Trican Well Service Ltd. · TSX:TCW

Trican Well Service — Investor Presentation (March 2015)

36 slides from Trican Well Service's investor presentation, March 2015

  1. Slide 1: Investor Presentation

    Investor Presentation March 2015

  2. Slide 2: Forward Looking Statements

    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 development

  3. Slide 3: Overview of Trican

    OVERVIEW OF TRICAN  Large, world-wide, full service REVENUE BY GEOGRAPHY pressure pumping company Year ending December 31, 2014 International  International 13% Canada • Russia (majority) 45% • Kazakhstan • Australia • Norway USA • Saudi Arabia 42% 3

  4. Slide 4: Trican Strengths

    TRICAN STRENGTHS 4

  5. Slide 5: Trican Strengths: Safety, Technology, Earnings Potential

    TRICAN STRENGTHS  Focus on safety, technology, and operational performance Historical Fracturing HP  Significant earnings potential on 1,400,000 1,200,000 existing assets 1,000,000 800,000  1,193,000 HP available 600,000 fracturing capacity 400,000 • 280,000 HP currently idle 200,000 0 2007 2008

  6. Slide 6: Trican Strengths: Our People

    TRICAN STRENGTHS  Our people are our strength – 6,000 skilled employees worldwide  Named one of Canada’s Top Employers for Young People for 2013, one of Canada’s Top Employers for 2014 and 2015, and one of Canada’s Top Family Friendly Employers for 2014  Hiring and training people are key to grow

  7. Slide 7: Strengths – Full Services

    STRENGTHS – FULL SERVICES Service Line % of 2014 Revenue (at December 31, 2014) Fracturing 79% Cementing 11% Nitrogen 4% Coiled Tubing 3% Acidizing & Specialty 2% Chemicals Industrial & Pipeline 1% Services 7

  8. Slide 8: Competitive Advantages

    COMPETITIVE ADVANTAGES  Customer-focused provider of technical solutions • Separate ourselves with technology • Named one of Canada’s top 100 Corporate R&D spenders in 2012, 2013 and 2014 (by Research Infosource Inc.) • Product development is a quick, customer-focused process • Strong regional tech

  9. Slide 9: Areas of Operation

    AREAS OF OPERATION  Canada  United States  Russia  Kazakhstan  Norway  Australia  Saudi Arabia 9

  10. Slide 10: Canada

    CANADA 10

  11. Slide 11: Geographic Coverage

    GEOGRAPHIC COVERAGE Horn River FORT NELSON HIGH LEVEL Shale British Columbia Alberta Saskatchewan Manitoba Montney FORT ST. JOHN Shale RED EARTH GRANDE PRAIRIE Duvernay WHITECOURT Shale HINTON NISKU LLOYDMINSTER DRAYTON VALLEY Viking RED DEER PROVOST DRUMHELLER Tight Oil Tight Gas CALGARY BRANDON BR

  12. Slide 12: Canada Equipment

    CANADA EQUIPMENT  Current Available Canadian fleet Canadian HP Growth • 440,000 fracturing HP 450,000 400,000 • 55 Cementing units 350,000 300,000 • 38 N2 Pumpers 250,000 200,000 • 19 Acid Units 150,000 100,000 • 16 Coil Units 50,000 0 2008 2009 2010 2011 2012 2013 2014 2015*  Expect to park 20% –

  13. Slide 13: Canada - Outlook

    CANADA - OUTLOOK  Strong activity in early Q1 2015 but slowing down significantly in March  Expect pricing drop of 10% in Q1 2015; pressure throughout 2015  Spring break-up expected to start early and end late  Substantial activity drop in second half of 2015 as customers’ cash flows are reduced

  14. Slide 14: USA

    CFRICAN] 14

  15. Slide 15: Geographic Coverage - Fracturing

    GEOGRAPHIC COVERAGE - FRACTURING MINOT Bakken Marcellus Mid-Con Utica Barnett  Barnett: 1 crew  Eagle Ford: 1 crews SHAWNEE  Permian: 3 crews  Oklahoma: 1 crew SPRINGTOWN  Marcellus: 4 crews ODESSA  Bakken: 1 crews Permian HOUSTON  Current active USA HP: 465,000 MATHIS Eagle Ford 15

  16. Slide 16: USA Equipment

    USA EQUIPMENT  Current active U.S. fleet • 465,000 fracturing HP • 9 Cement units • 10 Acid units • 6 Coil units • 11 N2 units  Parked 4 Fracturing crews in Q1 • Permian, Eagle Ford, Bakken, Haynesville • 150,000 HP 16

  17. Slide 17: USA – Outlook

    USA – OUTLOOK  Rig count will drop throughout 2015  Expect pricing decline of 15% – 20%  Will reduce costs and size of operations as required  Strong management team and lower cost structure than last downturn 17

  18. Slide 18: Cost Control

    COST CONTROL  Initiated significant cost control measures in late 2014  Salary reduction effective Feb. 1, 2015 • $28m in expected savings  Negotiating cost reductions with all North American suppliers • Targeting 10%-15% savings  Reduced people and infrastructure to match drop in active equipme

  19. Slide 19: Russia

    CFRICAN] 19

  20. Slide 20: Russia and the FSU

    RUSSIA AND THE FSU  Started operations in 2000  One of the largest fracturing companies in Russia  Primarily work on oil wells  All work is on 1 or 3 year contracts  Services: • Fracturing 88% • Coiled Tubing 6% • Cementing 4% • Nitrogen 2% 20

  21. Slide 21: Russia and the FSU

    RUSSIA AND THE FSU ARCTIC SHELF (BARENTS, PECHORA, KARA SEA) Traditional regions for oil production Regions of growth Operational Base NOVY URENGOY Representative Office MOSCOW GUBKINSKY NYAGAN KUEDA RADUZHNY VCNG NEFTEYUGANSK NIZHNEVARTOVSK VOLGO-URALS OTHER REGIONS OF WEST SIBERIA EAST SIBERIA CAS

  22. Slide 22: Russia - 2015

    RUSSIA - 2015  Strong technical and operational business  Future growth in Eastern Siberia to fill new Chinese pipeline  Russia/Ukraine conflict has not caused any operational disruptions thus far; will continue to monitor effects of sanctions  2015 tendering complete • Slight increase in year-o

  23. Slide 23: International

    INTERNATIONAL 23

  24. Slide 24: International: Australia and Kazakhstan

    INTERNATIONAL  Australia • Cement and environmental services • Slow first half of 2015 with growth in second half • LNG driven gas market  Kazakhstan • Fracturing services • Good profitability • Looking for growth opportunities 24

  25. Slide 25: International: Norway and Middle East

    INTERNATIONAL  Norway • Completion tools only • Strong acceptance of completion tool technology in North Sea • Anticipate stable 2015 demand  Middle East • Started coiled tubing operations in Q2 2014 • Looking to add additional contracts in 2015  Colombia • Suspended operations in early 2015 25

  26. Slide 26: Innovation

    INNOVATION CFRICAN] 26

  27. Slide 27: Innovation: MVP Frac

    INNOVATION  Trican focuses on separating itself with technology  MVP FracTM • Patented chemical solution that reduces proppant settling in slick water fracs • Strong market acceptance in Canada; looking to expand into other regions • MVP FracTM used in 20% of all wells fractured by Trican in Canad

  28. Slide 28: Completion Tools

    COMPLETION TOOLS  Operations in Norway, 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  Strong year-over-year growth in 2

  29. Slide 29: Trican Reservoir Solutions

    TRICAN RESERVOIR SOLUTIONS  Geological Solutions • Offer unconventional rock analysis, core testing and rock mechanics  Reservoir Solutions • Reservoir model that integrates geological and frac data to optimize long-term reservoir recoverability 29

  30. Slide 30: Sustainable Innovation

    SUSTAINABLE INNOVATION  EcoClean Fluids • Continuing to expand our line of environmentally friendly fracturing fluids  Water Management and Reduction • Developed a 100% recycled water crosslinked fluid solution with no mechanical treatment • Developed Bakken market using recycled water solutions 3

  31. Slide 31: Financial Overview

    FINANCIAL OVERVIEW 31

  32. Slide 32: Debt Structure

    DEBT STRUCTURE  Industry leading debt structure • Mix of variable and fixed rate • Low cost – average rate of 5.2% on notes • Balanced maturity dates ranging from 2016 to 2021  Current outstanding and available debt at December 31, 2014 • USD $300 million and CAD $80 million in fixed rate notes pa

  33. Slide 33: Cash Flow

    CASH FLOW  Managing cash flow and balance sheet a key focus in 2015  Dividend of $0.30/year  Total capital spend for 2015 expected to be $50 to $60 million  Working capital release in 2015 expected to provide significant cash inflows  Will pay down debt in first half of 2015 33

  34. Slide 34: Investment Advantages

    INVESTMENT ADVANTAGES  Significant earnings potential on existing assets  Low capital expenditures in 2015  Strong Canadian business that historically weathers the storm  Strong management team that has managed through numerous cycles  Geographical diversification  Focus on cost control 34

  35. Slide 35: Summary

    SUMMARY  Number of Outstanding Shares (as of Feb. 27, 2015): • 148.9 million  Average Daily Volume (one month period): • 1,153,825 (as of February 27, 2015)  Directors/Officers Ownership: • 2.0% (approx. - diluted basis)  Market Cap: • $650 Million as of February 27, 2015  Pay a semi-annual div

  36. Slide 36: Investor Presentation

    Investor Presentation March 2015

Trican Well Service — Investor Presentation (March 2015) on 6ix