Trican Well Service Ltd. Equity Research & Stock Reports

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24 Jun 24

Oilfield Services: Still Way Too Cheap

What you need to know: • We anticipate oil prices to remain within the US$80-$90 range, which will sustain the current uptick in E&P capital expenditure and foster a strong environment for oilfield services firms. • Our peer group continues to trade at deep-value multiples; currently at 4.5x/4.0x 2024E/2025E EBITDA. • We highlight a few of our favourite small-cap names that we believe have significant upside as we move into H2/24. Following our last oilfield services thematic note (published i

Companies: CFW ACX CEU CMG ESI HWO MCB PHX PD SES SHLE SDI STEP CVW TCW WRG TOT ETOLF

Atrium Research

11 Jan 23

Oilfield Services: Another Great Year Ahead

What you need to know: • We expect oilfield service stocks to continue to outperform in 2023 and beyond based on supportive oil price fundamentals, rising capex levels amongst E&Ps, and pricing power leading to margin expansion • Despite the sector’s strong fundamental tailwinds and the probability for a multi-year commodity supercycle, oilfield service companies are still trading at trough-level multiples Investment Thesis Supportive Oil Prices While we will not go in-depth on oil price funda

Companies: CFW ACX CEU CMG ESI MCB PHX PD SES MATR STEP TCW WRG TOT

Atrium Research

31 Aug 16

Positive Trends for Canadian Pressure Pumping

WCSB pressure pumping supply and demand is poised to benefit from an increase in stages per well and proppant per well. We believe this could cause supply and demand to tighten more quickly than anticipated in an activity recovery. Higher service intensity has been particularly evident in the Montney and Duvernay, where stages per well have generated a 2012-1Q16 CAGR of 23% and 44%, respectively, and a proppant per well CAGR of 39% and 62%. Our investment bias is towards Trican given it is the l

Companies: CFW FRC TCW

Stifel FirstEnergy

21 Jun 16

Announces Transactions to Improve Balance Sheet

Trican announced an equity issuance on June 1st totaling $69 mm (including the over-allotment), which resulted in the issuance of ~43.1 mm shares, or 28% of the outstanding share count as at March 31, 2016. The offering price was $1.60/share or an 8.6% discount to the halt price on June 1st. The Company concurrently announced the sale of its Completion Tools business to National Oilwell Varco Ltd. (NOV-N, not covered). The sale price was $53.5 mm, which was comprised of $30 mm cash and C$23.5 m

Companies: Trican Well Service Ltd.

Stifel FirstEnergy

06 May 16

1Q16 Update

Trican reported negative adjusted 1Q16 EBITDAS of $16 mm and EBITDAS of negative $26 mm. Comparisons to our estimates are not meaningful given the discontinuation of U.S. operations in the quarter. Canadian operating margins of negative 8.6% were much lower than our expectation of negative 1.4%. We believe this is important when considering the turnaround in profitability needed in 3Q16e for Trican to remain in compliance with its covenants. The risk of the Company having to use its equity cure

Companies: Trican Well Service Ltd.

Stifel FirstEnergy

04 May 16

1Q16 RESULTS MARRED BY ONE-TIME EVENTS

Trican's results were marred by one-time costs related to severance and professional fees ($10.6 mm) as well as the U.S. pressure pumping business being moved to discontinued operations. We believe the most important data for investors is the performance of the Canadian operations as that is what Trican will largely consist of moving forward. Consolidated results can be found at the end of this document. We believe the primary focus on the conference call tomorrow will be on the Company's abilit

Companies: Trican Well Service Ltd.

Stifel FirstEnergy

02 May 16

TRICAN WELL SERVICE LTD. ANNOUNCES RETIREMENT OF PRESIDENT AND COO

Trican has announced that Mr. Don Luft, President and COO will be retiring from his role effective May 3, 2016. Additionally, Mr. Luft will not stand for reelection as a Director of the Company at the upcoming AGM. Recall, Mr. Luft was one of the early instrumental players in transforming Trican from a private entity into a successful public company in 1996, and in the success and growth of the company since that time.

Companies: Trican Well Service Ltd.

Stifel FirstEnergy

13 Apr 16

1Q16e Preview and Commodity Update – All Is Quiet on the Western Front

We are updating our oilfield industry forecasts post the release of FirstEnergy’s new commodity price forecast for crude oil and natural gas on March 24, 2016. We have updated our 2016e Canadian well count/drilling days forecast to 3,209/37,335 from 3,800/43,325. In 2017e, we have left our forecast unchanged at 6,200 wells/70,200 days. In the U.S., our 2016e rig count forecast is now 482 (prior: 610) and 2017e is 675 (prior: 775). Data for 1Q16e came in weaker than our prior forecast anticipated

Companies: BDI CFW FRC ACX CEU ESI MTL PHX PSI PD SVY SES 0S9F TCW TDG WRG

Stifel FirstEnergy

16 Mar 16

U.S. PRESSURE PUMPING SALE DATE OF CLOSING PASSES WITH NO FORMAL CLOSING ANNOUNCEMENT

Until we learn otherwise, we still expect Trican to close the sale of its U.S. business to Keane. However, the expected closing date for this transaction of March 15, 2016 or earlier has passed, yet there has been no formal announcement that the sale has been completed.

Companies: Trican Well Service Ltd.

Stifel FirstEnergy

26 Feb 16

4Q15: Doing What Is Necessary

The outlook for Canadian profitability has deteriorated materially from our prior forecast due to continued price discounting in 1Q16e. We have lowered our 2016e EBITDAS to $5 mm from $20 mm and 2017e EBITDAS to $50 mm from $64 mm. Our 2016e exit net debt forecast has increased to $249 mm from $140 mm, as we had been far too aggressive in modelling working capital draws throughout 2016e. The risk of the Company having to use its equity cure provision has increased materially due to potential cov

Companies: Trican Well Service Ltd.

Stifel FirstEnergy

24 Feb 16

REPORTS 4Q15 RESULTS

Impact: negative due to weaker than expected Canadian operating income margins in 4Q15 and a weaker than anticipated Canadian outlook.

Companies: Trican Well Service Ltd.

Stifel FirstEnergy

09 Feb 16

Energy Services 4Q15e Preview and Updating Activity Outlook – Buckle Up

In conjunction with the new oil price forecast released by FirstEnergy on February 8, 2016, we have updated our 2016e Canadian well count/drilling days forecast to 3,800/43,325 from 4,950/54,853. In 2017e, we are now forecasting wells/drilling days of 6,200/70,200 from 7,900/86,600. In the U.S., our 2016e rig count forecast is now 610 (prior: 763) and 2017e is 775 (prior: 1,063).

Companies: BDI CFW FRC ACX CEU ESI MTL PHX PSI PD SVY SES 0S9F TCW TDG WRG

Stifel FirstEnergy

27 Jan 16

Trican Well Service Ltd. (TCW) Upgrading to Outperform after Formal Announcement of Sale of U.S. Business and Amended Covenants with Lenders

Trican has announced the sale of its U.S. Pressure Pumping business for US$200 mm (C$285 mm) plus a 10% equity investment, to Keane Group, a privately held U.S. Services company, and concurrently announced newly amended covenant relief with lenders. Total estimated transaction value is $352 to $405 mm. We estimate the EV/Replacement value metric at 32% after adjustments for working capital and EV/HP at $474. Both of these are respectable metrics. We are increasing our 12-month target price to $2

Companies: Trican Well Service Ltd.

Stifel FirstEnergy

19 Jan 16

NEW LARGE SHAREHOLDER WITH SIGNIFICANT EXPERIENCE IN THE FRACTURING BUSINESS

Impact: We expect the stock to trade higher on the news that there is a new large investor in Trican that has a prior history in pressure pumping.

Companies: Trican Well Service Ltd.

Stifel FirstEnergy

12 Jan 16

TRICAN WELL SERVICE LTD. (TCW) IN NEGOTIATIONS TO SELL U.S. PRESSURE PUMPING BUSINESS

Impact: neutral as there is no guarantee of a transaction being completed. Trican has announced that it is in negotiations for the sale of its U.S. pressure pumping business to Keane Group., a privately-held, U.S. based well completion company. Trican's management believes the price being offered represents fair value and that it would be in the best interest of shareholders, but significant terms and conditions are still under negotiation. No other details were released.

Companies: Trican Well Service Ltd.

Stifel FirstEnergy