Expectations of robust natural gas demand

Canada

Tyler Dahlseide, CEO of Calfrac Well Services, talks to The Energy Year about the positive demand outlook for natural gas in Western Canada and the factors that will drive the company’s business and margin growth in the coming years.

Calfrac Well Services is a Calgary-based hydraulic fracking specialist with operations in Canada, the US and Argentina.

• Natural gas demand in Canada and the US is being strengthened by power generation needs tied to the buildout of data centres.
• Higher gas demand is expected to support demand for well completions, fracturing, coiled tubing and cementing services.
• The US oilfield services market is expected to react fastest to commodity price changes, while Canada may lag but will eventually follow a similar path.

Calfrac Well Services recorded its highest margins in three years in Q1 2026. What factors have been driving your performance?
Canada’s oil and gas sector has been challenged over the past 10 years, and our business followed a similar trajectory. We had to pull back our activities during that time, as there were legacy fixed costs that needed to be right-sized.
We have carried out a significant overhaul in the districts where we operate and restructured our leadership team, which allowed us to do a similar amount of work with fewer fleets. That optimisation of the workflow and our variable opex is what came through in Q1 2026.

How do you see demand evolving from here across your core markets?
We see a constructive operating environment over the next three months – probably a better one than any of us would have anticipated during our budgeting in January 2026. There are tailwinds on the natural gas side, as the buildout of data centres is generating greater demand for power generation across the areas we serve, and we expect natural gas demand will continue to be robust in Canada and the US. That will bring higher demand for well completions, fracturing, coiled tubing and cementing.
Our business is roughly divided in thirds between Canada, the US and Argentina. We think the US will be the fastest to adapt to the new commodity price environment and will lead demand growth. Argentina will be a close second, with the Vaca Muerta Oil Sur pipeline to the Atlantic coast set to enter service at the end of 2026. Canada tends to be slower to react, but it will follow in due course.

What steps are you taking to prepare for this anticipated increase in business?
When clients want to scale their production programmes, they need partners they can count on to do efficient, safe and reliable work. Many of our client relationships are long-standing – in excess of 20 years, in some cases – as we have historically positioned ourselves as long-term service partners.
In designing our offerings, we have sought to align with the needs of top-tier operators, and our cornerstone clients in each of the segments we serve are among the largest players in those markets. They underpin our calendar and represent about 80% of our work in any given basin.
The remainder is made up of a tier of mid-market customers, as well as some smaller firms. For the first time in a long time, we are seeing a lot of new names in Canadian oil and gas. Capital formation is starting to translate into more work with juniors and startups.

How should investors think about the impact of oil prices on Canada’s oilfield services space and Calfrac’s share price?
In Canada, current oil price dynamics should bring about a very constructive environment with an increase in drilling and completions. For our operations, we put a lot less emphasis on the front-month WTI contract than on the one-year and two-year forward curves, which are what most of our customers use for planning, and levels have come up quite significantly since the start of 2026. They are about 30% higher than any of us would have anticipated six months ago.
I would tell investors to look at what I do rather than listen to what I say. I am a buyer of Calfrac stock, and we have a significant base of insider shareholders who believe in the company. Our priority is to provide industry-leading services to maximise free cashflow and strengthen our balance sheet. Good equipment will only take you so far along that route; experienced management and operations personnel are what make the difference.

What will define Calfrac’s next phase?
Calfrac’s leadership is made up of business owners, not hired guns. The company was started by entrepreneurs with a vision, and as the business has grown and evolved, part of the entrepreneurial spirit has become subsumed. Now we want to revive it and carve out our path on that basis.
You will more likely see us pursuing opportunities in markets where we already have a presence on the ground and understand the nuances, where we will be seeking to deploy technologies that are adjacent to our current portfolio. For example, there are heavy oil areas in Western Canada that are not fractured reservoirs and have not traditionally been conducive to coiled tubing interventions. With new tools, we can go into multilateral wells, carry out remedial treatments on old wellbores and deliver cost-effective production enhancements. Flexibility and customisation will underpin many of our growth projects in the future.

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