Skip to main content

Source Energy Services Ltd. is moving along with its plans to IPO, while STEP Energy Services Ltd. is delaying its public debut amid falling oil prices

Todd Korol/The Globe and Mail

Two Canadian energy service firms mulling initial public offerings are taking different approaches amid falling oil prices, with one forging ahead with its plans to make a public debut while the other is slamming on the brakes.

Source Energy Services Ltd., a TriWest Capital Partners company which produces sand used for hydraulic fracturing, is proceeding with marketing its stock sale and has plans to price its shares within the next week, according to one source familiar with the matter. The Calgary-based company said earlier this month that it aims to raise $300-million.

On the other hand, fracking company STEP Energy Services Ltd., also Calgary-based, has delayed its IPO as renewed weakness in oil prices undermines confidence in the sector. The company had filed paperwork for the offering in late February, aiming to raise about $200-million.

Story continues below advertisement

However, U.S. oil prices have fallen more than 10 per cent since then, sinking back under $50 (U.S.) a barrel and dashing optimism that had returned to the industry after a lengthy downturn.

Indeed, shares of STEP's publicly traded competitors have also weakened considerably in recent weeks. The Canadian energy sector is also grappling with the possibility of being slapped with a U.S. border adjustment tax, which could hurt exports.

As a result, STEP has postponed the offering, while reducing the targeted price range of its IPO to $10 to $12 (Canadian) per share, from $14 to $16 previously, according to a person familiar with the marketing process. The company is now planning to raise $150-million, with private-equity backer ARC Financial Corp. reducing the size of a planned secondary offering by $50-million, the person said.

STEP could revisit plans in six weeks, the person added, although exact timing will hinge on oil prices and overall sentiment. As oil see-saws, investors are "just sitting," the person said.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies