Wilks Brothers buys up Canadian fracking shares

Calfrac Well Services Ltd. surged after Texas investment firm Wilks Brothers LLC boosted its stake in the fracking company in a bet on a rebound in Canada’s beaten-down oilpatch.

Calgary-based Calfrac rose 3.2 per cent in Toronto, even as U.S. oil prices fell. The company’s shares have climbed more than 40 per cent since a low on June 26, despite lagging commodity prices.

Closely held Wilks Brothers said after market closed Thursday that it holds about 16.4 million shares in Calfrac after raising its stake to 12 per cent, from 10 per cent. That would make the firm the secondlargest shareholder behind Matco Investments Ltd.

Wilks Brothers is also the top holder of Calgary-based Trican Well Service Ltd., with about a 7.3 per cent stake, according to Bloomberg data.

Dan and Farris Wilks live in rural Cisco, Texas, and owe their fortune to Frac-Tech Holdings LLC, which they founded and built into one of the largest pressure pumping companies in North America.

“Much like the company’s involvement in Trican, we wouldn’t expect the Wilks Brothers to push towards trying to take an active role in managing the company and believe the investment will likely be fairly passive in nature,” Jon Morrison, an oil services analyst at CIBC Capital Markets, said in a note to clients.

A Wilks Brothers spokesman declined to comment on the holding.

The majority of Canadian oilservice companies are trading at “very reasonable multiples,” Michael Mazar, an analyst at BMO Capital Markets, said in a note. Mazar sees investors focusing on any forward outlooks and messaging heading into next year.