NCS Multistage at Emerging Growth Virtual Conference: Strategic Growth and Expansion

On Thursday, 27 March 2025, NCS Multistage Holdings (NASDAQ: NCSM) presented at the Emerging Growth Virtual Conference, highlighting its strategic initiatives and financial performance for 2024. CEO Ryan Hummer outlined the company’s focus on technology-driven solutions for the oilfield services sector, emphasizing both growth and operational efficiency. The company reported a robust revenue increase but also acknowledged challenges in a flat market.

Key Takeaways

• NCS Multistage’s revenue grew by 14% in 2024, reaching over $160 million.
• International revenue more than doubled, now over 10% of total revenue.
• The company maintains a strong gross margin of approximately 40%.
• NCS has $26 million in cash and a $20 million credit facility.
• Growth is expected in 2025 despite a flat market, driven by opportunities in Canada, the U.S., and international markets.

Financial Results

NCS Multistage reported a 14% increase in revenue for 2024, amounting to over $160 million. The company’s gross margin remained strong at approximately 40%, and adjusted EBITDA showed significant growth, highlighting operational efficiency. The firm expects to continue this trajectory into 2025, leveraging its strong balance sheet and available credit facility.

• Revenue: Increased by $20 million in 2024, with expectations for further growth in 2025.
• Gross Margin: Remained steady at 40%, with a 250 basis point improvement from 2023.
• Adjusted EBITDA: Increased by $20 million from 2020 to 2024, with a margin of 35%.
• Free Cash Flow: Anticipated conversion of 50% to 60% of adjusted EBITDA to free cash flow.
• Cash Position: Ended 2024 with $26 million in cash.

Operational Updates

NCS Multistage continues to focus on its key product lines, including fracturing systems and well construction. The company is expanding its presence in international markets, particularly in the North Sea and Middle East, while maintaining a strong foothold in Canada and the U.S.

• Fracturing Systems: Account for 65% of revenue, with significant activity in Canada.
• Well Construction: Focused on the Air Lock Casing Buoyancy System.
• International Expansion: Growth in the North Sea and Middle East.

Future Outlook

The company is optimistic about 2025, expecting revenue growth despite a flat oil and gas market. NCS plans to capitalize on opportunities in offshore development and the SAGD market in Canada. The firm is also exploring M&A opportunities to enhance its market position.

• Geographic Focus: U.S., Canada, Argentina, North Sea, and Middle East.
• Growth Opportunities: Offshore development and SAGD market.
• M&A Strategy: Evaluating opportunities to leverage infrastructure and capabilities.

Q&A Highlights

During the Q&A session, CEO Ryan Hummer discussed the importance of the Canadian market and growth drivers such as fracturing systems in the Montney formation. He also highlighted NCS’s nimbleness in product development and its partnership approach with customers.

• Canadian Market: High exposure continues to benefit the company.
• Growth Drivers: Focus on fracturing systems and well construction in key markets.
• Customer Benefits: Emphasis on tailored solutions and responsiveness to needs.

In conclusion, NCS Multistage’s strategic focus and financial health position it well for continued growth. For further details, readers are encouraged to refer to the full transcript.

Full transcript - Emerging Growth Virtual Conference:

Anna, Host, Emerging Growth Conference: One, next, we have an NCS multi stage holding stage holding stage holding stage

Ryan Hummer, CEO and Director, NCS Multistage Holdings: of the

Anna, Host, Emerging Growth Conference: NASDAQ and the SBLM. Is a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well construction, well completions, and field development strategies. Please welcome CEO and director Ryan Hummer. Nice to see you again, Ryan. Welcome.

Ryan Hummer, CEO and Director, NCS Multistage Holdings: Yeah, no, great seeing you, Anna. Hope everyone out there is having a great day. I just want to thank Emerging Growth Conference for inviting us to present today. I also want to thank everyone that’s taking time to watch the presentation. So maybe before we really jump in, I’ll spend a little bit of time talking about who we are and where we’re focused as a company.

So we are a technology focused oilfield services and equipment company. So we sell directly to the E and P customers to oil and natural gas producers that would include companies like Chevron, Conoco, Devon, Oxy, BP, Equinor, and in Canada, Canadian Natural Resources, Verint, Whitecap and similar customers. And generally, we are competing with large oilfield services companies, so companies like Schlumberger or SLB, Halliburton, NOV, InnovEx, CoreLab and others, generally taking on competition that’s larger than we are and, you know, winning our fair share. So within that market, we tend to focus on certain areas where we can obtain a leadership position and earn attractive margins. And over time, this has really led us to four product lines, which I’ll talk through a bit later, but they all have a common theme.

And the products and services that we provide enable capital efficient unconventional resource development. Historically, this has taken place in North America, but increasingly has taken place in other regions around the world. We focus on innovation and partnering with our customers to bring new solutions to market. Typically, these solutions will save our customers time, save our customers money, or maybe both, but also have the effect of helping them make better and more productive wells. So we pair this focus that we have on R and D and innovation with what we call a capital light business model.

So we outsource the manufacturing of most of the components that go into the products that we sell. We perform the assurance checks on the components, we oversee the assembly of the products and ensure quality and reliability, before sending the products out to the customer well site. But this has enabled us to minimize our capital investment requirements and has allowed us to generate meaningful free cash flow through business cycles. Typically, we’ll spend, you know, one to 2% of revenue on capital expenditures, which is pretty low for our industry. The the We’ve got very limited concentration in the shareholder base and no customer contributes more than 10% of our revenue.

And before I leave the page, I’ll note that we are traded on NASDAQ with the ticker NCSM. Our recent market capitalization and enterprise value are both currently just below $100,000,000 with EBITDA and free cash flow in 2024 of $22,000,000 and $12,000,000 respectively. So a relatively low trading multiple and a robust free cash flow yield for our investors. So I’ll walk you quickly through our product lines. I know this is generally a generalist audience, so I’ll primarily focus on the value that our products and services bring.

And I’ll start in the top left with Fracturing Systems, which represents 65% of our revenue as a company. So through this product and service offering, we help our customers to maximize resource recovery with a more controlled approach to well completions. We sell the sliding sleeves that you see in the graphic in the inset and customers will buy additional sliding sleeves for each new well that they complete using our technology. So we think of this as a consumable item, it gets used up once as the customer completes their well, the next well they drill they need to buy more. And we also provide a service whereby our personnel utilize a service tool while on location, they work together with the customer and other service companies to manipulate those sliding sleeves and to ensure, you know, we get the completion job that the customer is expecting.

So we believe that we’re the global leader in this product line. We’ve got an extensive track record and differentiated features both in our sliding sleeves and our service tool technology that allow us to operate in technically demanding environments around the globe. About 30% of all oil and gas wells completed in Canada use our fracturing systems technology, and we successfully expanded into international and offshore markets with this product line as well. So to give you a sense of the potential scope of a well that utilizes NCS Fracturing Systems technology, in the Montney formation in Canada, we recently completed a well that included over two ninety of our sliding sleeves, with one of the sleeves placed approximately every 40 feet in the lateral section of the customer’s well. We utilized a single service tool during the completion, which allowed for an efficient and continuous operation, which supported our customer as they placed over 23,000,000 of profit into the formation.

So this is really kind of leading edge completion intensity, and the wells that the customer has drilled and completed historically in this area have been some of the best performers in the Western Canadian Sedimentary Basin. So turning to Repeat Precision, which is on the top right of the slide, this is our second largest product line and it serves a large addressable market, especially in The United States. So basically, if a customer is not using our fracturing systems technology in their wells, they’ll utilize products that Repeat Precision can provide. So Repeat Precision has consistently expanded its product offering to grow its addressable market over time. We’ve long been known for having one of the highest performance composite frac plugs in the market, and we’ve added dissolvable plugs to our portfolio, which allows us to capture additional work on the same wellbore with our customers.

We also recently introduced a composite plug with a new feature, which is designed to improve performance when used in customer well pads, which use simulfrac operations. And this is, you know, increasingly common in North America and in West Texas in particular. And, you know, this new feature that we’ve embedded in our composite plug enables, you know, better operational efficiency in some of those simulfrac operations. So together with the new product development around the dissolvable side and the feature, the contingency feature on the composite plug, which primarily have US applications, we made really good inroads in introducing repeat precisions technology to our Canadian customers, where we’ve rapidly gained market share in that market as well. So Tracer Diagnostics, on the bottom left, this is a business that we acquired in 2017.

And through Tracer Diagnostics, we provide our customers with a reliable and cost effective service to help them improve their well designs and optimize field development. So the learnings from what can be a relatively low cost tracer study can can really help a customer create, you know, in some cases millions of dollars in value. So, you know, how do they do this and how do we help them? You know, so typically what we’ll do is we will pump a unique tracer chemical into individual stages in a customer’s well. We will then collect and analyze samples taken from that well and sometimes other wells in the area.

And we do this analysis at our own laboratories. We have one in Tulsa and we have one in Calgary. And after those samples have been analyzed, we provide the customer with a report that they can use to make operational decisions, either for the well that they just traced or decisions that could be made as far as how they go about with their future developments. And our customers will utilize the information from this service to evaluate changes to well spacing, so where they place their wells, you know, in the in the reservoir, and also changes to completion design, all with the objective ultimately of increasing resource recovery, so getting more oil or natural gas out of the ground and driving improved financial performance for the operator. So well construction on the bottom right is our fourth product line and the core technology within our well construction portfolio is what we call the Air Lock Casing Buoyancy System.

In our industry, our customers are drilling ever longer laterals, which helps them to improve their economic returns. So, probably five years ago, the average lateral length was about a mile and a half to 8,000 feet. Today, the average lateral is more than two miles and leading edge wells are being drilled to 15 or 20,000 feet, so I think three or four miles. So really, you know, an application that customers are using to improve their returns and be as capital efficient as possible. And the airlock systems help our customers ensure that they can take maximum advantage of drilling and completing those long laterals.

It gives the customer assurance and it saves them time in installing the well, which more than pays for the cost of the product. And, you know, I referenced in the introduction, the key connection across this product and service portfolio is really that we help our customers to maximize their return on investment from unconventional resource development. In North America, this is typically focused on enabling operational efficiencies, although in some instances we will enable better production results as compared to completing technologies and the customers will choose to use us for that rationale. In international markets, we really are helping our customers to accelerate their learning curves with respect to unconventional developments where, you know, the unconventional industry in The US and Canada is a bit more mature than it is outside of North America. So we’re helping them to apply unconventional techniques in order to maximize the value of both their new unconventional developments by getting up to speed as quickly as possible.

But then in some cases, taking what we’ve learned and what we can enable through our technology and helping customers maximize the value of more mature assets and existing infrastructure. And that’s something that we’re helping our customers do in the North Sea among other areas. So turning to the next slide, you know, NCS, NCS’s strategy was developed and introduced in 02/2002, and there are really three core business strategies that form our overall strategy. I’ll talk a little bit about what each of those strategies are, but really just want to say we are starting to see real benefits from the strategy that we’ve implemented. The first strategy is to build on our leading market positions.

So for us, these leading market positions include our market position in fracturing systems on a global basis where we think we’re the number one player, our presence in the Canadian completions market and our strong resulting customer relationships. I spoke earlier about our

Anna, Host, Emerging Growth Conference: fracturing systems technology being on about 30% of the

Ryan Hummer, CEO and Director, NCS Multistage Holdings: well completions in systems technology being on about 30% of the well completions in Canada and growing share with repeat precision as well. So we’ve got great incumbency and presence in the Canadian market. And the other leading market position is our global capabilities and our presence in tracer diagnostics, where in most markets around the world, we have a number one or number two market position. The second strategy for NCS is to capitalize on offshore and international opportunities, which we’ve been pursuing and investing in. So this is a focus for us really because international and offshore customers tend to buy based on technical characteristics versus price.

And there’s also an ability to build stickier customer relationships over time. So as a result, you know, we can be compensated for the value that we provide to our customers, it supports our overall gross margin profile. And the third strategic component for NCS is to commercialize innovative solutions to complex customer challenges. So this is really the core to what we do. We obtain and understand the voice of the customer and emerging market needs and we deliver solutions that bring tangible value to our customers.

And we’re always bringing new products to market and always are helping our customers to improve on a continuous basis. So one highlight for NCS as far as, you know, something that we’ve looked to understand is this strategy working, was our growth in markets outside of North America. So our international revenue more than doubled in 2024 as compared to 2023. It increased from about 5% of our total revenue to over 10%, And the international revenue itself grew by more than 100% year over year. And this really brought together all of the components of the strategy.

So it was achieved by leveraging our leadership position in fracturing systems, again in the North Sea and certain other markets and also in tracer diagnostics in The Middle East, by capitalizing on some of the long term business development efforts that we’ve had for international markets and also by enhancing our service delivery capabilities through our technology to help us participate in a broader set of offshore wells. We’re excited about what we were able to accomplish in 2024, I think there are kind of a lot of really interesting things ahead as we continue to execute on the strategy going forward. So this next slide, what I’ll say is that our operational performance and operational execution has also been delivering strong financial results for NCS. So we grew our revenue by about $20,000,000 in 2024, which represented 14% year over year growth. We do expect that we’ll grow revenue again in 2025, despite what I generally characterize as a flat overall market for oil and gas activity, especially in North America.

Our gross margin of approximately 40% across the years reflects the value of the products and services that we bring to our customers. So with our outsourced manufacturing model, our cost of sales tends to be highly variable in nature, although we were able to improve our gross margins by approximately two fifty basis points in 2024 as compared to 2023. Part of that is that improvement in the mix for international revenue, which has helped to support our margin profile. Our SG and A, on the other hand, is relatively fixed. And the team at NCS has done a great job of controlling SG and A expenses over the last several years.

And this relatively fixed SG and A provides us with attractive operating leverage in the business, allowing us to grow our EBITDA much faster than we’re growing revenue or gross profit. So you can see the impact of this over time. We grew revenue by approximately $56,000,000 from our post COVID trough in 2020 to 2024. So we grew revenue, you know, from a little bit over $100,000,000 to just over $160,000,000 but over the same time we grew our adjusted EBITDA by approximately $20,000,000 So this provided an incremental adjusted EBITDA margin of approximately 35% over the period. And we think we can continue to deliver strong incremental margins incremental adjusted EBITDA margins of 25% to 35% over the long run as we continue to grow the business and grow revenue.

In addition, as you’ll see on the bottom right, our Capital eight business model positions us to generate free cash flow through industry cycles. So over time, we expect that we can convert approximately 50% to 60% of our adjusted EBITDA to free cash flow. You’ll have year to year fluctuations, especially in years of high growth where you might be investing in working capital, but that 50% to 60 over the long term is a pretty good rule of thumb. So in short, I think NCS offers a very compelling opportunity for investors. We’ve got an attractive organic growth track record, and we’re focused on increasing our presence in growth markets for unconventional resource development, including Argentina and The Middle East in particular, but also in markets utilizing unconventional completion techniques in more conventional formations such as the North Sea.

We’re delivering EBITDA growth with strong incremental margins. We continue to bring innovative technology to our customers, especially for technically demanding applications that leverage our engineering capabilities and provide an opportunity for higher margins. Fourth, our Capital A business model minimizes capital investment and allows us to generate free cash flow through industry cycles. And finally, we have a strong balance sheet and expect to further strengthen it through free cash flow this year. At the end of 2024, we had approximately $26,000,000 in cash on hand and approximately $20,000,000 available through our revolving credit facility.

This combined with the free cash flow that we expect during 2025 positions us very well to participate in industry consolidation or to evaluate a framework to return capital to shareholders in the future. So that concludes my prepared remarks for today. So I’d be happy to take questions, Anna, from you or from the audience.

Anna, Host, Emerging Growth Conference: Alright. Perfect. Ryan, thank you so much. You mentioned having a leading market position in the completions market in Canada. So why is this important to your business?

Ryan Hummer, CEO and Director, NCS Multistage Holdings: Yeah. Thanks, Anna. That’s a great question. You were a little bit unique as a US listed company having more than 60% of our revenue tied to the Canadian market. So, you know, part of the background there, the Canadian market was really the first market to adopt our fracturing systems technology and it remains our largest market.

As I mentioned, I think we participate in about 30% of the wells that are candidates for our technology in Canada, potentially a bit more this year as we’re starting to really see some momentum in the Montney formation and as a result we do earn, you know, 60%, sixty five % of our revenue from Canada in any given year. And recently the Canadian market has actually been a stronger market than The U. S. And really this is a result of some relatively new infrastructure developments in the Canadian market. There’s an oil pipeline expansion that was completed in early twenty twenty four, that helps support more oil driven customer activity that year.

And there’s a project called LNG Canada, the country’s first LNG export facility, which will be commissioned later this year and that will support demand and pricing for natural gas as well. So that additional infrastructure has really been helping to improve realized pricing for our Canadian customers and improve their cash flows and therefore has led to some modest growth in activity in the Canadian market, whereas The U. S. Market has been characterized as kind of flat to down over the last couple of years just from an overall industry activity standpoint. So from my perspective, I certainly think that our relatively high exposure to Canada as compared to The US will continue to work to our benefit over the next couple of years.

Anna, Host, Emerging Growth Conference: And you mentioned you expect to grow revenue this year in a relatively flat industry environment. So elaborate on where you see that growth coming from.

Ryan Hummer, CEO and Director, NCS Multistage Holdings: Yeah. Thank you. So I’ll take it market by market, I guess. We think the biggest driver for growth in Canada this year will be in our fracturing systems product line, and in the Montney formation in particular. We’ve had some really good success with customers recently, both in enabling some really encouraging production results, but also in providing some operational flexibility that just isn’t available through competing completion techniques.

There are some instances in Canada where, you know, the customers are forced to monitor seismic activity with respect to their completions and if seismic activity hits a certain threshold, they need to shut down operations or potentially move to a different section of the well. And with other completion techniques, if you do that, it causes a relatively major disruption or you’re gonna give up part of that well and not be able to complete it. We’ve built a lot of flexibility into what we can deliver to our customers with our fracturing systems technology such that if they need to move to a different section of the wellbore, they can do so, but they’re not giving up that section that they left behind. We can go back in there and access that later. So I think that operational flexibility combined with those production results that customers have seen gives us some continued runway to grow in the Canadian market and we’ll see that this year.

Growth in The U. S. Should be driven both by the well construction product line as well as fracturing systems. We added a few well construction customers late in 2024 and we’re benefiting from that. But then we also expect a very busy second and third quarter in particular for fracturing systems work in The U.

S. We’ve got a lot of good activity lined up for the middle part of the year. And then internationally, we expect to grow our business in the North Sea this year, which builds on success that we had with the first wells that we completed with several new customers throughout 2024 and early twenty twenty five. In The Middle East, which is really the other big market for us internationally, we had a very robust year last year for Tracer Diagnostics in The Middle East in 2024 with a large project scope. That work may get scaled back a bit this year, but that will likely be offset by an increase in well construction work in the region.

So we received what’s called a commercial purchase agreement from a large national oil company last year for two different products within our well construction portfolio, started supplying those products late last year, but activity has started to increase over the last few months. I think that’ll likely continue to grow as the customer sees the benefits of using our technology in their unconventional resource development.

Anna, Host, Emerging Growth Conference: And you also mentioned possible industry consolidation. So how do you think about M and A opportunities?

Ryan Hummer, CEO and Director, NCS Multistage Holdings: Yeah, another good question. Maybe first, the energy sector, especially in North America, continues to mature. And as a result, you’ve seen a lot of consolidation amongst our customer base, which is resulting in fewer and larger players. And from my perspective, I think it makes a lot of sense that the oilfield services sector would experience consolidation as well, and I think that it will. You know, obviously our day to day focus is on our strategic plan and organic revenue growth, just executing that strategy.

And I mentioned the operating leverage of the business and how that can provide great results from an organic standpoint. But I also think that NCS can leverage its infrastructure and capabilities through the right M and A transactions in a way that can drive meaningful value for our shareholders. So, you know, by operating across four different product lines and operating in, you know, virtually all the key oil and gas geographies, right, we have a presence in The U. S, Canada, Argentina, the North Sea, Middle East. There are a lot of opportunities for us to find businesses that fit strategically with NCS and that could open multiple avenues for synergies, whether that be revenue expansion, cost synergies through economies of scale, or by leveraging our existing SG and A infrastructure.

So, with that, I think our cash balance, our credit availability, our expectation for continued free cash flow generation, that all positions us very well to participate in industry M and A. Now there’s no no guarantee we’ll be able to find the right target or come to terms on the right deal, but you know, if we do, we’ll be prudent around valuation. We’ll also be prudent with respect to if there is a larger acquisition or opportunity that’s out there, we’ll maintain a conservative pro form a balance sheet and leverage profile, which is consistent with with how we’ve operated historically.

Anna, Host, Emerging Growth Conference: Talk a little bit about what’s a benefit for a customer to deal with a smaller firm like yourself, and can you use that benefit to further expand while keeping true to the reason companies sign up with you?

Ryan Hummer, CEO and Director, NCS Multistage Holdings: Yeah. Great great question. And we we see this a lot with respect to some of our product development efforts where we can be a lot more nimble than some of the larger service companies like, you know, Halliburton, Schlumberger, Baker Hughes in particular. As far as, you know, taking that voice of the customer, understanding the need, getting the concept ready and through engineering, through field trial and out and ready for production, I think our product development cycle can be a lot faster certainly than a larger company. And some of the other benefits, and we’ve seen this through a couple of opportunities that we’ve had, I’ll speak to one in particular.

You know, we through our own efforts, right, have taken the fracturing systems product line and moved it from offshore to offshore, primarily off of platforms offshore. And we had a large international oil company that operates in the deepwater environment. And they wanted to utilize our fracturing systems technology because of what it can enable from an operational standpoint, wanted to access some reserves you know, from a target that’s below where they would otherwise do their completions and they selected our technology just based on, you know, a portfolio of features relative to what they were looking for. But we would not have necessarily taken an internal development to pursue, you know, a deepwater system on our own. So that’s an instance where, you know, we’re partnering with that large international oil company to develop And for us, it’s a benefit twofold, right.

So we get to have some of our R and D funded by the customer as a result, we get a product to market with them that meets their specific needs to be deployed, you know, in an offshore environment and we can take that sort of baseline concept for our deepwater sleeve system and service tools and then take that and market it to other operators over time. So I think there are multiple benefits that come with working with a smaller company like NCS, but I think it really comes down to responsiveness to the customer, whether that’s in the course of just an existing operation, but also identifying the needs and bringing to bear a new product that will meet the needs that they have in a relatively short time frame.

Anna, Host, Emerging Growth Conference: And what is the life of the sliding sleeve? Is there an increasing trend to the amount ordered by the customer?

Ryan Hummer, CEO and Director, NCS Multistage Holdings: Yeah. So what and and help to explain this. So a sliding sleeve, it basically gets installed in the customer’s well and it will it will be in that well through the entire life of the well that the well is producing. Almost all of our sliding sleeves today are what we call our multi cycle sleeves, which means you can open and close them multiple times throughout the course of the well. And we do this really to provide the customer with a system that provides value during the completion, but then also can provide value for that entire life of well period.

So as an oil and gas well produces, typically over time, you’ll see an increase in the amount of water that gets produced relative to oil or natural gas. You may see things like breakthrough for water from an aquifer, subterranean aquifer. And from an operational standpoint, the operator would want to go in and potentially close off that water production, because water is really a waste product in oil and gas, it needs to be collected and trucked and disposed of. So if you can reduce the water production, you can increase value for the customer’s well for their asset. And with our sliding sleeves, which can be reclosed over the life of that well, if we do see that breakthrough, we can go in and shut the sleeves for just a small section of that well, shut off that water breakthrough, And again, in different completion applications, whether it be plug and perf or different type of sleeve completion, typically you don’t have that life of well flexibility.

So, you know, the sleeve will last as long as the well is producing. And the question around are we selling more over time, I think the answer there is uncategorically yes. When we first introduced our sliding sleeve technology, we introduced it in, the Canadian Bakken formation. So it’s an area in Southern Saskatchewan. And in those wells, we would typically supply somewhere between twenty and thirty sleeves in a customer’s well.

And, you know, over time as we’ve developed the technology, made it more robust and that’s both the sleeve and the service tool, we’ve been able to deploy the sleeves into your traditional high intensity completions. I mentioned the one in the Montney. So we went from a starting point of, call it, 20 to 30 sleeves per well or is now leading edge, a customer might be running two fifty to 300 sleeves in the well. And that’s taken a lot of development effort, right, around the technology over time, it’s taken a lot of learnings from our service team. So I think we’ve got a great competitive mode, especially in that really high intensity work.

But we have definitely seen customers, you know, deploying more sleeves per well over time. Some of that has to do with the longer laterals. Some of it has to do with taking the way they designed the well and putting the entry points closer together. But that’s definitely been a trend that we’ve seen and that we’ve taken advantage of.

Anna, Host, Emerging Growth Conference: And probably last question due to time. What other geographic markets can you grow to? Or does it make more sense to build up Canada First?

Ryan Hummer, CEO and Director, NCS Multistage Holdings: Yes. So the core markets for us, as I mentioned earlier, U. S, Canada, we’ve got a presence in Argentina, the North Sea and The Middle East. And I think with that, we’ve got a lot of good growth runway in those markets. The offshore development is certainly one that could take place in The U.

S. And the Gulf Of America, that could take place in other markets around the world as well. We’ve made some inroads in the Canadian market. Traditionally, we’ve worked with more what I call your traditional oil and gas producer. There’s a large market in Canada around heavy oil, and for us there’s a sub market within Canada called SAGD, Steam Assisted Gravity Drainage, which really requires a lot of the flow control capabilities that we provide through our fracturing systems technology.

So I think that can be the next leg for us in Canada is moving from traditional oil and gas and really participating more in the SAGD market in Canada. I think we’ve got a lot of runway in the markets we’re in today and we don’t need to necessarily push into a new geography whether that be kind of Southeast Asia or Brazil at this point. I think we’ll push through with what we have and then if there is a specific opportunity in one of those markets we’ll, we’ll look at it and we’ll potentially make an investment to, to participate in that market over time. But I, you know, I feel really good about the runway we have, in the markets we’re participating in today.

Anna, Host, Emerging Growth Conference: And your fracturing systems tech, is there are there any issues with this in other markets?

Ryan Hummer, CEO and Director, NCS Multistage Holdings: There aren’t necessarily issues with it in other markets. There are there are markets that have preferred methodologies. The preferred methodology in The U. S. Primarily is what you call plug and perf, which is part of why we made the investment in Repeat Precision and we have that product line that has composite plugs and perforating guns.

You know, The U. S. Industry is really centered around that as the primary completion methodology. We do have certain geographic areas where we do a fair amount of fracturing systems work in The U. S.

And then we’ve taken that fracturing systems business, that’s really what we’ve led with in the North Sea. You do run into in certain areas customers that will want to utilize different deployment methodologies. We will typically run our service tool for fracturing systems on coiled tubing. Part of what we, were able to accomplish last year in the North Sea was running our service tool on jointed pipe, which helped to expand the customer opportunity there. So if coil tubing is in short supply, we do have other ways in which we can enable the customer to utilize our fracturing systems technology.

So there’s not so much a limitation around it but there are certainly preferences in certain markets. The Canadian market is a big adopter of fracturing systems. The North Sea is increasingly so, certain areas in The US. But there are markets that have really tried to optimize around plug and perf and other completions, and we just try to support the customer the best we can with the appropriate product line that we have.

Anna, Host, Emerging Growth Conference: And last question, Trisha Diagnostics. Is this a repeat service provided to customers, and how does the cost vary from start to finish?

Ryan Hummer, CEO and Director, NCS Multistage Holdings: Yeah. So it’s a it’s a bit of a mix. There are certain, services within Tracer Diagnostics that you would think of as a repeat service where a customer might use it on every well. And in those, typically the customer will deploy the tracer at what we call the toe of the wells, the point that’s farthest away from where you started drilling. And what they’re really looking for there is a very qualitative answer when they’re taking the samples.

They just want to know, am I seeing that tracer in the production or not? And they’re using that to identify, you know, whether that stage at the furthest section out, whether that’s producing or not. And there may be some reasons that that toe, wouldn’t produce, you may have a blockage in the wellbore, sand may have flowed back into the well, but so that really helps the customer diagnose do I need to go in and do a clean out, do something operationally? Or, you know, if I’ve drilled a four mile lateral, and I know that the toe will produce a little bit later, versus some of the other parts of the well, sort of the heel section and middle sections, maybe they’re trying to see the timing of when that toe starts to produce and contribute. And that’s something again that can be done on a repeatable basis and that’s a relatively low cost service for us because we’re deploying a relatively small amount of chemical.

It’s a pretty simple test for us to run through the laboratory. On the other side, you’ve got your more complex studies where you may be using almost every chemical tracer in our portfolio and deploying them across a three or four well pad, and you’re taking the samples from the wells that you deployed the tracer in and then all of the offsets. And what you’re really trying to do is to assess the flow and the interaction and interconnectivity of the fracture network that you’ve created downhole. And that’s the type of study where you’re taking a lot of samples, the reporting is very, very detailed, and typically the customer will be, you know, doing some other diagnostics alongside TRACERS. There’s a little bit of a, you know, correlation exercise as well.

So we’re seeing the data that we have from TRACERS together with some other service companies that may have done a different diagnostic and making sure that, you know, the customer’s getting as clear of a picture, right, that they can with respect to the study. And that is something that’s done on more of a periodic basis. A customer may do that if they’ve made a significant change to their completion program or maybe they just acquired another company, that the assets are new to them, they’re trying to learn more about it. So those bigger studies are more periodic and tend to come when when a customer is seeing change in their in their operations, again, either within their existing well portfolio that that they might move into or around an acquisition or if they’re making a meaningful change to a completion design. So and and those, you know, those are bigger ticket, you know, bigger ticket studies.

And again, those will be used on maybe 5% to 10% of the wells that are out there would would trace in that way, whereas, you know, the the tow tracing for what we call, you know, flow assurance, that’s something that could be done on on every well.

Anna, Host, Emerging Growth Conference: Alright. Well, Ryan, thank you for this thorough presentation. We’ve really enjoyed it and we hope to see you on our conference again real soon.

Ryan Hummer, CEO and Director, NCS Multistage Holdings: All right. Looking forward to it. So, yeah, thanks again, Anna. Appreciate the discussion and look forward to sharing future updates later in the year.

Anna, Host, Emerging Growth Conference: Perfect. Thanks so much. Everyone, we’ll be right back.

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