Essential Energy Services : Investor Presentation - Peters & Co. Winter Energy Conference

Peters & Co. Winter Energy Conference

Garnet Amundson, President & CEO

January 17, 2023

Essential Energy Services

• Leading Canadian market position in two service lines:

• • Coiled Tubing (Essential Coil Well Service (ECWS)):
  • • Strong market share in the deep coiled tubing market
    • 215 employees
  • Downhole Tools (Tryton):
  • • Estimated #1 market share in Canadian conventional tools
    • Established market presence in Canadian multi-stage completion tools
    • 95 employees
• Skilled workforce (330 employees); ongoing recruiting in a tight labor market
• Navigated multiple downturns and growth cycles with proven expertise in cost control - valuable during this inflationary period
• Financial stability: $5 million long-term debt, net of cash(a); $50 million working capital(a) (Sep 30/22)

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(a) See Non-IFRS and Other Financial Measures

Valuation Metrics

TSX: ESN	Jan 11/23
Market capitalization	$50 million
Long-term debt, net of cash (Sep 30/22)(1)(a)	$5 million
Enterprise value(2)(a)	$55 million
Working capital (Sep 30/22)(a)	$50 million
Valuation metrics:
EV/2023 EBITDAS(3)(a)	1.7x
Price/book(4)	0.4x

1. 1. Lease liabilities under IFRS 16 are excluded from long-term debt
   2. Jan 11/23 market capitalization plus Sep 30/22 long-term debt, net of cash
   3. Enterprise value divided by Jan 11/23 analyst estimate for 2023 EBITDAS(a) of $32 million; there is one analyst that covers Essential
   4. Jan 11/23 share price divided by Sep 30/22 book value of shareholders' equity per share
2. See Non-IFRS and Other Financial Measures

Low valuation relative to peer average and industry outlook

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Financial Stability - After 7+ Years of Downturn

	$10
	$0
	-$10
	-$20
$ millions	-$30
-$40

-$50

-$60

Q3/22 Q4/21 Q4/20 Q4/19 Q4/18 Q4/17 Q4/16 Q4/15 Q4/14

Cash(1)

Long-term debt(2)

1. 1. Cash, net of long-term debt (a)
   2. Long-termdebt, net of cash (a)
2. See Non-IFRS and Other Financial Measures

At Sep 30/22:

• $5 million long-term debt, net of cash(a)
• Prudent cost management and strategic decisions through the downturn
• Recent return to long-term debt reflects accounts receivable build

Credit Facility:

• $25MM revolving credit facility matures Nov/24

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Alignment with Shareholders

• ESG: Environmental, Social, Governance - a priority

• • "We care about the safety of each other and our environment" - part of our culture statement
  • Working on inaugural ESG Report
• Share buyback program
• Insider share ownership: 3%
• Board and executive increased equity exposure through the downturn:
• • Insider equity alignment: Since 2015, insider investment position (shares plus deferred share units (DSUs)) increased significantly as a portion of cash compensation was replaced with DSUs and restricted share units (RSUs)
  • DSUs are a long-termcommitment; cannot be exercised until the individual leaves Essential
  • RSUs and DSUs are non-dilutive(settle with cash)

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