Mr. Ken Zinger reports

CES ENERGY SOLUTIONS CORP. ANNOUNCES STRONG Q1 2024 RESULTS WITH RECORD REVENUE AND ADJUSTED EBITDAC AND DECLARES CASH DIVIDEND

CES Energy Solutions Corp. has released strong financial results for the three months ended March 31, 2024, with record quarterly revenue and adjusted EBITDAC (net income before interest, taxes, depreciation and amortization, finance costs, other income (loss), stock-based compensation, and impairment of goodwill). The company's board of directors also approved a quarterly dividend of 3.0 cents per share, which will be paid on July 15, 2024, to the shareholders of record at the close of business on June 28, 2024. First quarter highlights include:

• Record quarterly revenue of $588.6-million increased 6 per cent both sequentially and year over year;
• Record quarterly adjusted EBITDAC of $102.0-million at a 17.3-per-cent margin increased 21 per cent sequentially and 32 per cent year over year;
• Cash flow from operations of $86.3-million and free cash flow of $57.4-million;
• Total debt to adjusted EBITDAC reduced to 1.28 times from 1.49 times at fourth quarter 2023 with long-term debt declining by $35.5-million to $355.1-million;
• Returned $23.7-million to shareholders through $17.8-million in share repurchases and $5.9-million in dividends;
• Completed the July 21, 2023, normal course issuer bid program, repurchasing 18,719,430 shares, representing 10 per cent of the public float at renewal.

The record results achieved in Q1 2024 demonstrate the unique resilience, cash flow generation and profitability characteristics inherent in CES Energy's capital-expenditure-light, asset-light, consumable chemical business model supported by industry-leading people, infrastructure and technology.

CES Energy provided valuable solutions to increasingly complicated drilling programs, which require higher levels of service intensity, effectively overcoming a lower North American industry rig count. Attractive growth was also achieved by delivering superior production chemical services and technology to active, results-oriented, high-quality customers as they continue to maximize returns on their producing wells through effective chemical treatments. Adjusted EBITDAC margins improved 200 basis points as a result of increased service intensity, an attractive product mix and continued adoption of innovative, technologically advanced products supported by a prudent cost structure and vertically integrated business model.

CES Energy continued to aggressively return capital to its shareholders, underpinned by strong free cash flow generation and prudent leverage. During the quarter, CES Energy returned $23.7-million to shareholders, through $17.8-million or 4,576,130 common shares repurchased under its NCIB, in addition to its quarterly dividend of $5.9-million. As at March 31, 2024, CES Energy completed its July 21, 2023, NCIB program, repurchasing 18,719,430 shares, representing 10 per cent of the public float at renewal, and has the intention to renew the program on July 21, 2024.

CES Energy remains confident in its ability to continue generating strong surplus free cash flow, supported by its financial performance, outlook and capital structure. Furthermore, on May 8, 2024, the company's board of directors approved a quarterly dividend of 3.0 cents per share, which will be paid on July 15, 2024, to the shareholders of record at the close of business on June 28, 2024.

Outlook

The strong demand trends of developing countries and global demand requirements to support eventual energy transition initiatives, combined with depletion of existing resources, and reduced investment in the upstream oil and gas sector over recent years, have necessitated increased service intensity for available resources, thereby resulting in continued constructive end markets for CES Energy. This has led to stable commodity prices and a favourable outlook for CES Energy's primary North American target market. Despite economic uncertainty and continuing global conflicts, energy industry fundamentals continue to support critical drilling and production activity for oil and natural gas. Moreover, current depressed global inventories and fewer high-quality drilling locations provide cautious optimism for suitable pricing despite potential economic headwinds and geopolitical instability impacting customer spending plans. Currently, oil prices are sustained by increasing global demand and limited supply growth, with Organization of the Petroleum Exporting Countries adhering to lower production quotas, and while natural gas has demonstrated price weakness since early 2023, CES Energy anticipates a sustained period of elevated gas drilling activity in the United States and Canada as projects under construction come on-line.

CES Energy continues to be optimistic in its outlook for the rest of the year as it expects to benefit from stable upstream activity, increased service intensity levels and continued strength in commodity pricing across North America by capitalizing on its established infrastructure, industry-leading positioning, vertically integrated business model and strategic procurement practices.

Commensurate with current record revenue levels, CES Energy expects 2024 capital expenditures, net of proceeds on disposals of assets, to be approximately $70.0-million, split evenly between maintenance and expansion capital to support sustained revenue levels and business development opportunities. CES Energy plans to continue its disciplined and prudent approach to capital expenditures, and will adjust its plans as required to support prudent growth initiatives throughout divisions.

CES Energy has pro-actively managed both the duration and the flexibility of its debt. In April, 2023, CES Energy amended and extended its senior facility to April, 2026. The senior facility effectively addresses CES Energy's near-term and foreseeable longer-term requirements. The Canadian term loan facility provides CES Energy with the opportunity to refinance and rightsize the term portion of its capital structure on suitable terms at any time up until April of 2026. CES Energy routinely considers its capital structure, including increasing or decreasing the capacity of its senior facility, refinancing of the Canadian term loan facility, issuance of senior notes, and other potential financing options.

CES Energy's underlying business model is capex light and asset light, enabling the generation of significant surplus free cash flow. As its customers endeavour to maintain or increase production in the current environment, CES Energy will leverage its established infrastructure, business model and nimble customer-oriented culture to deliver superior products and services to the industry. CES Energy sees the consumable chemical market increasing its share of the oil field spend as operators continue to: drill longer-reach laterals and drill them faster; expand and optimize the utilization of pad drilling; increase the intensity and size of their fracks; and require increasingly technical and specialized chemical treatments to effectively maintain existing cash-flow-generating wells and treat growing production volumes and water cuts from new wells.

Conference call details

With respect to the first quarter results, CES Energy will host a conference call and webcast at 9 a.m. MT (11 a.m. ET) on Thursday, May 9, 2024. A recording of the live audio webcast of the conference call will also be available on the company's website. The webcast will be archived for approximately 90 days.

North American toll-free:  1-844-763-8274

International/Toronto callers:  647-484-8814

Webcast:  at the CES Energy website

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