Calfrac Well Services Ltd. on Thursday announced a capital budget for 2011 of $280 million. The capital program will focus on further bolstering Calfrac's fracturing, coiled tubing and cementing capacity, infrastructure and logistical capabilities as it continues to expand its presence in the emerging North American unconventional oil and natural gas markets. Additional equipment is also being constructed to support Calfrac's growing Russian and Latin America operations, including the anticipated entry into the Colombian pressure pumping market.
The Canadian division's 2011 capital budget totals $113 million, which includes the addition of approximately 91,000 hydraulic horsepower ("HHP") to Calfrac's Canadian fleet. A portion of this capital is supported by a recently executed long-term agreement with one of the leading operators in the Cardium play. Upon completion of the 2011 capital program, total horsepower capacity in Canada will reach approximately 339,000HHP.
The United States division's 2011 capital budget totals $129 million. This program includes the addition of approximately 74,000 HHP and support equipment to the Company's U.S. pressure pumping fleet. The focus of this capital will be to further expand Calfrac's presence in the oil producing regions of the U.S. market. Upon completion of the 2011 capital program, Calfrac's U.S. division's total horsepower capacity will be approximately 405,000 HHP.
The Russia division's 2011 capital budget totals $27 million, which includes the construction of the Company's sixth fracturing fleet and eighth deep coiled tubing unit as well as additional equipment to support the Company's existing operating fleet.
In addition to the 2011 capital program outlined above, Calfrac expects that during the first six months of 2011 it will complete the remaining portion of its 2010 capital program with the anticipated expenditure of approximately $120 million, consisting primarily of capital associated with the construction of two large fracturing spreads to service two long-term minimum commitment contracts in the Marcellus Shale play and to supplement Calfrac's North American horsepower capacity.
The combination of expected strong future cash flows, the completion of our recent US$450 million senior note issue and the $175 million of undrawn credit facilities positions Calfrac to pursue growth opportunities in a prudent manner with a strong balance sheet that provides flexibility to respond to market opportunities as they arise.
Calfrac also announced that its Board of Directors has approved a 50% increase to its semi-annual cash dividend from $0.05 to $0.075 per share, thereby increasing the annual dividend to $0.15 per share, and has declared a dividend of $0.075 per common share to be paid on January 15, 2011 to shareholders of record on January 3, 2011.
Calfrac provides specialized oilfield services to exploration and production companies designed to increase the production of hydrocarbons from wells drilled throughout western Canada, the United States, Russia, Mexico, Colombia and Argentina.
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