Slide 1: Investor Presentation
August 2024 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” and/or “forward-looking information” under applicable securities laws (collectively referred to as “forward-looking statements”). All statements other than statements of historical facts contained in this presentation
Slide 3: Overview of Pason
Overview of Pason Leading global provider of end-to-end data solutions for well construction INNOVATIVE 40+ years of distinctive technology, support and service capabilities High barriers to entry driven by scope of technology, service intensity and required scale Strong cash-generating capability w
Slide 4: Board of Directors
Board of Directors Marcel Kessler* T. Jay Collins James Bowzer Non-Executive Chair Chair, Human Resources and Director Joined Pason Board in 2012 Compensation Committee Joined Pason Board in 2024 Joined Pason Board in 2012 Jon Faber* Sophia Langlois Ken Mullen Laura Schwinn President & Chief Executi
Slide 5: Strong and Committed Management Team
Strong and Committed Management Team Jon Faber* Celine Boston Kevin Boston Craig Bye Natalie Fenez John Gurski President & Chief Executive Chief Financial Officer VP, Commercial VP, R&D - Cloud Platforms & VP, Legal & Corporate President, Energy Toolbase Officer With Pason since 2020 With Pason sinc
Slide 6: Intelligent Wellhead Systems Acquisition
Intelligent Wellhead Systems Acquisition 2019- Initial common share investment 2020 ($25 million) Data Wellsite Aggregation Common share investment Automation and 2021 ($7 million ) Management Common share investment 2022 ($8 million) 2022- Preferred share investment 2023 ($25 million) Automating wo
Slide 7: The Data Behind Well Construction
The Data Behind Well Construction Managing end-to-end Capture Aggregate Display Transmit Store Deliver Visualize Leverage well construction data With a superior service model Automation Safety Collaboration Reporting Analytics Enabling customer priorities Real-Time Decision Making Page 7
Slide 8: Superior Service Model
Superior Service Model Customer Support Service Phone Hardware Field Software Email Installation Office Communications Chat Monitoring Analytics Third Party Field Tech Real Time Advice Page 8
Slide 9: The Intelligence Layer in the Solar + Energy Storage Industry
The Intelligence Layer in the Solar + Energy Storage Industry Model the site Review energy costs Analyze Incorporate PV Create a proforma and rate switch incentives generation cash flow model scenarios Real-time Control advisory the assets Grid services Electric bill Solar Manual and revenue savings
Slide 10: Proven Financial Strength and Superior Profitability
Proven Financial Strength and Superior Profitability 2019 20233 North American land drilling rigs (average)1 1,050 843 -20% Improved financial Revenue $296 $369 +25% fundamentals despite C$ Millions C$ Millions challenging industry Adjusted EBITDA2 $130 $171 +32% conditions C$ Millions C$ Millions A
Slide 11: Revenue and Adjusted EBITDA
Revenue and Adjusted EBITDA Revenue and Adjusted EBITDA $ Adjusted EBITDA as a % of Revenue in CAD millions Increasing revenue per day and operating leverage drives attractive margins on lower industry activity Adjusted EBITDA is calculated in ‘Non-GAAP Reconciliation’ on page 23 this Investor Prese
Slide 12: Disciplined Approach to Invested Capital
Disciplined Approach to Invested Capital Net Capital Expenditures1 Free Cash Flow2 in CAD millions in CAD millions Investments made to enhance hosting capabilities & leverage software Includes growth capex related to IWS Acquisition & new drilling products Average capex of $25M/year with limited rei
Slide 13: Capital Allocation Priorities
Capital Allocation Priorities 1 Shareholder Returns Over Time Preserve Balance Sheet Strength ➢ Managing end market cyclicality with operating leverage ➢ Ability to pursue attractive growth opportunities 2 Disciplined and Sustainable Shareholder Returns ➢ Exposure to steady growth in the quarterly d
Slide 14: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights Continued 9% growth in $33 MILLION outperformance $96 MILLION North American of drilling & ADJUSTED Revenue per completions IN REVENUE EBITDA Industry Day year industry activity over year $8 MILLION $72M IN FREE CASH TOTAL CASH Resilient balance FLOW WITH NO DEBT Reven
Slide 15: Expectations of a less volatile industry environment going forward
Expectations of a less volatile industry environment going forward WTI (US$/bbl) vs. North American Land Rig Count1 FACTORS RESULTING IN LOWER VOLATILTY ▪ Capital discipline and return of capital frameworks among E&P companies ▪ Limited access to equity financing capital for E&P companies to fund pr
Slide 16: Summary of Key Industry Metrics
Summary of Key Industry Metrics Drill Complete Produce Store Use US land rigs US drilled but US oil production US storage of crude Global oil demand uncompleted wells (millions of barrels and petroleum (“DUCs”) per days) products (billions of barrels) Current2 568 rigs 4,510 DUCs 13.3 million barrel
Slide 17: Strong growth prospects are not reliant on higher levels of North American land drilling activity
Strong growth prospects are not reliant on higher levels of North American land drilling activity North American Land Rig Count1 vs. Consolidated Revenue GROWTH DRIVERS BEYOND INCREASED NORTH AMERICAN LAND DRILLING ACTIVITY ▪ Increased Revenue per Industry Day in North America, driven by growing use
Slide 18: Revenue per Industry Day has grown across industry cycles
Revenue per Industry Day has grown across industry cycles North American Revenue per Industry Day1 Primary Increased product adoption Increased US market share driven largely by Increased product adoption driven growth driven by well complexity large contractor partnerships by growing demand for dat
Slide 19: Significant Addressable Market in Completions
Significant Addressable Market in Completions US Active Land Rigs1 and Frac Spreads2 IWS REVENUE PER INDUSTRY DAY3 Q2-2024 C$5,103 PASON REVENUE PER INDUSTRY DAY3 Q2-2024 C$993 IWS’ daily revenue is more than 3x Pason’s in a market that has a little more than one-third of the number of active sites
Slide 20: Well Positioned for Meaningful Growth
Well Positioned for Meaningful Growth Significant Momentum with Revenue Growth Opportunities… Coupled with… North American Revenue per Industry Day 1 Intelligent Wellhead Systems Revenue ▪ Largely fixed cost base with high operating leverage ▪ Stable capital intensity with targeted growth- related i
Slide 21: Environmental, Social & Governance
Environmental, Social & Governance ENVIRONMENTAL SOCIAL GOVERNANCE • Developing products that drive • Unique and inspiring workplace culture • Experienced, independent and increased drilling and completions with a focus on total employee well- diverse Board of Directors efficiency, helping reduce ca
Slide 22: Value Proposition Summary
Value Proposition Summary Clear Strong margins Well market and positioned leader free cash flow for growth generation Distinctive Outstanding technology financial position profile Innovative Profitable Responsible Page 22
Slide 23: Pason Systems contact details
Pason Systems 6130 Third Street SE Calgary, AB T2H 1K4 Canada Phone: 403.301.3400 Web: — www.pason.com Email: investorrelations@pason.com Page 23
Slide 24: Appendix
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Slide 25: Historical Financial Information
Historical Financial Information $CAD 000s 2018 2019 2020 2021 2022 2023 Revenue 306,393 295,642 156,636 206,686 334,998 369,309 Adjusted EBITDA 1 145,987 129,644 39,540 72,520 159,510 171,466 as a % of revenue 48% 44% 25% 35% 48% 46% Investments in R&D and IT 2 31,462 32,164 27,468 32,903 38,066 42
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation $CAD 000s 2018 2019 2020 2021 2022 2023 Net income (loss) 62,944 53,803 5,134 31,925 105,726 95,827 Add: Income taxes 29,158 20,193 4,864 11,738 33,405 34,346 Depreciation and amortization 34,855 40,830 34,417 25,689 20,842 27,216 Stock-based compensation 12,313 10,840 4,840