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Calfrac profit soars on record revenues in fourth quarter, dividend raised

CALGARY – Calfrac Well Services Ltd. (TSX:CFW), a Calgary based oil and gas services company, is raising its dividend and lowering capital spending this year after reporting higher profits and revenues.

The company said Tuesday it has raised its semi-annual cash dividend to shareholders by a third to 10 cents a share from 7.5 cents after solid quarterly and annual financial results.

The company, which operates in Canada, the U.S. Latin America and Russia, paid $7.7 million in dividends last year.

As well, Calfrac said Tuesday it will cut its capital spending budget by $94 million – or 26 per cent – to $271 million, mainly in the United States.

“Calfrac wishes to strategically employ its capital budget to support existing customer commitments as its customers further develop their completion requirements in several North American unconventional resource plays through 2012,” the company said in a release before stock markets opened.

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“During the balance of 2012, the company expects to make fewer new equipment additions relating to potential future demand that is not supported by existing or pending contracts.”

Calfrac also said the cut in capital spending “also recognizes the lower horsepower requirements of many of today’s developing unconventional oil and liquids-rich reservoirs, which are the current focus of many customers” because of low natural gas prices.

In its financial report, Calfrac said its net profits rose to $78.9 million or $1.79 per share, up from net profits of $16.1 million or 37 cents a year earlier.

Fourth quarter revenues hit a record $490 million against $268.7 million a year earlier as the company cashed in on soaring demand for well pumping services in the shale gas sector in Canada and the United States.

For the full year, the company’s earnings more than tripled to $187.5 million from $49.5 million, while annual revenues jumped 64 per cent to more than $1.5 billion from $936 million