Dale Dusterhoft - Chief Executive Officer Mike Baldwin - SVP, Finance and CFO Jason Cockerill - Senior Finance Director and Treasury

James West - Evercore Sean Meakim - JP Morgan Scott Treadwell - TD Securities Mike Mazar - BMO Capital Markets Brian Purdy - PI Financial Dan Healing - Calgary Herald Ian Gillies - FirstEnergy Jon Morrison - CIBC World Markets John Daniel - Simmons

Thank you very much. Good morning, ladies and gentlemen.

I would like to thank you for attending the Trican Well Service conference call for the fourth quarter and year-end of 2015. Here is a brief outline of how we intend to conduct the call.

First of all, Mike Baldwin, our Senior Vice President of Finance and CFO, will give an overview of the quarterly results. I will then address issues around current operating conditions and near-term outlook.

We will then open the call for questions. Joining us today and available to address questions is also Don Luft, our President and Chief Operating Officer; and Jason Cockerill, our Senior Finance Director and Treasury.

I’d now like to turn the call over to Mr. Baldwin to discuss the overview of the financial results.

Thanks, Dale. Before we begin, I would like to point out that this conference call may contain forward-looking statements and other information based on current expectations or results for the Company.

Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. A number of business risks and uncertainties could cause the actual results to differ materially from these forward-looking statements and financial outlook.

These risks and uncertainties include, but are not limited to, 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. Among the risks are the ability of the oil and gas companies to finance their operations and other unforeseen factors.

Please refer to our 2014 Annual Information Form, dated March 25, 2015 for a more complete description of business risks and uncertainties facing Trican. Our fourth quarter results were released yesterday and are available on our website at www.tricanwellservice.com.

As noted in our press release, consolidated revenue for the fourth quarter of 2015 was $260.5 million, a decrease of 20% sequentially compared to the third quarter of 2015. The adjusted loss of $54.8 million and adjusted diluted loss per share was $0.37 compared to an adjusted loss of $71.9 million and an adjusted diluted loss per share of $0.48 in the third quarter.

Our adjusted operating income includes a total add back of $5.4 million for severance costs, base closure expenses and professional fees related to business sales. Funds used in operations were $27.1 million compared to $34.6 million in the third quarter.

Canadian revenue in the fourth quarter of 2015 decreased by 18% compared to the third quarter of 2015. The job count decreased by 19% sequentially due largely to reduced drilling and completions activity caused by the continued low commodity prices and an earlier than normal December shut down of operations by many customers.

35% of our equipment remained ideal during the quarter as it did the majority of the year to adjust the market conditions and activity levels. Utilization was relatively strong throughout the quarter, as we ran approximately 75% utilization on our active equipment.

Revenue per job remained relatively flat during the fourth quarter compared to the third quarter, so it was affected by the 30% year-over-year drop in overall Canadian pricing. Adjusted Canadian operating income for the fourth quarter of 2015 was $11.3 million as compared to $33.5 million for the third quarter of 2015, due to decreased pricing, activity levels and demand for our services.

Our Canadian region continues to focus on reducing costs, as the impact of low commodity prices continues throughout the region. Canadian operations’ fixed cost structure has been reduced by 37% since the beginning of 2015, as a result of workforce reductions, discretionary spending reductions, and lower compensation programs.

Canadian margins have been negatively impacted by costs in the fourth quarter of 2015 such as severance related to workforce reductions while repair and maintenance spending was not significantly lowered as we continue to keep our equipment in good working order and have not scavenged equipment during the downturn. For our U.S.

operations, revenue decreased 22% on a sequential basis, as weak commodity prices led to a substantial decrease in oilfield activity in the U.S. Despite the substantial revenue decline, our U.S.

operations continued to reduce operating loss by $26.6 million as compared to the third quarter of 2015. Revenue per job declined by 3% compared to the third quarter, so there has been an overall 33% decline in pricing relative to peak levels at the end of 2014.

Job count in the U.S. decreased by 24% on a sequential basis, as a result of lower overall activity levels and a shutdown of bases that were active in 2014.

Our international operations include financial results for Kazakhstan as well as our Russian and Norwegian completion tools businesses. All other international businesses have been seized and are now considered discontinued operations.

International revenue decreased 36% sequentially as job count decreased approximately 55% due to lower activity levels in Norway and Kazakhstan. As the first full quarter of operations since the sale of Russian pressure pumping assets, the majority of the remaining activity came from Kazakhstan operations combined with steady business in our Norwegian and Russian completion tool businesses.

Operating conditions continue to be challenging in Kazakhstan, as its activity has significantly slowed, resulting in an international operating loss of 16% compared to operating income of 14.3% in the third quarter. Given the sharp decrease in North American activity levels, cost control has been a key focus for Trican throughout 2015.

Cost of sales, which includes consumable products and product transportation costs is our largest cost category and represents approximately 50% of our total costs. Total average product cost reductions to-date have been approximately 10% to 20% in Canada and 20% to 25% in the U.S.

compared to product cost at the end of 2014. The weakening of the Canadian dollar has had an adverse effect on the total realized cost savings in Canada.

Corporate cost cutting measures continued during the fourth quarter of 2015. Overall corporate expenses for 2015 were $21.1 million less year-over-year.

Excluding charges for severance, professional fees related to sale of the U.S. business and changes in share unit cost, corporate expenses in 2015 were $26.0 million lower compared to 2014.

We ended 2015 with approximately $264 million of cash and available debt. Managing cash flow and strengthening the balance sheet continued to be a primary focus for Trican during the fourth quarter of 2015 and will continue to be a focus during the duration of this downturn.

In addition to significant asset sales and cost-cutting measures, several other measures were taken during 2015 that are expected to reduce leverage, preserve liquidity, and provide financial flexibility in 2016. Capital expenditures for the 12 months of 2015 totaled $18.3 million compared with $69.8 million for 2014.

With the decline in commodity prices and North American demand, capital expenditures will be kept to a bare minimum until operating conditions improve. We continue to maintain our equipment in all regions and the majority of these costs flow through our income statement and are not capitalized.

Additionally, capital expansion initiatives will not be considered during the current economic environment in order to preserve current liquidity levels. Spending on capital projects is currently limited to completion of existing E&Ps [ph] and spending that is critical to maintaining or increasing the Company’s near-term cash flow.

Trican regularly reviews its capital equipment requirements and will continue to follow its policy of adjusting the capital budget on a quarterly basis to reflect changing operating conditions and capital equipment needs. As previously announced on January 25, 2016, we entered in definitive agreement with Keane for the sale of Trican’s U.S.

pressure pumping business. The transaction involves the sale of the pressure pumping and select related assets and the assumption of certain liabilities of Trican Well Service L.P.

for proceed of U.S. $200 million along with the 10% ownership interest in Keane, on a go forward basis.

Trican will also receive certain economic interest in Kean that represent an additional 20% economic participation, above certain threshold upon a Keane liquidity event. We continue to work with Keane on finalizing this transaction and expect closing on or before March 15, 2016.

Combined with the above, we have reached an agreement with our lenders to further amend our debt agreements, including revised covenant terms, subject to the closing of the U.S. operations sale.

Trican has been dedicated to reducing our debt levels throughout this downturn. And after the application of the U.S.

sale proceeds, our outstanding debt balance is estimated to have decreased by approximately $540 million since January 1, 2015. This deleveraging has and will significantly strengthen our balance sheet and our relationship with our lenders.

Along with the debt reduction, all prior covenants have been removed until the third quarter of 2016, after which an interest coverage and leverage ratio covenant will be in place, but calculated on an annualized basis until the end of Q1 2017. We believe this amendment to our debt agreements and our reduced debt levels, put the Company in a solid financial position to enter this downturn and come out the other side as stronger company.

We should also point out that as a result of low and declining commodity prices, combined with the excess supply of pressure pumping equipment in the market, we performed impairment test in the fourth quarter in order to assess the carrying value of our assets. This analysis resulted in asset impairment charge of $246.6 million reported during the fourth quarter.

Approximately 95% of the asset impairment charges relates to the U.S. operations.

I’ll now turn the call over to Dale, who will be providing comments on operating conditions and strategic outlook.

Thanks Mike. Our fourth quarter in Canada came in below our expectations, as we saw significant drop in operating income in December which pulled down the quarter.

A large part of the sequential drop in operating income in Canada was due to our third quarter of 2015 running at peak utilization levels in all our service lines, which resulted in high operating income. The drop in utilization in the fourth quarter was primarily caused by our customers finishing programs early in December and utilization falling off significantly in the latter half of the month.

Pricing in the quarter also eroded by about 8% as compared to the third quarter due to competitive pricing in low commodity environment. Our market share remained high during the quarter and the customer base remains strong.

We were happy with the improvement in our U.S. operations, as we saw the benefit of the cost cuts, and location closures we made it in late Q3 and early Q4.

It was however still negative operating income primarily due to a slow November caused by low utilization due to customer scheduling. We’re making good progress on closing our transaction with Keane and both companies are working closely together to get the deal closed by March 15.

Internationally, our completion tool business in Norway fell off in Q4, and Kazakhstan market remained challenged due to low oil prices. Dropping activity in Norway was anticipated due to customer scheduling of work programs and activity is on target in 2016.

As commodity prices have dropped in 2016, Canadian rig count has also dropped to 40% to 45% below 2015 level. Activity in Canada for January and February is running slightly behind our expectations with average utilization at approximately 70% to start the year, which is lower than the 80% to 85% originally anticipated.

Utilization has been choppy in the quarter to-date with full utilization one week and weak utilization to fall on week, [ph] which makes it difficult to further scale back on credits. The warm winter that Canada has experienced combined with our customers slowing their programs early, could cause their early breakup which would negatively affect Q1 2016 margins.

Our customer base has remained strong and still have active programs planned for remainder of 2016, although we do not have good visibility on confirmation of these programs or to any changes to these programs at the present time. We anticipate that we will have better visibility on Q3 at the start of Q2.

Majority of our customers are focused on Montney and Deep Basin plays, which remain the strongest activity in Canada. The key to profitability in this low price environment is to correctly size our operations to the anticipated activity levels and run close to full utilization on equipment that we’re operating.

We continue to review our operations and will appropriately size our Canadian operations to the anticipated third quarter works scope. We’ll also undertake additional cost reductions in both the second and third quarter to ensure that we’re running a low cost, lean operation for remainder of this year.

In the last number of years, we have seen a seasonal increase in fracturing activity in the third quarter as customers complete some of their wells drilled in the winter during the one summer month and we anticipate this trend will again occur, which will improve third activity and margins over those seen in the first half of the year. We do however anticipate that the rig count and pricing will be lower year-over-year in the third quarter, which will result in a drop in operating income compared to the record for the higher operating income we saw in Q3 2015.

We continue to maintain a strong market share. And with additional cost reductions planned are confident in our ability to meet EBITDA targets that ensure we meet our challenges for the remainder of the year.

Kazakhstan and our completion tools businesses in Norway and Russia have become our primary international operating areas since the sale of our Russian pressure pumping business in the third quarter of 2015. Both the Norwegian and Russian completion tools businesses are anticipated to see moderate growth in 2016, as we continue to grow market share in these regions.

The Kazakhstan market continues to be slow and we continue to evaluate the future financial performance and our options in this region. We are now primarily a Canadian focused company and we’ll be rightsizing our infrastructure and corporate costs to synthesize the Company going forward.

Our main focus in the near-term will be to continue to reduce cost, increase profitability, and manage our debt levels and are committed to staying on side of our amended debt covenant. This downturn has been sharper and deeper than previous ones.

And we believe we have proactively addressed our balance sheets through the sale of non-profitable businesses and are positioning the remaining part of the Company to generate good operating income in a low activity environment. We don’t know when we will see an improvement in activity from commodity prices and we will proactively manage the Company yet through the downturn until we see it.

We remain confident in our ability to execute on the strategy needed to manage through this current downturn and expect to emerge as a stronger organization with a low cost structure which will be in a position to generate significant margins, once the recovery takes place. I thank you for your attention today and your interest in Trican.

I’d like to turn the call over to the operator for any questions. Thank you.

Hey, good morning Dale. Dale, if you think about the Canadian market right now, given that you have the asset sales pending, it’s going to take down clearly the kind of overhead cost that you would factor into your pricing.

Does this give you an ability to lower pricing further in Canada or are we already just at rock bottom.

No, I think there’s going to be a little bit of further pricing degradation in this quarter. I think we’ll see that.

And I think if you looked at all of our costs, so both our corporate overhead costs that will come off as we kind of reduce down to a Canadian company as well as all the other cost categories that we’re focusing on, I would say that allows us to improve our margins and lower our pricing further. So, we’re not planning on getting a lot of that back but we do believe our cost structure comes down.

And then as you speak with your customer base about kind of -- obviously you’ve got the break up coming into the second half this year, I think you alluded to a lot of programs that are still on the books right now. What’s your confidence with these commodity prices where they are that these programs actually get executed?

Yes. That’s a difficult thing in our business right now and that’s the one problem I think all service companies are seeing is we -- our customers are kind of running quarter to quarter on confirming programs.

And at this point in time kind of at the end of February, we don’t have conformation on the Q3 programs. We like our customer base and the plays they’re working in.

They’re working primarily in profitable Montney or -- I don’t know if possible is the right word but basically Montney and Deep Basin plays that are some of the strongest plays in Canada. So that bodes well for us but we still don’t have confirmation, really don’t anticipate it kind of until the April timeframe.

Dale, I just wanted to ask about what the competitive landscape looks like in Canada. And the outlook for activities obviously taken a pretty big leg down last couple of months.

The market was already a lot more consolidated than the U.S. but perhaps I would say on average the group is also more levered.

At this stage, if activity unfolds as you’ve laid out, is consolidation for the group inevitable?

Yes, it’s a good question. I would say, if you looked at activity levels where they are at, everyone has a lot of equipment parts, so there’s an overcapacity in the market.

And I would -- my personal feeling is that you’re going to see a change in the competitive landscape throughout ‘16 with all the various things that are going on, lower activity levels and as you said, the balance sheets and all those things. So, I think you do see just -- however it plays out some changes in the competitive landscape.

And then just thinking about the capital structure after you complete the sale of Keane, being now principally Canadian company, do you think about or how do you think about any -- any parts of the capital structure still have -- even still have some U.S. dollar denominated debt and any potential changes or thoughts around how to mitigate any FX impacts from that?

Hey Sean, it’s Mike here. Yes, I think we’re actually in pretty good position there.

With the pay-downs, the amount of U.S. dollar denominated debt becomes a lot lower.

And we do have the swaps that are in place that really from our perspective, we maintain an effective hedge position on those swaps through to the end of the 2018 maturities. The U.S.

dollar denominated debt that would be left unhedged, I think matures in 2021. So that gives us about five years to kind of deal with that part of it.

But the rest of it is basically fully hedged and as well any amounts that are drawn on a USD basis in the revolver, as we go through the application of the Keane proceeds and that type of thing will be converted over to Canadian denominated debt. So, I think for the most part, we’ve greatly mitigated the risk around the U.S.

dollar debt in the Canadian dollar, except in the 2021 maturities which we have some time to deal with.

I wanted to just maybe come back to Canada for one second. I know you talked about a slowdown in December and that impacts different clients and different service providers slightly differently.

I just want to make sure, have you seen any material change in the relationship you have with your key clients in Canada, whether that’s a market share or a client specific pricing concession that maybe an outlier to the industry or as you said, was it just really your client mix slowed down maybe a little better or worse than other people’s?

Yes, I think it was exactly that. And we see that quite a bit in our industry and we see that previous fourth quarters as well, like last year we saw the same thing where basically our client mix may slowdown quicker or something like that.

The majority of our client mix may slowdown quicker just due to their own internal issues or internal plans. And then, we get hit little over harder or we in some quarters we run little higher like in the third quarter our client mix was running at full tilt and it made a big impact on our margin compared to the peer group in third quarter.

So, we do see this. And our belief is that it was primarily client mix.

We are still working for those clients; we didn’t lose those clients but some of them slowed down quite early in December.

I wanted to ask if you guys have any visibility -- I know you talked in the past and it happened on the Russian sale where you had a working capital adjustment. With the slowdown that’s happened in the U.S., maybe a bit more than may have seen in December, January, is there any risk of a negative working capital adjustment that would happen on those?

There is always that potential. I think the working capital levels that we saw near the end of fourth quarter, we expect to remain fairly similar through to the end of March but that all remains to be seen.

I mean it’s obviously a calculation that can go either way, don’t have really good visibility at this point in time to see which way it’s going to go.

Okay, perfect. And Mike, you alluded to this on the last question.

Your thoughts on the hedge, it sounds like because you’ve got U.S. denominated debt, you may want to keep those in place.

Are you restricted in the timing of when you’d monetize those hedges by any renegotiated covenants or agreements or anything like that?

No, we are not at all. And the other benefit that we have with the swaps is we’re allowed to deduct those from the debt portion of the leverage ratio.

So, they actually reduce the debt. So, there is not really a motivation necessarily to monetize those to pay down debt because we effectively get that on a covenant calculation.

So, it’s more prudent for us to maintain those hedges on those U.S. dollar denominated debt because of us being predominantly Canadian dollar cash flow Company.

Okay, perfect. That’s all.

My other questions have been answered. I appreciate the color, guys.

Thanks.

Couple of quick ones on kind of -- I guess if you want to call it, near-term strategy. So, you guys kind of alluded to the fact that you are not scavenging equipment for ongoing operations of equipment that’s actually working.

I know you are going to get criticized either way and you are damned if you do any damages still. But is there a tipping point where maybe it is a good idea to actually do that and if you have to put capital into equipment when it goes back to [indiscernible] when you come to it?

Yes, that absolutely is. When you get to a point where you can’t generate acceptable operating income and repair your equipment, you’re going to do what you have to do.

And that could be that you borrow parts to make sure that you still have a good fleet that keeps the customers happy but reduces your operating cost. So, there is a tipping point there that you examine.

We haven’t had to exercise that strategy yet, but it’s kind of always under examination in these kind of environments.

Okay. So, philosophically, you are kind of against it, but if you have to, you have to, it’s not out of the question anyway?

That’s right. You have to do what you have to do in the downturn.

Right. Second question, you talked a little bit about pricing here and how pricing came down in Q1 and then you expect the kind of the normal seasonal drop in Q2.

I mean, the margins are so thin now. I mean is there any merit to just saying you know what, this is it; we are not giving a discount in Q2.

If you don’t want to do it, we will happily give away that market share because it’s unprofitable share anyway; I mean are we getting to that point?

Not in the Q2 timeframe because we do have still quite a bit of cost in our Q2. In Q2, if we don’t do any activity, so the cost structure is still fairly high, there is fixed cost there that we do have to cover.

And so even at very, very low margins work that we do in Q2 helps us because we are still making above our gross -- we’re still making gross margin on that business. And so that does help us.

But saying that, you always come to a point where you cross over. And if you’re going out and giving away money on every time that’s not acceptable.

But, if you are gathering some level of positive operating income, it’s going to cover your cost.

So, it’s a matter of covering the variable cost.

That’s right.

Alright.

Yes. And just to add on to that little bit, Mike, usually the biggest impact on your bottom line is the utilization of your equipment.

So getting some utilization helps you more than even if you have to take a bit of price decrease. I think from my perspective, the more important thing that we have to figure out and make some decision on is where does go forward Q3 activity levels look like and adjusting our cost structure to what those activity levels look like.

And at this point in point with all the negativity around activity levels and commodity prices, I think our bias is probably lower than higher. So that’s kind of the mind frame you have but there is lots of things that have to be answered before we make those final decisions.

Sure, I understand. No, that’s good color.

Thanks guys. I’ll turn it back.

I wanted to ask -- I mean you’ve alluded to sort of some cost cutting and restructuring that’s going to have to be done this year. Do you have any guidance for us, in terms of either SG&A or corporate cost that we can put into our models and give us an idea where you think you’re going to be or is this still a decision profit that’s influx?

It’s still a decision process that’s influx. I don’t have really good guidance at this stage.

So, unfortunately I can’t really help you as of yet. But I think probably the best way to think of it is just go back on historical norms as to where our -- those costs have been as a percentage of revenue.

So, taking a look at the total G&A costs combined and looking that as where you think your revenue numbers are going to come out. And that’s going to be one of the benchmarks that we’re going to be looking at and then clearly just taking also look at where our EBITDA is and making sure that it’s sufficiently positive.

Those are two metrics that are going to really drive where our cost cuts have to go.

Okay. And second question is just on margins.

Obviously, we had a down draft here in Canadian margins in Q4. It sounds like Q1 is -- utilization sounds like it’s going to be lower.

Is there any further steps you guys can take to make your cost structure more variable to maintain those percentage margins, even in a lower revenue environment? Just wondering what that’s going to look like going forward and if you have any visibility as to what Q2 margins might be like.

Yes. So, basically yes, I think that we will be doing to make our cost structure more variable and we’ll be asking on that and anticipate that will help us through the Q2, Q3 and rest of year timeframe.

And regarding margins in Q2, we believe that it’s going to be a challenge from a revenue standpoint because all the cost cuts that we’re implementing, we could be similar to last year, may be slightly better.

Good morning. I was just calling -- just looking for some more color on the rightsizing that’s being discussed in -- after the U.S.

sale closes. I guess it just makes sense that you need fewer people in Calgary, the Company is smaller.

Do you have any color on what that looks like?

No, not at this time, Dan. Basically, we have to ensure that we run a profitable company in Canada and we’ll take the necessary steps but no color at this time.

Okay. Dale, last month, I think you said Trican has gone 1,900 employees in Canada and about 35% of your equipment is part.

Has that changed in the last month, given the less than robust market out there?

Yes. So, it has come down a bit.

So, on the employee side, we would be down in 1,740 range overall the Company.

Okay.

So, that’s overall, that’s not just Canada, our international operations, not including the U.S.

Not included the U.S. and is more equipment being part?

That’s kind of a evaluation that we’re undertaking right now is to rightsizing the Company for what we anticipate 3Q activity levels will be and making sure that we’re running a high utilization during that quarter. And no comments really at this point in time, it’s ongoing.

I just want to touch base on your suppliers and where you think their ability is to further lower their cost of supplies to Trican, especially in light of a lot of service companies, I mean, I think they’re trying to getting to the bottom line on pricing, can your suppliers go any further do you think?

Little bit, but not a lot 1% or 2%, we think. But we’re coming to the point much like we were in the U.S.

where you don’t lock into long-term agreements and you’re pushing your supply chain almost on a project by project basis. And does realize some savings.

So, we’ll continue to do that. So we think we’ve got a little bit there yet, it’s just a little hard to quantify.

And the other thing I wanted to ask on understanding that there’s lot of moving parts right now, but you had provided some guidance around what you thought net debt maybe exiting Q1, post the Keane sale. Is there any update on range of values and where you think that maybe based on what you know today relative to where you had spoken to in January?

From our view, it’s probably in the same range. Obviously, few things play out but in particular exactly what proceeds are going to be, but at this point in time, still reasonably comfortable with the range we provided.

Sorry, if I missed this, but can you give any line of sight for what March activity levels will look like and do you expect to remain busy in the next couple of weeks or are you in the process of idling crews at this structure?

Yes, that’s a good question. We’re -- right now we’re little concerned with March quite honestly as to whether income’s dropping and then weather related issues, as you know a warm winter.

So, there is not much frost in the ground and [indiscernible] out pretty quick and give us an early break down. But we don’t -- we’re still busy.

We’ve got programs planned into mid-March. I think our view right now is getting into March 15, but that could change quite quickly.

The economy has dropped a little bit again this week. So, we’ll just keep monitoring it.

And it could have effect on our margins that we weren’t anticipating. If it comes off earlier, just the reality of it, if you lose the whole month that’s a pretty big issue.

Dale, in the release, you referenced pricing coming down again sequentially in Q1 relative to Q4. Do you have any sense of magnitude of what you think it’s down quarter over quarter?

Not at this point in time, no. We know it’s come down a bit but we don’t have it all quantified yet.

You referenced, you believe it having largely hit a trough at this point. Is that based on bidding activity in the recent weeks and it seemed like nobody’s going lower at this stage or is it a high level thought that it can’t get much worse than it is given where we are in fuel margins?

A combination of both I would think, but mainly it seems like it’s kind of leveled out from a tendering perspective. So, it’s probably our latest best indicator right now.

With current cost structures, we’re going to have to take our cost structures down further as we’ve talked about; our current cost structures is very lean, so we have to -- we’re also afraid of getting much lower on pricing.

Just to follow on Mike’s question around putting stuff to work in Q2 if you have to give further pricing discounts, when you referenced positive gross margins, does that include R&M and other costs associated with maintaining the fleet or is that just straight field margins for going out and working on a customer’s well?

We’re basically covering our R&M, and all of our cost and coming out positive on a per job basis.

The other way to look at it Jon, is it’s when we talk about that it’s going to be a cost of sale, it’s going to be a unit expense, it’s going to be a people cost. That’s predominantly what the major costs are that go into that number.

I know we saw in the last six months a number of competitors go and basically work for free or in negative field margin, are you still seeing some of that going in the marketplace or is there more discipline across the board today?

Not seeing negative field margins, no.

Last one just from me, Mike, can you just help us reconcile margins on a quarter over quarter basis? I realize that your guys’ customer mix was less busy and pricing came down a little bit.

But the decline on a quarter over quarter basis was fairly meaningful. Is there anything abnormal in there that we should think about that was one-time related?

Yes. Well, I think what you have to look at is Q3 being really-really good.

I mean the utilization on our equipment in Q3 was near full, which really helped the margins significantly. So, a good portion of that drop would be just a pullback in utilization.

I mean obviously having utilization that we set around 70% is still reasonable but that’s a pretty meaningful decline from where we were in Q3. So, I think that’s the other piece that you might be underestimating in the reconciliation.

Hey guys. Dale, I apologize, I missed the early part of the Q&A.

So, I might ask something that was already asked, but anyway. You mentioned in the prepared remarks that the Q1 utilization started off and is running right around 70%.

Can you just say what the average utilization rate was in Q4?

We would have been -- we would have been running higher than that in October-November and then we would have dropped down into the 30% range in December. So, on average, we’d have been -- we would have probably been I guess a little bit lower than the 70 on an overall basis.

Okay, got it. Thank you.

And then in the release in the outlook section, you note an expectation that Q2 activity levels should be similar to last year. I’m assuming you’re referring to the expected number of jobs as opposed to revenue, given the commentary about pricing pressures in Q1.

Is that fair?

Yes, that’s a good way to look at it. It’s what I was talking about down there.

I think we’ve got a similar type of bookings on a number of jobs but then the pricing..

Adjusts accordingly?

That’s right.

Got it. And then, just depreciation guidance for Q1 and give any asset impairment?

John, it’s a good question. To be quite honest, I don’t have that off the top of my head.

I’ll follow up on that if that’s okay.

It’s Jason here. We estimated going forward to be about $82 million a year pro forma the U.S.

sale. So, on a quarterly basis, about a quarter of that is where we currently -- our best estimates are.

Okay. Well, thank you very much for your interest in Trican today.

We appreciate you being on the call and we look forward to talking to you in the May timeframe when we talk about our first quarter. Have a great day.

Bye.