CAPP SCOTIABANK INVESTMENT SYMPOSIUM Toronto, ON April 12 & 13, 2016
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 operations 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. 2
OVERVIEW OF TRICAN Full service, Canadian pressure pumping company YEAR TO DATE DECEMBER 31, 2015 Revenue by Service Line Market leader in Canada 9% 2% 3% 2% 440,000 HP available fracturing capacity 17% Completions Tools business active in North America, Norway and Russia 67% Focus on safety, technology, and operational performance Fracturing Cementing Nitrogen Coiled Tubing Acid & Specialty Chemicals Industrial & Pipeline Services 3
CANADA
CANADA Trican is the largest pressure pumper in Canada Trican offers full services in Canadian market which balances revenue and profitability Large cementing market share Strong market share in other services Canadian market has fewer competitors (6 vs. over 30 in the U.S. market) Trican has a strong customer base in Canada Numerous long-term clients Canadian dollar to U.S. dollar exchange rate helps customer economics 5
CANADA Strong safety record Technical advantage in Canadian market which pays off in downturn Numerous engineers embedded in client offices MVP Frac TM system Geological and reservoir services integrated into frac designs Lightweight cement blends Technology retains and grows market share and improves returns in a downturn Strong operations 6
GEOGRAPHIC COVERAGE Horn River Shale FORT NELSON HIGH LEVEL British Columbia Alberta Saskatchewan Manitoba Montney Shale FORT ST. JOHN RED EARTH GRANDE PRAIRIE WHITECOURT HINTON NISKU LLOYDMINSTER Duvernay Shale DRAYTON VALLEY RED DEER PROVOST Viking Tight Oil Tight Gas CALGARY BROOKS ESTEVAN BRANDON Cardium Tight Oil Lower Shaunavon Tight Oil Bakken Shale Spearfish 7
CANADA EQUIPMENT Current Canadian fleet 440,000 fracturing HP 55 Cementing units 38 N 2 Pumpers 19 Acid Units 16 Coil Units 50% of equipment parked during remainder of 2016 Parked equipment ring fenced and ready to go to work when activity improves Will right size fleet up or down to maximize utilization and profits 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Canadian HP Growth 2008 2009 2010 2011 2012 2013 2014 2015 2016* * Anticipated HP at year-end based on approved budgets, which are subject to change 8
CANADA - OUTLOOK Utilization and activity low in Q1 March very slow due to early breakup Pricing down approximately 10% sequentially in Q1 2016 Q2 2016 slow due to normal spring breakup and commodity prices Poor visibility at this time on Q3 2016 Customers should confirm programs in May Anticipate slower Q3 2016 vs. previous year Customer base remains strong 9
CANADA - SECOND HALF COST SAVINGS Parked additional equipment for upcoming quarters Approximately 50% of equipment parked Closed Medicine Hat and Drumheller locations Cost savings of $1.3 million in second half Compensation savings Q2 rollbacks savings of approximately $9.5million Savings of approximately $3.5 million / month in second half Moving to variable pay schedule for remainder of year Product cost savings Approximately $1 million annually R&M, Other Costs Approximately $2 million / month 10
GETTING THROUGH THE DOWNTURN
POSITIVES AFTER THE DOWNTURN Strong earnings on reduced cost structure as utilization and pricing improve Mid-cycle EBITDA from Canada (2014): $226 million Peak EBITDA from Canada: $465 million Competitive landscape changing Baker-Halliburton merger will create opportunities in all of our markets Sanjel / STEP deal reduces competition One other small fracturing company in receivership Equipment attrition will be significant which improves recovery 12
GETTING THROUGH THE DOWNTURN Improve balance sheet Keep utilization high and costs low in remaining operations Reduce fixed costs as business centralizes to Canada Maintain customer relationships Provide differentiating safety, efficiency and technology 13
COMING OUT OF THE DOWNTURN We will focus on: Being on the leading edge of cost and operational efficiencies Achieving cost advantages through size and scale in Canada Separating ourselves through technology, safety, service quality and innovation Long term, need to lower cost to producers without lowering our margins More efficient, lower cost fracturing business through equipment designs, technology and reductions in costs Will look to expand service lines in Canada upon recovery to leverage on our strong Canadian business 14
COMPLETION TOOLS
COMPLETION TOOLS Operations in Norway, Russia, USA and Canada Offer multistage frac tools, completion and intervention tools for both open hole and cemented installations Competitive advantage with patented completion system that has capacity for 240 cemented stages Grown Norwegian and Russian revenue and profitability in 2015 due to market share growth 2016 demand still challenged in North America and anticipate continued strong performance in Norway and Russia 16
SALE OF U.S. BUSINESS
SALE OF U.S. BUSINESS Sold to Keane Group on March 16 Approximately $267 million (CAD) cash 10% retained ownership in Keane Potential 20% upside from certain economic interests upon Keane liquidity event Total transaction value between $334 and $387 million (CAD) 18
SALE OF U.S. BUSINESS Trican retains ownership of technology Keane has a non-exclusive license to Trican technology Trican will market certain technology to others in U.S. and to markets in which we no longer have equipment 19
U.S. SALE - STRATEGIC RATIONALE Covenant relief and strengthened balance sheet puts Trican in a strong position to weather the downturn Fair deal in this market $518 to $600 / HP 64% to 73% of PPE Retained ownership allows us to participate in U.S. recovery Combined Trican-Keane will have lower cost structure and good balance sheet to ride out the downturn and size to compete in U.S. going forward 20
U.S. SALE - STRATEGIC RATIONALE Keane intends to continue to grow the business to be a major player in the U.S. market Trican has a 2-year non-compete and first right to purchase the business should we decide to re-enter the U.S. Trican technology and engineering will augment Keane s operations Trican will license our technology to others going forward Allows Trican to focus on our core markets 21
FINANCIAL OVERVIEW
POST USA BALANCE SHEET Outstanding Senior Notes - Post Strategy $123 million drawn on $303 million revolving credit facility $303 million revolving credit facility is committed until 2018 Max utilization capped at $175 million until Q3 2016 $144 million of notes $41 million is due in April 2016 All note amounts are net of currency swaps $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Nov 2017 Apr 2018 USD Notes (hedged) 2019 2020 Apr 2021 USD Notes (unhedged) 2022 2023 Sept 2024 CAD Notes 23
COVENANT RELIEF Amended covenants put Trican in a strong position to ride out the downturn All financial covenants eliminated until Q3 2016 Leverage covenant of 5x and interest coverage of 2x will start in Q3 and will be calculated in Q3 as four times Q3 EBITDA 24
COVENANT RELIEF LTM calculations will not commence until Q2 2017 Normalized covenant of 3x Debt/EBITDA by Q1 2018 Equity cure provision allows us to apply 50% of any equity raise towards EBITDA in covenant calculations Equity cure can be used twice per year up to a maximum of $20 million 25
CASH FLOW Managing cash flow and liquidity a key focus in 2016 Dividend suspended until financial performance improves Total capital spend in 2016 expected to be approximately $20 million No expansion initiatives will be considered until financial performance improves 26
INVESTMENT ADVANTAGES Trading substantially below book value Significant earnings potential on existing assets High leverage on low cost structure coming out of downturn Strong Canadian business that generates industry leading margins Ability to further de-lever balance sheet Strong management team that has managed through numerous cycles Equipment base not scavenged and ready to go when activity increases 27
SUMMARY Number of Outstanding Shares (as of March 31, 2016): 148.9 million Average Daily Volume (one month period): 899,851 (as of March 31, 2016) Directors/Officers Ownership: 2.0% (approx. - diluted basis) Market Cap: $177 million as of March 31, 2016 28
CAPP SCOTIABANK INVESTMENT SYMPOSIUM Toronto, ON April 12 & 13, 2016