Mr. Pat Powell reports

CALFRAC REPORTS FIRST QUARTER 2024 RESULTS

Calfrac Well Services Ltd. has released its financial and operating results for the three months ended March 31, 2024. The following press release should be read in conjunction with the management's discussion and analysis (MD&A), and interim consolidated financial statements and notes thereto as at March 31, 2024. Additional information about Calfrac is available on the SEDAR+ website, including the company's annual information form for the year ended Dec. 31, 2023.

Chief executive officer's message

Calfrac's financial results were lower than the same period last year, primarily due to lower utilization in North America, as several customers in the Rockies region chose to defer work out of the winter months into subsequent quarters. Low natural gas prices also contributed to the reduction in completions activity across the industry. As a result, Calfrac idled two fracturing fleets in North America during the first quarter and will only reactivate fleets at pricing levels that generate an adequate return on capital. The company continued to safely and efficiently execute during the first quarter and reduced its trailing 12-month total recordable injury frequency (TRIF) from 1.05, as it exited 2023, to 0.87 as of March 31, 2024, which was the lowest in recent history.

Pat Powell, Calfrac's chief executive officer, commented: "I want to commend the Calfrac team for demonstrating their commitment to safe and efficient operations throughout the first quarter. I am looking forward to the remainder of the year as we expect strong utilization in North America and Argentina to drive strong returns for our shareholders."

During the quarter, Calfrac:

• Generated revenue of $330.1-million, a decrease of 33 per cent from the first quarter in 2023, resulting primarily from reduced activity in North America offset partially by higher activity in Argentina;
• Reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $26.1-million versus $83.8-million in the first quarter of 2023;
• Reported a net loss from continuing operations of $2.9-million, or three cents per share diluted, compared with net income of $36.3-million, or 41 cents per share diluted, during the first quarter in 2023;
• Idled two fracturing fleets in North America in response to lower activity due to the impact of lower natural gas prices and the deferral of customer work programs in the Rockies region into subsequent quarters;
• Disposed of a non-core real estate asset in North America for net proceeds of $11.4-million, which generated a gain on sale of $5.9-million;
• Had a cash position of $58.2-million of which approximately 60 per cent was held in Argentina. The Argentina cash balance includes an investment of $18-million (U.S.) in Argentinean government bonds (Bopreal bonds) that will allow for the repatriation of cash to Canada beginning in July, 2024, over a 12-month period;
• Reported an increase in period-end working capital to $273.7-million from $236.4-million at Dec. 31, 2023, primarily due to the investment in Bopreal bonds and higher inventory requirements;
• Incurred capital expenditures of $48.1-million, which included approximately $28.4-million related to the company's fracturing fleet modernization program.

Financial overview -- continuing operations

Three months ended March 31, 2024, versus 2023

North America

Outlook

Activity has significantly improved in the second quarter, with the company currently operating 12 fracturing fleets, and anticipating high utilization of these crews and its six coiled tubing units across North America for the remainder of the year. Utilization in North America was impacted by typical spring breakup conditions to begin the quarter, but has subsequently built significant momentum, which the company expects to carry through the third quarter and into the fourth quarter. Pricing has stabilized lower in certain operating regions, due to the decline in natural-gas-related activity, and is expected to remain at these levels to the end of 2024.

The company continues to make progress on its strategic priorities by deploying additional Tier 4 dynamic gas blending (DGB) fracturing pumps in North America, as well as divesting of a non-core property for net proceeds of $11.4-million. With its revised capital program, Calfrac expects to operate up to five next-generation fleets in North America by the end of the year.

Three months ended March 31, 2024, compared with three months ended March 31, 2023

Revenue

Revenue from Calfrac's North American operations decreased to $249-million during the first quarter of 2024 from $413-million in the comparable quarter of 2023. The significant reduction in first-quarter activity and financial performance was mainly due to a slower-than-expected start to the year, as planned completion programs in the Rockies region were deferred until later in the year, combined with the impact of the year-over-year decline in natural gas prices. As a result, Calfrac idled two fracturing fleets in February and operated an average of 10 crews in North America during the first quarter in 2024, compared with 15 fleets in the comparable quarter of 2023. In addition, an increase in activity where its customer provides the sand, as well as pricing pressure in the United States, contributed to the 22-per-cent decrease in average revenue per job in the first quarter of 2024 versus the same quarter in 2023. Coiled tubing revenue decreased by 40 per cent as compared with the first quarter in 2023, mainly due to lower utilization of Calfrac's six deep coiled tubing units, combined with a decrease in job size.

Adjusted EBITDA

The company's operations in North America generated adjusted EBITDA of $14.9-million, or 6 per cent of revenue, during the first quarter of 2024 compared with $76.5-million, or 19 per cent of revenue, in the same period in 2023. This decrease was due primarily to the significant decline in fracturing fleet utilization combined with slightly lower pricing relative to the same period in 2023.

Argentina

Outlook

Calfrac's Argentinean operations leveraged high utilization with superior service quality to generate a divisional record for first-quarter adjusted EBITDA of $16.1-million. During the quarter, this division also set a record for hours pumped in a day, while establishing a new country standard for lowest trailing 12-month TRIF of 0.42 at quarter-end. Calfrac expects to maintain this momentum throughout 2024 across all three service lines, as operators seek to execute on their development plans. As government leaders in Argentina implement new economic reforms and encourage additional domestic oil and gas development, Calfrac expects to capitalize on future opportunities to improve its operating and financial performance.

Three months ended March 31, 2024, compared with three months ended March 31, 2023

Revenue

Calfrac's Argentinean operations generated revenue of $81.1-million during the first quarter of 2024 versus $80.3-million in the comparable quarter in 2023, as the company maintained strong activity across all service lines. The slight increase in revenue was due to improved job mix for its fracturing service line. Coiled tubing and cementing revenue were consistent with the comparable quarter in 2023.

Adjusted EBITDA

The company's operations in Argentina generated adjusted EBITDA of $16.1-million during the first quarter of 2024 compared with $11.5-million in the same quarter of 2023, while the company's adjusted EBITDA margins also improved to 20 per cent from 14 per cent. This increase was primarily due to job mix in the Vaca Muerta shale play relative to the comparable period in 2023.

Capital expenditures

Capital expenditures were $48.1-million for the three months ended March 31, 2024, versus $34.5-million in the comparable period in 2023. Calfrac's board of directors approved a 2024 total capital budget of approximately $210-million in December, 2023. This was an increase of $45-million from the previous year, primarily to continue its fracturing fleet modernization program in North America and dedicate $40-million to support its Argentinean operations, while implementing new company-wide field-based technologies. On March 13, 2024, the board of directors approved a deferral of up to $50-million of capital allocated to its North American fleet modernization program to align with current market conditions.

The business of Calfrac is subject to certain risks and uncertainties. Prior to making any investment decision regarding Calfrac, investors should carefully consider, among other things, the risk factors set forth in the company's most recently filed annual information form under the heading risk factors, which is available on the SEDAR+ website under the company's profile. Copies of the annual information form may also be obtained on request without charge from Calfrac at Suite 500, 407, 8th Ave. SW, Calgary, Alta., Canada, T2P 1E5, or at the company's website.

Additional information

Calfrac's common shares are publicly traded on the Toronto Stock Exchange under the trading symbol CFW.

Calfrac provides specialized oil field services to exploration and production companies designed to increase the production of hydrocarbons from wells, with continuing operations focused throughout Western Canada, the United States and Argentina. During the first quarter of 2022, management committed to a plan to sell the company's Russian division, resulting in the associated assets and liabilities being classified as held for sale, and presented in the company's financial statements as discontinued operations. The results of the company's discontinued operations are excluded from the discussion and figures presented herein, unless otherwise noted.

Further information regarding Calfrac Well Services, including the most recently filed annual information form, can be accessed on the company's website or under the company's public filings found at SEDAR+.

First quarter conference call

Calfrac will be conducting a conference call for interested analysts, brokers, investors and news media representatives to review its 2024 first-quarter results at 10 a.m. (Mountain Time) on Tuesday, May 7, 2024. To participate in the conference call, please register on-line. Once registered, you will receive a dial-in number and a unique PIN (personal identification number), which will allow you to ask questions.

The call will also be webcast and can be accessed on-line. A replay of the webcast call will also be available on Calfrac's website for at least 90 days.

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