Trican Reports Second Quarter Results for 2013

Trican Reports Second Quarter Results for 2013 
CALGARY, ALBERTA -- (Marketwired) -- 07/30/13 -- Trican Well Service
Ltd. (TSX:TCW) - 


 
                                 -------------------------------------------
                                   Three months ended       Six months ended
($ millions, except per share     June 30,   June 30,   June 30,    June 30,
 amounts; unaudited)                  2013       2012       2013        2012
----------------------------------------------------------------------------
Revenue                          $   396.6  $   418.0  $ 1,015.0  $  1,134.3
Operating income /                                                          
 (loss) (i)                          (14.8)     (28.3)      71.4       133.6
Profit / (loss)                      (56.4)     (50.9)     (31.2)       38.5
Earnings / (loss) per                                                       
 share                 (basic)   $   (0.38) $   (0.35) $   (0.21) $     0.26
                       (diluted) $   (0.38) $   (0.35) $   (0.21) $     0.26
Adjusted profit /                                                           
 (loss) (i)                          (50.4)     (48.6)     (23.0)       43.7
Adjusted profit /                                                           
 (loss) per share(i)   (basic)   $   (0.34) $   (0.33) $   (0.15) $     0.30
                       (diluted) $   (0.34) $   (0.33) $   (0.15) $     0.30
Funds provided by /                                                         
 (used in)                                                                  
 operations(i)                       (29.1)     (43.6)      28.9        97.5
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Notes:                                                                      
(i) Trican makes reference to operating income/(loss), adjusted             
    profit/(loss) and funds provided by/(used in) operations. These are     
    measures that are not recognized under International Financial Reporting
    Standards (IFRS). Management believes that, in addition to net          
    income/(loss), operating income/(loss), adjusted profit/(loss) and funds
    provided by/(used in) operations are useful supplemental measures.      
    Operating income/(loss) provides investors with an indication of net    
    income/(loss) before depreciation and amortization, foreign exchange    
    gains and losses, other income, finance costs and income tax expense.   
    Adjusted profit/(loss) provides investors with information on net       
    income/(loss) excluding one-time non-cash charges and the non-cash      
    effect of stock-based compensation expense. Funds provided by/(used in) 
    operations provide investors with an indication of cash available for   
    capital commitments, debt repayments and other expenditures. Investors  
    should be cautioned that operating income/(loss), adjusted              
    profit/(loss), and funds provided by/(used in) operations should not be 
    construed as an alternative to net income/(loss) and cash provided/(used
    in) operations determined in accordance with IFRS as an indicator of    
    Trican's performance. Trican's method of calculating operating          
    income/(loss), adjusted profit/(loss) and funds provided by/(used in)   
    operations may differ from that of other companies and accordingly may  
    not be comparable to measures used by other companies.                  

 
SECOND QUARTER HIGHLIGHTS 
Consolidated revenue for the second quarter of 2013 was $396.6
million, a decrease of 5% compared to the second quarter of 2012. The
adjusted consolidated net loss was $50.4 million compared to $48.6
million, and adjusted diluted loss per share was $0.34 compared to
$0.33 for the same period in 2012. Adjusted loss per share for the
second quarter of 2013 excludes a goodwill impairment write-down of
$4.1 million relating to our Australia operations and $1.9 million in
non-cash stock-based compensation expense. Funds used in operations
were $29.1 million compared to $43.6 million in the second quarter of
2012.  
Our Canadian operations generated quarterly revenue of $116.1 million
and an operating loss of $12.8 million during the second quarter of
2013. Canadian revenue decreased by 17% and operating income
decreased by 1030 basis points compared to the second quarter of
2012. The second quarter in Canada is typically impacted by spring
break-up conditions; however, spring break-up extended later into the
quarter during 2013. Operating conditions were also negatively
impacted by increased rainfall throughout much of western Canada
during the second quarter. The adverse weather conditions led to a
decrease in second quarter industry activity levels compared to the
second quarter of 2012. Despite the weak quarterly results in Canada,
we expect strong demand for our services in Canada throughout the
second half of 2013 and we expect to recover most of the second
quarter activity that was lost due to weather. 
Our U.S. operations generated second quarter revenue of $201.5
million, a decrease of 4% compared to the first quarter of 2013.
Second quarter activity levels in the U.S. were relatively stable
compared to the first quarter of 2013 as the U.S. rig count remained
virtually unchanged. Our U.S. operating margins decreased by 430
basis points sequentially, as pricing declines were partially offset
by further progress made on cost-cutting initiatives. Pricing
decreased on a sequential basis by 8%, due largely to the renewal of
three fracturing contracts late in the first quarter where pricing
was adjusted down to reflect current market pricing. Activity levels
and utilization remained strong in the Marcellus during the second
quarter, and in response to this strong demand, we deployed a third
full time fracturing crew in this region late in the second quarter.
We have also deployed a fourth fracturing crew, relocated from an
existing region, early in July as we expect customer demand in this
region to remain strong for the balance of 2013. Our fracturing
contract in the Haynesville expired near the end of the second
quarter and we were unable to renew this contract with our customer
at acceptable prices. We are currently looking to replace this work
in the Haynesville but will also consider redeploying this equipment
into a more active region, if necessary. 
Second quarter revenue for our International operations was $79.0
million and the operating income was $3.6 million. Our Russian
operations comprise the majority of our International results, and
revenue was up year-over-year in this region as an increase in
horizontal drilling and completions activity led to increased
customer demand in Russia. Despite the revenue increases, second
quarter results in Russia were slightly below expectations due to
continued customer delays. In addition, operating margins are down
year-over-year in Russia as pricing increases obtained in the 2013
work tenders have been more than offset by cost inflation. We believe
third quarter activity levels will be strong in Russia and continue
to expect Russian revenue to increase by 15-20% relative to 2012,
with modest improvements in operating margins. 
MANAGEMENT'S DISCUSSION AND ANALYSIS 


 
COMPARATIVE QUARTERLY INCOME STATEMENTS ($ thousands, unaudited)            
----------------------------------------------------------------------------
                   
                                                         
                                                          Quarter-          
                                                             Over-          
Three months ended              % of               % of    Quarter       %  
 June 30,             2013   Revenue      2012  Revenue     Change  Change  
----------------------------------------------------------------------------
                                                                            
Revenue            396,607       100%  417,975    100.0%   (21,368)     (5%)
Expenses                                                                    
  Materials and                                                             
   operating       384,069      96.8%  426,468    102.0%   (42,399)    (10%)
  General and                                                               
   administrative   27,352       6.9%   19,762      4.7%     7,590      38% 
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Operating                                                                   
 income/(loss)(i)  (14,814)     (3.7%) (28,255)    (6.8%)   13,441     (48%)
  Finance costs      8,554       2.2%    7,395      1.8%     1,159      16% 
  Depreciation and                                                          
   amortization     50,613      12.8%   38,171      9.1%    12,442      33% 
  Goodwill                                                                  
   impairment        4,123       1.0%        -        -      4,123       -  
  Foreign exchange                                                          
   (gain)/loss)     (1,510)     (0.4%)   2,914      0.7%    (4,424)   (152%)
  Other income      (1,454)     (0.4%)    (736)    (0.2%)     (718)     98% 
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Loss before income                                                          
 taxes             (75,140)    (18.9%) (75,999)   (18.2%)      859      (1%)
Income tax                                                                  
 recovery          (18,751)     (4.7%) (25,139)    (6.0%)    6,388      25% 
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Net loss           (56,389)    (14.2%) (50,860)    12.2%    (5,529)     11% 
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(i) see first page of this report                                           

 
CANADIAN OPERATIONS  


 
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($ thousands, except revenue per job, unaudited)                            
                                                                            
Three months      June 30,     % of   June 30,     % of   March 31,    % of 
 ended,               2013  Revenue       2012  Revenue        2013 Revenue 
----------------------------------------------------------------------------
Revenue            116,061             140,178              338,649         
Expenses                                                                    
  Materials and                                                             
   operating       121,446    104.6%   136,127     97.1%    241,473    71.3%
  General and                                                               
   administrative    7,443      6.4%     5,222      3.7%      7,376     2.2%
                  ----------          ----------          ----------        
  Total expenses   128,889    111.1%   141,349    100.8%    248,849    73.5%
Operating                                                                   
 income/(loss)(i)  (12,828)   (11.1%)   (1,171)    (0.8%)    89,800    26.5%
Number of jobs       3,096               3,334                6,955         
Revenue per job     37,046              41,959               48,280         
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(i) see first page of this report                                           

 
Sales Mix 


 
----------------------------------------------------------------------------
Three months ended, (unaudited)            June 30,    June 30,   March 31, 
                                               2013        2012        2013 
----------------------------------------------------------------------------
% of Total Revenue                                                          
Fracturing                                       61%         57%         64%
Cementing                                        14%         18%         20%
Industrial Services                               9%          3%          1%
Nitrogen                                          5%          8%          7%
Coiled Tubing                                     4%          6%          4%
Other                                             4%          3%          1%
Acidizing                                         3%          5%          3%
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Total                                           100%        100%        100%
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Operations Review  
Second quarter Canadian activity levels were weak due to spring
break-up conditions that led to road bans and road weight
restrictions throughout most of the quarter. The wet weather in the
second quarter was more severe and prolonged in Canada than in
previous years, which was reflected in the drilling activity levels.
Second quarter Canadian rig count was down 11% and the number of
wells drilled was down 13% compared to the same period in 2012. These
lower activity levels had a negative impact on all of our pressure
pumping service lines in Canada. 
Overall pricing for our Canadian operations decreased by 10%
sequentially, and 26% compared to the second quarter of 2012. We
typically see pricing weakness in the second quarter due to low
activity levels, which caused a portion of the second quarter pricing
drop. In addition, pricing levels weakened due to competitive
Canadian market conditions as an increase in available pressure
pumping equipment in Canada compared to 2012 has led to pricing
decreases over the past several quarters.  
We continued to integrate i-TEC's completion tools into our Canadian
operations. With the low Canadian activity levels during the second
quarter, i-TEC's Canadian operations did not have a meaningful impact
on our overall financial results. We will continue to focus on
establishing a market presence for i-TEC and our Canadian completion
tools division throughout the remainder of 2013. 
Q2 2013 versus Q2 2012 
Canadian revenue for the second quarter of 2013 decreased by 17%
compared to the second quarter of 2012. Revenue per job decreased by
12% as the 26% reduction in pricing was partially offset by an
increase in fracturing revenue relative to total revenue. In
addition, we continued to see an increase in fracturing job sizes in
Canada, which also offset the pricing reduction. The job count
decreased by 7% b
ecause of the year-over-year decrease in overall
Canadian activity levels. 
Materials and operating expenses increased to 104.6% of revenue
compared to 97.1% for the same period in 2012. We are expecting
strong Canadian activity levels in the third quarter of 2013, and we
maintained our Canadian staffing levels, infrastructure and equipment
in order to be well positioned to capitalize on the expected increase
in activity. Consequently, we were unable to make any substantial
reductions to our fixed cost structure in Canada during the second
quarter, which had a negative impact on operating margins.  
General and administrative expenses increased by $2.2 million due
largely to higher share-based employee expenses. 
Q2 2013 versus Q1 2013 
Canadian revenue for the second quarter of 2013 decreased by 66%
compared to the first quarter of 2013. The job count decreased by
55%, which compared to the 57% sequential drop in the Canadian rig
count during the quarter. Revenue per job decreased by 23% due to the
10% decrease in price combined with a change in service line mix. Due
to the low volume of pressure pumping work combined with a strong
quarter for our Canadian industrial services group, industrial
services revenue was substantially higher as a percentage of total
revenue. Industrial services jobs are generally lower revenue
compared to our pressure pumping service lines. 
As a percentage of revenue, materials and operating expenses
increased to 104.6% compared to 71.3% in the first quarter of 2013.
Lower activity levels led to reduced operating leverage on our cost
structure, which contributed to most of the operating margin
decrease. Operating margins were also negatively impacted by the
price reduction. General and administrative costs for the second
quarter were relatively consistent with the first quarter of 2013.  
UNITED STATES OPERATIONS  


 
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($ thousands, except revenue per job, unaudited)                            
                                                                            
Three months       June 30,     % of  June 30,     % of   March 31,    % of 
 ended,                2013  Revenue      2012  Revenue        2013 Revenue 
----------------------------------------------------------------------------
Revenue             201,538            206,777              210,685         
Expenses(i)                                                                 
  Materials and                                                             
   operating        186,795     92.7%  224,084    108.4%    186,213    88.4%
  General and                                                               
   administrative     6,246      3.1%    4,825      2.3%      6,483     3.1%
                  ----------          ----------          ----------        
  Total expenses    193,041     95.8%  228,909    110.7%    192,696    91.5%
Operating income                                                            
 (loss)(ii)           8,497      4.2%  (22,132)   (10.7%)    17,989     8.5%
Number of jobs        2,208              1,915                2,035         
Revenue per job      92,096            108,394              103,696         
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(i) certain prior period expenses have been reclassified from materials and 
operating to general and administrative to conform to current period        
classification                                                              
(ii) see first page of this report                                          

 
Sales Mix 


 
----------------------------------------------------------------------------
Three months ended, (unaudited)            June 30,    June 30,   March 31, 
                                               2013        2012        2013 
----------------------------------------------------------------------------
% of Total Revenue                                                          
Fracturing                                       90%         92%         92%
Cementing                                         7%          4%          6%
Coil Tubing                                       3%          4%          2%
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Total                                           100%        100%        100%
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Operations Review 
Overall U.S. activity levels were flat sequentially, as the average
U.S. rig count for the second quarter of 2013 was relatively
consistent with the first quarter. Trican's U.S. equipment
utilization in the second quarter was also unchanged on a sequential
basis. We continued to see strong utilization from our fracturing
crews operating in the Eagle Ford and Marcellus plays. In response to
the strong demand in the Marcellus, we deployed an additional
fracturing crew in this region near the end of the second quarter,
resulting in a total of three crews operating in the Marcellus
region. Conversely, overall activity levels were flat in the Permian
and down in the Bakken and Oklahoma, as these areas remained very
competitive and over-supplied with fracturing equipment throughout
the second quarter. Flooding and wet weather in the Bakken and
tornados in Oklahoma also had a negative impact on activity levels in
these regions during the second quarter. As a result, Trican's
equipment utilization levels did not increase sequentially in the
Permian, Bakken and Oklahoma regions.  
Fracturing contracts in the Haynesville and Barnett expired during
the second quarter of 2013. The contract in the Barnett was extended
and utilization for this crew was stable throughout the quarter. The
Haynesville contract expired near the end of the second quarter and
we were unable to renew this contract at acceptable prices. We are
currently looking to replace this work in the Haynesville, but will
also consider redeploying this equipment into a more active region,
if necessary.  
Second quarter U.S. pricing decreased by 8% compared to the first
quarter of 2013. The majority of the decrease was due to the renewal
of three fracturing contracts late in the first quarter where pricing
was adjusted down to reflect current market pricing. In addition,
spot market pricing decreased slightly in the Permian, Oklahoma and
Bakken plays on a sequential basis. We continued to implement
cost-cutting measures in the second quarter of 2013 and made
additional progress in reducing product, transportation and logistics
costs. The progress made on cost-cutting initiatives helped to offset
the impact of lower pricing during the quarter. 
We continued to see growth in our U.S. cementing service line during
the second quarter of 2013. Cementing revenu
e increased by 25%
sequentially, and by 57% year-over-year as we continue to see good
customer acceptance of our U.S. cementing business. The U.S. coiled
tubing market remained very competitive during the second quarter and
as a result, we did not see any growth in this service line during
the quarter.  
We are pleased with the progress made by our U.S. completion tools
division during the second quarter of 2013. We are seeing good
customer acceptance of our i-TEC tools in the U.S. and saw a
substantial increase in sequential revenue for this U.S. division. We
will continue to focus on building the market presence and customer
base for i-TEC and our U.S. completion tools division throughout the
remainder of 2013.  
Q2 2013 versus Q2 2012 
U.S. revenue in the second quarter of 2013 was down 3% compared to
the second quarter of 2012. Revenue per job decreased by 15% due to
pricing reductions, a smaller proportion of fracturing revenue
relative to total revenue, and a decrease in fracturing job sizes.
The job count increased by 15% due largely to increased cementing
activity combined with higher utilization for our Marcellus and Eagle
Ford fracturing crews, which was offset slightly by lower activity in
the Haynesville and Oklahoma regions. 
As a percentage of revenue, materials and operating expenses
decreased to 92.7% from 108.4%. Cost reductions for guar and product
transportation and logistics contributed to a majority of the
decrease. These factors were offset partially by a decrease in our
pricing. General and administrative costs increased by $1.4 million
due largely to increased share-based compensation. 
Q2 2013 versus Q1 2013 
On a sequential basis, U.S. revenue decreased by 4%. Revenue per job
decreased by 11% due to an 8% drop in price and a smaller proportion
of fracturing revenue relative to total revenue. The job count
increased by 9% due primarily to increased activity in the Marcellus
combined with higher cementing activity. These increases were offset
partially by decreased utilization in the Haynesville and Oklahoma
regions. 
Materials and operating expenses increased to 92.7% from 88.4% as a
percentage of revenue due to the 8% decrease in price that led to
reduced operating leverage on our cost structure. This factor was
partially offset by continued progress made on reducing product
transportation and logistics costs. General and administrative costs
were down slightly as increased share-based expenses were offset by
lower administrative salary costs. 
INTERNATIONAL OPERATIONS 


 
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($ thousands, except revenue per job, unaudited)                            
                                                                            
Three months       June 30,    % of   June 30,    % of  March 31,     % of  
 ended,                2013 Revenue       2012 Revenue       2013  Revenue  
----------------------------------------------------------------------------
Revenue              79,007             71,020             70,111           
Expenses                                                                    
  Materials and                                                             
   operating         70,723    89.5%    60,523    85.2%    68,384     97.5% 
  General and                                                               
   administrative     4,637     5.9%     2,985     4.2%     3,848      5.5% 
                  ----------         ----------         -----------         
  Total expenses     75,360    95.4%    63,508    89.4%    72,232    103.0% 
Operating (loss)                                                            
 income(i)            3,647     4.6%     7,512    10.6%    (2,121)    (3.0%)
Number of jobs          962              1,057                914           
Revenue per job      76,235             62,506             73,249           
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(i) see first page of this report                                           

 
Sales Mix 


 
----------------------------------------------------------------------------
Three months ended, (unaudited)            June 30,    June 30,   March 31, 
                                               2013        2012        2012 
----------------------------------------------------------------------------
% of Total Revenue                                                          
Fracturing                                       83%         76%         84%
Coiled Tubing                                     8%         13%          8%
Cementing                                         5%          8%          5%
Nitrogen                                          2%          2%          2%
Other                                             2%          1%          1%
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Total                                           100%        100%        100%
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Operations Review 
Our International operations include the financial results for
operations in Russia, Kazakhstan, Algeria, Australia, Saudi Arabia,
Colombia and Norway. 
Our Russian operations comprise the majority of our International
results and activity levels in Russia were slightly below
expectations during the second quarter of 2013. Several of our
Russian customers' work programs were slightly behind schedule, which
contributed to the lower than expected revenue.  
Second quarter financial results were strong in Kazakhstan for our
two fracturing crews operating in the region and remained relatively
consistent with the first quarter of 2013.  
Financial results in Algeria have weakened year-over-year and are
also down slightly, sequentially, due to a decrease in cementing
activity for Trican in the region. We continue to see strong
operating margins from our coiled tubing operations in Algeria but
gains from the coiled tubing service line were more than offset by
losses for our cementing service line during the second quarter. In
response to the weak cementing activity in Algeria, we parked two
cement units during the second quarter and are currently focused on
growing our coiled tubing business in the region.  
Cementing and environmental services activity increased sequentially,
for our Australian operations and we are seeing improvement in this
market. However, the Australian market has been slow to develop and
is behind our initial activity level expectations for this region. We
still believe that the Australian market has good growth potential
and are committed to maintaining our presence in the region. 
The i-TEC International division is based in Norway and we are
continuing to integrate this division into our International
operations. We are seeing good customer acceptance of the i-TEC tools
in Russia and we will continue to focus on building i-TEC's market
presence in this region.  
We are continuing to participate in tenders in Saudi Arabia and
Colombia but did not perform any work in these regions during the
second quarter of 2013. 
Q2 2013 versus Q2 2012 
Second quarter revenue in 2013 for our International operations
increased by 11% compared to the second quarter of 2012. Revenue per
job increased by 22% due primarily to an increase in fracturing
revenue relative to total revenue, an increase in fracturing job
size, and a slight increase in Russian pricing. The increase in
horizontal completions and multi-stage fracturing for our Russian
operations led to an increase in fracturing job size. The job count
decreased by 9% due largely to a year-over-year decrease in coiled
tubing and cementing activity for our Russian operations. 
As a percentage of revenue, materials and operating expenses
increased to 89.5% from 85.2% compared to the second quarter of 2012.
Operating margins were negatively impacted by higher product costs in
Russia as well as operating losses in Algeria. General and
administrative costs increased by $1.7 million due largely to an
increase in share-based employee costs in Russia. 
Q2 2013 versus Q1 2013 
International revenue increased by 13% sequentially, due to increases
in both the job count and revenue per job. The job count increased by
5% due to increased activity in Russia for all our major service
lines. Increased activity in Russia was largely due to seasonal
improvements as the first quarter was impacted by cold weather.
Increased cementing activity in Australia also contributed to the job
count increase. Revenue per job increased by 4% due primarily to an
increase in fracturing revenue relative to total revenue. 
Materials and operating expenses decreased to 89.5% compared to 97.5%
in the first quarter of 2013 due largely to increased operational
leverage on 
our fixed cost structure in Russia. The improvements in
Russia were partially offset by operating losses in Algeria. General
and administrative costs are up $0.8 million due to increased
share-based expenses.  
CORPORATE  


 
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($ thousands,                                                               
 unaudited)                                                                 
Three months      June 30,     % of  June 30,     % of  March 31,     % of  
 ended,               2013  Revenue      2012  Revenue       2013  Revenue  
----------------------------------------------------------------------------
Expenses                                                                    
  Materials and                                                             
   operating         5,413      1.4%    4,895      1.2%     6,663      1.4% 
  General and                                                               
   administrative    9,026      2.3%    7,569      1.8%    12,987      2.7% 
                  ----------         ----------         -----------         
  Total expenses    14,439      3.6%   12,464      3.0%    19,650      4.1% 
Operating loss(i)  (14,439)           (12,464)            (19,650)          
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(i) see first page of this report                                           

 
Q2 2013 versus Q2 2012 
Corporate expenses for the second quarter of 2013 increased by $2.0
million compared to the second quarter of 2012 due largely to an
increase in share-based expenses. 
Q2 2013 versus Q1 2013 
Sequentially, corporate expenses decreased by $5.2 million due to
decreases in profit sharing and share-based expenses. 
OTHER EXPENSES AND INCOME 
Finance costs for the second quarter of 2013 decreased by $1.2
million compared to the same period in 2012. Depreciation and
amortization increased by $12.4 million compared to the same period
last year due to capital additions related to our capital expansion
program. 
Foreign exchange gains of $1.5 million have been recorded for the
quarter ended June 30, 2013, compared to losses of $2.9 million for
the same period in 2012. This change is due to the net impact of
fluctuations in the U.S. dollar and the Russian ruble relative to the
Canadian dollar. Other income, for the second quarter of 2013 was
$1.4 million compared to $0.7 million in the same period of 2012.
Other income is mainly comprised of interest income earned on cash
balances and gains on asset sales. 
During the three months ended June 30, 2013, due to slower than
anticipated growth in the region, Trican identified impairment
indicators for the goodwill balance related to the Australian
operations. As a result of the analysis performed, Trican concluded
that the recoverable value of the continuing Australian operations
was less than its carrying amount, and a goodwill impairment charge
of $6.4 million was recorded. Somewhat offsetting the goodwill
impairment is a gain of $2.3 million recognized through the reversal
of the performance-based contingency payment owed to the former
owners of the Australian entity. Trican continues to believe in the
viability of the Australian market and will continue to focus on
growing our presence in the region. 
INCOME TAXES 
Trican recorded an income tax recovery of $18.8 million for the three
months ended June 30 2013, versus a recovery of $25.1 million for the
same period of 2012. The decrease in the tax recovery is primarily
attributable to a larger taxable loss in Canada and smaller taxable
loss in the U.S. compared to the second quarter of 2012. Canada has a
lower corporate tax rate compared to the U.S.  


 
COMPARATIVE YEAR-TO-DATE INCOME STATEMENTS ($ thousands, unaudited)         
----------------------------------------------------------------------------
                                                                            
                                                          Quarter-          
                                                             Over-          
Six months ended               % of                % of    Quarter      %   
 June 30,              2013 Revenue        2012 Revenue     Change Change   
----------------------------------------------------------------------------
                                                                            
Revenue           1,014,983     100%  1,134,331   100.0%  (119,348)   (11%) 
Expenses                                                                    
 Materials and                                                              
  operating         886,094    87.3%    954,013   102.0%   (67,919)    (7%) 
 General and                                                                
  administrative     57,539     5.7%     46,727     4.7%    10,812     23%  
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Operating                                                                   
 income(i)           71,350     7.0%    133,590    (6.8%)  (62,241)   (47%) 
 Finance costs       16,535     1.6%     14,428     1.8%     2,107     15%  
 Depreciation and                                                           
  amortization       97,672     9.6%     74,003     9.1%    23,669     32%  
 Goodwill                                                                   
  impairment, net     4,123     0.4%          -     0.0%     4,123    100%  
 Foreign exchange                                                           
  (gain)/loss        (3,236)   (0.3%)     2,222     0.7%    (5,458)  (246%) 
 Other income        (3,524)   (0.3%)    (2,082)   (0.2%)   (1,442)    69%  
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Income/(loss)                                                               
 before income                                                              
 taxes              (40,221)   (4.0%)    45,019   (18.2%)  (81,118)  (180%) 
Income tax                                                                  
 expense/                                                                   
 (recovery)          (9,024)   (0.9%)     6,497    (6.0%)  (15,521)  (239%) 
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Net Income/(loss)   (31,197)   (3.1%)    38,675    12.2%   (69,643)  (181%) 
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(i) see first page of this report                                           

 
CANADIAN OPERATIONS  


 
----------------------------------------------------------------------------
($ thousands, except                                               Period-  
 revenue per job,                                                    Over-  
 unaudited)              June 30,     % of   June 30,     % of      Period  
Six months ended,            2013  Revenue       2012  Revenue      Change  
----------------------------------------------------------------------------
Revenue                   454,774             573,289                  (21%)
Expenses                                                                    
  Materials and                                                             
   operating              362,919     79.8%   402,092     70.1%        (10%)
  General and                                                               
   administrative          14,312      3.1%    13,358      2.3%          7% 
                        ----------          ----------          ------------
  Total expenses          377,231     82.9%   415,450     72.5%         (9%)
Operating income(i)        77,543     17.1%   157,839     27.5%        (51%)
Number of jobs             10,051              10,487                   (4%)
Revenue per 
job            44,819              54,384                  (18%)
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(i) see first page of this report                                           

 
Canadian revenue for the six months ended June 30, 2013, was 21%
lower than the same period in 2012. Revenue per job decreased by 18%
as the 23% year-to-date decrease in pricing was offset partially by
larger fracturing jobs performed in 2013 compared to 2012. The job
count was also down 4% due to lower Canadian activity levels as rig
count was down 11% for the first six months of 2013 compared to 2012. 
As a percentage of revenue, materials and operating expenses
increased to 79.8% from 70.1% compared to the same period in 2012.
Lower pricing and activity levels resulted in lower operating
leverage on our cost structure, which caused the decrease in
operating margins. General and administrative expenses increased by
$1.0 million as an increase in share-based costs was offset by a
decrease in profit sharing expenses.  
UNITED STATES OPERATIONS  


 
----------------------------------------------------------------------------
($ thousands, except                                               Period-  
 revenue per job,                                                    Over-  
 unaudited)            June 30,      % of  June 30,      % of       Period  
Six months ended,          2013   Revenue      2012   Revenue       Change  
----------------------------------------------------------------------------
Revenue                 412,223             425,313                     (3%)
Expenses(i)                                                                 
  Materials and                                                             
   operating            373,008      90.5%  416,254      97.9%         (10%)
  General and                                                               
   administrative        12,729       3.1%    9,487       2.2%          34% 
                      ----------           ----------           ------------
  Total expenses        385,738      93.6%  425,741     100.1%          (9%)
Operating                                                                   
 income/(loss)(ii)       26,486       6.4%     (428)     (0.1%)      6,088% 
Number of jobs            4,243               3,595                     18% 
Revenue per job          97,660             118,724                    (18%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) certain prior period expenses have been reclassified from materials     
and operating to general and administrative to conform to current period    
classification                                                              
(ii) see first page of this report                                          

 
U.S. revenue for the first six months of 2013 decreased by 3%
compared to the first six months of 2012. Revenue per job decreased
by 18% due to an 8% drop in pricing, a decrease in fracturing revenue
relative to total revenue, and smaller fracturing job sizes
performed. Job count increased by 18% due to an increase in cementing
activity combined with higher utilization in the Marcellus and Eagle
Ford. These increases were offset partially by decreased utilization
for our fracturing crews in the Haynesville and Oklahoma regions. 
As a percentage of revenue, materials and operating expenses
decreased to 90.5% from 97.9%. Cost reductions for guar and product
transportation and logistics led to an increase in operating margins.
These cost reductions were offset partially by reduced pricing.
General and administrative costs increased by $3.2 million due to
increased share-based, profit sharing and U.S. head office expenses.  
INTERNATIONAL OPERATIONS 


 
----------------------------------------------------------------------------
($ thousands, except                                               Period-  
 revenue per job,                                                    Over-  
 unaudited)            June 30,      % of   June 30,      % of      Period  
Six months ended,          2013   Revenue       2012   Revenue      Change  
----------------------------------------------------------------------------
Revenue                 149,118              135,729                    10% 
Expenses                                                                    
  Materials and                                                             
   operating            139,107      93.3%   121,825      89.8%         14% 
  General and                                                               
   administrative         8,485       5.7%     6,680       4.9%         27% 
                      ----------           ----------           ------------
  Total expenses        147,592      99.0%   128,505      94.7%         15% 
Operating income(i)       1,526       1.0%     7,224       5.3%        (79%)
Number of jobs            1,876                1,999                        
Revenue per job          76,235               63,415                    20% 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) see first page of this report                                           

 
Year-to-date International revenue is up 10% compared to the same
period in 2012. Revenue per job has increased by 20% due to an
increase in fracturing revenue relative to total revenue, an increase
in fracturing job size, and a slight increase in Russian pricing. The
job count has decreased by 6% due to a decrease in cementing and
coiled tubing in Russia.  
Materials and operating expenses increased to 93.3% of revenue
compared to 89.8% of revenue in the same period in 2012. An increase
in Russian product costs as well as operating losses in Algeria
contributed to the year-over-year decrease in operating margins.
General and administrative costs increased by $1.8 million due
largely to an increase in share-based employee expenses. 
CORPORATE  


 
----------------------------------------------------------------------------
($ thousands,                                                       Period- 
 unaudited)           June 30,       % of  June 30,       % of  Over-Period 
Six months ended,         2013    Revenue      2012    Revenue       Change 
----------------------------------------------------------------------------
Expenses                                                                    
  Materials and                                                             
   operating            12,076        1.2%   11,304        1.0%           7%
  General and                                                               
   administrative       22,013        2.2%   19,740        1.7%          12%
                      ----------           ----------           ------------
  Total expenses        34,089        3.4%   31,044        2.7%          10%
Operating loss(i)      (34,089)             (31,044)                     10%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) see first page of this report                                           

 
Corporate costs are up $3.0 million for the first six months of 2013
compared to the same period in 2012. Increased share-based expenses
account for the majority of the increase.  
OTHER EXPENSES AND INCOME 
For the six months ended June 30, 2013, finance costs increased by
$2.1 million compared to the same period in 2012 due to increased
debt balances. Depreciation and amortization increased by $23.7
million compared to the same period last year due to capital
additions related to our capital expansion program. 
Fore
ign exchange gains of $3.2 million have been recorded for the six
months ended June 30, 2013, compared to losses of $2.2 million for
the same period in 2012. This change is due to the net impact of
fluctuations in the U.S. dollar and the Russian ruble relative to the
Canadian dollar. Year-to-date other income was $3.5 million compared
to $2.1 million for the same period of 2012. Other income is largely
comprised of gains on asset sales and interest income on cash
balances.  
INCOME TAXES 
Trican recorded an income tax recovery of $9.0 million for the six
months ended June 30, 2013, versus and expense of $6.5 million for
the same period of 2012. The decrease in tax expense is primarily
attributable to lower earnings. 
LIQUIDITY AND CAPITAL RESOURCES 
Operating Activities 
Funds used in operations decreased to $33.1 million for the second
quarter of 2013 compared to $49.1 million for the same period in
2012. The decrease was due largely to less taxes paid during the
quarter. 
At June 30, 2013, Trican had working capital of $350.2 million
compared to $547.4 million at the end of 2012. The decrease is due to
lower cash on hand and lower accounts receivable primarily due to a
decrease in second quarter activity. 
Investing Activities 
Capital expenditures for the second quarter of 2013 totaled $30.0
million, compared with $148.3 million for the same period in 2012.
Capital expenditures for the six months ended June 30, 2013, were
$61.0 million compared to $304.2 million in the same period of 2012.
A substantial decrease in our 2013 capital program relative to the
2012 program resulted in a significant decline in capital
expenditures. 
During the second quarter of 2013, we increased our 2013 capital
budget by $27 million. The increase is largely directed at
maintenance and infrastructure initiatives for our Canadian and U.S.
operations. Capital expenditures for the remainder of 2013 are
expected to be approximately $100 million to $120 million based on
current 2013 budgets and remaining capital expenditures on prior year
budgets. 
During the first quarter of 2013, Trican closed the previously
announced acquisition of i-TEC in exchange for cash consideration of
$31.0 million and 2.4 million Trican common shares valued at $30.3
million. 
Financing Activities 
As at July 30, 2013, Trican had 148,896,934 common shares and
8,306,690 employee stock options outstanding. 
During the first six months of 2013, Trican's repaid net $74.9
million on its $500.0 million revolving credit facility. The balance
of the facility at June 30, 2013, was $171.7 million leaving $328.3
million of available debt under the facility. 
During the first quarter of 2013, Trican received approval from the
Toronto Stock Exchange to renew the normal course issuer bid to
purchase its own common shares, for cancellation, for the one-year
period of March 8, 2013, to March 7, 2014. During the six months
ended June 30, 2013, no common shares were purchased under the normal
course issuer bid. 
Trican currently pays a semi-annual dividend of $0.15 per share.
During the first quarter of 2013, $22.0 million in dividend payments
were made. During the second quarter of 2013, Trican accrued $22.3
million in dividends that will be paid during the third quarter of
2013. 
OUTLOOK 
Canadian Operations 
We expect Canadian demand for our services to be strong in the third
quarter of 2013. Canadian rig count has recently rebounded from
second quarter lows, and based on discussions with our Canadian
customers, we believe our activity levels for the third quarter of
2013 will be higher than the third quarter of 2012. We will complete
a large Horn River project and expect to be working for several
customers in the Duvernay during the third quarter. These large
projects are anticipated to keep equipment utilization levels strong
for our fracturing service line.  
Third quarter pricing is expected to improve compared to the second
quarter of 2013 but is not expected to return to first quarter
pricing levels. Despite the anticipated increase in activity, the
Canadian market remains competitive and we do not believe that
Canadian prices will increase substantially until activity levels and
equipment utilization remain strong over a sustained period of time.
Given the expectation of lower year-over-year pricing, we believe
operating margins in the third quarter of 2013 will be lower than the
third quarter of 2012.  
Based on early indications from our Canadian customers, we expect
Canadian demand and activity levels to sequentially drop in the
fourth quarter of 2013 but remain above 2012 levels. We also believe
that the Canadian market is poised to grow in 2014 based on further
development of the Duvernay play and LNG related activity in gas
plays such as the Montney and Horn River; however, this expectation
is dependent on several market factors including commodity prices and
the spending levels of our customers.  
U.S. Operations 
We expect the U.S. pressure pumping market to remain competitive for
the rest of 2013 as there continues to be excess pumping equipment in
the market. For this reason, we do not believe that there will be an
opportunity to increase pricing in 2013; however, we expect spot
market pricing to remain stable for the remainder of 2013. All of our
long term contracts for 2013 have been renegotiated, with all renewed
except for one crew in the Haynesville shale. We do not foresee
additional price drops on these contracted crews throughout the
remainder of 2013.  
We will continue to focus on increasing U.S. equipment utilization in
the upcoming quarters. Despite the competitive and challenging market
conditions, we believe there will be opportunities to increase
utilization through high-technology product offerings including water
recycling services, fluid systems and completion tools. We believe we
have differentiating technology and our focus in the U.S. will be to
effectively market this technology to new and existing U.S. customers
in order to increase utilization.  
We will also continue to focus on U.S. cost-cutting initiatives for
the second half of 2013. We believe that we can continue to lower our
product handling and transportation costs through better logistics
management. In addition, we expect that improvements to our U.S.
infrastructure will provide opportunities to lower outsourcing costs
for repairs and maintenance and product storage in the second half of
2013.  
In addition to the third Marcellus fracturing crew that was deployed
during the second quarter, we deployed a fourth fracturing crew in
the Marcellus early in the third quarter of 2013 due to strong
customer demand in the region. We expect to realize the full benefit
of these additional Marcellus crews during the third quarter of 2013.
Increased Marcellus activity, combined with additional cost control,
is expected to have a positive impact on U.S. margins in the third
quarter of 2013. However, U.S. operating margins in the second half
of 2013 will depend significantly on maintaining high equipment
utilization levels in a low price environment in all of our regions. 
International Operations 
Although the second quarter results in Russia were below
expectations, our 2013 outlook for this region has not changed. We
continue to expect revenue to increase by 15-20% relative to 2012
with modest improvements in operating margins. Revenue increases are
being driven by an increase in horizontal drilling and multi-stage
fracturing as the Russian market continues to trend towards more
unconventional work.  
Our Kazakhstan operations continued to be profitable although
year-over-year activity was down in the region. We expect activity
levels to be down slightly year-over-year with strong operating
margins for the remainder of 2013.  
The Algerian cementing business has been shut down due to low demand
levels in the region. With the focus now on the more profitable
coiled tubing business, we expect Algerian operating margins to
improve during the second 
half of 2013.  
Our cementing business in Australia improved during the second
quarter and we expect to continue this momentum into the second half
of 2013 as we have been awarded additional cementing contracts in
this region. We continue to focus on increasing utilization in
Australia for our cementing service line and will look to obtain new
work tenders during the second half of 2013.  
NON-IFRS DISCLOSURE 
Adjusted net income/(loss), operating income and funds provided by
/(used in) operations do not have any standardized meaning as
prescribed by IFRS and, therefore, are considered non-IFRS measures.  
Adjusted net income/(loss) and funds provided by operations have been
reconciled to profit and operating income has been reconciled to
gross profit, being the most directly comparable measures calculated
in accordance with IFRS. The reconciling items have been presented
net of tax. 


 
----------------------------------------------------------------------------
  (thousands;                                                               
   unaudited)                       Three months ended      Six months ended
----------------------------------------------------------------------------
                       June 30,   June 30,   March 31,  June 30,    June 30,
                           2013       2012        2013      2013        2012
----------------------------------------------------------------------------
Adjusted net                                                                
 income/(loss)        $ (50,407) $ (48,612) $   27,380 $ (23,027) $   43,688
Deduct:                                                                     
  Goodwill impairment     4,123          -           -     4,123           -
  Non-cash share-                                                           
   based compensation                                                       
   expense                1,859      2,248       2,188     4,047       5,166
----------------------------------------------------------------------------
                                                                            
Profit/(loss) for the                                                       
 period (IFRS                                                               
 financial measure)   $ (56,389) $ (50,860) $   25,192 $ (31,197) $   38,522
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
(thousands;                                                                 
 unaudited)                        Three months ended      Six months ended 
----------------------------------------------------------------------------
                       June 30,   June 30,  March 31,   June 30,   June 30, 
                           2013       2012       2013       2013       2012 
----------------------------------------------------------------------------
Funds provided                                                              
 by/(used in)                                                               
 operations(i)        $ (29,073) $ (43,574) $  57,956  $  28,883  $  97,508 
Charges to income not                                                       
 involving cash                                                             
 Depreciation and                                                           
  amortization          (50,613)   (38,171)   (47,059)   (97,672)   (74,003)
 Amortization of debt                                                       
  issuance costs           (216)      (201)      (216)      (432)         - 
 Stock-based                                                                
  compensation           (1,859)    (2,248)    (2,188)    (4,047)    (5,166)
 Gain/(loss) on                                                             
  disposal of                                                               
  property and                                                              
  equipment                (183)      (282)       460        277       (335)
 Net finance costs       (7,984)    (6,864)    (7,532)   (15,516)   (13,240)
 Unrealized foreign                                                         
  exchange gain /                                                           
  (loss)                  5,282     (3,460)     3,296      8,578     (3,653)
 Goodwill impairment,                                                       
  net                    (4,123)         -          -     (4,123)         - 
 Income tax                                                                 
  recovery/(expense)     18,752     25,139     (9,727)     9,025     (6,497)
 Interest paid           12,865      1,582      2,791     15,656      2,777 
 Income tax paid            763     17,219     27,411     28,174     41,131 
----------------------------------------------------------------------------
                                                                            
Profit/(loss) for the                                                       
 period (IFRS                                                               
 financial measure)   $ (56,389) $ (50,860) $  25,192  $ (31,197) $  38,522 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) this reconciliation has been modified for certain prior period to       
conform to the current year presentation                                    
                                                                            
----------------------------------------------------------------------------
(thousands;                                                                 
 unaudited)                        Three months ended      Six months ended 
----------------------------------------------------------------------------
                       June 30,   June 30,  March 31,   June 30,   June 30. 
                           2013       2012       2013       2013       2012 
----------------------------------------------------------------------------
Operating income      $ (14,814) $ (28,255) $  86,670  $  71,349  $ 133,591 
Add:                                                                        
  Administrative                                                            
   expenses              29,252     20,582     30,282     60,041     48,415 
Deduct:                                                                     
  Depreciation                                                              
   expense              (50,613)   (38,171)   (47,059)   (97,672)   (74,003)
----------------------------------------------------------------------------
                                                                            
Gross profit/(loss)                                                         
 (IFRS financial                                                            
 measure)             $ (36,175) $ (45,844) $  69,893  $  33,718  $ 108,003 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
FORWARD-LOOKING STATEMENTS 
This document contains certain forward-looking information and
financial outlook based on Trican's current expectations, estimates,
projections and assumptions that were made by the Company in light of
information available at the time the statement was made.
Forward-looking information and financial outlook that address
expectations or projections about the future, and other statements
and information about the Company's strategy for growth, expected and
future expenditures, costs, operating and financial results, future
financing and capital activities are forward-looking statements
. Some
forward-looking information and financial outlook are identified by
the use of terms and phrases such as "anticipate," "achieve",
"achievable," "believe," "estimate," "expect," "intend", "plan",
"planned", and other similar terms and phrases. This forward-looking
information and financial outlook speak only as of the date of this
document and we do not undertake to publicly update this
forward-looking information and financial outlook except in
accordance with applicable securities laws. This forward-looking
information and financial outlook include, among others: 


 
--  The expectation of strong demand for our services in Canada throughout
    the second half of 2013 and the expectation to recover most of the
    second quarter activity that was lost due to weather; 
--  The expectation that customer demand in the Marcellus region in the U.S.
    will remain strong for the balance of 2013; 
--  The intention of replacing fracturing work in the Haynesville as a
    result of an expired contract, but will also consider redeploying the
    equipment into a more active region, if necessary; 
--  The belief that third quarter activity levels will be strong in Russia
    and continue to expect Russian revenue to increase by 15 - 20% relative
    to 2012 with modest improvements in operating margins; 
--  The expectation of strong Canadian activity levels in the third quarter
    of 2013, and the expectation of capitalizing on the increase in activity
    through maintaining Canadian staffing levels, infrastructure and
    equipment; 
--  The intention of continued focus on establishing a market presence for
    i-TEC and our Canadian and U.S. completion tools division throughout the
    remainder of 2013; 
--  The plan to focus on growing our Algerian coiled tubing business with
    the shutdown of the Algeria cement service line; 
--  The belief that the Australian market has good growth potential, and our
    commitment to maintaining our presence in the region; 
--  The belief that Trican will continue to focus on building i-TEC's market
    presence in Russia; 
--  The belief in the viability of the Australian market and the continued
    focus on growing our presence in the market; 
--  The expectation that capital expenditures for the remainder of 2013 will
    be $100 to $120 million based on current 2013 budgets and remaining
    capital expenditures on prior year budgets; 
--  The expectation that approximately $22.3 million in additional dividend
    payments will be made in the third quarter of 2013; 
--  The belief that our third quarter Canadian activity levels will be
    higher than the third quarter of 2012; 
--  The expectation that our Canadian operations will complete a large Horn
    River project and that we will be working for several customers in the
    Duvernay during the third quarter; 
--  The anticipation that equipment utilization levels will remain strong
    for our Canadian fracturing service line; 
--  The expectation that third quarter Canadian pricing will improve
    compared to the second quarter of 2013, but is not expected to return to
    first quarter pricing levels; 
--  The expectation that the Canadian market remains competitive and that
    Canadian prices will not increase substantially until activity levels
    and equipment utilization remain strong over a sustained period of time;
--  The expectation of lower year-over-year pricing in Canada in the third
    quarter 2013; 
--  The belief that Canadian operating margins in the third quarter 2013
    will be lower than the third quarter 2012; 
--  The expectation, based on early indications from our Canadian customers,
    that Canadian demand and activity levels will sequentially drop in the
    fourth quarter of 2013 but remain above 2012 levels; however, this
    belief will be dependent on several market factors including commodity
    prices and the spending levels of our customers; 
--  The intention to focus on increasing equipment utilization in the
    upcoming quarters;  
--  The expectation that the U.S. pressure pumping market will remain
    competitive for the rest of 2013 as there continues to be excess pumping
    equipment in the market; 
--  The belief that there is not an opportunity to increase pricing in 2013,
    and an expectation that U.S. spot market pricing will remain stable for
    the remainder of 2013; 
--  The belief that we will not see any additional pricing declines
    throughout the remainder of 2013 on crews contracted in the U.S.; 
--  The belief that there will be opportunities in the U.S. to increase
    utilization through high-technology product offerings including water
    recycling services, fluid systems and completion tools; 
--  We believe we have differentiating technology and our focus in the U.S.
    will be to effectively market this technology to new and existing U.S.
    customers in order to increase utilization; 
--  The expectation that we will continue to focus on our U.S. cost-cutting
    initiatives for the second half of 2013; 
--  The belief that we can continue to lower our U.S. product handling and
    transportation costs through better logistics management; 
--  The expectation that improvements to our U.S. infrastructure will
    provide opportunities to lower outsourcing costs for repairs and
    maintenance and product storage in the second half of 2013; 
--  The expectation that we will realize the full benefit of the additional
    Marcellus crews during the third quarter of 2013; 
--  The expectation that increased activity in the Marcellus region,
    combined with additional cost control, will have a positive impact on
    U.S. margins in the third quarter of 2013; 
--  The belief that U.S. operating margins, in the second half of 2013, will
    depend significantly on maintaining high equipment utilization levels in
    a low price environment in all of our U.S. regions;  
--  The expectation that the increase in revenue of 15-20% will generate
    only a modest improvement in Russian operating margins relative to 2012;
--  The belief that our outlook in Russia has not changed;  
--  The belief that the Russian revenue increases are being driven by an
    increase in horizontal drilling and multi-stage fracturing as the
    Russian market continues to trend towards more unconventional work; 
--  The expectation that activity levels will be down slightly year-over-
    year in Kazakhstan with strong operating margins for the remainder of
    2013; 
--  The expectation that Algerian operating margins will improve during the
    second half of 2013, due to the focus on the more profitable coiled
    tubing business; 
--  The expectation that the improvements in the cementing business in
    Australia will continue into the second half of 2013; 
--  The expectation that we will continue to focus on increasing utilization
    in Australia for our cement service line and will look to obtain new
    work tenders during the second half of 2013; 
--  The intention to participate in tenders in Saudi Arabia and Colombia.  

 
Forward-looking information and financial outlook is based on current
expectations, estimates, projections and assumptions, which we
believe are reasonable but which may prove to be incorrect. Trican's
actual results may differ materially from those expressed or implied
and therefore such forward-looking information and financial outlook
should not be unduly relied upon. In addition to other factors and
assumptions which may be identified in this document, assumptions
have been made regarding, among other things: industry activity; the
general stability of the economic and political environment; effect
of market conditions on demand for the Company's products and
services; the ability to obtain qualified staff, equipment and
services in a timely and cost efficient manner; the ability to
operate its business in a safe, efficient and effective manner; the
performance and characteristics of various business segments; the
ef
fect of current plans; the timing and costs of capital
expenditures; future oil and natural gas prices; currency, exchange
and interest rates; the regulatory framework regarding royalties,
taxes and environmental matters in the jurisdictions in which the
Company operates; and the ability of the Company to successfully
market its products and services. 
Forward-looking information and financial outlook is subject to a
number of risks and uncertainties, which could cause actual results
to differ materially from those anticipated. These risks and
uncertainties include: fluctuating prices for crude oil and natural
gas; changes in drilling activity; general global economic, political
and business conditions; weather conditions; regulatory changes; the
successful exploitation and integration of technology; customer
acceptance of technology; success in obtaining issued patents; the
potential development of competing technologies by market
competitors; and availability of products, qualified personnel,
manufacturing capacity and raw materials. The foregoing important
factors are not exhaustive. In addition, actual results could differ
materially from those anticipated in forward-looking information and
financial outlook provided herein as a result of the risk factors set
forth under the section entitled "Risks Factors" in our Annual
Information Form dated March 21, 2013. Readers are also referred to
the risk factors and assumptions described in other documents filed
by the Company from time to time with securities regulatory
authorities.  
Additional information regarding Trican including Trican's most
recent annual information form is available under Trican's profile on
SEDAR (www.sedar.com). 


 
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION                      
                                                                            
                                                     June 30,  December 31, 
(Stated in thousands; unaudited)                         2013          2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS                                                                      
  Current assets                                                            
  Cash and cash equivalents                      $     52,386  $    113,506 
  Trade and other receivables                         365,625       437,038 
  Current tax assets                                   19,528           647 
  Inventory                                           230,979       211,794 
  Prepaid expenses                                     32,461        33,002 
----------------------------------------------------------------------------
                                                      700,979       795,987 
Property and equipment                              1,444,446     1,458,562 
Intangible assets                                       8,477        10,081 
Deferred tax assets                                   102,075        76,302 
Other assets                                           19,888        11,898 
Goodwill                                               76,718        43,689 
----------------------------------------------------------------------------
                                                 $  2,352,583  $  2,396,519 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current liabilities                                                         
  Bank loans                                     $      9,431  $      9,119 
  Trade and other payables                            262,448       228,788 
  Contingent consideration                                  -         2,860 
  Current tax liabilities                                   -         7,853 
  Current portion of long-term debt                    78,885             - 
----------------------------------------------------------------------------
                                                      350,764       248,620 
                                                                            
Loans and borrowings                                  548,359       694,972 
Deferred tax liabilities                               79,823        77,012 
                                                                            
Shareholders' equity                                                        
  Share capital                                       559,381       527,860 
  Contributed surplus                                  59,099        55,352 
  Accumulated other comprehensive loss                 (9,412)      (24,100)
  Retained earnings                                   762,467       815,700 
----------------------------------------------------------------------------
Total equity attributable to equity holders of                              
 the Company                                        1,371,535     1,374,812 
Non-controlling interest                                2,102         1,103 
----------------------------------------------------------------------------
                                                 $  2,352,583  $  2,396,519 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the condensed consolidated interim financial      
statements.                                                                 
                                                                            
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                    
                                                                            
                                       Three Months              Six Months 
                                     Ended June 30,          Ended June 30, 
(Stated in thousands, except                                                
 per share amounts;                                                         
 unaudited)                        2013        2012        2013        2012 
----------------------------------------------------------------------------
                                                                            
Revenue                      $  396,607  $  417,975  $1,014,983  $1,134,331 
Cost of sales                   432,782     463,819     981,265   1,026,329 
----------------------------------------------------------------------------
Gross (loss)/profit             (36,175)    (45,844)     33,718     108,002 
Administrative expenses          29,252      20,582      60,041      48,415 
Other income                     (1,391)       (205)     (2,505)       (894)
----------------------------------------------------------------------------
Results from operating                                                      
 activities                     (64,036)    (66,221)    (23,818)     60,481 
Finance income                      (63)       (531)     (1,019)     (1,188)
Finance costs                     8,554       7,395      16,535      14,428 
Foreign exchange (gain)/loss     (1,510)      2,914      (3,236)      2,222 
Goodwill impairment, net          4,123           -       4,123           - 
----------------------------------------------------------------------------
(Loss)/Profit before income                                                 
 tax                            (75,140)    (75,999)    (40,221)     45,019 
Income tax                                                                  
 expense/(recovery)             (18,751)    (25,139)     (9,024)      6,497 
----------------------------------------------------------------------------
(Loss)/Profit for the period $  (56,389) $ 
 (50,860) $  (31,197) $   38,522 
----------------------------------------------------------------------------
                                                                            
Other comprehensive                                                         
 (loss)/income                                                              
Items which may subsequently                                                
 be recycled through profit                                                 
 or loss                                                                    
  Unrealized (loss)/gain on                                                 
   hedging instruments              (57)       (261)         43         442 
  Foreign currency                                                          
   translation differences        7,616      (3,196)     14,645       1,404 
----------------------------------------------------------------------------
Total comprehensive                                                         
 (loss)/income for the                                                      
 period                      $  (48,830) $  (54,317) $  (16,509) $   40,368 
----------------------------------------------------------------------------
                                                                            
(Loss)/profit attributable                                                  
 to:                                                                        
  Owners of the Company         (56,264)    (50,785)    (30,901)     38,675 
  Non-controlling interest         (125)        (75)       (296)       (153)
----------------------------------------------------------------------------
(Loss)/profit for the period $  (56,389) $  (50,860) $  (31,197) $   38,522 
----------------------------------------------------------------------------
                                                                            
Total comprehensive                                                         
 (loss)/income attributable                                                 
 to:                                                                        
Owners of the Company           (48,840)    (54,242)    (16,509)     40,521 
Non-controlling interest             10         (75)          -        (153)
----------------------------------------------------------------------------
Total comprehensive                                                         
 (loss)/income for the                                                      
 period                      $  (48,830) $  (54,317) $  (16,509) $   40,368 
----------------------------------------------------------------------------
                                                                            
                                                                            
(Loss)/Earnings per share                                                   
----------------------------------------------------------------------------
  Basic                      $    (0.38) $    (0.35) $    (0.21) $     0.26 
  Diluted                    $    (0.38) $    (0.35) $    (0.21) $     0.26 
----------------------------------------------------------------------------
Weighted average shares                                                     
 outstanding - basic            148,845     146,653     148,720     146,800 
Weighted average shares                                                     
 outstanding - diluted          148,845     146,653     148,720     146,943 
----------------------------------------------------------------------------
See accompanying notes to the condensed consolidated interim financial      
statements.                                                                 
                                                                            
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                              
                                                                            
                                       Three Months              Six Months 
                                     Ended June 30,          Ended June 30, 
(Stated in thousands;                                                       
 unaudited)                        2013        2012        2013        2012 
----------------------------------------------------------------------------
Cash Provided By/ (Used In):                                                
Operations                                                                  
  (Loss)/ profit for the                                                    
   period                    $  (56,389) $  (50,860) $  (31,197) $   38,522 
  Charges to income not                                                     
   involving cash:                                                          
   Depreciation and                                                         
    amortization                 50,613      38,171      97,672      74,003 
   Amortization of debt                                                     
    issuance costs                  216         201         432         403 
   Stock-based compensation       1,859       2,248       4,047       5,166 
   Loss/(gain) on disposal                                                  
    of property and                                                         
    equipment                       184         282        (277)        335 
   Net finance costs              7,984       6,864      15,516      13,240 
   Unrealized foreign                                                       
    exchange (loss)/gain         (5,282)      3,460      (8,578)      3,653 
   Goodwill impairment, net       4,123           -       4,123           - 
   Income tax                                                               
    (recovery)/expense          (18,751)    (25,139)     (9,025)      6,497 
----------------------------------------------------------------------------
                                (15,445)    (24,773)     72,713     141,819 
  Change in inventories          (2,805)    (21,016)    (16,008)    (46,373)
  Change in trade and other                                                 
   receivables                  187,997     216,375      87,159     178,923 
  Change in prepayments          (1,091)     (2,413)      1,748      (8,146)
  Change in trade and other                                                 
   payables                     (44,857)    (49,639)     28,163      (6,844)
----------------------------------------------------------------------------
Cash generated from                                                         
 operating activities           123,799     118,534     173,775     259,379 
                                                                            
  Interest paid                 (12,865)     (1,582)    (15,656)     (2,777)
  Income tax paid                  (763)    (17,219)    (28,174)    (41,131)
----------------------------------------------------------------------------
                                110,171      99,733     129,945     215,471 
                                                                            
Investing                                                                   
  Interest received                   -         225           -         710 
  Purchase of property and                                                  
   equipment                    (30,045)   (148,268)    (61,031)   (304,155)
  Proceeds from the sale of                                                 
   property and equipment         1,761         588       2,690         679 
  Purchase of other assets            -           -      (4,600)          - 
  Payments received on loan                                                 
   to an unrelated third-                                                   
   party                            155           -         155         226 
  Business acquisitions               -      
     -     (31,009)          - 
----------------------------------------------------------------------------
                                (28,129)   (147,455)    (93,795)   (302,540)
                                                                            
Financing                                                                   
  Proceeds from issuance of                                                 
   share capital, net               906         369         906       1,108 
  Repurchase and                                                            
   cancellation of shares                                                   
   under NCIB                         -      (6,505)          -     (10,011)
  Issuance of long-term                                                     
   debt, net of debt                                                        
   issuance costs                     -      52,773      26,354      64,549 
  Repayment of long-term                                                    
   debt                        (103,000)    (25,425)   (103,000)    (25,425)
  Dividend paid                       -           -     (21,968)     (7,345)
----------------------------------------------------------------------------
                               (102,094)     21,212     (97,708)     22,876 
                                                                            
Effect of exchange rate                                                     
 changes on cash                    858        (328)        438        (393)
----------------------------------------------------------------------------
                                                                            
Decrease in cash and cash                                                   
 equivalents                    (19,194)    (26,838)    (61,120)    (64,586)
Cash and cash equivalents,                                                  
 beginning of period             71,580      88,107     113,506     125,855 
----------------------------------------------------------------------------
Cash and cash equivalents,                                                  
 end of period               $   52,386  $   61,269  $   52,386  $   61,269 
----------------------------------------------------------------------------
See accompanying notes to the condensed consolidated interim financial      
statements.                                                                 

 
BUSINESS ACQUISITIONS 
Effective January 11, 2013, Trican acquired all of the issued and
outstanding shares and discharged the existing debt of Petro Tools
Holding AS, the holding company for i-TEC and its subsidiaries
(collectively "i-TEC"), for consideration of $61.3 million, which is
made up of cash of $31.0 million and 2,381,381 Trican common shares,
issued at $12.73 per share. The initial accounting for the
acquisition is incomplete, as Trican is working to quantify the
opening fair values of the assets acquired, liabilities assumed and
intangible assets arising from the acquisition. Furthermore, the
value of goodwill arising from the synergies created through the
i-TEC acquisition will be determined once the values at acquisition
have been established. In conjunction with the acquisition, Trican
has agreed to pay contingent consideration of up to U.S. $45 million
subject to agreed upon financial targets for i-TEC for the year ended
December 31, 2013. Trican has determined the acquisition fair value
of the contingent consideration to be nil. All of i-TEC's earnings
have been included in Trican's condensed consolidated statement of
comprehensive income since January 11, 2013. 
The preliminary acquisition fair values have been determined as
follows: 


 
                                                                            
----------------------------------------------------------------------------
Fair value of acquired net assets:                                          
  Net working capital (including cash)                            $    8,809
  Property and equipment                                               4,880
  Deferred tax assets                                                  7,275
  Goodwill                                                            40,360
----------------------------------------------------------------------------
                                                                  $   61,324
----------------------------------------------------------------------------
Financed as follows:                                                        
  Cash                                                            $   31,009
  Shares issued out of treasury                                       30,315
----------------------------------------------------------------------------
                                                                  $   61,324
----------------------------------------------------------------------------

 
Final fair value determinations will be made once the accounting for
the transaction has been completed.  
GOODWILL IMPAIRMENT 
During the three months ended June 30, 2013, the accrual for the
performance based contingency payment of $2.3 million, payable to the
former owners of Viking Energy Pty. Limited, was reversed as the
performance criteria were not met. The Company identified this
reversal as an indicator of impairment at June 30, 2013, and as a
result completed an impairment test of the related goodwill, within
the Australia cash generating unit ("CGU"), included within the
International operations segment. Trican concluded that the
recoverable amount, determined by discounting the future cash flows
to be generated from the continuing operations of the Australian CGU,
was less than its carrying amount and a goodwill impairment charge of
$6.4 million was recorded. The Company used a discount rate of 11%
and a useful life of nine years to calculate the recoverable amount. 
LOANS AND BORROWINGS 
Long term debt 


 
                                                     June 30,  December 31, 
                                                         2013          2012 
----------------------------------------------------------------------------
Notes payable                                    $    452,079  $    430,408 
Finance lease obligations                              30,986        36,324 
Revolving credit facility                             181,146       255,693 
Hedge receivable                                       (9,609)       (5,059)
----------------------------------------------------------------------------
Total                                                 654,602       717,366 
Current portion of finance lease obligations (1)       17,927        13,275 
Russian demand revolving credit facility                9,431         9,119 
Current portion of long-term debt                      78,885             - 
----------------------------------------------------------------------------
Non-current                                      $    548,359  $    694,972 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Current portion of finance lease obligations is included in trade and   
    other payables.                                                         

 
Trican has a $500.0 million four-year extendible revolving credit
facility ("Revolving Credit Facility") with a syndicate of banks. The
Revolving Credit Facility is unsecured and bears interest at the
applicable Canadian prime rate, U.S. prime rate, Banker's Acceptance
rate, or at LIBOR, plus 50 to 325 basis points, dependent on certain
financial ratios of the Company. On October 18, 2012, Trican extended
its Revolving Credit Facility by an additional year to 2016. The
Revolving Credit Facility requires Trican to comply with certain
financial and non-financial covenants that are typical for this type
of ar
rangement. Trican was in compliance with these covenants at June
30, 2013 (2012 - in compliance). 
Notes payable 
The Notes payable require the Company to comply with certain
financial and non-financial covenants that are typical for this type
of arrangement. At June 30, 2013, the Company was in compliance with
these covenants (2012 - in compliance).  
INCOME TAXES  


 
                                         Three months            Six months 
                                       ended June 30,        ended June 30, 
                                      2013       2012       2013       2012 
----------------------------------------------------------------------------
Current income tax expense       $ (10,982) $   8,675  $   1,440  $  53,367 
Deferred income tax recovery        (7,769)   (33,814)   (10,464)   (46,870)
----------------------------------------------------------------------------
                                                                            
                                 $ (18,751) $ (25,139) $  (9,024) $   6,497 
----------------------------------------------------------------------------

 
The net income tax provision differs from that expected by applying
the combined federal and provincial income tax rate of 25.26% (2012 -
25.17%) to income before income taxes for the following reasons: 


 
                                                                            
Six months ended June 30,                                   2013       2012 
----------------------------------------------------------------------------
Expected combined federal and provincial income tax    $  (9,092) $  10,703 
Statutory and other rate differences                      (3,766)    (7,356)
Non-deductible expenses                                    2,612      3,276 
Stock based compensation                                   1,022        566 
Changes to deferred income tax rates                         299          - 
Translation of foreign subsidiaries                          (93)      (624)
Other                                                         (6)       (68)
----------------------------------------------------------------------------
                                                       $  (9,024) $   6,497 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
The change in the combined federal and provincial income tax rate is
due to an increase in the British Columbia provincial tax rate from
10% to 11% effective April 1, 2013. 
OPERATING SEGMENTS 
The Company operates in Canada and the U.S. along with a number of
international regions, which include Russia, Kazakhstan, Algeria,
Australia, Saudi Arabia, Colombia and Norway. Each geographic region
has a General Manager that is responsible for the operation and
strategy of their region's business. Personnel working within the
particular geographic region report to the General Manager; the
General Manager reports to the Corporate Executive.   
The Company provides a comprehensive array of specialized products,
equipment, services and technology to customers through three
operating divisions: 


 
--  Canadian operations provides cementing, fracturing, coiled tubing,
    nitrogen, geological, acidizing, reservoir management, industrial
    cleaning and pipeline, and completion systems and downhole tool
    services, which are performed on new and existing oil and gas wells. 
--  U.S. operations provides cementing, fracturing, coiled tubing, nitrogen,
    acidizing and completion systems and downhole tool services, which are
    performed on new and existing oil and gas wells. 
--  International operations provides cementing, fracturing, coiled tubing,
    acidizing, nitrogen, and completion systems and downhole tool services,
    which are performed on new and existing oil and gas wells. 

 
Information regarding the results of each geographic region is
included below. Performance is measured based on revenue and gross
profit as included in the internal management reports, which are
reviewed by the Company's executive management team. Each region's
gross profit is used to measure performance as management believes
that such information is most relevant in evaluating regional results
relative to other entities that operate within the industry.
Transactions between the segments are recorded at cost and have been
eliminated upon consolidation. 


 
                                 Canadian    United States    International 
                               Operations       Operations       Operations 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended June 30, 2013                                            
----------------------------------------------------------------------------
Revenue                   $       116,125  $       201,538  $        79,007 
Gross (loss) / profit             (24,068)          (6,964)           1,324 
Finance income                          -                -                - 
Finance costs                           -                -                - 
Tax (recovery) / expense          (10,928)          (7,261)            (562)
Depreciation and                                                            
 amortization                      18,141           24,724            7,001 
Assets                            850,635        1,117,887          334,074 
Goodwill                           62,492                -           14,226 
Property and equipment            565,050          758,916          105,917 
Capital expenditures               10,838           13,793            5,414 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended June 30, 2012                                            
----------------------------------------------------------------------------
Revenue                   $       140,178  $       206,777  $        71,020 
Gross (loss) / profit              (8,212)         (36,845)           3,928 
Finance income                          -                -                - 
Finance costs                           -                -                - 
Tax (recovery) / expense           (7,310)         (18,678)             849 
Depreciation and                                                            
 amortization                      12,864           18,750            6,613 
Assets                            829,960        1,063,951          302,541 
Goodwill                           22,690                -           21,059 
Property and equipment            778,357          539,309           84,250 
Capital expenditures               72,706           63,068           12,494 
----------------------------------------------------------------------------
 
                             Intersegment                                   
                             Eliminations        Corporate            Total 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended June                                                     
 30, 2013                                                                   
----------------------------------------------------------------------------
Revenue                   $           (63) $             -  $       396,607 
Gross (loss) / profit                (308)          (6,159)         (36,175)
Finance income                          -              (63)             (63)
Finance costs                           -            8,554            8,554 
Tax (recovery) / expense                -                -          (18,751)
Depreciation and                                                     
       
 amortization                           -              747           50,613 
Assets                               (116)          50,103        2,352,583 
Goodwill                                -                            76,718 
Property and equipment                  -           14,563        1,444,446 
Capital expenditures                    -                -           30,045 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended June                                                     
30, 2012                                                                    
----------------------------------------------------------------------------
Revenue                   $             -  $             -  $       417,975 
Gross (loss) / profit                   -           (4,715)         (45,844)
Finance income                          -             (531)            (531)
Finance costs                           -            7,395            7,395 
Tax (recovery) / expense                -                -          (25,139)
Depreciation and                                                            
 amortization                           -              (56)          38,171 
Assets                                  -           83,008        2,279,460 
Goodwill                                -                -           43,749 
Property and equipment                  -           14,418        1,416,334 
Capital expenditures                    -                -          148,268 
----------------------------------------------------------------------------
                                                                            
                                  Canadian   United States    International 
                                Operations      Operations       Operations 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June 30, 2013                                              
----------------------------------------------------------------------------
Revenue                   $        454,774 $       412,223  $       149,118 
Gross profit / (loss)               57,273          (5,325)          (3,915)
Finance income                           -               -                - 
Finance costs                            -               -                - 
Tax expense / (recovery)             3,066         (10,508)          (1,582)
Depreciation and                                                            
 amortization                       34,824          47,631           13,994 
Capital expenditures                24,151          29,356            7,524 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June 30, 2012                                              
----------------------------------------------------------------------------
Revenue                   $        573,289 $       425,313  $       135,729 
Gross profit / (loss)              147,479         (29,607)           1,209 
Finance income                           -               -                - 
Finance costs                            -               -                - 
Tax expense / (recovery)            25,055         (18,124)            (434)
Depreciation and                                                            
 amortization                       24,854          36,211           12,829 
Capital expenditures               105,593         173,713           24,849 
----------------------------------------------------------------------------
 
                                                                            
                             Intersegment                                   
                             Eliminations        Corporate            Total 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June 30,                                                   
 2013                                                                       
----------------------------------------------------------------------------
Revenue                   $        (1,132) $             -  $     1,014,983 
Gross profit / (loss)              (1,016)         (13,299)          33,718 
Finance income                          -           (1,019)          (1,019)
Finance costs                           -           16,535           16,535 
Tax expense / (recovery)                -                -           (9,024)
Depreciation and                                                            
 amortization                           -            1,223           97,672 
Capital expenditures                    -                -           61,031 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended June 30,                                                   
2012                                                                        
----------------------------------------------------------------------------
Revenue                   $             -  $             -  $     1,134,331 
Gross profit / (loss)                   -          (11,079)         108,002 
Finance income                          -           (1,188)          (1,188)
Finance costs                           -           14,428           14,428 
Tax expense / (recovery)                -                -            6,497 
Depreciation and                                                            
 amortization                           -              109           74,003 
Capital expenditures                    -                -          304,155 
----------------------------------------------------------------------------

 
The Corporate division does not represent an operating segment and is
included for informational purposes only. Corporate division expenses
consist of salary expenses, stock-based compensation and office costs
related to corporate employees, as well as public company costs.
Contacts:
Trican Well Service Ltd.
Dale Dusterhoft
Chief Executive Officer
ddusterhoft@trican.ca 
Trican Well Service Ltd.
Michael Baldwin
Vice President, Finance & CFO
mbaldwin@trican.ca 
Trican Well Service Ltd.
Gary Summach
Director of Reporting and Investor Relations
gsummach@trican.ca 
Trican Well Service Ltd.
(403) 266 - 0202
(403) 237 - 7716 (FAX)
2900, 645 - 7th Avenue S.W.
Calgary, Alberta T2P 4G8