Source Energy closes $175-million IPO

CALGARY — Source Energy Services has closed a $175-million financing in the first substantial initial public offering in the oil and gas sector in two-and-a-half years.

The Calgary-based company, one of the largest suppliers of speciality sand to Canada’s fracking industry, issued 16.7 million shares at $10.50 each in the listing.

Source had initially aimed to raise about $300 million by offering shares at somewhere between $17 and $20, but shelved the plan because of what it said were adverse capital market conditions.

The listing is the first for the oil and gas sector since Seven Generations Energy raised $932 million in Oct. 2014, save for some minor listings of a few million dollars.

The Seven Generations listing was the last of a series of high-profile public offerings in the sector, including PrairieSky Royalty’s $1.7-billion listing, before the oil price crash put further IPOs on hold.

Source Energy expects to see a significant increase in demand for its product this year as fracking operations ramp up both the amount of sand used per well, and the total number of wells fracked.