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Wednesday, July 26, 2000 CALGARY, ALBERTA-- /T/ FINANCIAL REVIEW ------------------------------------------------------------------------ ($ millions, except per share amounts) Three months Six months ended June 30, ended June 30, (Unaudited) 2000 1999 2000 1999 ------------------------------------------------------------------------ Revenue $17.5 $8.3 $53.2 $20.2 Earnings before interest, income taxes and depreciation & amortization (EBITDA) 1.6 1.4 12.5 3.9 Net income (loss) (0.3) 0.1 5.2 0.9 Net income (loss) per share before goodwill amortization(basic) (0.01) 0.01 0.35 0.08 (fully diluted) (0.01) 0.01 0.33 0.08 Net income (loss) per share (basic) (0.02) 0.01 0.33 0.07 (fully diluted) (0.02) 0.01 0.31 0.07 Funds from operations 2.2 1.5 9.8 3.7 Funds from operations per share (basic) 0.14 0.11 0.62 0.29 (fully diluted) 0.14 0.11 0.58 0.27 ------------------------------------------------------------------------ /T/ Trican Well Service Ltd. ("the Company") is pleased to announce its financial and operating results for the quarter and six months ended June 30, 2000. Revenue increased 110% and 164% for the three months ended and the six months ended June 30, 2000, respectively. The Company recorded a net loss for the quarter totaled $0.3 million in comparison to 1999 second quarter net income of $0.1 million. On a year-to-date basis, net income was $5.2 million, which is significantly higher than 1999 year-to-date earnings of $0.9 million. A loss per share of $0.02 ($0.02 fully diluted) was recorded this quarter which compares to earnings per share of $0.01 ($0.01 fully diluted) recorded in the 1999 second quarter. For the six months ended June 30, earnings per share is $0.33 ($0.31 fully diluted), which is more than 4 times greater than last year's earnings per share of $0.07 ($0.07 fully diluted) for the comparable period. As is typical in the Company's area of operations, activity during the quarter was interrupted by spring time road bans on the movement of heavy equipment. These normal delays were exacerbated by abnormally high levels of rainfall which delayed recommencement of operations after the road bans were lifted. Trican's activity level continues to rise significantly compared to last year. Despite poor weather conditions, Trican completed 87% more jobs this quarter and 122% more for the six months compared to the same periods in 1999. Even with unusually heavy rainfall, activity in the oilpatch improved strongly with well completions up approximately 91% during the second quarter over 1999. Materials and operating expenses were 88% of revenue for the quarter and 74% for the six months ended June 30th compared with 83% and 79% for the same periods last year. The increase in materials and operating expenses during the quarter is a result of pumping services, which typically has higher cost of sales, accounting for a larger proportion of total sales. Heavy spring rains negatively impacted equipment utilization in the fracturing, coiled tubing and nitrogen service lines which reduced operating margins. General and administrative expenses remained consistent with prior periods at 3% of revenue for the quarter and six months ended June 30th. Interest expense for the quarter and the six month period was consistent with the same periods in 1999 at 2% and 1% of revenue respectively. Depreciation and amortization increased by $0.9 million for the quarter and $1.4 million for the six months relative to the same periods in 1999. This non-cash expense continues to increase as Trican's capital program continues to expand the Company's equipment capacity. OPERATIONAL REVIEW Operations during the quarter were hampered by unusually high levels of rainfall. Northwestern Alberta recorded the second wettest second quarter seen in the last ten years. This unusually wet weather impacted operations in our Grande Prairie, Whitecourt and Red Deer bases and restricted the activities of our fracturing, coiled tubing and nitrogen service lines. Trican acquired Northline Energy Services during the first quarter of the year to broaden the array of coiled tubing services available to its customers. Northline's results during the second quarter show higher than expected activity and pricing. Management is pleased with Northline's results to-date and Northline has become a solid contributor to the results of the Company. Trican plans to open its eighth operating base in Fort St. John, British Columbia in the fall of 2000. The opening of this base is a continuation of the Company's expansion into the deeper, more technically challenging markets of western Alberta and British Columbia. Fort St. John will provide Trican with a platform to service the high level of gas directed exploration and development activity expected in this area. OUTLOOK Despite an unusually wet spring, 2000 continues to be a strong year for the Company. Industry watchers predict a high level of demand for well services. Continued high prices for oil and natural gas have positively impacted the demand for well services and are expected to continue for the balance of the year and into 2001. Early forecasts by some industry watchers suggest that 2001 will be as active and perhaps more active than 2000. Trican's ability to attract and retain qualified personnel, its additions to equipment capacity and further market penetration into Fort St. John, will position the Company to take advantage of any increases in activity levels in the future. 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. /T/ Consolidated Statements of Operations and Retained Earnings (000's), except per share amounts, (unaudited) Three months ended Six months ended June 30, June 30, 2000 1999 2000 1999 --------------------------------------- Revenue $ 17,461 $ 8,327 $ 53,231 $ 20,191 ------------------------------------------------------------------------ Expenses Materials & operating 15,443 6,898 39,223 15,889 General & administrative 509 320 1,558 702 Interest expense 320 135 567 285 Depreciation 1,713 966 3,108 1,958 Gain on disposal of capital assets (75) (337) (75) (337) ------------------------------------------------------------------------ 17,910 7,982 44,381 18,497 ------------------------------------------------------------------------ Income / (loss) before income taxes and goodwill amortization (449) 345 8,850 1,694 Provision for income taxes (283) 174 3,351 706 ------------------------------------------------------------------------ Net income / (loss) before goodwill amortization (166) 171 5,499 988 Goodwill amortization 157 49 305 98 Net income / (loss) (323) 122 5,194 890 Retained earnings, beginning of period 16,334 7,278 11,360 6,510 Change in accounting policy - - (543) - ------------------------------------------------------------------------ Retained earnings, end of period 16,011 7,400 16,011 7,400 ------------------------------------------------------------------------ Earnings / (loss) per share before goodwill amortization (basic) $ (0.01) $ 0.01 $ 0.35 $ 0.08 (fully diluted) $ (0.01) $ 0.01 $ 0.33 $ 0.08 ------------------------------------------------------------------------ Earnings / (loss) per share (basic) $ (0.02) $ 0.01 $ 0.33 $ 0.07 (fully diluted) $ (0.02) $ 0.01 $ 0.31 $ 0.07 ------------------------------------------------------------------------ Consolidated Balance Sheets (000's), (unaudited) June 30, 2000 December 31, 1999 ----------------------------------- Assets Current assets $ 21,761 $ 22,689 Capital assets 64,120 47,148 Goodwill 5,490 1,498 ------------------------------------------------------------------------ Total Assets $ 91,371 $ 71,335 ------------------------------------------------------------------------ Liabilities & Shareholders' Equity Current liabilities $ 13,108 $ 11,107 Long-term debt 13,517 5,653 Future income taxes 6,803 4,586 Shareholders' equity 57,943 49,989 ------------------------------------------------------------------------ Total Liabilities & Shareholders' Equity $ 91,371 $ 71,335 ------------------------------------------------------------------------ Consolidated Cash Flow Statements (000's), (unaudited) Six Months Ended June 30, 2000 1999 ------------------------------------------------------------------------ Cash provided by (used in): Operations Net income $ 5,194 $ 890 Changes to income not involving cash: Depreciation and amortization 3,414 2,056 Future income taxes 1,301 1,042 Gain on disposal of capital assets (75) (337) ------------------------------------------------------------------------ Funds from operations 9,834 3,651 Net change in non-cash working capital from operations 1,606 2,058 ------------------------------------------------------------------------ 11,440 5,709 ------------------------------------------------------------------------ Investments Purchase of capital assets (14,576) (7,932) Proceeds on disposal of capital assets 498 3,523 Acquisition of subsidiary (3,366) - Net change in non-cash working capital from the purchase and disposal of capital assets 874 (4,436) ------------------------------------------------------------------------ (16,570) (8,845) ------------------------------------------------------------------------ Financing Net proceeds from issuance of share capital 665 11,156 Increase in long-term debt 4,435 1,591 ------------------------------------------------------------------------ 5,100 12,747 ------------------------------------------------------------------------ Increase / (decrease) in cash position (30) 9,611 Cash (bank indebtedness), beginning of period 860 (2,848) ------------------------------------------------------------------------ Cash position, end of period $ 830 $ 6,763 ------------------------------------------------------------------------ /T/ -30-