streamline internal processes and help position the company for future innovation and growth.
The investment for 2025 is still anticipated to be approximately $10,000,000 which will be presented as a component of G and A expense in accordance with IFRS reporting standards. Balance sheet remains solid. We exited the quarter with positive working capital of approximately $159,000,000 including cash of $4,100,000 With respect to our return of capital strategy, we repurchased and canceled 2,500,000.0 shares under our NCIB program for the first quarter. Subsequent to Q1 twenty twenty five, we’ve repurchased and canceled an additional 6,600,000.0 shares, and we continue to be active with our buyback program when market prices are at levels that provide for a favorable investment opportunity. We’ve repurchased and canceled 11,700,000.0 shares to date, representing approximately 61% of the twenty twenty four-twenty twenty five NCIB program.
As noted in our press release, the Board of Directors approved a dividend of $05 per share. The dividend distribution is scheduled to be made on 06/30/2025, to shareholders of record as of the close of business on 06/13/2025. And I would note that the dividends are designated as eligible dividends for Canadian income tax purposes. So with that, I’ll turn things back
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: to Brad. Okay. Thanks, Scott. Just as a reminder, my comments will include Q1 twenty twenty five commentary and some forward looking statements for the rest of the year. So I remind you to go to our website and read our disclaimer that’s on Page two of our PowerPoint presentation, our investor presentation.
So overall, Q1 went pretty much as forecast. I would say there was no surprises really at all. We had similar activity levels to Q4, and we’re very fortunate that our customer list has really made great strides in the last few years with respect to level loading their work throughout the year. And we’re not experiencing nearly the same volatility from quarter to quarter that we grew to expect in the past. And it’s great from our perspective with respect to planning and staffing, etcetera.
As always, Q1 experienced the usual weather and breakup issues, but nothing that we hadn’t already built into our forecast. Activity levels held, I would say, pretty well through all the news with respect to political instability and tariffs. And we’re really and I’ll talk more about tariffs later on, but I really would say that, that has not significantly impacted our business at all at this time. In general, there was Scott mentioned, there was a little bit of pricing pressure, which really, I think, is a result of sort of a Q4 hangover for some of our competitors that had really slowed down going into the end of the year. And I
Keith MacKey, Analyst, RBC Capital Markets: would say that pretty much has stabilized for now. We always have
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: to keep an eye on that. You never sort of know where your competitors are at from a pricing perspective. But I would say, in general, it seems to have stabilized. And the same with costs. We’ve talked about this in the past.
Costs have really pretty much stabilized. We’re starting to see even some reductions with respect to fuel with the carbon tax and fuel surcharges. And there’s other items that are they do go up every year. But I would say the rate of change on costs has basically returned to normal compared to sort of the post COVID era where we’re seeing big changes from quarter to quarter and year to year. I would say it’s more what we’re all used to with just tiny changes from year to year.
On the fracturing side, no changes. We’re still very disciplined. We operate seven frac crews. We’re that means that we’re running about 60% of our total horsepower comparison to some of our competitors that are operating at capacity. They’ve even added equipment to this basin, which is, again, is unbelievable.
But we will continue to be disciplined and make sure the equipment is making money. As we’ve talked about before, this equipment only has so many hours on it. They’re approximately seven year assets. And so you can’t sort of carve two or three years out of those seven years to not make money and sort of hide behind high utilization. So we’ll pick our spots carefully and make sure that we provide a return to our
Conference Operator: we’re
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: going be we’re going to continue to be focusing in Northwest Alberta and Northeast BC going forward as we’ve been talking about before. On the cementing side, we’re really again, I think I’m repeating myself here, but we’re very happy with the performance of this division. Clearly, the technical leader in Canada in cementing, a very wide extensive customer list. And really, only reason that companies aren’t using us is we’re either not present in those operating areas just due to a shortage of people and equipment. But really, it’s probably a price issue, and we don’t make any apologies for that.
But we’re viewed as a technical leader. And certainly, if you’re into some of the trickier plays like the Duvernay, we have a 75% market share in that play, thanks to our expertise. We operated at very high utilization throughout Q1 and continue to in Q2. I think we’re about 10 rigs higher now than we were at this time last year. I would say, overall, we still sort of target to have about a 35% market share in the overall basin.
And that’s just because some of the plays were just we’re not active in and or not yet anyway. And we target to hold a 50% market share in the Montney in the Deep Basin and a higher in the Duvernay, as I discussed. We are starting to move back into some of the heavier oil plays that we had abandoned around COVID just due to lack of staffing. But now it take time. But again, those customers, they can view our expertise with respect to blends and equipment, and they see the value offering in that very easily.
Just a shout out to our group. We recently submitted a 9,000 meter liner, which is the longest in Canadian history. And this is an indication of these wells just get deeper and longer in the horizontal section and your ability to deal in these operating conditions becomes more and more important and we’re certainly seeing that in our market share. So great job to everybody in our cementing division. On the coil side, I’m going echo some similar comments.
We’re making great progress in the coil division. We’ve been focused on growing this now for a few years. And we have intermittent starts and stops, but I would say generally, it’s going quite well. We’re still disciplined in this. We’re operating sort of seven, eight coil crews.
So lots of room for growth for this division. Q1 was our largest revenue quarter ever and we had utilization over 70%. So that was a big win. I think we cycled over 1,000,000 meters of pipe and yet we only had downtime of 1.6%. Great job from our coil division.
We sort of have a joint venture with a company called ACOS and they have a multi directional tool for clients operating in some of the heavier oil, multi leg areas of the province. We completed our first job. It was an overwhelming success. So we’re looking for some market share growth around that going forward as well. And again, we have great fuel margins in this business.
We just don’t have the scale that we are hoping for. And so as we continue to grow this business, divisional earnings and return on invested capital in the Coil division will get to a level that we’re happy with. And I think we’re well on our way. So just for the rest of 2025, I’ll make some comments. And we were happy with Q1.
We’re happy with Q2 to date. There’s been some movement, of course, given commodity prices and just some of the political issues in the news, but nothing too significant. We’re forecasting 2025 to be quite level loaded. We’re closely watching oil and gas prices and just we’re on the lookout for potential delays or reductions in our customers’ programs, especially on the oil side. There has been delays, but nothing significant.
There’s always delays. Every year, there’s pads moving, pads getting canceled, pads getting added. And if you’re not building that kind of volatility into your forecast, you’re missing something. And so I think we have a very realistic view of this industry, we build in lots of room for movement, both in and out of the program. So we’re expecting 2025 to be very similar to 2024 from an activity level.
There is some pricing pressure and just some uncertainty around commodity prices. And so that always means there’s a little bit of panic in the system. And so that pricing pressure will lead to slightly lower margins like we saw in Q1, but still we’re still operating at levels that we’re really happy with. Our goal is to hit return on invested capital of 20% every year. And we’re at those levels today.
So in general, I would say, if this is a bit of a sidestep for the rest of 2025, we’re still happy with the financial returns. We believe our we provide a premium service offering, and we pursue the clients that value that and they look for operating efficiencies. They look for something other than just price, and we try to align ourselves with those customers. And today, we’ve been really successful. Our top 10 customers have probably been with us for ten years or more.
And it’s because it works out for their wells and then incremental production, etcetera. So they do what’s best for them. So far, that’s it’s worked out really well for us. Strip, especially on the gas side, strip pricing is very economic levels. And we’re fairly optimistic on gas activity for the rest of the year.
All of our customers are in great shape from a balance sheet perspective, and they’ll spend their money wisely and methodically. So we’re expecting that there’s sort of a slow continuation of what they’ve been doing year to date and in past years. So we think this year looks sort of very level loaded compared to last year. And it’s at similar levels. The Duvernay is working out, continues to build momentum.
It’s very service intensive, especially on the frac side, very long reaches on cementing and coil. So it’s great for our business. It’s a great opportunity to sort of showcase our technical expertise, and we’re getting great response from our customers in that play. On the tariff side, there was lots of news, lots of fears about what would happen. Clearly, the 10% tariffs on oil and natural gas going into The U.
S. Did not get implemented. However, the Canadian government did put in some retaliatory tariffs around the auto and steel, which is affecting our business. And really, the main issue there is on sand. We’re there’s tariffs that are sort of ranging in the $10 per tonne range.
And I would say it’s a little lower than that. But so far, we’re sort of modeling in $10 per tonne, and that came into effect in early March. There’s industry groups that are lobbying to have that removed. The idea is that there is no sort of plan B. We can’t access that sand from Canada.
There just isn’t enough capacity. So we think it’s an unfair tariff at this stage, and we’re hoping to get that reversed We’ll see how that goes. The tariffs have had minimal effect on cement and chemical products. Most of that is locally sourced. We purchased about 70,000,000 to $80,000,000 of cement and chemical products every year, probably less than 10% of those are affected by reciprocal Canadian tariffs.
The one thing we are keeping an eye on is coil. We do buy coil out of The U. S. And there’s talk about tariffs increasing the cost of that coil by as much as 25%. So we’ll see.
We don’t have to buy any more coil until late in the year. We’ll just keep an eye on that going forward. On the sand logistics side, that’s still an area of focus for us. We think it’s a great opportunity for us given our fleet and our logistics expertise. We think it’s going to become a larger and larger part of the overall efficiency of our customers’ programs and the profitability of the services that we provide is going to be more tightly linked to logistics.
Last mile logistics is essential to extracting profitability from the increasing sand volumes. And I’ve used these analogies before, but we have 50 to 100 railcars of sand being pumped into a single well these days. So you can imagine from a trucking perspective what that means, especially giving some of the distances that we’re dealing with. And so we’ve been steadily building our logistics department, like our trucking department with experienced professional drivers. And we’ve been building what we think is sort of the best from a trailer equipment perspective.
And I think it’s paying off. We have the largest logistics department in Canada. And I think a lot of our customers really see the value in that. And what I mean by that is when you have a B train of sand showing up on location every ten to twelve minutes and being dumped into the on-site storage and then pumped down the well, any interruptions in that schedule can mean big delays. And so we have hundreds of truckloads of sand showing up in a very sort of twenty four to thirty six hour period.
And so your ability to sort of perfectly time and plan that out can avoid a lot of downtime for your customers, which is very expensive. And so I think they see the value in what we do, and it’s been paying off. We’re still looking at various technologies. The ultimate goal is 100% natural gas fueled operations in the field. And I don’t think I’m going go through this in detail, I talked about this before.
We are going to be trialing our first one hundred percent natural gas engine this summer, and it should be ready in the second half of this year. And we’re combining it with some proprietary transmission technology that will allow us to pump at variable rates. The big challenge is with 100% natural gas engines is they run at a constant rate, which is not applicable for what we do for a living. We need to build to sort of rev up and down and change pumping pressures, change pumping rates. And so we’ve spent a lot of time and money on a proprietary transmission technology to help us deal with the constant rate of the engine, but with variable transmission speeds.
And so we’ll trial it out in the second half of this year and hope for the best that it is successful. When you combine those 100% natural gas engines with our electric ancillary equipment, we will be operating in essentially 100% natural gas on location, which is a big win from our customers from an emissions and fuel cost perspective. So really looking forward to seeing how that works out. And in the meantime, we’ll continue to deploy our Tier four DGB technology and our electric ancillary equipment. So until we get to 100%, but the ultimate goal is to operate with 100% natural gas fueled operations in the field.
We’re still obviously very excited about LNG Canada coming online. That should be in this summer. And once at full capacity, we’ll be exporting over 10% of the natural gas production in Canada, which clearly will have a positive impact on pricing. And I think a lot of our customers are looking forward to that. The Montney continues to stand out as one of the best plays, if not the best play in North America on a relative basis compared to the upside of that play from a drilling and reserves perspective.
We think we’re only in the sort of the second, third inning at the most when you compare it to The U. S. Plays are on the downslope of their life cycle. The Canadian plays like the Montney and Duvernay just look better and better every year in comparison. And I think our customers are looking forward to being positioned as well as they are.
And when you combine that with LNG exports, not just LNG Canada, but wood fiber and other facilities that are close to being online, we think the next five to ten years in Canada look fantastic. We don’t we’re not changing our strategy. We’re not changing our focus. We’re going to continue to develop technology and stand out as a differentiated service provider. But we’re very, very happy to be in this basin with especially with the customer base that we have.
We’re still focused on generating free cash flow, maintaining a conservative balance sheet. I think as Scott had mentioned, still subscribe to a differentiated return on capital strategy through the dividend and the buyback. We do view the buyback as sort of internal M and A. And so we’ll scale it up and down accordingly to what the opportunities are out there on the corporate side and where we are from a share price perspective. And I think we’ll just continue to pull on those levers as efficiently as possible.
We’re not afraid to use our bank lines if we find something really attractive. We as always, we operate effectively at little to no debt. And so we have lots of main capacity if we find something interesting. And we’ll just continue to evaluate M and A opportunities against our NCIB and our dividend going forward. But we expect to continue our differentiated strategy with hopefully growing dividends and lots of buybacks.
And our corporate priorities have not changed. We want to build a resilient, sustainable and differentiated company that everybody is proud to work at. We want to invest in high quality growth and equipment. We want to upgrade wherever we see the opportunity to set ourselves apart and from our competitors and provide a consistent return of capital to our shareholders through the dividend and the NCIB when appropriate. And so we’re going to continue to maintain a clean balance sheet, lots of financial discipline and just execute our plan over the next few years.
So I think I’ll stop there, operator, and we’ll go to questions.
Conference Operator: First question comes from Keith MacKey with RBC Capital Markets. Please go ahead.
Keith MacKey, Analyst, RBC Capital Markets: Hey, good morning and thanks for taking my questions. Brad, since you mentioned return on invested capital, I figured I would start there in this Q and A. Target of 20% Looks like the last couple of years from your presentations, it has moved from the low 20s to the high teens. So just curious, what does the path back to 20% look like to you? Does the market need to improve?
Or are there internal levers you could pull to get back to 20% return on invested capital?
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: Yes, both. I mean pricing, as you can imagine, can move that number from the high teens to low 20s really quickly. The other thing that we’ve been doing a really good job of is just getting rid of all of the redundant spare assets that exist sorry, assets and real estate that exist in this company. And you know how the calculation works. If you reduce the asset base, your denominator shrinks and makes the returns higher.
So we have a lot of redundant real estate, old equipment in every division that we actively try to dispose of whenever we get the opportunity. And we’ll just continue to make this company operate as efficiently as possible. I mean I think one of the few companies that understands our cost of capital, and it certainly is not 10% or 12% like a lot of service companies think it is. It’s much higher than that. And I think we can see that with the trading multiples quite easily.
So yes, it’s a tough hurdle when you’re targeting 20% returns on all your projects, whether internal or external. You’ve got to sort through a lot of opportunities to find those. And the only way to get there is just
Keith MacKey, Analyst, RBC Capital Markets: to
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: grind, grind, grind, grind and pick your spots carefully.
Keith MacKey, Analyst, RBC Capital Markets: Yes. Got it. And just to follow-up on the asset rationalization, older redundant equipment. What inning would you say that you Trican is in there?
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: From an asset rationalization perspective? Seven. Seven. Every time you get slowdowns in the we don’t sell the equipment locally to our competitors, obviously. And so we try to sell spare equipment into The U.
S. Or overseas, and it sort of comes in waves. And you might go through six months where there’s no action at all. And then all of a sudden, you get an opportunity to sell a bunch of pumps or a coil unit or something like that. But it’s you just got to keep your eyes peeled at all times.
And we’re almost at the stage now where from an equipment perspective, we’re getting to, I wouldn’t say, where we want to be, but we’re not that far away either. And on the real estate side, we’re really close. We’ve really cleaned up a lot of the redundant real estate in the last few years. What have we got I’m looking at Todd and Scott here. We’ve a couple of locations left to sell.
Yes, two. Two, yes. Small one.
Scott, Chief Financial Officer, Trican Well Services Limited: Yes, two, We’ve made very strong progress on both sides on the asset rationalization piece and then specifically on the real estate over the last few years as we’ve chipped away at it. So yes, I think seventh inning is probably a good metaphor, Keith.
Keith MacKey, Analyst, RBC Capital Markets: Yes. Got it. And I feel like I ask this every quarter, but can you just talk about the potential ramp in LNG Canada related fracturing activity? Have you seen anything notable yet? What is the RFP process looking like?
Any comments around that topic would be helpful.
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: It’s been quiet. I mean, I know I think we were all hoping for the sort of step change in activity sort of the six months before LNG became fully operational, and that hasn’t been that way. There’s been a slow sort of a slow grind. I think some of the participants are expecting to buy gas on the market opposed to having drilled it and produced it like we were hoping. But you are seeing and hearing about more long term sort of robust programs out of the participants there.
Like the there’s a lot of gas behind pipe for certain of the LNG Canada participants, but some of them are still short of gas. So it’s a bit of a mixture, but it hasn’t been the sort of overnight step change in activity that I think a lot of people maybe have been modeling.
Conference Operator: The next question comes from John Gibson with BMO Capital Markets. Please go ahead.
John Gibson, Analyst, BMO Capital Markets: Good morning, guys. Thanks for taking the question. First one, we saw a big merger, Canadian producer merger in Montney and Tubernet close today, I guess. I was wondering if that has impacted your activity level schedule or client base as we move forward? Or is it still a little bit too early?
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: No. I mean generally, I
Scott, Chief Financial Officer, Trican Well Services Limited: would
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: say it’s positive for us. We worked for both companies. On the cementing side, the combined co won’t run as many rigs as the two individuals were in aggregate. So we’ll lose some rigs from us on the cementing side, but probably pick up more frac work. So you got to you have to expect these things.
And I think we’ve done a really good job of being closely aligned with the companies that are likely to buy versus sell. And this is a perfect example of that. We had worked more for Whitecap than we did for Barron from a revenue perspective just because the fracking is so much bigger than the cementing. But yes, we’re I don’t we’re not it is what it is. You have to expect something like that happening a couple of times a year.
So we’re not worried about it at all.
John Gibson, Analyst, BMO Capital Markets: Okay. Got it. You’ve previously spoken for an update for M and A and you pointed to cementing as meaning more scale. Is this a line you could focus on in terms of acquisitions or even grow the fleet organically?
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: Yes. We have spare sorry, John, that you said cementing, right? Yes. Yes. We have spare capacity, spare equipment capacity.
We don’t have the staffing capacity. So we are going to continue to try to grow it in the eastern areas that we had previously been active in. And we’ll just have to sort of slowly but surely staff up. And maybe we’ll have to open up a base or a couple of field locations or something like that to provide support. But yes, I’m not terribly optimistic on the M and A side in cementing.
There’s only a few key players in Canada, and I don’t get the sense that any of them are for sale. But we have active files on sort of every one of our competitors and every one of our divisions. So we’re always looking at everything. So anything is possible, but it’s not something I think we can sort of rely on as part of a business plan as to complete M and A in any division, frankly.
John Gibson, Analyst, BMO Capital Markets: Okay. Got it. Just a quick one to end here. Is $10,000,000 a good run rate over the next few years to think about for technology investments? Or should we see that sort of step down in your sort of two and three?
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: It’s better.
Scott, Chief Financial Officer, Trican Well Services Limited: Yes. You didn’t see the glance I got there. But I mean, this project is going
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: to it’s going to be
Scott, Chief Financial Officer, Trican Well Services Limited: a multiyear project as we go forward. So there will be some spend next year as we work our way through it.
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: I mean, I would use that as a run rate for now, and
Scott, Chief Financial Officer, Trican Well Services Limited: then we can adjust it as we go.
Conference Operator: This concludes the question and answer session. I would like to turn the conference back over to Mr. Fedora for any closing remarks.
Brad Fedora, President and Chief Executive Officer, Trican Well Services Limited: Okay. Thank you, everyone, for your time. If you have any more questions, please call. We are available for today and the rest of the week if any other questions come up. Thank you again.
Conference Operator: This brings to a close today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
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