Mr. Bradley Fedora reports

TRICAN REPORTS SECOND QUARTER RESULTS FOR 2023 AND DECLARES QUARTERLY DIVIDEND

Trican Well Service Ltd. has released its second quarter results for 2023. The following news release should be read in conjunction with management's discussion and analysis (MD&A), the unaudited interim consolidated financial statements and related notes of Trican for the three and six months ended June 30, 2023, as well as the annual information form (AIF) for the year ended Dec. 31, 2022. All of these documents are available on SEDAR.

Second quarter highlights

• Trican's results for the quarter compared with the prior-year period improved with continued strong industry activity combined with a more consistent, lower inflationary environment leading to a more sustainable operating margin. This resulted in improvements in all major financial categories:
  • Revenue was $168.2-million for the three months ended June 30, 2023, a 10-per-cent increase compared with $152.6-million for the three months ended June 30, 2022.
  • Adjusted EBITDAS (earnings before interest, taxes, depreciation and amortization, and stock-based compensation) and adjusted EBITDA for the three months ended June 30, 2023, were $32.9-million and $31.9-million, compared with $23.6-million and $19.2-million, respectively, for the three months ended June 30, 2022.
  • Free cash flow for the three months ended June 30, 2023, was $22.7-million compared with $14.6-million for the three months ended June 30, 2022.
  • Profit for the three months ended June 30, 2023, was $9.8-million compared with $1.5-million for the three months ended June 30, 2022.
  • Subsequent to June 30, 2023, the company repurchased an additional 2,708,054 common shares which successfully concluded the 2022 to 2023 NCIB (normal course issuer bid) program. The company intends to renew its NCIB program in Oct., 2023, subject to Toronto Stock Exchange approval, as part of its continuing return of capital strategy.
• The company's balance sheet remains in excellent shape with positive working capital, including cash, of $127.8-million at June 30, 2023, compared with $169.4-million at Dec. 31, 2022, providing significant financial flexibility.
• Trican operates the newest, most technologically advanced fleet of fracturing equipment in Canada and successfully deployed Canada's first next-generation fracturing fleets in 2022. This was accomplished by significantly upgrading existing equipment through the deployment of fully electric ancillary equipment in addition to incorporating CAT Tier 4 Dynamic Gas Blending (DGB) engine technology into the company's fleet. The combination of Tier 4 DGB engine and electric ancillary equipment displaces up to 90 per cent of the diesel used in a conventional pumper with cleaner burning and less expensive natural gas resulting in lower overall fuel cost and reduced carbon dioxide and particulate matter emissions. The upgrades also include industry-leading continuous duty pumps (3,000 HHP) and idle reduction technology packages which enable longer pumping times and improved operating efficiencies.
  • Trican began the year operating three fleets of Tier 4 DGB equipment for a total of 126,000 HHP and is extremely pleased with the operational and financial performance of these assets.
  • During the first quarter of 2023, Trican's fourth Tier 4 DGB fleet (42,000 HHP) was deployed into the field bringing Trican's total Tier 4 DGB fleet to 168,000 HHP.
  • Upgrades to Trican's fifth Tier 4 DGB fleet (42,000 HHP) are under way with equipment anticipated to be field ready by early 2024 which will bring Trican's total tier 4 DGB fleet to 210,000 HHP.
  • Tier 4 upgrades and electric ancillary equipment are key components of Trican's environmental, social and governance (ESG) strategy. The company's continuing ESG initiatives, including fleet upgrades, will reduce its environmental impact, improve efficiency, and reduce its emissions profile thereby improving the sustainability of the company's operations and supporting its key customers in achieving their ESG goals.

Return of capital

• The company continues to be active in its normal course issuer bid (NCIB) program as a key component of its return of capital strategy:
  • During the three and six months ended June 30, 2023, Trican repurchased and cancelled 7,507,600 common share and 17,351,600 common shares, respectively, at a weighted average price of $3.24 per share and $3.28 per share, equating to approximately 3 per cent and 8 per cent of the 229,776,553 outstanding shares at Dec. 31, 2022.
  • On Oct. 3, 2022, the company announced the renewal of its NCIB program, commencing Oct. 5, 2022, to purchase up to 23,083,554 common shares for cancellation before Oct. 4, 2023, subject to the TSX NCIB rules. All common shares repurchased under the NCIB are returned to treasury for cancellation. As at June 30, 2023, the company had repurchased and cancelled 20,375,500 common shares under the 2022 to 2023 program. Subsequent to June 30, 2023, the company repurchased an additional 2,708,054 common shares which concluded the 2022 to 2023 NCIB program.
  • Since the initiation of our NCIB programs in 2017, Trican has repurchased 143,227,953 common shares, equating to approximately 41 per cent of total shares outstanding at the start of the NCIB programs.
• The company added an additional component to its return of capital strategy by instituting a quarterly dividend program in 2023:
  • During the three and six months ended June 30, 2023, the company paid a cash dividend of four cents per share for each quarter, or approximately $8.6-million and $17.5-million, respectively, in aggregate to shareholders.
  • On Aug. 1, 2023, the company's board of directors approved a dividend of four cents per share with distribution to be made on Sept. 30, 2023, to shareholders of record as of the close of business on Sept. 15, 2023. The dividends are designated as eligible dividends for Canadian income tax purposes.

Operating highlights

Capital expenditures

Capital expenditures for the three and six months ended June 30, 2023, totalled $14.4-million and $33.9-million, respectively ($24.7-million and $45.8-million for the three and six months ended June 30, 2022), related primarily to maintenance capital, the company's Tier 4 DGB fleet upgrade program and additional electric ancillary equipment. The company's preliminary 2023 growth, maintenance and infrastructure capital budget has been set at $113.8-million. Capital expenditures are financed with available cash resources and free cash flow.

Financial position

The company continues to focus on maintaining a strong balance sheet with significant positive working capital including cash. The company's ability to generate strong free cash flow and its financial flexibility will allow it to execute its strategic plans including investment in its Tier 4 DGB upgrade program, continued participation in its NCIB program and the payment of a quarterly dividend as a part of its disciplined capital allocation strategy which includes a consistent return of capital to the company's shareholders.

Outlook

The company's outlook for the industry remains consistent with its views outlined in Trican's first quarter 2023 MD&A (management discussion and analysis). Global demand for oil and natural gas is expected to remain strong and will likely grow as the world's major economies continue to rely on petroleum products for many goods that people use for modern day life. Oil and natural gas derivatives are used as the basis for a variety of products and functions including mobile phones, life-saving medical supplies, fuel for cars and trucks, energy to power factories, and is a reliable heat source for cooking and warming homes and buildings. Global oil markets are currently demonstrating a constructive positive outlook where the supply-demand balance is steadily and efficiently tightening. OPEC+ supply cuts in recent months are beginning to take hold, and markets are anticipating a subsequent draw on global oil inventories. More broadly, continuing geopolitical tensions have driven many countries to focus on securing reliable sources of energy that are developed in an environmentally sustainable manner. Given our high environmental and regulatory standards, Canada will play an increasingly important role as a supplier of choice for both oil and natural gas. Additional export capacity is in the late stages of construction through the Trans Mountain Pipeline, the Coastal GasLink Pipeline and several LNG export facilities on the West Coast of Canada to ensure that Canada is well positioned to provide a long-term supply of sustainably developed oil and natural gas to the world. These factors serve to provide a positive backdrop for oil and natural gas development activity in Western Canada and the associated oil field services required as the company moves through 2023 and beyond.

Despite significant forest fire activity in Western Canada, activity levels in the second quarter of 2023 remained fairly steady. Trican's operations were impacted as some work was shut down and delayed until the third quarter, but overall the quarter generally went as forecast. As a result, the company anticipates third quarter activity to be strong as its customers remain very positive on their second half of 2023 capital spending programs combined with work expected to be performed in the second quarter carries forward and is completed in Q3 2023.

Canadian market fundamentals remain strong for fracturing, cementing and coiled tubing services for the remainder of the year. Based on the company's estimates for activity in 2023, it expects the Canadian fracturing market to effectively be in balance for the remainder of 2023. The Montney reservoir in northeastern British Columbia and northwest Alberta remains one of the premier resource plays in North America and the company expects that the combination of attractive economics, future demand from LNG export facilities and improved relations with first nations should lead to continuing and growing activity in the play. Montney development requires large, high-pressure fracturing, cementing and coiled tubing services which should directly benefit Trican.

Industry pricing fundamentals have improved significantly over the past 12 to 18 months and the company has worked hard to offset significant inflation in its cost structure. The company will work diligently to ensure that it mitigates supply chain challenges such as long lead times on key inputs, parts and components. The company continues to experience inflationary pressures throughout its supply chain but at a much lower rate of change than experienced in 2022. The company also faces significant challenges in attracting and retaining qualified personnel to the oil field services industry which has increased its operating costs.

Trican continues to build on the investment made in its equipment fleet over the last two years to ensure that the company is on the forefront of pressure pumping technology and design in Canada. Demand for the company's Canadian market-leading low emissions Tier 4 DGB fracturing fleets is very robust and expected to grow through the remainder of 2023 as more equipment is deployed in the field. The company is currently in the process of upgrading its fifth fleet of Tier 4 DGB fracturing equipment containing high-pressure pumps which is anticipated to be field ready in early 2024.

To further reduce emissions and fuel costs from diesel consumption, the company continues to invest and enhance its equipment offering and have recently developed fully electric versions of certain ancillary equipment required for on-site fracturing operations and are deploying them into the company's fleet going forward. This equipment includes sand handling, fracturing blending and other items used on-site for chemical blending. The company believes these continuing technological advancements will augment its differentiation strategy and add value for its customers. The company's ability to generate strong free cash flow and its financial flexibility allows for continued progress in its fleet upgrade and electrification program.

The company will continue to serve its customers with state-of-the-art equipment and generate industry-leading returns in an environmentally and socially responsible manner. In turn, this will allow Trican to focus on returning capital to its shareholders both through its continuing NCIB program and its quarterly dividend program. The company believes its ability to deliver a multilayered return of capital strategy while maintaining a strong balance sheet will lead to long-term value creation for shareholders.

Conference call and webcast details

The company will host a conference call on Wednesday, Aug. 2, 2023, at 10 a.m. MT (12 p.m. ET) to discuss its results for the second quarter 2023.

To listen to the webcast of the conference call, please enter the URL as seen in the original version of this news release in your Web browser.

You can also visit the "investors" section of the company's website and click on "reports."

To participate in the Q&A (question and answer) session, please call the conference call operator at 1-800-319-4610 (North America) or 1-403-351-0324 (outside North America) 10 minutes prior to the call's start time and ask for the "Trican Well Service Ltd. second quarter 2023 earnings results conference call."

The conference call will be archived on Trican's website.

About Trican Well Service Ltd.

Headquartered in Calgary, Alta., Trican supplies oil and natural gas well servicing equipment and solutions to its customers through the drilling, completion and production cycles. Trican's team of technical experts provide state-of-the-art equipment, engineering support, reservoir expertise and laboratory services through the delivery of hydraulic fracturing, cementing, coiled tubing, nitrogen services and chemical sales for the oil and gas industry in Western Canada. Trican is the largest pressure pumping service company in Canada.

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