Trican Closes Acquisition of Tubing Services Firm Iron Horse

Trican Well Service Ltd said it has closed its $56.26 million (CAD 77.35 million) acquisition of privately owned fracturing and coiled tubing services provider Iron Horse Energy Services.

Iron Horse operates primarily in the Cardium, Charlie Lake, Mannville Stack, Viking, Montney and Shaunavon plays in the Western Canadian Sedimentary Basin (WCSB).

Under the terms of the acquisition, Iron Horse shareholders received approximately $77.35 million in cash and approximately 33.76 million common shares of Trican, according to a news release.

Trican said it has appointed Iron Horse Chairman and CEO Tom Coolen to its board of directors.

The Calgary, Alberta-based company said it received clearance from Canada’s Competition Bureau on Aug. 20.

“This acquisition augments our strategy and aligns with our long-term vision for growth and innovation in Canada. We look forward to better serving customers in all areas of the basin and creating meaningful value for our shareholders,” Trican President and CEO Brad Fedora said.

Iron Horse “extends Trican’s fracturing footprint and adds industry-leading coiled tubing integrated fracturing expertise,” according to an earlier statement. The acquisition adds over four fracturing spreads and 10 coiled tubing units, which will augment Trican’s services offering throughout the WCSB across the drilling, completion, and production lifecycles, the company said.

Iron Horse will operate as a wholly owned division of Trican, continuing to serve its existing customers while increasing its footprint with the support of Trican’s resources. Trican earlier said it expects to retain all of the existing management and employees of Iron Horse.

Positive Trends Seen Despite Macro Uncertainty

In its earnings release last week, Trican said the “trends are positive” despite the uncertainty in the continuing evolution in the political and regulatory environments of Canada and the USA. “Despite some uncertainty in the short term, our overall outlook for the next few years remains positive as Canadian market fundamentals continue to be attractive for fracturing, cementing and coiled tubing services in Western Canada,” the company said.

Trican said the start of liquefied natural gas (LNG) exports from the LNG Canada facility in Kitimat, British Columbia, was a “major turning point for Canadian energy”.

“Canada’s first large-scale LNG exports mark a significant structural shift, allowing our customers to sell oil and natural gas into global markets, particularly in Asia, benefiting from reduced reliance on the U.S. domestic market and prices. This increased export capacity for markets outside North America is anticipated to increase natural gas demand and prices as LNG exports, which are new to Canada, represent over 10 percent of current Canadian production,” Trican said.

“In parallel, the Trans Mountain Pipeline expansion is now fully in commercial service, increasing oil export capacity from Alberta to the West coast of Canada and helping narrow price differentials that have historically disadvantaged Canadian crude.  We are encouraged by the progress being made at other LNG export facilities in Canada including Woodfibre and Cedar LNG which have reached a positive final investment decision, and construction is underway representing a combined additional export volumes of 0.7 bcf/d. Woodfibre LNG is progressing toward a targeted 2027 in-service date, and Ksi Lisims LNG is advancing through regulatory and permitting stages,” the company continued.

Trican said that Canada’s expanded export capacity for oil and natural gas “creates a positive backdrop for drilling and completions activity in the WCSB, and the associated oilfield services such as pressure pumping”.

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