Mr. Bradley Fedora reports

TRICAN REPORTS ANNUAL RESULTS FOR 2023, DECLARES QUARTERLY DIVIDEND AND ANNOUNCES 12.5% DIVIDEND INCREASE

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

2023 highlights

• Trican's results for the year improved with continued strong industry activity, improved pricing environment, lower inflation leading to a more sustainable operating margin. This resulted in improvements to all major financial categories:
  • Revenue was $972.7-million for the year ended Dec. 31, 2023, a 12-per-cent increase compared with $866.3-million for the year ended Dec. 31, 2022.
  • Adjusted EBITDAS (earnings before interest, taxes, depreciation and amortization, and stock-based compensation) and adjusted EBITDA for the year ended Dec. 31, 2023, were $243.1-million and $235.6-million, compared with $197.8-million and $188.5-million, respectively, for the year ended Dec. 31, 2022.
  • Free cash flow and free cash flow per share for the year ended Dec. 31, 2023, was $161.6-million, 74 cents per share basic and 73 cents per share diluted compared with $157.0-million, 65 cents per share basic and 64 cents per share diluted for the year ended Dec. 31, 2022.
  • Profit and profit per share for the year ended Dec. 31, 2023, was $121.0-million, 56 cents per share basic and 55 cents per share diluted compared with $79.2-million, 33 cents per share basic and 32 cents per share diluted for the year ended Dec. 31, 2022.
  • During the year ended Dec. 31, 2023, the company returned an aggregate of $112.8-million to shareholders, consisting of $34.3-million from quarterly dividends and $78.5-million from the company's normal course issuer bid (NCIB) programs.
  • The company's board of directors has approved a quarterly dividend of 4.5 cents per share, representing an increase of 12.5 per cent over the prior quarter dividend.
• The company's balance sheet remains strong with positive working capital, including cash, of $153.2-million at Dec. 31, 2023, compared with $169.4-million at Dec. 31, 2022, providing significant financial flexibility. The company had loans and borrowings of nil at Dec. 31, 2023, compared with $29.8-million at Dec. 31, 2022.
• Trican operates the newest, most technologically advanced fleet of fracturing equipment in Canada. The company developed its fleet by upgrading existing equipment with CAT Tier 4 Dynamic Gas Blending (DGB) engine technology and building new fully electric ancillary equipment. The combination of Tier 4 DGB engines and fully electric ancillary equipment can displace up to 90 per cent of the diesel used in a conventional fracturing operation with cleaner burning and less expensive natural gas resulting in lower overall fuel cost and reduced carbon dioxide and particulate matter emissions. The company's fracturing fleet upgrades also include industry leading continuous heavy duty pumps (3,000 HHP) and idle reduction technology packages which enable longer pumping times and improved operating efficiencies.
  • Trican has completed its fifth Tier 4 DGB fleet (42,000 HHP) which brings 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, are intended to reduce the company's environmental impact, improve efficiency and reduce its emissions profile, thereby improving the sustainability of the company's operations and supporting the company's customers in achieving their ESG goals.

Return of capital

• The company continues to be active in its NCIB program as a key component of its return-of-capital strategy:
  • During the year ended Dec. 31, 2023, Trican purchased and cancelled 22,702,683 common shares at a weighted average price of $3.46 per share, equating to approximately 10 per cent of the 229,776,553 outstanding shares at Dec. 31, 2022. Subsequent to Dec. 31, 2023, the company purchased an additional 1,839,800 common shares.
  • On Oct. 2, 2023, the company announced the renewal of its NCIB program, commencing Oct. 5, 2023, to purchase up to 21,004,897 common shares for cancellation before Oct. 4, 2024, subject to the TSX NCIB rules. The 2022 to 2023 NCIB program was fully completed in Q3 2023 resulting in the purchase of 23,083,554 common shares.
  • Since the initiation of our NCIB programs in 2017, Trican has purchased 146,586,882 common shares, equating to approximately 42 per cent of total shares outstanding at the start of the NCIB programs. All common shares purchased under the NCIB are returned to treasury for cancellation.
• In 2023, Trican added an additional component to its return-of-capital strategy by instituting a quarterly dividend program:
  • During the year ended Dec. 31, 2023, the company paid a cash dividend of four cents per share for each quarter, or approximately $34.3-million in aggregate to shareholders.
  • On Feb. 21, 2024, the company's board of directors approved a dividend of 4.5 cents per share reflecting an increase of 12.5 per cent from the previous quarterly dividend payment of four cents per share. The increase will offset the reduction in share count as a result of the company's continuing NCIB program to keep the annual expected dividend payout at approximately $36-million. The distribution is scheduled to be made on March 29, 2024, to shareholders of record as of the close of business on March 15, 2024.
  • The dividends are designated as eligible dividends for Canadian income tax purposes.

Operating highlights

Capital expenditures

Capital expenditures for the year ended Dec. 31, 2023, totalled $79.3-million ($103.6-million for the year ended Dec. 31, 2022) related primarily to maintenance capital, the company's Tier 4 DGB fleet upgrade program and additional electric ancillary equipment. The company has approved a capital budget for 2024 of $76-million financed with available cash resources and free cash flow. The company has $15-million carry forward from the 2023 capital program, bringing the total for 2024 to approximately $90-million.

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 financial flexibility will allow the company to execute its strategic plans including investment in the company's industry leading fleet, continued participation in the company's 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 its shareholders.

Outlook

The company's overall outlook for the next few years remains unchanged. Trican expects annual oil field activity in Canada to remain relatively stable allowing the company to continue generating sector-leading returns for its shareholders. Canadian market fundamentals remain strong for fracturing, cementing and coiled tubing services for the year, and the company expects the Canadian fracturing market to remain balanced under the current supply and demand dynamic. Trican saw some work scheduled for the fourth quarter deferred into the first quarter of 2024 due to customer budget exhaustion and volatility in natural gas prices. Although the comapny had a relatively slow start to the new year, Trican anticipates first quarter of 2024 to be active as its customers look to complete their first quarter programs before the onset of spring breakup conditions.

The Montney reservoir in northeastern British Columbia and northwest Alberta remains one of the premier resource plays in North America. The company expects that the combination of attractive well economics, future demand from LNG (liquefied natural gas) export facilities and British Columbia's agreements 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 will directly benefit Trican. Additional Canadian export capacity is in the late stages of construction through the Trans Mountain Pipeline, the Coastal GasLink Pipeline and the LNG Canada facility. The company is also encouraged by the progress being made for additional LNG export facilities on the West Coast of Canada. This creates 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 2024 and beyond.

Trican continues to experience inflationary pressures on specific components in its supply chain but generally at a much lower rate compared with the last two years. The company will work diligently to ensure that it mitigates supply chain challenges such as long lead times on key inputs, parts and components. Challenges remain in attracting and retaining qualified personnel to the oil field services industry and thus expect to see continuing wage inflation.

Trican continues to build on the investments made in its equipment fleet over the last two years to ensure that it 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 robust and expected to remain strong for 2024. Trican has completed its fifth fleet of Tier 4 DGB fracturing equipment containing high-pressure pumps which is anticipated to be field ready in early 2024 bringing Trican's total Tier 4 fleet to an industry-leading 210,000 HHP.

To further reduce emissions and fuel costs from diesel consumption, the company continues to invest and enhance its equipment offering and has recently developed two fully electric sets of certain ancillary equipment required for on-site fracturing operations and is deploying them into its fleets going forward. This equipment includes sand handling, blending and other items used on site for chemical blending. Trican 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 the company's fleet upgrade and electrification program.

Trican 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 its shareholders.

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. Its team of technical experts provides 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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