Calgary-based Calfrac Well Services Ltd. said Thursday it will increase its capital spending program this year and into 2011 by C$56 million, or 25%, to accommodate the jump in hydraulic fracturing (hydrofracing) work being performed on wells in U.S. shale plays.

Calfrac said the increased spending is related to its long-term minimum commitment contract with EXCO Resources (PA) LLC, which is a 50-50 joint venture in the Marcellus Shale between EXCO Resources Inc. and BG Group plc. EXCO and BG jointly operate shale exploration in the Marcellus Shale, as well as in the Haynesville Shale and Deep Bossier Sands (see Daily GPI, May 11).

Calfrac plans to use the bump in capital spending to add another 55,000 hp to its fracturing fleet, bringing its total capacity to 650,000 hp. About C$66 million of the capital spending, which would come from cash flow and debt, is earmarked for 2011, the company said.

The news to increase its budget follows an announcement on Tuesday that ExxonMobil Corp. has licensed a well processing technology to the oilfield services provider. The multi-zone stimulation technology is expected to enable Calfrac to deploy perforating and fracturing equipment into the wellbore at the same time, ExxonMobil said. The technology would increase the number of zones that could be fractured on a daily basis.

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