AVEDA TRANSPORTATION AND ENERGY SERVICES INC.

AVEDA TRANSPORTATION AND ENERGY SERVICES INC. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the three and nine months ended September 30, 2017 and 2016 (Unaudited)

AVEDA TRANSPORTATION AND ENERGY SERVICES INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited) (In thousands of Canadian dollars) September 30, December 31, Note 2017 2016 ASSETS Current assets: Cash $ 234 $ 344 Trade and other receivables 46,253 26,425 Prepaid expenses 3,173 2,752 Non-current assets: 49,660 29,521 Equipment and leaseholds 89,545 100,737 Intangible assets 340 535 Total assets $ 139,545 $ 130,793 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Trade and other payables $ 28,971 $ 14,177 Current tax payable 267 288 Non-current liabilities: 29,238 14,465 Loans and borrowings 7 40,132 57,327 Note payable 33,696 36,253 Shareholders equity: 73,828 93,580 Share capital 8 112,448 91,476 Warrants 9 139 - Contributed surplus 14,391 13,856 Accumulated other comprehensive income 12,294 14,407 Deficit (102,793) (96,991) 36,479 22,748 Total liabilities and shareholders equity $ 139,545 $ 130,793 The accompanying notes are an integral part of these consolidated financial statements. Approved by the Board of Directors "David Werklund" Director "Paul Shelley" Director 2

AVEDA TRANSPORTATION AND ENERGY SERVICES INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (In thousands of Canadian dollars, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, Note 2017 2016 2017 2016 Revenue $ 53,502 $ 20,955 $ 146,523 $ 41,886 Expenses: Direct operating 48,214 22,518 132,522 52,816 Selling and administrative 4,610 2,877 14,073 10,362 Finance costs 1,623 1,364 5,232 4,314 Foreign exchange loss (gain) 110 (43) 199 53 Loss (gain) on disposal of equipment - (50) (16) 26 Loss before income taxes (1,055) (5,711) (5,487) (25,685) Income taxes: Current tax expense (recovery) 50 (66) 315 11 50 (66) 315 11 Net loss (1,105) (5,645) (5,802) (25,696) Other comprehensive income (loss): Foreign currency translation differences (1,105) 584 (2,113) (2,904) Comprehensive loss $ (2,210) $ (5,061) $ (7,915) $ (28,600) Loss per share Basic and diluted 5 $ (0.02) $ (0.30) $ (0.12) $ (1.35) Weighted average number of common shares outstanding: Basic and diluted 5 57,354 19,079 50,014 19,079 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 3

AVEDA TRANSPORTATION AND ENERGY SERVICES INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (Unaudited) (In thousands of Canadian dollars) Accumulated Other Share Contributed Comprehensive Capital Warrants Surplus Income Deficit Total Balance, January 1, 2017 $ 91,476 $ - $ 13,856 $ 14,407 $ (96,991) $ 22,748 Net loss - - - - (5,802) (5,802) Issuance of common shares (note 8) 20,972 - - - - 20,972 Issuance of warrants (note 9) - 139 - - - 139 Foreign currency translation differences - - - (2,113) - (2,113) Stock-based compensation expense - - 535 - - 535 Balance, September 30, 2017 $ 112,448 $ 139 $ 14,391 $ 12,294 $ (102,793) $ 36,479 Accumulated Other Share Contributed Comprehensive Capital Warrants Surplus Income Deficit Total Balance, January 1, 2016 $ 91,474 $ - $ 13,881 $ 16,512 $ (65,147) $ 56,720 Net loss - - - - (25,696) (25,696) Foreign currency translation differences - - - (2,904) - (2,904) Stock-based compensation expense - - (30) - - (30) Balance, September 30, 2016 $ 91,474 $ - $ 13,851 $ 13,608 $ (90,843) $ 28,090 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 4

AVEDA TRANSPORTATION AND ENERGY SERVICES INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited) (In thousands of Canadian dollars) Cash provided by (used in) Nine Months Ended September 30 Note 2017 2016 Operating activities: Net loss $ (5,802) $ (25,696) Items not affecting cash: Depreciation of equipment and leaseholds 11,712 13,587 Finance costs 5,232 4,314 Stock-based compensation expense (recovery) 535 (30) Income tax expense 315 11 Amortization of intangible assets 195 196 Foreign exchange loss 199 53 Loss (gain) on disposal of equipment and leaseholds (16) 26 Changes in non-cash balances relating to operations 6 (7,618) (2,558) Finance costs paid (6,120) (4,062) Income tax paid (314) (399) Net cash used in operating activities (1,682) (14,558) Investing activities: Purchase of equipment and leaseholds (6,320) (1,334) Proceeds from disposal of equipment and leaseholds 16 2,120 Net cash used in investing activities (6,304) 786 Financing activities: Issuance of common shares, net of share issuance costs 8 21,016 - Net increase (repayment) of loans and borrowings 7 (13,140) 13,874 Net cash provided by financing activities 7,876 13,874 Effect of foreign exchange rate changes on cash balances - (2) Change in cash (110) 100 Cash, beginning of period 344 338 Cash, end of period $ 234 $ 438 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 5

Aveda Transportation and Energy Services Inc. Notes to the Condensed Consolidated Interim Financial Statements (Dollar amounts are Canadian dollars, all amounts, except per share amounts, are in thousands unless otherwise specified) Three and nine months ended September 30, 2017 and 2016 (Unaudited) 1. Reporting Entity Aveda Transportation and Energy Services Inc. (the "Company") was incorporated pursuant to the laws of the Province of Alberta and is a publicly-traded company listed on the TSX Venture Exchange ("TSXV") under the symbol "AVE". The Company s primary business activity is the provision of specialized equipment and services for the transportation of equipment required for the exploration, development and production of petroleum resources. The Company operates in Western Canada and the United States. 2. Basis of Preparation a) Statement of Compliance These condensed consolidated interim financial statements ("Interim Financial Statements") have been prepared in accordance with International Accounting Standards ( IAS ) 34 Interim Financial Reporting. These Interim Financial Statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the annual financial statements for the year ended December 31, 2016 which have been prepared in accordance with International Financial Reporting Standards ( IFRS ). These Interim Financial Statements were authorized for issue by the Board of Directors on November 20, 2017. b) Seasonality In prior financial statements, the Company had discussed the seasonality of its operations. The Company has determined that seasonal activity patterns of the Western Canadian Sedimentary Basin and North Dakota s oil and gas operations are no longer material to the overall financial results. c) Basis of Measurement These condensed consolidated interim financial statements have been prepared on the historical cost basis. d) Functional and Presentation Currency These condensed consolidated interim financial statements are presented in Canadian dollars which is the functional currency of the Company and its Canadian subsidiary. The Company s United States ("U.S.") subsidiaries have a functional currency of U.S. dollars. As the Company has operations in the United States, the consolidated financial results may vary between periods due to the effect of foreign exchange fluctuations in translating the revenues and expenses of its operations in the United States to Canadian dollars. All financial information presented in Canadian dollars has been rounded to the nearest thousand except for per share amounts. The amounts included in accumulated other comprehensive income relate to foreign exchange translation gains and losses on entities whose functional currency is other than the Canadian dollar. Amounts included in accumulated other comprehensive income will be recycled into net income upon the disposition or partial disposition of the foreign operation. 6

Aveda Transportation and Energy Services Inc. Notes to the Condensed Consolidated Interim Financial Statements (Dollar amounts are Canadian dollars, all amounts, except per share amounts, are in thousands unless otherwise specified) Three and nine months ended September 30, 2017 and 2016 (Unaudited) e) New Standards and Interpretations not yet Adopted A number of new standards, and amendments to standards and interpretations, are not yet effective for the nine months ended September 30, 2017, and have not been applied in preparing these consolidated financial statements. Management is reviewing the standards to determine the impact on the Company s financial statements. IFRS 15 Revenue from Contracts with Customers IFRS 15 Revenue from Contracts with Customers is effective for annual periods beginning on or after January 1, 2018. Management has finalized its review of this standard and is of the opinion that is unlikely that there will be any significant impact on the Company s financial statements, except for additional disclosures, when adopted for the annual period beginning on January 1, 2018. 3. Significant Accounting Policies These Interim Financial Statements follow the same accounting policies and methods of computation as the most recent annual consolidated financial statements of the Company for the year ended December 31, 2016. 4. Segment Information The Company has two operating segments. These two operating segments have been differentiated by the geography in which the business operates. The following table provides financial results by segment: Three months ended September 30, 2017 United States Canada Corporate Total Revenue 47,227 6,275-53,502 Net loss (811) (70) (224) (1,105) Depreciation and amortization 3,238 704-3,942 Capital expenditures 1,264 552-1,816 Adjusted EBITDA 1 (loss) 4,509 333 (134) 4,708 Three months ended September 30, 2016 United States Canada Corporate Total Revenue 19,290 1,665-20,955 Net loss (4,869) (788) 12 (5,645) Depreciation and amortization 3,715 843-4,558 Capital expenditures 133 412-545 Adjusted EBITDA 1 (loss) 450 (342) (37) 71 7

Aveda Transportation and Energy Services Inc. Notes to the Condensed Consolidated Interim Financial Statements (Dollar amounts are Canadian dollars, all amounts, except per share amounts, are in thousands unless otherwise specified) Three and nine months ended September 30, 2017 and 2016 (Unaudited) The weighted average number of common shares outstanding is calculated as follows: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Issued common shares at January 1 19,080 19,079 19,080 19,079 Weighted average of shares issued (note 8) 38,274-30,934 - Weighted average number of common shares at September 30 57,354 19,079 50,014 19,079 As at September 30, 2017 and 2016, all options and share based instruments were excluded from the diluted weighted average number of common shares calculation as their effect would have been anti-dilutive. 6. Changes in Non-Cash Balances Relating to Operations Nine months ended September 30 2017 2016 Trade and other receivables $ (22,372) $ (3,483) Prepaid expenses (608) 106 Trade and other payables 15,444 711 Impact of foreign exchange (82) 108 $ (7,618) $ (2,558) 7. Loans and Borrowings On January 12, 2017, the Company entered into a new facility agreement with its banking syndicate. The Company extended its asset based operating facility ( New Facility ) to May 31, 2019. The maximum amount of the New Facility is $92,500 which consists of a committed facility of $77,500 and an acquisition line accordion of $15,000. On January 12, 2017, Werklund Capital Corporation and Werklund Ventures Ltd. (collectively WCC ), both related parties as WCC is controlled by the Company s Chairman of the Board, agreed under the New Facility to provide Aveda s banking syndicate (the Syndicate ) with a $5,000 standby debt facility (the Standby Facility ) that can be called upon at the sole discretion of the Syndicate in the event of a default under the New Facility. Due to the strong performance of the Company in the first half of 2017, the Syndicate agreed that it no longer requires this facility. Accordingly, the Company terminated the Standby Facility on August 4, 2017. As at September 30, 2017, the Company had utilized $41,850 (December 31, 2016 - $57,327) of its revolving credit facility resulting in Undrawn Availability (as defined in the facility agreement) on this facility of $32,811 (December 31, 2016 - $35,514). 8. Share Capital On February 22, 2017, the Company issued a total of 38,101 Common Shares, at a price of $0.60 per share, for aggregate gross proceeds of $22,860 (net proceeds of approximately $21,016). On April 12, 2017, the Company issued 111 Common shares valued in total accordance with the Standby Facility. On June 30, 2017, the Company issued 49 Common 9