NINE ENERGY SERVICE INVESTOR PRESENTATION Q4 2019 1
COMPANY OVERVIEW
NINE COMPANY OVERVIEW OUR COMPANY Focused on building a full-cycle ROIC business Asset-light business model with strong barriers to entry and 100% completions focused Leveraged to increasing completion intensity including mega-well…
NINES STRATEGIC POSITIONING STRATEGIC POSITIONING Barriers Service & Asset Light to Entry Technology DIFFERENTIATION Cash Flow Generation Defensibility Legitimacy Returns (ROIC) Sustainability Mitigation of Financial Risk…
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 +…
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 NAM FOOTPRINT FOOTPRINT IN EVERY Canada 2% MAJOR NAM BASIN EXCELLENT NAM REACH CAPABILITY Bakken 4% LOCALIZED TEAMS WITH REGIONAL Rockies 2% KNOWLEDGE Marcellus / Utica 17% MidCon 6% Permian 49% Barnett 1%…
ASSET LIGHT BUSINESS MODEL PRESSURE PUMPING E-LINE Pressure pumping E-line 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 Nine US Wireline & Completion Tools % of stages completed1 Nine Holds a…
CUSTOMERS WHO TRUST US Diverse, blue-chip customer base with minimal concentration 14
CONTINUED EXCELLENCE IN SAFETY NINE TRIR 2.47 1.5 1.44 1.26 0.88 0.77 2014 2015 2016 2017 2018 2019 15
RETURNS-FOCUSED GROWTH PHILOSOPHY Balance of Organic Growth and Strategic M&A: Augment technology portfolio + Enhance NAM footprint ORGANIC GROWTH DISCIPLINED M&A Market penetration of technology portfolio, including new Target only…
DISSOLVABLE PLUG THESIS & OVERVIEW 17
DISSOLVABLE PLUG THESIS INTACT MARKET OUTLOOK 2018 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 risk…
NINE DISSOLVABLE PLUG BENEFITS NEUTRAL OR REDUCE AFE INCREASED IRR REDUCED EMISSIONS INCREASED SAFETY WITH FEWER HUMANS AT SURFACE 19
DISSOLVABLES REDUCE LIFECYCLE OF WELL TRADITIONAL COMPOSITE PLUG COMPLETION CAN BE 18-38 DAYS PER WELLBORE DRILLING & CEMENTING WIRELINE & FRAC COMPLETE COILED TUBING OF WELLBORE MULTISTAGE STIMULATION OR STICK PIPE DRILLOUT…
NEW GENERATION OF DISSOLVABLE PLUGS NINE STINGER DISSOLVABLE PLUG PLUG OVERVIEW Shorter design, decreasing plug size by over 70% Predictable and reliable dissolution for entire addressable isolation tool market Completely…
NAM DISSOLVABLE PLUG MARKET Mixed Area (High-temp/low-temp) High-temp Coverage Area 150F Low-temp Coverage Area 150F 22
INTERNATIONAL MARKET ARGENTINA SAUDI ARABIA High-temp Coverage Area 150F 23
SIGNIFICANT AND SCALABLE EMISSION REDUCTIONS STINGER Dissolvable Frac Plug DISSOLVABLE FRAC PLUGS ON A 6-WELL PAD TAKE 84 CARS OFF THE ROAD: 404 METRIC TONS OF CO2E 24 source: ERM
ENVIRONMENTAL RESULTS (ELIMINATION OF COILED TUBING) DISSOLVABLE WITH NO CLEAN-OUT VS. CONVENTIONAL DRILL-OUT PER WELLBORE Conventional Dissolvable CARBON FOOTPRINT OF 70-PLUG DEPLOYMENT IN METRIC TON CO2 EQUIVALENTS 74,146 6,873…
ENVIRONMENTAL RESULTS (DISSOLVABLE WITH CLEAN-OUT) DISSOLVABLE CLEAN-OUT VS. CONVENTIONAL DRILL-OUT PER WELLBORE Conventional Dissolvable CARBON FOOTPRINT OF 70-PLUG DEPLOYMENT IN METRIC TON CO2 EQUIVALENTS 74,146 kg 60,843 kg…
FINANCIAL OVERVIEW 27
2019 FINANCIAL PERFORMANCE REVENUE (MM) 2019 FINANCIAL AND OPERATIONAL HIGHLIGHTS 827 833 Free cash flow1 generation of 39.2mm 544 Cash flow from operations of 101.3mm, an increase of 13% over 2018 Cash flow from operations per…
12/31/19 CAPITALIZATION PRO FORMA CAPITALIZATION COMMENTARY As of December 31, 2019 ABL credit facility undrawn (MM) 93.0 Total liquidity of 192.2 million as of Cash December 31, 2019 Debt Strong 2019 cash generation with ABL…
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. 31
APPENDIX
OUR LEGACY 33
NINE ADJ. EBITDA RECONCILIATION Three Months Ended Year ended December 31 ( mm unless otherwise noted) 31-Dec-19 30-Sep-19 30-Jun-19 31-Mar-19 2019 2018 EBITDA Reconciliation Net income (loss) (220.5) (20.6) 6.1 17.3 (217.8) (53.0)…
ROIC RECONCILIATION ( MM UNLESS OTHERWISE NOTED) Three Months Ended Year ended December 31 31-Dec-19 30-Sep-19 30-Jun-19 31-Mar-19 2019 After-tax net operating profit reconciliation: Net Income (loss) (220.5) (20.6) 6.1 17.3 (217.8)…
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