2. FORWARD LOOKING INFORMATION
This presentation contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements")
within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements.
Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective",
"continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future
outcomes. In particular, this presentation contains forward-looking statements relating to: future growth; results of operations; operational and financial
performance; projected capital expenditures and commitments and the financing thereof; expansion; increases in revenue; equipment delivery and deployment
dates; effect of rebranding; geographic allocation of equipment; customer commitments; ability to establish a working relationship with third party suppliers;
expectations regarding the Corporation's ability to raise capital and to increase its equipment fleet; benefits associated with financial results; activity levels; business
strategy; successful integration of structural changes; restructuring plans; organic growth potential; acquisitions and availability of insurance coverage. Aveda
believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements should not be unduly relied upon.
Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements.
Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and
other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this presentation in connection with the
forward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and
assumptions include, but are not limited to:
• the performance of Aveda’s businesses, including current business and economic trends;
• oil and natural gas commodity prices and production levels;
• capital expenditure programs and other expenditures by Aveda and its customers:
• the ability of Aveda to retain and hire qualified personnel;
• the ability of Aveda to obtain parts, consumables, equipment, technology, and supplies in a timely manner to carry out its activities;
• the ability of Aveda to maintain good working relationships with key suppliers;
• the ability of Aveda to market its services successfully to existing and new customers;
• the ability of Aveda to obtain timely financing on acceptable terms;
• currency exchange and interest rates;
• risks associated with foreign operations;
• changes under governmental regulatory regimes and tax, environmental and other laws in Canada and the United States; and
• a stable competitive environment.
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such
forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda’s actual performance and financial results in
future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, the risks identified by Aveda’s annual information form and management discussion and analysis for the year ended
December 31, 2011 (the "MD&A") and contained herein under the heading "Risk Factors". Any forward-looking statements are made as of the date hereof and,
except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise. 2
3. COMPANY OVERVIEW
Aveda Transportation and Energy Services (“Aveda” or the “Company”) is a growing provider of specialized oilfield
hauling and rentals to the US and Western Canadian oil and gas industry
Aveda was founded in 1994, went public in 2006 and was recapitalized in 2011
The Company is well positioned to take advantage of attractive organic and acquisition growth opportunities
throughout North America
Multiple cross-over business opportunities achieved through oilfield hauling and rental business units
Oilfield Hauling Oilfield Rentals
Rig moving Matting
Heavy hauling Tanks
Hot shot services Light towers
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4. MANAGEMENT AND BOARD OF DIRECTORS
Management Independent Board Members
David Werklund – Chairman, Interim President and CEO Martin Cheyne
Has been the Chairman of Aveda since 2006 and was appointed Has more than 25 years of diversified oil and gas experience
Interim President and CEO of Aveda in September 2011 Founder of DeeThree Exploration Ltd.
Began career in 1965 at Shell Canada as a Production Operator Former President and Director of Dual Exploration Inc. and Devlan
Founder and Chairman of the Board of Directors of CCS Exploration Inc.; both purchased by Cyries Exploration Inc.
Corporation (now Tervita Corporation)
Co-Founder of Concord Well Servicing
Doug McCartney
Founder & Executive Chairman of Werklund Capital
Managing Partner of Burstall Winger LLP
The 2005 Ernst & Young's Canadian Entrepreneur of the Year
Practices in the areas of securities and corporate finance and
Bharat Mahajan – CFO corporate and commercial law
Joined Aveda in October 2011 Director or officer of several public and private companies
Held several positions with Magna International overseeing
various international growth initiatives
Paul Shelley
Former CFO of several oilfield service companies, including
WellPoint Systems Inc. and Norex Exploration Services Inc. President of Convinco Financial Ltd.
Former Senior Vice President, Corporate Development at Kos Corp.
Investments Ltd.
Wayne Thompson – Vice President, Operations
25 years experience finance experience with GE Capital and RBC
More than 40 years of oilfield experience
Previously President DC Energy Oilfield Rentals
Former owner and CEO Radar Well Servicing
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5. MANAGEMENT TRACK RECORD
David Werklund founded CCS Corporation (now Tervita Corporation) in 1984 and built it largely through the
consolidation of several oilfield services companies and organic growth
CCS privatized in 2007 for approximately C$3.5 billion (the largest Trust privatization in Canadian history)
Historical Shareholder Returns CCS Selected Historical Acquisitions
CAGR Total Return
CCS 24% 2490%
Source: FactSet 5
6. CAPITALIZATION SNAPSHOT
Capitalization Balance Sheet Summary (1)
Share price (June 4, 2012) $2.80 Operating Line Available ($mm) $12.3
Shares Outstanding Basic (mm)(1) 10.0 Property and Equipment ($mm) $35.3
Shares Outstanding Fully Diluted (mm)(1) 10.7 Working Capital ($mm) $22.5
FD Market Capitalization ($mm) $30.1 Total Assets/Tangible Assets ($mm) $67.2/$66.8
Net Debt ($mm)(1)
Loans and Borrowings $22.7
Convertible Debenture (face)(2) $4.7 Shareholder Summary (1)(4)
Cash(1)(3) -$11.9 Werklund Capital Corp 36.7%
Total Net Debt ($mm) $15.5 Other Insiders 16.5%
Enterprise Value ($mm) $45.6 Total Insiders 53.2%
(1) At March 31, 2012 and accounts for June 2012 $8mm bought deal financing
(2) Convertible into 1,850,980 common shares at $2.55
(3) Includes potential cash from exercise of all options and warrants of $2.7 million and adjusted for proceeds from June 2012 financing
(4) Calculated based on total basic shares outstanding as at March 31, 2012
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7. OILFIELD HAULING MARKET
More than 2,500 Active Rigs in North America(1)
North American Active
Aveda has a targeted growth Land Rig Count(1)
plan that is focused on targeting WCSB 2012 2,565
oil/liquid rich weighted basins 2011 2,252
across North America 2010 1,772
Based on a recent market 616 2009 1,826
analysis, Aveda estimates each
Bakken
rig moves approximately 1.4
times per month or 17 times per 207
year (42,500 moves per year)
Aveda’s reputation, customer 137 Marcellus
relationships and quality service
results in high utilization of its
Barnett
transportation equipment
55
Active in Play / Region
Recently Opened Office
301
Expansion Opportunity 256 Eagle Ford
Oil Focused Permian
NGL Focused
7
(1) Active rigs as at January 31, 2012; as per Baker Hughes & CAODC
8. NORTH AMERICAN OPERATIONS
Eight offices located in the heart
Oilfield Hauling Locations
of the key North American
resource plays
Significant expansion opportunities
especially in U.S. markets
Flexible workforce can be SLAVE LAKE
transferred cross border to high
activity areas
GRAND PRAIRIE
Experienced team of more than
200 employees NISKU
MELITA
Asset Allocation CALGARY
MINERAL WELLS WILLIAMSPORT
30%
PLEASANTON
70%
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U.S. Canada
9. OILFIELD HAULING OVERVIEW
Modern, well maintained fleet
2011: 390 pieces of equipment in fleet (114
power units)
2012: 63 pieces of equipment on order (25
power units)
203 employees (120 drivers)
Fragmented industry makes for attractive
consolidation opportunities
Primary competitors include TransForce, Mullen, Flint
and regional specialty haulers
390 Pieces of Equipment in Hauling Fleet Blue Chip Customer Base
Trailer 276
Winch Tractor 71
Bed Truck 26
Picker 15
All-Terrain 2
0 50 100 150 200 250 300 9
10. OILFIELD HAULING CASE STUDY
Aveda has outperformed its competitors as a result of:
Newer, more specialized equipment
Experienced personnel
Planning and communications
Ability to meet industry demands for heavier equipment and larger loads
40 mile rig move – Marcellus Shale (1)
Competitor Aveda
11 days 4 days
The Result:
11% price premium for Aveda
64% reduction in rig downtime for customer
(1) 1,250 hp, jackknife triple rig, ~ 70 loads
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11. OILFIELD RENTALS OVERVIEW
Modern, well maintained equipment with 360
pieces in the rentals fleet
Currently contributes approximately 5% of total
revenue
Plan to build critical mass though the
acquisition of competitors with similar or
complementary equipment
Typical acquisition multiples identified at 1.5x
to 3.2x TTM EBITDA
360 Pieces of Equipment in Rental Fleet Blue Chip Customer Base
Rig Mats 162
400 Bbl Tanks 92
Light Towers 62
Miscellaneous 37
Generators 8
0 50 100 150 200
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12. GROWTH STRATEGY
Capital Expenditure Program
$16 million capital budget for 2012
$14 million for organic oilfield hauling fleet expansion
Investing $1 million in transportation management systems
Allocating $1 million for facility and leasehold improvements
Organic Growth Initiatives
Additional $10 million in near term growth CapEx being evaluated
Existing Customers
Rig moving and ancillary equipment (e.g. tanks, trailers, etc.)
Implement transportation management systems (e.g. GPS, satellite communications)
Expansion into New Areas
Target high activity resource plays focused on oil and NGL exploration
Growth Through Acquisitions
Additional $15 - $35 million in near term growth CapEx being evaluated
Acquire complementary fleets in both new and existing geographies
Typical acquisition multiples of 1.5x to 3.5x TTM EBITDA
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13. FINANCIAL PERFORMANCE: REVENUE
Aveda experienced 81% growth in 2011 revenue vs. 2010
Expansion into U.S. resource plays and increasing utilization
Growth in number of rigs in key operating areas/plays 2011 vs. 2010
Western Canada up 13%, Marcellus up 4%
Annual Historical Revenue ($mm) 2011 Revenue by Geography
$80
$72.2
$70
$60
$49.2 58%
Revenue ($mm)
$50
42%
$39.8
$40
$33.9
$30 $25.9
$20
$10
$0 Canada US
2007 2008 2009 2010 2011
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14. FINANCIAL PERFORMANCE: EBITDA
Higher utilization across North America Annual EBITDA ($mm)
$12.0 $11.3 24%
Premium pricing in key resource plays $10.0 20%
16%
$8.0 16%
EBITDA Margin
EBITDA ($mm)
Operational efficiencies resulting in
increased margins $6.0 11% 12%
$4.0 6% 8%
$4.2
$2.0 4%
$2.1
$0.0 0%
2009 2010 2011
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15. RECAPITALIZATION OVERVIEW
December 2011 Transaction Overview Proforma Werklund Capital Ownership
$3.0mm Common Shares Pre Financing WCC Ownership % (1)
With Werklund Capital @ $2.40 per share 3.5mm shares 28.2%
$4.7mm Convertible Debenture Add: Equity Financing
With Werklund Capital @ 4%, due Dec
0.1mm shares 0.9%
2014, convertible @ $2.55
Add: Convertible Debentures (assume exercised)
$35.0mm Operating Facility
1.9mm shares 14.6%
With PNC Bank @ prime + 1.25%
Add: Dilutive Securities
$5.0mm Accordion
0.2mm shares 1.3%
With PNC Bank @ prime + 1.25%
Total Share Ownership (FD) (Post May 2012 financing)
5.7mm shares 45.1%
1)Assumes 12.7mm shares post conversion of the convertible debentures
and exercise of options and warrants.
Closed $48
million in
financing
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16. ATTRACTIVE VALUATION
*Source: Factset, Bloomberg and company filings
1) Share price as of May 17, 2012
2) Enterprise Value calculated as market cap plus total debt minus cash
3) Estimates based on consensus research estimates 16
17. INVESTMENT HIGHLIGHTS
Proven management team with a history of value creation
Solid industry fundamentals supported by strong commodity prices
Clean balance sheet to support near-term growth initiatives
Significant growth opportunities across emerging oil-weighted resource plays
Flexible and experienced workforce to capture a range of growth opportunities
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18. CONTACT
Bharat Mahajan, CA
Chief Financial Officer
Aveda Transportation and Energy Services
Suite 725, 435 – 4th Avenue SW
Calgary, AB
T2P 3A8
(403) 264-5769
bharat.mahajan@avedaenergy.com
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