INVESTOR PRESENTATION April 2020 FORWARD LOOKING STATEMENTS This - - PowerPoint PPT Presentation

INVESTOR PRESENTATION

April 2020

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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AGENDA

Investment Summary Near Term Market Outlook Canadian Industry Overview and Trican’s Competitive Positioning Company Overview and Ongoing Business Transformation

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TRICAN OVERVIEW

• Focused in Canada, Trican has

a highly trained workforce dedicated to safety and

• perational excellence who

provide a comprehensive array

• f specialized products and

services using equipment required for the exploration and development of oil and gas reserves

• Trican has been servicing wells

in western Canada for more than 24 years

• Trican service lines cover 60%

to 70% of a typical well cost

Customer Full Cycle Technical Expertise

Engineering Support Reservoir Expertise Laboratory Services

Drilling Cycle

Cementing Services

Completion Cycle

Fracturing Coil Tubing Fluid Management

Production Cycle

Coil Tubing Acidizing Pipeline Services Industrial Services Chemical Services Remedial Cementing

WHAT WE DO

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BUSINESS TRANSFORMATION: OUR STRATEGIC PRIORITIES REMAIN INTACT To achieve top quartile ROIC in our sector

• Maintain market leading position in Fracturing and Cementing service lines
• Strengthen auxiliary service lines (Coiled Tubing)
• Activate parked equipment (if return hurdles can be met)
• Growth in existing services lines

Disciplined investment into future growth – ensure ROIC hurdle rates are met

• Return value to shareholders through share buyback program
• Sell excess and permanently stranded capital equipment, return

funds to the balance sheet

• 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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Having safe, efficient, customer- focused operations is always priority #1. Beyond safety and

• perational performance, our

strategic priorities remain intact:

BUSINESS TRANSFORMATION: 2015 AND ONGOING EFFORTS

• The 2014 oil supply glut required Trican to

take decisive action

• The Company’s actions have positioned

Trican to weather and take advantage of near-term North American energy market turbulence

Restructure Refocus Right Size Returns

7

TRICAN STRENGTH: FINANCIAL STRENGTH & RESILIENCY

• Financial position allows company to survive current downturn and

be in a strong position to take advantage of opportunities when industry improves

• Company has deleveraged by more than $700 million and

improved asset coverage relative to 2015 cyclical low

• Sold Russia business for ~ $1,720/HHP (Q3 2015)
• Sold US business for ~ $630/HHP (Q1 2016)
• Monetizing stranded capital by selling permanently idled assets
• Since 2017, sold $60 million of excess property and equipment at

values approximating net book value

• Sold water business in Q1 2020 for $17.6 million
• Selling redundant real estate: ~ $18 million listed for sale

Strong Financial Position

• Net bank debt of ~ $25 million (Mar. 31, 2020) (bank debt less ~

$23 million of cash)

• Positive working capital of greater than $100 million (Mar. 31, 2020)

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See non-GAAP measure Adjusted EBITDA as more fully described in Trican’s MD&A.

$0 $100 $200 $300 $400 $500 $600 $700 $800

• 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 Q2/19 Q3/19 Q4/19 Total Debt (millions) Debt / Tangible Capital

Debt / Tangible Capital

Total Debt (RHS) Debt / Tangible Capital (LHS) $0 $200 $400 $600 $800 $1,000 $1,200 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Canadian Results ($ millions)

Revenue Adjusted EBITDA

Hydraulic Fracturing 70% Cementing 16% Coil Services 8% Fluid Management 4% Industrial Services 2%

TRICAN STRENGTH: DIVERSIFIED SERVICE LINES

Market Leading Positions

• Canadian market leader in fracturing services

(based on horse-power)

• Canadian market leader in cementing services

(based on drilling rigs serviced)

• Supporting service lines: coil tubing, nitrogen,

acid, pipeline and industrial services

• 2019 revenue of $636 million

2019 Revenues: Business Unit Breakdown

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TRICAN STRENGTH: DRIVING EFFICIENCY IN THE CANADIAN MARKET

• Deliver exceptional customer service
• Drive efficiency in our business to lower our

costs and the cost to our customers

• Integrate small service lines with larger

business lines to improve cost structure and customer efficiency

• Reduce product chemistry costs resulting in

lower well costs for our customers

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TRICAN STRENGTH: DRIVING EFFICIENCY IN THE CANADIAN MARKET

• Ongoing innovations
• Largest natural gas dual fuel fleet (145,000 HHP) in

western Canada to help reduce well costs and GHGs

• Introducing new technology to reduce tractors on location

which will provide fuel savings, result in fewer engine hours, and reduce GHGs

• Implemented large bore treating iron, reducing repair and

maintenance costs

• Implementing equipment monitoring technology that will

reduce repairs and extend equipment life through data management

• Developed new cement blends to lower costs to customers
• Lowered fracturing product costs through implementation of

new fluid systems

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TRICAN STRENGTH: RIGHT FRACTURING FLEET

• Largest fleet of continuous duty pumps; most

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

• Equipment is well maintained, hot stacked

and requires little capex to activate

• Allows Trican to continue to efficiently
• perate in the highest service intensity

resource plays: Montney, Duvernay and Deep Basin (accounts for ~80% of the required HHP demand in Canada)

• Large dual fuel fleet to offer fuel savings:

145,000 HHP of natural gas bi-fuel pumps

Fracturing Fleet Type of Pump Pump (#) HHP % of Fleet Continuous Duty 2,700 / 3,000 HHP 126 345,000 59% Mid Tier 2,500 HHP 95 237,500 41% Total Fracturing Fleet 221 582,500

See MD&A for definition of Fracturing Fleet terms

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TRICAN STRENGTH: FRACTURING COMPETITIVE LANDSCAPE IMPROVING

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* Smaller crews not suitable for all higher intensity plays Source: Competitor company reports, internal company data, and internal estimates

• Canadian competitive landscape much better

than U.S. market

• Recent downturn is anticipated to drop active

crewed fleets by half in second half of 2020

• Crewed capacity in second half estimated to be

660,000 HHP and 18 crews as of April 1

• Evolving situation as second half activity

becomes better defined

• Crewed capacity was reduced ~ 400,000 HHP

during 2019

• Trican will not staff additional capacity until

prices improve

CANADIAN CAPACITY IN Q1 2020

Hydraulic Horsepower (HHP) Capacity Active Crewed Fleets Trican 583,000 324,000 8 Competitor A 305,000 193,000 4 Competitor B 298,000 225,000 6 Competitor C 170,000 125,000 2 Competitor D 250,000 140,000 3 Competitor E 263,000 175,000 5 Competitor F* 85,000 85,000 4 Competitor G* 50,000 50,000 4 2,004,000 1,317,000 36

TRICAN STRENGTH: AVAILABLE CAPACITY

• Trican has reduced its fleet size in response to

declining market conditions

• Current downturn will result in Trican parking

approximately half of our active equipment going forward that we were running in Q1

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Service Line Total Equipment Active, Manned Idled Fracturing (HHP) 583,000 162,000 (4 fleets) 421,000 (9 fleets) Cementing (trucks) 62 11 51 Coil Tubing (units) 23 6 17

• Will continue to monitor customer activity levels going forward and will adjust equipment as required to

reduce costs and keep utilization high on active equipment

• Existing idle equipment provides opportunity for incremental returns upon a market recovery
• Substantial leverage on existing infrastructure and fixed cost structure upon recovery
• Assets are well-maintained and not scavenged
• Can be activated by adding staff with little capital
• Approximately 9 fracturing fleets parked

TRICAN STRENGTH: ALIGNING COST STRUCTURE TO NEW CANADIAN MARKET

• We will continue to align our business to the changes in

the Canadian market and lower our costs accordingly:

• Reduced personnel costs including fixed and G&A by

approximately 50%

• Parked half of our active Q1 equipment
• Reduced discretionary costs in all categories
• Lowered capital spending to only essential maintenance

capital: estimated to be 3 to 4% of revenue going forward

• Will monitor customer activity going forward and will adjust

size of operations and cost structure with the target of making positive operating cash flow in the second half of the year

• History of cost reductions: annualized $40 million in cost

reductions during 2019

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TRICAN STRENGTHS: FINDING WAYS TO RETURN MONEY TO SHAREHOLDERS

• Trican is focused on delivering the top quartile

ROIC in our sector

• Since 2006, Trican has returned $390 million to

shareholders

• The Company remains focused on finding ways

to return funds to shareholders

• Have been actively purchasing shares under our

current NCIB and have purchased 6% of our approved volume since October 1, 2019

• Repurchased over 22% of the Company’s shares

since October 2017

• Paused NCIB recently and will activate once

industry visibility improves and stabilizes

• Current market dynamics support share

repurchases as the best way to return money to shareholders

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• 25,000

50,000 75,000 100,000 2006 2008 2010 2012 2014 2016 2018

• 100,000

200,000 300,000 400,000

Dividends and Share Repurchases, 2006 - 2019

Cumulative Dividend (RHS) Cumulative NCIB (RHS) Annual (LHS) Cumulative (RHS)

CANADIAN INDUSTRY & TRICAN COMPETITIVE POSITIONING

CANADIAN INDUSTRY: INCREASED WELL SERVICE INTENSITY

• 2019 well count 29% below 2018 levels
• 2020 estimates subject to change resulting from significant decline in oil prices
• 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 2020
• Tonnes of proppant placed per meter grew by approximately 30% in 2018 relative to 2017
• 1.5 tonnes / metre in 2018 vs. 1.2 tonnes / metre in 2017 (current 2019 data shows 1.4 tonnes / metre)
• Leading edge 2.0 tonnes / metre
• 2018 and 2019 data weighted to higher well service intensity wells

Source: Canadian Discovery Source: Stifel FirstEnergy

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10,853 10,924 5,376 3,963 6,959 6,781 4,809 5,050

• 2,000

4,000 6,000 8,000 10,000 12,000 2013 2014 2015 2016 2017 2018 2019E 2020E

WCSB - Wells Drilled

616 777 1,285 1,326 1,843 3,093 2,887

• 500

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

WCSB - Tonnes / Well

TRICAN: MARKET 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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Market Leading Positions

• Canadian market leader in fracturing

services (crewed HHP)

• Canadian market leader in cementing

services (based on rig count)

• Supporting service lines: coil tubing,

nitrogen, acid, pipeline and industrial services

• Trican service line offerings cover

approximately 60% to 70% of resource well AFE costs

TRICAN: CEMENT SERVICES

• Drilling rig count provides:
• A general indication of operational activity
• Cement operations track very closely with the

drilling rig activity

• Lower rig count has reduced cement truck

requirements, but longer laterals and increased cement requirements have counteracted this requirement

• Only two primary competitors in the cement

business

• Trican has maintained a steady market share in

this service line over the past decade

• Positive return on capital service line

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100 200 300 400 500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

12 Month Trailing Average Canadian Rig Count

Source: Baker Hughes GE Rig Count. 2020 includes actuals to March 6th and internal estimates to end of Q1/20.

TRICAN: GROWING COILED TUBING

• Adding scale to improve operating results
• Currently running 6 active units
• Have 17 more units to add back into the

market with little capital investment required

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TRICAN: INNOVATION

• Scale allows targeted investment into internally developed IP and new

technologies for reduced product costs

• Patented MVP™ fracturing fluids that suspend proppants and increase

production

• Nano surfactants to improve water flowback
• Developed new, high-viscosity friction reducers for produced water

fluids

• Some direct chemical sales to customers who use other pumping service

providers

• Introducing new technology to reduce tractors on location which will

provide fuel savings, result in fewer engine hours, and reduce GHGs

• Implementing equipment monitoring technology that will reduce repairs

and extend equipment life through data management

• Developed lower cost cement blends
• Continually lowering product costs

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Low industry activity cycle cash flow management: Current Cycle

• Continue to focus on lowering costs in downturn environment
• $40 million annualized cost savings realized throughout 2019 (full realization in 2020)
• Have adjusted active equipment, fixed and G&A costs down approximately 50% by April 1, 2020
• Will continue to adjust active equipment and costs downward to match industry activity
• Will maintain a strong balance sheet during downturn

Assets generated $183 million in adjusted EBITDA1 in 2017: Recent Cycle

• ~6,500 wells
• Average fracturing crew count of ~9.5 crews
• Excludes 5 months of acquired company results (Canyon acquired June 2017)

Trican will continue to evaluate asset divestiture opportunities or

• pportunities to generate returns on idle assets in other markets:

Other Financial Levers

• Since 2017, Trican has realized $60 million of proceeds from asset sales and expects to realize an incremental $15 million

in Q1 2020

• Currently have approximately $18 million of real estate available for sale

TRICAN STRENGTH: FINANCIAL MANAGEMENT AND CAPABILITIES

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1 See non-GAAP measures as more fully described in Trican’s MD&A.

NEAR-TERM OUTLOOK & INVESTMENT SUMMARY

OUTLOOK: Q2 2020

• Very slow quarter as customers adjust to new

commodity prices and delay well plans

• Trican has aggressively reduced cost structure

to adjust to reduced activity levels

• Prices relatively flat sequentially

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OUTLOOK: REMAINDER OF 2020

• Customers will adjust spending as commodity prices and cash

flows drop

• Each customer will adjust differently
• Trican will adjust active equipment and costs to changing

activity levels

• Overall activity estimated to be down 50% in second half of

2020

• Oil activity will be substantially down at current commodity prices
• AECO natural gas prices currently at a level that will drive some

gas activity in second half

• Pricing at levels that will not allow us to give many price breaks
• Will park additional equipment rather than operate at negative

cash returns

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WHY INVEST IN TRICAN

• Low debt level mitigates downside risk
• Company valued at historic low price

to tangible book value

• Fracturing horsepower valued below

what Trican sold 12 to 19-year-old equipment for ($160 / HHP)

• Ability to ride out the downturn with

significant torque upon recovery in the industry

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 Price / Tangible Book Value Debt / Tangible Equity

Price to Tangible Book Value vs. Leverage Profile

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

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INVESTMENT SUMMARY

RETURNS

• ROIC and capital

discipline focused

• Business

improvement and cost reductions for sustainable cash flow generation

• Positioned to

return money to shareholders

STRENGTH

• Largest Canadian

pressure pumping company with broad service offering

• Strong, loyal

customer base

• Low debt positions

Trican to withstand near-term weakness

• Strong asset

coverage

OPPORTUNITY

• Equipment capacity

provides opportunity for incremental returns upon a market recovery

• Financial position for
• pportunistic growth
• Low capex required

to grow business

• Very little customer

growth required to balance market

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APPENDICES

APPENDIX 1: SOCIAL AND ENVIRONMENTAL POLICIES

Safety

• Our frontline workers face dangers that are

not typical in most office workplace environments; therefore it is imperative we remain committed to safety.

• A common measure for our safety

performance is Lost Time Injury Rate (LTIR)

• During the past 12 Months, our LTIR rate

has dropped by nearly 50%

People Development

• Since 2017 we have invested over 200,000

hours of training time into our people

• To provide a safe and productive work

environment that results in quality service is training our people

• A majority of our operational people are

required to be trained as Class 1 driver trainers

• Trican’s driver trainer program has allowed

us to maintain our driver trainer status despite significantly increased regulations

• Investment into our lean six sigma

efficiency program will see a number of our people positioned to receive their green

• belt. Our people and our shareholders will

see the benefit of our lean initiatives

Environment

• Trican and its customers are subject to

strict environmental regulation and compliance.

• We have a system of governance to ensure

compliance of environmental rules and regulations

• Beyond standard regulatory compliance,

Trican is committed to finding economically and environmentally responsible ways to reduce our environmental footprint

• Trican has the largest fleet of dual fuel

fracturing pumps. Dual fuel fracturing pumps provide several benefits to our customers and the environment, including 27% reduced GHGs (source: U.S. EIA)

• Investment into tractor-less operations will

reduce engine idle times, fuel consumption and therefore GHGs

Our Annual Information Form provides more detail on our policies and governance surrounding social and environmental matters. Our primary initiatives in these areas are as follows:

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INVESTOR PRESENTATION

April 2020