NINE ENERGY SERVICE INVESTOR PRESENTATION Q3 2019 1
COMPANY OVERVIEW
NINE COMPANY OVERVIEW OUR COMPANY Focused on ROIC 2019 projection of 5-6% Leveraged to increasing completion intensity including mega-well pads, lateral lengths and stage count Super lateral, deep reach capable service offering and…
NINES UNIQUE STRATEGY Sustainability Returns (ROIC) Mitigation of financial risk Cash flow generative Capital Intensity Capital Light Wellsite Execution Customer Legitimacy Real-time information R&D 5
DRIVING VALUE FOR CONSTITUENTS CUSTOMERS Ability to decrease cost to complete and increase EUR VALUE EMPLOYEES INVESTORS Socioeconomic Financial movement & career Sustainability progression & Returns 6
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 +…
DISSOLVABLE PLUG THESIS INTACT MARKET OUTLOOK Today 3-5 Years 10-15% OF 35-50%+ STAGES OF STAGES COMPLETED COMPLETED DISSOLVABLE THESIS Time Savings Risk Mitigation Reduced Footprint Can save operators 24 Eliminates time and…
NAM DISSOLVABLE PLUG MARKET Mixed Area (High-temp/low-temp) High-temp Coverage Area 150F Low-temp Coverage Area 150F 9
INTERNATIONAL MARKET ARGENTINA SAUDI ARABIA High-temp Coverage Area 150F 10
MULTI-WELL PADS CONCENTRATE RISK BARRIERS TO ENTRY AND OPERATIONAL EFFICIENCIES CONTINUE TO INCREASE SINGLE-WELL PAD COMPLETIONS MULTI-WELL PAD COMPLETIONS LONGER LATERALS TIGHTER SPACING PAD DRILLING l l Concentration of dollars…
BROAD FOOTPRINT ENABLES TECHNOLOGY LEADERSHIP FOOTPRINT IN EVERY Canada 4% MAJOR NAM BASIN EXCELLENT NAM REACH CAPABILITY Bakken 4% LOCALIZED TEAMS WITH REGIONAL Rockies 1% KNOWLEDGE Marcellus / Utica 19% MidCon 10%…
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…
ADVANCEMENTS IN CEMENTING SOLUTIONS SLURRY HIGHLIGHTS Light-density slurry engineered to build strength 60% faster and deliver 40% higher compressive strength than similar density slurries Blend 27 Provides the lightness needed for…
CONSISTENT PROFITABLE MARKET SHARE GAINS Demonstrated Market Share Gains Throughout Cycles +183% 16% 17% 11% 8% 6% 6% 2014 2015 2016 2017 2018 2019 YTD Nine US Wireline & Completion Tools % of stages completed1 Nine Holds a…
ASSET LIGHT BUSINESS MODEL PRESSURE PUMPING E-LINE Pressure pumping E-line 16
CUSTOMERS WHO TRUST US Diverse, blue-chip customer base with minimal concentration 17
SAFETY IMPROVEMENT THROUGHOUT NINE NINE TRIR 2.47 64% 1.50 1.44 REDUCTION 1.26 0.88 2014 2015 2016 2017 2018 18
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 Target only…
PRODUCTION SOLUTIONS DIVESTITURE & CANADIAN WIRELINE CLOSURE 20
SHUT DOWN OF CANADIAN WIRELINE OPERATIONS During Q3, the Company began the process of shutting down wireline operations in Canada, but will maintain a completion tool footprint Despite having a great team in place, this geography was…
WELL SERVICE DIVESTITURE OVERVIEW On August 30, 2019 Nine sold its Production Solutions segment, which includes only well services, to Brigade Energy Services Includes Nines 107 workover rigs, ancillary equipment and real estate…
PRO FORMA NINE OVERVIEW NINE REVENUE MIX 1H19 NINE REVENUE MIX IH19 PRO FORMA FOR PRODUCTION DIVESTITURE Well Service 9% Completion Tools 26% Cementing Cementing 26% Completion Tools 24% 24% Coiled Tubing Coiled Tubing 17%…
FINANCIAL OVERVIEW 24
Q3 2019 FINANCIAL SNAPSHOT Q3 2019 FINANCIAL & OPERATIONAL PERFORMANCE Q3 2019 Adjusted EBITDA results in-line with Managements original guidance 202 REVENUE Q3 results do not include any contribution in September from…
9/30/19 CAPITALIZATION PRO FORMA CAPITALIZATION COMMENTARY As of September 30, 2019 ABL credit facility undrawn (MM) Total liquidity of 211.3 million as of Cash 93.3 September 30, 2019 Company continues to be focused on Debt…
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. 28
APPENDIX
OUR LEGACY 30
NINE ADJ. EBITDA RECONCILIATION Three Months Ended Year ended December 31 ( mm unless otherwise noted) 30-Sep-19 30-Jun-19 31-Mar-19 2018 2017 EBITDA Reconciliation Net income (loss) (20.6) 6.1 17.3 (53.0) (67.7) Interest expense 9.8…
ROIC RECONCILIATION Three Months Ended Three Months Ended Three Months Ended ( MM UNLESS OTHERWISE NOTED) 30-Sep-19 30-Jun-19 31-Mar-19 After-tax net operating profit reconciliation: Net Income (loss) (20.6) 6.1 17.3 Add back:…
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