INVESTOR PRESENTATION July 2019 FORWARD LOOKING STATEMENTS This - - PDF document

INVESTOR PRESENTATION

July 2019

FORWARD LOOKING STATEMENTS

This document contains statements that constitute forward-looking statements within the meaning of applicable securities legislation. These forward-looking statements include, among others, the Company’s prospects, expected revenues, expenses, profits, expected developments and strategies for its operations, and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of

• perations or performance. These forward-looking statements are identified by their use of terms and phrases such

as “anticipate,” “achieve”, “achievable,” “believe,” “estimate,” “expect,” “intend”, “plan”, “planned”, and other similar terms and phrases. Forward-looking statements are based on current expectations, estimates, projections and assumptions that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks and uncertainties include: fluctuating prices for crude oil and natural gas; changes in drilling activity; general global economic, political and business conditions; weather conditions; regulatory changes; and availability of products, qualified personnel, manufacturing capacity and raw materials. If any of these uncertainties materialize, or if assumptions are incorrect, actual results may vary materially from those expected.

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TRICAN & INDUSTRY OVERVIEW

INVESTMENT SUMMARY

• Trican has an excellent balance sheet (net $46

million debt) and significant earnings potential upon recovery

• Approximately 6 fracturing crews parked

(300,000 HP)

• Assets are well-maintained and not scavenged
• Can be activated by adding staff with little capital
• Assets generated $183 million EBITDA in 2017

and $347 million in 2014 (combined Trican and Canyon)

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INVESTMENT SUMMARY

• Largest Canadian pressure pumping company
• Industry-leading fracturing and cementing service lines
• Focused on top quartile return on invested capital
• Generation of free cash
• Capital disciplined investments
• Investments must exceed ROIC hurdle rate
• Shareholder returns through NCIB
• Repurchased approximately 16% of the Company’s shares

from October 2017 to present

• Continue to invest into repurchasing shares into Q2 2019

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INVESTMENT SUMMARY

• Very strong balance sheet
• Net credit facility debt of approximately $46 million

at the end of Q1/19, (debt less cash)

• Non cash working capital balance of $138 million
• Focused on lowering costs in competitive

environment

• Approximately $55 million of annualized cost

savings since Canyon acquisition in June, 2017

• $23 million in annualized savings this year over

last year

• Targeting an additional $16 million in cost savings

by year-end 2019

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INVESTMENT SUMMARY

• Strong loyal customer base that supports the company

through the downturn

• Experienced and motivated work force supported by an

executive leadership team with extensive experience managing oilfield services cycles

• Trading substantially below tangible book value and

replacement cost

• Opportune time to invest in cyclical business

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INVESTMENT SUMMARY

• Company valuation approaching cyclical low valuation – opportune

time to invest in a cyclical business

• Company has significantly improved asset coverage relative to 2015

cyclical low – exit 2018 debt lower than 10% of tangible equity value

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0.0x 0.2x 0.4x 0.6x 0.8x 1.0x 1.2x 1.4x 1.6x 1.8x 2.0x

• 0.20

0.40 0.60 0.80 1.00 1.20 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Price to Tangible Book Value Debt / Tangible Equity

Price to Tangible Book Value vs. Leverage Profile

Debt to Tangible Equity (LHS) Price to Tangible Book (RHS)

• Trican is a Canadian-

focused, energy services company, which provides an array of specialized products, equipment and services for the drilling and completions cycle of oil and gas exploration and development.

Customer Full Cycle Technical Expertise

Engineering Support Reservoir Expertise Laboratory Services

Drilling Cycle

Cementing Services

Completion Cycle

Fracturing Coil Tubing Nitrogen Fluid Management Acidizing

Production Cycle

Coil Tubing Acidizing Pipeline Services Industrial Services Chemical Services Remedial Cementing

WHAT WE DO

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Market Leading Positions

• Canadian market leader in fracturing services (based
• n adjusted EBITDA margin and market share)
• Canadian market leader in cementing services

(based on market share – no competitor margin data available)

• Supporting service lines: coil tubing, nitrogen, acid,

water management services, pipeline and industrial services Strong Financial Position

• 2018 revenue of $900 million
• Q1 2019 revenue of $246 million
• Market capitalization $340 million (July 2, 2019)
• Total net debt of $46 million at March 31st 2019

OUR CANADIAN MARKET AND FINANCIAL POSITION

Trailing 12 Month Revenues: Service Line Breakdown

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Hydraulic Fracturing, 71% Cementing, 15% Coil Services, 5% Fluid Management, 4% Industrial Services, 2% Other, 3%

FOCUSED GEOGRAPHIC COVERAGE

Horn River Shale Montney Shale Bakken Shale Cardium Tight Oil Viking Tight Oil Lower Shaunavon Tight Oil

GRANDE PRAIRIE WHITECOURT

HINTON

FORT ST. JOHN NISKU RED DEER BROOKS ESTEVAN

British Columbia Alberta Saskatchewan

Deep Basin Duvernay Shale

CALGARY

Manitoba

Spearfish

MEDICINE HAT

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OUR FOCUS To achieve top quartile ROIC in our sector

• Maintain market leading position in Fracturing and Cementing service lines
• Strengthen auxiliary service lines (Coiled Tubing, Water Management)
• Activate all parked equipment
• Growth in existing or complimentary, less capital intensive, less cyclical

services lines

• Disciplined investment into future growth – ensure ROIC hurdle rates are met
• Return value to shareholders through Normal Course Issuer Bid (share

buyback program)

• Reduce costs for ourselves and our clients through efficiency improvements and

scale Strengthen Existing Business Growth Share- holder Return Cost Control & Efficiency Gains

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CANADIAN INDUSTRY DYNAMICS – INCREASING WELL INTENSITY

• 2018 well count 38% below 2014 levels
• 2019 well count expected to be 24% below 2018 levels
• 7,000 – 8,000 wells today equates to 2014 well count levels in terms of fracturing equipment demand
• We expect well service intensity to remain flat in 2019 to 2018 levels;
• Tonnes of proppant placed per meter grew by approximately 25% in 2018 relative to 2017;
• 1.5 tonnes / metre in 2018 vs. 1.2 tonnes / metre in 2017
• 2018 data weighted to higher well service intensity wells

Source: Canadian Discovery Source: GMP First Energy, internal 2019E

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10,853 10,924 5,376 3,963 6,959 6,781 5,200

• 2,000

4,000 6,000 8,000 10,000 12,000 2013 2014 2015 2016 2017 2018E 2019E

WCSB - Wells Drilled

616 777 1,285 1,335 1,841 3,004 2,557

• 500

1,000 1,500 2,000 2,500 3,000 3,500 2013 2014 2015 2016 2017 2018 2019

WCSB - Tonnes / Well

CANADIAN INDUSTRY DYNAMICS – FRACTURING COMPETITIVE LANDSCAPE

Source: Competitor company reports, internal company data, and internal estimates

Hydraulic Horsepower (HHP) Capacity Idled Available Active Crewed Trican 671,850 90,000 581,850 370,000 Competitor A 306,000 5,000 301,000 270,000 Competitor B 297,500 72,500 225,000 225,000 Competitor C 200,000

• 200,000

200,000 Competitor D 250,000 25,000 225,000 225,000 Competitor E 260,000 20,000 240,000 240,000 Competitor F 80,000

• 80,000

50,000 Competitor G 50,000

• 50,000

50,000 2,115,350 212,500 1,902,850 1,630,000

• Estimated industry demand of ~1,250,000 HHP in 2H19
• 1,000,000 HHP will be for the Montney and Duvernay
• Internal estimate of 20% - 25% of equipment in Canada is not suited for higher

well service intensity plays (Montney and Duvernay)

• Some competitors moving equipment out of Canada

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CANADIAN INDUSTRY DYNAMICS – TRICAN’S COMPETITIVE POSITIONING

• More than 50% of Trican’s fleet is continuous duty

pumps, most efficient style of fracturing pump, designed for higher well service intensity plays:

• Approximately 122,000 HHP dual fuel capability
• Positions Trican to service growing, higher well

service intensity plays

• Supports Trican’s continued leading Canadian

fracturing market position as measured by both market share and margin

• Allows Trican to continue to efficiently operate in the

highest well service intensity resource plays: Montney, Duvernay and Deep Basin (estimated to account for ~ 80% of the required HHP demand in Canada)

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CANADIAN INDUSTRY DYNAMICS – TRICAN’S COMPETITIVE POSITIONING

• Existing idle equipment provides opportunity

for incremental returns upon a market recovery (minimal investment required for reactivations – just staffing)

• Substantial leverage on existing

infrastructure and fixed cost structure

• Monetized $17.6 million of idle non-core

assets in 2018

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OUTLOOK & TRICAN ADVANTAGE

Q2 2019

• Slow April and May
• Approximately 80% of our fracturing fleet was

booked in June

• We had some weather related delays late in the

month that pushed work into July

• Cementing business followed the rig count during

the quarter

• Anticipated the Q2 rig count to be 25% to 30%

below last year

• Coiled tubing had stronger activity than last year

as we added 2 units late in quarter

• Primary focus was to lower costs in Q2

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OUTLOOK – SECOND HALF 2019

• Customers’ cash flows up 20% to 25% compared to their

budgets

• Anticipate relatively flat activity in the second half as customers

remain capital disciplined

• 75% of all fracturing equipment committed to clients in Q3
• Need to manage customer scheduling, move and rig up days to

keep utilization high

• No price increases anticipated
• Looking for a price increase before adding equipment back into

the market

• Visibility for the fourth quarter is still limited as customers

have not confirmed fourth quarter programs

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OUTLOOK – SECOND HALF 2019

• Cement
• Anticipate rig count will remain below last year in

the second half

• Cement activity will follow the rig count
• Will size cement business to meet demand
• Pricing stable
• Coiled Tubing
• Coiled Tubing anticipated to be fully utilized in

second half

• 2 additional units added in second half will

increase activity year-over-year

• Pricing stable

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PERFORMANCE – ROIC and ADJUSTED EBITDA %

• To improve ROIC:
• Continue to optimize costs
• Increase utilization of existing fracturing fleet
• Generate revenue from idled equipment
• Strengthen weaker service lines
• Modest pricing improvements

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CAPITALIZATION – POSITIONED FOR OPPORTUNITIES

• Strong balance sheet allows for opportunistic

investment:

• Continued return to shareholders, active NCIB:

repurchased 53 million (approximately 17%) of the

• utstanding Trican shares from October 2017

through March 31, 2019

• Fleet upgrades: can further strengthen our

market leading fracturing fleet through selective upgrades

• Invest in supporting service lines: target increased

market share in coil and other supporting service lines

• M&A Opportunities: low leverage levels allow

cost effective funding options for acquisition opportunities

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• 0.10

0.20 0.30 0.40 0.50 0.60 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Debt / Tangible Capital

COMPETITIVE ADVANTAGE – PERSONNEL DEVELOPMENT

• Over one third of employees with more than 5 years of experience
• Career progression is an attraction to entry level employees
• Employee experience key to training and customer service

Technical, Support

• r Administrative

Position Manager Level Position Field Supervisor Field Technical Field Entry Level

23 0 to 1 Years 15% 1 to 3 Years 36% 3 to 5 Years 9% 5+ Years 39% Employee Headcounts by Years of Service

COMPETITIVE ADVANTAGE - PEOPLE AND CUSTOMER SERVICE

Leveraging more than 20 years of Canadian expertise:

• Safety: LTI rate of 0.14
• Efficiency: Working to increase fracturing pumping

hours per day to 16-20 from 10-12 hours per day

• Development: Industry-leading training programs
• Total Training Hours;
• 2017: 75,837
• 2018: 101,656
• Q1/19: 8,301 (Q1/18: 21,966)
• Canadian geographic focus: Canadian focus allows

potential for expansion of existing service lines or adding services lines within our current infrastructure

• Improving our operating leverage: Building on our

existing infrastructure and adding operationally focused personnel while maintaining G&A support levels

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Dec-15 5.5 Dec-16 4.4 Dec-17 6.5 Dec-18 8.2 Mar-19 9.9 2 4 6 8 10 12 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19

Field and Shared Service / SG&A Employee

Field & Shared Service / G&A Yearly Avg Field & Shared Service / G&A

• Expon. (Field & Shared Service / G&A)

COMPETITIVE ADVANTAGE – INNOVATION

Leveraging innovation for new opportunities:

• Scale allows targeted investment into internally developed

IP and new technologies

• Patented MVP

TM fracturing fluids; case studies indicate:

• 30% increased production in the Montney
• 20% increased production in the Cardium
• Global technology reputation allows new markets for IP

and technology

• Licensing agreement signed in the US for MVP Frac

TM

• CleanTRACK

TM patented dust control product field tested and

commercial in 2019

• 3rd party interest in customer facing applications platform
• International technical service agreement opportunities

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SUMMARY

• Capital disciplined company focusing on free

cash and ROIC

• Strong financial position to:
• Withstand near-term cyclical weakness
• Evaluate opportunistic growth
• Return capital to shareholders
• Continued focus on reducing costs to gain a

competitive advantage

• Largest Canadian pressure pumping company

with broad range of services

• Existing equipment complement provides
• pportunity for substantial incremental returns

upon a market recovery

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APPENDIX

APPENDIX 1: EQUIPMENT AS OF MARCH 2019

Service Line Total Equipment Active, Manned Active, Maintenance, Unmanned Idled ~ Market Share Fracturing (HHP) 672,000 370,000 212,000 90,000 30% Cementing (trucks) 67 33 9 25 38% Coil Tubing (units) 27 8 7 12 n/a Nitrogen (units) 74 15 19 40 n/a

• Given the industry slow down, increased amount of fracturing hydraulic horse power is

expected to be parked

• We will explore opportunities to monetize equipment that is no longer anticipated to be

competitive in the WCSB

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INVESTOR PRESENTATION

July 2019