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Wednesday, April 26, 2000 CALGARY, ALBERTA-- /T/ --------------------------------------------------------------------- Financial Review ($ millions, except per share amounts) Three months ended March 31, 2000 1999 --------------------------------------------------------------------- Revenue $35.8 $11.9 Earnings before interest, income taxes and depreciation & amortization (EBITDA) 10.9 2.5 Net income 5.5 0.8 Net income per share (basic) 0.35 0.06 (fully diluted) 0.33 0.06 Funds from operations 7.6 2.2 Funds from operations per share (basic) 0.49 0.17 (fully diluted) 0.46 0.16 --------------------------------------------------------------------- /T/ Trican Well Service Ltd. is pleased to announce record results for the first quarter of 2000. This is the third consecutive quarter that Trican has announced new records for the highest revenue, cash flow and net income in the Company's history. Revenue increased 201% for the three months ended March 31 compared to the same period in 1999. Net income for the quarter totaled $5.5 million, a significant 600% increase in comparison to 1999 first quarter net income of $0.8 million. Earnings per share of $0.35 ($0.33 fully diluted) reflects the higher levels of revenue and profitability and increased more than 480% over the first quarter 1999 levels. Trican's level of activity rose dramatically during the quarter. The number of jobs completed increased approximately 150% this quarter compared to the first quarter of 1999. This significant increase can be attributed to an increased demand for services coupled with expanded equipment capacity. Fueled by higher commodity prices, winter drilling activity increased substantially over 1999 levels creating substantially higher demand for all services. In particular, demand for Trican's pumping and fracturing services increased substantially over last year. The equipment additions made in recent years positioned the Company to take advantage of this increase in demand. The capital expansion program undertaken by Trican mid-way through 1999 was well timed as it provided additional operational capacity in all service lines to meet the increase in activity this winter. The average revenue per job rose almost 15% on a quarterly basis and reflects the geographic expansion into the deeper, more technically challenging markets, as well as, the continued evolution of the Company's sales mix towards the higher revenue service lines. Whereas fracturing, coiled tubing, and nitrogen services made up approximately one half of revenue in 1999, the same services represent more than 55% of revenue in the first quarter. Materials and operating expenses were 66% of revenue for the quarter, a decrease of 10% versus the first quarter of 1999. This reduction is a result of substantially higher activity levels and a shift in the sales mix from pumping services toward higher margin services. General and administrative expenses amounted to 3% of revenue for the quarter which is comparable with levels recorded in the same period last year. Depreciation and amortization increased by $0.5 million for the quarter relative to 1999. In January 2000, Trican completed the acquisition of Northline Energy Services Inc. ("Northline") which increased the Company's coiled tubing services capabilities. Northline's results have been consolidated with the operations of the Company since the date of acquisition. OPERATIONAL REVIEW Higher commodity prices have had a dramatic impact on the cash flow available to the oil and gas producers and have had a positive impact on demand for well services. Equipment expansion in all services lines over the past three years has provided the Company the opportunity to meet this demand for services and to increase revenue and earnings per share. Additional fracturing, coiled tubing, nitrogen and cementing equipment constructed in 1999, was available for use and contributed to operations in the first quarter of 2000. With the addition of Northline in January, Trican broadened the coiled tubing services available to its customers. Management has been very pleased with the performance of this company in the first quarter as Northline established its own records for activity, revenue and profitability. OUTLOOK It is generally expected that 2000 will continue to be a very strong year for the well service industry in Canada. With strong commodity prices continuing to fuel demand for services, industry watchers are now beginning to suggest that 2001 could yield similarly high levels of industry activity. With the acquisition of Northline and the steady equipment and geographic expansion undertaken in the past three years, Trican is positioned to meet the challenges of a stronger market. Trican is a well service company focused on serving the oil and gas industry in western Canada. Trican provides a comprehensive array of specialized products, equipment, services and technology for use in drilling, completion, stimulation and reworking of oil and gas wells. Through its bases in Red Deer, Lloydminster, Provost, Kindersley, Brooks, Whitecourt, Grande Prairie, and Edmonton, Trican provides coiled tubing, fracturing, stimulation, cementing and related services to the oil and gas industry. Consolidated Statements of Operations and Retained Earnings (000's), except per share amounts, (unaudited) /T/ Three months ended Mar. 31, 2000 1999 --------------------------- Revenue $ 35,770 $ 11,864 --------------------------------------------------------------------- Expenses Materials & operating 23,780 8,991 General & administrative 1,049 381 Interest expense 246 151 Depreciation & amortization 1,543 1,041 --------------------------------------------------------------------- 26,618 10,564 --------------------------------------------------------------------- Income before income taxes 9,152 1,300 Provision for income taxes 3,634 532 --------------------------------------------------------------------- Net income 5,518 768 Retained earnings, beginning of period 11,360 6,510 Change in accounting policy (543) - --------------------------------------------------------------------- Retained earnings, end of period 16,335 7,278 --------------------------------------------------------------------- Basic earnings per share $ 0.35 $ 0.06 Fully diluted earnings per share $ 0.33 $ 0.06 --------------------------------------------------------------------- Consolidated Balance Sheets (000's), (unaudited) March 31, 2000 December 31, 1999 ---------------------------------- Assets Current assets $ 31,786 $ 22,689 Capital assets 58,483 47,148 Goodwill 5,648 1,498 --------------------------------------------------------------------- Total Assets $ 95,917 $ 71,335 --------------------------------------------------------------------- Liabilities & Shareholders' Equity Current liabilities $ 18,870 $ 11,107 Long-term debt 13,041 5,653 Future income taxes 6,064 4,586 Shareholders' equity 57,942 49,989 --------------------------------------------------------------------- Total Liabilities & Shareholders' Equity $ 95,917 $ 71,335 --------------------------------------------------------------------- Consolidated Cash Flow Statements (000's), (unaudited) Three Months Ended March 31, 2000 1999 --------------------------------------------------------------------- Cash provided by (used in): Operations Net income $ 5,517 $ 768 Changes to income not involving cash: Depreciation and amortization 1,543 1,041 Future income taxes 562 390 --------------------------------------------------------------------- Funds from operations 7,622 2,199 Net change in non-cash working capital from operations (4,057) (2,604) --------------------------------------------------------------------- 3,565 (405) --------------------------------------------------------------------- Investments Purchase of capital assets (6,797) (1,412) Acquisition of subsidiary (3,366) - Net change in non-cash working capital from the purchase and disposal of capital assets 1,465 (190) --------------------------------------------------------------------- (8,698) (1,602) --------------------------------------------------------------------- Financing Net proceeds from issuance of share capital 340 - Increase in long-term debt 4,728 641 --------------------------------------------------------------------- 5,068 641 --------------------------------------------------------------------- Decrease in cash position (65) (1,366) Cash (bank indebtedness), beginning of period 861 (2,848) --------------------------------------------------------------------- Cash position (bank indebtedness), end of period $ 796 $(4,214) --------------------------------------------------------------------- /T/ -30-