Trican Reports Second Quarter Results for 2020

Calgary, Alberta--(Newsfile Corp. - July 31, 2020) - Trican Well Service Ltd. (TSX: TCW) ("Trican" or the "Company") is pleased to announce its second quarter results for 2020. The following news release should be read in conjunction with Management's Discussion and Analysis ("MD&A"), the unaudited interim consolidated financial statements and related notes of Trican for the three and six months ended June 30, 2020, as well as the Annual Information Form for the year ended December 31, 2019. All of these documents are available on SEDAR at


The negative impact of the COVID-19 health pandemic and the commodity price collapse (collectively "Market Events"), outlined in our April 6, 2020 news release and in our Q1 2020 MD&A continue to significantly affect the industry and the Company. Trican has adapted quickly to the changing market conditions, and we are confident that our resilient culture will carry the Company through these unprecedented times.

  • Financial position and liquidity:

    • Cash and cash equivalents of $26.4 million (December 31, 2019 - $7.2 million); 

    • Positive non-cash working capital of $47.8 million which includes $14.5 million of assets held for sale (December 31, 2019 - $132.6 million which includes $38.1 million of assets held for sale); 

    • Long-term loans and borrowings were fully repaid in Q2 2020 as a result of significant accounts receivable collections during Q2 (Long-term loans and borrowings at December 31, 2019 - $46.2 million);

  • Key cost and discretionary spending plan adjustments implemented in late March 2020 helped mitigate cash burn in the seasonally slow second quarter;

  • $5.0 million was recognized in relation to the Canada Emergency Wage Subsidy ("CEWS") as part of the federal government of Canada's response to the COVID-19 health pandemic.  If the CEWS was not available, the Corporation would have made more significant personnel reductions to mitigate second quarter negative financial results;

  • Planned capital expenditures have been and will continue to be limited to only necessary sustaining expenditures, estimated at less than 4% of revenue;

  • At June 30, 2020 the outstanding share balance was 264,726,435 which includes the repurchase and cancellation of 6,763,600 shares in 2020 at a weighted average price per share of $0.98 for the six months ended June 30, 2020, pursuant to its Normal Course Issuer Bid ("NCIB").

  • Consolidated revenue from continuing operations for Q2 2020 was $28.4 million, a $76.9 million decrease compared to Q2 2019.

  • Despite a 73% decline in the Company's revenue, the Company's net loss and negative adjusted EBITDA saw improvements, primarily due to cost reduction strategies implemented in late Q1 2020, efficiency improvements made through the last several quarters as part of our business optimization program, and government assistance programs relating to the COVID 19 pandemic. 

  • Net loss for Q2 2020 was $28.4 million (Q2 2019 - net loss of $28.6 million).

  • Adjusted EBITDA1 for Q2 2020 was negative $6.8 million, which includes recognition of $5.0 million from the CEWS program, and a $0.9 million recovery from previously impaired trade receivables that were collected during the quarter. The Company did not incur any expenses for severance nor stainless steel fluid end expenditures in Q2 2020.  Q2 2019 adjusted EBITDA was negative $15.1 million, which included $0.8 million of severance costs and $3.2 million in expenses for stainless steel fluid ends1.

  • The sale of surplus assets in Q2 2020 generated $2.1 million (Q2 2019 - $11.8 million) in proceeds which provided additional liquidity and allowed for continued investment in our core business and NCIB program.


($ millions, except per share amounts; total proppant pumped (thousands); internally sourced proppant pumped (thousands); total job count; and HHP(thousands))Three months ended Six months ended
($ millions, unaudited)June 30, 2020June 30, 2019March 31, 2020 June 30, 2020June 30, 2019
Revenue$28.4$105.2$191.8 $220.2$342.8
Gross (loss) / profit(29.4)(36.3)3.8 (25.6)(26.7)
Adjusted EBITDA1(6.8)(15.1)9.5 2.711.3
Net loss(28.4)(28.6)(155.0) (183.5)(35.2)
   Net loss per share - basic($0.11)($0.10)($0.58) ($0.69)($0.12)
   Net loss per share - diluted($0.11)($0.10)($0.58) ($0.69)($0.12)
Total proppant pumped (tonnes)50138285 335470
Internally sourced proppant pumped (tonnes)33138285 318470
Total job count 22931,1502,665 2,9583,834
Hydraulic Pumping Capacity569593572 569593
Active crewed HHP166347321 166347
Active, maintenance/not crewed HHP17223569 172235
Parked HHP23111182 231 11


2 Effective Q1 2020, the Company has adopted a new methodology for calculating job count. Comparative periods have been updated to reflect the change in methodology.

($ millions)As at June 30, 2020 As at December 31, 2019 
Cash and cash equivalents$26.4  $7.2 
Current assets - other$81.8  $225.5 
Current portion of lease liabilities$4.6  $4.5 
Current liabilities - other$28.9  $88.4 
Lease liabilities - non-current portion$13.8  $15.0 
Long-term loans and borrowings$-  $46.2 
Total assets$614.9  $926.5 


Second Quarter 2020 vs First Quarter 2020 Sequential Overview

Revenue in the second quarter of 2020 decreased 85.2% compared to the first quarter of 2020. Activity levels decreased significantly due to the normal spring break-up slowdown, combined with the significant drop in commodity prices, as the COVID-19 pandemic severely impacted demand for oil and gas products. Oil prices were hit particularly hard, with average pricing for WTI and WCS down 39% and 30% respectively, in the second quarter, relative to the first quarter. Gas prices were more resilient, with the WCSB benchmark AECO gas price staying flat against the first quarter. Market Events sharply curtailed customer activity, with total second quarter job count dropping to 253 from 2,665 in the first quarter. Trican responded to this extraordinary downturn by taking quick action to park much of our equipment that was active during Q1 2020, and also significantly reducing our costs.

The Company reduced the number of active Fracturing crews from eight in the first quarter to two in the second quarter. Typical seasonal second quarter spring break-up conditions exacerbated the activity decline, driving average utilization on the remaining crews to 25% for the quarter, compared to 84% in the prior quarter. Proppant volumes declined from 285,000 tonnes in Q1 to 50,000 tonnes in Q2, and the Fracturing job count decreased similarly.

The WCSB rig count averaged only 22 rigs through the second quarter, down from an average of 207 rigs in the first quarter of 2020. Cementing activity is highly correlated with the rig count, resulting in a significant decline in activity in the second quarter of 2020. The Company reduced the active crew count from 20 in Q1 to 6 in Q2. The number of Coiled Tubing operating days dropped from 467 in Q1 to 96 in Q2, and the crew count was reduced from nine crews to three. Utilization of the remaining active Cementing and Coiled Tubing crews saw similar decline as our Fracturing crews.

Gross loss and negative adjusted EBITDA1 for the second quarter of 2020 were $29.4 million and $6.8 million respectively, compared to the Q1 2020 gross profit of $3.8 million, and adjusted EBITDA of $9.5 million, respectively. To partially mitigate significant revenue declines, the Company took action late in the first quarter to contain costs, slashing all non-essential spending and reducing personnel costs by approximately 50% through a combination of headcount reductions and compensation rollbacks. The Company's Q2 results include the recognition of $5.0 million in CEWS recoveries. The CEWS has mitigated further job losses and helped the Company retain critical personnel to support an eventual recovery in our business.


Customer Environment

Our Outlook is slightly improved from our First Quarter 2020 MD&A as Canadian commodity prices, and in particular prices for oil and natural gas liquids, have recovered from the lows experienced early in the second quarter. The Canadian Benchmark AECO natural gas prices remained resilient in the face of COVID-19 health pandemic, a result of enhancements to certain natural gas transmission lines and supply agreements, combined with expected declines in natural gas production that was a byproduct of shut-in oil production. The improved pricing for liquids and the lower differential on light oil has boosted our customer cash flows, but further recovery in demand is required before the global oversupply of oil can be brought back into balance and bring oil prices back to pre-COVID-19 levels.

Our customers have significantly reduced capital expenditure plans and we anticipate they will only increase spending if oil prices remain stable and global economic activity improves. Although the relative stability in natural gas prices and improved economics of liquids rich gas wells is cushioning some of the oil related activity drop, we continue to anticipate that industry activity will drop by approximately 60% in the second half of the year. Our Hydraulic Fracturing crew count will be three crews, as compared to eight in the first quarter, and our Cement and Coiled Tubing active equipment has also been reduced by similar levels. We will continue to monitor our clients' plans going forward and will adjust our active and staffed fleet to accommodate future changes.

Q3 2020 Activity

Wet weather at the start of the quarter along with continued uncertainty surrounding the COVID-19 health pandemic modestly delayed the recommencement of drilling and completions activity, and as a result the WCSB rig count is up only modestly from the record lows touched in the second quarter. The rig count increased in the second half of July, and we anticipate that it will remain at these levels until September. This increase is driving a sequential increase in operating activity but still down significantly on a year-over-year perspective. We are managing our fleet utilization carefully, and will not sacrifice pricing to gain market share. The pressure pumping industry has brought world class efficiency to the WCSB and we must generate an adequate return on these investments to ensure the long-term sustainability of the sector. We will keep our costs in line with market conditions and manage our capital spending prudently, preserving our best-in-class balance sheet strength.

The Company is pleased that the Government of Canada has indicated that the CEWS will be extended to December 2020 which will help maintain employment levels to support the Company's business. The Company has also submitted applications to the respective provincial government agencies managing the distribution of funds for the remediation of orphan and inactive wells, and is cautiously optimistic that it will receive a base level of this remedial work to complement the primary cementing activity in its Cementing service line.

Capital Expenditures

Our capital expenditures for the six months ended June 30, 2020, of $7.5 million ($1.6 million during Q2 2020) have been focused primarily on maintenance and infrastructure projects, along with certain projects that brought immediate efficiencies and cost reductions. We fully funded these capital expenditures with $4.2 million of proceeds from the sale of surplus or obsolete assets as well as the sale of our Fluid Management business.

Our focus for 2020 will be to complete the projects already underway and limit additional expenditures to sustaining capital items. We have identified non-core real estate and obsolete or surplus equipment for disposal, and will be seeking out additional disposal opportunities provided we can earn a fair price on disposition.


Continuing Operations

($ thousands, except total job count, and revenue per job1, unaudited)      
Three months endedJune 30, 2020Percentage
of revenue
June 30, 2019Percentage
of revenue
March 31, 2020Percentage
of revenue
Revenue$28,370 100 %$105,226100 %$191,794100 %
Cost of sales      
  Cost of sales - Other29,901 105 %111,385106 %159,81483 %
  Cost of sales - Depreciation and amortization27,866 98 %30,14029 %28,23015 %
  Gross (loss) / profit(29,397)(104) %(36,299)(34) %3,7502 %
  Administrative expenses - Other6,686 24 %9,9699 %12,5047 %
  Administrative expenses - Depreciation1,303 5 %1,5621 %1,3351 %
  Impairment - Non-financial assets- - %-- %141,06574 %
  Impairment / (recovery) - Trade receivables(891)(3) %35- %10,5736 %
  Other income(821)(3) %(2,712)(3) %(218)- %
Results from operating activities(35,674)(126) %(45,153)(43) %(161,509)(84) %
  Finance costs775 3 %1,1511 %1,1271 %
  Foreign exchange loss / (gain)98 - %250- %(184)- %
Loss before income tax(36,547)(129) %(46,554)(44) %(162,452)(85) %
Income tax recovery(7,959)(28) %(18,597)(18) %(7,972)(4) %
Loss from continuing operations($28,588)(101) %($27,957)(27) %($154,480)(81) %
Adjusted EBITDA1($6,834)(24) %($15,085)(14) %$9,5335 %
Total job count2293  1,150 2,665 
Revenue per job196,823  84,818 70,620 
Total proppant pumped (tonnes)50,000  138,000 285,000 


2 Effective Q1 2020, the Company has adopted a new methodology for calculating job count. Comparative periods have been updated to reflect the change in methodology.

Sales Mix

Three months ended (unaudited)June 30, 2020June 30, 2019March 31, 2020
% of Total Revenue   
Fracturing62 %64 %73 %
Cementing19 %18 %17 %
Coiled Tubing14 %6 %8 %
Fluid Management- %5 %- %
Industrial Services3 %4 %2 %
Other2 %3 %- %
Total100 %100 %100 %



Continuing Operations

($ thousands, except total job count, and revenue per job1, unaudited)      
Six months endedJune 30, 2020Percentage
of revenue
June 30, 2019Percentage
of revenue
Year-over year changePercentage
Revenue$220,164 100 %$342,820100 %($122,656)(36) %
Cost of sales      
  Cost of sales - Other189,715 86 %310,10790 %(120,392)(39) %
  Cost of sales - Depreciation and amortization56,096 25 %59,45117 %(3,355)(6) %
  Gross (loss) / profit(25,647)(12) %(26,738)(8) %1,091(4) %
  Administrative expenses - Other19,190 9 %23,4197 %(4,229)(18) %
  Administrative expenses - Depreciation2,638 1 %2,9671 %(329)(11) %
  Impairment - Non-financial assets141,065 64 %-- %141,065100 %
  Impairment - Trade receivables9,682 4 %312- %9,3703,003 %
  Other income(1,039)- %(4,644)(1) %3,605(78) %
Results from operating activities(197,183)(90) %(48,792)(14) %(148,391)304 %
  Finance costs1,902 1 %2,4751 %(573)(23) %
  Foreign exchange (gain) / loss(86)- %325- %(411)(126) %
Loss before income tax(198,999)(90) %(51,592)(15) %(147,407)286 %
Income tax recovery(15,931)(7) %(19,540)(6) %3,609(18) %
Loss from continuing operations($183,068)(83) %($32,052)(9) %($151,016)471 %
Adjusted EBITDA1$2,699 1 %$11,3403 %($8,641)(76) %
Total job count2,958 3,834   
Revenue per job173,215 86,429   
Total proppant pumped (tonnes)335,000 470,000   


2 Effective Q1 2020, the Company has adopted a new methodology for calculating job count. Comparative periods have been updated to reflect the change in methodology.

Sales Mix

Six months ended (unaudited)June 30, 2020June 30, 2019
% of Total Revenue  
Fracturing72 %72 %
Cementing17 %15 %
Coiled Tubing9 %6 %
Fluid Management- %4 %
Industrial Services1 %1 %
Other1 %2 %
Total100 %100 %



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 Six months ended
 June 30, 2020June 30, 2019March 31, 2020 June 30, 2020June 30, 2019
Loss from continuing operations (IFRS financial measure)($28,588)($27,957)($154,480) ($183,068)($32,052)
  Cost of sales - Depreciation and amortization27,866 30,14028,230 56,09659,451
  Administrative expenses - Depreciation1,303 1,5621,335 2,6382,967
  Income tax recovery(7,959)(18,597)(7,972) (15,931)(19,540)
  Finance costs and amortization of debt issuance costs775 1,1511,127 1,9022,475
  Foreign exchange loss / (gain)98 250(184) (86)325
  Impairment - Non-financial assets- -141,065 141,065-
  Other income(821)(2,712)(218) (1,039)(4,644)
  Administrative expenses - Other: equity-settled share-based compensation492 1,078630 1,1222,358
Adjusted EBITDA($6,834)($15,085)$9,533 $2,699$11,340

1 Certain financial measures in this news release - namely adjusted EBITDA and adjusted EBITDA percentage are not prescribed by IFRS and are considered non-GAAP measures. These measures may not be comparable to similar measures presented by other issuers and should not be viewed as a substitute for measures reported under IFRS. These financial measures are reconciled to IFRS measures in the Non-GAAP Disclosures section of this news release. Other non-standard measures are described in the Non-Standard Measures section of this news release.  Stainless Steel Fluid Ends were historically expensed as depreciation prior to December 2017.  Not all hydraulic fracturing companies apply the accounting policy for Stainless Steel Fluid Ends consistently.

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 Six months ended
 June 30, 2020June 30, 2019March 31, 2020 June 30, 2020June 30, 2019
Adjusted EBITDA($6,834)($15,085)$9,533 $2,699 $11,340
Revenue$28,370 $105,226$191,794 $220,164 $342,820
Adjusted EBITDA %(24)%(14)%5% 1%3%



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.


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.


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:

  • that first half of 2020 results will not be a good predictor of future financial results;

  • 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 based on government announcements that the CEWS will be extended from August 29, 2020 to December 19, 2020;

  • anticipated industry activity levels in jurisdictions where the Company operates, as well as expectations regarding our customers' work programs and expectations on timing of completion thereof and business plans;

  • pricing reductions will result in Trican parking additional equipment;

  • the expectation that we will be able to generate positive operating cash flow;

  • 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, cost savings and optimization levels;

  • we will be able to maintain a strong balance sheet through this downturn;

  • the anticipated impact of pipeline improvements on AECO prices;

  • expectations regarding the Company's equipment utilization levels and demand for our services in 2020;

  • 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 that Trican's strong financial position will allow the Company to withstand uncertainty and invest opportunistically;

  • expectation as to the type of Hydraulic Fracturing 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 that certain components of administrative expenses will be useful in future predictions of quarterly administrative expenses;

  • 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;

  • 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 below and in the "Risk Factors" section of our AIF dated March 30, 2020:

  • volatility in market prices for oil and natural gas;

  • liabilities inherent on oil and natural gas operations;

  • impact of COVID-19 on the Company's customers, business, operations and personnel;

  • continuation of government assistance programs in response to the COVID-19 pandemic;

  • the success of our efforts and response to the COVID-19 pandemic;

  • our customers' ability to obtain adequate credit or financing to support their exploration and completion activities;

  • competition from other suppliers of oil and gas services;

  • competition for skilled personnel;

  • changes in income tax laws or changes in other laws and incentive programs relating to the oil and gas industry; and

  • changes in political, business, military and economic conditions in key regions of the world.

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; the Company's ability to continue its operations for the foreseeable future and to realize its assets and discharge its liabilities and commitments in the normal course of business; 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.


The Company will host a conference call on Thursday, July 31, 2020 at 9:00 a.m. MT (11:00 p.m. ET) to discuss the Company's results for the 2020 Second Quarter.

To listen to the webcast of the conference call, please enter the following URL in your web browser:

You can also visit the Investors section of our website at 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. Second Quarter 2020 Earnings Results Conference Call".

The conference call will be archived on Trican's website at


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:

Dale Dusterhoft
President and Chief Executive Officer

Robert Skilnick
Chief Financial Officer

Phone: (403) 266-0202
Fax: (403) 237-7716
2900, 645 - 7th Avenue S.W.
Calgary, Alberta T2P 4G8

Please visit our website at

To view the source version of this press release, please visit