OVERVIEW OF TRICAN - CURRENT Full service, Canadian pressure YEAR TO DATE DECEMBER 31, 2015 pumping company Revenue by Service Line 2% 3% 2% 440,000 HP available fracturing 9% capacity 17% Completions Tools business…
SALE OF U.S. BUSINESS 645,000 HP fracturing equipment 14 Cementing units 7 Coiled Tubing units Property, personnel, and ongoing work commitments 4
SALE OF U.S. BUSINESS Sold to Keane Group Approximately 285 million (CAD) cash 10% retained ownership in Keane Potential 20% upside from certain economic interests upon Keane liquidity event Total transaction value…
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…
DEBT REDUCTION AND COVENANT RELIEF Proceeds from U.S. sale will be used to pay down debt Debt post transaction of approximately 235 million 140 million of long-term notes 95 million drawn on 308 million revolver Will…
COVENANT RELIEF Amended covenants allow Trican 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…
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…
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 546 to 628 / HP 67% to 77% of PPE Retained ownership allows us…
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…
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…
CANADA Strong safety record Technical advantage in Canadian market which pays off in downturn MVP FracTM system Geological and reservoir services integrated into frac designs Lightweight cement blends Numerous engineers…
GEOGRAPHIC COVERAGE Horn River FORT NELSON HIGH LEVEL Shale British Columbia Alberta Saskatchewan Manitoba Montney FORT ST. JOHN Shale RED EARTH GRANDE PRAIRIE Duvernay Shale WHITECOURT HINTON NISKU LLOYDMINSTER…
CANADA EQUIPMENT Canadian HP Growth Current available Canadian fleet 500,000 450,000 440,000 fracturing HP 400,000 350,000 55 Cementing units 300,000 250,000 38 N2 Pumpers 200,000 150,000 19 Acid Units 100,000…
CANADA - OUTLOOK 35% of equipment parked during 2015 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 Pricing down 30% from 2014…
CANADA - OUTLOOK Utilization below expectations in Q1 (70%) A warm March could hurt quarter Pricing down in Q1 2016 Q2 2016 slow due to normal spring breakup Poor visibility at this time on Q3 2016 No adjustments up or…
CANADA - COST REDUCTIONS Reduce active fleets to match Q3 anticipated activity Exploring closing locations Reduce fixed costs further to match size of market Significant reductions in corporate costs as business becomes…
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…
INTERNATIONAL Closed sale of Russian business for 195 million CDN Includes first tranche of working capital adjustment Sold for 6.4x 2014 EBITDA Closed Saudi Arabia and Australia as scale not large enough to sustain…
GETTING THROUGH THE DOWNTURN
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…
POSITIVES AFTER THE DOWNTURN Strong earnings on reduced cost structure as utilization and pricing improve Competitive landscape changing Baker-Halliburton merger will create opportunities in all of our markets Competitive…
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…
INNOVATION
INNOVATION Trican focuses on separating itself with technology Technology must reduce /BOE for our customers or lower our costs MVP FracTM Patented chemical solution that reduces proppant settling in slick water fracs…
INNOVATION TriVertTM Diverting Agent Can be used in new completions or refracturing treatments Redirects fluid into new sections of the wellbore Contains particles that dissolve with time and temperature Expected to result…
TRICAN RESERVOIR SOLUTIONS Geological Solutions Offer unconventional rock analysis, core testing and rock mechanics Reservoir Solutions Reservoir model that integrates geological and frac data to optimize long-term reservoir…
SUSTAINABLE INNOVATION EcoClean Fluids Continuing to expand our line of environmentally friendly fracturing fluids Water Management and Reduction Developed a 100% recycled water crosslinked fluid solution with no mechanical…
FINANCIAL OVERVIEW
POST USA BALANCE SHEET Net book value of assets approximately 475 million 115 million drawn on 306 million revolving credit facility 306 million revolving credit facility is committed until 2018 Max utilization capped at 175…
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…
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 is generating industry…
SUMMARY Number of Outstanding Shares (as of February 29, 2016): 148.9 million Average Daily Volume (one month period): 859,559 (as of February 29, 2016) Directors/Officers Ownership: 2.0% (approx. - diluted basis) Market…
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