Mr. Bradley Fedora reports

TRICAN REPORTS FIRST QUARTER RESULTS FOR 2024, DECLARES QUARTERLY DIVIDEND

Trican Well Service Ltd. has released its first quarter results for 2024. The following news release should be read in conjunction with management's discussion and analysis, the unaudited interim consolidated financial statements, and related notes of Trican for the three months ended March 31, 2024, as well as the annual information form for the year ended Dec. 31, 2023. All of these documents are available on SEDAR+.

First quarter highlights:

• Trican's results for the quarter compared with the prior-year period were marginally lower based on decreased operating activity resulting from lower natural gas prices:
  • Revenue was $271.9-million for the three months ended March 31, 2024, an 8-per-cent decrease compared with $297.0-million for the three months ended March 31, 2023.
  • Adjusted EBITDAS (earnings before interest, taxes, depreciation and amortization, and share-based payments) and adjusted EBITDA for the three months ended March 31, 2024, were $74.4-million and $72.8-million, compared with $82.9-million and $81.6-million, respectively, for the three months ended March 31, 2023.
  • Free cash flow and free cash flow per share for the three months ended March 31, 2024, were $49.9-million and 24 cents per share, basic and diluted, compared with $54.9-million and 24 cents per share, basic and diluted, for the three months ended March 31, 2023.
  • Profit and profit per share for the three months ended March 31, 2024, were $41.2-million, 20 cents per share, basic, and 19 cents per share, diluted, compared with $46.0-million, 20 cents per share, basic and diluted, for the three months ended March 31, 2023.
• The company's balance sheet remains strong with positive working capital, including cash, of $174.5-million at March 31, 2024, compared with $153.2-million at Dec. 31, 2023, providing significant financial flexibility. As at March 31, 2024, the company had a cash balance of $9.3-million (Dec. 31, 2023: $88.8-million). The decrease in cash is a result of working capital requirements, tax instalments of $39.7-million and return on capital initiatives of $25.9-million. As at March 31, 2024, the company had no loans and borrowings (Dec. 31, 2023: nil).
• Trican operates the newest, most technologically advanced fleet of fracturing equipment in Canada. It developed its fleet by upgrading existing equipment with CAT Tier 4 dynamic gas blending 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. Its fracturing fleet upgrades also include industry-leading continuous heavy-duty pumps (3,000 hydraulic horsepower) and idle reduction technology packages, which enable longer pumping times and improved operating efficiencies:
  • During the first quarter of 2024, Trican's fifth Tier 4 DGB fleet (42,000 HHP) and second group of electrical ancillary equipment were deployed into the field, bringing 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 strategy. Its continuing environmental, social and governance initiatives, including fleet upgrades, are intended to reduce its environmental impact, improve efficiency and reduce its emission profile, thereby improving the sustainability of its operations and supporting its customers in achieving their ESG goals.

Return of capital:

• The company continues to be active in its normal course issuer bid program as a key component of its return of capital strategy:
  • During the three months ended March 31, 2024, Trican purchased and cancelled 4,045,700 common shares at a weighted-average price of $4.11 per share, or approximately 2 per cent of the company's outstanding shares at Dec. 31, 2023. Subsequent to March 31, 2024, the company purchased an additional 1,597,900 common shares, bringing total purchases under the 2023-2024 NCIB program to 8,536,529 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 Toronto Stock Exchange NCIB rules.
  • Since the initiation of ira NCIB programs in 2017, Trican has purchased 151,514,582 common shares, equating to approximately 44 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.
• The company continues to execute on its return of capital framework through the quarterly dividend program:
  • During the three months ended March 31, 2024, the company paid a cash dividend of 4.5 cents per share, or approximately $9.3-million in aggregate to shareholders.
  • On May 13, 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 prior-year quarterly dividend payments of four cents per share. The distribution is scheduled to be made on June 28, 2024, to shareholders of record as of the close of business on June 14, 2024.
  • The dividends are designated as eligible dividends for Canadian income tax purposes.

Operating highlights

Capital expenditures

Capital expenditures for the three months ended March 31, 2024, totalled $15.3-million ($19.5-million for the three months ended March 31, 2023) related primarily to maintenance capital and additional electric ancillary equipment. The company's capital budget for 2024 remains at approximately $90-million, including $15-million carry forward from the 2023 capital program, to be financed with available cash resources, free cash flow and its operating line.

Financial position

Trican continues to focus on maintaining a strong balance sheet with significant positive working capital including cash. Its ability to generate strong free cash flow and financial flexibility will allow it to execute its strategic plans, including continuing investment in its industry-leading fleet, continued strong 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 its shareholders.

Outlook

Its overall outlook for the next few years remains very positive as Canadian market fundamentals remain attractive for fracturing, cementing and coiled tubing.

The Montney reservoir in northeastern British Columbia and northwestern Alberta remains one of the premier resource plays in North America. Trican expects that the combination of attractive well economics, increasing demand from 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, technically challenging cementing and coiled tubing services with large volumes of product, which will directly benefit Trican.

Additional Canadian export capacity is a reality with the Trans Mountain pipeline entering into commercial service, completion of the Coastal GasLink pipeline and the LNG Canada project anticipated to start exports in late 2024 or early 2025. The company is also encouraged by the progress being made for additional LNG export facilities on the west coast of Canada. This new export capacity for both oil and natural gas creates an increasingly positive backdrop for oil and natural gas drilling and completion activity in Western Canada and the associated oil field services required as it moves through 2024 and beyond. It expects overall annual oil field activity in Canada to remain relatively stable, allowing it to continue generating sector-leading returns for its shareholders.

Q1 activity proved to be quite resilient in spite of a continued low natural gas price environment and a period of extremely cold weather delaying the start of operations in January. It expects that second quarter 2024 will be stronger than originally anticipated as some work scheduled for the first quarter was deferred into the second quarter. Additionally, certain customers are looking to accelerate portions of their previously scheduled second half 2024 work into the second quarter to mitigate potential summer water constraints given the continuing drought conditions in Western Canada. Trican continues to work closely with these customers on various solutions, including alternative water storage options and utilization of produced water through chemical treatment solutions. As Trican moves through the summer, it will continue to monitor potential access issues related to forest fire activity, which could delay activity in its operating areas. It will work closely with its customers to minimize business interruptions.

Trican continues to build on the investments made in its equipment fleet over the past three years to ensure that it is on the forefront of pressure pumping technology and design in Canada. Demand for its Canadian market-leading low emission Tier 4 DGB fracturing fleets continues to be robust and is expected to remain strong through the rest of 2024. Its fifth fleet of Tier 4 DGB high-pressure fracturing equipment containing continuous duty pumps was deployed in the field in early 2024, bringing Trican's total Tier 4 fleet to an industry-leading 210,000 HHP.

Trican continues to invest and enhance its equipment offering by moving forward with the electrification of certain ancillary equipment required for on-site fracturing operations, including the data van, blending, sand handling and other equipment used for fracturing. It believes these continuing technological advancements will augment its differentiation strategy and add value for its customers by increasing reliability, further reducing emissions and reducing fuel costs. Its ability to generate strong free cash flow and its financial flexibility allow for continued investment in its fleet and electrification program. It will continue to serve its customers with state-of-the-art equipment and generate industry-leading returns in an environmentally and socially responsible manner.

Trican remains focused on returning capital to its shareholders both through its quarterly dividend program and through its continuing NCIB program. Trican increased its quarterly dividend per share by 12.5 per cent, effective for first quarter 2024. It has made significant progress on its NCIB program to date and will look to fully utilize this program prior to its renewal. It 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.

Conference call and webcast details

The company will host a conference call on Tuesday, May 14, 2024, at 10 a.m. MT (12 p.m. ET) to discuss its results for the first quarter 2024.

You may listen to the webcast of the conference call on-line.

You can also visit the investors section of its website, and click on reports.

To participate in the question-and-answer session, please call the conference call operator at 1-800-319-4610 (North America) or 1-403-351-0324 (outside of North America) 10 minutes prior to the call's start time and ask for the Trican first quarter 2024 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. 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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