STEP Energy Services Announces Second Quarter Operational and Financial Update, Raises Guidance

STEP Energy Services Ltd.

STEP Energy Services Ltd.

CALGARY, Alberta, June 20, 2022 (GLOBE NEWSWIRE) — STEP Energy Services Ltd. (the “Company” or “STEP”) provides a second quarter operational and financial update.

STEP is pleased to provide an update on the second quarter operations in the Canadian and U.S. geographic regions.

Throughout the past 12 months, STEP has focused on partnering with clients with active and stable work programs, allowing STEP to drive robust utilization and high efficiencies in our operation. This focus creates an Exceptional Client Experience and generates improved profitability, which is expected to be reflected in the strengthening financial results.

Both the Canadian and U.S. geographic regions are continuing to experience strong demand for services and STEP’s management expects second quarter 2022 results to show sequential improvement in revenue and Adjusted EBITDA performance.

STEP was deliberate in its alignment with clients that were expected to have active work programs through the first half of the year, particularly during the second quarter of 2022. The work scope for the second quarter of 2022 was concentrated on larger multi-well pads, which minimized the impact of spring break-up conditions. This focus provided steady utilization for the Company’s five fracturing crews, outside of a slower period during mid-April to mid-May.

The larger pads and improved pricing are expected to result in a higher revenue per day relative to the first quarter of 2022. These large, high-intensity pads are well-suited for STEP’s equipment and logistics capabilities, which can pump in excess 20 hours per day and handle large volumes of proppant. Large pads also optimize STEP’s dual fuel fleets, reducing costs to our clients and lowering emissions. The partial recapture of deep pricing concessions for the Company’s services made through the last downturn provided additional tailwinds to the Company’s second quarter results. Pricing to date in the second quarter of 2022 has held steady or has been raised for much of the work, in contrast to the typical price discounting that occurs during the spring break-up period.

The market for pressure pumping services has tightened significantly in the U.S., particularly in the Permian Basin where STEP operates three fracturing crews. Supply chain constraints and industry discipline are keeping the fracturing crew count flat, despite an increase in the drilling rig count.

Consistent with the messaging seen from our larger U.S. competitors, STEP has seen profitability improve. Pricing for the Company’s services in the U.S. has increased from the start of the second quarter of 2022, which is creating opportunity for margin expansion for STEP.

The second quarter of 2022 is not yet complete, but as of today’s date STEP management estimates second quarter revenue to range between $250.0 million and $265.0 million and Adjusted EBITDA to range between $42.0-$50.0 million. These figures are dependent on some factors that are outside STEP’s control, including weather conditions. Adjusted EBITDA is a non-IFRS financial measure, which is not defined and does not have a standardized meaning under IFRS. See “Non-IFRS Measures” below.

This compares to $219.5 million in revenue and $37.0 million of Adjusted EBITDA ($9.2 million net income) reported in Q1 2022 and $107.5 million in revenue and $11.7 million of Adjusted EBITDA ($10.6 million net loss) generated one year ago in Q2 2021. For context, estimated top line revenue in the current quarter may be on track to be the highest in the Company’s history.

The third quarter of 2022 is expected to experience higher activity levels in Canada and steady activity in the U.S., with continued improvement in expected profitability on a sequential basis.

Inflation remains a pressing concern for the Company, pointing to the continued need for pricing adjustments.   Proppant supply remains under pressure, although to date STEP has been able to leverage its North American presence to secure supply from its major sand suppliers.   The supply of equipment is expected to remain tight, as the availability of trained personnel remains limited and much of the idled equipment requires significant investment to reactivate. STEP is satisfied that the market is in balance and does not anticipate activating additional fleet capacity through the balance of 2022.

Notwithstanding its expected strong second quarter performance, margins for the Company remain below the levels achieved in previous cycles. Returns on invested capital for the oilfield service sector must increase if the global energy complex is to address the extreme tightness in markets for both oil and natural gas. STEP expects to continue to move pricing higher, providing returns needed to reinvest into the Company’s employees and equipment and provide returns to our shareholders.

In line with the expected improvement in profitability, the Company expects its leverage to decrease on an absolute and relative basis. Debt retirement remains a key priority for the Company and a means to return value to STEP shareholders as balance sheet fundamentals improve. The Company has initiated discussions on the renewal of its credit facilities with its syndicate of lenders and expects to have the extension completed in due course.

STEP’s President and Chief Operating Officer, Steve Glanville, commented “I am extremely proud of the performance of our professionals who go above and beyond every day to create the Exceptional Client Experience that STEP is known for. These results are impossible without their dedication and hard work.”

STEP’s focus on value creation for its employees, clients and shareholders is built on a foundation that prioritizes the following:

  • A culture that fosters possibility thinking which delivers high performance results

  • A disciplined focus on debt repayment, with a Debt to Adjusted EBITDA goal of less than 1:1

  • Continued investment in state-of-the-art equipment that is ESG focused and delivers unparalleled performance

  • A client base that is aligned with our core values

Step’s latest Corporate Presentation can be found on the Investors section of the Company’s website and also by clicking the following link:

STEP intends to release its 2022 second quarter results on Wednesday, August 10, 2022 after market close. Financial Statements and Management’s Discussion and Analysis will be posted to STEP’s website and SEDAR immediately after the press release is disseminated.

STEP will host a conference call at 9:00 a.m. MT (11:00 a.m. ET) on Thursday, August 11, 2022.

To listen to the webcast of the conference call, please click on the following:

This link is also available on the Investors section of our website at; click on “Reports, Presentations & Key Dates”.

To participate in the Q&A session of the conference call, please dial the conference call operator 15 minutes prior to the call’s start time and ask for “STEP Energy Services Second Quarter 2022 Earnings Results Conference Call” using the following numbers:

The conference call will be archived on STEP’s website at

This press release includes terms and performance measures commonly used in the oilfield services industry that are not defined under IFRS. The terms presented are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These non-IFRS measures have no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The non-IFRS measure should be read in conjunction with the Company’s quarterly financial statements and annual financial statements and the accompanying notes thereto.

“Adjusted EBITDA” is a financial measure not presented in accordance with IFRS and is equal to net (loss) income before finance costs, depreciation and amortization, (gain) loss on disposal of property and equipment, current and deferred income tax provisions and recoveries, equity and cash settled share-based compensation, transaction costs, foreign exchange forward contract (gain) loss, foreign exchange (gain) loss, and impairment losses. Adjusted EBITDA is presented because it is widely used by the investment community as it provides an indication of the results generated by the Company’s normal course business activities prior to considering how the activities are financed and the results are taxed. The Company uses Adjusted EBITDA internally to evaluate operating and segment performance, because management believes it provides better comparability between periods. Reconciliations of the non-IFRS financial measure of Adjusted EBITDA to the IFRS financial measure of net income (loss) can be found in STEP’s Management Discussion and Analysis for the first quarter 2022 dated as of May 11, 2022 (under “Non-IFRS Measures and Ratios”), and the Management Discussion and Analysis for the second quarter 2021 dated as of August 11, 2021 (under “Non-IFRS Measures”), both of which are available on SEDAR ( and incorporated herein by reference.

Certain statements contained in this press release constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws (collectively, “forward-looking statements”). These statements relate to the expectations of management about future events, results of operations and the Company’s future performance (both operational and financial) and business prospects. All statements other than statements of historical fact are forward-looking statements. The use of any of the words “expects”, “expected”, “guidance”, “opportunity”, “may”, “project”, “should”, and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. While STEP believes the expectations reflected in the forward-looking statements included in this press release are reasonable, such statements are not guarantees of future performance or outcomes and may prove to be incorrect and should not be unduly relied upon.

In particular, but without limitation, this press release contains forward-looking statements pertaining to: pricing and profit improvements, STEP’s opportunity for margin expansion, second quarter 2022 financial results including projected revenue and Adjusted EBITDA, activity levels in the third and fourth quarter 2022, expected inflation and its effect on STEP, availability of proppant and STEP’s ability to obtain it, supply of equipment and personnel, anticipated STEP fleet capacity, cost to reactivate idle equipment, the need to increase returns on invested capital in order to relieve market tightness for oil and gas, future leverage and debt levels, STEP’s ability to return value to shareholders through debt retirement, expected improvements to balance sheet fundamentals, the expected renewal of STEP’s credit facilities, and the timing of STEP’s second quarter 2022 results release and conference call.

The forward-looking information and statements contained in this press release reflect several material factors and expectations and assumptions of STEP including, without limitation: the general continuance of current or, where applicable, assumed industry conditions; client activity levels and spending; the effect of inflation on the cost of goods and equipment; pricing of STEP’s services; predictable effect of seasonal weather on STEP’s operations; a reduction in costs and emissions associated with large pad work; STEP’s ability to market successfully to current and new clients; the effect of competition on STEP; STEP’s ability to utilize its equipment; STEP’s ability to collect on trade and other receivables; STEP’s ability to obtain and retain qualified staff and equipment in a timely and cost effective manner; levels of deployable equipment in the marketplace; future capital expenditures to be made by STEP; future funding sources for STEP’s capital program; STEP’s future debt levels; the availability of unused credit capacity on STEP’s credit lines; and STEP’s ability to obtain renewed financing on acceptable terms. STEP believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable, but no assurance can be given that these factors, expectations and assumptions will prove correct.

This press also release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about STEP’s expected second quarter revenues and Adjusted EBITDA, leverage, and debt levels, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. The actual results of operations of STEP and the resulting financial results will likely vary from the amounts set forth in this press release and such variation may be material. STEP and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments as of the date hereof; however, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results.

The forward-looking information and FOFI contained in this press release speak only as of the date of the document, and none of STEP or its subsidiaries assumes any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws. Actual results could also differ materially from those anticipated in these forward‐looking statements and FOFI due to the risk factors set forth under the heading “Risk Factors” in STEP’s Annual Information Form for the year ended December 31, 2021 dated March 16, 2022 and under the heading “Risk Factors and Risk Management” in STEP’s Management Discussion and Analysis for the first quarter 2022 dated as of May 11, 2022.

STEP is an oilfield service company that provides stand-alone and fully integrated fracturing, fluid and nitrogen pumping, and coiled tubing solutions. Our combination of modern equipment along with our commitment to safety and quality execution has differentiated STEP in plays where wells are deeper, have longer laterals and higher pressures. STEP has a high-performance, safety-focused culture and its experienced technical office and field professionals are committed to providing innovative, reliable and cost-effective solutions to its E&P clients.

Founded in 2011 as a specialized deep capacity coiled tubing company, STEP has grown into a North American service provider delivering completion and stimulation services to exploration and production companies in Canada and the U.S. Our Canadian services are focused in the Western Canadian Sedimentary Basin, while in the U.S., our fracturing and coiled tubing services are focused in the Permian and Eagle Ford basins in Texas, the Uinta-Piceance and Niobrara-DJ basins in Colorado and the Bakken basin in North Dakota.

Our four core values; Safety, Trust, Execution and Possibilities inspire our team of professionals to provide differentiated levels of service, with a goal of flawless execution and an unwavering focus on safety.

For more information please contact:

Steve Glanville
President & Chief Operating Officer

Klaas Deemter
Chief Financial Officer

Telephone: 403-457-1776

Telephone: 403-457-1772


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