Cutting board’s, CEO and staff salaries
CALGARY – Calfrac Well Services is cutting its 2020 capital program and employees by almost half because what they call “unforeseen deterioration in business conditions” from the COVID-19 global pandemic and the oil price war between Russia and Saudia Arabia.
“These global events have caused a significant decline in oil prices globally, resulting in reductions in the planned spending of many of Calfrac’s clients,” the company said in a statement.
Calfrac previously announced 2020 capital program of about $100.5 million and is cutting it to about $55.0 million. Calfrac has also reduced the number of crews being deployed in its North American operations from 19 fleets to nine, which will result in an aggregate reduction of about 40 per cent of the Company’s North American workforce.
In addition, Calfrac’s board of directors and senior management have taken the following actions to reduce the Company’s fixed costs:
- Reduced Calfrac’s board compensation by 25%;
- Reduced Executive officer salaries by 10%
- Eliminated retirement savings matching contributions, which previously represented up to 6% of base salary;
- Reduced staff employee salaries by 5 – 10%;
- Modified work schedules to provide increased flexibility to respond to fluctuating demand for the Company’s services, while reducing personnel costs;
- Reduced or eliminated several compensation programs and bonuses; and
- Restricted discretionary spending and suspended all non-emergency travel.
“It is difficult to predict how the COVID-19 pandemic and OPEC+ oil price war will continue to affect the demand for Calfrac’s services,” the statement said. “However, Calfrac’s management and board of directors will continue to monitor and assess the evolving circumstances to determine if further measures will need to be taken to mitigate the impacts to the Company of these unprecedented challenges.”
Calfrac has reduced staffing levels to essential personnel only at all locations and has implemented remote work procedures for the majority of office staff as part of its business continuity plan. Calfrac said it is committed to working with all of its stakeholders to meet the challenges presented by these unprecedented market and societal upheavals.
Calfrac’s common shares are publicly traded on the Toronto Stock Exchange under the trading symbol “CFW”. Calfrac provides specialized oilfield services to exploration and production companies designed to increase the production of hydrocarbons from wells drilled throughout western Canada, the United States, Argentina and Russia.
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