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Executives

Doug Ramsay - President and CEO

Laura Cillis - SVP of Finance and CFO

Gordon Dibb - COO

Tom Medvedic - SVP of Corporate Development

Analysts

Chad Friess - UBS

John Tasdemir - Canaccord Adams

Roy Ma - Stonecap Securities

Dana Benner - Thomas Weisel Partners

Brian Purdy - National Bank Financial

Roger Serin - TD Securities

Shawn Boyd - Westcliff Capital Management

Todd Garman - Peters & Company

Kevin Lo - Firstenergy Capital

Jeff Fetterly - CIBC World Markets

Shawn Boyd - Westcliff Capital Management

Presentation

Calfrac Well Services. (OTCPK:CFWFF) Q1 2010 Earnings Call May 6, 2010 12:00 PM ET

Operator

Good day. My name is Simon [ph], and I will be your conference operator today. At this time I’d like to welcome everyone to the Calfrac Well Services First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session.

(Operator Instructions) Thank you. Mr. Ramsay you may begin your conference.

Doug Ramsay

Thank you, Simon. Good morning, and welcome to our discussion of Calfrac Well Services first quarter results. Before we get started I'd like to outline how this conference call will be conducted.

Laura Cillis, our Senior Vice President of Finance and Chief Financial Officer will begin an overview of our quarterly financial performance. I’ll then provide review of operation, discuss our outlook for 2010. After which Laura Cillis, Gordon Dibb and Tom Medvedic and I will be available to answer questions that you may have.

I will now turn the call over to Laura.

Laura Cillis

Thank you, Doug, and thank you, everyone for joining us today. Before I begin my discussion this morning, I would like to know that this conference call will contain certain statements and/or expressions that could be consider to be forward-looking statements, under applicable securities legislation. Our assessment of future plans and operation is based on expectation that involve a number of business risks and uncertainties.

These risks are set out in detail in our most recently filed Annual Information Form, and include but are not limited to, commodity prices for Oil and Natural gas, weather conditions, currency exchange rates, national and international economic condition, political uncertainties, product, and supply availabilities, labor shortages, and the ability of our customers to access credit in capital markets. These conditions could cause the Company’s actual results to differ materially from our current expectations.

During the first quarter of 2010, Calfrac achieved the following financial results in comparison to the first quarter of 2009. Consolidated revenue increased from a 180.4 million in 2009 to record 227.1 million, with increased revenue in Canada, Russia and Latin America being offset by lower reported revenue in United States.

Operating income which is income generated after operating expenses and selling, general and administrative expenses was 17% of revenue, which increased from 15% generated in the first quarter last year.

EBITDA was 40.9 million for the first quarter of 2010, a 58% increase compared to the same quarter last year, and net income was 13.6 million or $0.31 per diluted share compared to 5.5 million or $0.15 per share in the first quarter of 2009.

In Canada, total revenue increased by 57% to 133.6 million in the first quarter of 2010 from 85.1 million for the same period of 2009. Saskatchewan revenue from Canadian operations was 123.3 million compared to 72.5 million in 2009.

Average revenue per job for fracturing increased by 44% primarily due to an increase in the completion of larger jobs in the Montney and Deep Basin regions combined with an increase in oil related fracturing in the Cardium play located in central Alberta, and improved pricing as the quarter progressed.

Significant leverage was achieved with the utilization of the added horsepower from the Century acquisition last November.

Canada’s operating income for the first quarter of 2010 was 39.4 million, as compared to 9.3 million in the same period of 2009. As a percentage of revenue, the first quarter of 2010 was 30% compared to 11% in 2009. Operating margins in the first quarter of 2010 were positive impacted by the higher activity, better pricing and larger job sizes.

For the United State, total revenue was 56 million, a decrease of 18% over the same quarter of last year. The decrease was primarily due to the depreciation of the US dollar, competitive pricing pressures, and lower cementing activity levels, this was partially offset by higher fracturing activity levels in the Rocky Mountain region and increasing utilization associated with fracturing operations in Pennsylvania.

Operating income decreased from 17.2 million at 25% of revenue in 2009 to 4.1 million, which was 7% this year. Operating margins to this segment have been negatively impacted by the reduced pricing levels, the higher relative cost based during the startup period for fracturing operations in the Marcellus and higher equipment repair expenses due to long sustained pump time and limitations on pumping capacity in certain markets for the unconventional resource plays. This was partially offset by the impact of the depreciation at the US dollar.

Calfrac’s revenues from its Russian operation, during the first quarter of 2010 increased from 15 million in 2009 to 17.6 million mainly due to higher coiled tubing and fracturing activity levels, as a result of a larger equipment fleet and customer based combined with an increase in fracturing job sizes offset partially by the impact of long periods of cold weather on equipment utilization during January and February and a depreciation of the Russian rouble by 5%.

The provision of proppant for a new customer in Western Siberia and higher fuel consumption and downtime driven by persistent cold weather during the first two months of this year, resulted in operating margins decreasing from 21% in 2009 to 4% during the first quarter of 2010, despite the higher revenue base.

Latin America, which consists of our Mexican and Argentinean operations, generated revenue of $19.9 million in the first quarter of 2010, compared to $11.8 million in the same quarter of last year. The increase in revenue was primarily due to higher fracturing activity with the expansion of the company’s fracturing operations into the Chicontepec region during the second quarter of 2009, and the commencement of cementing operations in Mexico during the third quarter of 2009. Offset partially by the depreciation of the Mexican and Argentine peso versus the Canadian dollar, lower fracturing activity and smaller job sizes in the Burgos region of Northern Mexico combined with smaller job sizes in Argentina.

Operating margins decreased from 2009 primarily as a result to the boarder scale of fracturing operations in Mexico combined with the shift to lower margin work in the Chicontepec regions. In addition, lower levels of equipment utilization in Fayetteville [ph] negatively impacted margins.

The increase in corporate expenses for the first quarter of 2010 from the same period of 2009 was mainly due to higher compensation expenses as result of an increase in the number of personnel supporting the Canadian operations and an increase in their related cost.

During the first quarter of 2010, the company incurred a foreign exchange gain of $2.1 million in comparison to a loss of $1.6 million last year. Foreign exchange gains and losses arise primarily from the translation of Calfrac's international operations in Russia, Mexico and Argentina using the temporal method. The foreign exchange gain recorded in the first quarter of 2010 was primarily related to the translation of a US dollar-denominated inter-company loan from a subsidiary in the United States. As the US subsidiary is translated using the current rate method, the associated foreign exchange loss is recorded in Other Comprehensive Income.

The effective tax rate for the first quarter of 2010 was 10% compared to 24% for the same period last year. The lower effective tax rate which primarily reach with greater proportion of the companies earnings being generated from Canada and the related impact of the drawdown of the remaining deferred credit balance of $2.5 million in the first quarter of 2010. As a result, earnings in Canada will be taxed at the higher expected level of tax rate.

Turning to the balance sheet, the company executed the quarter in strong financial condition with working capital of $157.7 million and a long-term debt of $272.1 million, the majority of which is not due until 2015. We continue to monitor our balance sheet and cash position very closely. Including the credit profile of our all of our customers with the focus of maintaining strong, both the strong balance sheet and financial flexibility to pursue additional growth opportunity.

I would now like to turn the call back to Doug for an overview of the company’s operations.

Doug Ramsay

Well, thank you, Laura. I will now provide visual review of our operations during the past quarter and discuss our prospects for 2010. I’ll begin with the operations in Canada. The Company experienced strong demand for its fracturing and coiled tubing services throughout the basin during the first quarter of 2010. Activity continued to be concentrated in the unconventional natural gas resource plays of northern Alberta and northeast British Columbia as well as growing unconventional oil plays such as the Cardium, Viking, and Bakken. The Company is very encouraged by the broad momentum generated in the first quarter focused on the light oil plays in western Canada. Calfrac anticipates that activity will continue to build throughout 2010 and beyond. This should be create a much better balance in apply [ph] mix for this geographic segment and by the extension most stable activity levels. In fact, oil related completion activity within the first quarter as compared to total completion activity was its highest point over a decade.

The first quarter of 2010 marked the first full quarter of operations since the acquisition of Century in November 2009. The operational capacity for us 70,000 hydraulic horsepower and 10 coiled tubing units, and experienced workforce acquired from Century were integral to achieving record levels of quarterly revenue. As the demand for pressure pumping services in Canada increased significantly from the fourth quarter of 2009, pricing and operating margins in this market also strengthened during the first quarter, pricing in particular especially strong during the latter half of the quarter.

Turning to United States. Fracturing activity levels in the Rocky Mountain region were higher than expected during the first quarter due to increased pipeline capacity alleviating previous natural gas takeaway issues. In the Fayetteville basin of Arkansas, fracturing activities remained strong, but were impacted by unseasonably cold weather in January and February, which hampered our operations.

Our operating flexibility arising from the acquisition of fracturing assets from Pure, Calfrac entered the Marcellus play in Pennsylvania in October 2009. Calfrac's operations remain in the start-up phase in this market and with drilling activity began to increase and the Company expects higher well completion activities, improved financial performance through 2010.

Due to higher than plan activity levels in the United States in the first quarter horsepower capacity was constrained the Company’s Rocky Mountain Arkansas districts. As a result, significant number of major components failure occurred, resulting in higher than expected equipment repair cost.

The deployment of additional pumping capacity end of March and early April Calfrac’s US fracturing equipment fleet returned to a more often [ph] operating configuration and Company expects these expense return to historic level for remainder of 2010.

Quarter-over-quarter the financial results of this segment were also significantly impacted by 16% depreciation in the value of US dollar as compared to Canadian dollar. Towards the end of the first quarter, Company began to experience in material improvement in pricing levels throughout this geographic segment, the full impact of which is anticipated to be realized during the remainder of 2010, which will lead to improved financial performance.

During the first quarter, the Company signed eight annual contracts with two of Russia's largest oil and natural gas companies. In order to meet these contractual commitments, Calfrac deployed an additional fracturing spread and coiled tubing increase in Western Siberia in January 2010.

Fracturing and coiled tubing operations in the quarter was significantly impacted by long period of cold winter weather in January, which continued into February. The Company reported financial results, were also impacted by 5% decline in the value of the Russian rouble, as compared to first quarter of 2009. However, Calfrac expects high levels of equipment utilization, improved financial performance results throughout the remainder of the year due to a larger operating scale.

In Mexico, Pemex continued to focus its drilling and completion activities during the first quarter on its Chicontepec field where Calfrac currently operates two fracturing spreads and five cementing units. The Company expects that oilfield service activity in this region during the remainder of 2010 will be focused primarily on completion activities, which should result in high utilization for Calfrac's fracturing fleet.

Fracturing activity in the Burgos natural gas field of northern Mexico, was lower than anticipated and the Company expects that activity will not improve in a meaningful way in 2010, as Pemex focused it activities in oil producing regions of the country. In the first quarter, activity in the Company's cementing operations in Argentina was relatively strong and continued to generate favorable operating results. Calfrac continues to develop new market opportunities as the Argentine business environment evolves.

Now, briefly turn our attention to our future prospects. Improvement in the global economy facilitated higher drilling and completion activity in Canada and the United States during the first quarter of 2010. Exploration and development activity in these regions remain focused on horizontal wells, incorporating multi-stage fracturing and coiled tubing technologies in unconventional oil and natural gas resource plays. This industry trend is expected to result in an increase in overall utilization levels for the pressure pumping service industry during 2010.

In Canada, the Company expects fracturing and coiled tubing activity in the Horn River shale gas play in northeast British Columbia to recommence late in the second quarter with a majority of the activity occurring in the third quarter. Calfrac is currently augmenting its infrastructure in Dawson Creek and Fort Nelson to enhance the operating efficiency and effectiveness of its fracturing and coiled tubing operations in the region. Overall, the energy sector's ongoing focus on unconventional natural gas, oil plays and anticipated to result on high levels of pressure pumping equipment utilization in Canada throughout the remainder of the year and to drive the financial performance of Calfrac's Canadian operations.

The renewed focus on exploiting light oil basins with new technologies is particularly encouraging. Activity in the Cardium, Viking and Bakken plays is expected to continue to be very robust. As discussed, this industry trend has led to significantly greater commodity-based diversification of Company's Canadian operations.

In the Fayetteville shale play of Arkansas, fracturing and cementing activity is expected to remain strong during 2010 due to high overall demand for pressure pumping services. As a result of increased pipeline infrastructure, in the Rocky Mountain region of Colorado, fracturing activity levels in this region is expect to continue and the positive momentum throughout the remainder of the year.

Calfrac diversified its operations in the United States by commencing fracturing operations in the Marcellus shale play of Pennsylvania during the fourth quarter of 2009. The Company expects that drilling and completion activity in this new play will increase significantly as the year progresses, and lead to improved financial results in this market.

Pricing levels in the US market have improved substantially, which anticipated to drive improved financial results during the remainder of the year. As mentioned, Calfrac signed eight annual contracts with two of the Russia's largest oil and natural gas companies during the first quarter and currently operates four fracturing spreads, six coiled tubing units in this oil-focused market.

With a larger equipment fleet, broader customer base and fewer anticipated weather-related issues as spring arrives, the Company expects improved financial performance in this region during the remainder of 2010. Fracturing activity levels in the Chicontepec oil and natural gas field of central Mexico are expect to remain strong throughout 2010.

However, the Company's fracturing operations in the Burgos natural gas field of northern Mexico are anticipated to decline slightly as Pemex focuses on the development of its onshore oil-producing areas such as the Chicontepec region. Calfrac's Latin America management team is continuing to evaluate future opportunities for growth in the Latin America market.

Overall, demand for North American pressure pumping services in the short-term is expect to continue to increase from 2009, and the long-term outlook for the pressure pumping industry remains strong, due primarily to the diversity, magnitude and continued anticipated growth, unconventional natural gas and oil plays.

Calfrac continues to focus on streamlining its cost structure and improving operating efficiencies. The Company will continue to execute its business strategy by capitalizing on future growth opportunities while using a conservative financial approach in order to maintain a strong balance sheet and overall financial flexibility.

I am pleased to announce that our Board of Directors has approved a $44 million increase to the Company's 2010 capital budget for a revised total of $116 million, including carryforward capital. The majority of this new capital will be focused on the addition of 60,000 hydraulic horsepower to Calfrac's North American fracturing equipment fleet and will increase the Company's total pumping capacity to 530,000 horsepower upon completion of this program.

Delivery of these pumping units is anticipated to take place evenly throughout the next year and the final decision regarding deployment will be determined as market opportunities evolve. In addition, this revision to the capital budget includes the equipment related to the deployment of a fifth fracturing spread for the Russian market. It is expected that approximately $16 million of this capital program will be expended in the first half of 2011.

On the final mode [ph], Martin Lambert, a founding director of Calfrac Well Services, will not be standing for re-election at the Annual General Meeting. We thank Martin for his many outstanding contributions to the growth of Calfrac over the past six years and wish him the best of luck in his future endeavors.

Thank you for join us today. Laura, Gordon and I are now ready to take your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Chad Friess with UBS. Your line is open.

Chad Friess – UBS

Hi guys.

Gordon Dibb

Hi, Chad.

Chad Friess – UBS

First of, I guess, a couple of question on Mexico. Did you want to receive the full brunt of the slow down in the Burgos space and overall there would be further down draft over the rest of the year and if so can you give an idea of how much Burgos work can made up the Q1 revenue in the lay down segment?

Gordon Dibb

It’s Gordon Dibb. With respect to Burgos our contract has been extended to the end of December 2010. So we would expect to have a regional level of activities in Burgos. Turning to contracts of the third month and we see that increased steady, and there they had as you would know in the Burgos field there has been a fair amount of the – unless or due to the Mexican broader talents [ph] and even through that we’ve been able to keep that activity pretty steady. I was saying probably our manufacturing activity Burgos is about third of the total. They expected to increase dramatically but we expected to be pretty steady.

Chad Friess – UBS

Okay. Did you say third, did I hear that right?

Gordon Dibb

About a third, yes.

Chad Friess – UBS

Okay, great. To what extent will you be able to reposition assets within Mexico or even to the US, sorry within Mexico to the Chicontepec region where activity is a little bit stronger?

Doug Ramsay

Through our contract we have the ability to move those assets around. It’s all dependent on the utilization that we can get from these assets.

Gordon Dibb

It's all consumable that we receive another extension to our contract for 2011.

Chad Friess – UBS

Okay, great. And just quickly another question on US pricing. I was wondering if you can give an idea of the order of magnitude of how much pricing has improved over Q1 levels?

Gordon Dibb

Overall, we’re looking at 10% to 15% overall price increase for that entire geographic region.

Chad Friess – UBS

Okay, are there any differences geographically in terms of the magnitude or the direction of the price shifts?

Gordon Dibb

I think because of competitive reasons we don’t discuss that. We like to love it as the segment at this point.

Chad Friess – UBS

Okay. Great. Thank you, guys.

Operator

Your next question comes from the line John Tasdemir with Canaccord. Your line is open.

John Tasdemir – Canaccord Adams

Good morning, guys. Couple of things, one on the -- Doug, I think I heard you say that you’d expect the US margins to return to kind of normal levels this year. And just speaking a point in time, I look through your last year ago period and you had 25% operating margins. Is that the normalized margin in you mind?

Doug Ramsay

You know what, early to tell you, but we have purse these prices increase. We have had a -- we had some major issues when comes to some repairs, putting our equipment to be honest too hard in a period of time, and I think what both of those change we made in the pricing increases and the -- we did take a fairly big, I guess, our utilization levels are low in Marcellus play out of our (inaudible) operations there. So overall, I can’t put a pin in it, but I would think it could be normalized second half, should be somewhere in that range.

John Tasdemir – Canaccord Adams

Okay. That make sense, and I guess, just ramping up towards that in the second quarter a little bit?

Gordon Dibb

I think, John, I think BoC improvement obviously given the pricing kicking in the last Q1 or early Q2. We should see an improvement through Q2 and presumably the improvement persisting through the remainder of the year.

John Tasdemir – Canaccord Adams

Okay. And switching back to the next go, I just want to understand a little bit, a bit better. Do you expect a return -- kind of profitability or breakeven levels on operating side in Mexico or?

Gordon Dibb

What we did, I mean even in Q1 in the midst of that quarter, John I think there was an operating we did have positive operating margins in that specific side, right? And so, certainly from our perspective, Doug had mentioned we expect to see a fairly robust activity in this context side of things on the fracturing side. So, yeah, our expectations now is we would expect to see some margin improvement through the rest of the year, but it will be somewhat needed right. It’s not -- I think we’re all very much aware of the business environment right now, but certainly, from where we’ve been able to derive, the focus of the activity in Chicontepec field will be specifically focused on the completion side. And so, we think we’re relatively well positioned in that particular area.

Douglas Ramsay

And, if you remember John we are contracted in our fracturing business directly to pay maximum. And we’re relying on a third party or someone else to, so they are working in that area, right?

Unidentified Company Speaker

Yes. And I just spoke on the return of profitability, you guys had a problem once and it’s not happening, [Inaudible] Yeah. You bet.

John Tasdemir – Canaccord Adams

And then, finally in Canada, I think you guys had mentioned before that the days are lot more busy now in the second quarter given the fact that people are now they want to spend the money on keeping the fluids freeze up is Keystone Canada this year, point to be a lot more moving to the downturn or we’re still expecting the seasonal 50% haircut that one is going forward?

Douglas Ramsay

Very well independent, we had -- we think that the an over the expansion into the Q1 enthusiasm because weather was cooler in April and allow us to get some of this work done that was really backlog work some, but we are experiencing, I guess 2 inches snow in my place just in the Calgary right now. So this was made of six, so it really depended on weather and its throughout the whole basin for over expenses weather or so we expect May to be, I guess the lowest utilize month and we have some good projects starting up in June, but that again John that will be access related as much been it was historically if you go back 10, 15 years because there is a better infrastructure in place of roads and matins on so forth, but we can’t really predict what’s going to happen in the month of May and accounted we do have a certain that really, really positive all of common business that’s waiting for opportunity for access, right. So that’s a long way saying we don’t know what’s going to happen in May.

John Tasdemir – Canaccord Adams

Still there it weather depend, okay. I just….?

Douglas Ramsay

All huge, huge.

John Tasdemir – Canaccord Adams

Okay. That’s all I got, well thanks everyone, thanks.

Douglas Ramsay

Thanks.

Operator

Your next question comes from the line of Roy Ma with Stonecap Securities. Your line is open.

Roy Ma - Stonecap Securities

Good morning, everyone.

Unidentified Company Speaker

Good morning,

Roy Ma – Stonecap Securities

First question, I want to ask how, what proportion of your expected fracturing jobs in Russia in 2010 is expected to include the provision propane versus jobs for your customers as well so as simple wide their own propane. And I’m trying to -- idea how that would be compared to discipline of flat job types in 2009 along the same basis?

Douglas Ramsay

The answer to your question, one of the four crews would be supply propane at very low market so one of those crews would be lower than our previous margins. But because the revenue includes the propane it might be a great percentage of 25%, so guessing how we said similar of 30%.

Roy Ma – Stonecap Securities

Okay. So and I assumed that in 2009 that type of job were not in the type of --

Douglas Ramsay

We did not worked for this customer in 2009.

Roy Ma – Stonecap Securities

Okay that’s helpful. And just a follow up question how much would you estimate the higher R&M cost in Arkansas that show into your profits in Q1?

Gordon Dibb

I would say right, broadly speaking I mean we would probably added a couple of sequence to our R&M through Q1 just based on those higher equipment repaired cost, and obviously quarter-to-quarter does fluctuate you know that’s we are probably looking at.

Roy Ma – Stonecap Securities

Couple of extra point you says those are on the operating margin side.

Gordon Dibb

Yes.

Roy Ma – Stonecap Securities

All right. Thank you very much. That’s all I have.

Doug Ramsay

Thanks Rollie [ph].

Operator

Your next question comes from the line of Dana Benner with Thomas Weisel Partners. Your line is open.

Dana Benner – Thomas Weisel Partners

Good morning, folks.

Doug Ramsay

Good morning.

Laura Cillis

Good morning.

Dana Benner – Thomas Weisel Partners

I wanted to start with the CapEx announcement. It's always an encouraging thing, almost always an encouraging thing to see companies investing in their business. And you chosen at this point to stay some what vague, I guess on deployment, I guess I am really looking for more color, is the simply the product of giving so many request for second half activity and I note that the balance of its being spend in the second half, or any additional color would be helpful?

Gordon Dibb

Dana, it's is Gordon. I think one of the big reason why we being a little late is that what we have to turn and to do is to be a little proactive and start a steady horsepower dealing [ph] so much a month over the next year. We just going to keep building dollars, so that we’re not behind the April all the time when we had get a contract, we need horsepower. We just think we’re at the sufficient size now that we can entertain a steady and consistent build of horsepower units, and that’s why we can determine exactly where they go and that's say [ph] chance of that to capital expenditure.

Doug Ramsay

And the large behind that Dana is that we are seeing larger jobs in all these major areas that we work. We also, I think on the long run or long term where we expect this is style of fracturing introducing in some of the other areas be at Mexico and Russia that we haven't even -- what we call the smaller horsepower or conventional work. So we’re just taking a lot longer-term approach to get better pricing, more consistent equipment, maybe our equipment is all relatively new, but it allows us some replacement in the future also.

Dana Benner – Thomas Weisel Partners

Is it, well the confidence in $80 oil and now it has passed about $4 gas, is that also maybe the thrust desire to move forward on this, is there any way to link this, review on commodity prices oil versus gas etcetera?

Doug Ramsay

We’re seeing a bigger shift certainly in Canada to some of these other term conventional oil plays Cardium, Viking, Lower Shaunavon. Some of these technologies using horizontal technologies, the different tool technology and timing with the fracturing chemistries that we have, have been very fair, and it moved up the scale of bunch. We see some good opportunities there and there are other opportunities in some other areas to exploit this horizontal technology in the oil reservoirs, right. For example the DJ Basin, the old retired field people think and they are looking at some of our customers who are dealing in horizontal technology in Niobrara, which will require more horsepower.

Dana Benner – Thomas Weisel Partners

All right. So, implicit understand, I guess, is the belief that the amount of extra capacity being introduced by yourselves and other sizable providers will not dampen the recovery and pricing?

Gordon Dibb

At this point that’s correct.

Dana Benner – Thomas Weisel Partners

Just one final question. I think you’d mentioned in your remarks, I think it was the introduction of the new proppant in Russia and I want if there’s more color you want to provide on that, or it’s relatively minor issue in terms of how the quarter unfolded or how a year unfold?

Gordon Dibb

I think in Russia, the fact that one of our associate who is supplying us on proppant would have the same [ph] on the first quarter. But it certainly, the reduction in margin was not solely attributable to that. As I said before, that’s only about 30% of total revenue. Russia in the first quarter and even today did not experience extreme cold that shut it down, but it was cold enough to have other operations. And it was cold for long enough and longer than normal and that had [inaudible] effect and we expected very our fuel cost as we’re looking into and if we just didn’t get the utilization that we were about because we will keep battling weather and we still battling weather in Russia.

Doug Ramsay

And also contributes to that is that we do have some other low margin, I guess, we will call commodity is a part of that contract we’re supplying 2 million packers at a small market there also. So, the jobs are higher in revenue but because of the lower margin on that these other -- I guess, we call cold commodities that has affected somewhat Dana, but Gordon is exactly right, we have longer colder, longer cold that we experienced a long time there. Then the same thing experienced in Arkansas, I guess seasonal level Arkansas you know work, and we had substantial snow falls in the Pennsylvania region, even more than normal there. So, weather as much as we saw like a bunch of all tired farmer sometimes, it doesn’t make an issue for us on these areas, right.

Dana Benner – Thomas Weisel Partners

Okay. That’s all I’ve got. Thank you very much.

Gordon Dibb

Okay.

Operator

Your next question comes from the line of Brian Purdy with National Bank Financial. Your line is open.

Brian Purdy – National Bank Financial

Hi, guys. I wanted to ask about the balance sheet and maybe a tide into your, I guess new strategy here in terms of trying to build equipment for growth ahead of having the demand in hand. Where do you see your comfort level in terms of pertaining to spend is there -- the cash flow number that you see your guys limited to in terms of pertaining to advance spending until you get to that point?

Laura Cillis

Brain, this is Laura. I mean, we do set targets that we look at with respect to debt to cash flow. We look at our annual cash flow that we generate from current operations. We manage our capital program according to the cash that we generate from operations. We feel pretty comfortable with the capital program that we have, that our board has approved for us and that we announced that, that we will be able to manage that program and still maintain a strong balance sheet.

Brian Purdy – National Bank Financial

Okay. I guess, you have seen you increased the capital budget couple of times in fairly rapid there is question here. So, is that tide into your seeing cash flow for 2010 improve or is that your outlook improve, or is it more related to this change in strategy?

Tom Medvedic

Sorry, Brian, it’s Tom here. I think view, I mean, if you take a look historically, Brian, it’s a slowly [ph] dynamic process for us. I mean, always we go through our annual budget cycle here in a fall. And on a quarterly basis we evaluate the market and opportunities and this time last year we ended up cutting our capital budget, to -- in response to what the market was.

I think from our perspective as we take a view and look at that and all the change that are taking place in a last four to six months has been a quite performed in the pressure pumping markets. So, you know really is that dynamic process, we continue to evaluate market opportunities and react accordingly.

Brian Purdy – National Bank Financial

Okay. And then, you know second I just wanted to ask about the, you know, either corporate expenses or SG&A which are way to look at it. Obviously you added a bit with the acquisition you have done, I am just wondering if you think what we see here in the current quarter is good run-rate going forward or do you expect any changes there?

Laura Cillis

Brian, I’ll answer that. When you look at our corporate cost for the first quarter, as we’ve mentioned some of that has to do with increase in our headcount in our people in our corporate cost. Part of which is building an organization to support our global organization. If not really driven by acquisition because the corporate costs are kind of independent of that, but also in addition to that as we’ve mentioned in the comments there is been some increase in the stock-based comp just a relative to where our price is at. But also we took the opportunity in the first quarter just based on our overall forecast for the year to grew [ph] some cost for bonus and which is something that -- given the situation we were in last year at this time, we didn’t have our anticipator [ph] a bonus program and quite happily we are at such this year.

Brian Purdy – National Bank Financial

Okay. And so just did you expect the current level is fairly good representation of what we should do expect for the rest of the year?

Laura Cillis

Well, it will depends, I mean, we’ll look at our -- the headcount is representative for the rest of the year and the cost associated there to. But with respect to bonuses in bonus level so we evaluate those each quarter as we revise our forecast over the course of the year.

Brian Purdy – National Bank Financial

Okay. Great. Thanks very much.

Operator

Your next question comes from the line of Roger Serin with TD Securities. Your line is open.

Roger Serin – TD Securities

Thanks very much. Good morning, everybody.

Tom Medvedic

Roger.

Roger Serin – TD Securities

I am wondering if you can give me some guidance so you’re doing these billed strategies what sort of margin expectations do you have to commit new capital for new equipment, are you looking at EBITDA margins in the 20% range is kind of a run-rate where it makes sense to get a return on capital?

Tom Medvedic

Roger from our perspective, our investment view hasn’t really change from the inception of company. We’ve always looked towards three year pay back in our equipment when we take a look at major investment and from that perspective that view hasn’t really changed. And so how that equates ultimately to EBITDA margin I guess it’s based on scope of the approach at with hand [ph] but that’s typically our investment philosophy is related major initiative so.

Roger Serin – TD Securities

Can you equate that to at regional utilization and margin expectation, Tom?

Tom Medvedic

Well, we go through sort of a calculation of expected returns on any given project which is quite comprehensive, so there’s number of factors that come in, Roger. So, I can’t provide any more color than that. But suffice to say, ultimately we look at those payback requirements in horsepower that we've got in the projects.

Douglas Ramsay

And we are building our lower margins, Roger we are building for -- certainly higher expectations we had in 2009 our EBITDAs and we’ve able to prove that with the installed-base we’re able to facilitate in Canada Q1 with some up-tick in pricing. So, when we look at these long term builds, we look at the 60,000 horsepower and probably this going to have 530,000 things done. So it's little better than 12%, and we think it's just been very proactive and we do try to put some real numbers around this and we've done some forecasting, strategizing where this will go. But, certainly today we can’t guarantee in EBITDA or ROC, return on capital imply for this, this kind of build versus one (inaudible) build 25 pumps for a certain regions and all that infrastructure was with it. So, it’s a bit hard to predict that but certainly not going for lower EBITDA or return on capital, less expectations we had in the past.

Roger Serin – TD Securities

Okay, Couple of things. Can you give me a sense of timing of when the fifth spread will get to Russia?

Gordon Dibb

We think, we hope that spread will be operational late in the third quarter.

Roger Serin – TD Securities

Okay. And so -- I just want to come back to some of the other questions on the first quarter in Russia. You’ve talked about sand being part of the explanation for the lower margins in the quarter weather is being part of it, what would you call would be onetime events if we include weather is being roughly onetime and maybe sand is being onetime as it related to the impact on your margins. Was it two-third of the impact or was onetime or can you give me a sense?

Gordon Dibb

That’s probably a decent percentage or direct to say from our perspective as we look at that, Russian margins for 2010, I mean, we don’t necessarily expect the margins for 2010 to be in that mid-20s region for 2010 per say though there will be somewhat lower than that but I would say, the largest impact for Q1, 2010 was the weather side and secondly it would have been on the nature of the work we’re doing there.

Roger Serin – TD Securities

Okay. So, you’re saying that you’re not forecasting, you’re not expecting mid 20% margins. Can you give us a guidance range of what you’re looking for?

Gordon Dibb

We don’t provide guidance. Roger in that context, I think, certainly our expectation is that margins will be significantly higher than they were in Q1 for obvious reasons and weather being the primary determine there. But, from our view at this point, you know probably, will be higher, but not, there is a level that we saw on 2009.

Roger Serin – TD Securities

Okay. Can’t blame me for drank. Can you give me a little bit of information on FlickPro [ph] sort of where you see they’re going in terms of utilization in the basin?

Douglas Ramsay

Well. It’s Doug, here. We think it’s a very-very good chemistry. The technology behind it was co-develop with one of our major Canadian customers. And I think they’ve actually stated was progress so I am not afraid to say that. It has applications certainly in the, as progress announcement in the down to queue and some other areas. We actually have used that similar that part of technology in that chemistry. And somebody other will call but more the early style well bores and that’s what the big application is, but we think there is some pretty good laid surround at this in order to took a probably 18 to 24 months to get a development in the share, what we are saying that there was an real good production behind this technology and there is application throughout the Western Canadian basin. We also think there is application in other geographic region where we work that we lend to this stop follow up of propane, but certainly in the, as called we the convinced -- unconventional conventional that has a lot of place of work and there could be some good application. And we are getting phone calls on the fairly regular basis. Especially now during Q2 in Canada where some of the customers have time to actually look at some of this technologies and efforts on science behind it, so certainly it’s not a company maker but one of our technology we have our back that we can bring to the market and this one has a certainly some very, very good, I guess we call qualifications of the production that the increase we’ve seen in some of the other reservoirs.

Roger Serin – TD Securities

It leads into my last question. I think to be that extracted from you on the last call rough allocation of oil versus gas activity on a revenue basis in sort of Q4 does that move materially in Q1 up or down?

Douglas Ramsay

We are still, we are about 30% on a revenue basis, in Canada comes from oil versus gas at this point. Now the definition is so broad, we do track a lot of, I’ll call it, oily gas wells where there is some furnace based produced and so on and so forth. So you can draw that if you want to manipulate the numbers you could probably go far as 40 but we like to say they were, about 30% of revenue comes from that in Canada, and we’re seeing more and more in the U.S. focused some there is we’ve been operating on those style of, we’ll call it higher condensate or highly propane gas wells, or higher I guess, higher condensate and oily more gas [inaudible] on this technology on.

So in Canada of 30 and then of course Russia is 100% oil, and Mexico would be 70% oil wells will be fracturing, I’m just turning to Gordon, he is shaking his head yes, so I’m not wrong. So overall the company I would think we’re probably 25%. Our revenue comes from oil wells at this point on a revenue basis.

Roger Serin – TD Securities

Yeah, Okay thanks very much for the time guys.

Doug Ramsay

Yeah

Operator: Your next question comes from the line of Shawn Boyd with Westcliff Capital Management. Your line is open.

Shawn Boyd – Westcliff Capital Management

Good morning, thank you. I wanted to just speak briefly on the capacity adds, if we’re thinking about 60,000 horsepower would be adding basically over the next six quarters assuming we’ll just knock out the June quarter here. I heard comments that we wanted to do this in fairly linear fashion. Can we think about this coming on, sort of 10,000 per quarter or should we think of it more loaded into 2011?

Doug Ramsay

Its going to be even throughout – Shawn, it’s going to be even throughout the next 12 months so you’re probably looking at 15,000 horsepower per quarter over the next four quarters.

Shawn Boyd – Westcliff Capital Management

Okay, very good, I appreciate that. And the other question I wanted to ask is if we look at your frac revenues per job, I think Canada and U.S., Canada is sort of surprising to the upside and U.S. kind of surprising to the downside. So can we look at that figure in Canada at a 121,000 and just speak to that briefly as we go into seasonality here for Q2 and then to the back half of the year? And then kind of the same question down in the U.S.?

Doug Ramsay

Well, the revenue per job. Shawn, as we look at Q2, and Q2 is always real difficult to (inaudible) I mean what you typically find in Q2 in Canada is that, any shallow gas activity you might have or in the evolving market seems (inaudible) those jobs are tend to be smaller in nature, and as we ramp-up to the latter part of Q2 and back into Q3 to regular operations you’re going to see your unconventional gas programs come back on. So it’s really hard to read too much into Q2 revenue per job, I mean on a normalized base I think as you took a look at the trends in Q1, I mean there really is a push towards particularly, as we see the Horn River activity start in Q3, there is going to be more and more focus on the larger job sides.

So, mean I think that trend basically will continue carving out Q2. But I think proportionally speaking, Q1 is going to be somewhat representative of what we see moving forward to the extent that we gain further momentum on the oil side, may tweak that a little bit but quite frankly I think those trends will continue.

The U.S. side again somewhat related to job mix, where the activity is being derived, you know, the extent that we expect to see a pick up in the Marcellus and continued strong activity in Arkansas. We drive those numbers higher, and the Rockies would tend to have, so increasing revenue per job proportionately speaking maybe somewhat less in some of the jobs and some of the more traditional shale plays.

Shawn Boyd – Westcliff Capital Management

Got it. So the early stage that you’re at on the start-up in the Marcellus would have impacted that number negatively in Q1. Is that correct?

Doug Ramsay

On revenue per job basis, probably that wouldn’t have impact on the revenue per job basis, you seen more on a lower overall revenue basis which is based on equipment utilization, right. So on a revenue per job basis we do see a pick up, it will have more profound influence on the dollar because those jobs would tend to be of the larger variety.

Shawn Boyd – Westcliff Capital Management

That’s my point. We didn’t have the benefit of that yet.

Doug Ramsay

That’s correct

Shawn Boyd – Westcliff Capital Management

I am misstating it, where we’ll get there as we move forward through the year.

Doug Ramsay

Right.

Shawn Boyd – Westcliff Capital Management

We should see it, okay. And last just from a book keeping standpoint, did we end the March quarter at about 225,000 horsepower in Canada and 190 in the U.S.?

Doug Ramsay

That’s about right. Canada has little bit high, probably ended somewhere in the 215 range I would say, and US number I think is pretty much brought [ph] on.

Shawn Boyd – Westcliff Capital Management

Great. Thanks so much. And good luck, Doug

Doug Ramsay

Thank you.

Operator

Your next question comes from the line of Todd Garman with Peters and Company. Your line is open.

Todd Garman – Peters & Company

Good morning.

Doug Ramsay

Good morning Todd.

Todd Garman – Peters & Company

Just wondering in the US the equipment repair cost that you incurred in this first quarter, did it limit equipment utilization?

Gordon Dibb

No. I think to answer that is we didn’t push to move into the Marcellus, which stretch our equipment. We also has some electronic problems which relate to pumping controls which we have sold subsequently, and we also has a little bit because pumping were taken out prematurely and placing a load under remaining pumping on the job, which -- that has been sold by an inventing our own control system. I don’t think it’s affect of the utilization; it’s just affected our cost.

Todd Garman – Peters & Company

Okay.

Doug Ramsay

And that's realized at January and February in Arkansas is colder than normal, so when we went to work, there is a big push on larger scale, I guess more continuous operations [Inaudible] to get back to repair in some of these pumps so and so forth. So, I'd say being 20-20, I wish them some of the different than that and we pushed the staff to limit. We would -- to redo what we may have not push as quite as hard, but we get and we rectified that through. Like Gordon said, some electronics changes and certainly we have more horsepower in the US than with more effective so [ph]. This style of business the learning curve is still in that form or learning as we go to. So, not to say our guys almost how we are doing, but it’s -- we pushed up hard right.

Todd Garman – Peters & Company

Yes. I guess in that, so the average revenue per job in the US wasn’t artificially lower than otherwise would have been because of lower average revenue per jobs in the Rockys because of --?

Gordon Dibb

As Doug had said earlier, we had 10% to 15% price increase, since the first quarter.

Todd Garman – Peters & Company

Yeah.

Gordon Dibb

And this will affect the job revenue.

Todd Garman – Peters & Company

And then just on the capital on the horsepower side. Has the style of equipment that you are going to be building for that additional 60,000 horsepower changed?

Doug Ramsay

To the average person, and we’re looking at different, certainly to our guys and our people that deals with this everyday, it is different. In electronics, it is there is some other larger engines and different styles of pumps and so for, so to the average guys no, to our guys operate it everyday and to the guys that are buys can sign EFEs [ph] Gordon and I and the rest of gang here, yes.

Todd Garman – Peters & Company

And part of it still start real -- , Doug?

Doug Ramsay

Still got wheels.

Todd Garman – Peters & Company

Thank you.

Operator

Your next question comes from the line of Kevin Lo with Firstenergy. Your line is open.

Kevin Lo – Firstenergy Capital

Hi, guys. Can you kind of tell me or kind of allude you, how under supplied it is the US and Canada in terms of from Calfrac [ph] standpoint?

Doug Ramsay

Two separate markets, can we talk them in general. Kevin, we saw in Q1, huge under supply of horsepower and people to be honest in Canada. Now in Q2, we try to forget about it, but on Q3 and Q4 there is still a huge under supply in the Canadian market, I can’t give you percentage of where the horsepower is. We know we turned, turned or differed at least 20% to 30% more work can we could do, could have done we have more people and equipment in the Q1 in Canada.

Then the US it’s very segmented, we certainly know there is a world working in, but there is a more of balance as compare to Canada, but the overall we’re getting request and demands for more equipment in the US also a specific areas with specific customers, right. And it’s all type of technology to suddenly we realized our as call bag a different technologies and chemistries a lot more in the last three to six months that we did in the previous throughout the 18 months before looking that this chemistry is closer and closer all the time and trying to get more effect as all the chemistry. So, again, and where that has made the (inaudible) there is just a reacquire business, has on what -- at this business very close. So there is another supply in some areas of equipment but the huge under supply we’re seeing in part of areas is in people.

Kevin Lo – Firstenergy Capital

Okay, with all the new company [ph] building is that displacing any old equipment or just incremental capacity?

Doug Ramsay

Incremental capacity.

Kevin Lo – Firstenergy Capital

Okay, great. And you know can you again the non-ministry thing but can you talk about how much you’re market share is in these oil plays like a Bakken and Saskatchewan thanking whatever that you kind of alluded to?

Doug Ramsay

It would be really hard in meeting [ph] those numbers and again for competitive reasons I think we’re pretty guarded and those that kind of information, Kevin. I am not sure my -- those competitors that tuned in maybe they would like to speak with that.

Kevin Lo – Firstenergy Capital

Okay. That’s all for me. Thank you very much.

Unidentified Company Representative

Okay.

Operator

Your next question comes from the line of Jeff Fetterly from CIBC World Markets. Your line is open.

Jeff Fetterly – CIBC World Markets

Good morning to all.

Douglas Ramsay

Good morning, Jeff.

Jeff Fetterly – CIBC World Markets

The pricing side you mentioned that 10 to 15% increase in the US in Q2 over Q1 how would that compared with the trough?

Douglas Ramsay

The trough I think we’ve experience the trough really later half '09 and in the Q1 2010. We’re negotiating these things throughout as we saw the opportunity I guess we call it to negotiate some better pricing and to be honest in some areas look to different customers that to we get better margins in different style of business too particularly in the US and we are talking about the Rockies, we’re seeing some changes there for sure in our customer mix also the positive versus the negative. But, it is 10% to 15% increase from the trough for sure and I think we just lag counted by quarter to be honest.

Jeff Fetterly – CIBC World Markets

We’ve heard that trough pricing is sitting in certain places 30% to 40% off of the trough are you seeing that dynamic in the US?

Douglas Ramsay

Lower than…

Jeff Fetterly – CIBC World Markets

Higher of the trough.

Douglas Ramsay

On some call we work on specifics yes, that’s why we’d like to give numbers more 10% to 15% I can go on find a few customers, or few particularly jobs are going up by 30% probably but I -- we’re not -- we don’t see a 30%, 40% increase in our overall pricing, I don’t care what saying that is for some time. That's almost ridiculous that anybody would even quote that to be honest Jeff. I give you a couple of circumstance when it’s up, but there’s other reasons, right

Gordon Dibb

I think it is somewhat basin specific to you Jeff. I mean certainly in the areas that we operate. I mean as we look back respectively to 2009, like Doug had mentioned, we probably saw short pricing somewhere in the Q3 timeframe and beginning in Q1 we started some price recovery, the full extend of which will all be realized in Q2 and above. But, I do think is certain basins where there is perhaps more of supply equipments than there were in other basins, you saw pricing get hit harder and then the recovery has been -- has probably come back a little bit faster. But, I think the premises is pricing has been somewhat basin specific. So we’re trying to quote here sort of averages to what we are seeing, we’re not talking about one-off here there. We’re seeing the average price recovery in those ranges as Doug had mentioned.

Jeff Fetterly – CIBC World Markets

What about the Canadian side, how has the pricing done on the Canada changed I guess in Q1 relatively to the second half of last year and then in second half of this year, post break up?

Douglas Ramsay

Canada, overall, with our customer mix we’re probably we’re up 10% to 15% also. And again, this is where maybe some guys have been misquoted or don’t have the right information. We did see some increase in specific areas that of 30% so on in Canada for one-off job here there. We’d be fools to think that we can sustain that, but the demand was very high and we can get something out in certain area wherever we stretch ourselves maybe a couple of times so we needed more dough to do that. But overall, we saw trough lies in Canada we’re probably up 15% in Canada from the troughs. And that’s substantial, because you know where that all flows, right.

Jeff Fetterly – CIBC World Markets

CapEx, what commitments softer firm do you have for this incremental equipment to-date?

Gordon Dibb

Softer firm. Basically what we anticipate is that we would be committed quarter-by-quarter.

Jeff Fetterly – CIBC World Markets

But is it safe to say that you have nothing infirm in place at this point?

Gordon Dibb

I think just price is more on the customer side. Just with regards to what our view is looking forward --

Jeff Fetterly – CIBC World Markets

Where is it going? Who is it going to?

Doug Ramsay

We have a potential to using equipment both in U.S. and Canada. But we are building this equipment in advance with any commitments from a customer. We’re building it in anticipation of increased activity. So when we get the commitments, we are not struggling, and being the (inaudible) or to try and find the horsepower that’s needed.

Jeff Fetterly – CIBC World Markets

Okay. Thank you. Thank for clarifying that. Do you have a sense as to how much you think might end up in Canada?

Doug Ramsay

No.

Jeff Fetterly – CIBC World Markets

So, I guess to some extent along Dana’s question earlier, are we close to the inflexion point in terms of when capacity just start to impair pricing power? In Canada, it will be close to 1.1 million by the end of 2010. Do you see that as being a concern heading into the winter of next year or even in the fourth quarter of this year?

Gordon Dibb

Well, first of all (inaudible) manage, have to manage effectively that your – as you can actually do a safe job for your customer. We don’t believe that they allow this road for CM and some of these oil regions or some technologies are being implemented, not everybody has a solid technology or has a wherewithal to even probably do it. So I’m not being, I guess, (inaudible) people having to pass, they hope to tell that they understand that this is more than a single cycle of business, and is more than just adding horsepower.

So in saying that I think there is – I don’t see at all certainly in the Canadian market there we’re needing capacity, we have huge demands. And if you look at any of the studies and Jeff you’re probably part of all those that, when the – now I guess, when the Horn River checks into the fulsome rather than lot of experiments, and we become inefficient, it’s going to suck up a lot of horsepower in Western Canada, and you just like what’s happening in the Cardium and some of these other oil plays where there is more and more horsepower go into that. We have seen a most recent interest in demand and shell our gas again, that’s countercyclical in CBM, that’s going to take some horsepower. So I really don’t see in the short or long-term this 1.1 million horsepower causing us some pricing issues, right.

Doug Ramsay

I think also it’s very high, dependent on commodity prices and I think we are now anticipating a collapse in commodity and the gas price for two bucks. We’ve also got – I’ve two resource of (inaudible) for the price of oil. So if you add those two things together, we're feeling confident there will be a steady demand for our services in the future, but as gas prices escalate above the $5 level and we all could be [inaudible] and people.

Tom Medvedic

I think, Jeff, just to add, I mean, I think broadly we talked lot about Canada, but certainly as we take a look at the market in North America, I mean we certainly seen the full operation of other shale plays in US as well, that has shocked [ph] up good amount of capacity. So what really is taking look at entire market and saying, the momentum that we’ve seen over the last year or two towards development of the unconventional plays, we think this will continue to take place.

And so, where exactly things gets slotted in, is yet to be determined formally. Obviously we’ve taken a look at different areas within North America as far as growth opportunities. So obviously you are not approving this amount. We are very comfortable that and we can find the place for this that will operate very profitably.

Jeff Fetterly – CIBC World Markets

Is it fair to say that you are comfortable, you have pricing power in a $4 gas environment and then $80 oil environmental in the second half of the year.

Doug Ramsay

Yes.

Jeff Fetterly – CIBC World Markets

Okay. So the last question I’ll turn it over, the Mexican side you counter-attack, you mentioned lower margin work. Is that a function of the type of work or is that pricing pressure?

Gordon Dibb

As a work.

Jeff Fetterly – CIBC World Markets

And how do you think that carry forward both I guess where did you counter-attack as well as your IPM partner?

Gordon Dibb

We introduced some technology that where there is some high margin. For the technology the (Inaudible) base fluid there has been quite a base fluid during Q1, during second half of 2009 we didn’t have that same issue. We believe our customer access trying to fix that problem or challenge they have and what's best there should be in that better margins in that part of our investment operations. So, I can’t say when that supply will be more reliable but in the mean time our customers did great work with and we’re doing other style fraction to get utilizations prospects.

Jeff Fetterly – CIBC World Markets

But it’s safe to say that from a margin perspective you believe you can get back to 2009 levels in North America?

Doug Ramsay

I think it’s too early to tell you because North America is certainly there is two regions in Mexico, there is two different service lines in Mexico. Argentine area -- Argentina have some affordable circumstances that they’re -- we think change in our favor overtime. So I will give you the exact answer but it will be better than we saw in Q1.

Jeff Fetterly – CIBC World Markets

Great. Thank you. I appreciate the color.

Doug Ramsay

Next.

Operator

Your next question comes from the line of Shawn Boyd with Westcliff Capital Management. Your line is open.

Shawn Boyd – Westcliff Capital Management

I just want to get back to the capacity as of, for once I missed it, I apologize, of the 60,000 or so we’re adding did you give us anything on the quarterly, into the how much that will be in Canada?

Doug Ramsay

No. We are not going to give that number out, at this time, because we are evaluating numerous opportunities.

Shawn Boyd – Westcliff Capital Management

I understand. Thank you so much, and take care.

Gordon Dibb

Thanks Shawn.

Operator

There are no further questions at this time. I’ll turn call back over to our presenters.

Doug Ramsay

Well, thank you very much. We appreciate your presence today and participation in our people. I just want to make a comment that we have seen a huge change, I should have pulled my notes from a year ago when we’re going through this. We’ve seen a dynamic shift in our business and opportunities shift from a year ago. We are of course that we went through that allowed us to build this business that we’re seeing into second half of 2010 and into 2011. Huge accolades for all their effort they have put in and all efforts of our executive team that, that manage through that last year and into now. We feel really good about of what we see in the future. But I appreciate everybody’s time that are on the call today. And we will be speaking to you this summer on our second quarter results. Thanks.

Operator

Ladies and gentleman, this concludes today's conference call. You may now disconnect.

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Source: Calfrac Well Services. Q1 2010 Earnings Call Transcript
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