SECURE INVESTOR PRESENTATION
August 2011
www.secure-energy.ca TSX: SES
HISTORY
• Secure’s first facility opened October 2007.
• Over 400 employees in the field and head office.
• Secure’s network has grown to 12 operating facilities in
Western Canada. Largest drilling fluid service company in
Western Canada.
• Raised $86 million of equity (May 2011).
• Closed the acquisition of Marquis Alliance June 1, 2011 for
$131 million. Closed the acquisition of XL Fluid Systems July
1, 2011 for $37 million.
• Current Market Cap value approx. $750 million Cdn.
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EXECUTIVE TEAM
Rene Amirault, President and Chief Executive Officer 29 years experience IOL, CCS, Consultant
Nick Wieler, C.F.O. 20 years experience IOL, Newalta, CCS
George Wadsworth, President Drilling Services Division 17 years experience Marquis founder, M.I. Swaco
Karen Myrheim, V.P. Sales & Marketing
24 years experience CCS, Enerland, Triumph EPCM
Gary Perras, V.P. Operations 15 years experience Sask Energy, CCS
Dan Steinke, V.P. Business Development 25 years experience Koch, CCS, SCF Partners
Allen Gransch V.P. Finance 10 years experience Price Waterhouse Coopers
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BOARD OF DIRECTORS
Rene Amirault President & CEO of Secure Energy Services Inc.
Murray Cobbe (Lead Director) Executive Chairman of Trican Well Service Ltd.
Dave Johnson Chairman of Progress Energy Resources Corp.
Brad Munro Former CCS lead director, Director of Galleon, 49 North Resource Fund, Winalta.
Kevin Nugent C.A. Former CEO of NQL Energy Services Inc., Director of Savanna & Trican
George Wadsworth
President of Marquis Alliance (Drilling Services Division of Secure)
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SECURE VALUE CHAIN
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•Drill cuttings to Landfill •Drill mud to FST •Recycling of hydrocarbon drilling mud •MA & XL services
•Completion waste to FST •Waste water to FST and SWD •Recycling of frac water •Frac water supply and storage
•Treating and terminaling of crude oil •Produced water •Slop oil and tank bottoms •Pipeline spills •Plant maintenance
•Fluids and cement •Contaminated soil to landfill •Environmental services
•Swabbing •De-waxing •Acidization •Re-completion fluids
FOX CREEK FULL SERVICE TERMINAL (FST)
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KEY SERVICES
Crude Oil Treatment
Crude Oil Marketing and Storage
Produced and Waste Water Disposal
Oilfield Waste Processing
Oilfield Solids Disposal
DAWSON PHASE I & II FST FACILITY
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[Dawson Creek]
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Phase I: Produced and Waste
Water Disposal (SWD)
Phase II: Oil Treatment and Waste
Processing (FST)
PEMBINA AREA CLASS I & II LANDFILL (“PAL”)
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SECURE FACILITIES
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1. LA GLACE
2. FOX CREEK
3. DAWSON
4. KOTCHO
5. NOSEHILL
6. OBED
7. SOUTH GP
8. DRAYTON (Q3/2011)
9. EMERSON
10. BRAZEAU
11. WILD RIVER (Q4/2011)
12. SOUTH GP
13. WILLESDEN GREEN
14. PEMBINA
FULL SERVICE
TERMINALS
STAND ALONE WATER
DISPOSAL FACILITIES
LANDFILLS
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Marquis Alliance offers clients environmental services and solids control to compliment its drilling fluids business
Marquis Alliance Energy Group (“MA”) provides
a specialized and integrated service offering to
upstream E&P companies, comprised of three
core segments:
• Drilling Fluids (82% of MA revenue)
• Environmental Services (13% of MA revenue)
• Solids Control (5% of MA revenue)
Focusing on leading resource plays in the
Canadian WCB and Northern US markets
Innovative and patented technologies leveraged
to medium/deep and horizontal drilling activity
which provide higher revenues and margins
MARQUIS ALLIANCE – DRILLING SERVICES DIVISION
DRILLING FLUID RECYCLING SYNERGIES IDENTIFIED
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OBM Blended at Facility
OBM used to drill well
OBM
Waste Generated
OBM waste delivered to SES
facility
SES facility processes and treats waste
Oil can be recovered from
multiple sources:
Cuttings sent to landfill
Slop oil/water, tank
bottoms, frac oils, etc.
“Spent” Oil based muds
OBM blending facilities will be an
extension of FST
Recycle 80% of oil based mud
hydrocarbon in 4 years
Integrated Process for Oil Based Mud
(“OBM”)
MA & XL ACQUISITION STRATEGY
• Corporate culture, management teams aligned for growth
• Recycled drilling fluids at FSTs
• New blending facilities at strategic FSTs to reduce trucking costs
• Improve waste handling at the drill site
• Enhanced environmental stewardship to our combined customers
• Provide full cycle “cradle to grave” customer solutions
• Accretive to Secure shareholders
• Balance sheet remains strong
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WESTERN CANADA PRODUCING OIL & GAS WELLS
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0
50,000
100,000
150,000
200,000
250,000
Crude Oil Natural Gas
Source: Canadian Association of Petroleum Producers (CAPP)
WCSB OIL & GAS WELL WATER PRODUCTION
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Water produced from Gas Wells (cubic metres/month)
Water produced from Oil Wells (cubic metres/day)
Source: IHS Accumap
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2011 ESTIMATED REVENUE MARKET SHARE
7%7%
22%
3%
14%
54%
2011 Est. Revenue $1.5 Billion
Secure
CCS
Other
Newalta
Producers
Western Canadian Conventional Oil and Gas By-Products
“Increased outsourcing” “Maturing basin = volumes growing”
Source: Internal estimates
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WESTERN CANADIAN DRILLING ACTIVITY
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-12.5%
0.0%
12.5%
25.0%
37.5%
50.0%
62.5%
75.0%
-
5,000
10,000
15,000
20,000
25,000
30,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 2011
Total Wells Completed Total Metres Drilled (000s metres) Hz/Directional Wells as % of all Wells Drilled
Sources: Daily Oil Bulletin
BUSINESS STRATEGY
Exploit the value chain from cradle to grave, with a
focus on environmental and recycling services:
• Complimentary services at FSTs (ie. drilling mud blending/recycling plants, environmental consulting)
• Recycling services (ie. frac water and storage, oil based mud)
• Organic growth in key under serviced and capacity constrained markets (ie. Drayton and Dawson)
• Acquisitions that compliment existing network (ie. Marquis Alliance / XL and Pembina Landfill)
• Acquire surplus assets and facilities from producers
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LATEST DEVELOPMENTS
• Expanded unconventional liquids rich gas services in Obed through FST expansion in Q1, 2011.
• Expanded Cardium exposure with the completion of the Brazeau (West Drayton) Disposal Well facility in Q2, 2011.
• South Grande Prairie FST expansion completed July, 2011.
• Drayton FST construction started and forecasted to be operational in Oct., 2011.
• Acquired Marquis Alliance for $131 million and raised $86 million of equity June 1, 2011.
• Acquired XL Fluid Systems Inc. on July 1, 2011 for $37 million.
• Approved credit facility for $150 million August, 2011.
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JUNE 30, 2011 BALANCE SHEET ($MMs)
Current Assets $93.6 Cash, A/R, Inventory, Prepaid
Assets $150.1 Plant & Equipment
$ 41.3 Assets under construction
$114.8 Other (Intangible, goodwill, FIT)
Total Assets $399.8
Liabilities $ 59.3 A/P, Current debt & leases
$ 2.0 Lease Obligations (non-current)
$ 10.7 Asset Retirement Obligations
$ 15.5 Deferred taxes
$ 1.7 Long Term Debt
Shareholders' Equity $310.6
Total Liabilities/Equity $399.8
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SECURE’S CONSISTENT ANNUAL GROWTH
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-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2007 2008 2009 2010
($ M
illio
ns)
EBITDA Revenue
Figures exclude oil purchase and resale
SECURE’S STRONG Q2 & YTD PERFORMANCE
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0.0
10.0
20.0
30.0
40.0
50.0
Q2 Revenue H1 Revenue Q2 EBITDA H1 EBITDA
($ M
illio
ns)
2010 2011
Figures exclude oil purchase and resale
BORROWING CAPACITY
Syndicated Credit Facility*
Loan Facility Max. $150 million plus $50 million accordion
Prime plus 1.25% to 2.5%**
**(rate is based on Funded Debt to EBITDA level, adjusted quarterly)
Multi-use Facility Operating, letters of credit, Capex,
Acquisitions
Renewal July 2014
Major Covenants Debt to T-12 EBITDA: < 3.0 to 1.0
* ATB, BMO, NB, HSBC, BNS, CWB
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2011 CAPITAL PLANS ($MMs)
Projects/Acquisitions for 2011
Organic
Carry over from 2010 $34.0
Facility expansion 36.0
Drilling rental equipment 10.0
New Opportunities (under evaluation) – 2011/12 15.0
Organic $95.0
Acquisitions
Marquis Alliance $132.0
XL Fluids 37.0
Acquisitions $169.0
Total 2011 Capital Budget $264.0
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SUMMARY
• Revenue growth will come from competitors, producers outsourcing and the market expansion
• Environmental Recycling services to complement existing facility base
• Value Added Services through acquisitions of Marquis Alliance & XL Fluids
• Facility growth will come from mostly organic built facilities and timely acquisitions
• Strong Balance Sheet to expand accretive opportunities
• Employer of choice based on leadership, corporate values and team culture
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FORWARD LOOKING STATEMENTS
• Certain statements contained in this presentation regarding 2011 construction plans, capital expenditures, future facilities and expansions of services constitute "forward-looking statements". Such statements reflect the current views of Secure with respect to future events and are subject to certain risks, uncertainties and assumptions, including, without limitation, general market conditions, commodity prices, interest rates and exchange rates, seasonality of operations, growth, acquisition strategy, integration of businesses into Secure's operations, potential liabilities from acquisitions, dependence on senior management, regulation, landfill operations, competition, risk of pending and future legal proceedings, employees, labour unions, fuel costs, access to industry and technology, insurance, future capital needs, debt service and sales of additional common shares.
• Many other factors could also cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements and readers are cautioned that the foregoing list of factors is not exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from the projections described herein. The forward-looking statements in this presentation are expressly qualified by this cautionary statement. Secure does not undertake any obligation to update or revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
• The forward-looking statements in this document are provided for the limited purpose of enabling potential
investors to evaluate an investment in the shares of Secure. Readers are cautioned that such statements
may not be appropriate, and should not be used, for other purposes.
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