tax | mnp llp - oilfield services quarterly update q4 2018 sheets/9194... · 2019-02-07 ·...

QUARTERLY UPDATE Q4 2018

OILFIELD SERVICES

OIL AND GAS INVESTMENT CLIMATE

HIGHLIGHTS FROM THE FRASER INSTITUTE GLOBAL PETROLEUM SURVEY, 2018 • An annual survey of hundreds of oil and gas industry professionals• Covers 16 factors include fiscal terms, taxation, environmental regulations, regulatory issues, and more• Rolls up into Policy Perception Index (PPI)

MAJOR DETERRENTS TO INVESTMENT IN ALBERTA% of respondents indicating “mild” to “strong” deterring factor

Uncertainty re protected areas: 80%

Environmental regulations: 75%

Cost of regulatory compliance: 75%

Political stability: 60% (behind Russia)

General taxation: 59% (behind France)

Fiscal terms: 57%

Regulatory duplication: 57% (behind France)

Source:

1) Fraser institute – 2018 Global Petroleum Survey (https://www.fraserinstitute.org/studies/global-petroleum-survey-2018)

RANK JURISDICTION

POLICY PERCEPTION

INDEX SCORE

1 Texas 100

2 Russia 75

3 Alberta 68

4 Egypt 59

5 Mozambique 58

6 Algeria 58

7 Nigeria 53

8 Indonesia 47

9 Iraq 38

10 Libya 35

11 Venezuela 0

LARGE RESERVE HOLDER COMPARISONS

TRENDS IN POLICY PERCEPTION: 2014 TO 2018

Alberta• From 10th position overall in North America to 20th

• From 2nd best in Canada to 2nd last • 5th from last in North America

Manitoba• Remains in the 1st quartile• Seen as the best jurisdiction in Canada for policy

Saskatchewan• Remains in the 1st quartile• Index score drops 17%• Overall position slips from top 5% to top 25%B.C.• Slips from 2nd quartile to 3rd quartile• Index score drops 12%• Position moves from 38% to 72%• Last in Canada• 3rd from last in North America

OIL AND GAS INVESTMENT CLIMATE

HIGHLIGHTS FROM THE FRASER INSTITUTE GLOBAL PETROLEUM SURVEY, 2018 (CONTINUED)

Source:

1) Fraser institute – 2018 Global Petroleum Survey (https://www.fraserinstitute.org/studies/global-petroleum-survey-2018)

SPECIFIC CANADIAN ISSUES MENTIONED BY SURVEY PARTICIPANTS

• Carbon tax

• Pipeline access

• Cap on GHG emissions

• Higher corporate and personal taxes

POLICY PERECEPTION INDEX

2018 2017 2016 2015 2014 2018 2017 2016 2015 2014

Alberta 67.83 68.73 66.87 77.71 85.90 43/80 33/97 43/96 26/126 14/156

B.C. 56.40 54.52 68.13 67.99 64.47 58/80 76/97 39/96 46/126 60//156

Manitoba 81.75 85.06 87.01 85.69 96.82 16/80 12/97 14/96 11/126 6/156

Saskatchewan 80.04 88.47 94.18 89.69 97.48 18/80 7/97 4/96 6/126 4/156

California 52.09 35.63 33.02 49.05 41.29 67/80 91/97 91/96 98/126 115/156

New Mexico 80.41 75.54 79.19 68.15 78.82 17/80 23/97 24/96 45/126 26/156

North Dakota 91.35 91.53 93.16 89.51 97.35 5/80 3/97 6/96 7/126 5/156

Oklahoma 96.35 94.14 100.00 92.64 99.38 2/80 2/97 1/96 4/126 2/156

Texas 100.00 100.00 97.65 95.67 98.19 1/80 1/97 2/96 2/126 3/156

Wyoming 91.67 85.79 93.26 80.88 88.83 4/80 9/97 5/96 19/126 11/156

U.S. Offshore - Gulf of Mexico 86.49 69.14 76.24 82.18 72.67 8/80 31/97 28/96 16/126 38/156

SCORE RANK

CA

NA

DA

UN

ITED

STA

TES

INDUSTRY OVERVIEWM&A TRANSACTIONS & PERFORMANCE

CANADIAN E&P TRANSACTIONS

SHARE BUYBACK ANNOUCEMENTS / COMPLETIONS

In the fourth quarter of 2018, several oilfield service (OFS) providers announced a normal-course issuer bid(NCIB). This implies directors and management believe that purchasing and cancelling their own shares willprovide a better rate of return than acquiring other companies or investing heavily in new equipment.

Trican Well Service Ltd. (Trican) announced on October 1, 2018 the successful completion of its 2017-2018NCIB announced on September 28, 2017. Pursuant to the NCIB, Trican purchased and canceled the maximumallowable number of common shares of Trican under the bid, totaling 34,274,375 common shares (10 percentof the public float for the common shares) for total consideration of $119 million at a weighted average priceper share of $3.47 (before broker commissions).

Pason Systems (Pason) intends to put an NCIB in place beginning December 18, 2018 and expiring December 17, 2019. Under the program, 6.6 million shares, or 10 percent of the public float (approximately 8 percent shares outstanding) are available for repurchase to a maximum of an estimated 32,000 shares a day. A full exercise of the NCIB would result in the deployment of $107 million, based on Pason’s share price at the time of announcement.

4.0B 12.3B

22.4B18.4B 17.2B

5.7B

24.7B

8.4B

18.4B

3.1B

30.5B

20.9B31

49

90 83 80

51

118

101

76

64

107

60

-

20

40

60

80

100

120

140

-

5

10

15

20

25

30

35

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Tran

sact

ion

Vo

lum

e (N

um

ber

of

Dea

ls)

Tran

sact

ion

Val

ue

($C

AD

Bill

ion

s)

Transaction value Transaction volume

2.7B 2.7B 2.5B3.9B

16.3B

1.7B3.1B

1.2B0.2B

3.7B

1.3B 0.7B

29

36

28 27 32

37

24

30

21

32 29

32

-

5

10

15

20

25

30

35

40

-

2

4

6

8

10

12

14

16

18

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Tran

sact

ion

Vo

lum

e (N

um

ber

of

Dea

ls)

Tran

sact

ion

Val

ue

($C

AD

Bill

ion

s)


2016 2017 2018

201820172016

Source: Capital IQ. Data as of December 31, 2018. Note: oilfield services transactions include companies with head offices in other countries.

AMERICAN E&P TRANSACTIONS

INDUSTRY OVERVIEWM&A TRANSACTIONS & PERFORMANCE

Source: Capital IQ. Data as of December 31st, 2018. Note: oilfield services transactions include companies with head offices in other countries.

CANADIAN OILFIELD SERVICES M&A TRANSACTIONS

7,902 7,946

9976,831

442 771 2,926 3,380 2,819

22,200

72,420

1,644

22

11

34

24

19

11

35

25 26

18

24

28

-

5

10

15

20

25

30

35

40

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Tran

sact

ion

Vo

lum

e (N

um

ber

of

Dea

ls)

Tran

sact

ion

Val

ue

($C

AD

Mill

ion

s)

AMERICAN OILFIELD SERVICES M&A TRANSACTIONS


201820172016

6 46

150

375

893

174

19

403

18

137

798

999

4

5

9

10

8

5

3

5 6

4

10

9

-

2

4

6

8

10

12

-

200

400

600

800

1,000

1,200

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Tran

sact

ion

Vo

lum

e (N

um

ber

of

Dea

ls)

Tran

sact

ion

Val

ue

($C

AD

Mill

ion

s)


2016 2017 2018

Top transactions of Q4-2018:1. Trinidad Drilling acquired by Precision Drilling Corporation2. Onstream Pipeline Inspection Ltd. acquired by Mistras Group, Inc.

Observations:1. The majority of third quarter 2018 transactions are due to the merger of Energy Transfer Partners and

Energy Transfer Equity LP (Affiliated companies). 2. Without this transaction, total transaction value for third quarter 2018 would be $3.155 billion.

MNP INSIGHTSALBERTA PRODUCTION CURTAILMENT

On December 2, 2018, the Provincial Government of Alberta announced a mandatory production curtailmentto reduce Alberta’s oil production by 8.7 percent, starting January 1, 2019.

The announcement came in response to the growing differential between the Western Canadian Select (WCS)pricing Alberta producers receive compared to West Texas Intermediate (WTI) pricing received by U.S.producers.

At the time of announcement, Alberta was producing 190,000 barrels a day more than could be shipped usingexisting pipeline and rail capacity.

OVERVIEW

• The Alberta Energy Regulator will administer the reduction using the existing Responsible EnergyDevelopment Act.

• The initial curtailment of 325,000 barrels per day (8.7 percent) is expected to drop over the course of 2019.The government will review the amount every month and adjust as needed. The level of curtailment foreach company will be based off its highest 6 months of production over the past 12 months.

• The curtailment is applied at the operator level.• Curtailment includes an exemption for the first 10,000 barrels of oil produced.• Applies to oil sands and conventional production.

HIGHLIGHTS

• Additional oil takeaway capacity is expected tobe available in late 2019, in part throughAlberta’s major investment in crude-by-railtransport.

• There is uncertainty on how curtailment willaffect smaller producers with non-operatedinterests.

• There is also uncertainty on how curtailment affects contractual agreements such as “take or pay” pipeline, delivery, or processing commitments.

• There is concern around the impact Enbridge’sLine 3 pipeline will have on curtailment when itcomes on line in the second half of 2019.

$0

$10

$20

$30

$40

$50

$60

$70

$80

$U

S/b

bl

WTI vs. WCS

WCS WTI Spread

Source: Alberta Government website (https://www.alberta.ca/release.cfm?xID=621526E3935AA-08A2-6F45-72145AEBDF115BDF)

https://www.alberta.ca/release.cfm?xID=621526E3935AA-08A2-6F45-72145AEBDF115BDF

SELECT RECENT M&A TRANSACTIONSINDUSTRY OVERVIEW

Source: Capital IQ and company websitesNote: In Canadian Dollars unless otherwise stated

Announced Aug 13, 2018

TEV $947 million

TEV/EBITDA 8.5x

TEV/Revenue 1.7x

• On August 13, 2018, Ensign Energy Services, made atakeover bid for Trinidad Drilling Ltd. for $1.68 percommon share. Ensign, which owns 9.8 percent ofTrinidad's shares, would acquire the remaining 90.2percent in the deal.

• On September 13, 2018, Trinidad’s board stated theybelieved the offer was undervalued and recommendedshareholders reject the offer.

• On October 5, 2018, Precision Drilling Corporation(Precision) announced it entered in a definitiveagreement with Trinidad to acquire all of theoutstanding shares of Trinidad for 0.445 commonshare of Precision for each outstanding share ofTrinidad.

• As of November 27, 2018, 56.38 percent of Trinidad’scommon shares were tendered to the offer satisfyingthe requirement of 50 percent approval of Trinidadshares not owned or controlled by Ensign and approvalof at least 66.67 percent of the total common shares.

• The offer represents a 17.2 percent premium overPrecision’s competing bid, based on the closing priceof Precision’s shares on November 26, 2018.

Acquired

Acquired

Closed Oct 31, 2018

TEV Undisclosed

TEV/EBITDA Undisclosed

TEV/Revenue Undisclosed

• XACT provides an acoustic technology platform thatdelivers real-time downhole drilling and completiondata with memory back up.

• Baker Hughes provides integrated oilfield products,services and digital solutions worldwide.

Closed Nov 6, 2018

TEV $12M



• Tartan is estimated to have generated revenue ofapproximately $70 million, adjusted EBITDA ofapproximately $3.5 million and have a backlog ofapproximately $50 million. The backlog primarilyconsists of contracted MRO and plant turnarounds.

• "Our growth strategies are centered on building bothscope and scale by targeting the addition ofcomplementary trade services. Tartan's mechanicalMRO capabilities will expand our Industrial Group'saccess to a larger share of the industrial market bothin terms of mechanical and general contractingopportunities," said David LeMay, President and CEOof Stuart Olson.

Acquired

Failed Offer

SELECT RECENT M&A TRANSACTIONSINDUSTRY OVERVIEW

• The acquisition, backed by FrontRow InvestmentManagement, will create the UK’s largest independentsupplier of well integrity services which will operate underthe new name “Unity.”

• "Together we are also a stronger, more resilient marketplayer, with a full-service capability and a growingtechnology portfolio. With Unity we now have a strongbase from which to grow our business across Europe andbeyond," said Gary Smart, CEO of Unity.

• The acquisition backed by financial sponsor Signal HillEquity Partners, will help McIntosh Perry to expand oiland gas engineering capabilities in Western Canada.

• “Onstream shares our strong focus on client satisfaction,technical expertise and providing high-quality services.”said Gus Sarrouh, CEO, McIntosh Perry. “We are well-positioned in the oil and gas market with OEL ProjectsLtd., a McIntosh Perry Company, and the addition ofOnstream furthers our goal to grow our oil and gasDivision in Western Canada. We are excited to welcomethe talented and experienced team at Onstream to theMcIntosh Perry family.”

MNP Corporate Finance acted as the exclusivefinancial advisor to Onstream Engineering Ltd. instructuring and negotiating this transaction.

Source: Capital IQ and company websitesNote: In Canadian dollars unless otherwise stated

Closed Nov 23, 2018

TEV Undisclosed



Acquired

Closed Dec 5, 2018

TEV Undisclosed



Acquired

Closed Dec 10, 2018

TEV $260 million

TEV/EBITDA 7.8x (est.)

TEV/Revenue 1.7x

Acquired

• The company reached a definitive agreement to beacquired by Finning International (TSX: FTT) for $260million on December 10, 2018. Previously, TorQuestPartners sold it's stake in the company to Kelso PrivateEquity and Transportation Resource Partners for anundisclosed amount on September 20, 2013.

• “This transaction is a great example of a Caterpillarcomplementary bolt-on acquisition that accelerates ourcustomer-centric growth strategy. With this investmentwe will provide new and existing customers withadditional services to improve productivity and decreasetheir total cost of equipment ownership,” said ScottThomson, President and CEO of Finning.

Acquired

Closed Dec 13, 2018

TEV US$143 million


TEV/Revenue 5.4x

• Onstream is a leading provider of proprietary, technology-enabled inline inspection and data analytics services, andis a leading provider of inline inspection services in the“unpiggable” segment of the small to mid-bore NorthAmerican gathering and midstream pipeline market.

• Dennis Bertolotti, Chief Executive Officer stated, "Theacquisition of Onstream is an ideal opportunity to diversifyour business. It will enable us to leverage our strength inthe midstream market and accelerate our growth byaccomplishing our strategic initiative to add a pipelineintegrity pillar to our service portfolio. ”

MACRO ECONOMIC INDICATORS INDUSTRY OVERVIEW

Source: Government of Alberta, B.C., and Saskatchewan; Data as of December 31, 2018.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Tota

l Rig

s

TOTAL RIG COUNT: CANADA vs. U.S.

Canada United States

Q4 Activity

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012 2013 2014 2015 2016 2017 2018

Avg

$/H

a

In 0

00

s H

ecta

res

Sold

OIL & GAS LAND SALES - ALBERTA, B.C., SASKATCHEWAN

BC Land Sales SK Land Sales AB Land SalesAB Avg$/Ha SK Avg$/Ha BC Avg$/Ha

MACRO ECONOMIC INDICATORS INDUSTRY OVERVIEW

Source: CAPIQ. Data as of December 31, 2018.Note: data does not contain share buy-backs.

• Access to capital remains challenging for oilfield service players.

• Total capital raised in 2018: $312 million vs. $4,086 million in 2017.OFS Capital

Raised

• While the majority of capital raised in 2018 was directed towards Encana and Suncor, Husky was active during the year in raising large capital amounts as well.

• Total of $24.7 billion in 2018 vs. $50.1 billion in 2017.

E&P Capital Raised

433 498 469946

200 150

600

5891,849

368

2,018

1,951

312

429150

62

52

65

69

34

-

10

20

30

40

50

60

70

80

2014 2015 2016 2017 2018

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Tran

sact

ion

Vo

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of

tran

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s)

Tran

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ion

Val

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in (

$C

AD

Mill

ion

s)

Precision Drilling Corporation Shawcor Ltd. CES Energy Solutions Corp. Trinidad Drilling Ltd.

All other players Mullen Group Ltd. Transaction volume

1.50 1.78 6.99

19.93

3.46 4.46

1.00

13.38

5.77

10.33

0.95

6.89

1.08

5.18

3.75

3.73

28.39

15.15

12.95

12.06

5.72

1.25

9.25

8.37

329

203

233 235

165

-

50

100

150

200

250

300

350

2014 2015 2016 2017 2018

-

10

20

30

40

50

60

Tran

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Vo

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of

tran

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s)

Tran

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Val

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in (

$C

AD

Bill

ion

s)

Cenovus Energy Inc. Canadian Natural Resources Limited Suncor Energy Inc. Husky Energy Inc.

All other players Encana Corporation Transaction volume

CANADIAN OILFIELD SERVICES - PRIVATE PLACEMENTS, PUBLIC OFFERINGS AND SHELF REGISTRATIONS

CANADIAN E&P– PRIVATE PLACEMENTS, PUBLIC OFFERINGS AND SHELF REGISTRATION

INDUSTRY OVERVIEWEXPERT THOUGHTS

Brad Wanchulak, CEO, Hydrera Water Services CanadaWhat was the most positive change in the last 12 months for your business?In the last year we have expanded both our executive and senior management teams. We havegrown from three executives and two senior managers to six executive managers and seven seniormanagers. This expansion marked the first time we truly invested in human capital versus operatingassets, this investment has allowed us to grow with substance and more certainty ofimplementational success.

What challenges are you seeing?The uncertainty in the Canadian operational realm has been difficult, impacting producers’ ability todrill, which, in turn, impacts our business. In addition, the low oil and gas prices of 2016 which weredifficult to bear and are now magnified in our current economic climate with new pricing lows andnegative production activity due to curtailments. The impact of returning to those low prices yetagain has created a double dip. This certainly presents a challenge for many companies who barelysurvived 2016.

What is your outlook for the next 12 months?In the next 12 months we see an opportunity to grow through expanded service offerings. We feelthat there will need to be some consolidation in the water management space and that many lateentrants could be forced to downsize operations to ensure survival. Margins are continually beingreduced by service providers who still operate for larger E&P companies and we feel that there willbe a slingshot effect when the Canadian oil and gas industry opens for business again. The result willbe fewer suppliers, which will naturally result in higher costs to producers and higher margins forservice companies.

Eirik Woodhouse, Co-Owner/EVP, Northlink Supply Ltd.What was the most positive change in the last 12 months for your business?We officially opened for business in July of 2018. In a very short time, we have seen many milestonescome and go, as our business continues to grow. We have many to thank for our success; includingour loyal customers and dedicated staff whom have earned trusting relationships with our vendorsand our customers. We could not be prouder of our accomplishments in this last year.

What challenges are you seeing?The halted construction of the Trans Mountain Pipeline Expansion. The Federal Court’s decision hashad a seriously negative impact on direct and in-directly related Alberta and British Colombia workersand businesses, it directly affects the primary industry we service. Fortunately, adapting to marketvolatility through adaptive thinking is what strong Alberta businesses do. We admit we feared theworst upon this disappointing announcement given we had just opened our doors, however wefunneled our energy not on fear and uncertainty, instead on what we could do to help our customersbe stronger in this market and tackle the increasing complexity of regulatory expectations and supplychain management.

What is your outlook for the next 12 months?With current oil prices seeming to have recently found a new bottom, we anticipate a sustainablepricing uptrend which in turn will create further opportunities for our customers and ourselves. Wewill strive to help new customers with innovative solutions that save their projects capital anddecrease environmental impacts, as well as re-affirm the relationships we’ve built over the last year.We’ve built our business model on providing the best service for our customers and we will continueto do so in 2019.

INDUSTRY OVERVIEWEXPERT THOUGHTS

Joel Jones, Partner, Borden Ladner Gervais LLPWhat was the most positive change in the last 12 months for your business?2018 saw increased M&A activity within the oilfield services sector, particularly due to attractivemarket valuations for buyers, consolidation pressure and the continued drive for diversificationthrough the acquisition of service companies with a U.S. presence.

What challenges are you seeing?One of the most significant issues facing Canadian industry participants continues to be the restrictedaccess to capital. Oilfield service providers continue to garner limited interest from North Americaninvestors. This, compounded with producers being increasingly cautious with their capital expendituresand their own ongoing issues with accessing capital markets, has heavily contributed to the challengingenvironment faced by oilfield service providers.

What is your outlook for the next twelve months?The trend of increased M&A activity, especially as it relates to small and mid-sized service companies,is anticipated to continue in 2019. As reduced work volumes and eroded margins force certaincompanies to consider strategic alternatives, others may forecast opportunity arising from factors suchas the mandatory curtailment of crude oil production plan announced by the Government of Albertaon December 2, 2018 and the upcoming provincial election in Alberta. As such influences continue todrive sellers and buyers together, the anticipated result is an increased number of completedtransactions in the oilfield services sector.

PUBLIC COMPARABLE ANALYSISPERFORMANCE ANALYSIS

Source: Capital IQ. Data as of December 31, 2018.

15.13%

-24.46%

-47.46%

-49.20%

-35.35%-30.90%-29.07%

-60%

-40%

-20%

0%

20%

40%

60%

80% OILFIELD SERVICE GROUP SHARE PRICES

Oil and Gas Drilling Oil and Gas Field Services Oil and Gas Machinery and EquipmentOil and Gas Storage and Transportation Integrated Oilfield Services Camp AccomodationsOil and Gas Software Solutions

5.66x5.94x

7.08x

14.27x

9.61x

12.00x12.09x

5.0x

7.0x

9.0x

11.0x

13.0x

15.0x

17.0x

19.0x

21.0xOILFIELD SERVICE GROUP TEV/EBITDA

Oil and Gas Field Services Integrated Oilfield Services Oil and Gas Machinery and EquipmentOil and Gas Software Solutions Oil and Gas Drilling Camp AccomodationsOil and Gas Storage and Transportation

PUBLIC COMPARABLE ANALYSISGROWTH, MARGINS & MULTIPLES

Source: Capital IQ. Data as of December 31, 2018.Above noted oilfield service peer groups are market capitalization weighted indexes, including the constituents listed on page 15.LTM refers to last twelve months. NTM refers to next twelve months. Figures above are based on median peer group metrics.

LTM REVENUE GROWTH NTM REVENUE GROWTH

LTM EBITDA MARGIN

LTM EV/EBITDA NTM EV/EBITDA

NTM EBITDA MARGIN

14%

19%

27%

15%

41%

19%

-7%

-10% 0% 10% 20% 30% 40% 50%

Drilling

Field Services

Machinery and Equipment

Integrated Oilfield Services

Storage and Transportation

Camp Accomodation

Software Solutions

13%

9%

12%

13%

28%

15%

10%

0% 5% 10% 15% 20% 25% 30%

Drilling

Field Services




Camp Accomodation

Software Solutions

8.0x

7.5x

7.0x

3.9x

10.9x

10.3x

11.7x

0.0x 5.0x 10.0x 15.0x

Drilling

Field Services




Camp Accomodation

Software Solutions

4%

0%

12%

-4%

0%

12%

14%

-5% 0% 5% 10% 15% 20%

Drilling

Field Services




Camp Accomodation

Software Solutions

17%

15%

14%

16%

35%

19%

42%

0% 10% 20% 30% 40% 50%

Drilling

Field Services




Camp Accomodation

Software Solutions

5.5x

2.5x

5.8x

3.9x

9.9x

5.9x

4.9x

0.0x 5.0x 10.0x 15.0x

Drilling

Field Services




Camp Accomodation

Software Solutions

6%18%

15%

8.5x

22%

5.5x

PUBLIC COMPARABLE ANALYSISPERFORMANCE ANALYSIS

We have selected a group of publicly traded oil and gas entities for this high-level analysis.

Source: Capital IQ. Data as of December 31, 2018.LTM refers to last twelve months. NTM refers to next twelve months.

Company

Market

Capitalization

Enterprise

Value Revenue

Revenue

Growth EBITDA

EBITDA

Margin

Revenue

Growth

EBITDA

Margin

NTM

EV/EBITDA

LTM

EV/EBITDA

LTM

EV/REV

Oil and Gas Drilling

Precis ion Dri l l ing Corporation $696 $2,285 $1,461 14.5% $329 22.5% 10.9% 25.8% 5.5x 6.9x 1.6x

Ens ign Energy Services Inc. $752 $1,483 $1,080 12.0% $174 16.1% 4.1% 22.6% 5.8x 8.5x 1.4x

Trinidad Dri l l ing Ltd. $457 $958 $596 30.4% $123 20.6% 14.8% 26.5% 5.3x 7.8x 1.6x

AKITA Dri l l ing Ltd. $162 $225 $86 41.2% ($9) (10.1%) 189.7% 15.3% 5.9x NM 2.6x

PHX Energy Services Corp. $137 $141 $285 25.8% $25 8.7% 6.3% 15.6% 3.0x 5.7x 0.5x

Western Energy Services Corp. $42 $263 $240 10.6% $32 13.5% 4.1% 17.3% 6.1x 8.2x 1.1x

Cathedra l Energy Services Ltd. $35 $37 $156 14.2% $3 1.7% 6.8% 9.8% 2.3x 14.1x 0.2x

Median $162 $263 $285 14.5% $32 13.5% 6.8% 17.3% 5.5x 8.0x 1.4x

Mean $326 $770 $558 21.2% $97 10.4% 33.8% 19.0% 4.8x 8.5x 1.3x

Oil and Gas Field Services

Mullen Group Ltd. $1,280 $1,769 $1,224 11.2% $178 14.6% 9.5% 15.9% 8.3x 9.9x 1.4x

Cal frac Wel l Services Ltd. $352 $1,354 $2,243 81.6% $293 13.1% (4.5%) 13.5% 4.3x 4.6x 0.6x

STEP Energy Services Ltd. $129 $429 $767 65.6% $133 17.3% (2.4%) 15.8% 3.6x 3.2x 0.6x

Macro Enterprises Inc. $89 $68 $80 (18.4%) ($1) (1.5%) 310.9% 13.6% 1.5x NM 0.8x

Essentia l Energy Services Ltd. $43 $65 $192 15.9% $17 9.0% 0.0% 12.7% 2.5x 3.8x 0.3x

Aveda Transportation and Energy Services Inc. $61 $135 $219 114.1% $17 7.8% N/A N/A 0.0x 7.9x 0.6x

Vertex Resource Group Ltd. $29 $113 $140 29.6% $18 13.2% N/A 16.4% 4.0x 6.1x 0.8x

MATRRIX Energy Technologies Inc. $26 $26 $19 239.7% $1 2.8% N/A N/A 0.0x 48.6x 1.4x

ENTREC Corporation $17 $170 $166 18.8% $14 8.1% N/A N/A 7.2x 12.6x 1.0x

ClearStream Energy Services Inc. $1 $235 $382 9.9% $7 1.9% N/A N/A 0.0x 32.0x 0.6x

Dalmac Energy Inc. $1 $13 $19 (3.2%) $2 9.8% N/A N/A 0.0x 7.1x 0.7x

Median $43 $135 $192 18.8% $17 9.0% 0.0% 14.7% 2.5x 7.5x 0.7x

Mean $184 $398 $496 51.3% $62 8.8% 62.7% 14.6% 2.9x 13.6x 0.8x

Oil and Gas Machinery and Equipment

Enerflex Ltd. $1,420 $1,581 $1,686 16.6% $226 13.4% 12.5% 14.0% 5.9x 7.0x 0.9x

CES Energy Solutions Corp. $840 $1,311 $1,202 28.1% $138 11.5% 7.3% 14.1% 7.2x 9.5x 1.1x

Tota l Energy Services Inc. $449 $725 $812 68.6% $121 14.9% 11.4% 13.6% 5.7x 6.0x 0.9x

McCoy Global Inc. $27 $20 $46 26.2% ($5) (10.7%) 31.6% 10.2% 3.3x NM 0.4x

Median $645 $1,018 $1,007 27.2% $130 12.4% 11.9% 13.8% 5.8x 7.0x 0.9x

Mean $684 $909 $937 34.9% $120 7.3% 15.7% 13.0% 5.5x 7.5x 0.8x


Secure Energy Services Inc. $1,133 $1,529 $2,934 34.6% $162 5.5% 8.1% 6.3% 7.6x 9.4x 0.5x

Trican Wel l Service Ltd. $373 $493 $1,013 32.6% $126 12.5% (22.3%) 15.5% 4.1x 3.9x 0.5x

High Arctic Energy Services Inc $162 $143 $207 (6.3%) $56 26.9% (3.5%) 19.6% 3.7x 2.6x 0.7x

Strad Energy Services Ltd. $72 $80 $115 (1.9%) $22 19.1% 23.2% 22.9% 2.5x 3.6x 0.7x

CWC Energy Services Corp. $59 $105 $147 53.2% $19 13.2% (16.7%) 11.0% 5.3x 5.4x 0.7x

Hyduke Energy Services Inc. $1 $8 $30 (17.5%) ($9) (29.6%) N/A N/A 0.0x NM 0.3x

Median $117 $124 $177 15.3% $39 12.8% (3.5%) 15.5% 3.9x 3.9x 0.6x

Mean $300 $393 $741 15.8% $63 7.9% (2.2%) 15.1% 3.8x 5.0x 0.6x

Oil and Gas Storage and Transportation

Enbridge Inc. $85,744 $167,952 $47,705 16.8% $11,820 24.8% (3.6%) 27.9% 13.1x 14.2x 3.5x

TransCanada Corporation $44,756 $96,935 $13,392 (0.7%) $8,143 60.8% 4.7% 64.1% 10.8x 11.9x 7.2x

Pembina Pipel ine Corporation $20,502 $30,412 $7,551 53.0% $2,398 31.8% 4.1% 36.7% 10.5x 12.7x 4.0x

Inter Pipel ine Ltd. $7,782 $13,079 $2,580 17.1% $1,252 48.5% 1.1% 48.8% 10.3x 10.4x 5.1x

Keyera Corp. $5,401 $7,640 $4,350 41.2% $769 17.7% 11.6% 16.5% 9.6x 9.9x 1.8x

Gibson Energy Inc. $2,699 $3,990 $7,624 40.6% $371 4.9% (0.3%) 5.5% 9.5x 10.8x 0.5x

Kinder Morgan Canada Limited $1,666 $916 $699 59.4% $390 55.9% (38.6%) 50.7% 4.2x 2.3x 1.3x

Tidewater Midstream and Infrastructure Ltd. $430 $723 $298 51.4% $65 21.9% (8.4%) 33.5% 7.9x 11.1x 2.4x

Median $6,592 $10,360 $5,950 40.9% $1,011 28.3% 0.4% 35.1% 9.9x 10.9x 3.0x

Mean $21,123 $40,206 $10,525 34.9% $3,151 33.3% (3.7%) 35.5% 9.5x 10.4x 3.2x

Camp Accomodations

Civeo Corporation $328 $971 $586 22.0% $89 15.2% 12.0% 19.0% 7.6x 10.3x 1.6x

Horizon North Logis tics Inc. $296 $321 $359 18.9% $28 7.7% 30.5% 12.9% 5.3x 11.6x 0.9x

Black Diamond Group Limited $115 $198 $162 8.3% $30 18.4% 3.5% 19.6% 5.9x 6.6x 1.2x

Median $296 $321 $359 18.9% $30 15.2% 12.0% 19.0% 5.9x 10.3x 1.2x

Mean $246 $497 $369 16.4% $49 13.8% 15.3% 17.2% 6.3x 9.5x 1.2x

Oil and Gas Software Solutions

Pason Systems Inc. $1,568 $1,384 $291 27.3% $115 39.5% 6.1% 47.9% 9.4x 12.1x 4.8x

Computer Model l ing Group Ltd. $489 $436 $72 (5.2%) $28 39.0% 0.3% 41.7% 14.4x 15.5x 6.0x

ION Geophys ica l Corporation $99 $225 $211 (6.7%) $22 10.4% 34.6% 31.5% 2.4x 9.7x 1.0x

Dawson Geophys ica l Company $106 $60 $213 10.3% $18 8.5% 14.1% 5.0% 4.9x 3.2x 0.3x

Pulse Seismic Inc. $80 $60 $11 (73.2%) $5 46.1% 41.3% 57.8% 6.4x 11.4x 5.3x

Cri tica l Control Energy Services Corp. $3 $15 $27 (8.4%) $1 2.8% N/A N/A 0.0x 20.0x 0.6x

Divestco Inc. $3 $13 $9 (45.5%) ($3) (34.6%) N/A N/A 0.0x NM 1.4x

Median $99 $60 $72 (6.7%) $18 10.4% 14.1% 41.7% 4.9x 11.7x 1.4x

Mean $335 $313 $119 (14.5%) $27 16.0% 19.3% 36.8% 5.4x 12.0x 2.8x

(Figures In $CAD Millions, except percentages and ratios)

LTM Operating Figures NTM Consensus Estimates Valuation

MNPCF – OILFIELD SERVICES LEADERSHIP TEAM

TRNSACTION LEADERSHIP

Brett Franklin, CPA, CAPresident, MNPCF

[email protected]

Mike Reynolds, CFAManaging Director

[email protected]

Mark Regehr, CFAManaging Director

[email protected]

Tom Minogue, CPA, CAManaging Director

[email protected]

Dale Antonsen, CPA, CAManaging Director

[email protected]

DUE DILIGENCE LEADERSHIP

Johnny EarlManaging Director

[email protected] 604-637-1514

MNPCF – RECENT TRANSACTIONS

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