Trican Well Service Ltd.
TSX : TCW

Trican Well Service Ltd.

February 28, 2012 20:09 ET

Trican Reports Record Fourth Quarter and Annual Results for 2011, a Dividend Increase, and a 2012 Capital Budget Reduction

CALGARY, ALBERTA--(Marketwire - Feb. 28, 2012) - Trican Well Service Ltd. (TSX:TCW)


                           -------------------------------------------------
                                Three months ended       Twelve months ended
                               Dec.     Dec.     Sept.       Dec.       Dec.
                                31,      31,       30,        31,        31,
($ millions, except per                                                     
 share amounts; unaudited)     2011     2010      2011       2011       2010
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Revenue                    $  694.2 $  434.3 $   659.1 $  2,309.6 $  1,478.3
Operating income                                                            
 (i)                          197.3    109.7     193.6      614.5      332.4
Net income                    114.9     55.6     111.3      338.6      150.4
Net income per                                                              
 share              (basic)   $0.78    $0.39     $0.76      $2.32      $1.09
                  (diluted)   $0.78    $0.38     $0.75      $2.30      $1.09
Adjusted net                                                                
 income (i)                   117.9     58.8     114.4      351.0      162.7
Adjusted net                                                                
 income per                                                                 
 share(i)           (basic)   $0.80    $0.41     $0.78      $2.41      $1.18
                  (diluted)   $0.80    $0.41     $0.77      $2.39      $1.17
Funds provided by                                                           
 operations(i)                181.9    108.0     174.3      588.8      320.0
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Notes:

(i) 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, foreign exchange, 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.

FOURTH QUARTER HIGHLIGHTS

Consolidated revenue for the fourth quarter of 2011 was $694.2 million, an increase of 60% compared to the fourth quarter of 2010. Consolidated net income increased by 107% to $114.9 million and diluted earnings per share increased to $0.78 compared to $0.38 for the same period in 2010. Funds provided by operations was $181.9 million compared to $108.0 million in the fourth quarter of 2010.

Our Canadian operations achieved record quarterly revenue of $417.0 million and operating income of $164.8 million during the fourth quarter of 2011. Canadian revenue increased by 56% and operating income increased by 63% compared to the fourth quarter of 2010. Canadian activity levels remained strong during the fourth quarter of 2011 and were led by oil and liquids-rich gas directed activity. Horizontal drilling activity also remained strong in Canada as 58% of wells drilled during the fourth quarter of 2011 were horizontal compared to 38% for the same period in the previous year. The number of fracturing stages per horizontal well also continued to increase during the fourth quarter, which benefitted our fracturing service line in Canada. In Canada during the fourth quarter we added 30,000 horsepower to our fleet, exiting 2011 with 321,200 fracturing horsepower compared to 258,700 at the end of 2010.

U.S. activity levels remained strong during the fourth quarter as U.S. rig count increased by 19% year over year and 3% sequentially. Strong activity levels contributed to record quarterly U.S. revenue of $215.7 million, an increase of 101% compared to the fourth quarter of 2010. U.S. pressure pumping demand continued to be driven by strong oil and liquids-rich gas and horizontal drilling activity. However, weak natural gas prices led to activity declines in our dry gas regions, which partially offset the increases in the oil and liquids-rich gas areas.

One new fracturing crew was deployed into the Eagle Ford shale during the fourth quarter, and crews in Oklahoma and the Permian began operations in early 2012. Equipment utilization levels for the new Eagle Ford crew were low due to typical start-up issues and our fixed cost structure continued to increase as we hired people to staff the new crews that were added in early 2012. In addition, utilization levels for our Fayetteville crew and one crew in the Haynesville were low near the end of the quarter as they were moved into oil and liquids-rich gas plays. These factors, combined with an extended holiday season that impacted utilization near the end of the quarter, had a negative impact on fourth quarter financial results and contributed to the 440 basis point sequential decrease in operating margins.

Revenue from our international operations was $61.5 million in the fourth quarter of 2011, up 5% year-over-year but down 23% sequentially. Our international operations include the financial results for operations in Russia, Kazakhstan, Algeria and Australia, with Russia and Kazakhstan comprising the majority of our international results. Revenue and activity levels in Russia and Kazakhstan were down sequentially, but consistent with overall expectations for the region. The sequential decrease in revenue and operating margins was caused by low utilization, which resulted from the completion of our Russian customers 2011 work programs and cold temperatures typically experienced near the end of the fourth quarter in Russia.

Capital Budget Update

Management completed an in-depth review of the Company's capital commitments and reduced the previously announced 2012 capital program by approximately $96 million to $582 million. The capital program reductions are primarily for our U.S. operations and include the cancellation of 50,000 fracturing horsepower and four twin cementing units.

The reductions are largely due to the decrease in dry gas activity in the U.S. market. Despite these reductions, our 2012 capital budget is expected to increase our U.S. fracturing capacity by 25% and significantly expand our non-fracturing service lines. These increases reflect our positive U.S. outlook for 2012, supported by strong oil and liquids-rich gas activity, horizontal drilling activity, and new play growth.

Dividend increase

Trican Well Service Ltd. is pleased to announce that its Board of Directors has approved an increase to its semi-annual dividend from $0.05 to $0.15 per share, thereby increasing the annual dividend to $0.30 per share. This increase reflects our expectation that Trican can sustain strong earnings in the future and maximize shareholder value while remaining committed to investing in the growth of our existing operations and future growth opportunities. The increase will be effective for the anticipated June 30, 2012 dividend payment.

MANAGEMENT'S DISCUSSION AND ANALYSIS


COMPARATIVE QUARTERLY INCOME STATEMENTS ($ thousands, unaudited)            
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                                                          Quarter-          
                                                             Over-          
Three months ended                % of              % of   Quarter          
 December 31,            2011  Revenue     2010  Revenue    Change % Change 
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Revenue               694,214    100.0% 434,271    100.0%  259,943     59.9%
Expenses                                                                    
  Materials and                                                             
   operating          473,693     68.2% 302,236     69.6%  171,457     56.7%
  General and                                                               
   administrative      23,226      3.3%  22,314      5.1%      912      4.1%
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Operating income(i)   197,295     28.4% 109,721     25.3%   87,574     79.8%
  Finance costs         6,557      0.9%   2,427      0.6%    4,130    170.2%
  Depreciation and                                                          
   amortization        36,443      5.2%  30,353      7.0%    6,090     20.1%
  Foreign exchange                                                          
   (gain)/loss         (3,975)    -0.6%   1,867      0.4%   (5,842)  -312.9%
  Other income         (1,405)    -0.2%  (1,277)    -0.3%     (128)    10.0%
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Income before income                                                        
 taxes                159,675     23.0%  76,351     17.6%   83,324    109.1%
Income tax expense     44,805      6.5%  20,750      4.8%   24,055    115.9%
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Net Income            114,870     16.5%  55,601     12.8%   59,269    106.7%
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(i) see first page of this report                                           

CANADIAN OPERATIONS                                                         

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($ thousands, except                                                        
 revenue per job,                                                           
 unaudited)            Dec. 31,    % of Dec. 31,    % of  Sept. 30,    % of 
Three months ended,        2011 Revenue     2010 Revenue       2011 Revenue 
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Revenue                 417,021          267,831            371,481         
Expenses                                                                    
  Materials and                                                             
   operating            246,363    59.1% 159,463    59.5%   216,746    58.3%
  General and                                                               
   administrative         5,898     1.4%   7,312     2.7%     7,813     2.1%
                       --------         --------         ----------         
  Total expenses        252,261    60.5% 166,775    62.3%   224,559    60.4%
Operating income(i)     164,760    39.5% 101,056    37.7%   146,922    39.6%
Number of jobs            7,108            6,674              6,960         
Revenue per job          58,296           39,378             52,766         
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(i) see first page of this report                                           

Sales Mix                                                                   

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Three months ended,                          Dec. 31,   Dec. 31,  Sept. 30, 
(unaudited)                                      2011       2010       2011 
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% of Total Revenue                                                          
Fracturing                                         68%        65%        67%
Cementing                                          16%        17%        17%
Nitrogen                                            8%         5%         8%
Coiled Tubing                                       4%         6%         4%
Acidizing                                           2%         4%         2%
Other                                               2%         3%         2%
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Total                                             100%       100%       100%
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Operations Review

Canadian pressure pumping demand remained strong during the fourth quarter of 2011. The number of active drilling rigs in Canada increased 15% year over year and by 3% sequentially, led by oil and liquids-rich gas directed activity, which was partially offset by declines in dry gas activity due to weak natural gas prices.

Horizontal drilling activity remains strong in Canada as 58% of wells drilled during the fourth quarter of 2011 were horizontal compared to 38% in the fourth quarter of 2010. Our fracturing service line continues to benefit from the strength of horizontal drilling as 95% of fourth quarter fracturing and fracturing related revenue was from horizontal wells. The number of fracturing stages per horizontal well also continued to increase during the fourth quarter, which also benefitted our fracturing service line in Canada.

We completed the majority of our 2011 Canadian capital budget during the fourth quarter of 2011. An additional 30,000 of fracturing horsepower was deployed during the fourth quarter and we exited 2011 with 321,200 of fracturing horsepower in Canada. Strong demand for pressure pumping services in Canada has led to high utilization for all new and existing Canadian fracturing equipment placed into service.

Current Quarter versus Q4 2010

Fourth quarter revenue increased by 56% or $149.2 million compared to the fourth quarter of 2010. Revenue per job increased by 48% due to larger job sizes combined with a 13% pricing increase. Job size continues to benefit from the trend towards larger fracturing treatments performed on horizontal wells. The demand for larger treatments has resulted in a demand for more fracturing horsepower per crew. Our average available fracturing horsepower in the fourth quarter of 2011 increased by 60% compared to the fourth quarter of 2010, which allowed us to respond to the demand for larger fracturing crews. Increased Canadian activity levels contributed to the job count increase of 7%.

As a percentage of revenue, materials and operating expenses decreased slightly to 59.1% from 59.5% as increased pricing and operational leverage on our fixed cost structure were offset by cost increases for key inputs and employee costs. General and administrative expenses decreased by $1.4 million due largely to lower share based employee costs and legal fees.

Current Quarter versus Q3 2011

Canadian revenue increased by 12% sequentially in the fourth quarter of 2011. A 3% increase in Canadian rig count contributed to the 2% sequential increase in job count. An increase in available equipment contributed to the 11% increase in revenue per job. The additional equipment has enhanced our ability to respond to the demand for larger fracturing jobs and an increase in fracturing treatments per well.

Materials and operating expenses increased as a percentage of revenue to 59.1% compared to 58.3% in the third quarter of 2011 due largely to increased third-party hauling expenses. Increased use of Nitrogen for the fracturing service line led to volume demands that exceeded our capacity to transport the product internally. In anticipation of sustained demand for Nitrogen in 2012, we have taken steps to reduce our third party hauling costs for transportation of Nitrogen.

General and administrative expenses decreased by $1.9 million due mainly to a decrease in share based employee costs.

UNITED STATES OPERATIONS


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($ thousands, except                                                        
 revenue per job,                                                           
 unaudited)          Dec. 31,     % of Dec. 31,     % of Sept. 30,     % of 
Three months ended,      2011  Revenue     2010  Revenue      2011  Revenue 
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Revenue               215,672           107,588            207,288          
Expenses                                                                    
  Materials and                                                             
   operating          164,632     76.3%  83,770     77.9%  150,279     72.5%
  General and                                                               
   administrative       3,819      1.8%   1,958      1.8%    2,474      1.2%
                     --------          --------          ---------          
  Total expenses      168,451     78.1%  85,728     79.7%  152,753     73.7%
Operating income(i)    47,221     21.9%  21,860     20.3%   54,535     26.3%
Number of jobs          1,495               822              1,445          
Revenue per job       145,151           131,538            144,361          
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(i) see first page of this report                                           

Operations Review

Overall U.S. activity levels remained strong during the fourth quarter of 2011 and were supported by strong horizontal drilling activity, which increased 23% year-over-year and 4% sequentially. U.S. pressure pumping demand and activity levels were also strong in the oil and liquids-rich gas plays during the quarter. Year-over-year and sequential rig count increases occurred in the oil and liquids-rich gas plays where Trican operates including the Eagle Ford, Permian and Oklahoma regions. Conversely, fourth quarter activity levels declined in the dry gas plays such as the Haynesville, Barnett, and Fayetteville due to weak natural gas prices. In response to this trend, one Haynesville crew was redeployed to the Eagle Ford and our Fayetteville crew began operating as a travelling crew in oil and liquids-rich gas plays.

Operating margins remained strong for our two Marcellus crews during the fourth quarter of 2011. Although this is a dry gas region, our contracted positions supported strong utilization levels for both crews.

One new fracturing crew was deployed in the Eagle Ford shale during the fourth quarter and crews in Oklahoma and the Permian began operations in the first quarter of 2012. Equipment utilization for the new Eagle Ford fracturing crew was low due to typical start-up issues and our fixed cost structure continued to increase as we hired people to staff the new crews that were added early in 2012. In addition, utilization levels for our Fayetteville crew and one crew in the Haynesville were low near the end of the quarter as they were moved into oil and liquids rich gas plays. These factors, combined with an extended holiday season that impacted utilization near the end of the quarter, had a negative impact on fourth quarter financial results and contributed to the 440 basis point sequential decrease in operating margins.

Current Quarter versus Q4 2010

Year-over-year revenue increased by 100% due to increases in job count and revenue per job. Job count increased by 82% and benefitted from an increase in average available horsepower compared to the fourth quarter of 2010. A 19% increase in year-over-year rig count in our areas of operation and service line expansion also contributed to the job count increase. These factors were partially offset by low utilization near the end of the quarter for the Haynesville and Fayetteville crews that were moved into oil and liquids-rich gas areas. Revenue per job increased by 10% as a 20% increase in pricing was partially offset by a lower proportion of work performed in the Haynesville, which generally has higher revenue per job than other regions.

As a percentage of revenue, materials and operating expenses decreased to 76.3% from 77.9% because of increased pricing and operational leverage on our fixed cost structure. These factors were partially offset by increased costs relating to the start-up of one new fracturing crew, an increase to the fixed cost structure as we hired people to staff the new crews that were added in early 2012, and the movement of two fracturing crews into oil and liquids-rich gas plays. In addition, the cost for key inputs such as acid, sand and guar have increased as demand for these products remains strong in the U.S. market. General and administrative costs increased by $1.9 million due largely to higher employee costs.

Current Quarter versus Q3 2011

Revenue for the fourth quarter increased by 4% relative to the third quarter of 2011. The addition of a new fracturing crew and a 3% U.S. rig count increase in the areas where we operate contributed to the increase. Activity levels continued to remain strong in our oil and liquids-rich gas areas as the rig count increased by 6% in these regions. U.S. rig count decreased by 4% in the dry gas areas where we operate, which partially offset the increased activity in the oil and liquids-rich gas plays. In addition, utilization near the end of the quarter was negatively impacted by the movement of the Haynesville and Fayetteville crews into oil and liquids-rich gas areas. Revenue per job in the fourth quarter was relatively flat on a sequential basis as fourth quarter pricing and sales mix were largely unchanged compared to the third quarter of 2011.

Materials and operating expenses increased to 76.3% from 72.5% as a percentage of sales. Operating margins were negatively impacted by start-up costs for the new fracturing crew, an increase to the fixed cost structure as we hired people to staff the new crews that were added in early 2012, and movement of two fracturing crews into oil and liquids-rich gas plays. General and administrative expenses increased by $1.3 million largely due to increased employee costs and travel expenses.


INTERNATIONAL OPERATIONS                                                    

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($ thousands, except                                                        
 revenue per job,                                                           
 unaudited)          Dec. 31,     % of Dec. 31,     % of Sept. 30,     % of 
Three months ended,      2011  Revenue     2010  Revenue      2011  Revenue 
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Revenue                61,521            58,852             80,335          
Expenses                                                                    
  Materials and                                                             
   operating           56,290     91.5%  53,840     91.5%   68,481     85.2%
  General and                                                               
   administrative       3,964      6.4%   4,011      6.8%    3,770      4.7%
                     --------          --------          ---------          
  Total expenses       60,254     97.9%  57,851     98.3%   72,251     89.9%
Operating income(i)     1,267      2.1%   1,001      1.7%    8,084     10.1%
Number of jobs          1,180             1,052              1,388          
Revenue per job        48,178            53,923             54,686          
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(i) see first page of this report     

Sales Mix                             

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Three months ended,                       Dec. 31,     Dec. 31,    Sept. 30,
(unaudited)                                   2011         2010         2011
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% of Total Revenue                                                          
Fracturing                                     74%          78%          76%
Coiled Tubing                                  13%          12%          11%
Cementing                                       8%           5%           8%
Nitrogen                                        5%           5%           5%
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Total                                         100%         100%         100%
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Operations Review

Our international operations include the financial results for operations in Russia, Kazakhstan, Algeria and Australia.

Our Russia and Kazakhstan operations comprise the majority of our international results and revenue and activity levels in this region were down sequentially due to lower equipment utilization levels. Utilization was negatively impacted by the completion of our customers 2011 work programs and cold temperatures typically experienced near the end of the fourth quarter. The year-over-year increase in activity resulted in a 5% increase in revenue, consistent with our expectations for the region.

Relative to the Canadian dollar, the Russian ruble weakened by 3% compared to the third quarter of 2011. The devaluation of the ruble had a negative impact on fourth quarter operating margins as approximately 25% of our costs in Russia are denominated in Canadian dollars and other foreign currencies.

In Algeria, we offer coiled tubing and cementing service to Sonatrach, the state owned oil company. Fourth quarter results for our Algeria operations continued to be negatively impacted by low utilization levels. We continue to focus on reducing costs in this region in an effort to improve profitability as well as work with Sonatrach to improve equipment utilization levels.

We have no active operations or equipment in Saudi Arabia. We are currently establishing a sales office in the region and expect to submit tenders for contracts with customers in Saudi Arabia during 2012.

We offer cementing and environmental services in Australia. Our Australia operations have not grown significantly since acquisition as we continue to establish our cementing service line and sales presence in the region.

Current Quarter versus Q4 2010

International revenue increased by 5% compared to the fourth quarter of 2010. Job count increased by 12%, which was relatively consistent with the expected year-over-year increase in activity based on our 2011 Russian contracts. Revenue per job decreased by 11% as pricing increases were more than offset by a lower proportion of fracturing revenue relative to total revenue during the quarter. Smaller average fracturing job sizes due to customer mix also contributed to the decrease in revenue per job.

Fourth quarter materials and operating expenses as a percentage of revenue remained flat at 91.5% compared to the fourth quarter of 2010. Year-over-year pricing increases were offset by cost increases for items such as fuel and operational employee costs. General and administrative expenses were relatively consistent on a year-over-year basis as higher employee costs were offset by lower bad debt and share based employee expenses.

Current Quarter versus Q3 2011

Revenue for our international operations decreased by 23% on a sequential basis as a result of decreases in revenue per job and job count. The 15% decrease in job count was due to decreased activity caused by seasonal slowdowns and the completion of the 2011 work contracts in Russia. Revenue per job decreased sequentially by 12% due to a lower proportion of fracturing revenue relative to total revenue, smaller average fracturing job sizes, and a 3% decrease in the ruble relative to the Canadian dollar.

Materials and operating expenses as a percentage of revenue increased to 91.5% from 85.2% on a sequential basis. Reduced operational leverage on our fixed cost structure combined with devaluation of the ruble contributed to the decrease in operating margins. General and administrative expenses increased by $0.2 million due to slightly higher employee costs.


CORPORATE                                                                   

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($ thousands,                                                        
        Dec.              Dec.             Sept.           
 unaudited)               31,      % of     31,      % of     30,      % of 
Three months ended,      2011   Revenue    2010   Revenue    2011   Revenue 
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Expenses                                                                    
  Materials and                                                             
   operating            6,408       0.9%  5,163       1.2%  5,548       0.8%
  General and                                                               
   administrative       9,545       1.4%  9,033       2.1% 10,373       1.5%
                      --------          --------          --------          
  Total expenses       15,953       2.3% 14,196       3.3% 15,921       2.4%
Operating loss(i)     (15,953)          (14,196)          (15,921)          
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(i) see first page of this report                                           

Current Quarter versus Q4 2010

Corporate expenses increased $1.8 million from the same quarter last year due primarily to increases in employee salaries and information technology expenses. The increase was partially offset by a decline in share based expenses and legal expenses.

Current Quarter versus Q3 2011

Corporate division expenses in the fourth quarter of 2011 were relatively consistent with the third quarter of 2011.

OTHER EXPENSES AND INCOME

Finance costs increased by $4.1 million on a year-over-year basis as a result of interest on the new private placement debt. Depreciation and amortization increased by $6.1 million compared to the same period last year, largely due to capital additions relating to our capital expansion program.

The foreign exchange gain of $4.0 million in the quarter versus a loss of $1.9 million in the same quarter last year was due to the net impact of fluctuations in the U.S. dollar and Russian ruble relative to the Canadian dollar. Other income was $1.4 million in the quarter versus $1.3 million for the same period in the prior year. Other income is largely comprised of interest income on a loan to an unrelated third party and interest income earned on cash balances.

INCOME TAXES

Trican recorded income tax expense of $44.8 million in the quarter versus $20.8 million for the comparable period of 2010. The increase in tax expense is primarily attributable to significantly higher earnings before taxes.

2011 HIGHLIGHTS

Consolidated revenue for 2011 increased by 56% to $2.3 billion compared to 2010, and net income increased to $338.6 million compared to $150.4 million in 2010. Adjusted diluted net income per share increased to $2.39 from $1.17 and funds from operations increased to $558.8 million from $320.0 million compared to 2010.

Our Canadian operations achieved record annual revenue of $1.3 billion and record operating income of $464.7 million. Strong demand in the Canadian market was led by activity in the oil and liquids-rich gas plays, as oil prices remained strong throughout 2011. Although the year-over-year Canadian rig count was up by 21%, the oil well count increased by 41%, while gas well count decreased by 5%. In addition, Trican's Canadian operations continued to benefit from the strength of horizontal drilling activity in 2011. The number of horizontal wells drilled as a percentage of total wells drilled increased to 55% in 2011, compared to 42% in 2010.

Our Canadian operations executed a large 2011 capital budget, increasing the size of our equipment fleet accordingly. The Canadian fracturing fleet increased by 62,500 horsepower, during 2011, and the size of our cementing, acidizing and nitrogen fleets also expanded during the year. The new equipment was deployed throughout the second half of 2011 and contributed to the substantial increase in year-over-year revenue. Year-over-year operating income increased by 65% and operating margins increased to 36.2%, compared to 32.8% in 2010. A key factor in the margin improvement was a 14% increase in 2011 pricing compared to 2010.

Annual 2011 U.S. revenue of $738.9 million was 105% higher than in 2010, and our operating income of $190.8 million was a 173% increase compared to 2010, both record highs for our U.S. operations. Operating income as a percentage of revenue was 25.8% compared to 19.4% in 2010, and benefitted from year-over-year pricing increases of 34%.

Demand for U.S. pressure pumping services grew in 2011, as the overall U.S. rig count increased by 22%. However, most of the growth was generated from areas containing oil and liquids-rich gas, such as the Eagle Ford, Permian and Oklahoma regions. Conversely, dry gas areas such as the Haynesville, Fayetteville and Barnett shales all experienced a decrease in year-over-year rig count. Year-over-year rig count in the oil and liquids-rich gas areas where Trican operates increased by 53%, compared to a 21% decline in the dry gas areas. Horizontal drilling continued to grow in the U.S. during 2011. Horizontal wells represented 57% of active U.S. drilling rigs in 2011, compared to 53% in 2010 and 45% in 2009. The growth of horizontal drilling benefited all of our U.S. service lines in 2011.

Our U.S. operations grew substantially during 2011. The expansion included commencement of fracturing operations in the Eagle Ford and Permian regions and the addition of a second fracturing crew in the Marcellus region. However, our aggressive expansion initiatives also resulted in start-up costs in the second half of 2011 that negatively impacted operating margins in the third and fourth quarters.

Our international operations include the financial results for operations in Russia, Kazakhstan, Algeria and Australia. Revenue from our international operations was $288.0 million in 2011, up 11% compared to 2010. Our Russia and Kazakhstan operations comprise the majority of our international results and revenue and activity levels were consistent with overall expectations for the region, based on the results of the 2011 tendering process. Activity levels increased by approximately 7% and operating margins were relatively flat, as pricing increases were fully offset by higher costs. Cost inflation was a factor during the first half of the year, but stabilized during the second half. Despite the slowdown in overall inflation, our Russian and Kazakhstan operations experienced cost increases for items such as hauling, fuel and products during the second half of the year.

In July of 2011, Trican entered the Australian market through the acquisition of a privately owned company that provides cementing and environmental services in Eastern Australia. This acquisition provided us with a strategic entry point into the growing Australian pressure pumping market.


COMPARATIVE ANNUAL INCOME STATEMENTS ($ thousands; unaudited)              
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                                                             Year-          
Twelve months                                                Over-          
 ended December                  % of                % of     Year        % 
 31,                    2011  Revenue       2010  Revenue   Change   Change 
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Revenue            2,309,647      100% 1,478,345    100.0% 831,302     56.2%
Expenses                                                                    
  Materials and                                                             
   operating       1,598,470     69.2% 1,076,062     72.8% 522,408     48.5%
  General and                                                               
   administrative     96,653      4.2%    69,929      4.8%  26,724     38.2%
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Operating                                                                   
 income(i)           614,524     26.6%   332,354     22.5% 282,170     84.9%
  Finance costs       20,041      0.9%     9,332      0.6%  10,709    114.8%
  Depreciation and                                                          
   amortization      126,576      5.5%   112,089      7.6%  14,487     12.9%
  Foreign exchange                                                          
   (gain)/loss        (4,275)    -0.2%     5,573      0.4%  (9,848)  -176.7%
  Other income        (5,985)    -0.3%    (3,878)    -0.3%  (2,107)    54.3%
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Income before                                                               
 income taxes        478,167     20.7%   209,238     14.2% 268,929    128.5%
Provision for                                                               
 income taxes        139,531      6.0%    58,876      4.0%  80,655    137.0%
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Net income           338,636     14.7%   150,362     10.2% 188,274    125.2%
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(i) See first page of this report                                           

CANADIAN OPERATIONS                                                         

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Twelve months ended December                                                
 31,                                                                        
                                                                      Year- 
                                                                      Over- 
($ thousands, except revenue                % of              % of     Year 
 per job, unaudited)                2011 Revenue      2010 Revenue   Change 
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Revenue                        1,282,684           858,201               49%
Expenses                                                                    
  Materials and operating        790,508    61.6%  551,222    64.2%      43%
  General and administrative      27,486     2.1%   25,078     2.9%      11%
                               ---------         ---------                  
  Total expenses                 817,994    63.8%  576,300    67.2%      42%
Operating income(i)              464,690    36.2%  281,901    32.8%      65%
Number of jobs                    25,393            21,931               16%
Revenue per job                   49,964            38,733               29%
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(i) See first page of this report                                           

2011 Canadian revenue increased by 49% compared to 2010 due to increases in job count and revenue per job. The job count increased by 16% and compares to the 21% year-over-year increase in the average number of Canadian active drilling rigs. Revenue per job increased by 29% and benefitted from a 14% annual price increase combined with a demand for larger fracturing treatments. 2011 financial results for our Canadian operations also benefitted from an increase in average available fracturing horsepower, as well as increases to our cementing, nitrogen and acidizing service lines. The increased capacity allowed us to respond to the increased demand for larger fracturing treatments and more treatments per horizontal well.

As a percentage of revenue, materials and operating expenses decreased to 61.6% from 64.2% compared to 2010. The decrease was due to improvements in pricing and increased operating leverage on our fixed cost structure and was partially offset by cost increases for key inputs such as acid, sand and guar. General and administrative costs increased by $2.4 million due largely to increases in employee costs.


UNITED STATES OPERATIONS                                                    

----------------------------------------------------------------------------
Twelve months ended December                                                
 31,                                                                        
                                                                      Year- 
                                                                      Over- 
($ thousands, except revenue                % of              % of     Year 
 per job, unaudited)                2011 Revenue      2010 Revenue   Change 
----------------------------------------------------------------------------
Revenue                          738,916           361,055              105%
Expenses                                                                    
  Materials and operating        535,550    72.5%  284,456    78.8%      88%
  General and administrative      12,539     1.7%    6,724     1.9%      86%
                               ---------         ---------                  
  Total expenses                 548,089    74.2%  291,180    80.6%      88%
Operating income(i)              190,827    25.8%   69,875    19.4%     173%
Number of jobs                     5,065             3,130               62%
Revenue per job                  146,457           115,740               27%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) See first page of this report                                           

U.S. revenue for 2011 increased by 105% compared to 2010. The job count increase of 62% was attributable to more available fracturing horsepower and additional non-fracturing equipment compared to 2010. In addition, the number of active U.S. drilling rigs in our areas of operations increased by 21% on a year-over-year basis. Revenue per job increased by 27% and benefitted from a 34% increase in year-over-year pricing. Pricing increases were partially offset by a 5% weakening of the U.S. dollar relative to the Canadian dollar and a slight increase in the proportion of non-fracturing work performed.

Material and operating expenses as a percentage of revenue decreased to 72.5% in 2011 from 78.8% in 2010. Operating margins benefitted from increased operational leverage on our fixed cost structure and increased pricing. These factors were partially offset by start-up and redeployment costs incurred in the second half of 2011 and increased product and employee costs compared to 2010. General and administrative expenses increased by $5.8 million due largely to increased employee costs.

INTERNATIONAL OPERATIONS


----------------------------------------------------------------------------
Twelve months ended December                                                
 31,                                                                        
                                                                       Year-
                                                                       Over-
($ thousands, except revenue                 % of              % of     Year
 per job, unaudited)                2011  Revenue      2010 Revenue   Change
----------------------------------------------------------------------------
Revenue                          288,047           259,089               11%
Expenses                                                                    
  Materials and operating        250,424    86.9%  224,890    86.8%      11%
  General and administrative      14,936     5.2%   10,435     4.0%      43%
                               ---------         ---------                  
  Total expenses                 265,360    92.1%  235,325    90.8%      13%
Operating income(i)               22,687     7.9%   23,764     9.2%      -5%
Number of jobs                     4,901             4,510                9%
Revenue per job                   55,902            56,206               -1%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) See first page of this report                                           

Year to date revenue for our International operations is up 11% compared to the same period in 2010. The job count increased by 9% and is consistent with our expectation of an increase in activity based on the 2011 tender results. Revenue per job decreased by 1% as price increases obtained during the 2011 tender results were offset by a lower proportion of fracturing revenue relative to total revenue combined with smaller average fracturing job sizes due to customer mix. Materials and operating expenses as a percentage of revenue increased slightly to 86.9% from 86.8% compared to the same period in 2010. Improved pricing and operating leverage on our fixed cost structure were offset by cost inflation. General and administrative expenses are up $4.5 million largely due to increased employee costs combined with the impact of bad debt recoveries that reduced general and administrative expenses in 2010.


CORPORATE                                                                   

----------------------------------------------------------------------------
Twelve months ended December                                                
 31,                                                                        
                                                                      Year- 
                                                                      Over- 
($ thousands,                                % of              % of    Year 
unaudited)                         2011   Revenue    2010   Revenue  Change 
----------------------------------------------------------------------------
Expenses                                                                    
  Materials and operating        21,988      1.0%  15,494      1.0%      42%
  General and administrative     41,692      1.8%  27,692      1.9%      51%
                               ---------         ---------                  
  Total expenses                 63,680      2.8%  43,186      2.9%      47%
Operating loss(i)               (63,680)          (43,186)               47%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) See first page of this report                                           

Corporate expenses increased $20.5 million compared to last year due largely to an increase in employee salaries, profit sharing expense, and corporate information technology costs. These increases were partially offset by a decrease in share based expenses.

OTHER EXPENSES AND INCOME

2011 finance costs increased $10.7 million relative to 2010 due to interest on the new private placement debt. Depreciation and amortization increased by $14.5 million as a result of the North American focused capital asset additions.

Foreign exchange gains of $4.3 million have been recognized in 2011 compared to losses of $5.6 million in 2010. The 2011 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 $2.1 million from the same period in 2010 due largely to proceeds from an insurance claim.

INCOME TAXES

The income tax provision for the year ended December 31, 2011 was $139.5 million compared to the income tax provision of $58.9 million in 2010. The increase in the tax provision is largely attributable to the significantly higher earnings.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Funds provided by operations increased to $181.9 million in the fourth quarter of 2011 from $107.7 million in the fourth quarter of 2010 largely as a result of increased net income.

Trican's ending 2011 working capital increased by $263 million compared to the end of 2010. The increase is predominantly due to year-over-year increased activity levels, causing trade receivables, inventory, and prepaid expenses to rise, partially offset by increased accounts payable. In addition, the Company has a cash balance of $126 million at the end of the year which is largely a result of the cash generated during 2011 and the proceeds from the debt private placement earlier in 2011.

Investing Activities

Capital expenditures for the fourth quarter of 2011 totaled $162.8 million compared with $60.3 million for the same period in 2010.

Trican's 2012 capital budget is projected to be $582 million and has been reduced by $96 million from the previously announced 2012 capital budget. The capital program reductions are primarily for our U.S. operations and include the cancellation of 50,000 fracturing horsepower and four twin cementing units in the U.S.

$183 million of the projected 2012 capital budget will be directed towards our Canadian operations, $348 million towards our U.S. operations and $51 million towards International operations. In addition, the 2012 capital budget consists of $448 million in expansion capital, $89 million in infrastructure needed to support new and existing operations, and $45 million in maintenance capital.

The 2012 capital budget is expected to add significant additional revenue generating capacity and 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 is expected to increase by 142,500 of fracturing horsepower, 12 cement pumpers, 7 coiled tubing units, 9 nitrogen pumpers, and 10 acid pumpers.

The international operations' capital expenditures largely consist of additional cementing capacity for Australia and maintenance capital for Russian and Kazakhstan.

At December 31, 2011, Trican had a number of ongoing projects relating to its capital program and estimates that $505 million of additional investment will be required to complete them.

On February 28, 2012, Trican increased its semi-annual dividend from $0.05 to $0.15 per share, thereby increasing the annual dividend per share to $0.30. The increase will be effective for the anticipated June 30, 2012 dividend payment.

Financing Activities

On October 18, 2011, Trican entered into a new $450 million four year extendible revolving credit facility (the "New Facility") with a syndicate of banks. The New Facility, which replaced the previous $250 million three year extendible facility, is unsecured and bears interest at the applicable Canadian prime rate, U.S. prime rate, Banker's Acceptance rate or at LIBOR plus 50 to 325 basis points, dependent on certain financial ratios of the Company. The New Facility requires Trican to comply with certain financial and non-financial covenants that are typical for this type of arrangement.

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.

As at February 28, 2012, Trican had 146,943,926 common shares and 5,637,189 employee stock options outstanding.

The Company has filed a Notice of Intention to make a Normal Course Issuer Bid ("NCIB") with the Toronto Stock Exchange. Under the NCIB, the Company will be permitted to acquire up to approximately 12.7 million of its common shares during the period March 2, 2012 to March 1, 2013. All common shares purchased through the bid will be cancelled. A copy of the Notice of Intention to make a NCIB is available without charge on request to the Company's Corporate Secretary.

OUTLOOK

Canadian Operations

Canadian demand for pressure pumping services was strong in 2011 and we expect this trend to continue in 2012. Recent industry forecasts reflect a 10% increase in drilling activity in 2012, compared to 2011. Oil and liquids-rich gas directed activity is expected to lead the increase, with strong oil prices anticipated throughout 2012. High demand in the oil and liquids-rich gas plays is expected to be partially offset by a decline in dry gas activity, as natural gas prices are expected to remain weak throughout 2012. However, activity in the Canadian oil and gas industry is currently dominated by oil and liquids-rich gas activity. This trend is expected to continue with recent industry forecasts suggesting that oil and liquids-rich gas activity could represent above 80% of Canadian drilling activity in 2012.

We expect strong Canadian demand to be supported by the continued strength of horizontal drilling activity. The number of Canadian horizontal wells drilled during 2011 increased by 43% compared to 2010, and represented 55% of all Canadian oil and gas wells drilled, compared to 42% in 2010 and 30% in 2009. We expect this trend to continue in 2012 due to the favorable economics of horizontal wells compared to conventional vertical wells.

New play development is also expected to support growth in the Canadian pressure pumping industry. We expect to see increased activity in new plays such as the Duvernay, Nordeg, and Muskwa. These plays contain oil and liquids-rich gas reserves and with strong oil prices anticipated, the 2012 well count in these areas is expected to increase compared to 2011.

The Canadian equipment built under our 2011 capital program has now been deployed and we expect an increase in year-over-year revenue as a result of the increased capacity. Furthermore, our 2012 budget includes an additional 92,500 of fracturing horsepower, as well as additional cement, nitrogen and acid equipment that we expect to deploy throughout the second half of 2012.

As well, we expect to maintain our strong Canadian operating margins in 2012. Cost increases for key inputs such as sand, acid and guar, as well as higher employee costs are anticipated. However, pricing increases are expected to offset the higher costs and result in 2012 margins that are consistent with 2011.

U.S. Operations

We anticipate U.S. activity to grow in oil and liquids-rich gas regions and slow in most dry gas regions. The rig count declines in the Haynesville, Fayetteville, and Barnett regions have resulted in a redeployment of equipment out of the dry gas areas and into the oil and liquids-rich gas areas. This redeployment has moderated managements' expectations regarding growth in the U.S. market for 2012. However, we continue to anticipate U.S. activity to remain strong as additional oil and liquids-rich gas plays are developed.

The shift from dry gas into oil and liquids-rich gas plays will negatively impact revenue and operating margins for our U.S. operations during the first quarter of 2012. In addition, first quarter operating margins for our new fracturing, cement and coil crews in the U.S. will be negatively impacted by low utilization levels as we establish our work programs with new customers in new regions. However, we believe that as we work through these issues during the first quarter and as the market shifts to more oil and liquids-rich gas activity, operating conditions will improve in the U.S. and operating margins will increase. In addition, we expect 2012 results to benefit from our strong U.S. contracted position. 62% of our existing U.S. fracturing fleet will be under contract during 2012, which is up from 55% in 2011, as two new contracts were added in the Permian during the first quarter of 2012.

We expect our U.S. operations will benefit from substantial equipment growth in 2012. Our 2011 capital budget included 205,000 of additional fracturing horsepower, and substantial increases to our cementing and coiled tubing service lines. The majority of this equipment was deployed in the second half of 2011 and in early 2012, therefore our 2012 financial results should benefit from deployment of this new equipment. Additionally, equipment from our 2012 capital budget is expected to be deployed throughout the second half of the year. We intend to deploy the new equipment from our 2012 budget into oil and liquids-rich gas focused areas, which is expected to include new geographic regions for Trican.

International Operations

Based on the results of the 2012 contract tendering process for our Russian and Kazakhstan operations, we expect 2012 revenue to increase by approximately 10% compared to 2011. The revenue increase is based on an 8% expected rise in activity, combined with a 2% expected increase in average revenue per job. The expected increase in average revenue per job is the combined result of increased pricing, partially offset by the impact of smaller fracturing job sizes, and a shift in the sales mix toward the cementing, coiled tubing and nitrogen service lines. These service lines typically experience lower average revenue per job relative to the fracturing service line.

Cost inflation continues to be an issue for our Russian and Kazakhstan operations. However, we expect a modest increase in operating margins in 2012, as a result of a shift in our work scope to higher margin jobs and continued focus on optimizing our cost structures in Russia and Kazakhstan.

Customer interest in horizontal completions and multi-stage fracturing is expected to increase in Russia during 2012. Several successful pilot projects were completed in 2011 and we expect this momentum to continue into 2012.

Although 2011 results for our Algeria operations were disappointing, we began to see increased activity in the second half of 2011, as bureaucratic issues with Sonatrach began to ease. Algeria also has gas supply commitments to Europe and will need to increase production in order to meet these contracts. Given these positive signs, our 2012 strategy in Algeria will be to increase equipment utilization levels, which is expected to lead to improved profitability in the region.

Our 2012 strategy in Australia will be to expand our cementing service line by building new customer relationships and offering high quality service. We expect to add to the current cementing fleet during 2012 as we continue to establish ourselves in the region. We do not expect the growth of the Australian operations to be significant to our overall financial results during 2012; however, we do anticipate establishing a meaningful presence in this market during the year.

In Saudi Arabia, we are working to establish our presence in the market and continue to expect to participate in pressure pumping tenders in 2012. Revenue from this region is not expected to be significant during 2012, as we will focus on establishing customer relationships and a reputation as a high quality service provider.

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       Twelve months ended 
----------------------------------------------------------------------------
                          Dec. 31,  Dec. 31,  Sept. 30,  Dec. 31,   Dec. 31,
                              2011      2010       2011      2011       2010
----------------------------------------------------------------------------
Adjusted net income       $117,873   $58,823   $114,352  $351,014   $162,724
Deduct:                                                                     
  Non-cash share-based                                                      
   compensation expense      3,003     3,222      3,088    12,378     12,362
----------------------------------------------------------------------------

Net income (IFRS                                                            
 financial measure)       $114,870   $55,601   $111,264  $338,636   $150,362
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                              Three months ended        Twelve months ended 
----------------------------------------------------------------------------
                         Dec. 31,  Dec. 31,  Sept. 30,  Dec. 31,   Dec. 31, 
                             2011      2010       2011      2011       2010 
----------------------------------------------------------------------------
Funds provided by                                                           
 operations              $181,916  $108,047   $174,284   $558,811   $320,028
Charges to income not                                                       
 involving cash                                                             
  Depreciation and                                                          
   amortization            36,443    30,353     31,474   126,576    112,089 
  Stock-based                                                               
   compensation             3,003     3,222      3,088    12,378     12,362 
  Loss/ (gain) on                                                           
   disposal of property                                                     
   and equipment              678      (129)    (1,075)     (369)      (167)
  Gain on revaluation of                                                    
   deferred                                                                 
   consideration                -         -          -         -        (22)
  Unrealized foreign                                                        
   exchange (gain)/loss    (2,273)        -         98    (3,157)      (880)
  Income tax expense       44,805    20,750     46,434   139,531     58,876 
  Income tax paid         (15,610)   (1,750)   (16,999)  (54,784)   (12,592)
----------------------------------------------------------------------------

Net income (IFRS                                                            
 financial measure)      $114,870   $55,601   $111,264  $338,636   $150,362 
----------------------------------------------------------------------------
----------------------------------------------------------------------------


----------------------------------------------------------------------------
                                Three months ended      Twelve months ended 
----------------------------------------------------------------------------
                           Dec. 31,  Dec. 31, Sept. 30,  Dec. 31,  Dec. 31, 
                               2011      2010      2011      2011      2010 
----------------------------------------------------------------------------
Operating income           $197,295  $109,721  $193,620  $614,524  $332,354 
Add:                                                                        
  Administrative expenses    25,398    23,652    25,814   102,514    73,860 
Deduct:                                                                     
  Depreciation expense      (36,443)  (30,353)  (31,474) (126,576) (112,089)

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

Gross profit (IFRS                                                          
 financial measure)        $186,250  $103,020  $187,960  $590,462  $294,125 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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:


--  The company expects to submit tenders for contracts with customers in
    Saudi Arabia during 2012; 
--  the 2012 capital program is expected to add significant additional
    revenue generating capacity to U.S. and Canadian operations; 
--  capacity for our U.S. operations is expected to increase by 142,500 of
    fracturing horsepower, 12 cement pumpers, 7 coiled tubing units, 9
    nitrogen pumpers, and 10 acid pumpers during 2012; 
--  even with reductions to our capital budget, we still expect to have
    712,500 of available U.S. fracturing horsepower by the end of the year; 
--  our 2012 capital budget is expected to increase U.S. fracturing capacity
    by 25% and significantly expand our non-fracturing service lines; 
--  expectations that strong demand for Canadian pressure pumping services
    will continue in 2012; 
--  oil and liquids rich gas directed activity is expected to lead the
    increase in drilling activity in 2012; 
--  high demand in the oil and liquids rich gas plays is expected to be
    partially offset by a decline in dry gas activity; 
--  gas prices are expected to remain weak; 
--  Canadian market is expected to continue to be dominated by oil and
    liquids rich gas activity; 
--  management expects strong pressure pumping activity in 2012 in the
    Canadian market; 
--  expectations that strong demand will continue to be supported by the
    strength of horizontal drilling activity; 
--  expect the proportion of horizontal wells drilled in Canada to continue
    to increase in 2012 as a result of the favorable economics; 
--  expectations that the number of fracturing treatments per horizontal
    well will increase in Canada during 2012 with moderation in comparison
    to the growth experienced in 2011; 
--  new play development in Canada is expected to support growth in the
    Canadian pressure pumping industry; 
--  expectations of increased activity in the Duvernay, Nordeg and Muskwa as
    the 2012 well count in these regions are expected to increase; 
--  expect an increase in revenue year over year as a result of increased
    capacity created by the 2011 capital budget; 
--  2012 builds are expected to be deployed to our Canadian operations
    throughout the second half of 2012; 
--  cost increases are expected during 2012 in the Canadian geographic
    region; however it is anticipated that pricing increases are expected to
    offset these increases keeping margins strong throughout 2012; 
--  overall demand for pressure pumping in the U.S. is expected to remain
    strong in 2012; 
--  strong oil prices are expected to support growth in oil and liquids rich
    gas regions including the Eagle Ford, Permian and Oklahoma plays; 
--  relatively moderate expectations in regards to the growth in the U.S.
    market for 2012; 
--  expectation that U.S. activity will continue to grow due to growth in
    existing oil and liquids rich gas plays; 
--  expect strong industry demand in the U.S. oil and liquids-rich gas plays
    to keep utilization levels strong in 2012; 
--  expect utilization levels to remain strong for our two Marcellus crews,
    due to our contracted positions in this region; 
--  expect our U.S. operations will benefit from substantial equipment
    growth in 2012; 
--  expectation that our U.S. results will benefit from a full year of
    availability of the equipment built in 2011; 
--  equipment from our 2012 capital budget is expected to be deployed to our
    U.S. operations throughout the second half of the year; 
--  intend to deploy the new equipment from our 2012 budget into oil and
    liquids-rich gas focused areas, which is expected to include new
    geographic regions for Trican; 
--  expect our 2012 U.S. pricing to remain flat relative to 2011; 
--  expect pricing in oil and liquids-rich gas plays to be largely offset by
    lower pricing in the dry gas plays; 
--  U.S. Operations 2012 results are expected to benefit from capacity
    additions in the oil and liquids plays; 
--  anticipating cost increases primarily related to proppant, chemicals and
    other cost inputs causing margins to remain consistent with 2011; 
--  expect 2012 revenue to increase by approximately 10% compared to 2011
    related to operations in Russia and Kazakhstan; 
--  8% expected rise in activity, combined with a 2% expected increase in
    average revenue per job will result in increased revenue for our
    International operations; 
--  we expect a modest increase in operating margins in 2012, as a result of
    a shift in our work scope to higher margin jobs; 
--  customer interest in horizontal completions and multi-stage fracturing
    is expected to increase in Russia during 2012; 
--  we expect to add to the current cementing fleet in Australia during
    2012; 
--  do not expect the growth of the Australian operations to be significant
    to our overall financial results during 2012; 
--  anticipate establishing a meaningful presence in the Australian market
    during the year; 
--  expectations that we will participate in pressure pumping tenders Saudi
    Arabia in 2012. 

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION


                                    December 31,  December 31,    January 1,
(Stated in thousands; unaudited)           2011          2010           2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS                                                                      
Current assets                                                              
  Cash and cash equivalents (note                                           
   4)                                $   125,855   $    81,058   $    26,089
  Trade and other receivables (note                                         
   5)                                    607,672       364,986       181,483
  Current tax assets                       1,553         6,046             -
  Inventory (note 6)                     173,515       106,607        91,197
  Prepaid expenses                        31,996         9,257         8,568
----------------------------------------------------------------------------
                                         940,591       567,954       307,337
Property and equipment (note 7)        1,178,410       700,755       532,317
Intangible assets (note 8)                14,662        20,816        28,082
Deferred tax assets (note 15)             33,369        74,330        81,790
Other assets (note 9)                      6,445        13,115        17,918
Goodwill (note 8)                         43,706        36,916        36,916
----------------------------------------------------------------------------
                                     $ 2,217,183   $ 1,413,886   $ 1,004,360
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS'                                               
 EQUITY                                                                     
Current liabilities                                                         
  Bank loans                         $         -   $         -   $    27,997
  Trade and other payables (note                                            
   11)                                   287,689       209,305       106,566
  Contingent consideration (note 3)        2,867             -         1,882
  Current tax liabilities                  3,363            22         6,505
  Current portion of loans and                                              
   borrowings (note 10)                   25,425             -             -
----------------------------------------------------------------------------
                                         319,344       209,327       142,950

Loans and borrowings (note 10)           400,256       107,152       176,918
Deferred tax liabilities (note 15)       132,031        98,006        45,809

Shareholders' equity                                                        
  Share capital (note 12)                529,062       486,594       246,854
  Contributed surplus                     45,894        42,919        32,811
  Accumulated other comprehensive                                           
   loss (note 12)                        (22,805)      (19,273)            -
  Retained earnings                      813,238       489,161       358,722
----------------------------------------------------------------------------
Total equity attributable to equity                                         
 holders of the Company                1,365,389       999,401       638,387
Non-controlling interest                     163             -           296
----------------------------------------------------------------------------
                                     $ 2,217,183   $ 1,413,886   $ 1,004,360
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Contractual obligations (note 19)                                           
Contingencies (note 22)                                                     
See accompanying notes to the consolidated financial statements.            

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


                              Three       Three        Twelve        Twelve 
(Stated in thousands,        Months      Months        Months        Months 
 unaudited except         Ended Dec   Ended Dec     Ended Dec     Ended Dec 
 per share amounts)        31, 2011    31, 2010      31, 2011      31, 2010 
----------------------------------------------------------------------------

Revenue                   $ 694,214   $ 434,271   $ 2,309,647   $ 1,478,345 
Cost of sales               507,964     331,251     1,719,185     1,184,220 
----------------------------------------------------------------------------
Gross profit                186,250     103,020       590,462       294,125 
Administrative expenses      25,398      23,652       102,514        73,860 
Other (income )/expense         167        (489)       (2,089)         (886)
----------------------------------------------------------------------------
Results from operating                                                      
 activities                 160,685      79,857       490,037       221,151 
Finance income               (1,572)       (788)       (3,896)       (2,992)
Finance costs                 6,557       2,427        20,041         9,332 
Foreign exchange                                                            
 (gain)/loss                 (3,975)      1,867        (4,275)        5,573 
----------------------------------------------------------------------------
Profit before income tax    159,675      76,351       478,167       209,238 
Income tax expense (note                                                    
 15)                         44,805      20,750       139,531        58,876 
----------------------------------------------------------------------------
Profit for the period     $ 114,870   $  55,601   $   338,636   $    150,362
----------------------------------------------------------------------------

Other comprehensive                                                         
 income                                                                     
  Unrealized loss on                                                        
   cash flow hedge             (289)          -        (1,358)            - 
  Foreign currency                                                          
   translation                                                              
   differences              (10,886)    (12,763)       (2,219)      (18,964)
----------------------------------------------------------------------------
Total comprehensive                                                         
 income for the period    $ 103,695   $  42,838   $   335,059   $   131,398 
----------------------------------------------------------------------------

Profit / (loss)                                                             
 attributable to:                                                           
Owners of the Company       114,921      55,601        338,707       150,362
Non-controlling interest        (51)          -           (71)            - 
----------------------------------------------------------------------------
Profit for the period     $ 114,870   $  55,601   $   338,636   $   150,362 
----------------------------------------------------------------------------

Total comprehensive                                                         
 income attributable to:                                                    
Owners of the Company       103,811      42,838       335,175       131,418 
Non-controlling interest       (116)          -          (116)          (20)
----------------------------------------------------------------------------
Total comprehensive                                                         
 income for the period    $ 103,695   $  42,838   $   335,059   $   131,398 
----------------------------------------------------------------------------

Earnings per share (note                                                    
 13)                                                                        
----------------------------------------------------------------------------
  Basic                   $    0.78   $    0.39   $      2.32   $      1.09 
  Diluted                 $    0.78   $    0.38   $      2.30   $      1.09 
----------------------------------------------------------------------------
Weighted average shares                                                     
 outstanding - basic        146,762     143,788       145,805       137,400 
Weighted average shares                                                     
 outstanding - diluted      147,466     145,215       147,085       138,571 
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.            

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


                                   Share   Contributed     Accumulated other
(Stated in thousands; unaudited) capital       surplus    comprehensive loss
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Balance at January 1, 2010     $ 246,854      $ 32,811            $       - 

Profit or loss for the                                                      
 period                                -             -                    - 
Foreign currency                                                            
 translation differences               -             -              (19,273)
Dividends to equity holders                                                 
 ($0.10 per share)                     -             -                    - 
Share-based payments                                                        
 transactions                          -        12,361                    - 
Share options exercised           16,267        (2,253)                   - 
Issuance out of treasury                                                    
 for deferred consideration          693             -                    - 
Issuance of shares               222,780             -                    - 
Acquisition of non-                                                         
 controlling interest                  -             -                    - 
----------------------------------------------------------------------------
Balance at December 31,                                                     
 2010                          $ 486,594      $ 42,919            $ (19,273)
----------------------------------------------------------------------------

Profit or loss for the                                                      
 period                                -             -                    - 
Foreign currency                                                            
 translation differences               -             -               (2,174)
Dividends to equity holders                                                 
 ($0.10 per share)                     -             -                    - 
Share-based payments                                                        
 transactions                          -        12,378                    - 
Share options exercised           42,468        (9,403)                   - 
Unrealized loss on cash                                                     
 flow hedge                            -             -               (1,358)
Investment in subsidiary               -             -                    - 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance at December 31,                                                     
 2011                          $ 529,062      $ 45,894            $ (22,805)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.            

                                                           Non              
(Stated in thousands;       Retained               Controlling              
 unaudited)                 earnings        Total     Interest Total Equity 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Balance at January 1, 2010  $358,722   $  638,387     $    296   $  638,683 

Profit or loss for the                                                      
 period                      150,362      150,362            -      150,362 
Foreign currency                                                            
 translation differences           -      (19,273)           -      (19,273)
Dividends to equity holders                                                 
 ($0.10 per share)           (14,401)     (14,401)           -      (14,401)
Share-based payments                                                        
 transactions                      -       12,361            -       12,361 
Share options exercised            -       14,014            -       14,014 
Issuance out of treasury                                                    
 for deferred consideration        -          693            -          693 
Issuance of shares                 -      222,780            -      222,780 
Acquisition of non-                                                         
 controlling interest         (5,522)      (5,522)        (296)      (5,818)
--------------------------------------------------------------------------- 
Balance at December 31,                                                     
 2010                       $489,161   $  999,401     $      -   $  999,401 
--------------------------------------------------------------------------- 

Profit or loss for the                                                      
 period                      338,707      338,707          (71)     338,636 
Foreign currency                                                            
 translation differences           -       (2,174)         (45)      (2,219)
Dividends to equity holders                                                 
 ($0.10 per share)           (14,630)     (14,630)           -      (14,630)
Share-based payments                                                        
 transactions                      -       12,378            -       12,378 
Share options exercised            -       33,065            -       33,065 
Unrealized loss on cash                                                     
 flow hedge                        -       (1,358)           -       (1,358)
Investment in subsidiary           -            -          279          279 
--------------------------------------------------------------------------- 
--------------------------------------------------------------------------- 
Balance at December 31,                                                     
 2011                       $813,238   $1,365,389     $    163   $1,365,552 
--------------------------------------------------------------------------- 
--------------------------------------------------------------------------- 
See accompanying notes to the consolidated financial statements.            

CONSOLIDATED STATEMENT OF CASH FLOWS


                                  Three       Three      Twelve      Twelve 
                                 Months      Months      Months      Months 
(Stated in thousands;         Ended Dec   Ended Dec   Ended Dec   Ended Dec
 unaudited)                    31, 2011    31, 2010    31, 2011    31, 2010 
----------------------------------------------------------------------------
Cash Provided By/ (Used In):                                                
Operations                                                                  
  Profit for the period       $ 114,870   $  55,601   $ 338,636   $ 150,362 
  Charges to income not                                                     
   involving cash:                                                          

    Depreciation and                                                        
     amortization                36,443      30,353     126,576     112,089 
    Amortization of debt                                                    
     issuance costs                 202           -         375           - 
    Equity settled share                                                    
     -based compensation          3,003       3,222      12,378      12,362 
    Gain on disposal of                                                     
     property and equipment         678        (129)       (369)       (167)
    Net finance costs             4,985       1,639      16,145       6,340 
    Gain on revaluation of                                                  
     deferred consideration           -           -           -         (22)
    Unrealized foreign                                                      
     exchange gain               (2,273)          -      (3,157)       (880)
    Income tax expense           44,805      20,750     139,531      58,876 
----------------------------------------------------------------------------
                                202,713     111,436     630,115     338,960 
  Change in inventory           (16,395)    (12,372)    (67,225)    (19,688)
  Change in trade and other                                                 
   receivables                   (6,279)      8,216    (232,628)   (175,271)
  Change in prepaid expenses     (1,899)        199     (21,995)     (1,046)
  Change in trade and other                                                 
   payables                      (1,407)    (21,059)     72,061      63,262 
----------------------------------------------------------------------------
                                176,733      86,420     380,328     206,217 

  Interest paid                 (12,795)     (2,356)    (17,454)     (9,161)
  Income tax paid               (15,610)     (1,750)    (54,784)    (12,592)
----------------------------------------------------------------------------
                                148,328      82,314     308,090     184,464 

Investing                                                                   
  Interest received                 389         605       1,851       2,598 
  Purchase of property and                                                  
   equipment                   (162,812)    (60,270)   (578,457)   (261,266)
  Proceeds from the sale of                                                 
   property and equipment            61         260       2,489         531 
  Payments received on loan                                                 
   to an unrelated third                                                    
   party                          1,750       3,358       6,175       5,336 
  Business acquisitions               -           -      (9,372)     (5,818)
----------------------------------------------------------------------------
                               (160,612)    (56,047)   (577,314)   (258,619)

Financing                                                                   
  Net proceeds from issuance                                                
   of share capital                 942       9,727      33,065     230,167 
  Issuance (repayment) of                                                   
   bank loans                         -           -           -     (28,093)
  Issuance (repayment) of                                                   
   long-term debt, net of                                                   
   financing fees                (1,706)    (18,041)    294,118     (59,638)
  Dividend paid                       -           -     (14,517)    (13,453)
----------------------------------------------------------------------------
                                   (764)     (8,314)    312,666     128,983 

Effect of exchange rate                                                     
 changes on cash                    (60)        658       1,355         141 
----------------------------------------------------------------------------

Increase / (decrease) in                                                    
 cash and cash equivalents      (13,108)     18,611      44,797      54,969 
Cash and cash equivalents,                                                  
 beginning of period            138,963      62,447      81,058      26,089 
----------------------------------------------------------------------------
Cash and cash equivalents,                                                  
 end of period                $ 125,855   $  81,058   $ 125,855   $  81,058 
----------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.            

Selected Notes to Consolidated Financial Statements

For the years ended December 31, 2011 and 2010

NOTE 7 - PROPERTY AND EQUIPMENT


                                                     Fixtures               
                           Land and                       and               
(stated in thousands)     buildings     Equipment    fittings         Total 
----------------------------------------------------------------------------
Cost                                                                        
Balance at January 1,                                                       
 2010                     $  70,991   $   744,580   $  27,303   $   842,874 
Additions                    11,949       267,534       4,777       284,260 
Disposals                         -       (26,432)          -       (26,432)
Effect of movements in                                                      
 exchange rates                (940)      (20,025)        (55)      (21,020)
----------------------------------------------------------------------------
Balance at December 31,                                                     
 2010                     $  82,000   $   965,657   $  32,025   $ 1,079,682 

Additions                    17,026       573,857       6,009       596,892 
Acquisitions through                                                        
 business combinations            -         5,495           -         5,495 
Disposals                         -       (28,711)          -       (28,711)
Effect of movements in                                                      
 exchange rates                  74         2,498         (11)        2,561 
----------------------------------------------------------------------------
Balance at December 31,                                                     
 2011                     $  99,100   $ 1,518,796   $  38,023   $ 1,655,919 
----------------------------------------------------------------------------

Accumulated Depreciation                                                    
Balance at January 1,                                                       
 2010                     $  12,025   $   282,112   $  16,420   $   310,557 
Depreciation                  3,833        98,040       3,709       105,582 
Disposals                         -       (29,986)          -       (29,986)
Effect of movements in                                                      
 exchange rates                (238)       (6,955)        (33)       (7,226)
----------------------------------------------------------------------------
Balance at December 31,                                                     
 2010                     $  15,620   $   343,211   $  20,096   $   378,927 

Depreciation                  3,355       112,850       5,386       121,591 
Disposals                         -       (20,848)          -       (20,848)
Effect of movements in                                                      
 exchange rates                 (48)       (2,094)        (19)       (2,161)
----------------------------------------------------------------------------
Balance at December 31,                                                     
 2011                     $  18,927   $   433,119   $  25,463   $   477,509 
----------------------------------------------------------------------------

Carrying amounts                                                            
At January 1, 2010           58,966       462,468      10,883       532,317 
At December 31, 2010         66,380       622,446      11,929       700,755 
At December 31, 2011         80,173     1,085,677      12,560     1,178,410 
----------------------------------------------------------------------------

Included within equipment are assets held under finance lease with a gross value of $35.2 million (2010 - $19.5 million) and accumulated depreciation of $9.4 million (2010- $6.2 million). The lease obligations are secured by the leased equipment.

NOTE 8 - INTANGIBLE ASSETS AND GOODWILL


                                                Non-compete        Customer 
(stated in thousands)               Goodwill     agreements   relationships 
----------------------------------------------------------------------------
Cost                                                                        
Balance at January 1, 2010    $       36,916 $       24,074  $       13,596 
Effect of movements in                                                      
 exchange rates                            -         (1,087)           (442)
----------------------------------------------------------------------------

Balance at December 31, 2010  $       36,916 $       22,987  $       13,154 

Acquisitions through business                                               
 combinations                          6,551              -               - 
Effect of movements in                                                      
 exchange rates                          239            468             191 
----------------------------------------------------------------------------

Balance at December 31, 2011  $       43,706 $       23,455  $       13,345 
----------------------------------------------------------------------------

Amortization and impairment                                                 
 losses                                                                     
Balance at January 1, 2010    $            - $        8,275  $        7,478 
Amortization                               -          2,966           2,691 
Effect of movements in                                                      
 exchange rates                            -           (466)           (303)
----------------------------------------------------------------------------
Balance at December 31, 2010  $            - $       10,775  $        9,866 

Amortization                               -          2,859           2,620 
Effect of movements in                                                      
 exchange rates                            -            293             190 
----------------------------------------------------------------------------

Balance at December 31, 2011  $            - $       13,927  $       12,676 
----------------------------------------------------------------------------

Carrying amounts                                                            
At January 1, 2010            $       36,916 $       15,799  $        6,118 
At December 31, 2010          $       36,916 $       12,212  $        3,288 
At December 31, 2011          $       43,706 $        9,528  $          669 
----------------------------------------------------------------------------

(stated in thousands)                    CBM process                  Total 
----------------------------------------------------------------------------
Cost                                                                        
Balance at January 1, 2010    $                8,503 $               83,089 
Effect of movements in                                                      
 exchange rates                                    -                 (1,529)
----------------------------------------------------------------------------

Balance at December 31, 2010  $                8,503 $               81,560 

Acquisitions through business                                               
 combinations                                      -                  6,551 
Effect of movements in                                                      
 exchange rates                                    -                    898 
----------------------------------------------------------------------------

Balance at December 31, 2011  $                8,503 $               89,009 
----------------------------------------------------------------------------

Amortization and impairment                                                 
 losses                                                                     
Balance at January 1, 2010    $                2,338 $               18,091 
Amortization                                     850                  6,507 
Effect of movements in                                                      
 exchange rates                                    -                   (769)
----------------------------------------------------------------------------
Balance at December 31, 2010  $                3,188 $               23,829 

Amortization                                     850                  6,331 
Effect of movements in                                                      
 exchange rates                                    -                    482 
----------------------------------------------------------------------------

Balance at December 31, 2011  $                4,038 $               30,642 
----------------------------------------------------------------------------

Carrying amounts                                                            
At January 1, 2010            $                6,165 $               64,998 
At December 31, 2010          $                5,315 $               57,732 
At December 31, 2011          $                4,465 $               58,368 
----------------------------------------------------------------------------

For the purposes of impairment testing, goodwill is allocated to the Company's geographic segments. The aggregate carrying amount of goodwill allocated to each region is as follows:


                                  December 31,   December 31,     January 1,
(Stated in thousands)                     2011           2010           2010
----------------------------------------------------------------------------
Canada                          $       22,690 $       22,690 $       22,690
International                           21,016         14,226         14,226
----------------------------------------------------------------------------
                                $       43,706 $       36,916 $       36,916
----------------------------------------------------------------------------

The recoverable amount was determined by discounting the future cash flows to be generated from the continuing operations of each geographic region. For both the Canadian and International operations the recoverable amount was in excess of the carrying amount attributable to each region. No impairment was recorded relating to the years ended December 31, 2011 and 2010.

NOTE 10 - LOANS AND BORROWINGS

Bank loans

The Company's Russian subsidiary has a U.S.$20 million (Canadian equivalent of $20.3 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 December 31, 2011 there was nothing drawn on this facility (December 31, 2010, nil).

Long term debt


                                  December 31,   December 31,     January 1,
(Stated in thousands)                     2011           2010           2010
----------------------------------------------------------------------------
Notes payable                   $      412,646 $       99,460 $      104,660
Finance lease obligations               26,766         11,753          4,694
Equipment and acquisitions loan              -              -         70,000
Revolving credit facility                    -              -              -
Hedge receivable                        (4,903)             -              -
----------------------------------------------------------------------------
 Total                                 434,509 $      111,213        179,354
Current portion of finance lease                                            
 obligations (1)                         8,828          4,061          2,436
Current portion of long-term                                                
 debt                                   25,425              -              -
----------------------------------------------------------------------------
Non-current                     $      400,256 $      107,152 $      176,918
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1) Current portion of finance lease obligations is included in trade and other payables.

On October 18, 2011, Trican entered into a new $450 million four year extendible revolving credit facility (the "New Facility") with a syndicate of banks. The New Facility, which replaced the previous $250 million three year extendible facility, is unsecured and bears interest at the applicable Canadian prime rate, U.S. prime rate, Banker's Acceptance rate or at LIBOR plus 50 to 325 basis points, dependent on certain financial ratios of the Company. The New Facility requires Trican to comply with certain financial and non-financial covenants that are typical for this type of arrangement.

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. This facility was unsecured and bore 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. This facility was replaced by the New Facility, as discussed above.

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:


--  Canadian $45 million Series C Senior Notes maturing April 28, 2016,
    bearing interest at a fixed rate of 5.22% payable semi-annually on April
    28 and October 28; 
--  Canadian $15 million Series D Senior Notes maturing April 28, 2021,
    bearing interest at a fixed rate of 6.11% payable semi-annually on April
    28 and October 28; 
--  U.S. $65 million Series E Senior Notes maturing April 28, 2016, bearing
    interest at a fixed rate of 4.61% payable semi-annually on April 28 and
    October 28; 
--  U.S. $80 million Series F Senior Notes maturing April 28, 2018, bearing
    interest at a fixed rate of 5.29% payable semi-annually on April 28 and
    October 28; and 
--  U.S. $105 million Series G 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 December 31, 2011, the Company was in compliance with these covenants.

NOTE 12 - SHARE CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Share Capital

Authorized:

The Company is authorized to issue an unlimited number of common 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, January 1, 2010                       125,638,669 $         246,854
Exercise of stock options                        1,248,566             9,958
Reclassification from contributed surplus                                   
 on exercise of options                                  -             2,254
Fair value adjustment of stock options                                      
 previously exercised                                    -             4,054
Issuance of shares (net of issuance                                         
 costs)(1)                                      17,698,500           222,781
Issuance out of treasury for CBM deferred                                   
 consideration                                      50,848               693
----------------------------------------------------------------------------
Balance, December 31, 2010                     144,636,583 $         486,594
Exercise of stock options                        2,280,276            33,280
Reclassification from contributed surplus                                   
 on exercise of options                                  -             9,188
----------------------------------------------------------------------------
Balance, December 31, 2011                     146,916,859 $         529,062
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1) The tax impact of the issuance costs was $2.6 million.

All issued shares are fully paid.

Subsequent to year end the Company has filed a Notice of Intention to make a Normal Course Issuer Bid ("NCIB") with the Toronto Stock Exchange. Under the NCIB, the Company will be permitted to acquire up to approximately 12.7 million of its common shares during the period March 2, 2012 to March 1, 2013. All common shares purchased through the bid will be cancelled. A copy of the Notice of Intention to make a NCIB is available without charge on request to the Company's Corporate Secretary.

Accumulated other comprehensive loss

Foreign currency translation differences

The foreign currency translation differences comprise all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as the translation of the liabilities that hedge the Company's net investment in a foreign operation.

Unrealized gain on cash flow hedge

The unrealized gain on cash flow hedge comprises the effective portion of the cumulative net change in the fair value of cash flow hedges related to hedged transactions that have not yet affected profit or loss.

NOTE 13 - EARNINGS PER SHARE

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


December 31, Basic Income Per Share                   2011              2010
----------------------------------------------------------------------------
Net income available to common                                              
 shareholders                            $         338,707 $         150,362
Weighted average number of common shares       145,804,728       137,400,019
Basic income per share                   $            2.32 $            1.09
----------------------------------------------------------------------------

Diluted Income Per Share                              2011              2010
----------------------------------------------------------------------------
Net income available to common                                              
 shareholders                            $         338,707 $         150,362
Weighted average number of common shares       145,804,728       137,400,019
Diluted effect of stock options                  1,279,942         1,171,371
----------------------------------------------------------------------------
Diluted weighted average number of                                          
 common shares                                 147,084,670       138,571,390
Diluted income per share                 $            2.30 $            1.09
----------------------------------------------------------------------------

At December 31, 2011, 1.5 million (2010 - 5.5 million) options were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive.

NOTE 21 - OPERATING SEGMENTS

The Company operates in Canada and the U.S. along with a number of international operations. The international regions include Russia, Algeria, Kazakhstan, Saudi Arabia and Australia. Each geographic region has a General Manager that is responsible for the operation and strategy of their region's business. Personnel working within the particular geographic region report to the General Manager; the General Manager reports to the corporate executive.

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


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

Information regarding the results of each geographic region is included below. Performance is measured based on Revenue and Gross profit, as included in the internal management reports which are reviewed by the Company's executive management team. Each regions Gross profit is used to measure performance as management believes that such information is most relevant in evaluating regional results relative to other entities that operate within the industry.


                                      Canadian  United States  International
(Stated in thousands)               Operations     Operations     Operations
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year ended December 31, 2011                                                
----------------------------------------------------------------------------
Revenue                         $    1,282,684 $      738,916 $      288,047
Gross profit/(loss)                    448,895        150,311         13,923
Finance income                           3,624            178             94
Finance costs                                -              -              -
Tax expense                             93,704         43,997          1,814
Depreciation and amortization           47,687         54,274         23,935
Assets                                 911,635        882,391        257,441
Goodwill                                22,690              -         21,016
Property and equipment                 505,781        573,548         88,287
Capital expenditures                   183,156        374,768         18,848
Goodwill expenditures                        -              -          6,551
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year ended December 31, 2010                                                
----------------------------------------------------------------------------
Revenue                         $      858,201 $      361,055 $      259,089
Gross profit/(loss)                    263,667         38,417          7,729
Finance income                           2,857             29            106
Finance costs                                -              -              -
Tax Expense                             53,844          4,303            611
Depreciation and amortization           47,243         38,182         26,470
Assets                                 587,747        460,905        263,106
Goodwill                                22,690              -         14,226
Property and equipment                 370,365        236,832         90,611
Capital expenditures                   126,920        116,388         16,234
----------------------------------------------------------------------------


(Stated in thousands)                      Corporate                  Total 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year ended December 31, 2011                                                
----------------------------------------------------------------------------
Revenue                         $                  -  $           2,309,647 
Gross profit/(loss)                          (22,667)               590,462 
Finance income                                     -                  3,896 
Finance costs                                (20,041)               (20,041)
Tax expense                                       16                139,531 
Depreciation and amortization                    680                126,576 
Assets                                       165,716              2,217,183 
Goodwill                                           -                 43,706 
Property and equipment                        10,794              1,178,410 
Capital expenditures                           1,685                578,457 
Goodwill expenditures                              -                  6,551 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year ended December 31, 2010                                                
----------------------------------------------------------------------------
Revenue                         $                  -  $           1,478,345 
Gross profit/(loss)                          (15,688)               294,125 
Finance income                                     -                  2,992 
Finance costs                                 (9,332)                (9,332)
Tax Expense                                      118                 58,876 
Depreciation and amortization                    194                112,089 
Assets                                       102,128              1,413,886 
Goodwill                                           -                 36,916 
Property and equipment                         2,947                700,755 
Capital expenditures                           1,724                261,266 
----------------------------------------------------------------------------

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

Revenue reported above represents revenue generated from external customers. There are no intersegment sales. Revenue from one external customer for the year ended December 31, 2011 amounted individually to greater than 10% of the Company's total revenue. The customer's revenue is exclusively within the U.S. and totals $359.7 million (2010 - $237.9 million).

The Company will host a conference call on Wednesday, February 29, 2012 at 9:00 a.m. MT (11:00 a.m. ET) to discuss the Company's results for the Fourth Quarter and Year End 2011.

To listen to the webcast of the conference call, please enter: http://www.gowebcasting.com/3069 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 1-800-766-6630 (North America) or 416-695-6622 (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 2011 Conference Call".

A replay of the conference call will be available until March 7, 2012 by dialing 1-800-408-3053 (North America) or 905-694-9451 (outside North America). Playback passcode: 5257364.

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

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

Contact Information

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

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

    Trican Well Service Ltd.
    2900, 645 - 7th Avenue S.W.
    Calgary, Alberta T2P 4G8
    (403) 266-0202
    (403) 237-7716 (FAX)
    www.trican.ca