Trican Well Service Ltd. · TSX:TCW
Trican Well Service — Investor Presentation (February 2021)
20 slides from Trican Well Service's investor presentation, February 2021
Slide 1: Investor Presentation February 2021
INVESTOR PRESENTATION February 2021
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: Who We Are
WHO WE ARE Trican is a leading Canadian energy services company, servicing wells in western Canada Drilling for more than 24 years Cycle Completion Cycle Our goal is to generate industry • Cementing Services • Fracturing leading returns in an • Coil Tubing environmentally and socially responsibl
Slide 4: Our Strategic Priorities
OUR STRATEGIC PRIORITIES Strengthen - Maintain market leading position in Fracturing and Cementing service lines Existing - Expand coil tubing Business Activate parked equipment (if return hurdles can be met) - Adapt our business approach, integrating ESG to improve value ESG Differentiate with new
Slide 5: 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 6: Diversified Service Lines
DIVERSIFIED SERVICE LINES Q3 2020 Trailing 12 Month Revenues: Business Unit Breakdown * Industrial * Fluid Services Management 1% Market Leading Positions 1% Other 4% Canadian market leader in fracturing Coil Services 7% services (based on horsepower) Canadian market leader in cementing Cementin
Slide 7: Financial Strength & Resiliency
FINANCIAL STRENGTH & RESILIENCY Strong Financial Position Low financial leverage: • September 30, 2020: ~ $1 million bank debt, $5 million Debt / Tangible Capital of cash 0.60 $800 • Clean balance sheet allows us to be in a strong 0.50 $700 Debt / Tangible Capital position to take advantage of att
Slide 8: Responsibly Improving Efficiency in Canada
RESPONSIBLY IMPROVING EFFICIENCY IN CANADA Leading Efficiency and Reducing our Environmental Impact Large natural gas dual fuel fleet (170,000 HHP) helps reduce well costs and emissions Introducing new technology to reduce tractors on location which will provide fuel savings, result in fewer eng
Slide 9: Canadian Industry & Trican Competitive Positioning
CANADIAN INDUSTRY & TRICAN COMPETITIVE POSITIONING
Slide 10: Available Capacity
AVAILABLE CAPACITY Existing idle equipment provides opportunity Service Line Total Active, Idled for incremental returns upon a market recovery Equipment Manned • Substantial leverage on existing infrastructure 280,000 289,900 Fracturing (HHP) 569,900 and fixed cost structure upon recovery (6 flee
Slide 11: Canadian Industry - Increased Well Service Intensity
CANADIAN INDUSTRY - INCREASED WELL SERVICE INTENSITY WCSB – Tonnes / Well WCSB – Wells Drilled 2,000 1,864 12,000 1,768 10,853 10,924 1,800 1,626 1,600 10,000 1,336 1,400 8,000 1,200 1,102 6,959 6,648 1,000 882 6,000 5,376 4,810 800 592 3,963 3,930 600 512 4,000 3,136 3,200 400 2,000 200 - 0 2013 20
Slide 12: Fracturing Fleet
FRACTURING FLEET Most efficient style of fracturing pump Fracturing Type of Pump Pump HHP % of designed for higher intensity plays Fleet (#) Fleet • Montney, Duvernay and Deep Basin Continuous HH (accounts for ~ 80% of the required 2,700 / 3,000 127 347,400 60% Duty P HHP demand in Canada) HH Mid-
Slide 13: Fracturing Competitive Landscape
FRACTURING COMPETITIVE LANDSCAPE CANADIAN CAPACITY Q1 2021 Hydraulic Capacity Active Fleets Horsepower Crewed (HHP) Canadian competitive landscape more Trican 569,900 280,000 6 consolidated than the U.S. market Competitor A 279,000 174,000 3 Expect an increase in active crewed Competitor B 282,5
Slide 14: Well Services
WELL SERVICES Cement: Cement operations track very closely with drilling Average Canadian Rig Count rig activity 12 Month Avg. 60 Day Avg. 800 Longer laterals have increased cement 700 requirements 600 500 Historically generated positive return on capital 400 despite recent market challenges 3
Slide 15: Aligning Cost Structure to New Canadian Market
ALIGNING COST STRUCTURE TO NEW CANADIAN MARKET Lean, efficient organization: • Reduced fixed personnel costs by over 55% since Q1/20 • Parked half of our active equipment • Lowered capital spending to essential maintenance capital: estimated to be 3% - 4% of revenue in 2020 • Closely monitoring ma
Slide 16: Returning Money to Shareholders
RETURNING MONEY TO SHAREHOLDERS Since 2006, Trican has returned $416 Dividends and Share Repurchases, 2006 - 2020 million to shareholders 120,000 450,000 Cumulative NCIB (RHS) 400,000 Focused on finding ways to return 100,000 Cumulative Dividend (RHS) 350,000 funds to shareholders Total Annual (
Slide 17: Near-Term Outlook & Investment Summary
NEAR-TERM OUTLOOK & INVESTMENT SUMMARY
Slide 18: Outlook for Winter 2020-2021
OUTLOOK FOR WINTER 2020-2021 Customers will adjust spending as commodity prices change • Each customer will adjust differently Trican activated additional equipment in Q1/21 to meet customer demand Current pricing at cyclical lows with no room to move down Trican will activate additional equ
Slide 19: Environment, Social and Governance
ENVIRONMENT, SOCIAL AND GOVERNANCE Our primary focus areas have been: 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 training time i
Slide 20: Investment Summary
INVESTMENT SUMMARY • ROIC and capital • Largest Canadian • Equipment capacity OPPORTUNITY discipline, focused on pressure pumping for incremental shareholder returns company with broad returns upon a market STRENGTH service offering RETURNS recovery • Operating efficiencies will drive free cash • St
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