Nbf-Stock - Calendar - Event-2023-04-24t19 57 20-04 00

NBCFM Research | Industry Note
April 24, 2023
INDUSTRY RATING Oilfield Services

Energy Equipment & Services: Market
Weight
Q1/23 OFS Preview & Majors Readthrough
(NBF Economics & Strategy Group)
OFS Majors first quarter results continue to frame an evolving narrative within the space,
where moderating, and now decelerating, rate of change & growth is emphasizing quality
& entrenchment of optimized returns to support shareholder value over the duration of an
elongated cycle.
This provides the basis for the thesis for our domestic peer coverage, where the cadence of
activity growth should similarly moderate, however a re-based (higher) & lower volatility top
line paired with streamlined costs & capitalization, should offer a view for a relatively higher-
quality underlying earnings profile, which is not priced in to the sector and should offer
continued upside & shareholder value through a prospective inclination in valuations (with
the group trading at a ~50% discount to historical multiples). We increasingly believe that this
phase of the cycle should positively bias those high-quality & entrenched offerings (as opposed to
lower quality & levered) that best accentuate that resilience of earnings & returns, with value
realization & multiple expansion to be delivered and validated by maximized free cash and an
increased emphasis of return of capital (or associated option-value). Again, on a risk-adjusted
basis, this is a different cycle for the sector than we have historically observed, and market
appreciation & attribution of value to that should increasingly embed itself over the medium-to-
long term.
OFS Majors Summary & Coverage Read-Through
The OFS majors (BKR; Not Rated, SLB; Not Rated) results generally came in line with expectations,
however that came on a decelerating basis (-2% Q/Q; prior periods noting moderating rate of
change) with returns checking-back (-170 bps Q/Q; 19% EBITDA margin vs. 21% prior Q & 17% same
period last), as contracting pricing & realizations re-magnified recent inflationary pressures.
As referenced within, traditional OFS business segments carried the day (flat Q/Q) relative to
more industrial-oriented offerings (-9% Q/Q), with a bias towards North America (+1% Q/Q)
as International markets lagged (-2% Q/Q). That said, and while unevenness and volatility of
operations is noted, the cycle has evolved with optimism remaining through the outlook given
more durable spending (set against high-utilization, and optimism in pricing & margins), however
with higher emphasis on the quality & resilience of earnings & returns over the long-term (relative
to the prior orientation towards high-rate of change).
In general, that perspective continues to underpin value through our domestic coverage, the
returns of which remain unappreciated in the equities (universally trading at a discount to
historical), and predominantly orients through high-quality (not levered) & entrenched exposures,
with our bias being through the likes of TCW, PSI (upgrading to OP from SP), PD & EFX (in that
order, given context of offerings & market segments).
Analyst Dan Payne, CFA

(403) 290-5441 ● dan.payne@nbc.ca
Associate Nick Stevenson, P.Eng, CFA

(403) 441-0928 ● nick.stevenson@nbc.ca
Associate Trevor Martensson For required disclosures, please refer to the end of the document.
(403) 290-5624 ● trevor.martensson@nbc.ca
Industry Note
NBCFM Research | April 24, 2023
Key Take-Aways
Key take-aways from OFS Major’s reporting (in addition to industry analogies and commentary, incl. recent
Dallas Fed Energy Survey) that serve as read-through to our domestic coverage, include;
1. Decelerating performance necessitates returns through high-efficiency & entrenched

operations.
a. Uneven and variable results should be expected across segments & regions; notably drag in
the US gas-weighted market (suggested as high as a 20% downside in rig count by BKR) vs.
oil-weighted & International segments.
i. Paradoxically, that near-term risk to gas potentially compounds the long-term call
on gas as LNG exports and consumption increase, with universal optimism reflected
towards that theme.
b. Pricing is situationally contracting (with some indicated price competition creeping back
in), potentially magnifying costs/margins (i.e. re-magnifying entrenched inflation; NOTE
inflation & supply chain was not mentioned as a material impact to earnings).
2. That relative quality & resilience of earnings through a durable cycle should dictate a greater
appreciation of valuations (i.e. multiple expansion).
a. In support of this, operators (and us) expect activity to be underpinned by stable &
consistent upstream focus on sustainable and balanced spending profiles (i.e. low
volatility).
b. Compounding that in a tight capacity market, is the likelihood of higher required activity to
accommodate supply in a complex of deteriorating inventory & efficiencies (emphasized
through required participation of Non-OPEC supply).
c. Each of those dynamics is expected to result in a more durable & extended cycle.
3. All in, expectation remains for double-digit top line growth in traditional OFS business segments
through 2023 with 150-200 bps margin expansion.
a. International markets are expected to be the predominant driver of this performance, with
North America suggested to have plateaued (i.e. stabilized at higher level through the early
innings of the cycle, relative to international that has yet to take off).
b. This remains supportive of cyclically low valuations across the sector.
Exhibit 1: OFS Majors Average Q/Q Revenue & EBITDA Growth

30%
20%
Q/Q Growth (%)
10%
0%
-10%
-20%
-30%
-40% Big 3 Avg. Q/Q Revenue Growth (%) Big 3 Avg. Q/Q EBITDA Growth (%)
Note: Dashed lines represent consensus; Source: NBF, Refinitiv
2
Industry Note
Upstream Perspective, Commodity & Activity Forecast

As defined within our recently published E&P Preview & Commodity Outlook, the Upstream group has
recently experienced headwinds & volatility as benchmark prices & differentials universally contracted in
the first quarter (-10% for liquids and much more meaningfully for gas, being cut in half), before bouncing
(except gas) in to the second quarter with improved visibility on the macro (incl. OPEC cuts), and support of
strong thematic tailwinds go-forward (particularly to WCS diffs). We expect the market and producers to
look through the volatility and any transitory weakness, and do not expect much change to guidance or
return of capital mandates, given programs were risked to a lower commodity price environment in the
first place (tailored to sustainability; break-even $50/bbl, see Exhibit 2), with only small changes to timing
& style of spending likely (barring a more material break-down in prices) with the bias remaining towards
liquids-based activity as gas remains higher risk from a spending & returns standpoint in the near-to-medium
term.
Within the referenced Outlook, we highlight our refreshed macro views surrounding the oil & gas landscape,
followed by our revised long-term commodity price assumptions, as reflected in Exhibits 3 & 4 in relation to
the forward strip. Additionally, the EIA recently provided its monthly STEO update, with associated S/D
forecast highlights & themes (Appendix 3), and from which we note a neutral to improving S/D balance for
both oil & gas.
Exhibit 2: NBF E&P Calculated Breakeven Pricing (2023e)

$100
Capex Breakeven Dividend Breakeven Median Capex Breakeven Median Dividend Breakeven
$90
Breakeven WTI (US$/bbl)
$80
$70
$60
$50
$40
$30
$20
$10
$0
KEC KEL PIPE LCX SGY YGR HWX POU NVA LOU ARX OVV MEG BTE WCP ERF CPG CR BIR VET TVE AAV PEY TOU
Source: NBF, Company Reports
OFS Impact & Outcome
From that upstream assessment, we have revised our OFS activity forecasts, which is largely unchanged with
minor deviations from our prior outlook (a reflection of the stability of activity), and with the main pressure
point reflected in a reduction in our gas rig forecast, as depicted in Appendix 4). This forecast supports
minor revisions to our OFS estimates, which ultimately supports ~55% ’23 EBITDA growth with relative
stability in to 2024 (~10%).
To that, little in the way of target & ratings changes are necessitated, and given the relative value-adjusted
opportunity for each, with optimism in the outlook given more durable spending (set against high-utilization,
and optimism in pricing & margins, relative to near-term transitory pressure points) and higher emphasis on
the quality & resilience of earnings & returns over the long-term (relative to the prior orientation towards
high-rate of change). In general, that perspective continues to underpin value through our domestic
coverage, the returns of which remain unappreciated in the equities (universally trading at a discount to
historical), with value realization & multiple expansion to be delivered and validated by an increased
emphasis of return of capital (or building option-value through positive working capital) predominantly
orients through high-quality (not levered) & entrenched exposures, with our bias being through the likes of
TCW, PSI, PD & EFX (in that order, given context of offerings & market segments).
3
Industry Note
Exhibit 3: NBF Commodity Price Assumption Changes

2022 2023 2024 2025+
Previous Revised %Δ Previous Revised %Δ Previous Revised %Δ Previous Revised %Δ
Crude Oil
WTI (US$/bbl) 94.43 94.43 0% 80.00 79.00 -1% 75.00 75.00 0% 70.00 70.00 0%
Edmonton Par Differential (US$/Bbl) -1.95 -1.95 0% -3.50 -3.36 4% -3.50 -3.00 14% -3.50 -3.00 -14%
Edmonton Par (C$/bbl) 120.12 120.12 0% 103.50 102.75 -1% 96.75 97.25 1% 90.00 90.50 1%
Edmonton C5+ Differential ($US/bbl) -1.17 -1.17 0% -1.60 -0.60 63% -2.50 -2.00 20% -2.50 -2.00 -20%
Edmonton Condensate ($C/bbl) 121.14 121.14 0% 106.00 106.50 0% 98.00 98.50 1% 91.25 92.00 1%
WCS Differential (US$/Bbl) -18.20 -18.20 0% -18.00 -17.40 3% -13.00 -15.00 -15% -13.00 -15.00 -15%
WCS (C$/Bbl) 98.81 98.81 0% 83.75 83.75 0% 83.75 81.00 -3% 77.00 74.25 -4%
Brent (US$/Bbl) 98.91 98.91 0% 85.00 84.25 -1% 80.00 80.00 0% 75.00 75.00 0%
NYMEX 3-2-1 Crack Spread (US$/Bbl) 36.78 36.78 0% 25.00 25.00 0% 20.00 20.00 0% 20.00 20.00 0%
Natural Gas - - - - - -
NYMEX (US$/mcf) 6.52 6.52 0% 4.50 2.95 -34% 4.50 3.50 -22% 4.25 4.00 -6%
AECO - NYMEX Basis (US$/mcf) -2.35 -2.35 0% -1.65 -0.70 -58% -1.40 -1.00 -29% -1.25 -1.00 -20%
AECO (C$/mcf) 5.43 5.43 0% 3.90 3.00 -23% 4.20 3.40 -19% 4.05 4.05 0%
NBP (C$/mcf) 41.74 41.74 0% 30.00 19.70 -34% 25.00 23.00 -8% 25.00 22.00 -12%
Currency - - - -
USD Exchange Rate ($C/$US) 0.77 0.77 0% 0.74 0.74 0% 0.74 0.74 0% 0.74 0.74 0%
Source: NBF, Bloomberg
Exhibit 4: NBF Commodity Price Assumptions vs. Strip Pricing

Crude Oil: NBF Price Deck vs. Actual Strip Pricing Natural Gas: NBF Price Deck vs. Actual Strip Pricing
WTI Fwd Strip WTI NBF WCS FWD Strip WCS NBF NYMEX Fwd Strip NYMEX NBF AECO Fwd Strip AECO NBF
$150 $9.50
NYMEX (US$/mcf); AECO
WTI (US$/bbl); WCS (C$/bbl)
$130 $8.50
$110 $7.50
(C$/mcf)
$6.50
$90
$5.50
$70
$4.50
$50 $3.50
$30 $2.50
$10 $1.50
2021 2022 2023 2024 2025 2026 2021 2022 2023 2024 2025 2026
NBF Price Deck Strip Pricing as of April 20, 2023

2021 2022 2023 2024 2025+ 2021 2022 2023 2024 2025+
WTI US$/bbl $68.00 $94.43 $79.00 $75.00 $70.00 WTI US$/bbl $68.00 $94.43 $76.98 $72.64 $68.27
Brent US$/bbl $70.75 $98.91 $84.25 $80.00 $75.00 Brent US$/bbl $70.83 $98.91 $81.14 $75.99 $72.66
Edm. Par Diff. US$/bbl -$3.80 -$1.95 -$3.36 -$3.00 -$3.00 Edm. Par Diff. US$/bbl -$3.79 -$1.95 -$3.25 -$3.33 -$5.29
Edm. C5+ Diff US$/bbl $0.40 -$1.17 -$0.60 -$2.00 -$2.00 Edm. C5+ Diff US$/bbl $0.43 -$1.17 -$1.52 -$1.65 -$2.05
WCS Diff. US$/bbl -$13.30 -$18.20 -$17.40 -$15.00 -$15.00 WCS Diff. US$/bbl -$13.30 -$18.20 -$17.57 -$14.24 -$15.74
NYMEX Gas US$/mcf $3.70 $6.52 $2.95 $3.50 $4.00 NYMEX Gas US$/mcf $3.72 $6.52 $2.74 $3.62 $4.23
AECO C$/mcf $3.65 $5.43 $3.00 $3.40 $4.05 AECO C$/mcf $3.64 $5.43 $2.59 $3.29 $4.11
AECO Basis US$/mcf -$0.80 -$2.35 -$0.70 -$1.00 -$1.00 AECO Basis US$/mcf -$0.82 -$2.35 -$0.78 -$1.11 -$1.13
FX USD/CAD $0.80 $0.77 $0.74 $0.74 $0.74 FX USD/CAD $0.80 $0.77 $0.74 $0.75 $0.75
4
Industry Note
Coverage Read-Through & Previews

OFS Major’s reporting foreshadows that of our domestic coverage, while generally validating our thesis for
the group (forecasts summarized within & below), with continued perspective & clarity to be offered
through upcoming reporting (as previewed, below);
Exhibit 5: Summary of NBF Estimate Changes

Oilfield Services Universe
Target EV/EBITDA Revenue Revenue EBITDA EBITDA
Rating Target 2023e 2023e 2024e 2023e 2024e
Symbol New Old New Old %∆ New Old %∆ New Old %∆ New Old %∆ New Old %∆ New Old %∆
EFX SP SP $11.50 $11.50 0% 5.5x 5.5x 0% $2,753.4 $2,581.3 7% $2,819.3 $2,609.0 8% $524.1 $520.6 1% $581.7 $549.0 6%
NESR UR UR nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf
PD OP OP $135.00 $135.00 0% 5.0x 5.0x 0% $1,969.6 $1,988.6 -1% $2,087.8 $2,124.4 -2% $643.5 $648.5 -1% $677.9 $691.7 -2%
PSI OP SP $20.00 $20.00 0% 8.0x 8.0x 0% $351.9 $355.8 -1% $393.9 $399.4 -1% $168.8 $171.4 -2% $195.9 $199.6 -2%
TCW OP OP $6.75 $6.75 0% 6.0x 6.0x 0% $982.5 $1,043.0 -6% $996.8 $1,053.7 -5% $241.5 $257.9 -6% $245.5 $271.8 -10%
OFS Universe Average 0% 6.1x 6.1x 0% 0% 0% -2% -2%
EFX (SP & $11.50 TP) – First quarter results will reflect the first full quarter since the completion of its
Exterran business combination, with results expected to be released on May 3rd (after market), and upon
which, we expect to begin to gain a greater appreciation for the scale & margin profile of the pro-forma
entity. With that, our estimates on the quarter align with consensus, with revenue of $690 mln (flat Q/Q)
and associated EBITDA of $118 mln (+37% Q/Q), to imply a 17% margin (vs. 12% prior Q). Looking forward, we
continue to believe that the main value catalyst to the company remains in validation of high-proportional &
high-margin recurring (contracted & take-or-pay) revenue mix across its pro-forma business (principally
driven through Energy Infrastructure, with the bulk of BOOM assets on-stream through mid-year; 55-65%
gross margins vs. Engineered Systems 10-20%), while the cadence of backlog conversion within its Engineered
Systems division remains on-track with expectations, and each complemented by continued high-grading
through synergies (on-going), to support a resilience of returns (i.e. +20% blended margin vs. historical 15-
20%) in support of free cash generation, de-leveraging, return of capital, and ultimately, an expanding
valuation multiple (growth remains an opportunistic medium-to-long term priority). EFX trades at 4.4x 2023e
EV/EBITDA (vs. peers at 6.2x) on leverage of 2.5x (vs. peers 2.9x); we reiterate our Sector Perform rating
and $11.50/sh target price, which is based on an unchanged 2023e EV/EBITDA multiple of 5.5x,
approximately in line with its historical multiple of 5.2x.
Exhibit 6: EFX Estimates; NBF vs. Consensus

Q1/23E 2023E 2024E
NBFe Cons. %∆ NBFe Cons. %∆ NBFe Cons. %∆
Enerflex (EFX)
Revenue ($ mln) 690.4 689.3 0% 2,753.4 2,777.5 -1% 2,819.3 2,840.4 -1%
Adj. EBITDA ($ mln) 117.8 118.0 0% 524.1 523.9 0% 581.7 583.0 0%
EBITDA Margin (%) 17% 17% 0% 19% 19% 0% 21% 21% 0%
Source: NBF, Company Reports, Bloomberg
Exhibit 7: EFX Peer Comparables

Company Ticker Mkt Cap Net Debt EV Div. Yield EBITDA EV/EBITDA D/EBITDA FCF Yield
(mln) (mln) (mln) (mln) (mln)
2023E 2024E 2023E 2024E 2023E 2024E 2023E 2024E
Archrock LP AROC.K US$1,572 US$1,641 US$3,214 6% US$414 US$454 7.8x 7.2x 4.0x 3.7x nmf nmf
USA Compression Partners LP USAC.N US$2,073 US$2,154 US$4,227 10% US$497 US$530 8.5x 8.2x 4.3x 4.3x -164% -28%
Total Energy Services Inc TOT.TO $341.9 $47.5 $389.4 4% $169.5 $172.7 2.3x 1.7x 0.3x -0.3x 22% 26%
CSI Compressco LP CCLP.O US$170 nmf nmf 3% US$128 US$136 nmf nmf nmf nmf nmf nmf
Natural Gas Services Group Inc NGS US$131 nmf nmf nmf US$31 US$36 nmf nmf nmf nmf nmf nmf
Average 6% 6.2x 5.7x 2.9x 2.6x -71% -1%
Enerflex EFX.TO $ 999.8 $ 1,329.0 $2,328.8 1% $ 524.1 $ 581.7 4.4x 3.7x 2.5x 1.9x 16% 22%
Source: NBF, Company Reports, Refinitiv
5
Industry Note
Exhibit 8: EFX Consensus Forward EV/EBITDA
10.0x $25
+/- 1 St. Dev. (EV/EBITDA) EV/EBITDA Share Price
Consensus 12 Month Fwd. EV/EBITDA (x)
8.0x $20
Share Price ($/sh)

6.0x $15
4.0x $10
2.0x $5
0.0x $0
2018 2019 2020 2021 2022 2023
PSI (OP & $20 TP) - First quarter results are expected to be reported on May 4th (after market), and which
should continue to reflect the strength of returns of its highly-entrenched & high-margin operations, albeit
potentially showing mild contraction sequentially as a reflection of its previously noted caution towards
activity through the first half of the year (but quite honestly, nothing of any concern for one of the more
robust business’ in the group); to that end, we forecast top line revenue of $96 mln (+1% Q/Q) and
associated EBITDA of $48 mln (-2% Q/Q), reflecting a mild check-back in margins towards 50% (from 52%
prior Q) while remaining best in class & top-tier. As we transit break-up in Canada and prevailing risk to the
gas rig fleet in the US, we will look for color on visibility for its expected resumption of operating strength
through H2/23, which again, as a function of one of the highest quality earnings profiles in the group, paired
with operating leverage & low maintenance capital requirements, should result in material free cash flow
conversion in support of continued return of capital (4% cash yield) and option-value through its pristine
balance sheet ($214 mln positive working capital outstanding at YE22). Ultimately, we continue to believe
that its complexion warrants a lower yield-based valuation, the recognition and result of which should
positively translate to shareholder value over the long-term. PSI trades at 4.4x 2023e EV/EBITDA (vs. peers
at 9.9x) on leverage of -1.3x (vs. peers -1.7x); based on its discounted valuation we are upgrading our rating
to Outperform (from Sector Perform) and maintaining our $20/sh target price, which is based on an
unchanged 2023e EV/EBITDA multiple of 8.0x, a discount to its historical multiple of 9.2x.
Exhibit 9: PSI Estimates; NBF vs. Consensus

Q1/23E 2023E 2024E
Pason (PSI)
Revenue ($ mln) 95.5 96.4 -1% 351.9 371.8 -5% 393.9 400.8 -2%
Adj. EBITDA ($ mln) 48.2 47.8 1% 168.8 183.5 -8% 195.9 202.7 -3%
EBITDA Margin (%) 50% 50% 1% 48% 49% -1% 50% 51% -1%
6
Industry Note
Exhibit 10: PSI Peer Comparables

Company Ticker Mkt Cap Net Debt EV Div. Yield EBITDA EV/EBITDA D/EBITDA FCF Yield
(mln) (mln) (mln) (mln) (mln)
2023E 2024E 2023E 2024E 2023E 2024E 2023E 2024E
Computer Modeling Group CMG.TO $ 566 $ (61) $ 505 3% $ 32.1 $ 38.2 15.7x 12.8x -1.9x -2.0x 4% nmf
Dril-Quip DRQ.N US$969 (US$256) US$713 nmf US$48 US$65 14.8x 11.1x -5.3x -3.7x nmf nmf
GeoSpace Technologies GEOS.O US$101 nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf nmf
Oceaneering OII.N US$1,791 US$57 US$1,848 0% US$289 US$332 6.4x 5.5x 0.2x 0.1x 6% 6%
PHX Energy Services PHX.TO $ 349 $ 5 $ 353 9% $ 137.5 $ 149.8 2.6x 2.1x 0.0x -0.2x 17% 26%
Pulse Seismic PSD.TO $ 99 nmf nmf 3% $ 12.0 $ 12.0 nmf nmf nmf nmf nmf nmf
Average 4% 9.9x 7.9x -1.7x -1.5x 9% 16%
Pason Systems PSI.TO $ 958.8 $ (218.3) $740.4 4% $ 168.8 $ 195.9 4.4x 3.5x -1.3x -1.4x 4% 7%
Exhibit 11: PSI Consensus Forward EV/EBITDA
25.0x $25
20.0x $20
Share Price ($/sh)

15.0x $15
10.0x $10
5.0x $5
0.0x $0
2018 2019 2020 2021 2022 2023
PD (OP & $135 TP) – First quarter results are expected on April 26th (before market), and, as noted in recent
management commentary, activity through the period remains resilient (~60 US rigs flat Q/Q & CDN rigs
peaking at 79 in Jan. 2023 vs. avg. of 66 in Q4/22) while price driven margin expansion should be noted on
the order of $2,000/day or 15-20% sequentially. With that we expect that results should trend towards
consensus, with revenue of $528 mln (+4% Q/Q) and associated EBITDA of $170 mln (+2% Q/Q); NOTE, our
EBITDA estimate is reflected excluding SBC, while given share price performance through the quarter,
unwind of prior SBC charges could skew the reported figure (albeit, in a positive light). While risk to activity
exists on a structural (i.e. US gas fleet; ~5-10% risk to activity) and seasonal (break-up) basis, the company
remains optimistic in the outlook in to H2/23, and continued re-contracting of its fleet on a disciplined basis
in to a tight capacity market, in any event, should continue to support a solid margin and earnings outlook.
In general, over the long-term, we continue to believe that the significance of its value (and operating
leverage) will be underpinned by positive trends to utilization (i.e. increased well count to accommodate
supply in a complex of deteriorating upstream inventory & efficiencies) in an already tight capacity market
for high-spec offerings. The punchline on PD remains unchanged, in that the materiality of its EBITDA profile
($609 mln 2023 run-rate) and associated FCF potential (currently targeting 10-20% of FCF towards share
repurchases) is not fully appreciated, with the stock trading at a +50% discount to its historical multiple at
3.0x 2023e EV/EBITDA (vs. peers at 3.3x & its historical multiple of 5.5x) on leverage of 1.4x (vs. peers
1.1x); we reiterate our Outperform rating and $135/sh target price, which is based on an unchanged 2023e
EV/EBITDA multiple of 5.0x, a discount to its historical multiple.
7
Industry Note
Exhibit 12: PD Estimates; NBF vs. Consensus

Q1/23E 2023E 2024E
Precision Drilling (PD)
Revenue ($ mln) 528.4 526.4 0% 1,969.6 2,017.6 -2% 2,087.8 2,158.5 -3%
Adj. EBITDA ($ mln) 170.1 169.5 0% 643.5 649.4 -1% 677.9 703.7 -4%
EBITDA Margin (%) 32% 32% 0% 33% 32% 0% 32% 33% 0%
Exhibit 13: PD Peer Comparables

Net Debt
Company Ticker Mkt. Cap Net Debt EV EBITDA EBITDA Growth EV/EBITDA /EBITDA P/TBV FCF Yield
(mln) (mln) (mln) (mln) (%) (%)
Large Market Share Drillers 2023E 2024E 2023E 2024E 2023E 2024E 2023E 2024E 2023E 2024E
Ensign ESI.TO $ 536.4 $ 1,151.9 $ 1,688 $ 541.0 $ 582.8 48% 8% 3.1x 2.4x 2.1x 1.5x 0.4x 42% 57%
Helmerich & Payne1 HP.N US$ 3,878 US$ 137.7 $ 4,015 US$ 1,064 US$ 1,188 152% 12% 3.8x 3.0x 0.1x -0.3x 1.3x 8% 15%
Nabors NBR.N US$ 1,138 US$ 1,826 $ 3,513 US$ 1,049 US$ 1,166 50% 11% 3.3x 2.2x 1.7x 1.2x 1.9x 35% 42%
Patterson-UTI PTEN.O US$ 2,597 US$ 480.1 $ 3,077 US$ 1,007 US$ 1,089 52% 8% 3.1x 2.6x 0.5x 0.2x 1.3x 14% 20%
Drillers Average 75% 10% 3.3x 2.5x 1.1x 0.6x 1.2x 25% 34%
Precision Drilling PD.TO $949 $889.6 $1,838 $643.5 $677.9 45% 5% 3.0x 2.3x 1.4x 0.8x 0.7x 30% 40%
1: HP reports on a September 30th Year End
Exhibit 14: PD Consensus Forward EV/EBITDA
12.0x $120
10.0x $100
Share Price ($/sh)

8.0x $80
6.0x $60
4.0x $40
2.0x $20
0.0x $0
2018 2019 2020 2021 2022 2023
8
Industry Note
TCW (OP & $6.75 TP) - First quarter results are expected to be reported on May 11th (after market), and
based on recent industry analogies and market activity, we expect that consensus expectations should be
met while reflecting positive sequential expansion, with top-line revenue of $288 mln (+22% Q/Q) and
associated EBITDA of $77 mln (+30% Q/Q). A recent management update continued to highlight the
company’s preferential orientations, with solid activity, pricing & margins experienced through the winter
season, as supported by the entrenchment of a high-proportion & high-quality fleet (i.e. market leader in
low-emissions capacity, +50% of its fleet), and which should continue to compound earnings & returns
through the cycle (arguably insulated from minor risk to activity on the gas front), as the outlook remains
optimistic relative to the prior year (solid in its own right). With that, we see a strong & resilient earnings
profile (albeit, with lower peaks) to result in material & consistent FCF, which in addition to excess working
capital ($170 mln working cap + $100 mln annual FCF) and associated option-value to shareholders (through
buy-back, possible dividend or acquisition), should translate to long-term multiple expansion. We continue
to view it as a unique orientation with the OFS & fracing group, where the mechanism towards value has
changed (i.e. return of capital rather than rate of change), while its resilience & lower earnings volatility is
the preferential make-up for the current cycle (rather than a levered-trade of the peers, which may receive
the required participation), and TCW is ahead on all key initiatives, like reinvestment & return of capital.
The stock trades at 2.7x 2023e EV/EBITDA (vs. historical 7.4x), with a re-rate to historical suggestive of +2x
upside; we reiterate our Outperform rating and $6.75/sh target price, which is based on an unchanged 2023e
EV/EBITDA multiple of 6.0x, while TCW trades at 2.7x 2023e EV/EBITDA (vs. peers 2.6x) on leverage of -0.1x
(vs. peers 0.2x).
Exhibit 15: TCW Estimates; NBF vs. Consensus

Q1/23E 2023E 2024E
Trican Well Services (TCW)
Revenue ($ mln) 288.4 280.6 3% 982.5 986.5 0% 996.8 1,055.5 -6%
Adj. EBITDA ($ mln) 77.3 77.5 0% 241.5 248.3 -3% 245.5 270.0 -9%
EBITDA Margin (%) 27% 28% -1% 25% 25% -1% 25% 26% -1%
Exhibit 16: TCW Peer Comparables

Company Ticker Mkt. Cap Net Debt EV HHP EV/HHP EBITDA EV/EBITDA Net Debt /EBITDA P/TBV FCF Yield
(mln) (mln) (mln)
Canadian Fracturing Peers 2023E 2024E 2023E 2024E 2023E 2024E 2023E 2024E
Calfrac Well Services CFW.TO $350 $218 $568 1,300,000 $425 $334.5 $356.2 1.7x 1.1x 0.7x 0.1x 0.7x 21% 35%
STEP Energy Services Ltd. STEP.TO $246 $86 $332 490,000 $675 $203.9 $228.2 1.6x 1.0x 0.4x -0.1x 0.7x 25% 46%
Canadian Average (excl. boxed outliers) $550 1.7x 1.0x 0.5x 0.0x 0.7x 23% 41%
Company Ticker Mkt. Cap Net Debt EV HHP EV/HHP EBITDA EV/EBITDA Net Debt /EBITDA P/TBV FCF Yield
(mln) (mln) (mln)
U.S. Fracturing Peers 2023E 2024E 2023E 2024E 2023E 2024E 2023E 2024E
Halliburton HAL US$31,122 US$4,745 US$35,867 4,600,000 US$7,800 US$5,042.3 US$5,726.0 7.1x 6.0x 0.9x 0.6x 4.0x 6% 8%
Liberty Oilfield Services LBRT.K US$2,426 (US$146) US$2,281 2,500,000 US$900 US$1,218.6 US$1,234.6 1.9x 1.4x -0.1x -0.5x 1.2x 21% 38%
Mammoth Energy Services TUSK.O US$198 nmf nmf 300,000 nmf US$154.7 US$169.7 nmf nmf nmf nmf nmf nmf nmf
NexTier Oilfield Solutions NEX US$2,003 (US$211) US$1,792 2,260,000 US$800 US$933.5 US$971.5 1.9x 1.3x -0.2x -0.7x 1.7x 26% 31%
Propetro Holding Corp PUMP.K US$833 (US$200) US$632 1,315,000 US$475 US$501.5 US$533.5 1.3x 0.7x -0.4x -0.8x 0.8x 8% 25%
RPC, Inc. RES.N US$1,707 nmf nmf 735,000 nmf US$534.7 US$531.1 nmf nmf nmf nmf nmf nmf nmf
U.S. Average (excl. boxed outliers) US$550 3.0x 2.4x 0.0x -0.4x 1.9x 15% 25%
North American Average (exlc. boxed outliers) 2.6x 1.9x 0.2x -0.2x 1.5x 18% 32%
Trican Well Services TCW.TO $689.3 ($26.2) $663.2 529,000 $1,250 $241.5 $245.5 2.7x 2.4x -0.1x -0.2x 1.4x 14% 17%
9
Industry Note
Exhibit 17: TCW Consensus Forward EV/EBITDA
25.0x $5
20.0x $4
Share Price ($/sh)

15.0x $3
10.0x $2
5.0x $1

0.0x $0
2018 2019 2020 2021 2022 2023
In support of our TCW thesis, below we highlight STEP (TSX; Not Covered), and LBRT (NYSE; Not
Covered) commentary & results;
STEP Ops Update (STEP: Not Covered) & TCW Read-Through ($6.75 TP) – CDN ops through Q1/23 were
robust with its best quarterly revenue performance, which is expected to result in strong Adjusted EBITDA
for the quarter. This came as a result of favourable weather conditions (extended cold weather provided a
longer operating cycle for coiled tubing) and client alignment (which should extend through Q2/23), which
resulted in solid utilization in both service lines (operating primarily in the Montney, Cardium & Viking), and
visibility into H2 is solid. That said, U.S. operations were mixed, with drag noted from to fracturing from
shifting client schedules related to commodity price pressures (i.e. ongoing weakness in natural gas prices),
with downtime to negatively impact margins for the period, but a bounce potential to come in Q2 with
commodity prices firming up. With that, results are expected to underperform expectations, with revenue
expected to be around $260-265 mln (vs. consensus $282 mln & prior Q $251 mln) with associated EBITDA of
$43-48 mln (vs. consensus $56 mln & prior Q $49 mln), while excess free cash will be reinvested in continued
de-leveraging and reinvestment in fleet upgrades. NBF does not currently provide coverage, a
recommendation or opinion on STEP Energy Services Ltd. The information in this email is a compilation of
publicly available information and is not to be construed otherwise.
LBRT Q1/23 Beat (LBRT: Not Covered) - LBRT, a North American pure play pressure pumping comp,
reported revenue of $1.3 bln (+3% Q/Q; in line with consensus) and adjusted EBITDA of $330 mln (+12% Q/Q;
+10% ahead of consensus), reflecting solid top line performance (albeit at a moderated rate of change;
having noted Majors decelerating), but continued operating leverage to note as the business cycle matures
with outsized margin expansion noted (25% vs. 24% prior Q). Management offered an extensive, balanced &
optimistic narrative for the outlook & impact of the prevailing market environment, with read-through to
domestic peers (like TCW, with reference to high-graded equipment exposures), as highlighted below;
 “industry is now investing with discipline” with “development programs…largely unchanged” and
“North American frac activity predominantly supports the maintenance of… production levels” which
“requires a healthy level of frac activity” while “spare production capacity today is quite modest
implying a positive outlook in the coming years for our industry and company” and while “in this
longer, perhaps steadier, cycle ahead there will be episodic challenges like… in natural gas markets”
but as that market “shows signs of a widely anticipated slowdown… the softness is likely transitory
10
Industry Note
ahead of a wave of LNG and Mexico pipeline export growth” and overall “frac markets remain at
high utilization levels, and robust demand in larger, oilier basins likely offsets softer conditions
isolated to gas basins”.
 “Service sector margins are now at healthy levels” and “we have excess demand for Liberty
services”, while “we will lead the way in maintaining pricing and profitability as we invest in our
digiTechnologies℠ offering and retire older equipment” in support of a persistently “tight frac
market… in North America”; “early year strength continues into the second quarter, where we are
seeing stable pricing and normal seasonality”
OFS Majors Snapshots

Below OFS Majors results are corroborated by the recent Dallas Fed Energy Survey (Mar 29, 2023), which
suggested stalled growth through the first quarter, with activity index’, utilization and pace of volume
expansion each sliding in to neutral (but positive) indicative of the noted deceleration to rate of change.
That, paired with still elevated costs (not including but structurally higher), albeit with early signs of abating
(particularly through supply chain & labour), imply modest contraction to margins. With that, the outlook
survey’s bias skews less optimistically (not necessarily negative) as a function of underlying uncertainty,
where NEW activity is suggested in the low-to-mid $60/bbl range (levels touched in Q1/23 & +15-20% higher
Q/Q), and all of which frames the expected relative stability to upstream activity for the time being.
BKR Q1/23 (Slight Beat; Not Covered) – BKR reported revenue of $5.7 bln (-3% Q/Q; vs. consensus $5.5 bln)
and adjusted EBITDA of $782 mln (-17% Q/Q; vs. consensus $741 mln), with margins coming in at 14% (vs. 16%
prior Q), and overall, results were modestly ahead of expectations (likely calibrated in to the quarter), but
reflected decelerating performance (prior periods had noted moderated rate of change). During the period,
revenue was primarily carried by traditional OFS segments (Flat Q/Q & margins generally intact), relative to
its Industrials division (-8% Q/Q on lower order conversion), albeit supported by more uneven and variable
performance from the underlying business segments & jurisdictions, notably; Subsea & Surface Pressure
Systems (+12%; “awarded its largest subsea tree order in almost five years) and Well Construction (+2%)
relative to Completions, Intervention & Measurements (-7%) and Production Solutions (-3%), while the bias
remains through International markets (+1%) vs. North America (-4%). Optimism remains in the outlook
(recall, BKR historically offers the bearish narrative), given a more durable & less volatile spending cycle,
which should reflect value through more resilient earnings & returns over the long-term.
Call Highlights:
Macro:
 “Despite the elevated recession risk for major developed economies, we expect the supply-
demand balance in the global oil markets to gradually tighten over the course of the year.
Factors driving this include China's economy recovering, non-OECD demand continuing to grow and
OPEC+ remaining proactive in maintaining adequate and stable oil price levels”.
 “We continue to believe current environment remains unique with a spending cycle that is more
durable and less sensitive to commodity price swings relative to prior cycles. Factors driving this
extended cycle include financially stronger operator balance sheet, disciplined capital spending,
focused on returns versus growth and IOCs and NOCs that are balancing modest production growth
with longer-term investments in new energy”.
 “The natural gas pricing has been weaker. We would expect 30 to 40 rigs…to be dropped over the
course of 2023. On the oil side…we don't see much risk to the oil activity. If we stay at around
$80, we should be able to stay level on the rigs and I don't think we'll see much impact unless we
11
Industry Note
start to go below the $70. For the public E&Ps, we don't see much risk to their activity levels until
we get to around $60 or below”.
 That near-term risk paradigm being offset by “Another notable characteristic of this cycle is the
continued shift towards the development of natural gas LNG. As the world increasingly recognizes
the crucial role natural gas will play in the energy transition, serving us both a transition and
destination fuel, the case for a multi-growth opportunity in gas is steadily improving. This is driving
operators of all sizes to dedicate more spending towards natural gas development as well as LNG
projects and seated infrastructure”.
 “looking into 2024, we'll have to monitor the health of the global economy and also the old demand.
And if OPEC+ cuts wind up being deeper or lasting longer, it could impact the growth trajectory to
some degree in 2024, but it's too early to say”.
Oilfield Services (OFS) & Oilfield Equipment (OFE):
 “In Oilfield Services and Equipment, despite recent volatility in oil and gas prices, we remain
positive on the outlook for a multiyear cycle, with growth trends clearly shifting in favor of
international and offshore markets”.
 “For 2023, we continue to expect OFSE to deliver double-digit revenue growth and for EBITDA
margins to expand by 150 to 200 basis points as activity increases in multiple regions and self-help
initiatives in key areas are executed”.
North American OFS:
 “In North America, activity has been seasonally weaker to start the year as expected with a high
likelihood of further softness as activity and gas basins respond to recent natural gas price
weakness”.
 “I think there's certainly a lot of moving parts in the North America market at the moment. We
expected some privates to drop oil rigs early in the year, but that would be gradually offset over the
course of the year by the public E&Ps and some majors adding some rigs”.
 “in terms of the pricing environment…as you look at North America, it's starting to level off, but we
expect our pricing for our technology in North America to remain firm”.
International OFS:
 “We expect this macro backdrop to still support a double-digit increase in global upstream
spending in 2023 with multiple international projects being executed, [and] the offshore
development pipeline growing”.
 “We are seeing the early stages of this shift through a step-up in the exploration and development
of gas reserves in regions like Africa, the Middle East and the Eastern Mediterranean”.
 “Geographically, multiple regions are poised for strong growth this year, led by the Middle East
and Latin America, where the pipeline for both shallow water and deepwater growth opportunities
becoming more visible. In other markets like West Africa and the Eastern Mediterranean, offshore
activity is also improving with multiyear drilling programs starting to come into focus”.
12
Industry Note
Exhibit 18: BKR Q1/23 Financial Results Overview

BKR Q1/23
Revenue Q/Q Y/Y EBITDA Q/Q Y/Y Margin Prior Q Last Y
($bln/$mln) (%) (%) ($mln) (%) (%) (%) (%) (%)
Headline $5.7 -3% 18% $782 -17% 25% 14% 14% 15%
Regional Mix*
North America $1 5% 20% N/A N/A N/A N/A N/A N/A

International $1.4 7% 16% N/A N/A N/A N/A N/A N/A
Segmented
Oilfield Services & Equipment $3.6 0% 19% $579 16% 33% 16% 16% 14%
Industrial & Energy Technology $2.1 -8% -7% $297 31% 2% 14% 17% 13%
*Only relates to Oilfield Services Segment
Note: All figures in USD
Exhibit 19: BKR Consensus Forward EV/DACF
20.0x $50
18.0x $45
16.0x $40
14.0x $35
Share Price ($/sh)

12.0x $30
10.0x $25
8.0x $20
6.0x $15
4.0x $10
2.0x $5
0.0x $0
2018 2019 2020 2021 2022 2023
SLB Q1/23 (In Line; Not Covered) – SLB reported revenue of $7.7 bln (-2% Q/Q; vs. consensus $7.4 bln) and
adjusted EBITDA of $1.8 bln (-7% Q/Q; vs. consensus $1.8 bln), with margins contracting to 23% (vs. 24% prior
Q), again, and similar to other reporting peers, with results as expected but reflecting decelerating
performance (prior periods had noted moderated rate of change). During the period, revenue was carried by
traditional OFS segments (Well Construction; +1% Q/Q & margins intact, and Production Systems; FLAT Q/Q,
with margins checking-back), while North American was the standout region (+4% Q/Q) relative to
International markets that lagged (-3%), and each similarly reflecting the variability and unevenness of
performance from the underlying business mix. Management remains constructive towards the outlook,
suggesting the market and spending offers a more resilient and durable view of the cycle, and positioning for
a strong H2/23 as led by the strength of international markets, with activity in North America largely
expected to plateau.
Call Highlights:
Macro:
 “Through the first quarter, the resilience, breadth and durability of the upcycle have only
become more evident”.
13
Industry Note
 “To begin, the untiring demand, investments and activity during this cycle are resilient despite
short-term economic and demand uncertainties. The combination of energy security, the initiation
of long-cycle projects and OpEx policy sets the condition for a decoupling of the activity outlook for
short-term demand uncertainties”.
 “energy security remains a top priority for most countries and is driving structural investments that
are governed primarily by national interest”.
 [On impact of OPEC+ cuts] “We have not seen any impact of businesses, and we don't believe there
will be any. We believe that these companies and the national companies are really set and fully
focused on mobilizing resource to execute their very ambitious capacity expansion plan”.
 “there is a lot of exploration happening across every basin…and…this trend has been going up. This
trend is certainly different from the greenfield, frontier exploration that characterize…the last
cycle. However, this cycle…we are seeing a return of frontier exploration, driven by energy
security, [and] the desire to replace reserves and to secure new gas particularly, and we see it
happening across many basins”.
 “the quality of the unfolding upcycle in oil and gas is improving, with unique attributes of
resilience, breadth and duration. This is very much evidenced by the strengthening outlook in both
Middle East and offshore markets and further reinforced by the tight supply balance as demand
forecast approach new highs at year-end”.
 “pricing continues to trend positively, enabling us to extract more value for our products and
services”.
 “We are primed for revenue growth and margin expansion through the year, underpinned by a
very solid international outlook. In North America, we still expect tangible market growth but at a
lower rate than originally anticipated at the start of the year, mainly as a result of ongoing
weakness in gas prices. Taken together, we expect the strong international growth to offset any
weakness in North America, keeping our full year ambitions intact with year-on-year growth in
excess of 15%, which should support adjusted EBITDA growth in the mid-20s.”
 “More specific to the second quarter. Directionally, we expect revenue to grow about mid- to high
single digits with operating margins expanding by 50 to 100 basis points, driven by a seasonal
rebound in the international markets”.
North America:
 “In parallel, the North America market, characterized by higher short-cycle exposure, is also set to
benefit from positive demand outlook and supportive commodity pricing. However, this will be
impacted by an anticipated activity plateau in the short term, which will subsequently be reflected
in production volumes”.
 “In North America, we…expect tangible market growth but at a lower rate than originally
anticipated at the start of the year, mainly as a result of ongoing weakness in gas prices”.
 “we are seeing pricing tailwinds and we have seen pricing tailwinds in the global market for quite a
few quarters and starting in North America”.
International:
 “In the Middle East, the largest-ever investment cycle has now commenced. This will support
ongoing capacity expansion projects over the next 4 years in both oil and gas”.
14
Industry Note
 “Collectively, we expect this market segment to reach or exceed more than 2/3 of the total global
upstream spend and support a long tail of resident activity over the next few years”.
 “the resurgence of exploration and appraisal activity…is starting to gather strong momentum in the
existing basins and new frontiers, from West and South Africa to the East Mediterranean, we are
starting to see exploration appraisal at the pace that was unforeseen just a few months ago”.
Exhibit 20: SLB Q1/23 Financial Results Overview

SLB Q1/23
Revenue Q/Q Y/Y EBITDA Q/Q Y/Y Margin Prior Q Last Y
($bln/$mln) (%) (%) ($bln/$mln) (%) (%) (%) (%) (%)
Headline $7.7 -2% 26% $1.8 -7% 43% 23% 24% 21%
Regional Mix
International (incl. MENA) $6.0 -3% 29% N/A N/A N/A N/A N/A N/A
MENA $2.4 -5% 18% N/A N/A N/A N/A N/A N/A
North America $1.7 4% 32% N/A N/A N/A N/A N/A N/A
Segmented *
Well Construction $3.3 1% 36% $672 -1% 73% 21% 21% 16%
Production Systems $2.2 0% 26% $205 -14% 49% 9% 11% 7%
Reservoir Performance $1.5 -3% 24% $242 -14% 52% 16% 18% 13%
Digital & Integration $0.9 -12% 4% $265 -31% -9% 30% 38% 34%
Exhibit 21: SLB Consensus Forward EV/DACF
18.0x $90
16.0x $80
14.0x $70
12.0x $60
Share Price ($/sh)

10.0x $50
8.0x $40
6.0x $30
4.0x $20
2.0x $10
0.0x $0
2018 2019 2020 2021 2022 2023
NBF does not currently provide coverage, a recommendation or opinion on STEP Energy Services
Limited, Liberty Energy Inc., Baker Hughes Company or Schlumberger Limited. The information in this
Research Note is a compilation of publicly available information and is not to be construed otherwise.
15
Industry Note
Appendix 1: OFS Sensitivity Analysis

2023e Valuation Sensitivity Analysis
TCW 5.3x 1.4x
PD 4.8x 1.7x
PSI 5.9x 3.1x
EFX 4.7x 4.0x
4.0x 3.0x 2.0x 1.0x 0.0x -1.0x -2.0x -3.0x

Change in 2023e EV/EBITDA
Activity +5% Activity +10% Activity -5% Activity -10%
Note: Data labels show 2023e EV/EBITDA in the +10% and -10% activity scenarios; Scenarios assume activity and pricing changes by the percentage
indicated
2023e Leverage Sensitivity Analysis
TCW 0.3x -0.3x
PD 2.6x 0.7x
PSI -1.1x -1.5x
EFX 2.6x 2.4x
1.5x 1.0x 0.5x 0.0x -0.5x -1.0x -1.5x

Change in 2023e D/EBITDA
Activity +5% Activity +10% Activity -5% Activity -10%
Note: Data labels show 2023e D/EBITDA in the +10% and -10% activity scenarios; Scenarios assume activity and pricing changes by the percentage
indicated
16
Industry Note
Appendix 2: OFS Majors Comps

OFS Majors Comparables Table
Shares Market Cap Div. Agg. FCF
Company Ticker Price OS (mln) Yield Yield FCF Yield EV/EBITDA Net Debt/EBITDA
2023E 2024E 2023E 2024E 2023E 2024E
OFS Majors
Schlumberger SLB $50.22 1,425 $71,564 2.0% 9.5% 5.6% 7.5% 9.9x 8.4x 1.0x 0.6x
Baker Hughes BKR $30.19 1,012 $30,563 2.6% 7.2% 4.5% 4.7% 10.6x 8.8x 1.0x 0.7x
Halliburton HAL $34.47 903 $31,122 1.9% 10.3% 5.9% 8.4% 7.1x 6.0x 0.9x 0.6x
Average 2.0% 9.5% 5.6% 7.5% 9.9x 8.4x 1.0x 0.6x
17
Industry Note
Appendix 3: EIA DUC Count & Forecasts

EIA US DUC Well Count
9 2.5
DUC Count Total U.S. Rigs
Drilled Uncompleted Wells (Thousands)
Monthly Avg. US Rigs (Thousands)

8 2.0
7 1.5
6 1.0
5 0.5
4 0.0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: NBF, EIA
18
Industry Note
Crude Oil
The relative S/D imbalance remained relatively unchanged in the forecast M/M, however with variance
across the respective forecast years, including; a) Supply contracted through ’23 (-0.2 mmbbl/d; a function
of OPEC cuts offset by mild compensation from non-OPEC), while volumes are then expected to expand in
‘24 (+0.2 mmbbl/d; normalized OPEC and continued non-OPEC growth), and each of which hold higher risk to
the downside (i.e., OPEC management & non-OPEC inventory/efficiency degradation), paired against b) A
static view of consumption (totally unchanged), and again, a continued reflection of the resilience &
inelasticity of consumption to prevailing macro risks. The S/D balance remains relatively well balanced (+0.5
mmbbl/d), and inventories are expected to remain in material deficit through the outlook (-200 mmbbl or -
16% deficit inventory YE23, not expected to rebalance through the outlook), in support of a relatively
constructive price forecast ($77.25/bbl, ~5% premium to strip).
EIA Oil Forecast
EIA Oil Forecasts

2022 2023e 2024e
Actual New Old New Old
World Oil Production (mmbbl/d) 99.8 101.3 101.5 103.2 103.0
OPEC (mmbbl/d) 34.2 33.7 34.1 34.6 34.7
Non-Opec Production (mmbbl/d) 65.7 67.6 67.4 68.6 68.3
U.S. Crude Oil Production (mmbbl/d) 11.9 12.5 12.4 12.7 12.6
World Oil Consumption (mmbbl/d) 99.4 100.9 100.9 102.7 102.7
S/D Imbalance (mmbbl/d) 0.4 0.4 0.6 0.5 0.3
Inventories:
OECD Beginning (mmbbl) 2640 2769 2783 2850 2893
(% avg) % -11% -3% -2% 1% 3%
OECD End (mmbbl) 2769 2850 2893 2920 2930
(% avg) (%) -3% 1% 3% 6% 6%
US Beginning (incl. SPR) (mmbbl) 1792 1594 1585 1600 1636
(% avg) (%) -8% -16% -16% -11% -9%
US End (incl. SPR) (mmbbl) 1594 1600 1636 1613 1669
(% avg) (%) -16% -11% -9% -3% 0%
Spot WTI (US$) $94.79 $79.27 $77.08 $75.25 $71.58
Source: NBF, EIA
19
Industry Note
Natural Gas
The S/D imbalance for natural gas surprisingly contracted M/M (-0.5 Bcf/d through 2024; ~0.5 Bcf/d over-
supplied vs. prior month ~0.9 Bcf/d), which is the product of; a) Near-term revision of consumption (+0.9
Bcf/d ‘23), as a reflection of higher assumed Res/Com demand that previously forecast (previously revised
materially lower to reflect impact of a warm winter), in addition to minor changes elsewhere (Power &
Industrial each slightly higher than anticipated; again inelastic), and b) Largely unchanged supply forecast
(+0.1 Bcf/d; rig count fading), while c) Net exports remain intact (-0.1 Bcf/d), with LNG & Pipe exports
unchanged. The net impact being, an improvement in storage fundamentals (exiting winter at 6% surplus as
opposed to prior 10% view), and ultimately returning to a neutral to deficit balance through next winter
(before pivoting back to surplus at YE24), which should positively support pricing (in a relative sense) over
the next twelve months with prices forecast at ~$3.50/mcf (vs. prior ~$3.60/mcf) that is generally in-line
with strip.
EIA Gas Forecast
EIA Natural Gas Forecasts

2022 2023e 2024e
Actual New Old New Old
Supply (Bcf) 98.1 100.9 100.7 101.6 101.7
Net Exports (Bcf) 10.6 13.4 13.4 14.5 14.6
LNG (Bcf) 10.5 12.0 12.0 12.7 12.7
Pipe (Bcf) 0.1 1.4 1.4 1.9 1.9
Demand (Bcf) 88.6 87.4 86.5 86.1 86.1
Power (Bcf) 33.2 32.6 32.5 31.2 31.5
Industrial (Bcf) 23.2 22.9 22.6 22.2 22.1
Res/Com (Bcf) 23.4 23.0 22.6 23.8 23.5
Other (Bcf) 8.8 8.9 8.9 8.9 8.9
S/D Imbalance (Bcf) -1.1 0.0 0.8 0.9 1.0
Storage:
Beginning (Bcf) 3,210 2,927 2,922 3,095 3,157
(% avg) (%) 4% -10% -10% -2% 0%
End (Bcf) 2,927 3,095 3,157 3,285 3,359
(% avg) (%) -10% -2% 0% 7% 8%
Winter (Bcf) 1,401 1,856 1,926 1,625 1,658
(% avg) (%) -16% 6% 10% -4% -3%
Price ($US/mcf) $6.67 $3.06 $3.14 $3.85 $4.04
Source: NBF, EIA
20
Industry Note
Appendix 4: Commodity, Rig & Frac Forecast Changes

NBF Rig Estimate Changes
Actual Actual Actual Actual 2023 2024
2019 2020 2021 2022 Previous Revised %Chg Previous Revised %Chg
Commodities
Oil
WTI (US$/bbl) $57.00 $39.25 $68.00 $94.43 $80.00 $79.00 -1% $75.00 $75.00 0%
WCS (C$/bbl) $58.10 $35.50 $68.50 $98.81 $83.75 $83.75 0% $83.75 $81.00 -3%
MSW (C$/bbl) $69.05 $45.25 $80.50 $120.12 $103.50 $102.75 -1% $96.75 $97.25 1%
Natural Gas
NYMEX (US$/mcf) $2.55 $2.15 $3.70 $6.52 $4.50 $2.95 -34% $4.50 $3.50 -22%
AECO (C$/mcf) $1.80 $2.25 $3.65 $5.43 $3.90 $3.00 -23% $4.20 $3.40 -19%
Avg. FX (CAD:USD) $0.75 $0.75 $0.80 $0.77 $0.74 $0.74 0% $0.74 $0.74 0%
Rig Count
Canada
Oil 84 45 75 110 115 115 0% 110 110 0%
Gas 51 45 55 65 65 60 -8% 60 55 -8%
Canada Rig Count 135 90 130 175 180 175 -3% 170 165 -3%
Oil directed 62% 50% 58% 63% 64% 66% 3% 65% 67% 3%
US
Oil 774 350 375 575 595 590 -1% 575 575 0%
Gas 169 85 95 145 145 140 -3% 145 135 -7%
US Rig Count 943 435 470 720 740 730 -1% 720 710 -1%
Oil directed 82% 80% 80% 80% 80% 81% 1% 80% 81% 1%
North America
Oil 858 395 450 685 710 705 -1% 685 685 0%
Gas 220 130 150 210 210 200 -5% 205 190 -7%
NA Rig Count 1,078 525 600 895 920 905 -2% 890 875 -2%
Oil directed 80% 75% 75% 77% 77% 78% 1% 77% 78% 2%
Source: NBF, Baker Hughes, Bloomberg
21
Industry Note
NBF Frac Estimate Changes

Actual Actual Actual Actual 2023 2024
2019 2020 2021 2022 Previous Revised %Chg Previous Revised %Chg
Frac Spreads
Canada
FracSpreads / Rigs 16% 14% 14% 14% 16% 15% -2% 16% 16% 0%
Capacity 56 48 42 41 41 41 0% 41 41 0%
Active* 21 13 18 24 28 27 -5% 27 26 -3%
Utlization 38% 26% 42% 59% 69% 66% -5% 66% 64% -3%
US
FracSpreads / Rigs 44% 34% 46% 39% 39% 38% -2% 40% 40% 0%
FracSpreads / Oil Rigs 54% 44% 58% 49% 48% 47% -3% 49% 49% -1%
Capacity 510 456 400 383 389 389 0% 389 389 0%

Active 417 150 221 281 287 278 -3% 283 279 -1%
Utlization 82% 33% 55% 73% 74% 71% -3% 73% 72% -1%
Frac HHP
Canada
Capacity 2.0 1.9 1.9 1.9 1.9 1.9 0% 1.9 1.9 0%
Demand 0.8 0.5 0.8 1.1 1.3 1.2 -5% 1.2 1.2 -3%
Utlization 38% 26% 43% 59% 69% 66% -5% 66% 64% -3%
US
Capacity 22.9 20.5 18.0 17.3 17.5 17.5 0% 17.5 17.5 0%
Demand 18.7 7.0 10.0 12.0 12.9 12.5 -3% 12.7 12.6 -1%
Utlization 82% 34% 56% 70% 74% 71% -3% 73% 72% -1%
* NBF Estimate of active and crewed spreads
22
Industry Note
Appendix 5: Rig Count Detail by Play/Region

U.S. Oil Rig Count U.S. Gas Rig Count
5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 2023
1000 250
900
800 200
U.S. Gas Rig Count

U.S. Oil Rig Count
700
600 150
500
400 100
300
200 50
100
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Last 1Wk 1M 1Y Last 1Wk 1M 1Y
Rigs 591 548 318 492 Rigs 159 143 92 109
% Change 8% 86% 20% % Change 11% 73% 46%
U.S. Total Rig Count U.S. Horizontal Rig Count

5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 2023
1200 1200
1000 1000
U.S. Horizontal Rig Count

Total U.S. Rig Count
800 800
600 600
400 400
200 200
0 0 0
Rigs 750 691 410 601 Rigs 687 636 372 541
% Change 9% 83% 25% % Change 8% 85% 27%
U.S. Land Rig Count U.S. Offshore Rig Count

5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 2023
1800 30
1600
25
U.S. Offshore Rig Count
1400
U.S. Land Rig Count
1200 20
1000
15
800
600 10
400
5
200
0 0
Rigs 730 679 397 583 Rigs 20 12 13 18
% Change 8% 84% 25% % Change 67% 54% 11%
U.S. Frac Spread Count U.S. Frac Spread to Oil Rig Ratio
5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 Last Yr 2023
600 70%
U.S. Frac Spread to Oil Rig Ratio
60%
500
U.S. Active Frac Spreads
50%
400
40%
300
30%
200
20%
100
10%
0 0%
Frac Spreads 290 269 195 254 Frac Spread Ratio 49% 50% 61% 51%
% Change 8% 49% 14% Change -3% -20% -3%
Source: NBF, Bloomberg, Baker Hughes
23
Industry Note
Permian Rig Count Eagle Ford Rig Count

5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 2023
600 100
90
500 80
Eagle Ford Rig Count

Permian Rig Count
70
400
60
300 50
40
200
30
20
100
10
0 0
Rigs 358 356 216 334 Rigs 68 68 32 61
% Change 1% 65% -35% % Change 0% 113% -48%
Williston Rig Count DJ-Niobrara Rig Count

5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 2023
70 40
35
60
DJ-Niobrara Rig Count

30
Williston Rig Count
50
25
40
20
30
15
20
10
10 5
0 0 0
Rigs 41 41 13 36 Rigs 17 17 7 15
% Change 0% 215% -64% % Change 0% 143% -53%
Other U.S. Oil Rig Count Marcellus Rig Count

5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 2023
250 80
70
200
Other U.S. Oil Rig Count
60
Marcellus Rig Count
50
150
40
100 30
20
50
10
0 0
Rigs 89 88 37 91 Rigs 41 41 30 37
% Change 1% 138% -59% % Change 0% 37% -19%
Haynesville Rig Count Other U.S. Gas Rig Count

5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021Last Yr 2023
70 120
60 100
Other U.S. Gas Rig Count
Haynesville Rig Count
50
80
40
60
30
40
20
20
10
0 0
Rigs 64 64 45 67 Rigs 54 52 17 40
% Change 0% 42% -33% % Change 4% 206% -58%
Source: NBF, Bloomberg, Baker Hughes
24
Industry Note
Canada Oil Rig Count Canada Gas Rig Count

5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 2023
250 160
140
200
Canada Gas Rig Count

120
Canada Oil Rig Count
100
150
80
100 60
40
50
20
0 0
Rigs 42 45 86 48 Rigs 63 66 79 53
% Change -7% -51% -13% % Change -5% -20% 19%
Canada Total Rig Count Alberta Rig Count

5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 2023
400 300
350
250
Canada Total Rig Count
300
Alberta Rig Count

200
250
200 150
150
100
100
50
50
0 0 0
Rigs 105 111 165 101 Rigs 82 89 141 87
% Change -5% -36% 4% % Change -8% -42% -6%
Saskatchewan Rig Count British Colombia Rig Count

5 Yr. Range 2018 2019 2020 2021 2023 5 Yr. Range 2018 2019 2020 2021 2023
80 35
70 30
British Columbia Rig Count
Saskatchewan Rig Count
60
25
50
20
40
15
30
20 10
10 5
0 0
Rigs 2 2 6 2 Rigs 20 19 17 11
% Change 0% -67% 0% % Change 5% 18% 82%
Active Rig Contractors - Canada Active Operators - Canada

Rigs Apr 21 Apr 14 w/w∆ w/w ∆% Mar 24 m/m∆ m/m ∆% Last yr y/y∆ y/y ∆% Rigs Apr 21 Apr 14 w/w∆ w/w ∆% Mar 24 m/m∆ m/m ∆% Last Yr y/y∆ y/y ∆%
Precision 34 38 -4 -11% 42 -8 -19% 32 +2 6% Tourmaline 6 8 -2 -25% 14 -8 -57% 6 0 0%

Ensign 23 24 -1 -4% 30 -7 -23% 25 -2 -8% Whitecap 3 3 0 0% 4 -1 -25% 1 +2 200%
Horizon 9 9 0 0% 11 -2 -18% 3 +6 200% ARC 5 7 -2 -29% 7 -2 -29% 8 -3 -38%
Akita 7 6 +1 17% 9 -2 -22% 5 +2 40% CNRL 12 13 -1 -8% 16 -4 -25% 10 +2 20%
Fox 4 4 0 0% 3 +1 33% 4 0 0% Peyto 3 3 0 0% 4 -1 -25% 5 -2 -40%
Savanna 10 12 -2 -17% 15 -5 -33% 10 0 0% Crescent Point 1 1 0 0% 1 0 0% 1 0 0%
CWC Ironhand 0 2 -2 -100% 6 -6 -100% 3 -3 -100% Paramount 4 4 0 0% 3 +1 33% 5 -1 -20%
Tempco 0 0 0 nmf 1 -1 -100% 1 -1 -100% Baytex 1 1 0 0% 1 0 0% 0 +1 nmf
Bonanza 2 2 0 0% 5 -3 -60% 2 0 0% Cenovus 6 7 -1 -14% 6 0 0% 4 +2 50%
Stampede 3 3 0 0% 4 -1 -25% 2 +1 50% Headwater 3 3 0 0% 4 -1 -25% 1 +2 200%
Other 10 9 +1 11% 13 -3 -23% 9 +1 11% Other 58 59 -1 -2% 79 -21 -27% 55 +3 5%
Total 102 109 -7 -6% 139 -37 -27% 96 +6 6% Total 102 109 -7 -6% 139 -37 -27% 96 +6 6%
Source: NBF, Bloomberg, Baker Hughes, Rig Locator
25
Industry Note
ENERFLEX LTD. - EFX
STOCK RATING Sector Perform CURRENT SHARE PRICE $8.08

TARGET PRICE $11.50 52 WK HIGH / LOW $10.10 - $5.10
YIELD 1% MARKET CAP ($mln) $999.8
RETURN TO TARGET 42% ENTERPRISE VALUE ($mln) $2,328.8
KEY DRIVERS GEOGRAPHIC FOOTPRINT

2019 2020 2021 2022 2023E 2024E
Engineered Systems Sales $ mln $1,448.5 $598.6 $354.1 $953.1 $1,418.9 $1,452.9
y/y growth % % 23% -59% -41% 169% 49% 2%
Service Sales $ mln $373.1 $303.3 $327.4 $443.7 $672.1 $688.1
y/y growth % % 8% -19% 8% 36% 51% 2%
Energy Infrastructure Sales $ mln $223.8 $315.2 $278.7 $381.1 $662.4 $678.4
y/y growth % % 27% 41% -12% 37% 74% 2%
Total Revenue $ mln $2,045.4 $1,217.1 $960.2 $1,777.8 $2,753.4 $2,819.3
y/y growth % % 20.1% -40.5% -21.1% 85.2% 54.9% 2.4%
EBITDA $ mln $345.7 $191.3 $140.0 $222.3 $524.1 $581.7

margin % % 16.9% 15.7% 14.6% 12.5% 19.0% 20.6%
FINANCIAL & OPERATING SUMMARY FREE CASH FLOW PROFILE

2019 2020 2021 2022 2023E 2024E 2019 2020 2021 2022 2023E 2024E
Revenue $ mln $2,045.4 $1,217.1 $960.2 $1,777.8 $2,753.4 $2,819.3 Revenue $ mln $2,045.4 $1,217.1 $960.2 $1,777.8 $2,753.4 $2,819.3
COGS $ mln $1,616.3 $918.9 $740.6 $1,455.1 $2,042.8 $2,062.5 EBITDA $ mln $345.7 $191.3 $140.0 $222.3 $524.1 $581.7
Gross Margin $ mln $429.1 $298.2 $219.6 $322.7 $710.6 $756.8 Less: Cash Taxes $ mln $31.7 -$6.9 $13.1 $17.9 $37.2 $45.8
SG&A $ mln $197.2 $182.2 $152.5 $320.4 $418.1 $428.2 Less: Interest $ mln $18.6 $22.5 $17.0 $38.9 $98.5 $91.5
Operating Margin $ mln $231.9 $116.0 $67.0 $2.3 $292.5 $328.6 Add (less) Other: $ mln -$19.5 $14.4 -$1.1 -$96.9 $16.2 $16.2
Add: Depreciation $ mln $86.6 $85.3 $87.6 $128.3 $231.6 $253.1 Cash from Operations $ mln $275.9 $190.1 $108.8 $68.5 $404.5 $460.6
Add: Other $ mln $27.2 -$10.0 -$14.6 $91.7 $0.0 $0.0 Less: Maint Capex $ mln $10.0 $20.0 $15.0 $30.9 $45.0 $20.0
EBITDA $ mln $345.7 $191.3 $140.0 $222.3 $524.1 $581.7 Cash Avbl. for Div/Growth $ mln $265.9 $170.1 $93.8 $37.6 $359.5 $440.6
EBITDA Margin % 17% 16% 15% 13% 19% 21% Less: Growth Capex $ mln $253.4 $113.8 $42.3 $84.9 $195.0 $220.0
Less: M&A/Other $ mln -$13.7 -$4.7 -$4.9 -$149.5 -$10.0 -$10.0
FCF (pre-Dividend) $ mln $26.2 $61.0 $56.4 $102.2 $174.5 $230.6
Less: Dividends $ mln $37.5 $24.2 $7.2 $9.0 $12.4 $12.4
FCF $ mln -$11.4 $36.8 $49.2 $93.2 $162.2 $218.2
Shares Outstanding mln 89.7 89.7 89.7 123.7 123.7 123.7
FCF/sh $/sh -$0.13 $0.41 $0.55 $0.75 $1.31 $1.76
QUARTERLY REVENUE VALUATION & COMPS

(in $C mln) 2019 2020 2021 2022 2023E 2024E 2023E 2024E
10.0x $25
Q1 $484.9 $365.7 $203.2 $323.1 $690.4 $710.0 EV/EBITDA 4.4x 3.7x +/- 1 St. Dev. EV/EBITDA Share Price
Q2 $541.9 $287.4 $204.5 $372.1 $674.8 $690.0 Peers 6.2x 5.7x
Q3 $544.3 $265.0 $231.1 $392.8 $655.6 $670.3 Maint FCF Yield (pre-Div) 36% 44% 8.0x $20
Q4 $474.4 $298.8 $321.3 $689.8 $732.6 $749.0 FCF Yield 16% 22%
Cons. 1Y FWD EV/EBITDA
Annual $2,045.4 $1,217.1 $960.2 $1,777.8 $2,753.4 $2,819.3 Peers -71% -1%
6.0x $15
Share Price
QUARTERLY EBITDA
4.0x $10
(in $C mln) 2019 2020 2021 2022 2023E 2024E Net Debt/EBITDA 2.5x 1.9x
Q1 $66.7 $66.7 $29.6 $38.7 $117.8 $147.4 Peers 2.9x 2.6x
Q2 $83.4 $33.5 $36.1 $44.9 $133.4 $142.7 Dividend Yield 1% 2.0x $5
Q3 $106.5 $38.2 $32.8 $52.5 $130.0 $139.2 Peers 6%
Q4 $89.0 $52.8 $41.5 $86.1 $142.9 $152.4
Annual $345.7 $191.3 $140.0 $222.3 $524.1 $581.7 Target EV/EBITDA 5.5x 4.5x 0.0x $0
2018 2019 2020 2021 2022 2023
Source: Company reports, Bloomberg, Refinitiv, NBF estimates
26
Industry Note
PASON SYSTEMS INC - PSI
RATING Outperform CURRENT SHARE PRICE $11.76

TARGET PRICE $20.00 52 WK HIGH / LOW $16.91 - $11.41
YIELD 4.1% MARKET CAP ($mln) $958.8
TOTAL RETURN 74.1% ENTERPRISE VALUE ($mln) $740.4
KEY DRIVERS GEOGRAPHIC FOOTPRINT

2019 2020 2021 2022 2023E 2024E
N.A. Rev. per Industry Day $ $ 653 $ 684 $ 758 $ 840 $ 853 $ 990
NA Revenue $mln $ 256.7 $ 131.4 $ 166.1 $ 274.6 $ 281.9 $ 317.0

Intl Revenue $mln $ 37.7 $ 21.9 $ 36.5 $ 53.2 $ 62.2 $ 68.4
Solar & Storage Revenue $mln $ 1.2 $ 3.4 $ 4.1 $ 7.2 $ 7.8 $ 8.6
Revenue $mln $ 295.6 $ 156.6 $ 206.7 $ 335.0 $ 351.9 $ 393.9

2019 2020 2021 2022 2023E 2024E 2019 2020 2021 2022 2023E 2024E
Revenue $mln $ 295.6 $ 156.6 $ 206.7 $ 335.0 $ 351.9 $ 393.9 Revenue $mln $ 295.6 $ 156.6 $ 206.7 $ 335.0 $ 351.9 $ 393.9
Op. Expenses $mln $ 105.5 $ 66.7 $ 76.7 $ 109.9 $ 112.1 $ 127.0 EBITDA $mln $ 129.5 $ 39.5 $ 72.5 $ 159.5 $ 168.8 $ 195.9
Gross Margin $mln $ 190.1 $ 89.9 $ 130.0 $ 225.1 $ 239.8 $ 266.9 Less: Cash Taxes $mln $ 15.3 $ 5.3 $ 13.9 $ 32.5 $ 33.6 $ 39.3
as a % of sales % 64% 57% 63% 67% 68% 68% Less: Interest $mln $ - $ - $ - $ - $ - $ -
G&A $mln $ 60.7 $ 50.4 $ 57.5 $ 65.6 $ 71.0 $ 71.0 Less: Other $mln $ 2.5 $ (6.4) $ (9.1) $ (7.9) $ 10.0 $ 10.0
EBITDA $mln $ 129.5 $ 39.5 $ 72.5 $ 159.5 $ 168.8 $ 195.9 CFO $mln $ 111.7 $ 40.6 $ 67.7 $ 134.9 $ 125.2 $ 146.6
EBITDA Margin % 44% 25% 35% 48% 48% 50% Less: Maint. Capex $mln $ 18.0 $ 5.0 $ 10.0 $ 15.0 $ 15.0 $ 15.0
Cash Avbl. for Div/Growth $mln $ 93.7 $ 35.6 $ 57.7 $ 119.9 $ 110.2 $ 131.6
CFPS (b/f W/C chgs) $ $ 1.31 $ 0.48 $ 0.82 $ 1.65 $ 1.54 $ 1.80 Less: Growth Capex $mln $ 6.2 $ 0.7 $ 0.2 $ 19.5 $ 30.0 $ 30.0
Less: M&A/Other $mln $ 32.1 $ 6.5 $ 16.8 $ 57.7 $ - $ -
Dividend $/sh $ 0.74 $ 0.48 $ 0.20 $ 0.36 $ 0.48 $ 0.48 FCF (pre-Dividend) $mln $ 55.5 $ 28.3 $ 40.7 $ 42.7 $ 80.2 $ 101.6
Less: Dividend $mln $ 63.1 $ 40.4 $ 16.6 $ 29.5 $ 39.1 $ 39.1
Net Tangibel BVPS $/sh $ 3.18 $ 2.84 $ 2.88 $ 3.60 $ 4.34 $ 5.29 FCF $mln $ (7.6) $ (12.1) $ 24.1 $ 13.2 $ 41.1 $ 62.5
Shares Outstanding mln 84.5 83.1 82.2 81.5 81.5 81.5
FCF/sh $/sh $ (0.09) $ (0.15) $ 0.29 $ 0.16 $ 0.50 $ 0.77
Net Debt $mln $ (161.0) $ (149.3) $ (158.3) $ (132.1) $ (218.3) $ (273.5)

Net Debt/EBITDA (x) -1.2x -3.8x -2.2x -0.8x -1.3x -1.4x
QUARTERLY EBITDA VALUATION & COMPS
(in $C mln) 2019 2020 2021 2022 2023E 2024E 2023E 2024E
25.0x $25
Q1 $ 40.6 $ 33.3 $ 13.2 $ 33.4 $ 48.2 $ 49.6 EV/EBITDA 4.4x 3.5x
+/- 1 St. Dev. EV/EBITDA Share Price
Q2 $ 30.7 $ (0.8) $ 12.8 $ 31.0 $ 39.3 $ 41.6 Peers 9.9x 7.9x
Q3 $ 31.5 $ (1.1) $ 22.4 $ 46.2 $ 41.1 $ 54.4 Maint FCF Yield (pre-Div) 11% 14%
Q4 $ 26.6 $ 8.2 $ 24.2 $ 48.9 $ 40.2 $ 50.4 FCF Yield 4% 7% 20.0x $20
Annual $ 129.5 $ 39.5 $ 72.5 $ 159.5 $ 168.8 $ 195.9 Peers 9% 16%

U.S. RIG COUNT Net Debt/EBITDA -1.3x -1.4x Cons. 1Y FWD EV/EBITDA
2019 2020 2021 2022 2023E 2024E Peers -1.7x -1.5x 15.0x $15
Share Price
Q1 1045 782 392 632 759 725 Dividend Yield 4%
Q2 989 394 450 713 738 710 Peers 4%
Q3 919 251 497 758 718 693
Q4 818 308 559 773 713 700 Target EV/EBITDA 8.0x 7.0x 10.0x $10
Annual 943 435 470 720 730 710

CANADA RIG COUNT
2019 2020 2021 2022 2023E 2024E 5.0x $5
Q1 185 195 145 198 223 200
Q2 83 25 73 114 112 105
Q3 131 48 150 199 177 172
0.0x $0
Q4 139 89 161 190 183 178 2018 2019 2020 2021 2022 2023
Annual 135 90 130 175 175 165
Source: Company reports, Baker Hughes Rig Count, Refinitiv, NBF estimates, Bloomberg
27
Industry Note
PRECISION DRILLING - PD
STOCK/RISK RATING Outperform Current Share Price $69.96

TARGET PRICE $135.00 52 Week High/Low $114.50 - $36.77
YIELD 0% Market Cap ($ mln) $948.6
TOTAL RETURN 93% Enterprise Value ($ mln) $1,838.1
KEY DRIVERS NORTH AMERICAN FOOTPRINT

calendar year-end 2019 2020 2021 2022 2023e 2024e
Drilling
Average Rigs # 229 226 226 226 226 226
Utilization % 54% 31% 39% 52% 55% 55%
Day Rate $ $ 31,700 $ 33,982 $ 27,042 $ 33,317 $ 38,834 $ 41,453
Revenue $ mln $ 1,399 $ 861 $ 878 $ 1,436 $ 1,755 $ 1,872
Completions & Production

Average Rigs # 137 123 123 120 135 135
Utilization % 30% 18% 28% 39% 35% 35%
Revenue $ mln $ 109 $ 63 $ 95 $ 135 $ 155 $ 155

2019 2020 2021 2022 2023e 2024e (in $C mln, except per share) 2019 2020 2021 2022 2023e 2024e
Canada Revenue $1,541 $935.8 $986.8 $1,617 $1,970 $2,088
Utilization % 34% 27% 40% 52% 53% 51% EBITDA (ex. SBC) $411.4 $285.2 $249.5 $445.3 $643.5 $677.9
Day Rate $ $ 21,569 $ 21,611 $ 21,105 $ 27,037 $ 29,106 $ 31,416 Less: Cash taxes $1.1 $5.3 $3.2 $4.4 $4.7 $5.6
Less: Interest $118.5 $107.5 $91.4 $87.8 $82.4 $71.5
U.S. Add (less): Other $0.8 ($1.7) ($2.6) ($70.1) ($35.0) ($35.0)
Utilization % 71% 32% 38% 54% 58% 58% Cash from Operations $292.7 $170.7 $152.2 $283.0 $521.4 $565.7
Day Rate $ $ 23,397 $ 26,184 $ 21,213 $ 27,393 $ 32,500 $ 34,000 Less: Maintenance capex $39.0 $34.7 $60.4 $120.9 $62.0 $62.0
Cashl avbl. for div./growth $253.7 $136.1 $91.9 $162.0 $459.4 $503.7
International Less: Growth capex/Other $121.7 $26.9 $15.6 $63.3 $173.0 $128.0
Utilization % 66% 52% 46% 46% 50% 62% Free Cash Flow $132.0 $109.2 $76.3 $98.7 $286.4 $375.7
Day Rate $ $ 51,282 $ 54,811 $ 52,836 $ 51,242 $ 55,000 $ 60,000 FCF/shr $0.47 $8.11 $5.74 $7.28 $21.12 $27.71
Revenue $ mln $1,541 $935.8 $986.8 $1,617 $1,970 $2,088 Less: Dividend $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Operating Expenses $ mln $ 1,039 $ 583.4 $ 698.1 $ 1,125 $ 1,231 $ 1,315 Add (less): Change in working capital ($4.5) $55.4 ($13.0) ($45.9) ($79.4) ($2.3)
Gross Profit $ mln $ 502.4 $ 352.3 $ 288.7 $ 492.6 $ 738.5 $ 772.9 Surplus (deficit) $127.5 $164.6 $63.3 $52.9 $207.0 $373.4
Gross Margin (%) % 33% 38% 29% 30% 37% 37% per share $0.45 $12.22 $4.76 $3.90 $15.27 $27.54
SG&A $ mln $ 110.4 $ 87.0 $ 95.9 $ 181.0 $ 130.0 $ 130.0 Shares Outstanding 282.9 13.5 13.3 13.6 13.6 13.6
EBITDA (ex. SBC) $ mln $ 411.4 $ 285.2 $ 249.5 $ 445.3 $ 643.5 $ 677.9
EBITDA Margin % 27% 30% 25% 28% 33% 32% Net Debt $1,352 $1,128 $1,068 $1,067 $889.6 $509.8
SBC $ mln $ 19.5 $ 19.8 $ 56.7 $ 133.7 $ 35.0 $ 35.0 Net Debt/TTM EBITDA 3.3x 4.0x 4.3x 2.4x 1.4x 0.8x
EBITDA $ mln $ 391.9 $ 265.4 $ 192.8 $ 311.6 $ 608.5 $ 642.9 Credit Facility $814 $764 $758 $824 $826 $821
Utilization (incl. letters of credit) 0% 15% 24% 29% 29% 29%
QUARTERLY EBITDA (ex. SBC) FINANCIAL COVENANTS
(in $C mln) 2019 2020 2021 2022 2023e 2024e Threshold 2022e Q1/23e Q2/23e Q3/23e Q4/23e 2024e
Q1 $116.9 $98.6 $65.3 $84.5 $170.1 $190.3 Senior Credit Facility
Q2 $85.1 $67.0 $55.2 $69.1 $128.9 $138.4 Debt to EBITDA <2.5x 0.7x 0.5x 0.5x 0.4x 0.4x 0.4x
Q3 $99.9 $51.3 $58.7 $125.1 $166.3 $165.6 EBITDA to Interest Expense1 >2.25x 3.6x 4.9x 5.5x 6.1x 7.4x 9.0x
Q4 $109.5 $66.3 $70.3 $166.5 $178.2 $183.5 Unsecured Notes
Annual $411.4 $285.2 $249.5 $445.3 $643.5 $677.9 Interest Coverage >2.0x 5.1x 6.0x 6.6x 7.2x 7.8x 9.5x
U.S. RIG COUNT VALUATION & COMPS
2019 2020 2021 2022 2023e 2024e 2023E 2024E 14x $180
+/- 1σ EV/EBITDA Share Px
Q1 1,045 782 378 632 759 725 EV/EBITDA 3.0x 2.3x
$160
Q2 989 394 450 713 738 710 Peers 3.3x 2.5x 12x
Q3 919 251 497 758 718 693 FCF Yield 30% 40% $140
Cons. 1Y FWD EVEBITDA
10x
Q4 818 308 559 773 713 700 Peers 25% 34% $120
Annual 943 435 470 720 730 710
Share Price
8x $100
CANADA RIG COUNT Net Debt/EBITDA 1.4x 0.8x 6x $80

2019 2020 2021 2022 2023e 2024e Peers 1.1x 0.6x $60
Q1 185 195 145 200 225 200 P/TBV 0.7x 4x
$40
Q2 85 25 75 115 110 105 Peers 1.2x
2x
Q3 130 45 150 200 175 170 ROCE 13% $20
Q4 140 90 160 190 185 180 Peers 13% 0x $0

Annual 135 90 130 175 175 165 2017 2018 2019 2020 2021 2022 2023
Source: NBF, Company Reports, Baker Hughes, Bloomberg, Refinitiv
28
Industry Note
Trican Well Services - TCW
STOCK/RISK RATING Outperform Current Share Price $3.23

TARGET PRICE $6.75 52 Week High/Low $4.78 - $2.69
YIELD 5.0% Market Cap ($ mln) $689.3
TOTAL RETURN 109% Enterprise Value ($ mln) $663.2
KEY DRIVERS ASSET FOOTPRINT

Calendar year-end 2019 2020 2021 2022 2023e 2024e
Canada
Average Active HHP # 334,500 219,250 222,325 373,975 393,364 406,929
Revenue/HHP $/HHP 2,333 2,380 2,573 2,600 2,592 2,581
Revenue Mix
Frac % 71% 73% 75% 75% 74% 74%
Cementing % 16% 17% 16% 17% 15% 15%
Coiled tubing % 7% 9% 8% 8% 10% 10%
Other % 16% 18% 7% 4% 6% 7%
Share Count (mln) # 271.5 255.7 247.0 229.8 213.4 197.1
FINANCIAL SUMMARY FREE CASH FLOW PROFILE

(in $C mln, except shares) 2019 2020 2021 2022 2023e 2024e (in $C mln, except per share) 2019 2020 2021 2022 2023e 2024e
Revenue $655.1 $397.0 $562.5 $866.3 $982.5 $996.8 Revenue $655.1 $397.0 $562.5 $866.3 $982.5 $996.8
EBITDA $30.6 $30.6 $101.6 $188.5 $241.5 $245.5
Less: Cash taxes ($32.7) ($31.5) ($0.1) $28.7 $35.8 $37.2
Operating Expenses $577.3 $331.2 $434.9 $639.2 $701.0 $711.3 Less: Interest $4.7 $3.3 $2.0 $2.6 $3.4 $3.4
Gross Profit $77.8 $65.9 $127.6 $227.1 $281.5 $285.5 Less: Other ($32.0) ($38.5) $2.8 $31.0 $6.1 $6.1
Gross Margin (%) 12% 17% 23% 26% 29% 29% Cash from Operations $26.6 $20.3 $102.5 $188.3 $208.4 $211.0
Less: Maintenance capex $30.0 $15.5 $20.0 $30.0 $40.0 $40.0
SG&A $45.1 $44.3 $28.2 $39.8 $40.0 $40.0 Cashl avbl. for div./growth ($3.4) $4.8 $82.5 $158.3 $168.4 $171.0
EBITDA $30.6 $30.6 $101.6 $188.5 $241.5 $245.5 Less: Growth capex $3.2 ($2.7) $33.9 $73.7 $73.8 $65.0
EBITDA Margin (%) 5% 8% 18% 22% 25% 25% Free Cash Flow ($6.7) $7.5 $48.6 $84.7 $94.6 $106.0
FCF/sh ($0.02) $0.03 $0.20 $0.37 $0.44 $0.54
Less: Dividend $0.0 $0.0 $0.0 $0.0 ($35.5) ($32.8)
Add (less): Change in working capital $2.1 $50.5 ($28.4) ($36.0) ($1.3) ($1.5)
Surplus (deficit) ($4.6) $58.0 $20.2 $48.6 $128.8 $137.3
QUARTERLY EBITDA per share ($0.02) $0.23 $0.08 $0.21 $0.60 $0.70
(in $C mln) 2019 2020 2021 2022 2023e 2024e Shares Outstanding 271.5 255.7 247.0 229.8 213.4 197.1
Q1 $26.3 $24.8 $27.3 $38.9 $77.3 $82.9
Q2 ($14.3) ($6.8) $14.2 $19.2 $26.0 $20.2 Net Debt $39.0 ($22.6) ($29.5) ($28.3) ($26.2) ($37.8)
Q3 $4.0 ($2.6) $32.1 $70.9 $75.2 $77.5 Net Debt/TTM EBITDA nmf -0.7x -0.3x -0.2x -0.1x -0.2x
Q4 $14.6 $15.2 $28.0 $59.4 $62.9 $64.9 Credit Facility $175.0 $227.3 $275.0 $275.0 $125.0 $125.0
Annual $30.6 $30.6 $101.6 $188.5 $241.5 $245.5 Utilization 80% 18% 17% 17% 0% 0%
FINANCIAL COVENANTS VALUATION & COMPS

2022e Q1/23e Q2/23e Q3/23e Q4/23e 2024e 2023e 2024e 30x $6
Leverage Ratio Max 3.5x 3.5x 3.5x 3.5x 3.5x 3.5x EV/EBITDA 2.7x 2.4x
NBF Estimate nmf nmf 0.0x 0.1x nmf nmf Peers 2.6x 1.9x 25x $5
FCF Yield 14% 17%
Cons. 1Y FWD EVEBITDA
Interest Coverage Min 2.5x 2.5x 2.5x 2.5x 2.5x 2.5x Peers 18% 32% 20x $4
NBF Estimate 73.3x 73.7x 72.1x 67.4x 71.4x 72.6x Net Debt/EBITDA -0.1x -0.2x
Share Price
Peers 0.2x -0.2x 15x $3
CANADA RIG COUNT P/TBV 1.4x

10x $2
2019 2020 2021 2022 2023e 2024e Peers 1.5x
Q1 185 195 145 200 225 200 ROCE 26%
5x $1
Q2 85 25 75 115 110 105 Peers 27%
Q3 130 50 150 200 175 170 EV/HHP $1,250 +/- 1σ EV/EBITDA Share Px
0x $0
Q4 140 90 160 190 185 180 Peers $600 2017 2018 2019 2020 2021 2022 2023
Annual 135 90 130 175 175 165
Source: NBF, Company Reports, Baker Hughes, Bloomberg, Refinitiv
29
Industry Note
Disclosures
PRICE, RATING AND TARGET HISTORY: I = Initiation, OP = Outperform, SP = Sector Perform, UP = Underperform, UR = Under Review, R = Restricted; T = Tender (Source: Factset, NBF)
Precision Drilling Corporation Rating History as of 04/24/2023

OP:$1.00 SP:$1.15 SP:$1.15 SP:$23.00 SP:$30.00 SP:$32.50 OP:$40.00 SP:$32.50 OP:$40.00 OP:$55.00 OP:$65.00 OP:$80.00
04/30/2020 07/05/2020 10/22/2020 11/13/2020 01/05/2021 02/18/2021 04/14/2021 04/14/2021 04/22/2021 06/16/2021 10/21/2021 02/10/2022
120
100
80
60
Price (CAD)
40
20
0
Jul 20 Oct 20 Jan 21 Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23
OP:$120.00 OP:$135.00
04/24/2022 10/27/2022
Closing Price
Trican Well Service Ltd. Rating History as of 04/24/2023

SP:$0.90 SP:$1.00 NA SP:$1.50 SP:$2.00 SP:$2.25 SP:$2.75 SP:$3.25 SP:$3.50 SP:$4.00 OP:$6.25 SP:$4.00
07/23/2020 07/31/2020 10/21/2020 11/06/2020 01/05/2021 02/18/2021 05/13/2021 06/16/2021 07/28/2021 10/27/2021 04/24/2022 04/24/2022
5
Price (CAD)
2
0
OP:$6.25 OP:$6.75
04/25/2022 11/10/2022
Closing Price
National Energy Services Reunited Corp. Rating History as of 04/24/2023

OP:$13.00 OP:$12.00 OP:$14.00 OP:$17.50 OP:$13.50 SP:$10.00 UR:NA
05/06/2020 05/06/2020 02/18/2021 06/16/2021 03/15/2022 04/24/2022 08/19/2022
16
14
12
10
Price (USD)
8
6
4
Closing Price
30
Industry Note
Enerflex Ltd. Rating History as of 04/24/2023

OP:$8.50 OP:$8.00 OP:$10.00 OP:$10.50 OP:$12.50 SP:$10.75 OP:$10.75 SP:$10.75 SP:$11.50
08/07/2020 11/06/2020 01/14/2021 02/25/2021 10/17/2021 11/05/2021 02/03/2022 01/30/2023 03/02/2023
12
11
10
9
8
Price (CAD)
7
6
5
4
Closing Price
Pason Systems Inc. Rating History as of 04/24/2023

OP:$10.00 SP:$10.00 SP:$8.50 SP:$7.50 OP:$10.50 OP:$11.00 SP:$11.00 SP:$12.25 SP:$14.50 SP:$15.25 SP:$19.00 SP:$20.00
04/30/2020 06/14/2020 08/06/2020 10/27/2020 01/14/2021 02/25/2021 06/23/2021 11/03/2021 01/09/2022 02/23/2022 04/25/2022 11/03/2022
18
16
14
12
10
Price (CAD)
8
6
4
Closing Price
RISKS:
PD / PDS
Commodity Prices: With the majority of its business tied to the growth of the oil and gas industry, PD will be a cyclical stock that trades to some degree with the demand for commodities.
Industry Overcapacity: Industry overcapacity due to low levels of activity can result in an oversupply of drilling equipment and idle rigs and crews.
Labour Shortage: PD can periodically experience challenges in attracting qualified workers to staff its assets. This could result in some of the company’s fleet sitting idle.
TCW
Commodity Prices: Demand, pricing and terms for Trican services depend significantly upon the level of expenditures made by oil and gas companies, which are directly related to the demand for,
and price of oil and gas.
Seasonality: Trican operations in Canada are susceptible to weather volatility, as heavy rains, warmer winters and typical “spring break-up” weather can limit access to well sites.
Regulatory: Trican is subject to stringent environmental laws and regulations, some of which may provide for strict liability for damages to natural resources or threats to public health or safety.
31
Industry Note
NESR
Commodity Prices: Demand for NESR services is sensitive to the level of exploration, development, production activity and capital spending by oil and natural gas companies. The level of these
activities is directly affected by trends in oil and natural gas prices, which historically have been volatile and are likely to continue to be volatile.
Political: NESR operates in multiple countries across the Middle East, North Africa and Asia, exposing operations in these countries to political and economic instability and risk of government
actions that could have a material adverse effect on business operations and financial conditions.
Tax/Regulatory: NESR has operations in more than 15 countries, requiring compliance with the respective tax authorities of each jurisdiction. The income earned in each jurisdiction is subject to
taxation on differing bases.
EFX
Commodity Prices: Periods of prolonged or substantial declines in commodity prices may lead to reduced levels of capital expenditures by E&P and midstream companies, which may negatively
impact the demand for Enerflex products and services.
Regulatory: As an oil and gas service company, Enerflex is subject to compliance with health, safety and environmental laws and regulations, and also complies with a number of federal, provincial,
state, local and foreign environmental laws.
Seasonality: Demand for natural gas fluctuates with heating and electric power requirements caused by the changing seasons in North America, which in turn impacts demand for Enerflex’s
products and services.
PSI
Drilling Technology Advancements: The evolution of the land drilling rig creates both a risk and potential opportunity for Pason as certain products become less relevant but different
instrumentation and communication needs emerge. Not keeping pace with drilling advancements could lead to product obsolescence.
Commodity Prices: PSI’s share price has historically been highly correlated to WTI prices. Not surprising given the Company’s large share of the North American drilling market, equity valuation has
been linked to continental crude prices.
Competition: PSI’s primary competitor has the financial capacity to significantly outspend PSI in developing new products and services, as well as allocate a larger budget to sales and marketing,
increasing Pason’s risk of losing market share.
ADDITIONAL COMPANY RELATED DISCLOSURES

Enerflex Ltd. 2, 3, 5, 6, 7
National Energy Services Reunited Corp.
Pason Systems Inc.
Precision Drilling Corporation 2, 3, 5, 7, 177
Trican Well Service Ltd. 10
LEGEND FOR COMPANY RELATED DISCLOSURES:
2 National Bank Financial Inc. has acted as an underwriter with respect to this issuer within the past 12 months.
3 National Bank Financial Inc. has provided investment banking services for this issuer within the past 12 months.
4 National Bank Financial Inc. or an affiliate has managed or co-managed a public offering of securities with respect to this issuer within the past 12 months.
5 National Bank Financial Inc. or an affiliate has received compensation for investment banking services from this issuer within the past 12 months.
6 National Bank Financial Inc. or an affiliate has a non-investment banking services related relationship during the past 12 months.
7 The issuer is a client, or was a client, of National Bank Financial Inc. or an affiliate within the past 12 months.
8 National Bank Financial Inc. or its affiliates expects to receive or intends to seek compensation for investment banking services from this issuer in the next 3 months.
9 As of the end of the month immediately preceding the date of publication of this research report (or the end of the second most recent month if the publication date is less than 10 calendar days
after the end of the most recent month), National Bank Financial Inc. or an affiliate beneficially own 1% or more of any class of common equity securities of this issuer.
10 National Bank Financial Inc. makes a market in the securities of this issuer, at the time of this report publication.
11 A partner, director, officer or research analyst involved in the preparation of this report has, during the preceding 12 months provided services to this issuer for remuneration other than normal
course investment advisory or trade execution services.
12 A research analyst, associate or any other person (or a member of their household) directly involved in preparing this report has a financial interest in the securities of this issuer.
13 A partner, director, officer, employee or agent of National Bank Financial Inc., is an officer, director, employee of, or serves in any advisory capacity to the issuer.
14 A member of the Board of Directors of National Bank Financial Inc. is also a member of the Board of Directors or is an officer of this issuer.
15 A redacted draft version of this report has been shown to the issuer for fact checking purposes and changes may have been made to the report before publication.
177 An NBF analyst attended a tour of the Nisku Drilling Support Center in Nisku, Alberta on October 3, 2022. A portion of the analyst's expenses were paid for by the issuer.
32
Industry Note
RATING DISTRIBUTION
Outperform Sector Perform Underperform
Coverage Universe Ratings Distribution 61% 36% 0%
Investment Banking Distribution 63% 52% 66%
DISCLOSURES
Ratings And What They Mean: PRIMARY STOCK RATING: NBF has a three-tiered rating system that is relative to the coverage universe of the particular analyst. Here is a brief description of
each: Outperform (OP) – The stock is expected to outperform the analyst’s coverage universe over the next 12 months; Sector Perform (SP) – The stock is projected to perform in line with the sector
over the next 12 months; Underperform (UP) – The stock is expected to underperform the sector over the next 12 months. SECONDARY STOCK RATING: Under Review (UR) − Our analyst has
withdrawn the rating because of insufficient information and is awaiting more information and/or clarification; Tender (T) − Our analyst is recommending that investors tender to a specific offering for
the company’s stock; Restricted (R) − Because of ongoing investment banking transactions or because of other circumstances, NBF policy and/or laws or regulations preclude our analyst from rating
a company’s stock. INDUSTRY RATING: NBF has an Industry Weighting system that reflects the view of our Economics & Strategy Group, using its sector rotation strategy. The three-tiered system
rates industries as Overweight, Market Weight and Underweight, depending on the sector’s projected performance against broader market averages over the next 12 months. RISK RATING: As of
June 30, 2020, National Bank Financial discontinued its Below Average, Average and Above Average risk ratings. We continue to use the Speculative risk rating which reflects higher financial and/or
operational risk.
GENERAL: This Report was prepared by National Bank Financial Inc. (NBF), a Canadian investment dealer, a dealer member of IIROC and an indirect wholly owned subsidiary of National Bank of
Canada. National Bank of Canada is a public company listed on the Toronto Stock Exchange.
The particulars contained herein were obtained from sources which we believe to be reliable but are not guaranteed by us and may be incomplete and may be subject to change without notice.
The information is current as of the date of this document. Neither the author nor NBF assumes any obligation to update the information or advise on further developments relating to the topics
or securities discussed. The opinions expressed are based upon the author(s) analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell
the securities mentioned herein, and nothing in this Report constitutes a representation that any investment strategy or recommendation contained herein is suitable or appropriate to a recipient’s
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This Report is for distribution only under such circumstances as may be permitted by applicable law. This Report is not directed at you if NBF or any affiliate distributing this Report is prohibited or
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RESEARCH ANALYSTS: The Research Analyst(s) who prepared these reports certify that their respective report accurately reflects his or her personal opinion and that no part of his/her
compensation was, is, or will be directly or indirectly related to the specific recommendations or views as to the securities or companies.
NBF compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of NBF including Institutional Equity Sales and
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CANADIAN RESIDENTS: NBF or its affiliates may engage in any trading strategies described herein for their own account or on a discretionary basis on behalf of certain clients and, as market
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NBF or its affiliates often act as financial advisor, agent, lender or underwriter or provides trading related services for certain issuers mentioned herein and may receive remuneration for its services.
As well, NBF and its affiliates and/or their officers, directors, representatives, associates, may have a position in the securities mentioned herein and may make purchases and/or sales of these
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and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
In respect of the distribution of this Report to UK residents, NBF has approved the contents (including, where necessary, for the purposes of Section 21(1) of the Financial Services and Markets Act
2000). This Report is for information purposes only and does not constitute a personal recommendation, or investment, legal or tax advice.
33
Industry Note
NBF makes no representation as to the proper characterization of the investments for legal, regulatory or tax purposes, or as to the ability of a particular investor to invest or transact in the
investments under applicable legal restrictions.
If securities are offered by an issuer in a foreign jurisdiction, or the security is structured through a foreign special-purpose-vehicle, or you purchase securities that are issued by foreign issuers, your
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34
Industry Note
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NBCFM Research | Industry Note

April 24, 2023

INDUSTRY RATING Oilfield Services

OFS Majors Summary & Coverage Read-Through

Analyst Dan Payne, CFA

Associate Nick Stevenson, P.Eng, CFA

1. Decelerating performance necessitates returns through high-efficiency & entrenched

b. This remains supportive of cyclically low valuations across the sector.

Exhibit 1: OFS Majors Average Q/Q Revenue & EBITDA Growth

Note: Dashed lines represent consensus; Source: NBF, Refinitiv

Upstream Perspective, Commodity & Activity Forecast

Exhibit 2: NBF E&P Calculated Breakeven Pricing (2023e)

Source: NBF, Company Reports

OFS Impact & Outcome

Exhibit 3: NBF Commodity Price Assumption Changes

Exhibit 4: NBF Commodity Price Assumptions vs. Strip Pricing

NBF Price Deck Strip Pricing as of April 20, 2023

Source: NBF, Bloomberg

Coverage Read-Through & Previews

Exhibit 5: Summary of NBF Estimate Changes

Source: NBF, Company Reports

Exhibit 6: EFX Estimates; NBF vs. Consensus

Exhibit 7: EFX Peer Comparables

Source: NBF, Company Reports, Refinitiv

Exhibit 8: EFX Consensus Forward EV/EBITDA

Share Price ($/sh)

Exhibit 9: PSI Estimates; NBF vs. Consensus

Exhibit 10: PSI Peer Comparables

Source: NBF, Company Reports, Refinitiv

Exhibit 11: PSI Consensus Forward EV/EBITDA

Share Price ($/sh)

Exhibit 12: PD Estimates; NBF vs. Consensus

Exhibit 13: PD Peer Comparables

Exhibit 14: PD Consensus Forward EV/EBITDA

Share Price ($/sh)

Exhibit 15: TCW Estimates; NBF vs. Consensus

Exhibit 16: TCW Peer Comparables

Source: NBF, Company Reports, Refinitiv

Exhibit 17: TCW Consensus Forward EV/EBITDA

Share Price ($/sh)

+/- 1 St. Dev. (EV/EBITDA) EV/EBITDA Share Price

OFS Majors Snapshots

Oilfield Services (OFS) & Oilfield Equipment (OFE):

North American OFS:

Exhibit 18: BKR Q1/23 Financial Results Overview

North America $1 5% 20% N/A N/A N/A N/A N/A N/A

Exhibit 19: BKR Consensus Forward EV/DACF

Share Price ($/sh)

Exhibit 20: SLB Q1/23 Financial Results Overview

Exhibit 21: SLB Consensus Forward EV/DACF

Share Price ($/sh)

Appendix 1: OFS Sensitivity Analysis

TCW 5.3x 1.4x

PSI 5.9x 3.1x

EFX 4.7x 4.0x

4.0x 3.0x 2.0x 1.0x 0.0x -1.0x -2.0x -3.0x

Activity +5% Activity +10% Activity -5% Activity -10%

2023e Leverage Sensitivity Analysis

TCW 0.3x -0.3x

PSI -1.1x -1.5x

EFX 2.6x 2.4x

1.5x 1.0x 0.5x 0.0x -0.5x -1.0x -1.5x

Activity +5% Activity +10% Activity -5% Activity -10%