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Calfrac to boost spending Add to ...

Calfrac Well Services Ltd. , a Calgary-based energy services and well drilling company, is raising its 2010 capital spending program by $56-million to a revised total of $236-million.

The company said Thursday the increase is focused on building fracturing equipment for the its U.S. operations.

Hydraulic fracturing is a process that results in the creation of fractures in rocks aimed at increasing the output of an oil and gas well. The process has been used for more than 60 years to stimulate energy wells, but is being increasingly used in shale gas drilling, where natural gas is trapped underground in rock formations.

Shale gas formations in northern B.C., the U.S. Midwest states, the Rocky Mountain area and Texas are becoming an increasing source of North America's natural gas supply.

The expansion comes after a recent long-term minimum commitment contract with Exco Resources (PA), a joint venture between Exco Resources Inc. and BG Group, plc on operations in the the Marcellus shale formation in the U.S. Midwestern states.

Calfrac said the capital spending increase will add another 55,000 horsepower to Calfrac's fracturing fleet, bringing its total capacity to 650,000 horsepower.

About $66-million of the 2010 capital program will be spent in 2011, the company said.

Calfrac provides specialized oilfield services to exploration and production companies operating in western Canada, the United States, Russia, Mexico and Argentina.

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