Trican Well Service Ltd. Reports Annual Results for 2020 and Announces New Appointments

Calgary, Alberta–(Newsfile Corp. – February 23, 2021) – Trican Well Service Ltd. (TSX: TCW) (“Trican” or the “Company“) is pleased to announce its annual results for 2020, the appointment of interim CFO and appointment of the Chairman of the Board. The following news release should be read in conjunction with Management’s Discussion and Analysis (“MD&A”), the audited annual consolidated financial statements, related notes of Trican and the Annual Information Form for the year ended December 31, 2020. All of these documents are available on SEDAR at www.sedar.com.

Trican is pleased to announce the appointment of Klaas Deemter, CPA, CMA to the role of interim CFO, effective March 1, 2021. Mr. Deemter joined Trican in 2009 and has held a series of progressively more senior finance roles and was most recently Corporate Controller. Prior to joining Trican, Mr. Deemter worked in commercial banking with two of Canada’s chartered banks. Mr. Deemter’s experience within Trican, and in oilfield services, will provide steady financial leadership as the Company continues the executive search process to find a permanent replacement for outgoing CFO, Robert Skilnick, whose planned resignation was previously announced on January 13, 2021.

The Company is also pleased to announce the appointment of Thomas M. Alford as Chairman of the Board, effective February 23, 2021. Trican wishes to thank Allen Brooks for his service as Acting Chairman following the transition of Mr. Fedora to President and CEO in September 2020.

HIGHLIGHTS

The negative impact of the COVID-19 health pandemic and volatile commodity prices (collectively “Market Events”) had a significant negative effect on Trican’s business, and the oilfield services industry more generally during 2020. Trican adapted quickly to the changing market conditions and we are confident that our resilient culture and strong financial position will ensure the Company remains well positioned to advance our business as we move through these uncertain times.

• Financial position and liquidity:

• Cash and cash equivalents of $22.6 million (December 31, 2019 – $7.2 million);
• Positive non-cash working capital of $39.2 million (December 31, 2019 – $132.6 million which includes $38.1 million of assets held for sale);
• At December 31, 2020, the Company had no bank debt outstanding (December 31, 2019 – $46.2 million);
• Subsequent to December 31, 2020, the Company strengthened its liquidity and financial position further through agreements to sell non-core assets and businesses for proceeds of more than $7.0 million, including the signing of a definitive agreement to sell its software business for estimated proceeds of $6 million; and
• The Company’s strong balance sheet and liquidity provides significant financial flexibility to invest in technology to meet customers’ needs and invest in future growth to deliver shareholder value.

• Consolidated revenue from continuing operations was $397.0 million, a 38% decrease compared to 2019.
• Net loss from continuing operations for 2020 was $233.3 million (2019 – net loss from continuing operations of $71.4 million). The biggest factors causing an increase to the net loss for 2020, relative to 2019, were Market Events resulting in the recognition of $163.4 million for impairment of non-financial assets (2019 – $10.1 million), $9.1 million impairment loss on trade receivables resulting from a change in the Company’s customer credit risk and $17.1 million of severance costs (2019 – $9.0 million) associated with workforce reductions.
• Adjusted EBITDA¹ for the year ended December 31, 2020, was $14.6 million, compared to $28.0 million for the year ended December 31, 2019. Adjusted EBITDA¹ for the year ended December 31, 2020, was negatively affected by reduced activity levels, a $9.1 million impairment loss on trade receivables, combined with $17.1 million of severance costs (2019 – $9.0 million), offset by the recognition of $14.1 million from the Canadian Emergency Subsidy programs (2019 – nil).
• On January 15, 2020, the Company completed the sale of its fluid management business for consideration of approximately $17.7 million. For 2020, total cash proceeds from the sale of the fluid management business and surplus and non-core asset sales was $24.2 million (2019 – $31.8 million).
• At December 31, 2020, our outstanding share balance was 255,735,611 (2019 – 271,490,035), which includes the repurchase and cancellation of 17,130,235 shares in 2020 at a weighted average price per share of $1.08, pursuant to the Company’s Normal Course Issuer Bid (“NCIB”). During 2019, 30,102,845 common shares were purchased under our NCIB program at a weighted average price per share of $1.15). Subsequent to December 31, 2020, the Company repurchased an additional 986,200 shares at a weighted average price per share of $1.71.
• In 2020, $13.8 million was recognized in relation to Canadian Emergency Wage Subsidy (“CEWS”) and $0.3 million for the Canada Emergency Rent Subsidy (“CERS”), collectively, Canadian Emergency Subsidies (“CES”) as part of the federal government of Canada’s response to the COVID-19 health pandemic. The CES program allowed the Company to maintain staff on the payroll through a period of significant economic turmoil.

CONTINUING OPERATIONS – FINANCIAL REVIEW

($ millions, except per share amounts. The following are stated in thousands: weighted average shares, proppant pumped, total job count and HHP)	Three months ended							Year ended
($ millions, unaudited)	December 31, 2020			December 31, 2019			September 30, 2020	December 31, 2020				December 31, 2019			December 31, 2018
Revenue	$102.8			$163.3			$74.1	$397.0				$636.1			$864.5
Gross (loss) / profit	(4.0)			(6.1)			(10.9)	(40.6)				(44.6)			8.5
Adjusted EBITDA1	14.5			14.6			(2.6)	14.6				28.0			83.2
Weighted average shares outstanding – basic and diluted	257,172			277,261			263,491	263,830				288,528			322,125
Loss from continuing operations	(24.5)			(19.5)			(25.7)	(233.3)				(71.4)			(229.1)
Per share – basic	(0.1)			(0.1)			(0.1)	(0.9)				(0.3)			(0.7)
Per share – diluted	(0.1)			(0.1)			(0.1)	(0.9)				(0.3)			(0.7)
Loss for the period	(25.0)			(20.9)			(26.1)	(234.7)				(73.5)			(232.7)
Per share – basic	($0.10)			($0.07)			($0.10)	($0.89)				($0.26)			($0.72)
Per share – diluted	($0.10)			($0.07)			($0.10)	($0.89)				($0.26)			($0.72)
Canadian Emergency Wage Subsidy	4.9			–			4.2	14.1				–					$-
Total proppant pumped (tonnes)	229			262			127	691				898			1,558
Internally sourced proppant pumped (tonnes)	162			241			127	607				877			797
Total job count	1,545			2,147			765	5,268				5,822			11,384
Hydraulic Pumping Capacity	570			583			572	570				583			672
Active crewed HHP	190			324			200	190				324			340
Active, maintenance/not crewed HHP	85			67			114	85				67			242
Parked HHP	295			192			258	295				192			90

 

($ millions)	As at December 31, 2020	As at December 31, 2019	As at December 31, 2018
Cash and cash equivalents	$22.6	$7.2	$8.2
Current assets – other	$99.8	$225.5	$193.3
Current portion of lease liabilities	$3.5	$4.5	$-
Current liabilities – other	$57.2	$88.4	$85.8
Lease liabilities – non-current portion	$10.3	$15.0	$-
Long-term loans and borrowings	$-	$46.2	$45.9
Total assets	$563.2	$926.5	$1,037.8

Fourth Quarter 2020 vs Fourth Quarter 2019

The effects of the COVID-19 pandemic continued to impact the Company in the fourth quarter of 2020, as revenue and activity levels were significantly below the comparative 2019 period. Despite significantly lower revenue and activity levels, relative to Q4 2019, the Company was able to mitigate the impact to Q4 2020 net loss and adjusted EBITDA¹, through previously implemented cost control and other restructuring efforts.

• Consolidated revenue from continuing operations for Q4 2020 was $102.8 million, a $60.6 million decrease compared to Q4 2019.
• Net loss for Q4 2020 was $25.0 million (Q4 2019 – net loss of $20.9 million). The biggest factor causing an increase to the net loss for 2020, relative to 2019, was the recognition of $22.3 million for impairment of non-financial assets (2019 – $10.1 million).
• Adjusted EBITDA¹ for Q4 2020 was $14.5 million, which includes recognition of $4.9 million from the CES programs. Q4 2019 adjusted EBITDA¹ was positive $14.6 million.
• The sale of surplus assets in Q4 2020 generated $2.6 million (Q4 2019 – $4.3 million) in proceeds which provided additional liquidity and allowed for continued investment in our core business and NCIB program.

Fourth Quarter 2020 vs Third Quarter 2020 Sequential Overview

Revenue in the fourth quarter of 2020 increased 39%, or $28.7 million, from the third quarter revenue levels. The fourth quarter saw increased activity levels compared to the previous quarter as a result of stronger commodity prices and customer spending. Q4 2020 activity levels continued to be negatively affected by the ongoing COVID-19 pandemic, but were up in Q4 2020 compared to Q3 2020.

The average WTI price in Q4 2020 was only up 4% over Q3 2020, but positive price commentary from OPEC producers and optimism over vaccine rollouts led the WTI benchmark price to close the quarter at $48.63, 17% higher from the start of the quarter. Natural gas prices peaked early in the quarter, with AECO hitting $3.19/GJ, before retreating to close the quarter at $2.35 as the onset of colder winter weather was delayed. Natural gas price performance has been strong all year, with the benchmark AECO price climbing 14% from the start to the finish of the year. Natural gas prices have been aided in part by improvements in infrastructure and Market Egress capacity made in the last 12 months. The sequential increase in commodity prices contributed to an increase in the WCSB drilling Rig Count from the third quarter, rising from 52 during Q3 to 89 during Q4, a 71% sequential increase.

The demand for Pressure Pumping services significantly improved in Q4 2020 compared to Q3 2020, increasing the amount of Proppant pumped and revenue by 80% and 39%, respectively, for the fourth quarter. Revenue did not increase at the same rate as the increase in Proppant pumped as there was a higher proportion of customer activity weighted to customers that supply their own Proppant (the Company earns revenue selling Proppant to customers). The Company reactivated one additional Hydraulic Fracturing Crew in the fourth quarter to accommodate increased customer and industry demand. As a result of the increased demand, Hydraulic Fracturing Utilization on our crewed equipment was 60% in Q4 2020 compared to 53% in Q3 2020. The Company prioritizes utilization on its fleet of Dual Fuel Engine pumps as part of our commitment to reducing emissions and working with our customers to meet their ESG goals. The Company exited the fourth quarter with five Fracturing Crews and 105,000 Average Active Crewed HHP, up from three crews and 60,000 HHP at the end of the third quarter.

Coiled Tubing and Cementing activity realized sequentially increased activity levels. Our Cementing¹ job count increased by approximately 109% sequentially, allowing for the reactivation of six additional crews at the end of the fourth quarter. Coiled Tubing Operating Days increased from 178 days in the third quarter to 308 days in the fourth quarter, allowing for activation of a sixth crew late in the quarter.

Gross loss and adjusted EBITDA¹ for the fourth quarter of 2020 were $4.0 million and $14.5 million, respectively, an improvement over the Q3 2020 gross loss of $10.9 million and negative adjusted EBITDA¹ of $2.6 million. Improved Q4 2020 financial results are primarily due to the increased activity levels. Q3 2020 financial results were negatively affected by severance expenditures in the quarter of $11.7 million. The Company’s Q4 2020 results benefited from $4.9 million (Q3 2020 – $4.2 million) recognized from the CES programs, funds that helped avoid further personnel reductions.

Net loss in Q4 2020 of $24.1 million was consistent with the net loss from Q3 2020 of $25.7 million despite the increase in operational activity and revenue. Q4 2020 net loss was negatively affected by specific asset impairments of $22.3 million related to non-financial assets with no expectation of returning to active cash generating use.

OUTLOOK

The rally in oil and related commodity prices that began in Q4 2020 has continued into 2021. WTI moved past US $50/bbl in early Q1 2021 and has not gone below US $50/bbl since then. WTI prices over US $50/bbl suggest that North American oil and gas producers have significantly improved economics, providing some stability for oilfield services activity levels. Natural gas prices are also expected to remain stable, with a positive long-term bias coming from the ongoing construction of LNG facilities in British Columbia. The recovery in commodity prices, combined with significant overall industry cost reductions has led to improved cash flows for our customers. The industry is exercising capital restraint and will be using a significant portion of available cash to restore balance sheets and provide a return to shareholders. We expect that 2021 activity will be modestly higher than 2020.

Q1 2021 Outlook

Favourable weather conditions and strong momentum carrying forward from Q4 2020 resulted in a high level of activity thus far in Q1. The drilling Rig Count¹ ramped up quickly in early January, averaging 162 through January and the first half of February versus an average of 89 in Q4 2020 and 196 in Q1 2020. Strong customer demand resulted in the addition of a sixth Hydraulic Fracturing Crew in early January. All six Fracturing Crews, 18 Cementing crews and six Coiled Tubing Crews are seeing high utilization and we anticipate this to continue through Q1 until we see the typical Spring Break-Up declines in March.

2021 Full Year Outlook

Customers have responded favourably to Trican’s commitment to improving pumping efficiency while reducing our environmental impact. Customers’ preliminary capital plans indicate that we should see improved utilization in 2021 relative to 2020. The Company’s large Dual Fuel Engine natural gas fleet and Idle Reduction Technology reduce well costs and emissions, while new chemistries will reduce fresh water usage, both key metrics for forward thinking oil and gas producers that have strong ESG programs.

Our ability to supply products and services with a reduced environmental impact, coupled with continued strong operational performance and improved industry conditions, is expected to drive an increase in demand for our services in Q2 2021 relative to Q2 2020. The Company has secured Hydraulic Fracturing work programs with existing and new customers that will contribute to higher year-over-year financial results in Q2 2021, a quarter that is traditionally the weakest for oilfield services due to the wet conditions resulting from the Spring Break-Up thaw and heavy rainfalls during the spring season which limit the movement of heavy equipment.

Visibility into the second half of the year is improving, but is still clouded by near term headwinds caused by ongoing uncertainty related to the COVID-19 pandemic. The Company is prepared to respond to increased customer capital spending and has significant financial flexibility to add equipment to respond to additional customer demand if full cycle returns can be achieved. Our strong balance sheet and reduced fixed cost structure also give the flexibility to withstand some market turbulence if conditions were to weaken.

We will continue to manage our balance sheet prudently, ensuring investment returns are commensurate with any balance sheet risk assumed. Our ability to monetize surplus property and equipment, combined with modest operating cash flows, will provide additional capital that will allow selective investments that meet our return hurdle rate and continued investment into our NCIB program.

Pricing for Our Services

Pricing remains competitive, with pricing for contracted services in Q1 2021 remaining flat against Q4 2020. If the equipment supply and demand remains in balance going into the second half of the year, we will be looking for price increases from our clients that will help to improve our margins to more economic levels.

Capital Expenditures and Divestitures

Capital expenditures for the year ended December 31, 2020, of $12.8 million (Q4 2020 – $4.2 million) were focused primarily on sustaining and infrastructure projects, along with certain projects that brought immediate efficiencies and cost reductions. These capital expenditures were fully funded with $24.2 million of proceeds from the sale of surplus or obsolete assets, as well as the sale of our fluid management business in Q1 2020.

The focus for 2021 will be to complete projects already underway and make selective investments into our fleet to improve efficiency and support Trican’s drive to become an ESG leader in the WCSB oilfield services sector. Our core Sustaining Capital program will adjust with activity levels. Currently we are anticipating our Sustaining Capital program to be approximately 2% to 4% of revenue. The Company may look to make incremental investments that offer compelling returns on invested capital given its strong financial position.

We continue to seek opportunities to sell redundant real estate and surplus equipment, which will partially fund new investments. Subsequent to December 31, 2020, the Company entered into agreements to sell its non-core software business and other redundant assets for estimated proceeds $7.0 million. The pace of incremental disposals will remain uneven during 2021 given the amount of surplus assets that have come into the market since March 2020.

Hydraulic Fracturing Asset Requirements

Trican is continuing to see interest from customers for equipment and product solutions that will provide highly efficient operations while reducing the impact on the environment and communities where we operate. Trican’s Hydraulic Fracturing equipment is specifically designed to meet the demands of the higher intensity regions of the WCSB, including the Montney, Duvernay and Deep Basin formations. These regions account for approximately 80% of the required hydraulic horsepower demand in Canada. Additionally, Trican’s fleet also includes an industry leading 170,000 HHP of Duel Fuel Engine Fracturing pumps, which displace higher particulate diesel fuel with cleaner burning natural gas. Trican is also investing in Idle Reduction Technology to lower emissions and repair costs. These investments reflect Trican’s commitment to becoming an industry leader in ESG practices by reducing our environmental footprint and the cost of services to our customers. The Company’s fleet of Hydraulic Fracturing pumps at December 31, 2020, is presented in the table below:

			At December 31, 2020
Fracturing Fleet:	Type of Pump		Pumps (#)	HHP				% of Fleet
Continuous Duty	2,700 / 3,000 HHP		127			347,400		61 %
Mid Tier	2,500 HHP		89			222,500		39 %
Legacy Tier	2,250 HHP		—			—		— %
Total Fracturing Fleet			216			569,900

Trican is well positioned to continue to add Continuous Duty equipment equipped with Dual Fuel Engine technology that displaces diesel fuel with natural gas to generate scale and create more efficient operations. Pressure pumping companies that can continue adding this equipment will become leaders in meeting customer requirements and industry ESG commitments.

Primary Objectives

Our goal remains to achieve top quartile return on invested capital in our sector. Our primary objectives are:

• Strengthen Existing Business: Maintain our market leading position in Fracturing and Cementing service lines and strengthen auxiliary service lines, specifically Coiled Tubing.
• Environmental, Social, Governance: Adapt our business approach, integrating ESG into our business to improve value for our stakeholders. We will differentiate with new technologies that allow our customers to reduce their environmental impact, and engage with the communities we live and work in.
• Shareholder Return: Continue our disciplined investment into future growth, ensuring full-cycle return hurdles can be met before investing in new equipment and sell excess and permanently stranded capital equipment, further strengthening the balance sheet.
• Opportunities for Improved Profitability on Existing Asset Base: Improve operating efficiencies to generate more profit from existing assets, find opportunities to generate returns from idle assets, and implement Lean Six Sigma efficiency initiatives that will make us a leaner and more cost efficient company.

COMPARATIVE QUARTERLY INCOME STATEMENTS

Continuing Operations

($ thousands, except total job count, and revenue per job1, unaudited
Three months ended	December 31, 2020	Percentage of revenue		December 31, 2019	Percentage of revenue			September 30, 2020	Percentage of revenue
Revenue	$102,766		100	$163,318		100	$74,088			100%
Cost of sales
Cost of sales – Other	82,451		80%	139,040		85	58,999			80%
Cost of sales – Depreciation and amortization	24,350		24%	30,402		19	25,978			35%
Gross loss	(4,035)		(4)%	(6,124)		(4)	(10,889)			(15)%
Administrative expenses – Other	6,995		7%	10,675		7	18,105			24%
Administrative expenses – Depreciation	1,114		1%	1,356		1	1,206			2 %
Impairment – Non-financial assets	22,331		22%	10,091		6	—			— %
(Recovery) / impairment – Trade receivables	(603)		(1)%	41		—	—			— %
Other (income) / loss	(1,496)		(1)%	(4,865)		(3)	630			1 %
Results from operating activities	(32,376)		(32)%	(23,422)		(14)	(30,830)			(42)%
Finance costs	731		1%	1,219		1	673			1 %
Foreign exchange loss	331		—%	136		—	860			1 %
Loss before income tax	(33,438)		(33)%	(24,777)		(15)	(32,363)			(44) %
Income tax recovery	(8,902)		(9)%	(5,303)		(3)	(6,652)			(9)%
Loss from continuing operations	($24,536)		(24)%	($19,474)		(12)	($25,711)			(35)%
Adjusted EBITDA1	$14,481		14%	$14,605		9	($2,556)			(3)%
Total job count	1,545			2,147			765
Revenue per job1	66,515			76,068			96,847
Total proppant pumped (tonnes)	229,000			262,000			127,000

Sales Mix

($ thousands, except total job count, and revenue per job1, unaudited
Three months ended	December 31, 2020	Percentage of revenue		December 31, 2019	Percentage of revenue			September 30, 2020	Percentage of revenue
Revenue	$102,766		100	$163,318		100	$74,088			100%
Cost of sales
Cost of sales – Other	82,451		80%	139,040		85	58,999			80%
Cost of sales – Depreciation and amortization	24,350		24%	30,402		19	25,978			35%
Gross loss	(4,035)		(4)%	(6,124)		(4)	(10,889)			(15)%
Administrative expenses – Other	6,995		7%	10,675		7	18,105			24%
Administrative expenses – Depreciation	1,114		1%	1,356		1	1,206			2 %
Impairment – Non-financial assets	22,331		22%	10,091		6	—			— %
(Recovery) / impairment – Trade receivables	(603)		(1)%	41		—	—			— %
Other (income) / loss	(1,496)		(1)%	(4,865)		(3)	630			1 %
Results from operating activities	(32,376)		(32)%	(23,422)		(14)	(30,830)			(42)%
Finance costs	731		1%	1,219		1	673			1 %
Foreign exchange loss	331		—%	136		—	860			1 %
Loss before income tax	(33,438)		(33)%	(24,777)		(15)	(32,363)			(44) %
Income tax recovery	(8,902)		(9)%	(5,303)		(3)	(6,652)			(9)%
Loss from continuing operations	($24,536)		(24)%	($19,474)		(12)	($25,711)			(35)%
Adjusted EBITDA1	$14,481		14%	$14,605		9	($2,556)			(3)%
Total job count	1,545			2,147			765
Revenue per job1	66,515			76,068			96,847
Total proppant pumped (tonnes)	229,000			262,000			127,000

COMPARATIVE ANNUAL INCOME STATEMENTS

Continuing Operations

$ thousands, except total job count, and revenue per job1, unaudited)
Year ended	December 31, 2020		Percentage of revenue	December 31, 2019		Percentage of revenue	Year-over year change	Percentage change
Revenue
Cost of sales	$397,019		100%	$636,071		100%	($239,052)	(38) %
Cost of sales – Other	331,165		83%	562,303		88%	(231,138)	(41) %
Cost of sales – Depreciation and amortization	106,423		27%	118,396		19 %	(11,973)	(10) %
Gross (loss) / profit	(40,569)		(10)%	(44,628)		(7)%	4,059	(9) %
Administrative expenses – Other	44,291		11%	49,569		8%	(5,278)	(11) %
Administrative expenses – Depreciation	4,957		1%	5,670		1%	(713)	(13) %
Impairment – Non-financial assets	163,397		41%	10,091		2%	153,306	>100%
Impairment – Trade receivables	9,079		2%	372		— %	8,707	2,341%
Other (income) / loss	(1,904)		— %	(15,369)		(2)%	13,465	(88) %
Results from operating activities	(260, 389)		(66)%	(94,961)		(15)%	(165,428)	174%
Finance costs	3,307		1 %	4,690		1%	(1,383)	(29)%
Foreign exchange loss	1,105		— %	176		—%	929	528%
Loss before income tax	(264,801)		(67)%	(99,827)		(16)%	(164,974)	165%
Income tax recovery		(31,484)	(8)%	(28,392)		(4)%	(3,092)	11%
Loss from continuing operations		($233,317)	(59)%	($71,435)		(11)%	($161,882)	227%
Adjusted EBITDA1		$14,624	4%	$27,973		4%	($13,349)	(48)%
Total job count		5,268		7,969
Revenue per job1		75,364		79,818
Total proppant pumped (tonnes)		691,000		898,000

Sales Mix

Year ended (unaudited)	December 31, 2020				December 31, 2019
% of Total Revenue
Fracturing				73 %	73 %
Cementing				17 %	16 %
Coiled Tubing				9 %	8 %
Industrial Services				– %	2 %
Other				1 %	1 %
Total				100 %	100 %

NON-GAAP MEASURES

Certain terms in this News Release, including adjusted EBITDA and adjusted EBITDA percentage, do not have any standardized meaning as prescribed by IFRS and therefore, are considered non-GAAP measures and may not be comparable to similar measures presented by other issuers.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP term and has been reconciled to profit / (loss) for the applicable financial periods, being the most directly comparable measure calculated in accordance with IFRS. Management relies on adjusted EBITDA to better translate historical variability in our principal business activities into future forecasts. By isolating incremental items from net income, including income / expense items related to how the Company chooses to manage financing elements of the business, management can better predict future financial results from our principal business activities. The items included in this calculation have been specifically identified as they are either non-cash in nature, subject to significant volatility between periods, and / or not relevant to our principal business activities. Items adjusted in the non-GAAP calculation of adjusted EBITDA, are as follows:

• Non-cash expenditures, including depreciation, amortization, and impairment of non-financial assets; and equity-settled share-based compensation;

• Consideration as to how we chose to generate financial income and incur financial expenses, including foreign exchange expenses and finance costs;
• Taxation in various jurisdictions;

• Transaction costs, as this cost is subject to significant volatility between periods and is dependent on the Company making significant acquisitions and divestitures which may be less reflective, and / or useful in segregating, for purposes of evaluating the Company’s ongoing financial results; and

• Other income / expense which generally result from the disposition of equipment, as these transactions generally do not reflect quarterly operational field activity.

($ thousands; unaudited)		Three months ended							Year ended
		December 31, 2020		December 31, 2019		September 30, 2020			December 31, 2020		December 31, 2019
Loss from continuing operations (IFRS financial measure)		($24,536)		($19,474)		($25,711)			($233,317)		($71,435)
Adjustments:
	Cost of sales – Depreciation and amortization	24,350		30,402		25,978			106,423		118,396
	Administrative expenses – Depreciation	1,114		1,356		1,206			4,957		5,670
	Income tax recovery	(8,902)		(5,303)		(6,652)			(31,484)		(28,392)
	Finance costs and amortization of debt issuance costs	731		1,219		673			3,307		4,690
	Foreign exchange loss	331		136		860			1,105		176
	Impairment – Non-financial assets	22,331		10,091		—			163,397		10,091
	Other (income) / loss	(1,496)		(4,865)		630			(1,904)		(15,369)
	Administrative expenses – Other: equity-settled share-based compensation	558		1,043		460			2,140		4,146
Adjusted EBITDA		$14,481		$14,605			($2,556)		$14,624		$27,973

Adjusted EBITDA %

Adjusted EBITDA % is determined by dividing adjusted EBITDA by revenue from continuing operations. The components of the calculation are presented below:

($ thousands; unaudited)	Three months ended			Year ended
	December 31, 2020	December 31, 2019	September 30, 2020	December 31, 2020	December 31, 2019
Adjusted EBITDA	$14,481	$14,605	($2,556)	$14,624	$27,973
Revenue	$102,766	$163,318	$74,088	$397,019	$636,071
Adjusted EBITDA %	14%	9%	(3)%	4%	4%%

OTHER NON-STANDARD FINANCIAL TERMS

In addition to the above non-GAAP financial measures, this News Release makes reference to the following non-standard financial terms. These terms may differ and may not be comparable to similar terms used by other companies.

Revenue Per Job

Calculation is determined based on total revenue from continuing operations divided by total job count. This calculation may fluctuate based on both pricing, sales mix and method with which the client requests its invoices be prepared.

COMMON INDUSTRY TERMS

A list of abbreviations, terms and other items that are commonly referred to in the oilfield services business and internally at Trican is included within our MD&A. The terms, calculations and definitions may differ from those used by other oilfield services businesses and may not be comparable.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute forward-looking information and statements (collectively “forward-looking statements”). These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “achieve”, “estimate”, “expect”, “intend”, “plan”, “planned”, and other similar terms and phrases. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. We believe the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this document should not be unduly relied upon. These statements speak only as of the date of this document.

In particular, this document contains forward-looking statements pertaining to, but not limited to, the following:

• We will advance our business;
• we have strengthened our liquidity position subsequent to December 31, 2020;
• we have the liquidity to invest in new opportunities;
• that CES programs helped mitigate further significant personnel reductions;
• that Trican will adapt to the current economic environment;
• the impact of COVID-19 and the associated effect of the world-wide weakness in demand for oil and gas as a result of quarantine measures;
• expectation of first quarter 2021 and full year 2021 revenue and activity levels;
• anticipated industry activity levels as well as expectations regarding our customers’ work programs and expectations on timing of completion thereof and business plans;

• pricing changes will result in Trican activating or parking additional equipment;

• expectations regarding EBITDA and operating cash flow levels;
• expectations regarding our client’s ability to pay for goods and services;
• expectation that we are adequately staffed for current industry activity levels;
• expectations regarding the Company’s cost structure and optimization levels and that severance costs should decrease in the future;

• expectations regarding the Company’s equipment utilization levels and demand for our services in 2021;
• expectation that we will maintain disciplined pricing levels to pay for overhead expenditures;
• expectations regarding credit risk and that we have an adequate provision for trade receivables;
• expectation as to the type of pressure pumping equipment required and which operating regions the equipment is appropriate to operate in;
• expectations regarding the Company’s financial results, working capital levels, liquidity and profits;

• expectations regarding Trican’s capital spending;
• expectations regarding Trican’s utilization of its NCIB program;

• expectations that adjusted EBITDA will help predict future earnings;
• anticipated ability of the Company to meet foreseeable funding requirements;

• anticipated compliance with debt and other covenants under our revolving credit facilities;

• expectations regarding the potential outcome of contingent liabilities;
• expectations regarding provincial income tax rates and ongoing tax evaluations;
• expectations surrounding weather and seasonal slowdowns; and

• expectations regarding the impact of new accounting standards and interpretations not yet adopted.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth herein and in the “Risk Factors” section of our AIF for the year ended December 31, 2020, available on SEDAR (www.sedar.com).

Readers are cautioned that the foregoing lists of factors are not exhaustive. Forward-looking statements are based on a number of factors and assumptions, which have been used to develop such statements and information, but which may prove to be incorrect. Although management of Trican believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Trican can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: crude oil and natural gas prices; the impact of increasing competition; the general stability of the economic and political environment; the timely receipt of any required regulatory approvals; industry activity levels; Trican’s policies with respect to acquisitions; the ability of Trican to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability to operate our business in a safe, efficient and effective manner; the ability of Trican to obtain capital resources and adequate sources of liquidity; the performance and characteristics of various business segments; the regulatory framework; the timing and effect of pipeline, storage and facility construction and expansion; and future commodity, currency, exchange and interest rates .

The forward-looking statements contained in this document are expressly qualified by this cautionary statement. We do not undertake any obligation to publicly update or revise any forward-looking statements except as required by applicable law.

Additional information regarding Trican including Trican’s most recent AIF, is available under Trican’s profile on SEDAR (www.sedar.com).

CONFERENCE CALL AND WEBCAST DETAILS

The Company will host a conference call on Wednesday, February 24, 2021 at 10:00 a.m. MT (12:00 p.m. ET) to discuss the Company’s results for the 2020 Fourth Quarter and Year End.

To listen to the webcast of the conference call, please enter the following URL in your web browser: http://www.gowebcasting.com/11085. You can also visit the Investors section of our website at www.tricanwellservice.com/investors and click on “Reports”.

To participate in the Q&A 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. Fourth Quarter and Year End 2020 Earnings Results Conference Call”.

The conference call will be archived on Trican’s website at www.tricanwellservice.com/investors.

ABOUT TRICAN

Headquartered in Calgary, Alberta, Trican provides a comprehensive array of specialized products, equipment and services that are used during the exploration and development of oil and gas reserves.

Requests for further information should be directed to:

Bradley P.D. Fedora
President and Chief Executive Officer
E-mail: investors@trican.ca

Robert Skilnick
Chief Financial Officer
E-mail: investors@trican.ca
Phone: (403) 266-0202
Fax: (403) 237-7716
2900, 645 – 7th Avenue S.W.
Calgary, Alberta T2P 4G8

Please visit our website at www.tricanwellservice.com.

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