Mr. Rene Amirault reports

SECURE ANNOUNCES 2023 THIRD QUARTER RESULTS

Secure Energy Services Inc. has released its 2023 third quarter results.

Rene Amirault, chief executive officer of Secure, remarked: "Third quarter results highlighted Secure's ability to generate significant free cash flow across our critical infrastructure network, enabling us to execute on our capital allocation priorities. Year to date, Secure has delivered an annualized 12-per-cent return to shareholders, achieved through our 40-cent-per-share annualized dividend payment and the repurchase of 7 per cent of our outstanding shares under Secure's NCIB. These actions underscore our commitment to enhance returns to our shareholders, complemented by our growth capital program this year.

"We were pleased to bring into service our Clearwater oil terminal and gathering infrastructure, and our Montney water disposal infrastructure expansion at the end of the third quarter, both of which are backstopped by commercial agreements. These additions provide critical infrastructure for the safe and reliable handling of production volumes for our customers. We continue to see a strong opportunity set to work with customers seeking further brownfield expansions based on reducing their costs and environmental footprint."

Third quarter highlights:

• Continued demand for critical services and strong utilization across the company's infrastructure network resulted in revenue (excluding oil purchase and resale) of $427-million, up 2 per cent from the third quarter of 2022.
• Recorded net income of $47-million or 16 cents per basic share, down $13-million from the third quarter of 2022 primarily due to a gain on an asset sale recorded in the prior-year period.
• Achieved adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $158-million or 54 cents per basic share, up 8 per cent from adjusted EBITDA of 50 cents per basic share in the third quarter of 2022.
• Maintained an industry-leading adjusted EBITDA margin of 37 per cent.
• Generated funds flow from operations of $130-million, or 45 cents per basic share, up 5 per cent per basic share from the third quarter of 2022.
• Generated $104-million of discretionary free cash flow, or 36 cents per basic share, up 3 per cent per basic share from the third quarter of 2022.
• Completed and commissioned the expansion of the company's Montney water disposal infrastructure and Clearwater oil terminalling and gathering infrastructure projects safely, on time and on budget. These assets will begin contributing to the corporation's results in the fourth quarter.
• Paid a quarterly dividend of 10 cents per common share, representing an attractive yield of 5.2 per cent on Secure's common shares.
• Repurchased and cancelled 4.6 million common shares under the corporation's normal course issuer bid (NCIB) at a weighted average price per share of $7.32 for a total of $33-million. The purchases in the third quarter resulted in Secure reaching the maximum allowable repurchases under the NCIB, which included repurchases of 7 per cent of outstanding common shares this year. Secure's board of directors has approved the renewal of the NCIB which is expected to occur in December, 2023.
• Maintained a total debt to EBITDA covenant ratio of 1.9 times.

The corporation's operating and financial highlights for the three and nine months ended Sept. 30, 2023, and 2022, can be summarized as noted herein.

Outlook

March 3, 2023, Competition Tribunal order

On March 3, 2023, the Competition Tribunal of Canada issued an order requiring Secure to divest 29 facilities all formerly owned by Tervita Corp. On Aug. 1, 2023, the Federal Court of Appeal dismissed Secure's appeal of the tribunal's order. "The combination of Secure and Tervita better positioned us to serve our customers and we have proven the significant cost efficiencies through our financial results over the past two years," said Mr. Amirault. "We are disappointed that the Federal Court of Appeal dismissed our appeal and sought leave to appeal to the Supreme Court of Canada. We are pleased that the Federal Court of Appeal stayed the tribunal's order while the Supreme Court determines whether to hear our appeal. As a prudent course of action, Secure has engaged an adviser and is evaluating the potential sale of the 29 facilities. Due to the uncertainty with respect to the timing of a hearing being granted or a resolution of the matter, our board of directors and management continue to consider all options with respect to the tribunal's order to best serve our customers and other stakeholders."

Q4 2023 and 2024 expectations

For the remainder of 2023, Secure expects activity levels to remain strong in the energy and industrial sectors despite continuing macroeconomic factors, shifting supply and demand dynamics driving commodity price volatility, and elevated interest rates. Secure's customers continue to showcase balance sheet strength, modest growth, cost optimization efforts and operational efficiency strategies for disciplined production growth. The industrial sector is also expected to remain stable, marked by sustained volumes, demand for the company's infrastructure services, and activity linked to long-term and recurring projects. Secure also continues to diligently manage inflationary costs through price increases and operational efficiencies.

Secure's infrastructure network maintains significant capacity to support customers, accommodating increased volumes for processing, disposal, recycling, recovery and terminalling, driving higher same-store sales with minimal incremental fixed costs or additional capital. The company also continues to realize a sizable organic opportunity set to partner with its customers in areas where infrastructure and additional capacity are required to match production growth. In 2023, the planned $100-million in growth capital has been committed, with significant growth projects now operational. In 2024, Secure expects to spend approximately $50-million on opportunities that continue to leverage its existing infrastructure through long-term contracts, as well as approximately $85-million on sustaining capital including landfill expansions, and approximately $20-million on settling Secure's abandonment retirement obligations.

Over all, Secure maintains a constructive outlook for volumes, activity levels and infrastructure demand throughout the remainder of 2023 and 2024. Looking ahead, it expects to continue to direct its significant discretionary free cash flow to its four capital allocation priorities. For 2024, this includes capital structure improvements through the repayment of high interest debt, paying its 40-cent annualized dividend which currently yields an attractive 5.2 per cent, growing its base infrastructure with customer-backed contracts and opportunistically repurchasing shares.

Long-term outlook

The continued need for energy security has placed renewed focus on the long-term role Secure believes Canadian oil and gas will play in responsibly meeting the growing demand for energy. While energy diversification is crucial to address future global demand and achieve emission reduction objectives, the significance of oil and natural gas as fundamental energy resources will persist for decades to come. Canada stands out with its world-class safety, environmental and social practices making it a reliable source of sustainably produced energy.

The significant expansion of access from the Trans Mountain expansion project, LNG Canada and new natural gas liquids marine export terminals is expected to lead to increased domestic production across commodities. The corporation is encouraged by the long-term investments undertaken by energy producers, from exploration and appraisal to production development and capacity expansions, highlighting the extensive and robust nature of the energy industry in Canada. Secure anticipates that these market dynamics will persist, driving sustained and growing activity levels in the years to come.

Secure is well positioned to benefit from this activity for the long term due to the critical services provided to energy and industrial customers through its infrastructure network located in key areas across Western Canada and North Dakota. Furthermore, Secure's industrial landfills will benefit from recurring volumes resulting from government regulations mandating abandonment, remediation and reclamation activities. Diverse waste streams and continuing demand from the company's industrial customer base further enhance the stability and resilience of its operations.

Secure remains committed to its vision of being the leader in environmental and energy infrastructure, prioritizing value creation for its customers through reliable, safe and environmentally responsible infrastructure. This approach allows the company's customers to allocate their capital where it can yield the highest return while emphasizing operational excellence and leading ESG (environmental, social, governance) standards.

Financial statements and MD&A

The corporation's consolidated financial statements and notes thereto and management's discussion and analysis for the three and nine months ended Sept. 30, 2023, and 2022, are available on Secure's website and on SEDAR+.

Third quarter 2023 conference call

Secure will host a conference call Wednesday, Nov. 1, 2023, at 9 a.m. MST to discuss the third quarter results. To participate in the conference call, dial 416-764-8650 or toll-free 1-888-664-6383. To access the simultaneous webcast, please visit Secure's website. For those unable to listen to the live call, a taped broadcast will be available on Secure's website and, until midnight MST on Wednesday, Nov. 8, 2023, by dialling 1-888-390-0541 and using the pass code 527696.

About Secure Energy Services Inc.

Secure is a leading waste management and energy infrastructure business headquartered in Calgary, Alta. The corporation's extensive infrastructure network located throughout Western Canada and North Dakota includes waste processing and transfer facilities, industrial landfills, metal recycling facilities, crude oil and water gathering pipelines, crude oil terminals, and storage facilities. Through this infrastructure network, the corporation carries out its principal business operations, including the processing, recovery, recycling and disposal of waste streams generated by its energy and industrial customers and gathering, optimization, terminalling and storage of crude oil and natural gas liquids. The solutions the corporation provides are designed not only to help reduce costs, but also lower emissions, increase safety, manage water, recycle byproducts and protect the environment.

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