CE Franklin - Copic Oilfield Services Conference ... - CE Franklin Ltd.

AMEX (CFK)TSX (CFT)COPIC Oilfield Services ConferenceMay 31, 2006Toronto, ON CanadaPresentation by:Michael WestChairman, President and CEO

Forward Looking InformationThe information in this presentation may contain “forward-lookingstatements” within the meaning of Section 27A of the Securities Act of1933 and Section 21E of the Securities Exchange Act of 1934. Allstatements, other than statements of historical facts, that addressactivities, events, outcomes and other matters that CE Franklin plans,expects, intends, assumes, believes, budgets, predicts, forecasts, projects,estimates or anticipates (and other similar expressions) will, should or mayoccur in the future are forward-looking statements. These forward-lookingstatements are based on management’s current belief, based on currentlyavailable information, as to the outcome and timing of future events. Whenconsidering forward-looking statements, you should keep in mind the riskfactors and other cautionary statements and refer to the Form 20-F forfurther detail.

CE Franklin Ltd.• Trading– AMEX (CFK)– TSX (CFT)• 17.9 million total sharesoutstanding• 50% (fully diluted) shareholder isSmith International Inc. (Fortune500 Company)• 41 locations in western Canada

Where We Are LocatedBRITISHCOLUMBIAALBERTASASK.MANITOBAONTARIO

Top Active Operators2005CompanyEncanaCannatHuskyApacheBurlingtonTalismanDevonNexenPenn WestParamountDevon ARL1997CompanyRenaissancePCPCannatWascanaCrestarTalismanNorcenGulfPocoAnderson

Financial Results(in thousands of Canadian dollars, except per share data)Three monthsended March 31Year-ended December 31Unaudited 2006 2005 2004 2003 2002Sales 176,357 482,403 338,701 257,125 255,128Income (loss) fromcontinuing operations 8,879 18,864 6,142 1,300 (2,023)Income (loss) fromdiscontinued operations - - (27) (879) (470)Net income (loss) 8,879 18,864 6,115 421 (2,493)Net income (loss) per sharefrom continuing operationsBasic $ 0.50 $ 1.09 $ 0.36 $ 0.07 $ (0.12)Diluted $ 0.47 $ 1.01 $ 0.35 $ 0.07 $ (0.12)% of SalesGross profit 18.3% 18.9% 17.8% 16.9% 13.7%EBITDA 8.6% 7.5% 4.7% 3.1% 0.7%Net income 5.0% 3.9% 1.8% 0.2% (1.0)%Return on equity 29.0% 12.0% 0.9% (5.2)%

Revenue Trend45%40%35%30%25%20%15%10%5%0%2003 2004 2005Well Completions Rig Counts Revenue

Balance Sheet(in thousands of Canadian dollars, except per share amounts)As at March 31 As at December 31Unaudited 2006 2005 2004Current assets 213,687 179,988 131,407Total assets 229,769 192,508 145,509Current liabilities,excluding debt 90,876 86,859 63,861Debt (1) 53,589 29,717 26,970Other - - 612Shareholders' equity 85,304 75,932 54,066% CapitalizationDebt 38.6% 28.1% 33.3%Equity 61.4% 71.9% 66.7%(1) Includes demand bank operating loan of $52.2; 2006 and $29.1 million; 2005 & 2004.

CFK Price and Volume

Trending20002001 *2002 *2003 *2004 *2005 *Oil Price (US$)30.2019.5129.4232.7943.4561.04Gas Price (Cdn$)5.343.525.976.885.909.01Well Completions200020012002200320042005Oil5,4964,7023,8564,4874,4354,835Gas8,92911,2009,12113,41815,68315,403Total (excluding dry/service)14,39515,90212,97717,90520,11820,238*As at December 31

Activity LevelsProjected to remain strong26,725(wells completed excluding dry and service)20,118 20,23817,90514,39515,90212,9772000 2001 2002 2003 2004 2005 2006*FSource: PSACWells Completed Oil Natural Gas

Results of actions• Total revenue per employee– 2002 = $799k– 2003 = $884k– 2004 = $1.0 million– 2005 = $1.3 million– 2006 = $440k (Q1)• Revenue per employee has improved by58% the year ended 2005 versus 2002

Results of actions (CONT)• Product margins in the start of 2002 were13.7% compared to 17.8% in 2004 and18.9% in 2005• Incremental revenue growth of 15.1% toEBITDA 2005 versus 2002• EBITDA as % of revenue in 2002 was 0.7%compared to 7.5% in 2005

Employee Turnover Statistics• The turnover statistics for three key positions forthe last three years reflect an improving workplace:Position 2002 2003 20042005BranchManagers26% 22% 0%0%Sales Staff 25% 4% 4%4%Executive 8% 0% 0%0%

Management System• ISO 9001:2000• COR Certified• IRP 16 Certified and Trained• SOX 404

Amortization Savings in 2006• 1999 to 2001 invested $16 million in enterprisesoftware system and eCommerce initiative• Fully amortized at the end of 2005– $2 million reduction in amortization expense– After tax savings = $1.2 million or $0.07 ashare diluted• SOX 404 initiative will cost the Companybetween $1.5 million and $2.0 million in 2006;or between $0.05 to $0.07 per share diluted

Board of Directors• David A. Dyck (2004)• Michael J.C. Hogan (2006)• John J. Kennedy (1999)• Robert McClinton (2006)• Douglas L. Rock (1999)• Victor J. Stobbe (2003)• Michael S. West (2002)

Strategic direction• Geographic growth• Service diversification• Product diversification• Partnerships, joint venturesand acquisitions• Oil Sands MRO

Summary• Solid track record• Outperform the market• Market to remain strong• Areas for untapped growth• Solid partnerships

COPIC Oilfield Services ConferenceMay 31, 2006Toronto, ON CanadaAMEX (CFK)TSX (CFT)Presentation by:Michael WestChairman, President and CEO