Nine Energy Service : Second Quarter 2020 Investor Presentation

NINE ENERGY SERVICE INVESTOR PRESENTATION Q2 2020

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 June 30, 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.

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COMPANY OVERVIEW

NINE COMPANY OVERVIEW

OUR COMPANY

• Focused on building a full-cycle ROIC business
• Asset-lightbusiness model with strong barriers to entry and 100% completions focused
• Leveraged to increasing completion intensity including mega-well pads, lateral lengths and stage count
• 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

FINANCIAL OVERVIEW ($MM)				PRO FORMA REVENUE BY SERVICE LINE3
$827	$833				Completion Tools
					24%
Adj.	Adj.		Adj.	Cementing
	35%
EBITDA	EBITDA	$399	EBITDA
Margin	Margin	Margin
17%	14%		0%

$141	$113
		$0	Wireline
			27%	Coiled Tubing
2018A1	2019A2	H1 20 Annualized
	14%

Revenue Adj. EBITDA

1Revenue and Adjusted EBITDA include Magnum contribution as of 10/25/18 closing date. 2Financials based on actuals YTD through 12/31/19; 3Financials based on YTD through 6/30/20 Actuals	4
See appendix for Adjusted EBITDA reconciliation

STRATEGY

DRIVING VALUE FOR CONSTITUENTS

	CUSTOMERS
	Ability to decrease
	cost to complete
	and increase EUR
	VALUE
EMPLOYEES	INVESTORS
Socioeconomic	Financial
movement & career	Sustainability
progression	& Returns

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TECHNOLOGY-DRIVEN COMPLETIONS OFFERING

Nine is capable of addressing 100% of the onshore wells drilled in North America, regardless of completion type

PRE & POST STIMULATION		HORIZONTAL LATERAL		TOE OF THE WELL
		Large Diameter Coil + Memory Tools

Long-string

Cementing

	Offering includes tools & equipment capable of	Extremely reliable in super
Proprietary	completing super laterals (10,000 ft.+)	laterals (10,000 ft.+)
Liner
Hanger
Tools
	Scorpion Composite Plug-	MVPTM Dissolvable Plug -	SmartStart - Strategic alliance
	Owned IP	Owned IP

MagnumDiskTM	StingerTM Dissolvable Plug -	Scorpion Extended Range Plugs	FlowGun - Owned IP
- Owned IP	Owned IP	- Owned IP

BreakthruTM Casing Flotation Device

- Owned IP

2020E New NA HZ Wells Drilled: 8,7371

2020E NA Stage Count: 295,7791

2020E New NA HZ Wells Drilled: 8,7371

1 Spears & Associates, Q2 2020.

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MULTI-WELL PADS CONCENTRATE RISK

BARRIERS TO ENTRY AND OPERATIONAL EFFICIENCIES CONTINUE TO INCREASE

SINGLE-WELL PAD COMPLETIONS

MULTI-WELL PAD COMPLETIONS

LONGER LATERALS • TIGHTER SPACING • PAD DRILLING

Concentration of dollars / pad + exponential impact of Non-Productive Time = highly selective customers

• Total well cost: $5-$7mm
• ~8,000 feet of lateral length completed
• 40 stages
• 12mm pounds of sand
• 1,000 boe/d oil produced

E&P Revenue/Day = ~$50,0001

• Total pad cost: $30-$42mm
• ~48,000 feet of lateral length completed
• 240 stages
• 72mm pounds of sand
• 6,000 boe/d oil produced

E&P Revenue/Day = ~$300,0001

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

6 single wells required 6 wireline units 2014: Stages/Employee = 5.5

Increased capital efficiency → ↑ROIC

6 wells on a pad requires 1 wireline unit

Q2 2020: Stages/Employee = 10

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

BROAD NAM FOOTPRINT

FOOTPRINT IN EVERY MAJOR NAM BASIN

EXCELLENT NAM REACH CAPABILITY

LOCALIZED TEAMS WITH REGIONAL KNOWLEDGE

Canada 2%

Bakken 4%

Rockies 2%

Marcellus / Utica 17%

MidCon 6%

Permian 49%	Barnett 1%
Haynesville 9%
~3% of overall revenue comes from outside NAM

Eagle Ford 7%

Service Coverage Area and Revenue by Region1

Major Unconventional Basins

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1 YTD as of 12/31/2019 and pro forma for Production Solutions divestiture.

ASSET LIGHT BUSINESS MODEL

PRESSURE PUMPING

E-LINE

BARRIERS TO ENTRY THROUGH TECHNOLOGY AND SERVICE

HOW DOES NINE BUILD MOATS AROUND THE BUSINESS?

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

COMPLETION SOLUTIONS	PERFORMANCE BARRIERS
Cementing Services	• ~21,100 cementing jobs with on-
	time rate of ~91%1

Completion Tools	•	~215,200 isolation, stage 1 and
		casing flotation tools and ~22,500
		frac sleeves deployed2
Wireline Services	•	~164,400 stages with a success rate
		of ~99%1

Coiled Tubing Services	• ~9,500 jobs and ~209 million
	running feet of coiled tubing with a
	success rate greater than 99%3
	(Average lateral length/job
	~22,000 feet)

EQUIPMENT BARRIERS → FIT FOR "DEEP REACH"

• High-qualitydedicated Midland, Delaware, Midcon 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 June 30, 2020. 2 Management estimates for time period from March 2011 to June 30, 2020. 3Management estimates for time

period from April 2014 to June 30, 2020.

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ADVANCEMENTS IN CEMENTING SOLUTIONS

SLURRY	HIGHLIGHTS
	Light-density slurry engineered to build strength
	60% faster and deliver 40% higher compressive
Blend 27	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
	Low density slurry that eliminates costly beads
	while maintaining compressive strength and
	lighter density significantly lowering cost for
CPT Trident	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.
	Advanced formulation that delivers the lightness
	needed to cement mature geologies, along with
	the density required to hold form in the
Nine Lite	formation
Can be mixed down to 10 pounds per gallon,
	speeding pump times and reducing NPT by as
	much as 48 hours per well

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CONSISTENT PROFITABLE MARKET SHARE GAINS

Demonstrated Market Share Gains Throughout Cycles

+200%		17%	18%
	16%
11%

8%

6%6%

2014

2015

2016

2017

2018

2019

Q2 2020

Nine US Wireline & Completion Tools % of stages completed1

Nine Holds a Competitive Advantage in US Cementing

Nine % rigs followed - South Texas2			Nine % rigs followed - West Texas2
									21%
		6%			10%	110%
		18%
17%
	YE 2014	6/30/2020				YE 2014	6/30/2020

Source: 1Management estimates of Nine frac stages relative to industry frac stages based on Spears & Associates, Q2 2020. Includes Magnum starting October 25, 2018. 2Management	13
estimates.

CUSTOMERS WHO TRUST US

Diverse, blue-chip customer base with minimal concentration

CONTINUED EXCELLENCE IN SAFETY

NINE TRIR

2.47
	1.5	1.26	1.44
				0.88	0.77
2014	2015	2016	2017	2018	2019

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RETURNS-FOCUSED GROWTH PHILOSOPHY

Balance of Organic Growth and Strategic M&A:

Augment technology portfolio + Enhance NAM footprint

ORGANIC GROWTH		DISCIPLINED M&A

• 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

• 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

NINE PRESENCE

Permian	Midcon	Northeast	Bakken	Rockies	Canada	Eagle Ford Haynesville International

Wireline

Cementing

Completion Tools

Coiled Tubing

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DISSOLVABLE PLUG THESIS & OVERVIEW

THE PLUG REVOLUTION

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NINE DISSOLVABLE PLUG BENEFITS

NEUTRAL OR REDUCE

AFE

INCREASED

IRR

REDUCED

EMISSIONS

INCREASED

SAFETYWITH FEWER HUMANS AT SURFACE

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DISSOLVABLES REDUCE LIFECYCLE OF WELL

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

START

PRODUCTION

7-14 DAYS

7-14 DAYS

4-10 DAYS

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

DRILLING & CEMENTING	WIRELINE & FRAC COMPLETE	ELIMINATIONOF
OF WELLBORE	MULTISTAGE STIMULATION	DRILL-OUT
	STINGER

START

PRODUCTION

7-14 DAYS

7-14 DAYS

0-3 DAYS1

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

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NEW GENERATION OF DISSOLVABLE PLUGS

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-volumeproduct 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

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NAM DISSOLVABLE PLUG MARKET

Mixed Area (High-temp/low-temp)

High-temp Coverage Area > 150ºF

Low-temp Coverage Area ≤ 150ºF

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INTERNATIONAL MARKET

ARGENTINA

SAUDI ARABIA

High-temp Coverage Area > 150ºF

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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.

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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

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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

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source: ERM

ENVIRONMENTAL RESULTS (ELIMINATION OF COILED TUBING)

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

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

74,146	6,873 kg
kg CO2eq	CO2eq

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

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source: ERM

ENVIRONMENTAL RESULTS (DISSOLVABLE WITH CLEAN-OUT)

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

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

74,146 kg	60,843 kg
CO2eq	CO2eq

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

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source: ERM

FINANCIAL OVERVIEW

Q2 2020 FINANCIAL SNAPSHOT

REVENUE

ADJ. EBITDA

CASH BALANCE

Q2 2020 ($MM)

$53

Q2 2020

Q2 2020

$(11)

$89

Q2 2020

FINANCIAL & OPERATIONAL PERFORMANCE

• Maintained sizeable cash balance with current cash position as of 6/30/20 of $88.7 million, as well as $39.4 million of accounts receivable
• Significant NAM activity declines of ~70% quarter over quarter, most evident in the Permian Basin
• Sequential revenue declines month over month throughout the year, and believe we are at or near the bottom
• Continue to gain ground with the commercialization of the low-temp dissolvable plug and commercialization of high- temperature dissolvable plug is complete
• Activity reductions affected revenue and profitability across service lines with the largest revenue declines coming in coiled tubing and wireline
• • Activity declines ranged from ~53 % - 76% and pricing declines ranged from 1% - 22%

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6/30/20 CAPITALIZATION

PRO FORMA CAPITALIZATION

	As of June 30, 2020
	($MM)
Cash	$88.7
Debt
ABL Credit Facility	0.0
Senior Unsecured Notes	363.9
Other Debt	2.3
Total debt	$366.2
Net Debt	$277.5
Total cash	$88.7
ABL availability	$44.8
Total liquidity	$133.5

COMMENTARY

• ABL credit facility undrawn
• Total liquidity of $133.5 million as of June 30, 2020
• $39.4mm of Accounts Receivable and $59.3mm of inventory as of June 30, 2020
• During Q1, repurchased ~$13.8 million of the senior notes for a repurchase price of ~$3.5 million in cash, excluding accrued interest
• Subsequent to 3/31/20, repurchased an additional $15.9 million of the senior notes for a repurchase price of ~$3.9 million in cash, excluding accrued interest
• Company continues to be focused on generating through-cycle returns and generating free cash flow

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UNIQUE VALUE PROPOSITION

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

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

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APPENDIX

OUR LEGACY

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NINE ADJ. EBITDA RECONCILIATION

			Year ended December 31
($ mm unless otherwise noted)	30-Jun-20	31-Mar-20	2019	2018
EBITDA Reconciliation
Net income (loss)	($24.2)	($300.9)	($217.8)	($53.0)
Interest expense	9.2	9.8	39.8	22.3
Interest Income	(.2)	(.4)	(.9)
Depreciation	8.4	8.5	50.5	54.3
Amortization	4.1	4.2	18.4	9.6
Provision (benefit) from income taxes	(.2)	(2.1)	(3.9)	2.4
EBITDA	($2.8)	($280.9)	($113.8)	$35.5
Adjusted EBITDA Reconciliation
EBITDA	($2.8)	($280.9)	($113.8)	$35.5
Impairment of property and equipment	-	-	66.2	45.7
Impairment of goodwill and other intangible assets	-	296.2	135.7	32.1
Transaction and integration costs	-	.1	13.0	10.3
Loss on sale of subsidiary	-	-	15.9	-
Loss or gains from the revaluation of contingent liabilities	.9	(.4)	(21.2)	3.3
Gain on extinguishment of debt	(11.6)	(10.1)	-	-
Loss on equity investment	-	-	-	0.3
Non-cashstock-based compensation expense	2.1	3.6	14.1	13.2
Gain (loss) on sale of property and equipment	(1.8)	(.6)	(.5)	(1.7)
Legal fees and settlements	.02	.04	.3	2.4
Inventory writedown	-	-	-	-
Restructuring charges	2.1	2.3	4.0	-
Adjusted EBITDA	($11.0)	$10.3	$113.0	$141.1
Revenue	52.7	146.6	832.9	827.2
% Adj. EBITDA margin	-21%	7%	14%	17%

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ROIC RECONCILIATION

($ MM UNLESS OTHERWISE NOTED)			Year ended December 31
	30-Jun-20	31-Mar-20	2019
After-tax net operating profit reconciliation:
Net Income (loss)	($24.2)	($300.9)	($217.8)
Add back:
Impairment of property and equipment	-	-	66.2
Impairment of goodwill	-	296.2	20.3
Impairment of intangibles	-	-	114.8
Interest expense	9.2	9.8	39.8
Interest Income	(.2)	(.4)	(.9)
Transaction and integration costs	-	.1	13.0
Restructuring charges	2.1	2.3	4.0
Gain on extinguishment of debt	(11.6)	(10.1)
Loss on sale of subsidiaries	-	-	15.9
Benefit of deferred income taxes	-	(1.6)	(4.3)
After-tax net operating profit	($24.7)	($4.5)	$51.0
Total capital as of prior year-end /period-end:
Total stockholders' equity	91.9	389.9	594.8
Total debt	386.2	400.0	435.0
Less: Cash and cash equivalents	(90.1)	(93.0)	(63.6)
Total capital as of prior period-end	$387.9	$696.9	$966.2
Total capital as of period-end /year-end:
Total stockholders' equity	70.0	91.9	389.9
Total debt	372.6	386.2	400.0
Less: Cash and cash equivalents	(88.7)	(90.1)	(93.0)
Total capital as of period-end	$353.9	$387.9	$696.9
Average total capital	$370.9	$542.4	$831.5
ROIC	-27%	-3%	6%

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