NCS Multistage Holdings, Inc. reported strong revenues and earnings in the third quarter of 2017, but expects a lull in Canadian activity in the final quarter of the year as operators exhaust their 2017 budgets.

NCS, a provider of engineered products and support services that facilitate the optimization of oil and natural gas well completions and field development strategies, reported total revenues of $56 million in the third quarter, up 95 per cent from the comparable period in 2016. Net income was $3.4 million, a $3.7 million improvement over the third quarter of 2016. 

For the first nine months of 2017, the company reported revenues of $151.5 million, an increase of $88.4 million, or 140 per cent as compared to the first nine months of 2016. Net income of $5.4 million for the first nine months of 2017 compares to a net loss of $17 million for the first nine months of 2016.

Canadian revenues climbed by 105 per cent in the third quarter of 2017 compared to 2016, totalling $40.4 million. Revenues were up 145 per cent compared with the second quarter of 2017. For the first nine months of 2017, Canadian revenues climbed from around $45 million to around $98.5 million

“We have successfully grown our market position, specifically in the Deep Basin,” said company chief executive officer Robert Nipper, as an explanation for the company’s Canadian performance.

However, NCS is predicting the final quarter of 2017 could be slower than the third quarter.

“We believe the rig count could decline in the fourth quarter,” said Nipper as weather and low spot prices for natural gas curtail activity. “Some customers are also likely to exhaust their 2017 drilling budgets in November so we will see lower revenues.”

However, Nipper said this is likely just a bump in road.

“We believe 2018 will be in line with 2017 and drilling activity will rev up quickly in the first quarter as operators finalize their capital budgets,” he explained.

In the U.S., NCS saw revenues climb to $13.3 million in the third quarter of 2017, up from $6.2 million in the comparable quarter of 2016. For the first nine months of 2017, revenues totalled $43.8 million, up from $13.6 million in 2016.

Nipper said U.S. revenues are variable quarter-to-quarter. While third quarter revenues declined compared to the second quarter, he said NCS had already sold more sliding sleeves in the fourth quarter than they did in the entire third quarter. He expects fourth quarter revenues to climb by 40 to 50 per cent compared to the third quarter.

In the first nine months of 2017, NCS was working with 15 customers across the major shale gas and tight oil basins in the US, with most customers focused on the Permian.

“They range from super-majors to major independents to private companies,” said Nipper, adding that NCS’s customers were operating 150 rigs at the end of October.

As customers test the company’s technologies, Nipper said NCS is learning its offerings are working across formations and plays in the U.S.