Calgary-based Calfrac Well Services Ltd. announced Friday it was cutting its capital spending as well as reducing its North American workforce by 40 per cent.
In a news release the company said the moves are being made “as a result of the rapid and unforeseen deterioration in business conditions resulting from the COVID-19 global pandemic and the oil price war among OPEC+ members. These global events have caused a significant decline in oil prices globally, resulting in reductions in the planned spending of many of Calfrac’s clients.”
Calfrac its capital program will be reduced by approximately $100.5 million down to approximately $55.0 million. Calfrac has also reduced the number of crews being deployed in its North American operations from 19 fleets to nine.
The following actions, it said, are also being taken to reduce costs:
- Reduced Calfrac’s board compensation by 25 per cent;
- Reduced Executive officer salaries by 10 per cent;
- Eliminated retirement savings matching contributions, which previously represented up to six per cent of base salary;
- Reduced staff employee salaries by five to 10 per cent;
- Modified work schedules to provide increased flexibility to respond to fluctuating demand for the company’s services, while reducing personnel costs;
- Reduced or eliminated several compensation programs and bonuses; and
- Restricted discretionary spending and suspended all non-emergency travel.
“It is difficult to predict how the COVID-19 pandemic and OPEC+ oil price war will continue to affect the demand for Calfrac’s services. However, Calfrac’s management and board of directors will continue to monitor and assess the evolving circumstances to determine if further measures will need to be taken to mitigate the impacts to the Company of these unprecedented challenges,” it said.
