Trican Well Service Ltd. · TSX:TCW
Trican Well Service — Investor Presentation (September 2020)
25 slides from Trican Well Service's investor presentation, September 2020
Slide 1: Investor Presentation September 2020
INVESTOR PRESENTATION September 2020
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
Slide 3: Agenda
AGENDA Canadian Industry Overview and Company Overview Near Term Investment Trican’s and Priorities Market Outlook Summary Competitive Positioning 3
Slide 4: Trican Overview
TRICAN OVERVIEW
Slide 5: Environment, Social and Governance
ENIVORNMENT, SOCIAL AND GOVERNANCE Our current core focus areas in relation to ESG: Safety People Development Environment Our frontline workers face dangers that are Since 2017 we have invested over 200,000 Trican and its customers are subject to not typical in most office workplace hours of t
Slide 6: What We Do
WHAT WE DO Trican has been servicing wells in western Canada for more than 24 years Drilling Completion Cycle Cycle Focused in Canada, our highly Cementing Fracturing trained workforce is dedicated Services Coil Tubing to achieving safe operational excellence We provide specialized products an
Slide 7: Our Strategic Priorities Remain Intact
OUR STRATEGIC PRIORITIES REMAIN INTACT Strengthen - Maintain market leading position in Fracturing and Cementing service lines Existing - Strengthen auxiliary service lines (Coiled Tubing) Business - Activate parked equipment (if return hurdles can be met) - Growth in existing services lines Growth
Slide 8: Western Canadian Sedimentary Basin Focus
WESTERN CANADIAN SEDIMENTARY BASIN FOCUS Market Leading Positions Canadian market leader in fracturing services (crewed HHP) Horn River British Columbia Alberta Saskatchewan Manitoba Shale Canadian market leader in cementing Montney FORT ST. JOHN services (based on rig count) Shale GRANDE PRAIRI
Slide 9: Diversified Service Lines
DIVERSIFIED SERVICE LINES 2019 Revenues: Business Unit Breakdown * Fluid * Industrial Management Services 4% 2% Market Leading Positions Coil Services Canadian market leader in fracturing services 8% (based on horsepower) Cementing Canadian market leader in cementing services 16% (based on drill
Slide 10: Financial Strength & Resiliency
FINANCIAL STRENGTH & RESILIENCY Debt / Tangible Capital 0.60 $800 Strong Financial Position 0.50 $700 Debt / Tangible Capital Low financial leverage: Total Debt (millions) $600 0.40 $500 • June 30, 2020: Net cash of ~ $26 million, $nil 0.30 $400 bank debt 0.20 $300 $200 Clean balance sheet allow
Slide 11: Driving Efficiency in the Canadian Market
DRIVING EFFICIENCY IN THE CANADIAN MARKET Largest natural gas dual fuel fleet (146,600 HHP) in western Canada to help reduce well costs and GHGs Introducing new technology to reduce tractors on location which will provide fuel savings, result in fewer engine hours, and reduce GHGs Implemented
Slide 12: Canadian Industry & Trican Competitive Positioning
CANADIAN INDUSTRY & TRICAN COMPETITIVE POSITIONING
Slide 13: Available Capacity
AVAILABLE CAPACITY Trican has reduced its fleet size in response to Service Line Total Active, Idled Equipment Manned declining market conditions 169,500 337,500 Fracturing (HHP) 569,400 (4 fleets) (10 fleets) Current downturn has resulted in Trican parking Cementing (trucks) 62 11 51 approximat
Slide 14: Canadian Industry - Increased Well Service Intensity
CANADIAN INDUSTRY - INCREASED WELL SERVICE INTENSITY WCSB - Tonnes / Well WCSB - Wells Drilled 2,000 12,000 1,763 10,853 10,924 1,800 1,534 10,000 1,600 1,364 1,405 1,400 8,000 1,144 6,959 6,781 1,200 1,008 1,000 6,000 5,376 4,769 800 706 3,963 578 4,000 600 3,047 3,120 400 2,000 200 - - 2013 2014 2
Slide 15: Fracturing Fleet
FRACTURING FLEET Largest fleet of continuous duty pumps in Canada Most efficient style of fracturing pump, designed for higher intensity plays Fracturing Type of Pump Pump HHP % of Fleet (#) Fleet • Montney, Duvernay and Deep Basin Continuous (accounts for ~80% of the required HHP 2,700 / 3,000
Slide 16: Fracturing Competitive Landscape
FRACTURING COMPETITIVE LANDSCAPE CANADIAN CAPACITY IN H1 2020 Canadian competitive landscape more Hydraulic Capacity Active Fleets consolidated than U.S. market Horsepower Crewed (HHP) Trican 569,400 165,900 3 Recent downturn is anticipated to drop active Competitor A 279,000 174,000 3 crewed fl
Slide 17: Cement Services
CEMENT SERVICES Drilling rig count: • Cement operations track very closely with the drilling rig activity • Current activity is at historic lows Average Canadian Rig Count • Lower rig count has reduced cement truck 12 Month Avg. 60 Day Avg. requirements, but longer laterals and increased cement 50
Slide 18: Coiled Tubing
COILED TUBING Adjusting business to current market 4 units available in second half of 2020 Have 19 more units to add back into the market with little to no capital investment required 18
Slide 19: Aligning Cost Structure to New Canadian Market
ALIGNING COST STRUCTURE TO NEW CANADIAN MARKET We will continue to align our business to the changes in the Canadian market and lower our costs accordingly: • Reduced personnel costs by over 50% since Q1 • Parked half of our active Q1 equipment • Lowered capital spending to essential maintenance c
Slide 20: Finding Ways to Return Money to Shareholders
FINDING WAYS TO RETURN MONEY TO SHAREHOLDERS Since 2006, Trican has returned $400 million to shareholders Dividends and Share Repurchases, 2006 - 2020 Focused on finding ways to return funds to 100,000 400,000 shareholders Cumulative Dividend (RHS) 75,000 300,000 Cumulative NCIB (RHS) • Have bee
Slide 21: Near-Term Outlook & Investment Summary
NEAR-TERM OUTLOOK & INVESTMENT SUMMARY
Slide 22: Outlook for Remainder of 2020
OUTLOOK FOR REMAINDER OF 2020 Customers will adjust spending as commodity prices change • Each customer will adjust differently Trican will activate additional equipment as demand increases Pricing at levels that will not allow us to give many price breaks Will activate additional equipment
Slide 23: Why Invest in Trican
WHY INVEST IN TRICAN Low debt level mitigates downside risk Price to Tangible Book Value vs. Leverage Profile 1.20 2.0x Company valued at historic low price 1.8x Price to Tangible Book Value 1.00 1.6x Debt / Tangible Equity to tangible book value 0.80 1.4x 1.2x Fracturing horsepower valued bel
Slide 24: Investment Summary
INVESTMENT SUMMARY • ROIC and capital • Largest Canadian • Equipment capacity OPPORTUNITY discipline focused pressure pumping provides opportunity company with broad for incremental STRENGTH • Operating efficiencies RETURNS service offering returns upon a will drive free cash market recovery flow an
Slide 25: Investor Presentation
INVESTOR PRESENTATION September 2020
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