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Trican president and CEO Dale Dusterhoft said during a conference call the company is acquiring a fleet of mostly active pressure pumping equipment that will generate cash for the combined company immediately and, “We are going to need that spare capacity down the road.”

But CIBC World Markets analyst Jon Morrison asked Dusterhoft how the company rationalized “spending $640 million in stock at this point to buy a platform that is incredibly similar in size to your idle capacity”, when Trican could spend just $3.5 million to reactivate its own idle fleet.

Though demand for oilfield activity has increased in recent months, Trican still has 250,000 horsepower of pressure pumping equipment parked.

AltaCorp Capital analyst Aaron MacNeil, however, didn’t see the idle equipment as a problem, especially if demand for oilfield services continues to improve.

“There is clearly a labour constraint in the market today,” he said, adding the availability of equipment would allow the combined Trican-Canyon entity to ramp up more quickly as conditions improve.

MacNeil, who has reviewed the two companies’ customer list, also noted their customer base did not overlap. Since “customer relationships matter,” he said, the combined company could also activate more of its idle fleet by tapping into its expanded customer network.

The rationale for the deal was not just to combine customer bases and pressure pumping fleets, but to consolidate in an effort to further drive down costs, Dusterhoft said.