Canada's oil pumping sector well-positioned to benefit from upturn- ATB

STEP Energy Services

10/09/2020 12:21

** Broker ATB Capital Markets says the Canadian pumping 
space is now in a "structurally better position" to take
advantage of an upturn in activity
    ** Sees more upside than downside risk to activity, pricing,
and margins in the industry
    ** After years of suffering weak returns, character of the
Canadian pumping providers is changing and they will be focused
more on returns and FCF rather than on growth - ATB
    ** Trican Well Service Ltd  TCW.TO  broker's top pick;
raises PT to C$1.50 from C$1.20
    ** Lifts PT on Step Energy Services  STEP.TO  to C$0.60 from
 C$0.50; says it offers leverage to both the Canadian and U.S.
pumping and coiled tubing markets
    ** Keeps PT unchanged for Calfrac Well Services Ltd  CFW.TO 
but slightly lowers EBITDA estimates for 2020, 2021 and 2022 by
1.5%, 0.1%, and 2.1% respectively
    ** Expects cumulative Canadian EBITDA margins for TCW, CFW
and STEP to increase from 9.5% in 2020 to 10.5% in 2021 and to
17% in 2022

 (Reporting by Shruti Sonal in Bengaluru)
 ((Shruti.Sonal@thomsonreuters.com; Twitter: @shrutisonal26))