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Investors will have to wait longer for big changes at GasFrac Energy Services Inc. to bear fruit, a realization that prompted an 8 per cent drop in the shares on Friday.

GasFrac, known for its technology that involves using propane to fracture rock during oil and gas drilling operations, has reconstituted its board of directors following the entrance of New York-based activist investor Julien Balkany in the spring.

Second-quarter results, however, showed the company still trying to move past struggles that have pressured the stock, including heavy dependence on a handful of customers.

Revenue in the quarter rang in well under analysts' expectations at $7.3-million, compared with $30.6-million during the same period in 2013. The company reported a net loss of $31.7-million, or 50 cents a share, compared with a loss of $4.8-million, or 8 cents a share, last year.

About half the loss was the result of a writedown of some inventory and operations.

GasFrac was hit by a big drop in spending by U.S. customer BlackBrush Oil & Gas, which was recapitalized in a takeover by a private equity firm. GasFrac said the company is restarting operations this month. Its big Canadian client, Husky Energy Inc., meanwhile, has shifted a large portion of its spending to Canada's East Coast, cutting its spending on the technology.

Scott Treadwell, analyst with TD Securities, had expected revenue of $36.6-million for the quarter. "We believe that GasFrac will have to seek new customers as it appears its core clientele are slowing down operations, which drove the lion's share of its revenue," he wrote in a note to clients.

The company has appointed Mark Williamson as interim CEO as it searches for a replacement for James Hill, who has stepped down.

"The hurdle for this company has been that it tried to compete directly with entrenched technologies in saturated markets," Mr. Williamson said in a conference call. "Like you, the board is not satisfied with the current results, nor the financial state of the company."

After he built up his stake in GasFrac, Mr. Balkany said the company's problem was that it had not tried to push its technology specifically in regions where water – used in most fracking operations – is scarce.

Mr. Williamson said the board has launched a review of all operations, including marketing operations and costs.

The company said it is unclear when it will be cash flow positive, and it may have to raise capital to fund operations. It warned that if it cannot secure necessary financing, it could be forced to weigh alternatives, including a sale of some or all of its assets.

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