Investor Presentation WRG April 2015 Disclaimer FORWARD-LOOKING - - PowerPoint PPT Presentation

WRG

Investor Presentation

April 2015

Disclaimer

FORWARD-LOOKING INFORMATION This presentation may contain certain statements or disclosures relating to Western Energy Services Corp. (“Western”) that are based on the expectations of its management as well as assumptions made by and information currently available to Western which may constitute forward- looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Western anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information. In some cases, forward-looking information can be identified by terms such as “forecast”, “future”, “may”, “will”, “expect”, “anticipate”, “believe”, “potential”, “enable”, “plan”, “continue”, “contemplate”, “pro-forma”, or other comparable terminology. Forward-looking information contained in this presentation includes, among other things, the 2015 Budgeted Capital Expenditures and statements relating to future dividends. Completing those anticipated expenditures and the payment of future dividends assumes that Western’s cash flow will be sufficient and is subject to known and unknown risks, uncertainties and other factors that could influence Western’s actual results and cause actual results to differ materially from those stated, anticipated or implied in the forward-looking information. As such, readers are cautioned not to place undue reliance on the forward-looking information, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in more detail in Western’s Annual Information Form and other documents available at www.sedar.com. and include risks associated with the oil and gas industry and demand for drilling rigs and oil and gas services. Past performance of Western referred to in this presentation is shown for illustrative purposes only, does not guarantee future results of Western and is not meant to forecast, imply or guarantee the future performance of Western, which will vary. The forward-looking information is made as of the date of this presentation and Western does not undertake any obligation to update or revise any of the included forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking information contained in this presentation is expressly qualified by this cautionary statement. 2

Western’s Strategic Growth

Market Capitalization $560 Million April 6, 2015

3

Western Today

(plus 3 rigs under construction) (plus 1 rig under construction)

4

Geographic Diversity Drives Strong Customer Base

5

High Quality Customer Base

Consolidated year-to-date revenue as at December 31, 2014

CANADIAN NATURAL RESOURCES 13% PROGRESS 7% ARC 6% BONAVISTA 5% PENGROWTH 4% DEVON 4% BAYTEX 4% HUSKY ENERGY 4% CRESCENT POINT 4% ADVANTAGE OIL & GAS 3% Other 46%

> 150 Customers

6

<3,049m 33% 3,050 - 4,569m 57% >4,570m 10%

Industry by Depth Capacity**

Western’s Drilling Rig Fleet

**Source: IHS March 31, 2015 – Canada Only * Includes 3 rigs under construction

ELR Triples, 10 (4 pad rigs) ELR Telescopic Doubles, 38 (3 pad rigs) ELR Telescopic Range III Singles, 7 ELR Telescopic Range II Single, 1 Stiff Single, 1

Western's Drilling Rigs*

<3,049m 4% 3,050 - 4,569m 77% >4,570m 19%

Western's Fleet by Depth Capacity*

7

Western’s Competitive Advantage

Modern efficient fleet

– Small footprint and efficient moves – Rig-up and drill efficiently – Average age ~7 years – Automated pipe handling and hydraulic BOP handling – Two 5,000 m ELR telescopic doubles under construction

Pad drilling capability

– Commissioned first two ELR convertible pad rigs – Completed four pad rig conversions – One additional 6,000m AC ELR triple pad rigs under construction

100% of fleet have top drives available at customer request 6th largest drilling rig fleet in Canada

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Premium Drilling Utilization and Day Rates

79 81 27 53 55 71 28 56 65 81 34 60 59

Percent CAODC Industry Average CAODC Industry 10 Yr Avg Western

Canadian Drilling Utilization Rates (1) Canadian Drilling Day Rates (2) (3) (Total revenue per operating day)

$28,016 $33,199 $34,329 $33,507 $28,952 $31,904 $31,238 $28,399 $27,414 $31,721 $31,749 $30,602 $29,283 $32,502 $20,984 $24,117 $24,899 $26,493 $24,064 $26,572 $25,025 $26,389 $23,163 $24,564 $25,604 $26,359 $24,697 $26,484

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Q3/11Q4/11Q1/12Q2/12Q3/12Q4/12Q1/13Q2/13Q3/13Q4/13Q1/14Q2/14Q3/14Q4/14 Western Weighted AVG publicly traded CDN Drillers (excl. Western) (1) Source: Industry Research, CAODC estimates at January 8, 2014 (2) Source: Industry Research, Company Disclosure and RBC Capital Markets estimates at December 31, 2014 (3) Includes Third Party Charges

Western’s premium drilling rig fleet has consistently realized above average utilization and industry leading day rates in Canada

9

Western’s Well Servicing Fleet

One of the newest fleets in Canada

– Average age of the fleet ~5 years – 7th largest well servicing fleet in Canada – For Q4 2014 Eagle had the 3rd highest

• perating hours amongst CAODC

members

Constructing 8th Slant Rig Operation Centres:

– Red Deer, Alberta – Grande Prairie, Alberta – Lloydminster, Saskatchewan – Estevan, Saskatchewan

Mobile Singles, 32 49% Mobile Doubles, 26 39% Mobile Slants, 8* 12%

* Includes 1 slant rig under construction

10

70 73 43 62 63 74 30 51 53 63 40 55 58

Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Percent Peer Group Utilization* Eagle

Premium Service Rig Utilization

Quality equipment and strong employee base drives higher utilization Eagle hourly rates are competitive but moderately lower than industry due to geographic rig mix

Canadian Well Servicing Rig Hourly Rates (1) (2) Canadian Well Servicing Rig Utilization Rates

Source: Industry Research, Company Disclosure as at December 31, 2014 1. Peer group includes Precision Drilling, Savanna Energy Services, Essential Energy Services, Ensign Energy Services and CWC Well Services. 2. Based on full utilization of 10 hours per day

(1, 2) (1)

Source: Raymond James Industry Research, Company Disclosure as at September 30, 2014 1. Peer group includes Precision Drilling, Savanna Energy Services, Essential Energy Services and CWC Well Services. 2. Peer group hourly rates may include other non service rig specific services

$773 $825 $758 $740 $766 $802 $763 $746 $804 $822 $800 $804 $837 $774 $830 $757 $755 $786 $832 $806 $848 $838 $858 $866 $831 $853

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Eagle Peer Group Hourly Rate*

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Quality Oilfield Rental Equipment

Broad range of surface rental equipment for:

– Frac Services – Well Completion – Coil Tubing Services – Drilling

Larger customer base that includes Exploration & Production and

• ilfield service companies

Replacement cost of assets – approximately $40 million Quality equipment with new assets being deployed to meet current demand Increased customer demand from unconventional resource plays Evolving business providing opportunities to deploy long life assets for

• ur customers

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Operating Highlights

2014 2013 % Change 2014 2013 % Change Contract drilling Canadian Operations Rig fleet (end of period) 49 47 4% 49 47 4% Operating Revenue per revenue day (CDN$) 27,104 26,060 4% 26,178 24,829 5% Drilling rig utilization rate per revenue day 65% 72% (10%) 64% 61% 5% Drilling rig utilization rate per operating day 59% 65% (9%) 58% 55% 5% CAODC industry average utilization rate 45% 43% 5% 44% 40% 10% United States Operations Rig fleet (end of period) 5 5

• 5

5

• Operating Revenue per revenue day (US$)

28,309 23,457 21% 26,124 22,507 16% Drilling rig utilization rate per revenue day 95% 99% (4%) 94% 81% 16% Drilling rig utilization rate per operating day 85% 87% (2%) 83% 67% 24% Well Servicing Rig fleet (end of period) 65 65

• 65

65

• Operating Revenue per service hour (CDN$)

837 804 4% 817 766 7% Well servicing rig utilization rate 58% 53% 9% 54% 45% 20% Operating Highlights Fourth Quarter Year Ended December 31

13

Corporate Overview

Common shares Basic Diluted 75 Million 80 Million Current share price (as at April 6, 2015) $7.00 52 Week Range $4.88 – $11.70 Market capitalization (f.d.) (as at April 6, 2015) $560 Million Net debt $203 Million Enterprise value (f.d.) $763 Million Working capital (excl. current-portion of LTD) $79 Million Capital assets (NBV) $827 Million Book value per share (f.d.) $7.51 Net tangible assets per share (f.d.) $6.61

14

Financial Highlights

2014 2013 % Change 2014 2013 % Change 2012 2011 2010 Operating Revenue 129,181 119,831 8% 474,120 353,124 34% 282,856 237,428 52,285 Gross Margin 57,826 52,980 9% 207,231 147,559 40% 131,063 114,837 22,902 Gross Margin as a % of Operating Revenue 45% 44% 2% 44% 42% 5% 46% 48% 44% Adjusted EBITDA 50,419 43,543 16% 176,777 117,423 51% 108,931 99,324 16,504 Adjusted EBITDA as a % of Operating Revenue 39% 36% 8% 37% 33% 12% 39% 42% 32% (8,164) 15,797 (152%) 36,450 35,246 3% 45,178 64,746 26,590 per share (basic) (0.11) 0.22 (150%) 0.49 0.51 (4%) 0.77 1.25 1.17 0.075 0.075

• 0.30

0.30

• 0.15
• Capital expenditures

31,071 27,529 13% 108,604 95,234 14% 127,231 88,869 21,282 Dividends per share Fourth Quarter Year Ended December 31 Financial Highlights (Thousands CDN$) Net Income (Loss) Year Ended December 31

15

Balance Sheet Overview

Credit Facility Covenants Covenant Bank Debt (excluding Senior Notes) to EBITDA Ratio 2.5 to 1 or less Debt to Capitalization Ratio 60% or less EBITDA to Interest Expense Ratio 2.0 to 1 or more Credit Ratings Standard & Poor's B+ Moody's B1

• $265 million High Yield 7⅞% Coupon Bonds due January 2019
• $175 million unutilized revolver

Consolidated Balance Sheet ('000s) December 31, 2014 December 31, 2013 Cash and other current assets 158,823 $ 113,484 $ Property and equipment 827,306 783,225 Goodwill and other 70,989 90,083 Total assets 1,057,118 $ 986,792 $ Current liabilities 80,487 $ 62,868 $ Long term debt and other 265,984 264,834 Deferred taxes 109,444 95,665 Total 455,915 423,367 Shareholders' equity 601,203 563,425 Total liabilities and equity 1,057,118 $ 986,792 $

16

2015 Budgeted Capital Expenditures $46 Million

Maintenance 43% ($20 million) Expansion 53% ($24 million) Rotational Equipment 4% ($2 million)

Consolidated Capital Spending – Expansion vs. Maintenance & Rotational Equipment

Horizon 61% Stoneham 7% Eagle 15% Aero 17%

Consolidated Capital Spending by Entity

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Strategic Initiatives

Stay financially flexible with a well structured balance sheet Remain focused on cost control Continue to offer a quarterly dividend Respond to strategic initiatives across all divisions Ensure safe and efficient operations remain at the forefront of every element of the business Continue to focus on enhancing and fine tuning existing business lines for optimum performance

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Appendix

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Well Licenses by Objective (2) Horizontal Well Licenses (2) WCSB Well Licenses > 3,050m (2) Canadian Wells – Operating Days (1)

158,427 121,023 134,835 78,005 119,300 145,272 124,613 120,221 131,021 76,696

• 20,000

40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

200 400 600 800 1000 1200 1400 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Hz Licenses Issued

2011 2012 2013 2014 (1) Source: CAODC, 2015 Forecast as at January 22, 2015 (2) Source: Nickle’s Energy as at December 31, 2014

• 50

100 150 200 250 300 350 400 450 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Well Licenses > 3,050 m

19% CAGR

500 1,000 1,500 2,000 2,500 3,000 3,500 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Number of Well Licenses

Oil Gas

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Western’s Drilling Rig Depth Capacity

** Includes 3 rigs under construction

Depth (m) WCSB # of Rigs* % of Fleet WESC** % of Fleet < 760 22 3%

• 760 to 1,524

75 10%

• 1525 to 2,279

50 7% 2 4% 2,280 to 3,049 119 16%

• 266

35% 2 4% 3,050 to 3,799 248 33% 23 40% 3,800 to 4,569 170 22% 21 37% 4,570 to 6,099 59 8% 11 19% 6,100 and deeper 14 2% 491 65% 55 96% Total 757 100% 57 100%

* Source: IHS March 31, 2015

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Leading Deep Driller in Canada

Source: IHS, Industry Research as at March 31, 2015 (based on companies of Western’s size or greater) * Western includes 3 rigs under construction 96% 89% 83% 72% 65% 60% 4% 4% 17% 12% 21% 7% 17% 11% 24% 19% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Western* Nabors Trinidad Precision Savanna Ensign Greater than 2,999m Between 2,000 and 2,999m Less than 2,000m

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Notes

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Alex R.N. MacAusland President & CEO Jeffrey K. Bowers Senior Vice President, Finance & CFO

Western Energy Services Corp. 1700, 215 – 9th Avenue SW Calgary, Alberta T2P 1K3 Telephone: (403) 984-5916 www.wesc.ca