Nine Energy Service : Fourth Quarter 2020 Earnings Call

Q4 2020

INVESTOR PRESENTATION

DISCLAIMER

Forward-Looking Statements & Non-GAAP Financial Measures

Certain statements in this presentation are forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words "could," "believe," "anticipate," "intend," "estimate," "expect," "may," "continue," "predict," "potential," "project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward- looking statements may include statements about the volatility of future oil and natural gas prices; our ability to successfully manage our growth, including risks and uncertainties associated with integrating and retaining key employees of the businesses we acquire; availability of skilled and qualified labor and key management personnel; our ability to accurately predict customer demand; competition in our industry; governmental regulation and taxation of the oil and natural gas industry; environmental liabilities; our ability to implement new technologies and services; availability and terms of capital; general economic conditions; operating hazards inherent in our industry; our financial strategy, budget, projections, operating results, cash flows and liquidity; and our plans, business strategy and objectives, expectations and intentions that are not historical. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements contained herein are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved.

For additional information regarding known material factors that could affect our operating results and performance, please see our final IPO prospectus, Current Reports on Form 8-K, Annual Report on Form 10-K and Quarterly Reports on Form 10-Q which are available at the SEC's website,http://www.sec.gov. Should one or more of these known material risks occur, or should the underlying assumptions change or prove incorrect, our actual results, performance, achievements or plans could differ materially from those expressed or implied in any forward-looking statement. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. All subsequent written or oral forward-looking statements concerning us are expressly qualified in their entirety by the cautionary statements above. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law. All information in this presentation is as of December 31, 2020 as indicated unless otherwise noted.

In addition to reporting financial results in accordance with GAAP, the Company has presented Adjusted EBITDA, Adjusted EBITDA margin and return on invested capital (ROIC). These are not recognized measures under, or an alternative to, GAAP. The Company's management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company. These non-GAAP measures are intended to provide additional information only and do not have any standard meaning prescribed by GAAP. Use of these terms may differ from similar measures reported by other companies. In particular, because of its limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to use to reinvest in growth of the Company's business, or as a measure of cash that will be available to meet the Company's obligations. These non-GAAP measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP.

Industry and Market Data

This presentation includes market data and other statistical information from third party sources, including independent industry publications, government publications and other published independent sources. Although the Company believes these third party sources are reliable as of their respective dates, the Company has not independently verified the accuracy or completeness of this information.

2

COMPANY OVERVIEW

• • Focused on building a full-cycle ROIC business

• • Asset-light business model with

  REVENUE BY SERVICE LINE2

• • Leveraged to increasing 26%

  strong barriers to entry and 100% 26% completions focused

  completion intensity including mega-well pads, lateral lengths and stage count

  Completion Tools

  Cementing

  Coiled Tubing

  Wireline

• • Super lateral, deep reach capable service offering and focus - agnostic to completion style

• • Able to provide downhole conveyance services coupled with forward-leaning technology

• • Diversified completion portfolio and geography

• 1 Revenue and Adjusted EBITDA include Magnum contribution as of 10/25/18 closing date.

• 2 Financials based on YTD through 12/31/20 Actuals

  See appendix for Adjusted EBITDA reconciliation

FINANCIAL OVERVIEW ($MM)

$827

$833

$(26)

2018A1

2019A

Revenue

Adj. EBITDA

2020A

4

EXECUTION OF STRATEGY

• • Grew top-line contribution of completion tools from ~3% in 2017 to ~26% in 2020

• • Reduced capex requirements (2018: ~$53mm; 2019: ~$62mm; 2020: ~$10mm)

• • Became 100% completions focused

• • Lowered headcount by ~68% from YE 2018 to YE2020

• • Added 100+ patents to portfolio and added robust R&D team

Nine/Beckman

Magnum & Frac Tech

Merger

AcquisitionsCommercialization of Dissolvable Stinger

Divested Well Services & Shut down Canadian Wireline

Nine IPO

6

1Includes $5.6mm of carryover from 2019 capex

7

NINE IS CAPABLE OF ADDRESSING 100% OF THE ONSHORE WELLS DRILLED IN NORTH AMERICA, REGARDLESS OF COMPLETION TYPE

Long-stringCementing

Large Diameter Coil + Memory Tools

PRE & POST STIMULATION

2021E New NA HZ

Wells Drilled: 8,9421

HORIZONTAL LATERAL

2021E NA Stage Count: 311,4151

Offering includes tools & equipment capable of completing super laterals (10,000 ft.+)

TOE OF THE WELL

2020E New NA HZ Wells Drilled: 8,9421

Extremely reliable in super laterals (10,000 ft.+)

MagnumDiskTM- Owned IPProprietary Liner Hanger ToolsBreakthruTM Casing Flotation Device - Owned IP

1 Spears & associates, Q4 2020.

ScorpionTM Composite Plug- Owned IPStingerTM Dissolvable Plug - Owned IP

MVPTM Dissolvable Plug - Owned IPScorpionTM Extended Range Plugs - Owned IP

SmartStart PLUS® - Strategic alliance

FlowGunTM - Owned IP

8

BARRIERS TO ENTRY AND OPERATIONAL EFFICIENCIES CONTINUE TO INCREASE

SINGLE-WELL PAD COMPLETIONS

6 wireline units required for 6 single wells

5.5 2014: Stages/Employee

Source: Company Estimates.

1 Assumes IP rates of 1,000 boe/d at $50 WTI and $300,000 per day/6-well pad

MULTI-WELL PAD COMPLETIONS

LONGER LATERALS | TIGHTER SPACING | PAD DRILLING

1 wireline unit on a pad of 6 wells

13 FY 2020: Stages/Employee

Increased capital efficiency →↑ROIC

• • Dissolvable plugs can save operators up to ~24 days per 6-well pad in reduced drill-out time & up to ~12

  days saved with clean-out run

• • Increases IRR for operators by significantly reducing cycle times and bringing product to market faster

• • Eliminates time and risk of drilling out plugs, as well as associated service costs

• • Significant reduces carbon footprint compared to composite plugs

9

FOOTPRINT IN EVERY MAJOR NAM BASIN

EXCELLENT NAM REACH CAPABILITYLOCALIZED TEAMS WITH REGIONAL KNOWLEDGE

~4% of overall revenue comes from outside NAM

Service Coverage Area and Revenue by Region1

Major Unconventional Basins

1 YTD as of 12/31/2020

Canada 1%

Bakken 3%

Rockies 2%

Permian 49%

MidCon 2%

Barnett 2%

Eagle Ford 5%

Marcellus / Utica 20%

Haynesville 12%

PRESSURE PUMPING

E-LINE

HOW DOES NINE BUILD MOATS AROUND THE BUSINESS?

Service + technology / equipment + people to service the longest laterals today and tomorrow

COMPLETION SOLUTIONS

Cementing ServicesCompletion ToolsWireline ServicesCoiled Tubing Services

PERFORMANCE BARRIERS

• • ~22,000 cementing jobs with on-time rate of ~91%1

• • ~241,200 isolation, stage 1 and casing flotation tools2

• • ~171,000 stages with a success rate of ~99%1

• • ~9,800 jobs and ~218 million running feet of coiled tubing with a success rate greater than 99%3 (Average lateral length/job ~22,200 feet)

EQUIPMENT BARRIERS → FIT FOR "DEEP REACH"

• • High-quality dedicated Midland, Delaware, Haynesville and Eagle Ford labs (to API specs) with testing capabilities to cement laterals over 10,000' long → Redundant pumps with 1,000 HP and dual-sided bulk plants

• • Owned IP of one of the most critical and prolific composite and dissolvable isolation tools for laterals reaching beyond 10,000' → Highly dependable "toe" and casing flotation solutions

• • Superior wellsite execution enabling company to have the NPT and efficient operations

• • Longest wireline completion of 19,000+ feet in lateral

• • ~ 86% of coil fleet is "Big Pipe" deep reach (≥2.375" diameter) → coupled with high HP frac pumps to push coil further downhole

• • Downhole memory tool tracking real-time data

1 Management estimates for time period from January 2014 to December 31, 2020. 2 Management estimates for time period from March 2011 to December 31, 2020. 3Management estimates for time period from April 2014 to December 31, 2020.

SLURRY	HIGHLIGHTS
Blend 27	Light-density slurry engineered to build strength 60% faster and deliver 40% higher compressive strength than similar density slurries Provides the lightness needed for depleted formations along with the strength of heavier density slurries at a fraction of the materials costs
CPT Trident	Low density slurry that eliminates costly beads while maintaining compressive strength and lighter density significantly lowering cost for operators. Allows for reduction in mileage and equipment and overall reducing the footprint on site as bead slurries require blenders to batch mix on site.
Nine Lite	Advanced formulation that delivers the lightness needed to cement mature geologies, along with the density required to hold form in the formation Can be mixed down to 10 pounds per gallon, speeding pump times and reducing NPT by as much as 48 hours per well

DEMONSTRATED MARKET SHARE GAINS THROUGHOUT CYCLES

2014

2015

2016

2017

2018

NINE HOLDS A COMPETITIVE ADVANTAGE IN US CEMENTING

2019

2020

Nine % rigs followed - South Texas 2

Nine % rigs followed - West Texas 2

YE 2014

35%

16%

23%

YE 2020

YE 2014

YE 2020

Source: 1 Management estimates of Nine frac stages relative to industry frac stages based on Spears & Associates, Q4 2020. Includes Magnum starting October 25, 2018.

2 Management estimates.

60%

Diverse, blue-chip customer base with minimal concentration

LOWEST TRIR IN COMPANY HISORY

2.47

1.5

0.77

0.30

2014

2015

2016

2017

2018

2019

2020

Balance of Organic Growth and Strategic M&A:

Augment technology portfolio + Enhance NAM footprint

ORGANIC GROWTH

• • Market penetration of technology portfolio, including new dissolvable and composite plug technology

• • Selective and deliberate deployment of capex for high- quality and differentiated equipment and facilities within the most active basins

• • Market share gains through service and technology

• • Securing and maintaining best talent in the industry

NINE PRESENCE

DISCIPLINED M&A

• • Target only best-in-class technology, companies and management teams

• • Competitive advantage securing and sourcing non- marketed deals

• • Entrepreneurs want to partner and stay with "like- minded" and nimble management team

PermianMidconNortheastBakkenRockiesCanadaEagle FordHaynesville International
Wireline
Cementing
Completion Tools
Coiled Tubing

DISSOLVABLE PLUG THESIS & OVERVIEW

NEUTRAL OR REDUCE

AFE

INCREASED

IRR

REDUCED

EMISSIONS

INCREASED

SAFETYWITH FEWER HUMANS AT SURFACE

TRADITIONAL COMPOSITE PLUG COMPLETION CAN BE ~18-38 DAYS PER WELLBORE

DRILLING & CEMENTING	WIRELINE & FRAC COMPLETE	COILED TUBING
OF WELLBORE	MULTISTAGE STIMULATION	OR STICK PIPE DRILLOUT
SCORPION
7-14 DAYS	7-14 DAYS

4-10 DAYS

START PRODUCTION

DISSOLVABLE PLUG COMPLETION CAN BE ~14-31 DAYS PER WELLBORE: A REDUCTION OF ~20%

Source: Management Estimates. Estimated days including rig-up and rig-down time when applicable. 1Assumes 1-3 days for potential clean-out

NINE STINGER™ DISSOLVABLE PLUG

PLUG OVERVIEW

• • Shorter design, decreasing plug size by over 70%

• • Predictable and reliable dissolution for entire addressable isolation tool market

• • Completely dissolvable, eliminating plug drill-out

MARKET & FINANCIAL OVERVIEW

• • High-volume product with the ability to address entire addressable plug market in both NAM land and abroad (1 stage = 1 plug)

• • Almost 100% free cash flow conversion ($1 of EBITDA = $1 Cash) and requires minimal capex to generate significant growth

• • Margin accretive to Nine

• • Strong patents and exclusive arrangements in place to protect IP design and material science

Mixed Area (High-temp/low-temp)

High-temp Coverage Area > 150ºF

Low-temp Coverage Area ≤ 150ºF

High-temp Coverage Area > 150ºF

CASE STUDY: FULL WELLBORE DEPLOYMENT IN PERMIAN

In efforts to reduce significant costs and risks associated with using composite plugs, a large diversified in the Permian Basin deployed Nine's Stinger Dissolvable plugs in 3, full wellbores averaging ~20,000 ft. MD.

All 123 Stinger plugs deployed achieved zonal isolation and degradation, with no downhole tags during the cleanout run.

The cleanout representative concluded that it was the best results they've experienced with dissolvable plugs.

Temperatures ranged from 100° to 150° F, with chlorides of approximately 20,000 ppm.

PROVEN DISSOLUTION AT ROOM TEMPERATURE

In the Marcellus Shale, a large independent deployed 10 Stinger Dissolvable plugs in a challenging, low-temperature (75° F) environment with chlorides ranging from 22,000 ppm - 58,000 ppm.

With maximum treating pressures reaching 8,200 psi and estimated differential pressures of 5,600 psi, all 10 plugs achieved zonal isolation.

No plugs were tagged during cleanout

and the combined return of all 10 Stingers was about the size of a dime.

Combined return of all 10 Stingers was about the size of a dime

SIGNIFICANT AND SCALABLE EMISSION REDUCTIONS

STINGER™ Dissolvable Frac Plug

DISSOLVABLE FRAC PLUGS ON A 6-WELL PAD TAKE 84 CARS OFF THE ROAD:

~404 METRIC TONS OF CO2E

source: ERM

DISSOLVABLE WITH NO CLEAN-OUT VS. CONVENTIONAL DRILL-OUT PER WELLBORE

Conventional

Dissolvable

CARBON FOOTPRINT OF 70-PLUG DEPLOYMENT IN METRIC TON CO2 EQUIVALENTS

The life-cycle carbon footprint of the dissolvable plug would be 91% smaller per wellbore than the conventional composite plug.

ENVIRONMENTAL RESULTS (ELIMINATION OF COILED TUBING)

DISSOLVABLE CLEAN-OUT VS. CONVENTIONAL DRILL-OUT PER WELLBORE

Conventional

Dissolvable

CARBON FOOTPRINT OF 70-PLUG DEPLOYMENT IN METRIC TON CO2 EQUIVALENTS

The life-cycle carbon footprint of the dissolvable plug is 18% smaller per wellbore than the conventional composite plug.

ENVIRONMENTAL RESULTS (DISSOLVABLE WITH CLEAN-OUT)

FINANCIAL OVERVIEW

REVENUE ($MM)ADJUSTED EBITDA ($MM)ADJ. EBITDA MARGIN

See appendix for Adjusted EBITDA and ROIC reconciliation.

2020 FINANCIAL AND OPERATIONAL HIGHLIGHTS

• • Year-end cash balance of $68.9mm and undrawn ABL

• • Grew percentage of US stages completed from ~17% in 2019 to ~23% in 2020

• • Organically expanded cementing service line into the Haynesville

• • From 2019 to 2020, Company's percentage of dissolvable plugs sold compared to composite plugs increased by 7% from Q1 to Q4 2020

• • Lowest TRIR in company history of 0.30

• • Repurchased $53.3mm par value of bonds for $14.6mm of cash, on average, representing 27% of par value

• • Reduced capex by ~84% year over year to $10.2mm

• • Successful in largely offsetting our capex with equipment sales. For the FY 2020, spent $9.4mm in cash capex compared to $7.6mm in proceeds from sales of PP&E and PP&E insurance proceeds

• • Generated ~$66.5mm in cash from the monetization of accounts receivable and inventory

31

12/31/20 CAPITALIZATION

PRO FORMA CAPITALIZATION
As of December 31, 2020 ($MM)
Cash	$68.9
Debt
ABL Credit Facility	0.0
Senior Unsecured Notes	346.7
Other Debt	1.9
Total debt	$348.6
Net Debt	$279.7
Total cash	$68.9
ABL availability	$37.9
Total liquidity	$106.8

COMMENTARY

• • During 2020, Company repurchased $53.3mm par value of bonds for $14.6mm of cash, on average, representing 27% of par value and leaving $346.7mm par value of bonds outstanding

• • As of December 31, 2020, Nine had $41.2mm in Accounts Receivable and $38.4mm in inventory

• • In 2020, Company successful in largely offsetting capital expenditures with equipment sales. For the full year 2020, Company spent $9.4 million in cash capex compared to $7.6 million in proceeds from sales of PP&E and PP&E insurance proceeds.

• • ABL remains undrawn

• • Nine is focused on balancing near-term liquidity with long-term refinancing, but priority remains to be the preservation of cash

Asset-light business model

Completions focused

Technology and service differentiation

Ability to service the most technically demanding wells

Returns-focused business philosophy

Access to entire addressable market

Leading market position across broad geographic footprint

Entrepreneurial, highly incentivized and aligned management team

Strategy works in every basin for every well

UNIQUE VALUE PROPOSITION

CLOSE TO PERFECTION. FAR FROM ORDINARY. DRIVEN TO SUCCEED.

APPENDIX

Year ended December 31
($ mm unless otherwise noted)	31-Dec-20	30-Sep-20	30-Jun-20	31-Mar-20	2020	2019	2018
EBITDA Reconciliation
Net income (loss)	($35.4)	($18.5)	($24.2)	($300.9)	($378.9)	($217.8)	($53.0)
Interest expense	8.6	9.1	9.2	9.8	36.8	39.8	22.3
Interest Income	(.02)	(.04)	(.2)	(.4)	(.6)	(.9)
Depreciation	7.7	7.8	8.4	8.5	32.4	50.5	54.3
Amortization	4.1	4.1	4.1	4.2	16.5	18.4	9.6
Provision (benefit) from income taxes	(.1)	(.04)	(.2)	(2.1)	(2.5)	(3.9)	2.4
EBITDA	($15.1)	$2.4	($2.8)	($280.9)	($296.4)	($113.8)	$35.5
Adjusted EBITDA Reconciliation
EBITDA	($15.1)	$2.4	($2.8)	($280.9)	($296.4)	($113.8)	$35.5
Impairment of property and equipment	-	-	-	-	-	66.2	45.7
Impairment of goodwill and other intangible assets	-	-	-	296.2	296.2	135.7	32.1
Transaction and integration costs	-	-	-	.1	0.1	13.0	10.3
Loss on sale of subsidiary	-	-	-	-	-	15.9	-
Loss or gains from the revaluation of contingent liabilities	(.5)	0.3	.9	(.4)	0.3	(21.2)	3.3
Gain on extinguishment of debt	(.3)	(15.8)	(11.6)	(10.1)	(37.8)	-	-
Loss on equity investment	-	-	-	-	-	-	0.3
Non-cash stock-based compensation expense	2.0	2.0	2.1	3.6	9.7	14.1	13.2
Gain (loss) on sale of property and equipment	.04	(0.5)	(1.8)	(.6)	(2.9)	(.5)	(1.7)
Legal fees and settlements	-	.02	.02	.04	.03	.3	2.4
Restructuring charges	.03	0.5	2.1	2.3	4.9	4.0	-
Adjusted EBITDA	($13.9)	($11.1)	($11.0)	$10.3	($25.8)	$113.0	$141.1
Revenue	62.0	49.5	52.7	146.6	310.9	832.9	827.2
% Adj. EBITDA margin	-22%	-22%	-21%	7%	-8%	14%	17%

($ MM UNLESS OTHERWISE NOTED)	Year ended December 31
31-Dec-20	30-Sep-20	30-Jun-20	31-Mar-20	2020	2019
After-tax net operating profit reconciliation:
Net Income (loss)	($35.4)	($18.5)	($24.2)	($300.9)	(378.9)	($217.8)
Add back:
Impairment of property and equipment	-	-	-	-	-	66.2
Impairment of goodwill	-	-	-	296.2	296.2	20.3
Impairment of intangibles	-	-	-	-	-	114.8
Interest expense	8.6	9.1	9.2	9.8	36.8	39.8
Interest Income	(0.2)	(.04)	(.2)	(.4)	(.6)	(.9)
Transaction and integration costs	-	-	-	.1	.1	13.0
Restructuring charges	0.03	0.5	2.1	2.3	4.9	4.0
Gain on extinguishment of debt	(0.3)	(15.8)	(11.6)	(10.1)	(37.8)
Loss on sale of subsidiaries	-	-	-	-	-	15.9
Benefit of deferred income taxes	-	-	-	(1.6)	(1.6)	(4.3)
After-tax net operating profit	($27.1)	($24.8)	($24.7)	($4.5)	($81.0)	$51.0
Total capital as of prior year-end / period-end:
Total stockholders' equity	53.6	70.0	91.9	389.9	389.9	594.8
Total debt	349.4	372.6	386.2	400.0	400.0	435.0
Less: Cash and cash equivalents	(80.3)	(88.7)	(90.1)	(93.0)	(93.0)	(63.6)
Total capital as of prior period-end	322.7	$353.9	$387.9	$696.9	696.9	$966.2
Total capital as of period-end / year-end:
Total stockholders' equity	20.4	53.6	70.0	91.9	20.4	389.9
Total debt	348.6	349.4	372.6	386.2	348.6	400.0
Less: Cash and cash equivalents	(68.9)	(80.3)	(88.7)	(90.1)	(68.9)	(93.0)
Total capital as of period-end	300.2	$322.7	$353.9	$387.9	$300.2	$696.9
Average total capital	311.4	$338.3	$370.9	$542.4	$498.5	$831.5
ROIC	-35%	-29%	-27%	-3%	-16%	6%