INVESTOR PRESENTATION February 2016 FORWARD LOOKING STATEMENTS - PowerPoint PPT Presentation

INVESTOR PRESENTATION February 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 - CURRENT YEAR TO DATE SEPTEMBER 30, 2015  Large, North American, full service pressure pumping company Revenue by Geography 56% 44%  1,083,500 HP available fracturing capacity USA Canada  87 Cement & 37 Acid Units Revenue by Service Line  29 Coiled Tubing & 61 N 2 Units 3% 2% 4% 3% 9% Fracturing Cementing Nitrogen  Focus on safety, technology, and Coiled Tubing Acid & Specialty Chemicals operational performance Industrial & Pipeline Services 79% 3

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 between $352 and $405 million (CAD) 5

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  Expected closing: March 15, 2016 6

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 7

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 four times Q3 EBITDA 8

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 9

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 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 10

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 11

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 producer economics 13

CANADA  Strong safety record  Technical advantage in Canadian market which pays off in downturn • 20% of fracturing work in 2014 done with MVP frac • Geological and reservoir services integrated into frac designs • Lightweight cement blends • Numerous engineers embedded in client offices • Technology retains and grows market share and improves returns in a downturn  Canadian Q3 operating margin: 19.3% 14

GEOGRAPHIC COVERAGE FORT NELSON Horn River HIGH LEVEL Shale British Columbia Alberta Saskatchewan Manitoba FORT ST. JOHN Montney Shale RED EARTH Duvernay GRANDE PRAIRIE Shale WHITECOURT HINTON NISKU LLOYDMINSTER DRAYTON VALLEY Viking RED DEER PROVOST Tight Oil DRUMHELLER CALGARY Tight Gas BRANDON ESTEVAN BROOKS MEDICINE HAT Spearfish Bakken Cardium Lower Shaunavon Shale Tight Oil Tight Oil 15

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 N 2 Pumpers 200,000 150,000 • 19 Acid Units 100,000 50,000 • 16 Coil Units 0 2008 2009 2010 2011 2012 2013 2014 2015 2016* * Anticipated HP at year-end based on approved budgets, which are subject to change 16

CANADA - OUTLOOK  35% of equipment parked during 2015 • Anticipate keeping remaining equipment highly utilized  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 25% off 2014 peak levels 17

CANADA - OUTLOOK  Customer base strong  Cost cutting measures have substantially improved second half results in 2015 • Still working on additional cost savings  Utilization high but not at peak in Q1 (75%)  A warm March could hurt quarter  Pricing down slightly in Q1 2016  Q2 2016 slow due to normal spring breakup  Poor visibility at this time on Q3 2016 • No adjustments up or down 18

CANADA - COST CUTTING  Product Costs • Largest element of cost structure • Have achieved 10-15% reduction  People • Have reduced Canadian employee base by 45% • Total salary and benefits cost reduced by 57% • Expected annual fixed cost reductions of $86 million  Other • Implemented significant cost cutting measures for all other costs  Fixed costs reduced 42% year-over-year 19

CORPORATE - COST CUTTING  People Costs • Salary and benefits reductions - Salary reductions of 10% - Temporary suspension of certain benefits • Reduced Corporate employee base by 40% • Total annualized cost reductions of $24 million  Other • Implemented significant cost cutting measures for all other Corporate expenses  Corporate costs down 70% year- over-year 20

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 22

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 International infrastructure  Kazakhstan sale in progress • Currently working with potential buyers 23

GETTING THROUGH THE DOWNTURN

GETTING THROUGH THE DOWNTURN  Improve balance sheet  Keep utilization high and costs low in remaining operations  Maintain customer relationships  Provide differentiating safety, efficiency and technology 25

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 landscape will change - Smaller competitors struggling to survive - Mergers of mid-sized companies improves market - Equipment attrition will be significant 26