NINE ENERGY SERVICE INVESTOR PRESENTATION Q3 2018 1
COMPANY OVERVIEW
NINE COMPANY OVERVIEW OUR COMPANY Focused on ROIC Leveraged to increasing completion intensity including mega-well pads, lateral lengths and stage count Super lateral, deep reach capable service offering and focus Agnostic to…
TECHNOLOGY-DRIVEN COMPLETIONS OFFERING Nine is capable of addressing 100% of the onshore wells drilled in North America, regardless of completion type PRE & POST STIMULATION HORIZONTAL LATERAL TOE OF THE WELL Large Diameter Coil +…
PREMIER ISOLATION TOOL PROVIDER Able to serve the entire addressable isolation tool (isolation tool = plug) market with proven dissolvable and composite offerings (1 frac stage = 1 plug) 2019E NA Stage Count: 775,0081 2 market share…
SUSTAINABLE VALUE PROPOSITION OF SERVICE & TECHNOLOGY Service and technology drives efficiencies and lowers total cost of ownership for operators SERVICE/TECHNOLOGY PERFORMANCE DAYS SAVED REVENUE GENERATION FOR OPERATORS1 ScorpionTM…
MULTI-WELL PADS CONCENTRATE RISK BARRIERS TO ENTRY CONTINUE TO INCREASE SINGLE-WELL PAD COMPLETIONS MULTI-WELL PAD COMPLETIONS LONGER LATERALS TIGHTER SPACING PAD DRILLING l l Concentration of dollars / pad + exponential impact…
BROAD FOOTPRINT ENABLES TECHNOLOGY LEADERSHIP FOOTPRINT IN EVERY MAJOR NAM BASIN significant benefit to potential strategic partners through distribution volume Canada 4% EXCELLENT NAM REACH CAPABILITY proximity to the…
BARRIERS TO ENTRY THROUGH TECHNOLOGY AND SERVICE HOW DOES NINE BUILD MOATS AROUND THE BUSINESS Service + technology / equipment + people to service the longest laterals today and tomorrow COMPLETION SOLUTIONS PERFORMANCE BARRIERS…
PROOF OF PERFORMANCE Majority Of Nines Completion Work Is Long Laterals Has Led To Increased Efficiencies And Higher Barriers To Entry 16% 167% 48 14.5 78% 164% 27 6% 5.5 2014 Q3 2018 2014 2017 2014 Q3 2018 2 Nine US…
CUSTOMERS WHO TRUST US Diverse, blue-chip customer base with minimal concentration COMPLETION PRODUCTION 12
PROFESSIONALIZED HSE PROGRAM IMPROVED HSE REPORTING AND PERFORMANCE ACROSS SERVICE LINES Nine TRIR1 2.47 67% Reduction 1.50 1.44 1.26 0.8 2014 2015 2016 2017 2018 YTD (Q3) 1Does not include Magnum 13
RETURNS-FOCUSED GROWTH PHILOSOPHY Balance of Organic Growth and Strategic M&A: Augment technology portfolio + Enhance NAM footprint ORGANIC GROWTH DISCIPLINED M&A Strategic expansion of existing service lines within NAM Continue to…
MAGNUM OIL TOOLS OVERVIEW On October 25, 2018 Nine acquired Magnum Oil Tools Transaction is accretive to EPS, margins and long-term ROIC, and will significantly enhance Nines free cash flow generation while reducing capital and labor…
PRO FORMA FINANCIAL OVERVIEW (mm) NINE MAGNUM PRO FORMA1 903 759 544 633 REVENUE 283 340 57 90 145 2016 2017 1H 2018 2016 2017 1H 2018 2016 2017 1H 2018 ADJUSTED EBITDA 153 109 83 60 44 10 2 23 12 2016 2017 1H…
PRO FORMA CAPITALIZATION (10/25/18) In conjunction with the Magnum transaction, which closed on October 25, 2018, Nine put a new capital structure in place with long-dated maturities and enhanced financial flexibility PRO FORMA…
UNIQUE VALUE PROPOSITION Completions focused Technology and service differentiation Ability to service the most technically demanding wells Returns-focused business philosophy Access to entire addressable market Leading market…
CLOSE TO PERFECTION. FAR FROM ORDINARY. DRIVEN TO SUCCEED. 21
APPENDIX
NINE STANDALONE ADJ. EBITDA RECONCILIATION Six months Six months Three Months Ended Year ended December 31 ended ended June 30, December 31, ( mm unless otherwise noted) 30-Sep-18 30-Jun-18 31-Mar-18 2017 2016 2015 2014 20141 20141…
NINE STANDALONE ROIC RECONCILIATION Three Months Ended Three Months Ended Three Months Ended Year Ended December 31 ( MM UNLESS OTHERWISE NOTED) 30-Sep-18 30-Jun-18 31-Mar-18 2014 After-tax net operating profit reconciliation: Income…
MAGNUM STANDALONE ADJ. EBITDA RECONCILIATION ( mm unless otherwise noted) 2016 2017 1H'18 EBITDA Reconciliation Net income (loss) 1 22 21 Interest expense 0 0 0 Depreciation 1 1 0.4 Income tax expense (benefit) 0 0 1 EBITDA 2 23 22…
NINE PRO FORMA ADJ. EBITDA RECONCILIATION ( mm unless otherwise noted) 2017 1H'18 EBITDA Reconciliation Net income (loss) (71) 15 Interest expense 36 18 Depreciation 55 27 Amortization 19 9 Income tax expense (benefit) (7) 3…
BALANCE SHEET & LIQUIDITY POSITION (9/30/18) CAPITALIZATION COMMENTARY As of September 30, 2018 Nine has a total liquidity position of (MM) 136.0mm as of 9/30/18 Cash 86.5 Nine will be disciplined with capital deployment, with a…
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