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Written by SmallCappower.com

Trican Well Service Ltd. (TOLWF)  Continued demand for fracturing and other services coupled with scale post its merger with Canyon Services have resulted in a strong 2Q17 performance, with revenue up 322% and adjusted operating income coming in at $12.2 million in Canadian dollars compared to a loss in the prior year quarter. Notwithstanding strong fundamentals, the share price of Trican Well Service is down more than 20% over the past three months, which offers an attractive entry point for investors.

About Trican Well Service Ltd.

Trican provides comprehensive equipment and services for the exploration and development of oil and gas reserves in Canada. Its recent merger with Canyon Services has made Trican the largest driller in Canada with a 37% share of total capacity.

Investment Thesis

Trican merger with Canyon Services creates the largest driller in Canada

The recent (closed in June 2017) merger with Canyon Services has significantly expanded the scale of Trican Well Service. Post merger, the Company has become the largest oil driller in Canada, operating a fracturing fleet of 680,000 HP for a 37% share of total Canadian capacity. The merger has also expanded the scale of Coiled Tubing, Acid, and Nitrogen businesses of Trican. Of the estimated $20- $40 million in annual synergies post the merger, Trican Well Service has already realized $18 million (Canadian) as of July 30, 2017.

Canadian Fleet and Revenue Contribution by Segment

Geographically, Trican Well Service has presence across Western and southern Canada, covering key oil plays including Montney Shale, Deep Basi, Cardium and Bakken Shale, among others.