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Calgary’s Source Energy to seek $250-million in IPO

Hydraulic fracturing sand is seen an operation near Bowden, Alta., Tuesday, Feb. 14, 2012.

Jeff McIntosh/The Globe and Mail

Source Energy Services Inc., Canada's largest distributor of high-quality fracking sand, is seeking to raise about $250-million in an initial public offering as a revival in oil drilling boosts demand for its product, according to people familiar with the matter.

The Calgary-based company, which is backed by TriWest Capital Partners, has hired Bank of Nova Scotia, Morgan Stanley and Bank of Montreal to lead the share sale, according to a filing late Monday. The company is seeking a valuation of about $1-billion, according to people familiar with the matter.

The company said in the filing it plans to use the proceeds from the offering to pay for the acquisition of a new facility near Blair, Wisc., pay down debt and other capital expenditures.

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A representative for Source Energy declined to comment.

Source is the second Canadian oilfield services firm to file for an IPO in a week after STEP Energy Services Ltd. filed for its own initial stock sale last Thursday. Canadian Imperial Bank of Commerce and Raymond James Financial Inc. will be leading STEP Energy's sale.

Source Energy is hoping to capitalize on a turnaround in oilfield services as North America's fracking industry begins to improve on higher crude prices.

Hydraulic fracturing is a technique that blasts water, sand and chemicals underground to release trapped hydrocarbons. Source Energy supplies and distributes fracking sand and has operations in Western Canada, North Dakota and Texas, according to its website.

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