Trican Well Service Ltd.
TSX : TCW

Trican Well Service Ltd.

August 08, 2011 19:53 ET

Trican Reports Record 2nd Quarter Results

CALGARY, ALBERTA--(Marketwire - Aug. 8, 2011) - Trican Well Service Ltd. (TSX:TCW)


                            ------------------------------------------------
                             Three months ended            Six months ended
                             June 30,   June 30, March 31, June 30, June 30,
($ millions,
 except per share
 amounts;
 unaudited)                     2011       2010      2011     2011     2010
----------------------------------------------------------------------------
Revenue                       $421.7     $306.3    $534.6   $956.3   $636.3
Operating income (1)            78.3       42.9     145.3    223.6    115.2
Net income                      30.1        8.9      82.4    112.5     41.5
Net income per       (basic)
 share                         $0.21      $0.07     $0.57    $0.78    $0.32
                   (diluted)   $0.21      $0.06     $0.56    $0.77    $0.31
Adjusted net
 income (1)                     33.3       12.7      85.5    118.8     46.9
Adjusted net         (basic)
 income per share(1)           $0.23      $0.09     $0.59    $0.82    $0.36
                   (diluted)   $0.23      $0.09     $0.58    $0.81    $0.35
Funds provided by
 operations(1)                  60.9       42.9     141.7    202.6    104.9
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Notes:

(1) Trican makes reference to operating income, adjusted net income and funds provided by operations. These are measures that are not recognized under International Financial Reporting Standards (IFRS). Management believes that, in addition to net income, operating income, adjusted net income and funds provided by operations are useful supplemental measures. Operating income provides investors with an indication of earnings before depreciation, taxes and interest. Adjusted net income provides investors with information on net income excluding one-time non-cash charges and the non-cash effect of stock-based compensation expense. Funds provided by operations provide investors with an indication of cash available for capital commitments, debt repayments and other expenditures. Investors should be cautioned that operating income, adjusted net income, and funds provided by operations should not be construed as an alternative to net income and cash flow from operations determined in accordance with IFRS as an indicator of Trican's performance. Trican's method of calculating operating income, adjusted net income and funds provided by operations may differ from that of other companies and accordingly may not be comparable to measures used by other companies.

SECOND QUARTER HIGHLIGHTS

Consolidated revenue for the second quarter of 2011 was $421.7 million, an increase of 38% compared to the second quarter of 2010. Consolidated net income increased by 237% to $30.1 million and diluted earnings per share increased to $0.21 compared to $0.06 for the same period in 2010. Funds provided by operations was $60.9 million compared to $42.9 million in the second quarter of 2010.

Record second quarter revenue of $167.8 million was achieved by our Canadian operations, which was 20% higher than the second quarter of 2010. Second quarter operating income of $31.3 million was also a new Canadian record and was 17% higher than same period in 2010. Canadian operations in the second quarter benefitted from the growth of pad well project work, which is less prone to spring break-up conditions. In particular, second quarter utilization levels were supported by a large pad well Horn River project. Second quarter results were also strongly influenced by the continued growth in horizontal drilling as 95% of total fracturing and fracturing related revenue was generated from this type of activity.

U.S. operations second quarter revenue of $172.4 million was 20% higher than the first quarter of 2011 and represents a new quarterly record for this region. U.S. operating margins continue to rise and were 28.9% in the second quarter of 2011, which is a 150 basis point improvement sequentially and a 1,070 basis point improvement compared to the second quarter of 2010. U.S. results continue to benefit from robust industry activity levels and our geographic and service line expansion initiatives started in 2010. We commenced operations in the Eagle Ford during the second quarter and both equipment utilization and operating margins were encouraging in this region. We also initiated coiled tubing operations in the U.S. and saw significant sequential and year over year increases in cementing and nitrogen revenue during the second quarter of 2011 which is indicative of our commitment of becoming a full service pressure pumping service provider in the U.S. market.

Our U.S. operations will be expanding its fracturing service line into the Permian basin during the third quarter of 2011. The initial expansion into the Permian basin will be through a short-term agreement committing 15,000 HP with a new U.S. customer. We expect to deploy additional HP into the region early in fourth quarter of 2011. Expansion into the Permian basin establishes a presence for our U.S operations in a key oil play in the region. Management believes that activity and demand in this area will be robust given the current price of oil and the recent increase in oil directed drilling activity in the U.S.

During the second quarter, our U.S. head office was officially moved from Denton, Texas to Houston, Texas. This move has brought us closer to many of our key U.S. customers and will allow us to better serve and expand our growing U.S. customer base.

Russian revenue increased to $81.5 million, which is a 14% year over year increase and a 26% sequential increase. Second quarter operating margins for our Russian operations improved to 13.7% compared to 10.4% in the second quarter of 2010 and 3.4% in the first quarter of 2011. Second quarter activity levels in Russia benefitted from improved weather conditions and allowed our customers to execute their 2011 work plans after delays experienced in the first quarter. Cost inflation stabilized somewhat during the second quarter and contributed to the improved margins.

2012 Capital Budget

Trican's 2012 capital budget is projected to be $678 million and includes $102 million in near term commitments that are necessary to ensure timely construction of the equipment required to execute on Trican's 2012 growth plans. $576 million of the projected capital budget will be directed towards our North American operations and $102 million towards International operations.

Despite the recent turmoil in the markets, the 2012 capital budget is indicative of management's belief that North American demand for pressure pumping services will remain strong through 2012. We do however recognize the potential impact that recent market conditions may have on future industry activity. As a result and consistent with prior capital budgets, we will continue to respond to market dynamics, manage our expenditures, and maintain our balance sheet strength in the future.

The 2012 projected capital budget consists of $537 million in expansion capital, $104 million in infrastructure needed to support new and existing operations, and $37 million in maintenance capital. The expansion capital includes an additional 92,500 of fracturing horsepower, 5 cement pumpers, 7 nitrogen pumpers, and 4 acid pumpers for our Canadian operations. Capacity for our U.S. operations will increase by 192,500 of fracturing horsepower, 16 cement pumpers, 7 coiled tubing units, 9 nitrogen pumpers, and 10 acid pumpers.

The international capital expenditures will be directed towards growth opportunities in new international markets, including Saudi Arabia and Australia. The capital budget for our Russian operations largely consists of maintenance capital.


COMPARATIVE QUARTERLY INCOME STATEMENTS ($ thousands, unaudited)

                                                          Quarter-
                                                             Over-
Three months ended                % of              % of   Quarter       %
 June 30,                2011  Revenue     2010  Revenue    Change  Change
----------------------------------------------------------------------------

Revenue               421,701    100.0% 306,309    100.0%  115,392      38%
Expenses
 Materials and
  operating           319,061     75.7% 247,442     80.8%   71,619      29%
 General and
  administrative       24,363      5.8%  15,921      5.2%    8,442      53%
----------------------------------------------------------------------------
Operating income(1)    78,277     18.6%  42,946     14.0%   35,331      82%
 Finance costs          5,416      1.3%   2,620      0.9%    2,796     107%
 Depreciation and
  amortization         28,554      6.8%  27,975      9.1%      579       2%
 Foreign exchange
  (gain)/loss              81      0.0%     772      0.3%     (691)    -90%
 Other income          (1,287)    -0.3%  (1,072)    -0.3%     (215)     20%
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Income before income
 taxes                 45,513     10.8%  12,651      4.1%   32,862     260%
Income tax expense     15,437      3.7%   3,739      1.2%   11,698     313%
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Net Income             30,076      7.1%   8,912      2.9%   21,164     237%
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(1) see first page of this report

CANADIAN OPERATIONS
----------------------------------------------------------------------------
Three months ended,   
 ($ thousands, except
 revenue per           June 30,   % of   June 30,   % of   March 31,   % of
 job, unaudited)          2011 Revenue      2010 Revenue       2011 Revenue
----------------------------------------------------------------------------
Revenue                167,805           139,823            326,379
Expenses
 Materials and
  operating            130,008    77.5%  106,881    76.4%   197,388    60.5%
 General and
  administrative         6,510     3.9%    6,098     4.4%     7,266     2.2%
                      ------------------------------------------------------
 Total expenses        136,518    81.4%  112,979    80.8%   204,654    62.7%
Operating income(1)     31,287    18.6%   26,844    19.2%   121,725    37.3%
Number of jobs           3,725             3,695              7,562
Revenue per job         44,369            37,322             42,380
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(1) see first page of this report

Sales Mix
----------------------------------------------------------------------------
Three months ended,                            June 30,  June 30,  March 31,
(unaudited)                                       2011      2010       2011
----------------------------------------------------------------------------
% of Total Revenue
Fracturing                                          67%       71%        63%
Cementing                                           16%       13%        21%
Nitrogen                                             6%        4%         6%
Coiled Tubing                                        3%        5%         5%
Acidizing                                            3%        3%         3%
Industrial Services                                  3%        2%         1%
Other                                                2%        2%         1%
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Total                                              100%      100%       100%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Operations Review

As expected, activity in the second quarter fell from first quarter levels due to spring break-up as road weight restrictions and reduced accessibility to remote areas limited industry activity. However, Canadian results were strong in 2011 relative to historical second quarter levels despite the wet weather experienced late in the quarter. Canadian results benefitted from the growth of pad well project work in areas such as the Horn River and Montney. In particular, we completed a large Horn River project in the second quarter that increased utilization levels substantially. We performed over 25 fracs per well for this project, which contributed to the year-over-year increase in revenue per job.

Overall industry activity in Canada increased modestly with a year-over-year increase of 4% in the number of active drilling rigs led by the continued strength of oil and liquids-rich gas and horizontal drilling activity. Our fracturing service line continues to benefit from the growth in horizontal drilling as revenue from this type of activity was 95% of total fracturing and fracturing related revenue compared to 81% in the second quarter of 2010.

Strong demand for pressure pumping services resulted in a 14% increase in pricing compared to the second quarter of 2010. Price increases were fully offset by increased employee costs and resulted in second quarter margins that were slightly lower than the second quarter of 2010.

Current Quarter versus Q2 2010

Revenue for the quarter increased by 20% or $28.0 million compared to the second quarter of 2010. A 19% increase in revenue per job comprised most of the revenue increase as job count increased by only 1%. Revenue per job benefitted from a 14% increase in pricing combined with the strength of horizontal drilling activity, which generally requires more fracturing horsepower and larger cementing treatments relative to vertical wells. The increase in cementing job size was particularly strong with a 50% increase in cementing revenue per job compared to the second quarter of 2010.

As a percentage of revenue, materials and operating expenses increased slightly to 77.5% from 76.4% as pricing increases were offset by increases to employee costs. Employee costs are high because we have increased our operations staff in anticipation of strong activity levels for the balance of 2011. General and administrative costs increased by $0.4 million due mainly to increases in share based employee expenses.

Current Quarter versus Q1 2011

As expected, revenue during the second quarter was 49% lower than the first quarter due to spring break-up. Job count decreased sequentially by 51% compared to a 67% decrease in overall industry rig count as utilization levels from our fracturing service line were supported by work performed on pad wells during the quarter. Work on these pad wells and other horizontal wells drove a significant portion of the activity during the quarter and as a result, revenue per job increased by 5% on a sequential basis. The work performed on pad wells also impacted sales mix as fracturing revenue increased as a percentage of total revenue. These factors were partially offset by a 3% decrease in pricing compared to the first quarter of 2011.

Materials and operating expenses increased as a percentage of revenue to 77.5% compared to 60.5% for the first quarter of 2011 due to lower utilization caused by spring break-up and reduced operating leverage. General and administrative expenses decreased $0.8 million due largely to a decrease in profit sharing expenses.


UNITED STATES OPERATIONS

----------------------------------------------------------------------------
Three months ended,   
 ($ thousands, except
 revenue per job,      June 30,   % of   June 30,   % of   March 31,   % of
 unaudited)               2011 Revenue      2010 Revenue       2011 Revenue
----------------------------------------------------------------------------
Revenue                172,404            94,974            143,552
Expenses
 Materials and
  operating            118,635    68.8%   76,193    80.2%   102,005    71.1%
 General and
  administrative         4,013     2.3%    1,516     1.6%     2,233     1.6%
                      ------------------------------------------------------
 Total expenses        122,648    71.1%   77,709    81.8%   104,238    72.6%
Operating income(1)     49,756    28.9%   17,265    18.2%    39,314    27.4%
Number of jobs           1,178               872                947
Revenue per job        146,229           109,202            151,695
----------------------------------------------------------------------------
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(1) see first page of this report

Operations Review

U.S. industry activity remained robust during the second quarter and led to strong financial results for our U.S. operations. The number of active drilling rigs in our areas of operations increased by only 3% on a sequential basis and 10% on a year-over-year basis. However, our new operating regions in the Eagle Ford and Marcellus plays had year-over-year rig count increases of 70% and 36% respectively. Overall activity levels in the U.S. continue to be driven by oil and liquids-rich gas directed activity. 53% of active drilling rigs targeted oil during the second quarter, which is the highest level since 1993.

It was our first quarter of operations for our Eagle Ford base, and both equipment utilization and operating margins were encouraging in this region. We continue to have strong utilization and operating margins for our fracturing crews in the Marcellus and Oklahoma regions. The Eagle Ford and Oklahoma regions are key liquids-rich gas producing areas and we expect demand in these regions to remain strong for the balance of 2011. We also expect activity in the Marcellus play to maintain its momentum for the remainder of 2011 as it is a large, low cost reservoir situated close to the eastern U.S. natural gas consuming market. In addition, we have long term contracts in place in the Marcellus that will keep utilization levels strong. Activity levels in our dry gas producing regions, such as the Haynesville and Barnett plays, have declined with low natural gas prices. However, key contracts in these areas allowed us to maintain strong utilization levels during the second quarter in these regions.

We continue to execute on our strategy to become a full service provider in the U.S. We commenced coiled tubing operations in Oklahoma during the second quarter and expect to expand on this initiative throughout the balance of 2011. We also saw significant increases in cementing and nitrogen revenue for our U.S. operations on both a sequential and year-over-year basis.

During the second quarter, our U.S. regional office was officially moved from Denton, Texas to Houston, Texas. This move has brought us closer to many of our key U.S. customers and will allow us to better serve and expand our growing U.S. customer base.

Current Quarter versus Q2 2010

Revenue increased by 82% in the second quarter of 2011 compared to the second quarter of 2010. Job count increased by 35% and benefitted from geographic expansion into the Eagle Ford and Marcellus regions. Service line expansion also led to a higher job count with significant growth of our cementing service line and the introduction of coil tubing services during the second quarter of 2011. The increase in job count was also the result of increased activity levels as year-over-year rig count increased by 10% in our areas of operation. Revenue per job increased by 34% as a 51% increase in pricing was partially offset by a 6% decrease in the U.S. dollar relative to the Canadian dollar, and expansion of our non-fracturing service lines, which generally have lower revenue per job than our fracturing service line.

As a percentage of revenue, materials and operating expenses decreased to 68.8% from 80.2% because of increased pricing and operational leverage on our fixed cost structure. These factors were partially offset by cost increases for key inputs, such as sand and chemicals.

General and administrative costs increased by $2.5 million due largely to higher employee costs including salaries, restricted share unit expenses, and relocation costs relating to the establishment of our U.S. regional office in Houston.

Current Quarter versus Q1 2011

Revenue for the quarter increased by 20% relative to the first quarter of 2011 despite the minimal change in sequential rig count in our areas of operations. The commencement of operations in the Eagle Ford region and strong sequential growth for our base in the Marcellus region contributed substantially to the 24% increase in job count. In addition, second quarter weather conditions were more favourable than the first quarter, which also contributed to the job count increase. Revenue per job decreased by 4% on a sequential basis due to a 2% decrease in the U.S. dollar and increase in non-fracturing work. Second quarter pricing was relatively consistent with first quarter pricing.

Materials and operating expenses decreased to 68.8% from 71.1% as a percentage of sales largely because of operational leverage on our fixed cost structure and a decrease in repairs and maintenance costs. General and administrative expenses increased by $1.8 million as a result of an increase in salaries, restricted share unit expenses and employee relocation costs.


RUSSIAN OPERATIONS

----------------------------------------------------------------------------
Three months ended,   
 ($ thousands, except
 revenue per job,      June 30,   % of   June 30,   % of   March 31,   % of
 unaudited)               2011 Revenue      2010 Revenue       2011 Revenue
----------------------------------------------------------------------------
Revenue                 81,492            71,512             64,699
Expenses
 Materials and
  operating             66,450    81.5%   61,295    85.7%    59,204    91.5%
 General and
  administrative         3,885     4.8%    2,760     3.9%     3,316     5.1%
                       -----------------------------------------------------
 Total expenses         70,335    86.3%   64,055    89.6%    62,520    96.6%
Operating income(1)     11,157    13.7%    7,457    10.4%     2,179     3.4%
Number of jobs           1,254             1,182              1,076
Revenue per job         62,442            59,153             58,269
----------------------------------------------------------------------------
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(1) see first page of this report

Sales Mix
----------------------------------------------------------------------------
Three months ended,                            June 30,  June 30,  March 31,
 unaudited)                                       2011      2010       2011
----------------------------------------------------------------------------
% of Total Revenue
Fracturing                                          79%       84%        81%
Coiled Tubing                                       10%        8%        11%
Cementing                                            7%        5%         4%
Nitrogen                                             4%        3%         4%
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Total                                              100%      100%       100%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Operations Review

Second quarter activity levels increased both sequentially and year over year for our Russian operations. As expected, improved weather conditions allowed our customers to execute their 2011 work plans after delays experienced in the first quarter. Cementing activity was particularly strong in the second quarter with a substantial increase in utilization on both a sequential and year over year basis.

Operating margins improved compared to the second quarter of 2010 and the first quarter of 2011. The increase in activity led to improved operational leverage on our fixed cost structure and cost inflation stabilized somewhat in the second quarter, in particular for fuel and product costs. Despite these positive developments, cost inflation continues to be a significant issue for our Russian operations and we will continue to focus on optimizing our cost structure throughout the balance of 2011.

The Russian ruble remained relatively stable during the second quarter, strengthening by 3% sequentially and 2% year-over-year.

Current Quarter versus Q2 2010

Revenue increased 14% compared to the second quarter of 2010. Job count increased by 6% as customer delays in the first quarter led to increased activity and high utilization levels in the second quarter. Increased activity was led by our cementing and coiled tubing service lines, which had a positive influence on operating margins for our Russian operations. Revenue per job increased by 6% due largely to price increases obtained during the 2011 tendering process.

Materials and operating expenses for the quarter decreased as a percentage of revenue to 81.5% compared to 85.7% for the same period in 2010. Improved pricing and operational leverage on our fixed cost structure led to the higher operating margins. These factors were partially offset by cost inflation for items such as fuel, and third party hauling. General and administrative costs increased by $1.1 million due largely to higher employee costs.

Current Quarter versus Q1 2011

Revenue increased 26% from the first quarter of 2011 as a result of increases in job count and revenue per job. The 17% increase in job count was largely due to improved weather conditions that led to stronger industry activity. In particular, cementing activity improved substantially with a 60% sequential increase in job count. The growth of fracturing job sizes and a 3% increase in the ruble accounted for the 7% increase in revenue per job.

Materials and operating expenses as a percentage of revenue decreased to 81.5% from 91.5% on a sequential basis. Cost stabilization combined with improved operational leverage both contributed to the increase in operating margins. General and administrative expenses increased by $0.6 million due to an increase in restricted share unit costs.


CORPORATE DIVISION

----------------------------------------------------------------------------
Three months ended,
 ($ thousands,
 except revenue
 per job,           June 30,    % of   June 30,    % of   March 31,    % of
 unaudited)            2011  Revenue      2010  Revenue       2011  Revenue
----------------------------------------------------------------------------
Expenses
 Materials and
  operating           3,968      0.9%    3,073      1.0%     6,066      1.1%
 General and
  administrative      9,955      2.4%    5,547      1.8%    11,819      2.2%
                    --------------------------------------------------------
 Total expenses      13,923      3.3%    8,620      2.8%    17,885      3.3%
Operating loss(1)   (13,923)            (8,620)            (17,885)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) see first page of this report

Corporate division expenses consist of salaries, stock-based compensation and office costs related to corporate employees, as well as public company costs.

Current Quarter versus Q2 2010

Corporate division expenses were up $5.3 million from the same quarter last year due primarily to increases in employee salaries and profit sharing expenses.

Current Quarter versus Q1 2011

Corporate division expenses were down $4.0 million on a sequential basis due largely to a decrease in profit sharing expense.

OTHER EXPENSES AND INCOME

Finance costs increased by $2.8 million on a sequential basis as a result of interest on the new private placement debt. Depreciation and amortization increased by $0.6 million compared to the same period last year, largely as a result of higher equipment balances in our North American regions.

The foreign exchange loss of $0.1 million in the quarter was due to the net impact of fluctuations in the U.S. dollar and Russian ruble relative to the Canadian dollar. Other income was $1.3 million in the quarter versus $1.1 million for the same period in the prior year. Other income is largely comprised of interest income on the loan to the unrelated third party and interest income earned on cash balances.

INCOME TAXES

Trican recorded income tax expense of $15.4 million in the quarter versus $3.7 million for the comparable period of 2010. The increase in tax expense is primarily attributable to significantly higher earnings.

OTHER COMPREHENSIVE INCOME

The other comprehensive income for the quarter ended June 30, 2011, includes $4.3 million in foreign currency translation losses recognized on translating the financial statements of our foreign operating entities whose functional currency is not Canadian dollars. In addition, $2.8 million in unrealized gains were recognized on net investment and cash flow hedges. Since April 1, 2011, the Canadian dollar strengthened 1% against the U.S. dollar and weakened 2% against the Russian ruble.


COMPARATIVE YEAR-TO-DATE INCOME STATEMENTS 
----------------------------------------------------------------------------
($ thousands; unaudited)
                                                              Year-
                                                              Over-
Six months ended                    % of              % of     Year       %
 June 30,                  2011  Revenue     2010  Revenue   Change  Change
----------------------------------------------------------------------------

Revenue                 956,329    100.0% 636,309    100.0% 320,020      50%
Expenses
 Materials and
  operating             683,723     71.5% 492,048     77.3% 191,675      39%
 General and
  administrative         48,997      5.1%  29,030      4.6%  19,967      69%
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Operating income(1)     223,609     23.4% 115,231     18.1% 108,378      94%
 Finance costs            7,427      0.8%   4,907      0.8%   2,520      51%
 Depreciation and
  amortization           58,659      6.1%  51,488      8.1%   7,171      14%
 Foreign exchange
  (gain)/loss              (228)     0.0%   2,621      0.4%  (2,849)   -109%
 Other income            (3,043)    -0.3%  (1,683)    -0.3%  (1,360)     81%
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Income before
 income taxes           160,794     16.8%  57,898      9.1% 102,896     178%
Provision for income
 taxes                   48,292      5.0%  16,443      2.6%  31,849     194%
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Net income              112,502     11.8%  41,455      6.5%  71,047     171%
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(1) See first page of this report

CANADIAN OPERATIONS
----------------------------------------------------------------------------

Six months ended June 30, 2011                                    Year-Over-
 ($ thousands, except revenue             % of             % of        Year
 per job, unaudited)              2011 Revenue     2010 Revenue      Change
----------------------------------------------------------------------------
Revenue                        494,182          352,765                  40%
Expenses
 Materials and operating       327,398    66.2% 247,388    70.1%         32%
 General and administrative     13,775     2.8%  10,869     3.1%         27%
                              ----------------------------------------------
 Total expenses                341,173    69.0% 258,257    73.2%         32%
Operating income(1)            153,009    31.0%  94,508    26.8%         62%
Number of jobs                  11,323            9,736                  16%
Revenue per job                 43,020           35,866                  20%
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(1) See first page of this report

Revenue for the six months ended June 30, 2011 is up 40% compared to the same period in 2010. Job count increased by 16% and compares to the 20% year-over-year increase in the average number of active drilling rigs. Revenue per job increased by 20% due largely to a 13% pricing increase combined with larger job sizes resulting from increased horizontal drilling activity.

As a percentage of revenue, materials and operating expenses decreased to 66.2% from 70.1% for the comparable period in 2010. The decrease was due to improvements in pricing and increased operating leverage on our fixed cost structure and was partially offset by an increase in employee costs. General and administrative costs increased by $2.9 million due largely to increases in employee costs.


UNITED STATES OPERATIONS

----------------------------------------------------------------------------
Six months ended June 30,                                        Year-Over-
 ($ thousands, except revenue             % of             % of        Year
 per job, unaudited)              2011 Revenue     2010 Revenue      Change
----------------------------------------------------------------------------
Revenue                        315,956          154,250                 105%
Expenses
 Materials and operating       220,639    69.8% 125,143    81.1%         76%
 General and administrative      6,246     2.0%   2,598     1.7%        140%
                              ----------------------------------------------
 Total expenses                226,885    71.8% 127,741    82.8%         78%
Operating income(1)             89,071    28.2%  26,509    17.2%        236%
Number of jobs                   2,125            1,501                  42%
Revenue per job                148,663          102,984                  44%
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(1) See first page of this report

Revenue for the six months ended June 30, 2011 is up 105% compared to the same period in 2010. Job count increased by 42% and benefitted from geographic and service line expansion initiatives as well as a 6% increase in rig count in our areas of operations. Revenue per job increased by 44% due largely to a 53% pricing increase offset by a 7% weakening of the U.S. dollar versus the Canadian dollar.

Materials and operating expenses as a percentage of revenue decreased to 69.8% from 81.1% compared to the same period in 2010. The decrease was due to increased pricing and operating leverage on our fixed cost structure and was partially offset by an increase in product and employee costs. General and administrative costs increased by $3.6 million due largely to increases in employee expenses.


RUSSIAN OPERATIONS

----------------------------------------------------------------------------
Six months ended June 30,                                        Year-Over-
 ($ thousands, except revenue             % of             % of        Year
 per job, unaudited)              2011 Revenue     2010 Revenue      Change
----------------------------------------------------------------------------
Revenue                        146,191          129,294                  13%
Expenses
 Materials and operating       125,653    86.0% 113,121    87.5%         11%
 General and administrative      7,202     4.9%   4,829     3.7%         49%
                             -----------------------------------------------
 Total expenses                132,855    90.9% 117,950    91.2%         13%
Operating income(1)             13,336     9.1%  11,344     8.8%         18%
Number of jobs                   2,333            2,211                   6%
Revenue per job                 60,446           57,509                   5%
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(1) See first page of this report

Year to date revenue for our Russian operations is up 13% compared to the same period in 2010. Job count has increased by 6% and is consistent with our expectation of an increase in activity based on the 2011 tendering process. Revenue per job increased by 5% largely due to price increases obtained during the 2011 tendering process.

Materials and operating expenses as a percentage of revenue decreased to 86.0% from 87.5% compared to the same period in 2010. Margins increased from improved pricing and operating leverage on our fixed cost structure were partially offset by cost inflation. General and administrative expenses are up $2.4 million largely due to an increase employee costs.


CORPORATE DIVISION

----------------------------------------------------------------------------
Six months ended June 30,                                        Year-Over-
 ($ thousands, except revenue              % of              % of      Year
 per job, unaudited)              2011  Revenue     2010  Revenue    Change
----------------------------------------------------------------------------
Expenses
 Materials and operating        10,033      1.0%   6,396      1.0%       57%
 General and administrative     21,774      2.3%  10,734      1.7%      103%
                             -----------------------------------------------
 Total expenses                 31,807      3.3%  17,130      2.7%       86%
Operating loss(1)              (31,807)          (17,130)                86%
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(1) See first page of this report

Corporate division expenses increased $14.7 million compared to last year due to an increase in employee salaries, profit sharing expense and stock based compensation costs.

OTHER EXPENSES AND INCOME

Year-to-date finance costs increased $2.5 million relative to the comparable period in 2010 due to interest on the new private placement debt. Depreciation and amortization increased by $7.2 million compared to 2010. The depreciation increase is due to asset additions primarily in North America.

Foreign exchange gains of $0.3 million have been recognized in 2011 compared to losses of $2.6 million in 2010. The 2010 gain is due to the net impact of fluctuations in the U.S. dollar and Russian ruble relative to the Canadian dollar. Other income increased by $1.4 million from the same period in 2010 due largely to proceeds from an insurance claim.

INCOME TAXES

An income tax expense of $48.3 million was recorded for the six months ended June 30, 2011 compared to an income tax expense of $16.4 million for the same period in 2010. The increase in tax expense is largely attributable to significantly higher earnings.

OTHER COMPREHENSIVE INCOME

The other comprehensive income for the first six months includes $4.3 million in unrealized losses on translating the financial statements of our foreign subsidiaries whose functional currency is not Canadian dollars. In addition, $2.8 million in unrealized gains were recognized on net investment and cash flow hedges. The Canadian dollar weakened 1% against the U.S dollar and strengthened 4% against the Russian ruble from December 31, 2010 to June 30, 2011.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Funds provided by operations increased to $60.9 million in the second quarter of 2011 from $42.8 million in the second quarter of 2010 largely as a result of higher net income.

At June 30, 2011, the Company had working capital of $620.5 million, an increase of $261.9 million from the 2010 year end level of $358.6 million. The increase in the net working capital position is predominantly a result of an increase in cash from the new private placement debt. In addition, accounts receivable and inventory have risen as a result of the increase in activity levels.

Investing Activities

Trican's 2012 capital budget is projected to be $678 million and includes $102 million in near term commitments that are necessary to ensure timely construction of the equipment required to execute on Trican's 2012 growth plans. $576 million of the projected capital budget will be directed towards our North American operations and $102 million towards International operations.

The 2012 projected capital budget consists of $537 million in expansion capital, $104 million in infrastructure needed to support new and existing operations, and $37 million in maintenance capital. The expansion capital includes an additional 92,500 of fracturing horsepower, 5 cement pumpers, 7 nitrogen pumpers, and 4 acid pumpers for our Canadian operations. Capacity for our U.S. operations will increase by 192,500 of fracturing horsepower, 16 cement pumpers, 7 coiled tubing units, 9 nitrogen pumpers, and 10 acid pumpers.

The international capital expenditures will be directed towards growth opportunities in new international markets, including Saudi Arabia and Australia. The capital budget for our Russian operations largely consists of maintenance capital.

Capital expenditures for the quarter totalled $161.0 million compared with $43.5 million for the same period in 2010. This investment was largely directed towards equipment and operating facilities in North America.

At June 30, 2011, Trican had a number of ongoing capital projects and estimates that $254.4 million of additional investment will be required to complete them.

Financing Activities

On April 28, 2011, Trican closed the issuance of U.S.$250 million and CAD$60 million senior unsecured notes on a private placement basis (the "Private Placement"). The notes issued under the Private Placement are subject to various terms with an average term of 7.5 years and an average rate of approximately 5.4%. The notes are unsecured and rank equally with Trican's bank facilities and other outstanding senior notes. Trican intends to use the net proceeds to fund a portion of its 2011 capital expenditure program and for general corporate purposes.

During the first quarter of 2011, the Company replaced its existing Revolving Credit Facility with a new syndicated CAD $250 million three year extendible Revolving Credit Facility (the "New Facility"). The New Facility is unsecured and bears interest at Canadian prime rate, U.S. prime rate, Banker's Acceptance rate or at LIBOR plus 125 to 375 basis points, dependent on certain financial ratios of the Company.

As at August 8, 2011, Trican had 146,228,970 common shares and 6,686,296 employee stock options outstanding.

Financial Instruments

During the quarter, Trican entered into two distinct hedges, each with the purpose of hedging the gains and losses incurred on U.S. dollar balances. The first hedge consists of cross-currency swap agreements, which hedges U.S.$95 million of the U.S.$250 million private placement of senior unsecured notes (the "Notes") which were issued during the quarter ended June 30, 2011. This hedge has been assessed as a highly effective cash-flow hedge. The foreign exchange loss on the hedged portion of the Notes has been recorded in other comprehensive income. The fair value of the cross-currency swap agreements at June 30, 2011 is $0.7 million and has been recorded in other assets on the balance sheet and as a gain in other comprehensive income.

The second hedge is a net investment hedge of our U.S. operations. The foreign exchange loss on the non-hedged portion of the senior unsecured notes of U.S.$155.0 million has been offset against the gains and losses incurred on the translation of the net assets of our U.S. operations. For the quarter ended June 30, 2011, there were no ineffective portions, therefore the change in fair value has been included in other comprehensive income.

OUTLOOK

Canadian Operations

Demand for pressure pumping services in Canada has been robust during the first half of 2011. With strong oil prices and the favourable economics of liquids-rich gas plays, we expect demand for all our service lines to remain strong throughout the balance of 2011. Although we are not anticipating an increase in the price of natural gas during 2011, any meaningful improvements in natural gas prices would be expected to have a sizable impact on industry activity.

We expect Canadian pricing for the second half of 2011 to rebound from second quarter levels and increase modestly compared to the first quarter of 2011. We expect this to result in second half margins that are substantially higher than the second quarter and consistent with those seen in the first quarter of 2011. Cost increases are anticipated to largely offset any margin gains expected from the pricing increases. However, Canadian demand is expected to be robust for the balance of 2011 and into 2012. As a result, we expect pricing and operating margins to remain strong after capacity additions from 2011 capital budgets have entered the Canadian market.

Four new Canadian fracturing crews will be deployed throughout the second half of 2011 as part of the 2011 capital expenditure budget. This will increase our Canadian horsepower by 62,500 to 321,200. We expect all new and existing Canadian fracturing crews to be fully utilized during the second half of the year as the Canadian pressure pumping industry remains under supplied. The new crews will have a positive impact on 2011 financial results but the full impact of these additions will not be seen until 2012.

U.S. Operations

The outlook for our U.S. operations continues to remain strong with overall industry activity being led by oil and liquids-rich gas directed activity. We expect robust activity levels in the Marcellus and Eagle Ford regions as well as stable activity across our other regions, which we expect will lead to high utilization levels throughout the balance of 2011.

We expect U.S. pricing to increase marginally throughout the remainder of 2011 and be offset by cost inflation and start-up costs associated with geographic and service line expansion. As a result, second half margins are expected to be consistent with those seen in the second quarter of 2011.

We expect to add five new fracturing crews to our U.S. operations throughout the second half of the year. One new crew began operating in the Marcellus play in early July and we expect to add a new crew in the Eagle Ford late in the third quarter and a new crew into Oklahoma early in the fourth quarter. In addition, we will begin operations in the Permian basin during the third quarter of 2011 with a short-term agreement committing 15,000 horsepower with a new U.S. customer. We expect to add an additional fracturing crew to Permian basin during the fourth quarter of 2011. These additions are expected to increase our U.S. fracturing horsepower by approximately 180,000 to 569,500 by the end of 2011.

We will also continue to expand our other service lines in the U.S. in the second half of 2011. Four new coiled tubing units will be deployed throughout the second half of the year and ten new twin cementing units will be deployed late in 2011 and early in 2012.

Russian Operations

After a slow start to the year, our Russian operations recovered somewhat in the second quarter with more favorable weather conditions and stabilization of our key costs. Cost inflation remains a concern in Russia and we will continue to focus on optimizing our cost structure for the balance of 2011. Our 2011 outlook for Russia remains unchanged and we continue to expect activity levels to increase by 7% with operating margins that are consistent with 2010.

Despite the lower margins in Russia relative to our North American operations, Trican believes in the long term potential of the Russian market. This region contains significant oil and gas reserves and it is the primary supplier of energy to Europe. In addition, we believe that the demand for pressure pumping services will increase in the future as Russian producers move towards more technically challenging basins. We believe it is important for us to maintain our leading position in this market in order to capitalize on this growth as it occurs.

NON-IFRS DISCLOSURE

Adjusted net income, operating income and funds provided by operations do not have any standardized meaning as prescribed by IFRS and, therefore, are considered non-IFRS measures.

Adjusted net income and funds provided by operations have been reconciled to net income and operating income has been reconciled to gross profit, being the most directly comparable measures calculated in accordance with IFRS. The reconciling items have been presented net of tax.


----------------------------------------------------------------------------
                               Three months ended          Six months ended
----------------------------------------------------------------------------
                          June 30,   June 30,  March 31,  June 30,  June 30,
                             2011       2010       2011      2011      2010
----------------------------------------------------------------------------
Adjusted net income        33,328     12,675     85,463   118,789    46,858
Deduct:
 Non-cash stock-based
  compensation expense      3,252      3,763      3,035     6,287     5,403
----------------------------------------------------------------------------

Net income (IFRS
 financial measure)        30,076      8,912     82,428   112,502    41,455
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                              Three months ended           Six months ended
----------------------------------------------------------------------------
                          June 30,   June 30,  March 31,  June 30,  June 30,
                             2011       2010       2011      2011      2010
----------------------------------------------------------------------------
Funds provided by
 operations                60,912     42,924    141,702   202,611   104,915
Charges to income not
 involving cash
 Depreciation and
  amortization             28,554     27,975     30,105    58,659    51,488
 Stock-based
  compensation              3,252      3,763      3,035     6,287     5,403
 Loss/ (gain) on
  disposal of
  property and equipment        3        (13)        25        28       (20)
 Gain on revaluation of
  deferred consideration        -          -          -         -       (22)
 Unrealized foreign
  exchange
 (gain)/loss                 (992)         5         10      (982)      808
 Income tax expense        15,437      3,738     32,855    48,292    16,442
 Income tax paid          (15,418)    (1,456)    (6,756)  (22,175)  (10,639)
----------------------------------------------------------------------------

Net income (IFRS
 financial measure)        30,076      8,912     82,428   112,502    41,455
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                              Three months ended           Six months ended
----------------------------------------------------------------------------
                          June 30,   June 30,  March 31,  June 30,  June 30,
                             2011       2010       2011      2011      2010
----------------------------------------------------------------------------
Operating income           78,277     42,946    145,333   223,609   115,231
Add:
 Administrative expenses   25,552     16,786     25,750    51,302    30,717
Deduct:
 Depreciation expense     (28,554)   (27,975)   (30,105)  (58,659)  (51,488)

----------------------------------------------------------------------------

Gross profit (IFRS
 financial measure)        75,275     31,757    140,978   216,252    94,460
----------------------------------------------------------------------------
----------------------------------------------------------------------------

FORWARD-LOOKING STATEMENTS

This document contains statements that constitute forward-looking statements within the meaning of applicable securities legislation. These forward-looking statements are identified by the use of terms and phrases such as "anticipate," "achieve", "achievable," "believe," "estimate," "expect," "intend", "plan", "planned", and other similar terms and phrases. These statements speak only as of the date of this document and we do not undertake to publicly update these forward-looking statements except in accordance with applicable securities laws. These forward-looking statements include, among others:

- expectations that activity levels in the Canadian geographic region will remain strong;

- expectations that the strong demand levels in the Eagle Ford and Oklahoma regions will continue through the remainder of 2011;

- expectations that the activity in the Marcellus play will maintain its momentum for the remainder of 2011;

- anticipate the demand for all service lines to remain strong for the second half of 2011;

- not anticipating a meaningful increase in the price of natural gas during 2011, however anticipate that any improvements in the natural gas prices would have a sizable impact on industry activity;

- expect Canadian pricing to rebound during the second half of 2011 compared to 2010, with small increases compared to the first quarter of 2011;

- expectations that the pricing increases will result in improvements in margins in the Canadian region;

- Cost increases are anticipated to offset any significant growth in margins;

- expectation that Canadian demand will remain strong through 2011 and into 2012;

- expectations that all new and existing Canadian fracturing crews will be utilized during the second half of the year;

- expectations of robust activity levels in the Marcellus and Eagle Ford regions, as well as stable activity across our other regions in the U.S. geographic region;

- increased activity is expected to lead to strong utilization levels in the U.S. geographic region for the duration of 2011;

- anticipate prices to increase marginally throughout the remainder of 2011 with cost inflation offsetting any potential growth in margins;

- margins during the second half of 2011 in the U.S. are expected to be relatively consistent with the first half of 2011;

- expect to add five new fracturing crews to our U.S. operations throughout the second half of 2011;

- expectations that activity levels in Russia will increase by 7% with operating margins that are consistent with 2010;

- expectations that long term Russian activity levels will grow resulting in future benefits; and

- belief that the demand for pressure pumping services will increase in the future as Russian producers move towards more technically challenging basins.

Forward-looking statements are based on current expectations, estimates, projections and assumptions, which we believe are reasonable but which may prove to be incorrect and therefore such forward-looking statements should not be unduly relied upon. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: industry activity; the general stability of the economic and political environment; effect of market conditions on demand for the Company's products and services; the ability to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability to operate its business in a safe, efficient and effective manner; the performance and characteristics of various business segments; the effect of current plans; the timing and costs of capital expenditures; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its products and services.

Forward-looking statements are subject to a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks and uncertainties include: fluctuating prices for crude oil and natural gas; changes in drilling activity; general global economic, political and business conditions; weather conditions; regulatory changes; the successful exploitation and integration of technology; customer acceptance of technology; success in obtaining issued patents; the potential development of competing technologies by market competitors; and availability of products, qualified personnel, manufacturing capacity and raw materials. In addition, actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth under the section entitled "Business Risks" in this document.

Additional information regarding Trican including Trican's most recent annual information form is available under Trican's profile on SEDAR (www.sedar.com).


CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                      June 30,  December 31,
(Stated in thousands; unaudited)                         2011          2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS
Current assets
 Cash and cash equivalents                           $298,640       $81,058
 Trade and other receivables                          374,508       364,986
 Current tax assets                                    12,499         6,046
 Inventory                                            149,055       106,607
 Prepaid expenses                                      14,821         9,257
----------------------------------------------------------------------------
                                                      849,523       567,954
Property and equipment (note 3)                       903,576       700,230
Intangible assets                                      17,303        20,816
Deferred tax assets                                    52,153        74,330
Other assets                                           11,830        13,115
Goodwill                                               36,916        36,916
----------------------------------------------------------------------------
                                                 $  1,871,301    $1,413,361
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
 Bank loans (note 4)                                       $-            $-
 Trade and other payables                             228,977       209,305
 Current tax liabilities                                   22            22
----------------------------------------------------------------------------
                                                      228,999       209,327

Loans and borrowings (note 4)                         407,440       106,627
Deferred tax liabilities                              110,293        98,006

Shareholders' equity
 Share capital (note 5)                               506,303       486,594
 Contributed surplus                                   44,739        42,919
 Accumulated other comprehensive income               (20,853)      (19,273)
 Retained earnings                                    594,380       489,161
----------------------------------------------------------------------------
Total equity attributable to equity holders of
 the Company                                        1,124,569       999,401
----------------------------------------------------------------------------
                                                 $  1,871,301    $1,413,361
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Contractual obligations (note 9) 
Subsequent events (note 11)
See accompanying notes to the consolidated financial statements.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Stated in    
 thousands,
 except per
 share         Three Months    Three Months      Six Months      Six Months
 amounts;     Ended June 30,  Ended June 30,  Ended June 30,  Ended June 30,
 unaudited)            2011            2010            2011            2010
----------------------------------------------------------------------------
Revenue            $421,701        $306,309        $956,329        $636,309
Cost of sales       346,426         274,552         740,077         541,849
----------------------------------------------------------------------------
Gross profit         75,275          31,757         216,252          94,460
Administrative
 expenses            25,552          16,786          51,302          30,717
Other income           (600)            (89)         (1,720)            (72)
----------------------------------------------------------------------------
Results from
 operating
 activities          49,687          15,060         166,670          63,815
Finance income         (687)           (983)         (1,323)         (1,611)
Finance costs         5,416           2,620           7,427           4,907
Foreign
 exchange
 (gain)/loss             81             772            (228)          2,621
----------------------------------------------------------------------------
Profit before
 income tax          45,513          12,651         160,794          57,898
Income tax
 expense
 (note 8)            15,437           3,739          48,292          16,443
----------------------------------------------------------------------------
Profit for
 the period         $30,076          $8,912        $112,502         $41,455
----------------------------------------------------------------------------
Earnings
 per share
 (note 6)
----------------------------------------------------------------------------
 Basic                $0.21           $0.07           $0.78           $0.32
 Diluted              $0.21           $0.06           $0.77           $0.31
----------------------------------------------------------------------------
Weighted average
 shares outstanding
 - basic            145,385         136,424         145,067         131,073
Weighted average
 shares
 outstanding
 - diluted          147,223         137,457         146,889         132,237
----------------------------------------------------------------------------

Other
 comprehensive income
 Unrealized
  gain on hedging
  instruments         2,753               -           2,753               -
 Foreign currency
  translation
  differences        (5,231)          1,730          (4,333)         (2,313)
----------------------------------------------------------------------------

Total comprehensive
 income for the
 year               $27,598         $10,642        $110,922         $39,142
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Total
 comprehensive
 income
 attributable
 to:
Owners of
 the Company         27,598          10,642         110,922          39,162
Non-controlling
 interest                 -               -               -             (20)
----------------------------------------------------------------------------
Total
 comprehensive
 income for
 the period         $27,598         $10,642        $110,922         $39,142
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Stated in     Three Months    Three Months      Six Months      Six Months
 thousands;   Ended June 30,  Ended June 30,  Ended June 30,  Ended June 30,
 unaudited)            2011            2010            2011            2010
----------------------------------------------------------------------------
Cash
 Provided By/
 (Used In):
Operations
 Profit for
  the period        $30,076          $8,912        $112,502         $41,455
 Charges to
  income not
  involving
  cash:
  Depreciation
   and
   amortization      28,554          27,975          58,659          51,488
  Stock-based
   compensation       3,252           3,763           6,287           5,403
  Loss/(gain)
   on disposal
   of property
   and equipment          3             (13)             28             (20)
  Gain on
   revaluation
   of deferred
   consideration          -               -               -             (22)
  Unrealized
   foreign
   exchange
   loss                (992)              5            (982)            808
  Income tax
   expense           15,437           3,738          48,292          16,443
----------------------------------------------------------------------------
                     76,330          44,380         224,786         115,555
 Change in
  inventories       (10,004)           (361)        (36,780)         (4,170)
 Change in
  trade and
  other
  receivables       110,553          28,740          (4,454)        (96,213)
 Change in
  prepayments        (4,308)         (2,911)         (5,504)         (1,958)
 Change in
  trade and
  other payables    (20,155)         (4,626)         14,270          63,221
----------------------------------------------------------------------------
Cash generated
 from operating
 activities         156,416          65,222         192,317          76,435

 Interest paid       (1,547)         (4,129)         (2,084)         (4,856)
 Income tax paid    (15,418)         (1,456)        (22,175)        (10,639)
----------------------------------------------------------------------------
                    135,451          59,637         168,058          60,940

Investing
 Interest
  received              621             732           1,151           1,317
 Purchase of
  property and
  equipment        (160,953)        (43,453)       (261,216)       (117,790)
 Proceeds
  from the
  sale of
  property and
  equipment             116             110             487             163
 Payments
  received on
  loan to an
  unrelated
  third party         1,308           1,269           2,711           2,641
 Business
  acquisitions            -          (5,818)              -          (5,818)
 Net change
  in non-cash
  working
  capital from                                                        
  investing
  activities        (14,549)        (12,772)          3,535         (14,261)
----------------------------------------------------------------------------
                   (173,457)        (59,932)       (253,332)       (133,748)

Financing
 Net proceeds
  from issuance
  of share capital   11,747         220,513          15,241         220,587
 Issuance
  (repayment)
  of bank
  loans              (6,810)        (43,929)              -         (27,161)
 Issuance
  (repayment)
  of long-term
  debt, net of
  financing fees    295,824         (93,980)        295,824         (42,795)
 Dividend
  paid                    -               -          (7,232)         (6,282)
----------------------------------------------------------------------------
                    300,761          82,604         303,833         144,349
Effect of
 exchange
 rate changes
 on cash             (1,326)            899            (977)           (180)
----------------------------------------------------------------------------

Increase in
 cash and
 cash
 equivalents        261,429          83,208         217,582          71,362
Cash and
 cash
 equivalents,
 beginning of
 period              37,211          14,243          81,058          26,089
----------------------------------------------------------------------------
Cash and
 cash
 equivalents,
 end of
 period            $298,640         $97,451        $298,640         $97,451
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.

Selected Notes to the condensed consolidated interim financial statements (unaudited)

For the periods ended June 30, 2011 and 2010

NOTE 3 - PROPERTY AND EQUIPMENT

Included within property and equipment are assets held under finance lease with a gross value of $24.5 million (December 31, 2010 - $18.5 million) and accumulated depreciation of $8.0 million (December 31, 2010 - $5.4 million).

NOTE 4 - LOANS AND BORROWINGS

Bank loans

The Company's Russian subsidiary has a U.S.$20 million (Canadian equivalent of $19.3 million) demand revolving facility with a large international bank. This facility is unsecured, bears interest at LIBOR plus a premium, as determined by the bank, plus 2.75% and has been guaranteed by the Company. As at June 30, 2011 there was nothing drawn on this facility (December 31, 2010, nil).


Long term debt

(Stated in thousands)                      June 30, 2011  December 31, 2010
----------------------------------------------------------------------------
Notes payable                                    395,554             99,460
Finance lease obligations                         11,886              7,167
Revolving credit facility                              -                  -
----------------------------------------------------------------------------
                                                $407,440           $106,627
----------------------------------------------------------------------------
----------------------------------------------------------------------------

During the first quarter of 2011, the Company replaced its existing Revolving Credit Facility with a new syndicated CAD $250 million three year extendible Revolving Credit Facility. The New Facility is unsecured and bears interest at Canadian prime rate, U.S. prime rate, Banker's Acceptance rate or at LIBOR plus 125 to 375 basis points, dependent on certain financial ratios of the Company.

Notes payable

On April 28, 2011 the Company closed a private placement of Senior Unsecured Notes (the "Notes") that will rank equally with the Company's bank facilities and other outstanding senior notes. The following outlines the terms of the new Notes:

- U.S. $65 million Senior Notes maturing April 28, 2016, bearing interest at a fixed rate of 4.61% payable semi-annually on April 28 and October 28;

- Canadian $45 million Senior Notes maturing April 28, 2016, bearing interest at a fixed rate of 5.22% payable semi-annually on April 28 and October 28;

- U.S. $80 million Senior Notes maturing April 28, 2018, bearing interest at a fixed rate of 5.29% payable semi-annually on April 28 and October 28;

- Canadian $15 million Senior Notes maturing April 28, 2021, bearing interest at a fixed rate of 6.11% payable semi-annually on April 28 and October 28; and

- U.S. $105 million Senior Notes maturing April 28, 2021, bearing interest at a fixed rate of 5.90% payable semi-annually on April 28 and October 28.

On June 21, 2007, the Company entered into an agreement with institutional investors in the U.S. providing for the issuance, by way of private placement of U.S. $100 million of Senior Unsecured Notes (the "Notes") in two tranches:

- U.S. $25 million Series A Senior Notes maturing June 22, 2012, bearing interest at a fixed rate of 6.02% payable semi-annually on June 22 and December 22; and

- U.S. $75 million Series B Senior Notes maturing June 22, 2014, bearing interest at a fixed rate of 6.10% payable semi-annually on June 22 and December 22.

The Notes require the Company to comply with certain financial and non-financial covenants that are typical for this type of arrangement. At June 30, 2011, the Company was in compliance with these covenants.

NOTE 5 - SHARE CAPITAL

Authorized:

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


The shares have no par value.

Issued and Outstanding - Common Shares:

----------------------------------------------------------------------------
(stated in thousands, except share amounts) Number of Shares         Amount
----------------------------------------------------------------------------
Balance, December 31, 2010                       144,636,583      $ 486,594
Exercise of share options                          1,018,090         15,457
Reclassification from contributed surplus
 on exercise of options                                               4,252
----------------------------------------------------------------------------
Balance, June 30, 2011                           145,654,673      $ 506,303
----------------------------------------------------------------------------
----------------------------------------------------------------------------

All issued shares are fully paid.

Securities convertible into common shares of the Company are as follows:

----------------------------------------------------------------------------
                                           June 30, 2011  December 31, 2010
----------------------------------------------------------------------------
Securities convertible into common shares:
Employee share options                         7,295,642          6,700,864
----------------------------------------------------------------------------
----------------------------------------------------------------------------


NOTE 6 - EARNINGS PER SHARE

(Stated in thousands, except share and per share amounts)

Basic Income Per Share                                  2011           2010
----------------------------------------------------------------------------
Profit available to common shareholders           $  112,502      $  32,543
Weighted average number of common shares             145,067        125,662
Basic earnings per share                               $0.78          $0.26
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Diluted Income Per Share                                2011           2010
----------------------------------------------------------------------------
Profit available to common shareholders           $  112,502      $  32,543
Weighted average number of common shares             145,067        125,662
Diluted effect of share options                        1,822          1,132
----------------------------------------------------------------------------
Diluted weighted average number of common shares     146,889        126,794
Diluted earnings per share                             $0.77          $0.26
----------------------------------------------------------------------------
----------------------------------------------------------------------------

NOTE 7 - FINANCIAL INSTRUMENTS

Market Risk

Foreign exchange rate risk

The Company is exposed to foreign currency exchange rate risk in Canada primarily related to its U.S. dollar denominated long term debt. During the quarter the Company entered into two cross currency swap contracts to manage the known currency exposure related to the long term debt. The cross currency swap contracts require the periodic exchange of payment with the exchange at maturity of notional principal amounts on which the payments are based. At June 30, 2011 the Company had the following cross currency swap contracts outstanding:


(Stated in thousands)
                                               Interest Rate  Interest Rate
Maturity Date       Amount (US$) Exchange rate          (US$)         (CAN$)
----------------------------------------------------------------------------
April 28, 2016           45,000         0.9515          4.61%          5.69%
April 28, 2018           50,000         0.9512          5.29%          6.14%

At June 30, 2011, the estimated fair value of the above risk management contracts was an asset of $0.7 million.

All cross currency swap derivative financial instruments were designated as cash flow hedges at June 30, 2011. For the six month period ended June 30, 2011, there was no ineffective portion of the hedging relationship included in profit and loss.

Credit Risk

Counterparties

Counterparties to financial instruments expose the Company to credit losses in the event of non-performance. Counterparties to cash transactions are limited to high credit quality financial institutions. The Company does not anticipate non-performance that would materially impact the Company's financial statements.


NOTE 8 - INCOME TAXES

(Stated in thousands)                          
Six months ended                               June 30, 2011  June 30, 2010
----------------------------------------------------------------------------
Provision for current income taxes                   $15,702         $9,990
Provision for deferred income taxes                   32,590          6,453
----------------------------------------------------------------------------
                                                     $48,292        $16,443
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The net income tax provision differs from that expected by applying the combined federal and provincial income tax rate of 26.64% (2010 - 28.21%) to income before income taxes for the following reasons:


Six months ended                             June 30, 2011  June 30, 2010
----------------------------------------------------------------------------
Expected combined federal and provincial
 income tax                                          $42,788        $16,333
Statutory and other rate differences                   4,131         (1,852)
Non-deductible expenses                                3,354          2,523
Translation of foreign subsidiaries                     (120)           522
Changes to deferred income tax rates                  (2,161)        (1,032)
Capital and other foreign tax                            313              -
Other                                                    (13)           (51)
----------------------------------------------------------------------------
                                                     $48,292       $ 16,443
----------------------------------------------------------------------------
----------------------------------------------------------------------------

NOTE 10 - OPERATING SEGMENTS

The Company operates in three main geographic regions: Canada, Russia (which includes Kazakhstan and Algeria), and the U.S. Each geographic region has a General Manager ("GM") that is responsible for the operation and strategy of their region's business. Personnel working within the particular geographic region report to the GM; the GM reports to the corporate executive.

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

- Canadian Operations provides cementing, fracturing, coiled tubing, nitrogen, geological, and acidizing services, which are performed on new and existing oil and gas wells, and industrial services.

- U.S. Operations provides fracturing, cementing, nitrogen and acidizing services which are performed on new and existing oil and gas wells.

- Russian Operations provides cementing, fracturing, deep coiled tubing, nitrogen and acidizing services which are performed on new and existing oil and gas wells.

                                   United
(Stated in            Canadian     States    Russian
 thousands)         Operations Operations Operations Corporate        Total
----------------------------------------------------------------------------
Three months ended
 June 30, 2011
----------------------------------------------------------------------------
Revenue               $167,805   $172,404    $81,492        $-     $421,701
Gross profit/(loss)     27,263     42,133     10,017    (4,138)      75,275
Finance Costs                -          -          -    (5,416)      (5,416)
Depreciation and
 amortization           11,732     11,682      5,105        35       28,554
Assets                 638,071    471,706    258,965   502,559    1,871,301
Goodwill                22,690          -     14,226         -       36,916
Property and
 equipment             510,333    298,917     86,786     7,540      903,576
Capital
 expenditures           42,043    113,560      5,350         -      160,953
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended
 June 30, 2010
----------------------------------------------------------------------------
Revenue               $139,823    $94,974    $71,512        $-      $306,309
Gross profit/(loss)     22,364      8,486      3,980    (3,073)      31,757
Finance Costs                -          -          -    (2,620)      (2,620)
Depreciation and
 amortization           11,299     10,350      6,311        15       27,975
Assets                 502,227    363,994    239,699   135,639    1,241,559
Goodwill                22,690          -     14,226         -       36,916
Property and
 equipment             301,964    201,912    100,921     2,163      606,960
Capital
 expenditures           30,127      8,881      4,107       338       43,453
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                   United
(Stated in            Canadian     States    Russian
 thousands)         Operations Operations Operations Corporate        Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended
 June 30, 2011
----------------------------------------------------------------------------
Revenue               $494,182   $315,956   $146,191        $-     $956,329
Gross profit/(loss)    146,439     70,967      9,050   (10,204)     216,252
Finance Costs                -          -          -    (7,427)      (7,427)
Depreciation and
 amortization           22,244     24,441     11,669       305       58,659
Capital
 expenditures           70,730    180,350      9,193       943      261,216
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six months ended
 June 30, 2010
----------------------------------------------------------------------------
Revenue               $352,765   $154,250   $129,294        $-     $636,309
Gross profit/(loss)     85,725     11,244      3,887    (6,396)      94,460
Finance Costs                -          -          -    (4,907)      (4,907)
Depreciation and
 amortization           21,029     17,962     12,463        34       51,488
Capital
 expenditures           42,568     61,816     12,706       700      117,790
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The Corporate division does not represent an operating segment and is included for informational purposes only. Corporate division expenses consist of salary expenses, share-based compensation and office costs related to corporate employees, as well as public company costs.

NOTE 11 - SUBSEQUENT EVENTS

On July 11, 2011, Trican announced that it had reached an agreement to purchase Viking Energy Pty Ltd. and its subsidiaries (collectively "Viking Energy"). Viking Energy is a privately-owned enterprise based in Brisbane, Queensland and provides cementing and environmental services in eastern Australia. Under the terms of the purchase, Trican acquired 100% of the shares and units of Viking Energy through its wholly-owned Australian subsidiary for cash consideration of AU$9.1 million, with additional contingent consideration up to a maximum of AU$2.4 million payable based on the financial results of Viking Energy over the next two years. The cash consideration is funded by Trican's existing cash reserves.

The Company will host a conference call on Tuesday, August 9, 2011 at 9:00 a.m. MT (11:00 a.m. ET) to discuss the Company's results for the Second Quarter 2011.

To listen to the webcast of the conference call, please enter: http://www.gowebcasting.com/2513 in your web browser or visit the Investor Information section of our website at www.trican.ca.

To participate in the Q&A session, please call the conference call operator at 1-866-223-7781 (North America) or 416-340-8018 (outside North America) 15 minutes prior to the call's start time and ask for the "Trican Well Service Ltd. - Second Quarter 2011 Conference Call".

A replay of the conference call will be available until August 16, 2011 by dialing 1-800-408-3053 (North America) or 905-694-9451 (outside North America). Playback passcode: 2848180.

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

Headquartered in Calgary, Alberta, Trican has operations in Canada, the US, Russia and North Africa. Trican provides a comprehensive array of specialized products, equipment and services that are used during the exploration and development of oil and gas reserves.

Requests for shareholder information should be directed to Dale Dusterhoft or Michael Baldwin.

Please visit our website at www.trican.ca

Contact Information

  • Trican Well Service Ltd.
    Dale Dusterhoft
    Chief Executive Officer
    (403) 266-0202
    (403) 237-7716 (FAX)
    ddusterhoft@trican.ca

    Trican Well Service Ltd.
    Michael Baldwin
    Vice President, Finance and Chief Financial Officer
    (403) 266-0202
    (403) 237-7716 (FAX)
    mbaldwin@trican.ca

    Trican Well Service Ltd.
    2900, 645 - 7th Avenue S.W.
    Calgary, Alberta T2P 4G8
    www.trican.ca