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Investor Presentation

Peters & Co. Investor Conference

September 2018

September 2018 Investor Presentation / Cathedral Energy Services 2

Forward Looking StatementsCertain statements in this presentation including (i) statements that contain words such as “anticipate”, “could”, “expect”, “seek”, “may”, “intend”, “will”, “believe”, “should”, “project”, “forecast”, “plan” and similar expressions suggesting future outcomes, including the negatives thereof, (ii) statements that are based on current expectations and estimates about the markets in which the Cathedral operates and (iii) statements of belief, intentions and expectations about developments, results and events that will or may occur in the future, constitute “forward-looking statements” and are based on certain assumptions and analysis made by Cathedral. Forward-looking statements in this presentation include, but are not limited to, high performance directional drilling services, deliver Better Performance Every Day, proprietary technology, partnership approach with our customers, CLAW motor developments, focused on new motor models, performance advantages of motors, FUSION MWD developments, grow U.S. market share, growth opportunities in U.S. market, focus on U.S. market, pushing price increases, capacity constrained in U.S. market, any reference to capital expenditures including the amount, nature and timing thereof, executing on operational improvements, price increases and alternative pricing structures, customers being educated on operating limits, upgrading equipment, continued focus on commercializing our proprietary technologies, demand for higher performance equipment, executing on margin improvement opportunities, new capex facilitating revenue and growth opportunities, continued focus on improving and growing the business, strong balance sheet facilitates future growth opportunities, favorable valuation and financial metrics relative to industry peers, oil and natural gas prices and demand; and any other statements involving such matters. Suchforward-looking statements are subject to important risks and uncertainties, which are difficult to predict and that may affect Cathedral’s operations, including, but not limited to: the impact of general economic conditions in Canada and the United States; industry conditions, including the adoption of new environmental, safety and other laws and regulations and changes in how they are interpreted and enforced; volatility of oil and natural gas prices; oil and natural gas product supply and demand; risks inherent in Cathedral’s ability to generate sufficient cash flow from operations to meet its current and future obligations; increasedcompetition; the lack of availability of qualified personnel or labor unrest; fluctuation in foreign exchange or interest rates; stock market volatility; opportunities available to or pursued by Cathedral and other factors, many of which are beyond the control ofCathedral. Cathedral’s actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do transpire or occur, what benefits Cathedral will derive from there. Subject to applicable law, Cathedral disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

All forward-looking statements contained in this document are expressly qualified by this cautionary statement. Further informationabout the factors affecting forward-looking statements is available in Cathedral’s current Annual Information Form and AnnualReport which have been filed with Canadian provincial securities commissions and are available on www.sedar.com


Cathedral Overview

Established 1998

High performance directional drillingservices that deliver

“Better Performance Every Day”

Proprietary technology

Partnership approach with our customers to help them achieve higher drilling performance and lower project costs

North American footprint - 79% of revenue is U.S. based

C O M P A N Y O V E R V I E W


Geographical Focus

C O M P A N Y S T R A T E G Y


Cathedral SnapshotTSX: CETTTM Financial Performance1

Market Statistics Recent share price $0.9052 week high / low $2.02 / $0.88

Shares outstanding (basic) 49.5 million

Valuation Metrics Current market value $45 millionEnterprise value2 $47 millionTangible book value per share $2.01TTM EV/EBITDA multiple 3.9x

OwnershipInsiders 5.7%Institutions ~40%

$150 MillionRevenue

$12 MillionEBITDAS

Notes: 1. Revenue and EBITDA are for the 12 months ended June 30, 20182. Term Debt = $5.5 million, Cash = $3.3 million as at June 30, 2018

C O M P A N Y O V E R V I E W


How we deliver “Better Performance Every Day”


Proprietary MWD and Motor Platforms

• Experience• Culture• Training programs• Health and Safety Program

Catalyst™ Engineering Services

Financial strength,equipment fleet, geographical footprint

Collaborate with our customers to facilitate improved drilling performance

FUSION™ MWDnDURANCE®

Motors


CLAW Motor Developments

Focused on new models that deliver specific performance characteristics targeted at today’s active programs in higher flow, deeper drilling environments:

• Higher Rig Flow• Higher Speed• Higher Torque

Performance Advantages:• More torque than standard industry motors

• Able to accommodate higher flow rates

and differential pressure.

• Suitable for drilling single-run wells

(surface shoe to TD)

• Able to leverage higher rig pump rates



FUSION™ MWD Developments

FUSION EM – optimized design and materials enables longer runs in aggressive drilling fluids

FUSION EMc2 – integrates a mud-driven downhole generator which enables EM to continuously operate at high power levels without fear of depleting batteries, losing power and having to trip • Higher power central data processing

unit (“brain”)

• Ruggedized chassis, latch connectors, threaded barrel (“backbone”)

• Plug-and-play sensors and telemetry options

FUSION RP – higher torque rotary valve reduces industry-wide jamming tendency and enables pulse transmission in higher flow, deeper applications

FUSION LP – direct actuated main shaft capable of generating large pulses detectable throughout deeper drilling operations



Recent U.S. Performance Achievements


PERMIAN:Cathedral's new 7" Claw 400 (HS) delivering new levels of performance in the Permian. 4,841 ft. drilled in 24hr and 20 continuous stands without any slides in Wolfcamp formation.2018

One run 11,467' curve and lateral drilled with the 7" nDURANCECLAW in 156 drilling hrs with a TD at 20,102 ft.2018

One run curve and lateral drilled to 18,958 ft. with FUSION EMc2 High Output Telemetry in the Permian.2018

Another 7" CLAW success, drilling to 4,489 ft. in 24 hours in the Wolfcamp.2018

Another successful run with the nDURANCE 7" CLAW, drilling a one run curve and lateral (11,366 ft. interval) with a TD at 19,696 ft. in Spraberry.2018

ROCKIES:RECORD RUN: The fastest well recorded in the North Piceance, 6 day well spud to release. 2018

Our new 7.25" motor delivers 15% improvement in the Niobrara, drilling a 8.5" monobore to 12,070 ft. setting a 24 hr drilling record. 2018

MID CON:Utilizing the 5" CLAW, Cathedral drills a 4,909 ft. lateral in 53.25 hrs with a TD of 12,640 ft. -- a new level of performance in the challenging Mississippi Lime. 2018

Cathedral's first successful one run lateral to TD utilizing the proprietary CLAW 250 (XT) motor in Kingfisher County.2018


Challenging H1 2018

$(2,000)

$(1,000)

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2

EBIT

DAS

Rev

enue

Revenue and EBITDAS

US Rev Can Rev EBITDAS

Escalating costs (repairs, transport and labor)

Customer and job mix impacted margins

Extraordinary events in U.S. impacted Q2

F I N A N C I A L R E S U L T S


2018 YTD Results

$75 MillionRevenue

$2.5 MillionEBITDAS

2018 – Q2 YTD Financial Performance

$5.5 MillionTERM DEBT

Currently Capacity Constrained U.S. Day Rate Impacted by Job Mix

$3.3 MillionCASH

Targeted 2018 CapEx of $19 Million Net CapEx after Lost in Hole Equipment Proceeds estimated at $10.5 million

‐

500

1,000

1,500

2,000

2,500

3,000

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

DD Activity Days

Canada US

‐

2,000

4,000

6,000

8,000

10,000

12,000

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

DD Revenue Day Rates

Cdn DR (CND) US DR (USD)



Our Response

Challenge / Opportunity Response• Grow U.S. market share • Deliver Better Performance Every Day

• Very price competitive market in Canada

• Focus on U.S market• Pushing price increases and alternative

pricing structures• Capacity constrained in U.S. market • $19 million target CapEx program

• Improve equipment utilization• Cost escalation in U.S.

• Labor cost and availability • Supply chain costs and timing

• Executing on operational improvements• Price increases and alternative pricing

structures

• Equipment being run very hard• Repairs and maintenance• Recoveries for damages

• Customers being educated on operating limits

• Upgrading equipment• Demand for higher performance

equipment• Continued focus on commercializing our

proprietary technologies



Summary

Growth opportunities in U.S. market we can capitalize on based on our differentiated technology

Executing on margin improvement opportunities

New CapEx facilitating revenue and growth opportunities

Strong balance sheet facilitates future growth opportunities

Favorable valuation and financial metrics relative to industry peers

I N V E S T M E N T H I G H L I G H T S


Contact Information

Scott MacFarlane, President and CEO– Direct: 403.444.3534 – Email: [email protected] /or/

[email protected]

Michael Hill, CFO– Direct: 403.444.3536 – Email: [email protected] /or/

[email protected]


Thank you

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