FORWARD-LOOKING INFORMATION

Transcription

1 Peters & Co. Annual Energy Conference September 13, 2017

2 Forward Looking FORWARD-LOOKING INFORMATION This presentation may contain certain statements or disclosures relating to Xtreme Drilling Corp. ( Xtreme ) that are based on the expectations of its management as well as assumptions made by and information currently available to Xtreme which may constitute forward looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Xtreme anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information. In some cases, forward looking information can be identified by terms such as forecast, future, may, will, expect, anticipate, believe, potential, enable, plan, continue, contemplate, pro -forma, or other comparable terminology. Forward looking information contained in this presentation includes, among other things, the 2017 Budgeted Capital Expenditures, market trends, and utilization and customer demand. Completing those anticipated expenditures assumes that Xtreme s cash flow will be sufficient and is subject to known and unknown risks, uncertainties and other factors that could influence Xtreme s actual results and cause actual results to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in more detail in Xtreme s Annual Information Form and other documents available at and include risks associated with the oil and gas industry and demand for drilling rigs. Past performance of Xtreme referred to in this presentation is shown for illustrative purposes only, does not guarantee future results of Xtreme and is not meant to forecast, imply or guarantee the future performance of Xtreme, which will vary. The forward looking information is made as of the date of this presentation and Xtreme does not undertake any obligation to update or revise any of the included forward- looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward looking information contained in this presentation is expressly qualified by this cautionary statement. These reports are available at:

3 XTREME SUMMARY $151.2 CAD $318.4 CAD 220

4 XTREME TODAY

5 US LAND MARKET UPDATE Rig Data US rig count has increased to 923 active rigs from bottom in Q of 350 active rigs. Legacy rig replacement cycle will continue as operators look to high grade fleet. 67% of active rigs now AC as compared to 39% two years prior. Approximately 850 AC rigs in the US with 700 being 1,500hp or greater with approximately 130 still idle. Need for Premier/Super Spec rigs driven by operators continually extending laterals and pumping requirements. Larger hole diameter and lateral requires greater pumping capacity; both volume and pressure Multiple wells drilled from single pad will continue to increase Continuous quest to improve efficiency/reduce NPT. Pace of Rig Count increase has flattened and likely will remain in current commodity price environment. 2,000 1,800 1,600 1,400 Q Rig Count: 1,880 Active US Land Drilling Rig Count by Type 9/30/2014 to Current 1,200 1,000 Current Rig Count: Tier 1: 39% Q Rig Count: 356 Tier 1: 67% Q Q Q Q Q Q Q Q Q Q Q Q Recent AC Rigs (Tier 1: <1,500hp) AC Rigs (Tier 1: 1,500hp<) SCR Rigs (Tier 2) Mechanical Rigs (Tier 3)

6 XTREME DRILLING FLEET Xtreme s 21 rig Tier 1 fleet is among the industries newest, and has been upgraded to exceed evolving operator requirements through a C$70-$75 million 2017 capital investment program. Three XE rigs being built for U.S. operators: Proprietary design Premier Spec 1,800hp AC rig Rig 801 contracted to commence operations in Oklahoma in October Rigs 802 & 803 to commence operations in Ohio in December and January, respectively Ten - XDR 500 rigs being optimized for U.S. operators: 1,500 hp AC rig 7,500 psi mud pumps High Torque top drives X-Y walking systems (where necessary) Remote Condition Monitoring (began implementing across fleet in 2016) Eight - XDR 200/300 rigs to operate in Canada or internationally: High-spec, high-efficiency super single AC rigs Currently operating in Canada with prior operations in the US, Mexico and India Actively being marketed for sale in Canada and Middle East Rig Model XDR 200/300 XDR500/ XE Location Canada Colorado Ohio* Colorado North Dakota Oklahoma* Texas Oklahoma AVAILABLE RIGS CURRENTLY OPERATING (contracted) TYPE AC VFD AC VFD AC VFD MAX HOOK LOAD (lbs) 200, ,000/600, ,000 TOP DRIVE AC 150 Ton AC 350 Ton AC 500 Ton MAST SINGLE RGIII TRIPLE TRIPLE

7 850XE PREMIER SPEC RIG The 850 XE ( Xtreme Efficiency ) will be the fastest-moving Premier/Super Spec rig in the market outfitted with industry-first componentry which drives Xtreme Efficiency. Proprietary design 1,800hp AC electric new build rig. Integration of Rig Automation controls with key components and equipment monitoring. Patent pending X/Y walking system that utilizes GPS and proprietary software to optimize rig moves on pad. Only US land rig able to rig up cat-walk traditionally or on drillers side based on pad configuration. Dual rig set up based on Offline Stand Building System developed with German rig builder Bentec. Ability to rack up to 30,000 of 5 drill pipe and walk with in mast. Target of under 48 hours from rig release to spud between pads. Rig Category PREMIER SPEC SUPER SPEC Company Xtreme Drilling Current Market Leading Competitors Rig 850 XE Standard Super Spec Rig Max Hook Load: 850,000 lbs. 750,000 lbs. Rig Horsepower: 1,800 HP AC 1,500 HP AC Setback Rating: 750,000 lbs. 500,000 to 600,000 lbs. 5" Drill Pipe Rack Back: 30,000 ft 20,000 to 25,000 ft Mud Pumps: (3) 1,600HP (2-3) 1,600HP Top Drive: AC 500 Ton (52,000+ lbs/ft) AC 500 Ton Primary Power Engines: (4) Cat 3512E (5.904HP total) (3) Cat 3512C or equivalent (4,428HP total) Intra-Pad Moves: X-Pad Optimizer Standard X/Y Walking Avg. Inter-Pad Move Time: 48 hours (fully craneless) hours Dual Hoisting Capability: Offline Stand Building System NONE Rig Sound Attenuation: 50 Decibals at 100 ft. NONE

8 XDR 500 OPTIMIZATION Developed strategy in 2016 to optimize the ten rig XDR 500 rigs through upgrades to fluid system, topdrives and walking system where necessary. Spent approximately C$12mm in 2016 and will spend an additional C$6mm in 2017 capital budget. Optimized nine of ten XDR 500 fleet to make ideal for US Resource plays: 7,500 PSI Mud system w/ 3 rd pump New drilling motor design allows Higher Pressures Drilling with higher pressure increases ROP, reduced pressure loss at bit and increase in hydraulics. Mono-bore well designs at longer lengths require a higher ECD for hole cleaning.(ecd= Equivalent Circulating Density) Higher Torque Capacity on Top Drive Well design (Mono-bores ),with no intermediate casing set, increases torque through build section. Larger Hole size, 8-3/4 increases torque Aggressive PDC bit technology Drill string 5 make up torque with friction factor of 1.1 =38,000ft / lbs on NC-50 Connection, 5 DS connection as high as 59,000ft/lbs As of September 2017 nine of ten XDR 500 rigs are working which is up from four at the same time in 2016.

9 XTREME STRATEGIC SUMMARY Xtreme Corporate Optimization Optimization of corporate structure after selling of XSR coil business in June of Accretive share buyback program of 12.2% of Company in Q Current process to divest non-core Canadian XDR 200 and internationally focused XDR 300 rigs. Leading Edge Drilling Technology Aggressive Strategy to position XDC as competitive tech focused high spec U.S. driller Optimization of XDR 500 rigs over past 18 months to meet U.S. resource play demand Deployment of XDR 500 rigs to new basin (Oklahoma) Design and Development of true next generation Premier Spec rig design in 14 months. 850XE highest capacity, fastest moving land Premier/Super Spec rig in US Land Designed to maximize efficiency in U.S Resource plays Platform for future development of rigs when market is ready. Current contract profile of 9 of 10 XDR 500 and 3 of 3 850XE rigs contracted. Compelling Balance Sheet and Relative Valuation No long term debt on balance sheet provides flexibility and optionality. Positioned ideally to take advantage of increasing US activity levels. Compelling Relative Valuation EV / 2018 EBITDA: 7.1x vs. industry group average of 7.6x Mkt. Cap / TBV: 0.6x vs. industry group average of 0.7x Net Debt / 2018 EBITDA: None vs. industry group average of 2.4x

10 DISCLAIMER