Source Energy scales back IPO as oil prices slip
|calgaryherald.com 20 Mar 2017 at 11:22|
Source Energy Services frac sand terminal located in Wembley Alberta. The facility can hold up to 50,000 tonnes of frac sand, approximately 500 rail cars full. The facility has its own conveyer belt system that hauls in the sand from the rail cars and is then shipped out to well sites in the region. Jocelyn Turner / Grande Prairie Daily Herald-Tribune
Source Energy Services Inc., Canada’s largest distributor of fracking sand, has cut the size of its initial public offering to about $250 million from $300 million amid a decline in oil prices, according to a document obtained by Bloomberg News.
The Calgary-based company plans to sell shares at between $13 to $15 apiece, down from $17 to $20 a share previously, the document shows. The company expects to sell 16.7 million to 19.2 million shares, implying a raise of about $251 million at the midpoint of the share and price range.
A representative for the company wasn’t immediately available for comment. Source is backed by Canadian private equity firm TriWest Capital Partners.
About 16.2 million to 18.7 million commons shares will be sold by a treasury offering, while between 500,000 to 600,000 will be sold through a secondary offering, the document shows.
Last week, another Calgary-based fracking services company, STEP Energy Services Ltd., postponed its own IPO after U.S. oil this month dipped below US$50 a barrel for the first time in 2017 as near-record U.S. stockpiles and rising output weighed on the production reductions by OPEC and its allies.
Source said in a filing earlier this month it plans to use the proceeds from the offering to pay for the acquisition of a new facility near Blair, Wisconsin, pay down debt and other capital expenditures. The company supplies and distributes fracking sand and has operations in Western Canada, North Dakota, Wisconsin, and Texas, according to its website.