HispanicBusiness

Despite the prospect of an oversupplied U.S. pressure pumping market in 2013, we believe Trican's U.S. operating margins will increase gradually throughout the year. We have undertaken substantial cost cutting initiatives that are expected to improve margins and have already started to see some of the benefits of these initiatives in the fourth quarter of 2012. In addition, we are expecting realized guar prices to continue to decline in the first quarter of 2013 as we work through our higher priced inventory.

We expect to grow our cementing and coiled tubing service lines in the U.S. during 2013 by increasing utilization on existing equipment. A substantial amount of new cementing and coiled tubing equipment was built in 2012, and with a full year of equipment availability in 2013, we anticipate sales from these service lines to increase as a percentage of total sales. An important part of our U.S. strategy is to become a full service pressure pumping company, and we will continue to execute on this strategy in 2013.

International

Based on the results of the 2013 contract tendering process for our Russian operations, we expect 2013 revenue to increase by approximately 25%, as measured in Russian roubles, compared to 2012. The estimated revenue increase is based on a 2% expected rise in overall activity combined with a 23% expected increase in average revenue per job. The expected increase in average revenue per job is the combined result of the trend towards larger fracturing job sizes in multi-stage completions, a shift in the sales mix toward more fracturing work relative to coiled tubing and cementing, and a modest increase in pricing.

A high rate of inflation in the Russian market and strong competition continues to challenge the Russian operation's profitability. However, we are anticipating moderate improvements in operating margins in 2013 as a result of a shift in our work scope to higher margin work and multi-stage activity, including completion tool revenue, and a continued focus on optimizing the Russian operations' cost structure.

2012 was a successful year for our two fracturing crews in Kazakhstan, and we expect the Kazakhstan pressure pumping market to be stable in 2013. Activity levels are expected to be down slightly; however, operating margins are expected to remain strong in this region.

Our Algeria operations improved modestly in 2012, in particular for our coiled tubing service line. We expect Algerian coiled tubing activity and pricing to remain stable in 2013 and we will look to secure additional contracts for this service line to keep equipment utilization strong. The cementing market in Algeria was very competitive in 2012 and we expect this to continue in 2013. We will look to increase pricing and utilization for our cementing equipment in Algeria in 2013. We will also continue to closely monitor the political instability in this region and react appropriately should the instability negatively impact our Algeria operations and, more importantly, the safety of our people.

Our 2013 strategy in Australia will be to continue to expand our cementing service line and build new customer relationships. We expect to see moderate growth in Australian cementing revenue and operating income improvements in 2013. However, Australia oil and gas activity continues to develop slowly and we do not expect this region to generate a meaningful level of profitability in 2013.

Through our joint business arrangements in Saudi Arabia and Colombia, we are working to establish our presence in these markets and expect to participate in pressure pumping tenders in 2013. Initially, we will look to add cementing and coiled tubing services, with an eventual goal of being full service pressure pumping companies in these regions.