Trican Well Service Ltd.
TSX : TCW

Trican Well Service Ltd.

February 27, 2007 20:28 ET

Trican- 2006 Year End Record Results

CALGARY, ALBERTA--(CCNMatthews - Feb. 27, 2007) - Trican Well Service Ltd. (TSX:TCW):



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Financial Review Three months ended Years ended
($ millions, except per share December 31, December 31,
amounts, unaudited) 2006 2005 2006 2005
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(unaudited) (unaudited)
Revenue $ 208.3 $ 207.5 $ 847.5 $ 640.9
Operating income(1) 61.3 83.0 284.2 225.2
Net income before
stock-based
compensation
expense(1) $ 37.9 $ 52.3 $ 183.6 $ 136.9
Net income before
stock-based
compensation
expense per
share(2) (basic) $ 0.33 $ 0.46 $ 1.60 $ 1.21
(diluted) $ 0.32 $ 0.44 $ 1.55 $ 1.16
Net income 35.3 50.5 172.6 131.7
Net income per
share(2) (basic) $ 0.31 $ 0.45 $ 1.50 $ 1.17
(diluted) $ 0.30 $ 0.42 $ 1.44 $ 1.12
Funds provided
by operations(1) 63.5 88.9 226.5 202.2
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(1) Trican makes reference to operating income, net income before
stock-based compensation expense and funds from operations. These are
measures that are not recognized under Canadian generally accepted
accounting principles (GAAP). Management believes that, in addition to
net income, operating income, net income before stock-based
compensation expense, net income before stock-based compensation
expense per share and funds from operations are useful supplemental
measures. Operating income provides investors with an indication of
earnings before depreciation, taxes and interest. Net income before
stock-based compensation expense provides investors with information on
net income excluding the non-cash affect of stock-based compensation
expense. Funds from operations provide investors with an indication of
cash available for capital commitments, debt repayments and other
expenditures. Investors should be cautioned that operating income, net
income before stock-based compensation expense, and funds from
operations should not be construed as an alternative to net income
determined in accordance with GAAP as an indicator of Trican's
performance. Trican's method of calculating operating income, net
income before stock-based compensation expense and funds from
operations may differ from that of other companies and accordingly may
not be comparable to measures used by other companies.

(2) Comparative amounts have been restated to reflect the effect of the May
2006 two for one stock split.


FOURTH QUARTER HIGHLIGHTS

Results for the quarter ended December 31, 2006 reflect the impact of increased equipment capacity and strong demand for services for our Russian operations and lower demand for our services in Canada. Russian operations set new quarterly record highs for total revenue and revenue per job, as a result of expanded equipment capacity and operational reach. Activity in Canada was hampered by producer concerns with lower natural gas commodity prices, which reduced industry activity and demand for our services.

Activity in the Western Canadian Sedimentary Basin (WCSB), as measured by the number of active drilling rigs, decreased 25% for the quarter relative to the same period in 2005. Gas directed drilling in the shallow to intermediate depth areas of the basin was hardest hit, with lower demand for shallow cementing, conventional and CBM fracturing services. As a result of this significant drop in activity levels, revenue in Canada fell 18% relative to the comparable prior quarter.

Trican's consolidated revenue increased marginally compared to the same period in 2005 as the contribution from our Russian operations offset the decline in sales in Canada. Net income for the period of $35.3 million decreased 30% over the $50.5 million recorded in the fourth quarter of 2005. Similarly, the Company recorded net income per share, excluding the impact of stock-based compensation, of $0.33 ($0.32 diluted) versus $0.46 ($0.44 diluted) for the comparable period in 2005. Funds from operations of $63.5 million for the quarter decreased $25.4 million or 29% over the comparable period in 2005 primarily as a result of lower earnings.

HIGHLIGHTS FOR 2006

Trican's financial and operational performance for 2006 reflects strong demand for services in Canada for the first three quarters of the year coupled with record levels of activity from our Russian operations. The Company recorded revenues of $847.5 million in the year, surpassing the previous year's record of $640.9 million by over 32%. Net income set another Company record at $172.6 million increasing 31% from the previous year's record of $131.7 million. In line with higher net income, diluted earnings per share rose 29% to $1.44 from $1.12 in 2005. Funds from operations of $226.5 million for the year established another Company record and represents an increase of $24.3 million from the 2005 total of $202.2 million.

During the first quarter, a new record for the number of wells drilled in a quarter was established in the WCSB as strong commodity prices and an extended winter drilling season supported high levels of activity in the basin. However, unseasonably warm temperatures in much of North America led to a significant build up of natural gas inventory which precipitated a decrease in the price for natural gas resulting in reduced drilling activity over the remainder of the year. The average Nymex natural gas price for the month of December 2005 was $US 13.43 per Mmbtu; however, by the end of the year the average price in December had fallen by 47% to $US 7.16 per Mmbtu. Oil prices continued to perform well relative to last year as the average spot price of West Texas Intermediate, an international benchmark for crude oil, increased 17% in 2006 to US$66.05 per barrel from US$56.44 in 2005. However as with natural gas prices, oil prices fell later in the year causing uncertainty among producers and undermining demand for services.

Despite a year-over-year 6% decrease in drilling activity for the year, revenue from the Company's Canadian operations increased over 18% as a result of additional equipment capacity and the Company's strategic operational focus on the deeper, more technically challenging areas of the WCSB. The number of wells drilled fell 6% to 23,441 in 2006 versus 24,899 in 2005 and 22,729 in 2004. Activity levels were particularly hard hit in the shallow and intermediate depth areas as a result of producer's concerns over natural gas commodity prices. This led customers to reduce spending on marginal gas plays impacting shallow gas and coal bed methane exploitation programs. However, Trican's revenue in the northern and deeper areas of the basin increased 31% compared with last year, reflecting the Company's significant investment and strong operating presence in these markets. Work in these areas was less affected by short term commodity price weakness, as these development programs are focused on longer lived reserves with longer delivery times to market. However, activity in this area fell late in the year as producers completed or scaled back development programs.

Revenue from the Company's Russian operations benefited from a full year of operations from the Nefteyugansk base added late in 2005. Operating capacity was also expanded as Trican added two additional fracturing crews during the year, which drove record revenue of $191.8 million, a 125% increase over the prior year's $85.3 million. Operating margins also improved as a result of higher activity levels, management focusing on increasing operational efficiencies and improved pricing relative to the prior year.

OPERATIONS REVIEW

Trican provides a comprehensive array of specialized products, equipment and services that are used during the entire life cycle of an oil or gas well. The Company's pressure pumping operations are centered principally in Western Canada with growing operations in Russia and a new presence in the United States, which we established in early 2007.

Canadian Operations

2006 was a challenging year with demand for services falling significantly during the year. Activity in the first quarter established new highs as the year started off strongly aided by high demand for service and an extended winter drilling season. However, natural gas price weakness undermined activity as the year progressed and our customers re-examined their gas directed development programs.

The number of wells drilled in the WCSB fell 6%, from the record 24,899 wells established in 2005 to 23,441 wells in 2006. Natural gas wells represented approximately 68% of the total, compared with 72% in 2005. Shallow gas-oriented drilling, including coalbed methane (CBM) activity, weakened in 2006 as producers focused their spending on deeper plays with more robust economics. In 2006, approximately 2,500(1) CBM wells were drilled compared to approximately 3,000(2) in 2005, which represented a 17% decrease year-over-year.

(1) Petroleum Services Association of Canada

(2) Petroleum Services Association of Canada

Despite a 6% decrease in activity during the year, Canadian revenue was up 18% or just over $100 million. This increase was the result of relatively strong demand for the Company's fracturing services in the deeper, more technically challenging areas of the basin which were not affected by the slow down in drilling until the fourth quarter and additional investment in equipment capacity, in particular, nitrogen and fracturing capacity that service the deep areas of the WCSB. The Company benefited from 11 additional nitrogen units, three new conventional fracturing crews, two deep coiled tubing units and one new cement unit which were added relative to 2005.

Since going public in December 1996, Trican has invested almost $444 million in new equipment and facilities in Canada to meet the increasing demands of its customers. The majority of this investment has been directed to expanding equipment capacity to better service the deep areas of the basin where margins are highest. During 2006, Trican's Canadian capital budget was approximately $140 million and was directed to new equipment and facilities, with a particular emphasis on expanding our deep fracturing and nitrogen capacity. Trican is the preeminent pressure pumping company in Canada operating one of the largest fleets of equipment in Western Canada.



Number of Units at end of year
(Canada) 2004 2005 2006(C) 2007(D)
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Fracturing Crews(A)
Conventional 12 15 18 18
CBM(B) 2 4 4 4
Cement Pumpers 45 50 57 57
Deep Coiled Tubing Units 12 16 22 22
Shallow Coiled Tubing Units 11 8 8 8
Nitrogen Pumpers 16 22 32 32
Acidizing Units 10 12 13 13
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Notes:
(A) a fracturing crew is made up of several pieces of specialized equipment
(B) comprises principally high-rate nitrogen pumping units. These units
pump at higher rates than the pumpers used in our other areas of
business
(C) operational or in the final stages of construction
(D) capital program for the year has been deferred until after the first
quarter


With the significant investment program undertaken in recent years, Trican now operates the largest and most technologically advanced pressure pumping fleets in Canada. The Company has equipment situated across the entire basin; however, with a recent emphasis on building equipment to service the deeper more technical areas of the WCSB, Trican now believes it is the leading service provider to this growing market segment.

Russian Operations

Late in 2005, a new one year contract was awarded to Newco by Yuganskneftegaz, a subsidiary of Rosneft, for the provision of hydraulic fracturing services in the Priobskoye oilfield in the Khanty-Mansiysk region of Western Siberia. This contract was serviced out of the Company's Nefteyugansk base and work completed under this contract significantly increased fracturing revenue and revenue per job. As a result of Newco's high level of operational and technical performance under this contract, early in 2007, the Company was awarded a new three year contract to perform fracturing treatments. This contract, which is estimated to be worth approximately $US 210 to $US 250 million in revenue over its life, is an important milestone for the Company and further establishes a strategic relationship on which to base future growth.

Russian operations established new Company records for the year completing 1,552 jobs or an increase of over 9% relative to the prior year. Even more significant was the increase in revenue per job which more than doubled last year's amount to $123,611, a direct result of work performed in the Nefteyugansk area. Another Company milestone achieved was the largest fracturing treatment ever undertaken by Trican and what we believe was the largest treatment executed in Russia at that time. In late September, a Nefteyugansk fracturing crew completed a 536-tonne hydraulic fracturing treatment. This treatment took more than six hours to pump and was completed as planned without incident.

A key factor in the Company's record performance and growth is the strength of our Russian personnel. By attracting high quality personnel and continually investing in training programs for our staff, Newco has been able draw on our Russian employees to staff key management positions to support the growth of the Company. With these key individuals in place, the Company is well positioned to build strong working relationships with our customers. We believe this philosophy differentiates Newco from other service providers and has helped make us one of the largest pressure pumping companies operating in Russia.

Demand for fracturing services has grown sharply over recent years and Newco has expanded its equipment fleet to meet this growing demand. In 2006, the Board of Directors approved increases in the capital budget for Trican's Russian operations bringing the total budget for 2006 to $25 million. Trican used this additional investment to upgrade the pumping capacity and expand logistical support for the Company's fracturing operations, in response to increasing job sizes. Russia, which by the fourth quarter of 2006 represented almost 30% of Trican's Well Service Division revenue, is an exciting growth opportunity for the company. The robust growth in Russian revenues in 2006 helped offset a challenging year in Western Canada.

2007 is expected to see the continued growth in the Company's fracturing service lines with the addition of three new fracturing crews and three new cement pumpers. The Company also intends to broaden its service offerings to its customers by adding three deep coiled tubing units and nitrogen pumpers.

At the end of 2006, Trican has invested over $58 million in new equipment and facilities to support its growing Russian operations.



Number of Units at end of year
(Russia) 2004 2005 2006 2007(A)
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Fracturing Crews - Conventional 4 6 8 11
Cement Pumpers 3 3 3 6
Deep Coiled Tubing - - - 3
Nitrogen Pumpers - - - 3
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Note:
(A) expected equipment capacity at the end of the year based upon approved
budgets


United States Operations

On February 2, 2007, Trican announced an agreement to acquire Liberty Pressure Pumping LP ("Liberty"), a provider of pressure pumping services in Texas. Headquartered in Denton, Texas, Liberty provides fracturing stimulation services principally in the active Barnett Shale play of North Texas, where it currently operates four crews of fracturing equipment. Two additional crews are currently under construction. The fifth crew should be deployed by the end of the first quarter of 2007 and the sixth crew during the third quarter. When fully operational, these six crews will add an additional 130,000 hp to Trican's worldwide fracturing fleet. In addition, Liberty has contracts in place for the fabrication of three further fracturing crews with delivery anticipated in the third and fourth quarters of 2007; these three crews will add another 56,000 hp to the fracturing fleet.



QUARTERLY COMPARATIVE INCOME STATEMENTS
($ thousands, unaudited)
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Quarter-
over-
Three months ended % of % of Quarter %
December 31, 2006 Revenue 2005 Revenue Change Change
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Revenue 208,329 100.0% 207,502 100.0% 827 0%
Expenses
Materials and
operating 137,870 66.2% 118,673 57.2% 19,197 16%
General and
administrative 9,147 4.4% 5,828 2.8% 3,319 57%
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Operating income(1) 61,312 29.4% 83,001 40.0% (21,689) -26%
Interest expense 71 0.0% 356 0.2% (285) -80%
Depreciation and
amortization 9,848 4.7% 6,775 3.3% 3,073 45%
Foreign exchange
(gain)/loss (853) -0.4% 460 0.2% (1,313) -285%
Other income (1,079) -0.5% (487) -0.2% (592) -122%
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Income before income
taxes and
non-controlling
interest 53,325 25.6% 75,897 36.6% (22,572) -30%
Provision for income
taxes 17,758 8.5% 25,322 12.2% (7,564) -30%
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Income before
non-controlling
interest 35,567 17.1% 50,575 24.4% (15,008) -30%
Non-controlling
interest 240 0.1% 112 0.1% 128 114%
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Net Income 35,327 17.0% 50,463 24.3% (15,136) -30%
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The Company operates three divisions - Well Service, Production Services and Corporate. The Well Service Division provides deep coiled tubing; nitrogen; fracturing, including coalbed methane fracturing; and cementing services. The Production Services Division provides acidizing, intermediate depth coiled tubing, and industrial services.



FINANCIAL REVIEW

WELL SERVICE DIVISION

Overview
Three months ended Quarter-
December 31, Over-
($ thousands, % of % of Quarter
unaudited) 2006 Revenue 2005 Revenue Change
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Revenue 196,938 196,766 0%
Expenses
Materials and
operating 128,646 65.3% 110,167 56.0% 17%
General and
administrative 525 0.3% 287 0.1% 83%
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Total expenses 129,171 65.6% 110,454 56.1%
Operating income(1) 67,767 34.4% 86,312 43.9% -21%
Number of jobs 6,290 8,032 -22%
Revenue per job 31,562 24,630 28%
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The Well Service Division's performance for the quarter reflects continued strong demand for services in Russia, offset by lower activity in Canada. Revenue for the quarter was the third highest in the Company's history and improved slightly over the comparable 2005 amount. The geographic mix for the quarter reflects the growth of Russian operations and the decline in activity in Canada. Russian operations accounted for 29% of revenue for the quarter, a strong increase from 13% last year. Correspondingly, Canadian operations fell to 71% of total revenue for the quarter from 87% last year. Revenue per job was the second highest on record for a quarter, increasing 28% over last year. Significant growth in conventional fracturing revenue as a proportion of total Well Service revenue, larger overall job size in Russia and continued focus on operations in the deeper, more technically challenging areas of the Canadian basin were contributing factors in elevating revenue per job.

The total number of jobs completed in the quarter fell 22% relative to the comparable prior period as a 5% increase in the number of jobs completed in Russia was unable to overcome a 23% decline in Canadian activity. The Well Service Division continues to be the Company's largest division, making up 95% of total revenue for the quarter, consistent with the same period in 2005. Within this Division, fracturing services, which includes CBM fracturing, increased to 67% of divisional revenue versus 57% in the fourth quarter of 2005. Cementing made up 22% versus 30% last year, while coiled tubing and nitrogen services combined for the remaining 11%.



Well Service - Canadian Operations

Three months ended Quarter-
December 31, Over-
($ thousands, % of % of Quarter
unaudited) 2006 Revenue 2005 Revenue Change
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Revenue 139,035 170,203 -18%
Expenses
Materials and
operating 86,453 62.2% 89,976 52.9% -4%
General and
administrative 375 0.3% 265 0.2% 42%
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Total expenses 86,828 62.5% 90,241 53.0%
Operating income(1) 52,207 37.5% 79,962 47.0% -35%
Number of jobs 5,883 7,644 -23%
Revenue per job 23,896 22,384 7%
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Results from Canadian operations reflect the impact of a 25% reduction in activity in the quarter which resulted in an 18% decrease in revenue compared with the same period in 2005. Job count fell by 23% to 5,883 jobs with all service lines reflecting the impact of lower demand for services. Concern over lower natural gas prices reduced activity in all areas of operations but had a greater impact on activity in the shallow and intermediate depth areas of the basin during the quarter. CBM activity suffered from reduced demand as well as increased competition from new service providers. To counter this, the Company recently secured a long-term arrangement that management expects will result in three of its four CBM fracturing crews being fully utilized during the first quarter 2007, and half of the crews fully utilized during the remainder of the year.

Revenue per job increased 7% quarter-over-quarter as a result of fracturing contributing a larger proportion of total revenue, a February 2006 price book increase and continued growth in the proportion of services performed in the deeper areas of the basin. The Company continued to bolster its operating capabilities in this segment of the basin with the addition of three new bases compared to last year. The Company also added three additional fracturing crews, two new deep coil tubing units, 11 nitrogen units and one additional cementing unit operating relative to the comparable prior quarter.

Materials and operating expense for the quarter decreased $3.5 million; however, they increased as a percentage of revenue compared with the same period in 2005. Although demand for services fell in the fourth quarter, the Company was not able to adjust its fixed cost structure in advance of the winter drilling season resulting in a loss of operational leverage. Higher salary and benefit costs resulted from carrying an elevated staffing level through the fourth quarter in anticipation of a busy first quarter of 2007. General and administrative costs remained relatively unchanged on a quarter-over-quarter basis.



Well Service - Russian Operations

Three months ended Quarter-
December 31, Over-
($ thousands, % of % of Quarter
unaudited) 2006 Revenue 2005 Revenue Change
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Revenue 57,903 26,563 118%
Expenses
Materials and
operating 42,193 72.9% 20,191 76.0% 109%
General and
administrative 150 0.3% 22 0.1% 582%
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Total expenses 42,343 73.1% 20,213 76.1%
Operating income(1) 15,560 26.9% 6,350 23.9% 145%
Number of jobs 407 388 5%
Revenue per job 142,368 68,889 107%
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Revenue for the quarter from Russian operations, which comprises fracturing and cementing services, increased 118% to a record $57.9 million compared to the same period in 2005. Revenue improved as a result of strong demand for services, expanded equipment capacity and a new operations base in Nefteyugansk established late in 2005. Trican built this base as a result of securing a major contract in the area. Operating capacity increased significantly with the addition of two fracturing crews since the fourth quarter of 2005, bringing the total operating capacity to eight fracturing crews. This additional equipment capacity was added to support higher levels of demand for services, a broadening customer base and an expanded operational reach. As a result of overall larger job sizes and improved contract pricing, revenue per job of $142,368 set another new record, more than doubling the comparable prior quarter's amount of $68,889. The number of jobs completed increased by 5% to 407 jobs, the second highest for a quarter in the Company's history. Fracturing represented 97% of total Russian revenues and cementing accounted for 3% for the quarter, compared to 96% and 4% respectively for the same period last year.

Materials and operating expense for the quarter decreased as a percentage of revenue to 72.9%, compared to 76.0% for the same period in 2005. The decrease was a result of improved pricing, a continued focus on achieving efficiency gains and increased operating leverage on our fixed cost structure. General and administrative expenses remained relatively unchanged on a quarter-over-quarter basis.

Fourth quarter operating margins were approximately 2% lower as a percentage of revenue from the third quarter of 2006, due in part to increased staffing levels necessitated by the planned addition of fracturing and cement equipment. The ninth fracturing crew and fourth cementing unit, approved under the 2007 business plan, were rushed into service early to meet customer demands and the upcoming busy winter drilling season. Also reducing margins compared with the third quarter were higher repairs and maintenance costs, as equipment was prepared for the demanding winter season.



PRODUCTION SERVICES DIVISION

Three months ended Quarter-
December 31, Over-
($ thousands, % of % of Quarter
unaudited) 2006 Revenue 2005 Revenue Change
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Revenue 11,391 10,736 6%
Expenses
Materials and
operating 8,862 77.8% 7,999 74.5% 11%
General and
administrative 52 0.5% 46 0.4% 13%
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Total expenses 8,914 78.3% 8,045 74.9%
Operating income(1) 2,477 21.7% 2,691 25.1% -8%
Number of jobs 798 605 32%
Revenue per job 10,598 10,636 0%
Number of hours 2,159 3,055 -29%
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The Production Services Division includes intermediate depth coiled tubing services, acidizing services and industrial services.

During the quarter, revenue from the Production Services Division increased 6% over the same period of 2005, primarily as a result of a significant increase in industrial service work, offset by lower revenue from intermediate depth coiled tubing. The number of jobs completed increased by 32% as a result of completing larger industrial service jobs and having one additional acid unit quarter-over-quarter. Revenue per job remained relatively unchanged while the number of hours for the intermediate depth coiled tubing service line decreased 29% versus the fourth quarter of 2005.

Materials and operating expenses increased as a percentage of revenue to 77.8% compared to 74.5% for the same period of 2005, as a result of a decrease in overall activity including a marked decline in shallow coiled tubing services. GenrGGeneralk GGGGeneral Administrative expenses remained relatively unchanged on a quarter-over-quarter basis.



CORPORATE DIVISION

Three months ended Quarter-
December 31, % of % of Over-
($ thousands, Total Total Quarter
unaudited) 2006 Revenue 2005 Revenue Change
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Expenses
Materials and
operating 363 0.2% 506 0.2% -28%
General and
administrative 8,569 4.1% 5,496 2.6% 56%
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Total expenses 8,932 4.3% 6,002 2.9%
Operating loss(1) (8,932) (6,002) 49%
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Corporate Division expenses consist mainly of general and administrative expenses. Overall, expenses increased $2.9 million on a quarter-over-quarter basis and increased as a percentage of revenue. General and administrative costs increased $3.1 million due to higher stock-based compensation and staffing costs, and an increase to the provision for doubtful accounts partially offset by lower deferred share unit costs. Higher stock-based compensation and staffing costs accounted for $1.6 million of the increase while an increase in the provision for doubtful accounts contributed an additional $1.3 million. Offsetting this was a reduction in deferred share unit costs of $0.6 million as a result of a decrease in the Company's share price quarter-over-quarter. The remaining increase of $0.8 million was a result of higher legal and general and administrative expenses.

OTHER EXPENSES AND INCOME

Interest expense decreased to $0.1 million as a result of repayment of debt. Depreciation and amortization increased by $3.1 million for the quarter relative to the same period in 2005 as a result of the continued investment in equipment and operations facilities. Foreign exchange gains increased quarter-over-quarter by $1.3 million as a result of US and Ruble currency fluctuations relative to the Canadian dollar. Other income increased $0.6 million as a result of interest income earned on larger cash balances.



Comparative Annual Income Statements
($ thousands; unaudited)
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Year-
over-
Years ended % of % of Year- %
December 31, 2006 Revenue 2005 Revenue Change Change
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Revenue 847,472 100.0% 640,898 100.0% 206,574 32%
Expenses
Materials and
operating 531,875 62.8% 393,347 61.4% 138,528 35%
General and
administrative 31,405 3.7% 22,373 3.5% 9,032 40%
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Operating income(1) 284,192 33.5% 225,178 35.1% 59,014 26%
Interest expense 736 0.1% 1,624 0.3% (888) -55%
Depreciation and
amortization 34,798 4.1% 24,335 3.8% 10,463 43%
Foreign exchange gain (2,027) -0.2% (798) -0.1% (1,229) -154%
Other income (2,321) -0.3% (838) -0.1% (1,483) -177%
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Income before income
taxes and
non-controlling
interest 253,006 29.9% 200,855 31.3% 52,151 26%
Provision for income
taxes 79,633 9.4% 68,762 10.7% 10,871 16%
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Income before
non-controlling
interest 173,373 20.5% 132,093 20.6% 41,280 31%
Non-controlling
interest 810 0.1% 363 0.1% 447 123%
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Net income 172,563 20.4% 131,730 20.6% 40,833 31%
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The Company operates three divisions - Well Service, Production Services and Corporate. The Well Service Division provides deep coiled tubing; nitrogen; fracturing, including coalbed methane fracturing; and cementing services. The Production Services Division provides acidizing, intermediate depth coiled tubing, and industrial services.



WELL SERVICE DIVISION

Overview
Years ended Year-
December 31, over-
($ thousands, % of % of Year-
unaudited) 2006 Revenue 2005 Revenue Change
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Revenue 797,517 601,670 33%
Expenses
Materials and
operating 495,558 62.1% 361,735 60.1% 37%
General and
administrative 1,493 0.2% 1,105 0.2% 35%
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Total expenses 497,051 62.3% 362,840 60.3%
Operating income(1) 300,466 37.7% 238,830 39.7% 26%
Number of jobs 26,178 25,890 1%
Revenue per job 30,679 23,393 31%
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The Well Service Division's record financial and operating performance for the year reflects the growth of Russia operations, strong initial demand for services in Canada and the impact of expanded equipment capacity in both markets. Revenue for the 12 months ended December 31, 2006 for the Well Service Division increased 33% compared to the same period in 2005. Geographically, Russian operations accounted for 24% of the revenue for the year, an increase from 14% last year, reflecting the increased scope of operations and strong demand for services. Correspondingly, Canadian revenue fell to 76% of total revenue from 86% last year as a result of a decline in activity in the second half of the year.

Revenues for each service line increased over 2005 levels with fracturing and cementing contributing the greatest increases. The growth in fracturing revenue was significant, making up 84% of the total increase in Well Service revenue on a year-over-year basis. This improvement was due to increased equipment capacity, coupled with larger, more technically challenging jobs which drove higher revenue per job. Additional equipment helped set a new Company record for total number of jobs completed, increasing to 26,178, versus the previous year's record of 25,890. Revenue per job increased 31% and established another Company record as a result of continued focus by Canadian operations on the deeper, more technically challenging areas of the market and increased fracturing job size in Russia.

Revenue from the Well Service Division accounted for 94% of total Company revenue and this was consistent with 2005. On a year-over-year basis, fracturing services revenue, which includes CBM fracturing, increased to 63% of total Well Service revenue compared to 56% for the corresponding period of 2005. Cementing services contributed 26% of the total sales of the Well Service Division, compared to 30% in 2005. Coiled tubing accounted for 6% and Nitrogen contributed 5% of total Well Service revenue versus 8% and 6% respectively in 2005.



Well Service - Canadian Operations

Years ended Year-
December 31, Over-
($ thousands, % of % of Year
unaudited) 2006 Revenue 2005 Revenue Change
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Revenue 605,725 516,398 17%
Expenses
Materials and
operating 355,903 58.8% 296,842 57.5% 20%
General and
administrative 1,243 0.2% 908 0.2% 37%
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Total expenses 357,146 59.0% 297,750 57.7%
Operating income(1) 248,579 41.0% 218,648 42.3% 14%
Number of jobs 24,626 24,472 1%
Revenue per job 24,822 21,240 17%
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Revenue from Canadian operations increased 17% or $89.3 million to a record $605.7 million year-over-year despite a 6% drop in drilling activity levels. Canadian revenue per job also set a new record, surpassing the previous year's record by 17%. The growth in revenue per job was the result of growth in fracturing services, a February 2006 price book increase for this geographic segment and a greater proportion of work performed in the deeper areas of the basin. The number of jobs performed established another new record at 24,822 jobs, which edged out last year's record as a result of the addition of 11 nitrogen units, three conventional fracturing crews, two deep coiled tubing units and one cement unit relative to 2005.

Materials and operating expense for the year increased marginally as a percentage of revenue to 58.8% compared to 57.5% for the same period in 2005. Higher fixed salary and benefit costs represented the majority of the increase, as staff was hired to man new equipment arriving late in the year in anticipation of the winter drilling season. General and administrative costs remained relatively unchanged on a year-over-year basis.



Well Service - Russian Operations

Years ended Year-
December 31, Over-
($ thousands, % of % of Year
unaudited) 2006 Revenue 2005 Revenue Change
-------------------------------------------------------------------
Revenue 191,792 85,272 125%
Expenses
Materials and
operating 139,655 72.8% 64,893 76.1% 115%
General and
administrative 250 0.1% 197 0.2% 27%
--------- ---------
Total expenses 139,905 72.9% 65,090 76.3%
Operating income(1) 51,887 27.1% 20,182 23.7% 157%
Number of jobs 1,552 1,418 9%
Revenue per job 123,611 60,558 104%
-------------------------------------------------------------------
-------------------------------------------------------------------


Revenue from Russian operations increased over $106 million or 125% year-over-year to a record $191.8 million as a result of expanded operational reach and additional operating capacity. Russian job count of 1,552 was the highest on record for a year, increasing 9% over the level set the previous year due to additional equipment capacity, expanded area of operations and strong demand for services. Revenue per job also set a new record increasing 104% to $123,611, a direct result of larger more technical jobs, particularly in the Nefteyugansk area.

Materials and operating expenses for the year decreased as a percentage of revenue to 72.8% from the 76.1% recorded in the previous year. The decrease was a result of improved pricing, a continued focus on achieving efficiency gains and increased operating leverage. General and administrative expenses remained relatively unchanged year-over-year.



PRODUCTION SERVICES DIVISION

Years ended Year-
December 31, Over-
($ thousands, % of % of Year
unaudited) 2006 Revenue 2005 Revenue Change
-------------------------------------------------------------------
Revenue 49,955 39,228 27%
Expenses
Materials and
operating 34,563 69.2% 29,514 75.2% 17%
General and
administrative 385 0.8% 169 0.4% 128%
--------- ---------
Total expenses 34,948 70.0% 29,683 75.7%
Operating income(1) 15,007 30.0% 9,545 24.3% 57%
Number of jobs 3,112 2,211 41%
Revenue per job 10,960 10,213 7%
Number of hours 11,947 13,951 -14%
-------------------------------------------------------------------
-------------------------------------------------------------------


Revenue from the Production Services Division increased by 27% on a year-over-year basis as a result of a significant increase in acidizing and industrial service revenue. The number of jobs completed increased by 41% as a result of more acidizing units in service and larger industrial service jobs completed relative to the prior year. Revenue per job increased by 7% as a result of a price book increase in February 2006 coupled with a greater proportion of industrial service jobs, which have higher average revenue per job. Demand for acidizing services benefited from higher oil prices relative to natural gas prices leading customers to focus on oil well stimulation while larger industrial service job sizes drove strong results for this segment.

Revenue from the Production Services Division accounted for 6% of the total revenue of the Company and this was consistent with the prior year. As in the prior year, acidizing services made the largest contribution to this Division's total revenue at 60%, followed by industrial service at 21%. Coiled tubing made up 19% of total divisional revenue for the year.

Materials and operating expense decreased as a percentage of revenue to 69.2% compared to 75.2% of revenue for the same period of 2005, as a result of greater operating leverage. General and administrative expenses remained relatively unchanged on a year-over-year basis.



CORPORATE DIVISION

Years ended Year-
December 31, % of % of Over-
($ thousands, Total Total Year
unaudited) 2006 Revenue 2005 Revenue Change
-------------------------------------------------------------------
Expenses
Materials and
operating 1,621 0.2% 2,098 0.3% -23%
General and
administrative 29,660 3.5% 21,099 3.3% 41%
--------- ---------
Total expenses 31,281 3.7% 23,197 3.6%
Operating loss(1) (31,281) (23,197) 35%
-------------------------------------------------------------------
-------------------------------------------------------------------


Corporate Division expenses increased $8.1 million overall on a year-over-year basis; however, as a percentage of revenue, they remained relatively unchanged. General and administrative costs increased $8.6 million due to higher stock-based compensation and salary costs, and an increase to the provision for doubtful accounts partially offset by lower deferred share unit costs (DSU). Stock-based compensation and salary costs accounted for $8.0 million of the increase while an increase in the bad debt provision represented $1.9 million. Offsetting this was a decrease in DSU costs of $2.7 million as a result of a decline in the Company's share price year-over-year. The remaining increase of $1.4 million was a result of higher general administrative expenses as a result of growth of the company.

OTHER EXPENSES AND INCOME

Interest expense for the year decreased $0.9 million, primarily as a result of repayment of various loans over the last year. Depreciation and amortization increased by $10.5 million on a year-over-year basis as a result of the continued expansion of the Company's equipment capacity and operating facilities. Fluctuations in the U.S. and Ruble currency against the Canadian dollar resulted in a $1.2 million increase in foreign exchange gains as compared with the prior year. Other expense and income increased by $1.5 million on a year-over-year basis due to higher interest income earned as a result of higher cash balances on hand.

INCOME TAXES

Trican's income tax expense increased as a result of an increase in profitability in 2006. The Company's effective tax rate during 2006 was 31.5%, which is lower than the prior year's 34.2% due to growth in taxable income from foreign subsidiaries, which are taxed at a lower rate, and the Federal and Provincial government's announcement of reductions to their corporate income tax rates which were substantively enacted in the second quarter 2006. This was slightly offset by higher non-deductible expenses, such as stock-based compensation expense. The future tax component relates to the deferral of taxable income as a result of the Trican partnership, as well as to accelerated deductions for capital cost allowance for tax purposes claimed in excess of depreciation and amortization for accounting purposes.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Funds provided by operations decreased 29% to $63.5 million from $88.9 million in the fourth quarter of 2006 as a result of lower earnings before income tax in Canada offset by strong results from our Russian operations. For the year ended December 31, 2006 funds from operations established a new Company record and totaled $226.5 million, an increase of 12% from the 2005 total of $202.2 million. The increase was a direct result of a significant improvement in earnings for both Canada and Russia for the year.

At December 31, 2006 the Company had working capital of $239.2 million which was an increase of $86.3 million over the 2005 year end level of $152.9 million. Significant increases in activity levels in Russia necessitated carrying higher inventory levels while higher cash balances resulted from increased earnings. Offsetting these increases were higher current income taxes payable. The change in current portion of long-term debt was the result of repayment of certain lease obligations.

The Company has a bank facility available for working capital and equipment financing requirements. At December 31, 2006, all of these lines were available for use.

Capital Resources

Trican's debt is all current at year-end 2006 compared with $6.7 million of long-term debt outstanding at the end of 2005. This debt is in the form of lease facilities involving certain pieces of the Company's operating equipment. These arrangements are reflected in the accounts of the Company as capital leases, and are repayable over 84 months from the commencement of the lease. The leases contain no financial covenants and bear interest at an average of 8.12%. The Company believes that its strong balance sheet and unutilized borrowing capacity combined with funds from continuing operations will provide sufficient capital resources to fund its on-going operations and future expansion.

SUBSEQUENT EVENT

On February 2, 2007 the Company announced that it has reached an agreement to acquire approximately 93% of Liberty Pressure Pumping LP ("Liberty"), a provider of pressure pumping services in Texas. Headquartered in Denton, Texas, Liberty provides stimulation services used in the development and completion of oil and gas wells.

Under the terms of the agreement Trican, through a wholly-owned U.S. subsidiary, will acquire an approximate 93% interest in Liberty in exchange for cash consideration of $U.S. 189.8 million and $US 65.9 million of Trican common shares (number of shares to be determined by the $Cdn:$US exchange rate at closing and a value per share of $Cdn 19.33). Liberty management will retain an approximate 7% interest. Trican will acquire the remaining interest over three years in equal installments at a price based upon the financial results of Liberty, in accordance with previously agreed upon terms. Cash consideration will be funded from existing cash and bank facilities and a planned debt financing. The transaction was announced February 2 and is expected to close early March.

Liberty provides fracturing stimulation services, principally in the Barnett Shale play of North Texas, where it currently operates four crews of fracturing equipment. Two additional crews(FK1)(FK2) are currently under construction; the fifth crew is expected to be deployed by the end of the first quarter of 2007 and the sixth crew during the third quarter. When fully operational, these six crews will add an additional 130,000 hp to Trican's worldwide fracturing fleet. In addition, Liberty has contracts in place for the fabrication of three further fracturing crews with delivery anticipated in the third and fourth quarters of 2007; these three crews would add another 56,000 hp to the fracturing fleet. Liberty had growing revenues of approximately $US 42.7 million in 2006.

Liberty is a newly formed company that began operations in 2006. However, Liberty's management team, who will continue to run the operations, bring with them many years of experience, strong customer relationships and a good understanding of the Texas market.

INVESTING ACTIVITIES

Capital expenditures for the quarter and the year totaled $25.2 and $130.1 million respectively. This compares with $32.4 million and $120.0 million for the same periods in 2005. The majority of this investment was directed to well service equipment and facilities, in particular, fracturing and nitrogen and related support equipment and infrastructure. The capital program undertaken during the year was funded entirely by cash flow from operations.

During the year, the Company acquired an additional 1.5% interest for $2.5 million in the company holding the Russian operations. This transaction, which was in accordance with a pre-existing agreement, brought the Company's interest to 97%.

CASH REQUIREMENTS

The Company has historically financed its capital expenditures with funds from operations, equity issues and debt. At the end of 2006, the Company had a number of ongoing capital projects and estimates that $35.7 million of additional investment will be required to complete these projects. In addition to these amounts, capital expenditures under the Company's 2007 business plan for Russian Operations are expected to total a record $US 77 million as a result of recent contract awards, customer requests to broaden service offerings and continued strong demand for the Company's current services. The Company will determine its 2007 capital program for Canadian operations after the end of the winter drilling season.

The recently announced Liberty acquisition discussed in the Subsequent Event section will be financed by existing cash and bank facilities and a planned debt financing. The Company's existing bank facilities will be increased as a result of the transaction.

Trican continues to review opportunities for growth in North America, Russia, and in other parts of the world. The capital budget may be increased if viable business opportunities are identified by the Company.

FINANCING ACTIVITIES

The Company had a $15.0 million operating line and $25.0 million extendible revolving equipment and acquisition line. At December 31, 2006, no amounts were drawn on these facilities.

As at February 27, 2007, the Company had 115,651,417 common shares and 10,505,801 employee stock options outstanding.

BUSINESS RISKS

A complete discussion of business risks faced by the Company may be found under "Management's Discussion and Analysis in Trican's 2005 Annual Report.

OUTLOOK

Russia

Demand for services in Russian continues to look strong. Earlier this year, Trican's Russian operations were awarded a three-year strategic contract with Yuganskneftegaz. This contract is for a guaranteed number of large volume fracturing jobs over three years commencing January 1, 2007 subject to ongoing work performance requirements, with potential for a 20% increase in work scope over the contract term. This contract award was based on the Company's high level of operational and technical performance and over its life is estimated to generate revenue of approximately US$210 to $250 million.

Trican also intends to invest an additional $US 77 million in its Russian operations in 2007. The funds will be used to expand operating capacity and to broaden service offerings. Equipment capacity for our fracturing and cementing services will be enhanced by the addition of three new fracturing crews and three cement units. To broaden its service offerings, the Company will also be introducing three deep coiled tubing units and three nitrogen units into the market during the year.

Canada

During the first quarter of 2006, North America experienced one of the warmest winters on record which significantly reduced the amount of natural gas consumed during the winter heating season. Higher than normal natural gas storage levels persisted for the balance of the year reducing natural gas prices and gas directed drilling programs. Expected demand for services in Canada for the upcoming year is, in large part, dependent upon the severity of the winter experienced in the natural gas consuming markets of North America. To date, winter temperatures in these markets have been colder than experienced in 2006 but have been somewhat warmer than typically experienced over the last five years. As a result, some industry watchers have indicated that activity levels in Canada could be 5 - 10% lower in 2007 than seen in recent years. Due to this uncertainty, management has deferred finalizing the 2007 capital program until the end of the winter heating season.

United States

The Company recently announced an agreement to acquire Liberty Pressure Pumping LLP, a fracturing service company with operations centered in the Barnett Shale play of North Texas. This transaction is expected to close in early March. Unlike western Canada, on-shore natural gas directed drilling activity in the United States has continued at strong levels despite weakening natural gas commodity prices. Like the Canadian pressure pumping market, demand for services will be strongly influenced by near and medium term natural gas prices. Management believes that activity will continue at strong levels in the areas in which the Company intends to operate due to the economic performance of the gas plays in this area and the unique elements of the exploitation leases which reinforce the need to continue to drill prospects.

With the significant investment undertaken in equipment and facilities in recent years, Trican is committed to meeting the demands of its customers and becoming the preeminent pressure pumping Company in our areas of operations. In Canada, the Company is well equipped to respond to changes in demand for services. In Russia, the Company's emerging position as a leading provider of pressure pumping services is presenting it with new growth opportunities. In the US, the Liberty acquisition will provide the Company with a solid platform for additional growth.

With the Company's unique position in three of the leading pressure pumping markets in the world, Trican is well positioned to continue to deliver strong financial and operational performance.

FORWARD-LOOKING STATEMENTS

This document contains statements that constitute forward-looking statements within the meaning of applicable securities legislation. These forward-looking statements include, among others, the Company's prospects, expected revenues, expenses, profits, expected developments and strategies for its operations, and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "achieve", "achievable," "believe," "estimate," "expect," "intend", "plan", "planned", and other similar terms and phrases. Forward-looking statements are based on current expectations, estimates, projections and assumptions that involve 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; and availability of products, qualified personnel, manufacturing capacity and raw materials. If any of these uncertainties materialize, or if assumptions are incorrect, actual results may vary materially from those expected.



CONSOLIDATED BALANCE SHEETS

(Stated in thousands; unaudited) As at December 31, 2006 2005
---------------------------------------------------------------------------
ASSETS
Current assets
Cash and short-term deposits $ 94,710 $ 35,023
Accounts receivable 156,306 145,717
Inventory 80,029 40,314
Prepaid expenses 11,807 6,707
---------------------------------------------------------------------------
342,852 227,761
Property and equipment (note 5) 384,659 290,512
Future income tax assets (note 11) 2,396 2,693
Other assets 1,321 2,803
Goodwill (note 4) 13,983 11,774
---------------------------------------------------------------------------
$ 745,211 $ 535,543
---------------------------------------------------------------------------
---------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 58,142 $ 59,731
Dividend payable 5,760 -
Current income taxes payable 36,312 7,683
Current portion of long-term debt (note 7) 3,397 7,451
---------------------------------------------------------------------------
103,611 74,865

Long-term debt (note 7) - 6,703
Future income tax liabilities (note 11) 100,413 91,991
Non-controlling interest (note 4) 1,419 901
Shareholders' equity
Share capital (note 8) 84,661 77,806
Contributed surplus 15,638 6,251
Foreign currency translation adjustment (7,137) (8,521)
Retained earnings 446,606 285,547
---------------------------------------------------------------------------
539,768 361,083
---------------------------------------------------------------------------
Contractual obligations and contingencies
(note 13 and 15)
Subsequent event (note 16)
$ 745,211 $ 535,543
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.


CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS

Three Three
Months Months Year Year
Ended Ended Ended Ended
(Stated in thousands, except Dec. 31, Dec. 31, Dec. 31, Dec. 31,
per share amounts; unaudited) 2006 2005 2006 2005
---------------------------------------------------------------------------

Revenue (note 14) $ 208,329 $ 207,502 $ 847,472 $ 640,898
Expenses
Materials and operating 137,870 118,673 531,875 393,347
General and administrative 9,147 5,828 31,405 22,373
---------------------------------------------------------------------------
Operating income 61,312 83,001 284,192 225,178
Interest expense on long-term
debt 71 356 736 1,624
Depreciation and amortization 9,848 6,775 34,798 24,335
Foreign exchange (gain)/loss (853) 460 (2,027) (798)
Other income (1,079) (487) (2,321) (838)
---------------------------------------------------------------------------
Income before income taxes and
non-controlling interest 53,325 75,897 253,006 200,855
Provision/(recovery) for current
income taxes (note 11) 1,386 (3,780) 70,816 26,967
Provision for future income taxes
(note 11) 16,372 29,102 8,817 41,795
---------------------------------------------------------------------------
Income before non-controlling
interest 35,567 50,575 173,373 132,093
Non-controlling interest (note 4) 240 112 810 363
---------------------------------------------------------------------------
Net income 35,327 50,463 172,563 131,730
Retained earnings, beginning of
period 417,039 235,084 285,547 153,817
Dividend (5,760) - (11,504) -
---------------------------------------------------------------------------
Retained earnings, end of period $ 446,606 $ 285,547 $ 446,606 $ 285,547
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Earnings per share (note 9)
Basic $ 0.31 $ 0.45 $ 1.50 $ 1.17
Diluted $ 0.30 $ 0.42 $ 1.44 $ 1.12
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Dividend per share $ 0.05 $ - $ 0.10 $ -
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Weighted average shares
outstanding - basic (note 9) 115,155 113,824 114,846 113,232
Weighted average shares
outstanding - diluted (note 9) 119,605 119,585 119,572 118,329
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.


CONSOLIDATED CASH FLOW STATEMENTS

Three Three
Months Months Year Year
Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
(Stated in thousands; unaudited) 2006 2005 2006 2005
---------------------------------------------------------------------------
Cash Provided By (Used In):
Operations
Net income $ 35,327 $ 50,463 $ 172,563 $ 131,730
Charges to income not involving
cash:
Depreciation and amortization 9,848 6,775 34,798 24,335
Future income tax provision 16,372 29,102 8,817 41,795
Non-controlling interest 240 112 810 363
Stock-based compensation 2,542 1,851 11,028 5,158
(Gain)/loss on disposal of
property and equipment 63 (50) 442 (92)
Gain on sale of investment (135) - (135) -
Unrealized foreign exchange
(gain)/loss (756) 601 (1,803) (1,120)
---------------------------------------------------------------------------
Funds provided by operations 63,501 88,854 226,520 202,169
Net change in non-cash working
capital from operations (15,115) (32,992) (22,963) (57,469)
---------------------------------------------------------------------------
Net cash provided by operations 48,386 55,862 203,557 144,700

Investing
Purchase of property and equipment (25,183) (32,398) (130,130) (119,970)
Proceeds from the sale of property
and equipment - 2,318 1,294 3,170
Purchase of other assets - (30) (7) (36)
Business acquisitions - - (2,536) (4,185)
Net change in non-cash working
capital from the purchase of
property and equipment (5,147) (3,127) (1,204) (1,619)
---------------------------------------------------------------------------
(30,330) (33,237) (132,583) (122,640)

Financing
Net proceeds from issuance of
share capital 629 957 5,214 6,638
Repayment of long-term debt (531) (1,136) (10,757) (8,030)
Dividend paid - - (5,744) -
---------------------------------------------------------------------------
98 (179) (11,287) (1,392)

Increase in cash and short-term
deposits 18,154 22,446 59,687 20,668
Cash and short-term deposits,
beginning of period 76,556 12,577 35,023 14,355
---------------------------------------------------------------------------
Cash and short-term deposits, end
of period $ 94,710 $ 35,023 $ 94,710 $ 35,023
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Supplemental information
Income taxes paid 9,878 5,601 43,666 30,571
Interest paid 71 275 736 1,543
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.


Notes to Consolidated Financial Statements

For the years ended December 31, 2006 and 2005

NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of business

Trican Well Service Ltd. (the "Company") is an oilfield services Company incorporated under the laws of the province of Alberta. The Company provides a comprehensive array of specialized products, equipment, services and technology for use in the drilling, completion, stimulation and reworking of oil and gas wells in Western Canada, Russia and Kazakhstan.

Basis of presentation

The financial statements are prepared in accordance with Canadian Generally Accepted Accounting Principles. Management is required to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from these estimates.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements:

Consolidation

These consolidated financial statements include the accounts of the Company and its subsidiaries, all of which, except one, are wholly owned. All inter-company balances and transactions have been eliminated on consolidation.

Cash and short-term deposits

The Company's short-term investments with original maturities of three months or less are considered to be cash equivalents and are recorded at cost, which approximates fair market value.

Inventory

Inventory is carried at the lower of cost, determined under the first-in, first-out method, and net realizable value.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Major betterments are capitalized. Repairs and maintenance expenditures which do not extend the useful life of the property and equipment are expensed.

Depreciation is calculated using the straight-line method over the estimated useful life of the asset as follows:



---------------------------------------------------------------------------
---------------------------------------------------------------------------
Buildings and improvements 20 years
Equipment 3 to 10 years
Furniture and fixtures 2 to 10 years
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Management bases the estimate of the useful life and salvage value of property and equipment on expected utilization, technological change and effectiveness of maintenance programs. Although management believes the estimated useful lives of the Company's property and equipment are reasonable, it is possible that changes in estimates could occur which may affect the expected useful lives of the property and equipment.

Asset impairment

Property and equipment is tested for impairment annually, or more frequently as circumstances require. An impairment loss is recognized when the carrying amount of the assets exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. Estimates of undiscounted future net cash flows are calculated using estimated future job count, sales prices, operating expenditures and other costs. These estimates are subject to risk and uncertainties, and it is possible that changes in estimates could occur which may effect the expected recoverability of the Company's assets.

To test for and measure impairment, assets are grouped at the lowest level for which identifiable cash flows are largely independent. The three lowest asset groupings for which identifiable cash flows are largely independent are Well Service, Production Services and industrial services which is a component or reporting unit within Production Services.

Goodwill

Goodwill represents the excess of purchase price for business acquisitions over the fair value of the acquired net assets. Goodwill is allocated as of the date of the business combination to the Company's reporting units that are expected to benefit from the synergies of the business combination. Goodwill is not amortized, but is tested for impairment at least annually.

The impairment test is carried out in two steps. In the first step, the carrying amount of the reporting unit is compared with its fair value. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired and performance of the second step of the impairment test is unnecessary. The second step compares the implied fair value of the reporting unit's goodwill with its carrying amount to measure the amount of the impairment loss, if any.

Revenue recognition

The Company's revenue comprises services and other revenue and is generally sold based on fixed or determinable priced purchase orders or contracts with the customer. Service and other revenue is recognized when the services are provided and collectibility is reasonably assured. Customer contract terms do not include provisions for significant post-service delivery obligations.

Income taxes

The Company follows the liability method of accounting for income taxes. Under this method, the Company records future income taxes for the effect of any difference between the accounting and income tax basis of an asset or liability, using the substantively enacted tax rates. The computation of the provision for income taxes involves tax interpretations, regulations and legislation that are continually changing. There are tax matters that have not yet been confirmed by taxation authorities; however, management believes the provision for income taxes is reasonable.

Foreign currency translation

For foreign entities whose functional currency is the Canadian dollar, the Company translates monetary assets and liabilities at year-end exchange rates, and non-monetary items are translated at historical rates. Income and expense accounts are translated at the average rates in effect during the year. Gains or losses from changes in exchange rates are recognized in consolidated income in the year of occurrence.

For foreign entities whose functional currency is not the Canadian dollar, the Company translates net assets at year-end rates and income and expense accounts at average exchange rates. Adjustments resulting from these translations are reflected in the shareholders' equity section of the consolidated statements of operations and retained earnings as foreign currency translation adjustments.

Transactions of Canadian entities in foreign currencies are translated at rates in effect at the time of the transaction. Foreign currency monetary assets and liabilities are translated at current rates. Gains or losses from changes in exchange rates are recognized in consolidated income in the year of occurrence. Advances made to subsidiaries for which settlement is not planned or anticipated in the foreseeable future will be considered part of the net investment. Accordingly, gains and losses on foreign currency translation are reported as cumulative translation adjustments, a separate component of shareholders' equity.

Stock-based compensation plans

The Company has a stock option plan which is described in note 10. The Company accounts for stock options using the Black-Scholes option pricing model, whereby the fair value of stock options are determined on their grant date and recorded as compensation expense over the period that the stock options vest, with a corresponding increase to contributed surplus. When stock options are exercised, the proceeds together with the amount recorded in contributed surplus are recorded in share capital.

The Company has a deferred share unit plan which is described in note 10. The Company accrues a liability equal to the closing price of the Company's common shares for each unit issued under the plan.

Earnings per share

Basic earnings per share is calculated using the weighted average number of common shares outstanding during the period. Under the treasury stock method, diluted net earnings per share is calculated based on the weighted average number of shares issued and outstanding during the year, adjusted by the total of the additional common shares that would have been issued assuming exercise of all stock options with exercise prices at or below the average market price for the year, offset by the reduction in common shares that would be purchased with the exercise proceeds.

Comparative figures

Comparative figures have been restated to conform to current year's presentation.

NOTE 3 - ACCOUNTING STANDARDS PENDING ADOPTION

The CICA has issued two new accounting standards: Section 1530, Comprehensive Income; and Section 3855, Financial Instruments - Recognition and Measurement. The Company will apply these standards effective January 1, 2007, which are summarized below.

Section 3855, Financial Instruments - Recognition and Measurement - This section describes the standards for recognizing and measuring financial instruments on the balance sheet and the standards for reporting gains and losses in the financial statements. Financial assets classified as loans and receivables and financial liabilities classified as other liabilities have to be measured initially at fair value. The impact of the adoption of this new section on the consolidated financial statements is not expected to be material.

Section 1530, Comprehensive Income - A statement entitled "Consolidated Statement of Comprehensive Income" will be added to the Company's Consolidated Statement of Operations and Retained Earnings. Comprehensive income consists of net income plus "other comprehensive income." Other comprehensive income will include the unrealized exchange gains or losses arising from self-sustaining foreign operations. Accumulated other comprehensive income will be presented separately in shareholders' equity.

NOTE 4 - ACQUISITIONS

In June 2004, the Company purchased 19,472 shares of R-Can Services Limited (R-Can), which is the subsidiary that holds the investment in the Company's Russian Operations from existing shareholders for $3.0 million, representing 40.2% of the issued and outstanding shares. In accordance with the terms of the purchase agreement, contingent consideration of $4.2 million was paid in the first quarter of 2005 based on R-Can achieving specified earnings levels in 2004 and was recorded as an additional cost of the purchase allocated to goodwill net of an accrual for contingent consideration.

In June 2004, Trican entered into an agreement to purchase the remaining 5% of the issued and outstanding shares from the remaining shareholder of R-Can. Under the terms of the agreement, the consideration will be based upon a calculated value derived from an adjusted enterprise value. The terms of the agreement provide for no limitation to the maximum consideration payable. The agreement provides for acquisition of the remaining shares equally in each of March 2006, 2007 and 2008.

In March 2006, the Company purchased 1,509 shares of R-Can for $2.5 million; the purchase price was allocated through a reduction in non-controlling interest of $0.3 million and an increase in goodwill of $2.2 million. As a result of the acquisition, the Company's ownership percentage of R-Can increased 1.5% to 97%.



NOTE 5 - PROPERTY AND EQUIPMENT (STATED IN THOUSANDS)

2006 2005
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Property and Equipment:
Land $ 13,336 $ 10,628
Buildings and improvements 35,478 21,898
Equipment 436,514 331,481
Furniture and fixtures 18,977 13,566
---------------------------------------------------------------------------
504,305 377,573

Accumulated Depreciation:
Buildings and improvements 4,602 3,305
Equipment 107,202 78,269
Furniture and fixtures 7,842 5,487
---------------------------------------------------------------------------
119,646 87,061
---------------------------------------------------------------------------
$ 384,659 $ 290,512
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Property and equipment includes assets under capital lease with a net book value of $7.6 million (2005-$22.2 million) including accumulated amortization of $7.4 million (2005-$15.7 million).

NOTE 6 - BANK LOANS

The Company has a $15.0 million operating line. Advances are available under the operating line either at the bank's prime rate or Bankers' Acceptance plus 0.85% or in combination and are repayable on demand. At December 31, 2006, no amounts were drawn on the operating facility.

NOTE 7 - LONG-TERM DEBT

The Company has a $25.0 million extendible revolving equipment and acquisition line. Advances are available under the extendible revolving equipment and acquisition line either at the bank's prime rate plus 0.25% or Bankers' Acceptance plus 1.05% or in combination. The facility is extendible annually at the option of the lenders. Should this facility not be extended, outstanding amounts will be transferred to a four-year term facility repayable in equal quarterly installments. This facility is subject to covenants that are typical for this type of arrangement. This facility, together with the operating line, is secured by a general security agreement. At December 31, 2006, no amounts were drawn on the extendible revolving equipment and acquisition facility.



Long-term debt comprises the following:

(Stated in thousands) 2006 2005
---------------------------------------------------------------------------
Capital lease obligations $ 3,397 $ 14,154
---------------------------------------------------------------------------

Less: Current Portion 3,397 7,451
---------------------------------------------------------------------------
$ - $ 6,703
---------------------------------------------------------------------------
---------------------------------------------------------------------------


The capital lease obligations bear interest at an average rate of 8.12% per annum, repayable on a monthly basis amortized over a seven-year term. The capital lease contracts contain no financial covenants and are secured by a pledge of specific assets.

Interest expense on long-term debt was $0.7 million for the year ended December 31, 2006 (2005 - $1.6 million).

Reference is made to note 16.

NOTE 8 - SHARE CAPITAL

Authorized:

The Company is authorized to issue an unlimited number of common shares and preferred shares, issuable in series.



Issued and Outstanding - Common Shares:
---------------------------------------------------------------------------
(stated in thousands, except share amounts) Number of Shares Amount
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Balance, December 31, 2004 111,301,566 $ 70,185
Exercise of stock options 2,606,566 6,638
Compensation expense relating to options exercised 983
---------------------------------------------------------------------------
Balance, December 31, 2005 113,908,132 77,806
Exercise of stock options 1,289,542 5,214
Compensation expense relating to options exercised 1,641
---------------------------------------------------------------------------
Balance, December 31, 2006 115,197,674 $ 84,661
---------------------------------------------------------------------------
---------------------------------------------------------------------------


The Company's shareholders approved a subdivision of its issued and outstanding common shares on a two-for-one basis at the Company's Annual and Special Meeting held on May 10, 2006. The completion of the share split occurred on May 25, 2006, upon approval of securities regulators. All common share and per common share amounts have been restated to reflect the share split.



NOTE 9 - EARNINGS PER SHARE

Basic Earnings Per Share

(Stated in thousands, except share amounts) 2006 2005
---------------------------------------------------------------------------

Net income available to common shareholders $ 172,563 $ 131,730
Weighted average number of common shares 114,845,714 113,231,782
Basic earnings per share $ 1.50 $ 1.17
---------------------------------------------------------------------------

Diluted Earnings Per Share 2006 2005
---------------------------------------------------------------------------

Net income available to common shareholders $ 172,563 $ 131,730
Diluted weighted average number of common
shares
Weighted average number of common shares 114,845,714 113,231,782
Diluted effect of stock options 4,725,885 5,097,474
---------------------------------------------------------------------------
119,571,599 118,329,256
Diluted earnings per share $ 1.44 $ 1.12
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Excluded from the calculation of diluted earnings per share were weighted average options outstanding of 693,795 (2005 - 256,426) as the options' exercise price was greater than the average market price of the common shares for the year.

NOTE 10 - STOCK-BASED COMPENSATION

The Company has two stock-based compensation plans which are described below.

Incentive stock option plan:

Options may be granted at the discretion of the Board of Directors and all officers and employees of the Company are eligible for participation in the Plan. Since July 2004, non-management directors have not participated in this plan. The option price equals the weighted average closing price of the Company's shares on the Toronto Stock Exchange for the five trading days preceding the date of grant. Options granted prior to 2004 vest equally over a period of four years commencing on the first anniversary of the date of grant, and expire on the fifth or tenth anniversary of the date of grant.

In 2004, the Company prospectively revised the stock option plan so that one-third of new options issued vest on each of the first and second anniversary dates, and the remaining third vest ten months subsequent to the second anniversary date. These options expire on the third anniversary from the date of grant. The compensation expense that has been recognized in net income for the twelve months ended is $11.0 million (2005 - $5.2 million). The weighted average grant date fair value of options granted during 2006 has been estimated at $5.77 (2005: $4.71) using the Black-Scholes option pricing model. The Company has applied the following weighted average assumptions in determining the fair value of options on the date of grant:



2006 2005
---------------------------------------------------------------------------
Vesting period (years) 2.8 2.8
Expiration period (years) 3.0 3.0
Expected life (years) 2.5 2.5
Weighted average volatility 33% 46%
Risk-free interest rate 4.0% 3.5%
---------------------------------------------------------------------------
---------------------------------------------------------------------------


The Company has reserved 11,519,767 common shares as at December 31, 2006 (December 31, 2005 - 11,390,812) for issuance under a stock option plan for officers and employees. The maximum number of options permitted to be outstanding at any point in time is limited to 10% of the Common Shares then outstanding. As of December 31, 2006, 10,963,944 options (December 31, 2005- 9,075,332) were outstanding at prices ranging from $0.62 - $30.01 per share with expiry dates ranging from 2007 to 2012.

A summary of the status of the Company's stock option plan as of December 31, 2006 and 2005, and changes during the years ending on those dates is presented below:



2006 2005
---------------------------------------------------------------------------
Weighted Weighted
Average Average
Exercise Exercise
Options Price Options Price
---------------------------------------------------------------------------
Outstanding at the
beginning of year 9,075,332 $ 7.27 9,129,300 $ 3.62
Granted 3,350,710 23.67 2,731,200 14.79
Exercised (1,289,542) 4.07 (2,606,566) 2.55
Cancelled/forfeited (172,556) 17.28 (178,602) 4.83
---------------------------------------------------------------------------
Outstanding at the
end of year 10,963,944 $ 12.50 9,075,332 $ 7.27
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Exercisable at end of year 4,635,767 $ 5.73 3,381,682 $ 3.17
---------------------------------------------------------------------------
---------------------------------------------------------------------------

The following table summarizes information about stock options outstanding
at December 31, 2006:


Options Outstanding
---------------------------------------------------------------------------
Weighted Weighted
Range of Average Average
Exercise Number Remaining Exercise
Prices Outstanding Life Price
---------------------------------------------------------------------------
$ 0.62 to $ 2.12 113,000 3 $ 1.06
$ 2.04 to $ 3.04 1,019,688 5 2.39
$ 2.63 to $ 3.07 725,398 6 2.75
$ 3.13 to $ 3.68 887,112 2 3.39
$ 5.20 to $ 8.84 2,383,283 1 5.89
$ 10.69 to $ 25.50 2,590,103 2 14.80
$ 17.58 to $ 30.01 3,245,360 3 23.77
---------------------------------------------------------------------------
$ 0.62 to $ 30.01 10,963,944 2.6 $ 12.50
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Options Exercisable
---------------------------------------------------------------------------
Weighted
Range of Average
Exercise Number Exercisable
Prices Exercisable Price
---------------------------------------------------------------------------
$ 0.62 113,000 $ 1.06
$ 2.04 1,019,688 2.39
$ 2.63 725,398 2.75
$ 3.13 577,362 3.39
$ 5.20 1,407,483 5.84
$ 10.69 792,836 14.95
$ 17.58 - -
---------------------------------------------------------------------------
$ 0.62 4,635,767 $ 5.73
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Deferred share units plan:

In 2004, the Company implemented a deferred share unit ("DSU") plan for outside directors. Under the terms of the plan, DSU's awarded will vest immediately and will be settled with cash in the amount equal to the closing price of the Company's common shares on the date the director specifies upon tendering their resignation from the Board, which in any event must be after the date on which the notice of redemption is filed with the Company and within the period from the Director's termination date to December 15 of the first calendar year commencing after the Director's termination date. The Company has recorded a $0.5 million recovery (2005 - $2.2 million expense) in the year relating to DSU's and there are 124,000 DSU's outstanding at year end (2005 -108,000).



NOTE 11 - INCOME TAXES (STATED IN THOUSANDS)
2006 2005
---------------------------------------------------------------------------
Current tax provision $ 70,816 26,967
Future tax provision 8,817 41,795
---------------------------------------------------------------------------
$ 79,633 $ 68,762
---------------------------------------------------------------------------
---------------------------------------------------------------------------

The geographic income before income taxes and non-controlling interest for
the years ended December 31, are as follows:

2006 2005
---------------------------------------------------------------------------
Canada $ 210,250 $ 187,036
Foreign 42,756 13,819
---------------------------------------------------------------------------
$ 253,006 $ 200,855
---------------------------------------------------------------------------
---------------------------------------------------------------------------

The net income tax provision differs from that expected by applying the
combined federal and provincial income tax rate of 32.86% (2005 - 33.60%)
to income before income taxes for the following reasons:

2006 2005
---------------------------------------------------------------------------
Expected combined federal and provincial income
tax $ 83,138 $ 67,487
Non-deductible expenses 5,188 2,600
Foreign income tax in lower rate jurisdictions (4,555) (1,824)
Future income tax rate reduction (4,937) -
Translation of foreign subsidiaries (43) 42
Large corporations tax 114 102
Other 728 355
---------------------------------------------------------------------------
$ 79,633 $ 68,762
---------------------------------------------------------------------------
---------------------------------------------------------------------------

The components of the net future income tax liability as at December 31
are as follows:

2006 2005
---------------------------------------------------------------------------
Future income tax assets:
---------------------------------------------------------------------------
Non-capital loss carryforwards $ 1,337 $ 1,338
Deferred share units 776 1,016
Share issue costs 30 93
Other 253 246
---------------------------------------------------------------------------
2,396 2,693
Future income tax liabilities:
---------------------------------------------------------------------------
Property, equipment and other assets (29,367) (26,349)
Partnership income (71,046) (65,642)
---------------------------------------------------------------------------
(100,413) (91,991)
---------------------------------------------------------------------------
$ (98,017) $ (89,298)
---------------------------------------------------------------------------
---------------------------------------------------------------------------


NOTE 12 - FINANCIAL INSTRUMENTS

a) Fair values of financial assets and liabilities

The fair values of cash and short term deposits, accounts receivable, accounts payable and accrued liabilities included in the consolidated balance sheets, approximate their carrying amount due to the short-term maturity of these instruments. Long-term debt, including current portion, has a fair value of approximately $3.4 million as at December 31, 2006 (December 31, 2005 - $14.4 million).

b) Credit risk

Accounts receivable includes balances from a large number of customers. The Company assesses the credit worthiness of its customers on an ongoing basis as well as monitoring the amount and age of balances outstanding. Accordingly, the Company views the credit risks on these amounts as normal for the industry. As at December 31, 2006 the Company's allowance for doubtful accounts was $2.2 million (December 31, 2005 - $1.9 million).

c) Interest rate risk

The Company manages its exposure to interest rate risks through a combination of fixed and floating rate borrowing facilities that are available if required. As at December 31, 2006, all of its borrowings were at fixed rates.

d) Foreign currency risk

The Company is exposed to foreign currency fluctuations in relation to its Russian operations and certain equipment and product purchases from U.S. vendors related to its Canadian operations; however, management believes this exposure is not material to its overall operations.

NOTE 13 - CONTRACTUAL OBLIGATIONS

The Company has future operating lease obligations on office and shop premises and automobile equipment in the aggregate amount of $18.4 million. The Company has capital lease obligations on oil field servicing equipment in the aggregate amount of $3.4 million as disclosed in note 7. The minimum operating lease payments over the next five years are as follows:



(stated in thousands) Payments due by period
---------------------------------------------------------------------------
2007 2008 2009 2010 2011 Total
---------------------------------------------------------------------------
Operating leases 5,472 5,195 3,402 2,226 2,060 $ 18,355
---------------------------------------------------------------------------
---------------------------------------------------------------------------


As at December 31, 2006, the Company has commitments totaling approximately $35.7 million relating to the construction of fixed assets.

NOTE 14 - SEGMENTED INFORMATION

The Company provides a comprehensive array of specialized products, equipment, services and technology to customers through two operating divisions:

- Well Service provides deep coiled tubing, nitrogen, fracturing, including coalbed methane fracturing, and cementing services which are performed on new and producing oil and gas wells;

- Production Services provides acidizing, intermediate depth coiled tubing, and industrial services which are predominantly used in the stimulation and reworking of existing oil and gas wells.



Well Production
(Stated in thousands) Service Services Corporate Total
---------------------------------------------------------------------------
Year ended December 31, 2006
---------------------------------------------------------------------------
Revenue $ 797,517 $ 49,955 $ - $ 847,472

Operating income (loss) 300,466 15,007 (31,281) 284,192

Interest expense - - 736 736

Depreciation and amortization 31,042 2,574 1,182 34,798

Assets 586,718 52,476 106,017 745,211

Goodwill 7,931 6,052 - 13,983

Capital expenditures 124,122 3,129 2,879 130,130

Goodwill expenditures 2,228 - - 2,228
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year ended December 31, 2005
---------------------------------------------------------------------------
Revenue $ 601,670 $ 39,228 $ - $ 640,898

Operating income (loss) 238,830 9,545 (23,197) 225,178

Interest expense 156 - 1,468 1,624

Depreciation and amortization 21,385 2,339 611 24,335

Assets 455,221 38,208 42,114 535,543

Goodwill 5,722 6,052 - 11,774

Capital expenditures 112,769 3,713 3,488 119,970

Goodwill expenditures 4,185 - - 4,185
---------------------------------------------------------------------------
---------------------------------------------------------------------------


The Company's operations are carried out in two geographic locations:
Canada and Russia:

(Stated in thousands) Canada Russia Total
---------------------------------------------------------------------------
Year ended December 31, 2006
---------------------------------------------------------------------------
Revenue $ 655,680 $ 191,792 $ 847,472

Operating income 236,627 47,565 284,192

Property and equipment 333,203 51,456 384,659

Goodwill 7,014 6,969 13,983
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Year ended December 31, 2005
---------------------------------------------------------------------------
Revenue $ 555,626 $ 85,272 $ 640,898

Operating income 207,297 17,881 225,178

Property and equipment 257,070 33,442 290,512

Goodwill 7,087 4,687 11,774
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Revenue from one customer of Well Service division represents approximately $102.2 million of the Company's total revenues for 2006 ($66.4 million in Well Service and Production Services divisions in 2005).

NOTE 15 - CONTINGENCIES

The Company, through the performance of its services, is sometimes named as a defendant in litigation. The nature of these claims is usually related to personal injury or completed operations. The Company maintains a level of insurance coverage deemed appropriate by management and for matters for which insurance coverage can be maintained. The Company has no outstanding claims having a potentially material adverse effect on the Company.

NOTE 16 - SUBSEQUENT EVENT

On February 2, 2007 the Company announced that it had reached an agreement to acquire approximately 93% of Liberty Pressure Pumping LP ("Liberty"), a provider of pressure pumping services in Texas. Headquartered in Denton, Texas, Liberty provides stimulation services used in the development and completion of oil and gas wells.

Under the terms of the agreement Trican, through a wholly-owned U.S. subsidiary, will acquire an approximate 93% interest in Liberty in exchange for cash consideration of $U.S. 189.8 million and $US 65.9 million of Trican common shares (number of shares to be determined by the $Cdn:$US exchange rate at closing) and a value per share of $Cdn 19.33. Liberty management will retain an approximate 7% interest. Trican will acquire the remaining interest over three years in equal installments at a price based upon the financial results of Liberty in accordance with previously agreed upon terms. Cash consideration will be funded from existing cash and bank facilities and a planned debt financing. The Company's existing bank facilities are in the process of being increased as a result of the transaction and will be finalized once the transaction closes. The announcement date of the transaction was February 2 and closing is expected early March.

Trican Well Service Ltd. ("Trican") intends to release its Fourth Quarter and Year End 2006 results on Tuesday, February 27, 2007 after the close of the market.

Murray Cobbe, President and Chief Executive Officer and Michael Kelly, Vice President, Finance and Administration and Chief Financial Officer will then host a conference call on Wednesday, February 28, 2007 at 9:00 a.m. MT (11:00 a.m. ET) to discuss the Company's results for the Fourth Quarter and Year End 2006.

To access the conference call, contact the conference call operator at 1-877-888-3490 (North America) or 416-695-6130 (outside North America) 15 minutes prior to the call's start time and ask for the "Trican Well Service Ltd. - Fourth Quarter and Year End 2006 Conference Call".

A replay of the conference call will be available until March 7, 2007 by dialing
1-888-509-0081 (North America) or 416-695-5275 (outside North America). Playback passcode: 638508.

The conference call will be archived on Trican's website at www.trican.ca.

Headquartered in Calgary, Alberta, Trican's principal operations are in Canada; however, the Company also has growing operations in Russia, Kazakhstan and the United States. Trican provides a comprehensive array of specialized products, equipment and services that are used during the exploration and development of oil and gas reserves. The Company is managed in three divisions - Well Service, Production Services and Corporate.

Contact Information

  • Trican Well Service Ltd.
    Murray Cobbe, President and CEO
    (403) 266-0202
    (403) 237-7716 (FAX)
    Email: mcobbe@trican.ca
    or
    Trican Well Service Ltd.
    Michael Kelly, Vice President, Finance and Administration
    and Chief Financial Officer
    (403) 266-0202
    (403) 237-7716 (FAX)
    Email: mkelly@trican.ca
    or
    Trican Well Service Ltd.
    2900, 645 - 7th Avenue S.W.
    Calgary, Alberta T2P 4G8
    Website: www.trican.ca