STEP Energy Services — Investor Presentation (March 2022)
20 slides from STEP Energy Services's investor presentation, March 2022
Slide 1: STEP Energy Services Investor Presentation
March 2022 STEP ENERGY SERVICES Investor Presentation 1
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation does not purport to be all-inclusive or to contain all information that Company’s ability to utilize its equipment; the Company’s ability to obtain qualified staff, goods, and equipment in a prospective investors may require. Readers are enco
Slide 3: STEP at a Glance
THREE SERVICE LINES Energy services company providing fracturing, coiled STEP at a tubing, fluid and nitrogen pumping services Glance GEOGRAPHIC DIVERSIFICATION In-basin field service centers, training, and corporate Throughout the last decade, we have offices in U.S. and Canada focused on building
Slide 4: North American Operations
North American Operations Montney Deep Basin Duvernay Viking Consolidated Asset Base – in Q1-22: Active: Q1-22* Fracturing Coil Tubing Calgary Fracturing (HHP) Coil Tubing Canada 4-5 spreads 8 units Bakken ACTIVE: 365,000* 16 units U.S. 3 spreads 8 units TOTAL: 490,000 31 units Powder River Basin Ni
Slide 5: Commodity pricing and market dynamics
CRUDE OIL: NATURAL GAS: $140 $16 $7 Futures Pricing Futures Pricing $120 $14 $6 $100 $12 Henry Hub (US$/MMBtu) $80 $5 $10 AECO-C (C$/GJ) (US$/bbl) $60 $4 $40 $8 $3 $20 $6 $0 $2 $4 ($20) $1 $2 ($40) $0 $0 Jan 16 Jan 17 Jan 18 Jan 19 Jan 20 Jan 21 Jan 22 Jan 23 Jan 24 Jan 25 Jan 16 Jan 17 Jan 18 Jan 1
Slide 6: Post Pandemic Recovery: Rig Counts and Share Price
COMBINED US AND CANADA RIG COUNT: 2020 TO PRESENT 1,200 $2.50 1,000 $2.00 Average Share Price 800 Number of Rigs $1.50 600 $1.00 400 $0.50 200 - $0.00 U.S. Canada Average Share Price Linear (Average Share Price) POST PANDEMIC RECOVERY • Rig counts in North America are expected to remain constructive
Slide 7: Strategic Priorities
Strategic Invest in industry-leading technology Priorities Drive ESG performance Generate stakeholder returns 7
Slide 8: #1 – Invest in Industry-Leading Technology
#1 – Invest in Industry-Leading Technology We will: • Drive incremental margin. • Increase value to clients. • Support the pursuit of sustainable solutions that positively impact our stakeholders. OPERATIONS BUSINESS INNOVATION SYSTEMS • Electric-powered fracturing services • Single Shot IOR™ - post
Slide 9: E-Coil and STEP-conneCT
E-Coil and STEP-conneCT REAL-TIME DATA ACQUISITION • As a part of our STEP-IQ™ Real-Time Data Services, e-coil and STEP-conneCT are used during coiled tubing milling operations to provide live downhole data representing wellbore conditions. • STEP-conneCT is a downhole data acquisition tool, conveye
Slide 10: STEP-XPRS and EPIC
STEP-XPRS and EPIC ELECTRIFICATION OF FRACTURING • An efficient and versatile integrated coiled tubing and fracturing spread (STEP-XPRS) that delivers ESG-focused benefits to operators. • The purpose-built spread includes an Electric-Powered Integrated Combination unit (EPIC) which is capable of bei
Slide 11: #2 – Drive ESG Performance
#2 – Drive ESG Performance We will: • Pursue ESG priorities that protect the health and safety of our team and the communities in which we work. • Minimize the environmental impact of our operations. • Ensure we have a workplace of diversity and opportunity. • Create an accountability framework to m
Slide 12: Reducing Our Footprint
Reduce emissions and diesel consumption • Dual-fuel and Tier 4 engines help operators reduce the emissions Reducing Our intensity of fracturing operations. • Four fracturing fleets in Canada have dual-fuel capabilities. Footprint • Approximately 65% of the U.S. fleet is either Tier 4 diesel or Tier
Slide 13: Low Emission Fracturing
Low Emission Fracturing PRESSURE PUMPING FLEET (HP) SUSTAINABLE WELL COMPLETIONS • Tier 2 Dynamic Gas Blending (“DGB”) (134,750 HP in North America) o Tier 2 DGB CAT engines displace diesel with cleaner burning natural gas, reduce on- site diesel consumption and lower overall fuel costs. 17% o STEP
Slide 14: Caring for Our Community
Safety Safety is our number one core value and the foundation of our culture; Goal Zero is a corporate priority. Caring for Our Community Contribution Community Since the Company's inception, our professionals have raised over $600,000 for charities across North America through the annual Our engage
Slide 15: #3 – Generate Stakeholder Returns
#3 – Generate Stakeholder Returns Momentum in the industry has enabled a shift in our priorities and reinvestment into our operations. Since January 1, 2021, we have: • Reactivated equipment to increase operating capacity* - added seven coil units and three fracturing spreads. • Rehired field and su
Slide 16: Financial Performance: Q4-2021 in Review
Financial Performance Q4-2021 IN REVIEW • Q4-2021 saw ongoing recovery from the pandemic: • Revenue increased 122% from Q4-2020 and 19% from Q3-2021. • Strongest fourth quarter revenue since Q4-2018. • The U.S. division had their best fourth quarter EBITDA contribution; Canada had their best fourth
Slide 17: Financial Performance: Fiscal Year 2021 Revenue
Financial Performance • The U.S. fracturing division continued strong growth for the year ended 2021 with activation of third fleet FISCAL YEAR 2021 REVENUE midway through Q3. STEP was able to achieve modest pricing increases, and increased utilization to 704 operating days in 2021. • The U.S. coile
Slide 18: Debt Reduction Progress
DEBT REDUCTION PROGRESS 300 >$100 mm Reduction 250 Targeting $28 mm reduction to YE-22 (Sub 2x Net Debt** to Adjusted EBITDA) Net Debt ($ millions) 200 150 100 50 - * Projections based on analyst consensus Adjusted EBITDA ** Net Debt is a non-IFRS financial measure. See Non-IFRS Measures and Ratios
Slide 19: Outlook
Outlook Both the U.S. and Canadian operations have experienced strong levels of activity in the first quarter of 2022. Extreme cold in January in Canada Closing out the fourth quarter of 2021 with resulted in some operation delays, but favorable conditions through the highest revenue since Q4-2018,
Slide 20: Investor Relations Contact
403-457-1772 investor_relations@step-es.com www.stepenergyservices.com 20
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