Keane Announces Fourth Quarter and Full-Year 2017 Financial and Operational Results; $100 Million Stock Repurchase Program

February 26, 2018

HOUSTON–(BUSINESS WIRE)–Keane Group, Inc. ("Keane" or the "Company") today reported fourth
quarter and full-year 2017 financial results.

Results and Recent Highlights

Reported fourth quarter 2017 revenue of $501.5 million, compared to
third quarter 2017 of $477.3 million
Reported fourth quarter 2017 net income of $43.9 million, compared to
third quarter 2017 net income of $4.1 million
Achieved fourth quarter 2017 Adjusted EBITDA of $93.8 million,
compared to third quarter 2017 of $71.6 million
Increased annualized Adjusted Gross Profit per fleet to $17.3 million,
compared to third quarter 2017 of $14.2 million
Board of Directors authorized stock repurchase program of up to $100
million
Executed dedicated agreement for one previously ordered newbuild
fleet; deployment expected by end of second quarter 2018

Fourth Quarter 2017 Financial Results

Revenue for the fourth quarter of 2017 totaled $501.5 million, an
increase of 5% compared to revenue for the third quarter of 2017 of
$477.3 million. Reported net income for the fourth quarter of 2017
totaled $43.9 million, compared to net income of $4.1 million for the
third quarter of 2017. Net income per share for the fourth quarter of
2017 totaled $0.39, compared to net income per share for the third
quarter of 2017 of $0.04. Excluding one-time items and other adjustments
further discussed below, net income for the fourth quarter of 2017 was
$38.2 million, compared to net income of $17.4 million for the third
quarter of 2017.

Adjusted EBITDA for the fourth quarter of 2017 totaled $93.8 million,
compared to $71.6 million for the third quarter of 2017. Adjusted Gross
Profit for the fourth quarter of 2017 was $113.1 million, compared to
$89.7 million for the third quarter of 2017.

Selling, general and administrative expenses for the fourth quarter of
2017 totaled $24.6 million, compared to $28.6 million for the third
quarter of 2017. Excluding one-time items, selling, general and
administrative expenses for the fourth quarter of 2017 totaled $18.4
million compared to $17.5 million for the third quarter of 2017.

“Constructive market dynamics for completions services continued during
the fourth quarter,” said James Stewart, Chairman and Chief Executive
Officer of Keane. “We are proud of our performance and execution during
the quarter and throughout the year, grounded by our strategy of
partnering with high-quality blue chip customers under dedicated
agreements. We are deepening our customer relationships, and in many
cases, running multiple fleets per customer, validating our successful
partnership model. The outlook for U.S. completions services remains
robust, and we are encouraged by current market signals and feedback
from our customers, supporting our decision to order 150,000 newbuild
horsepower for delivery and deployment later this year.”

“We achieved another quarter of strong financial performance,
maintaining full-utilization, advancing profitability, further
optimizing our asset portfolio and strengthening our balance sheet” said
Greg Powell, President and Chief Financial Officer of Keane. “During the
fourth quarter, we grew adjusted EBITDA by approximately 30%
sequentially and improved average annualized Adjusted Gross Profit per
fleet by more than 20%. The industry experienced colder than normal
weather late in the fourth quarter, resulting in periods of inefficiency
in many regions, including the Permian. However, our dedicated customer
agreements, combined with quality execution, allowed us to continue our
growth and deliver results at the high-end of our profitability
guidance.”

Full Year 2017 Financial Results

Revenue for the full year 2017 totaled $1.542 billion, an increase of
266% compared to revenue for the full year 2016 of $420.6 million. Net
loss for the full year 2017 was $(36.1) million, compared to a net loss
for the full year 2016 of $(187.1) million. Net loss per share for the
full year 2017 totaled $(0.34).

Adjusted EBITDA for the full year 2017 totaled $214.5 million, compared
to $1.9 million for the full year 2016. Adjusted gross profit for the
full year 2017 was $275.0 million, compared to $27.8 million for the
full year 2016.

Completion Services

Revenue for Completion Services totaled $495.5 million for the fourth
quarter of 2017, an increase of 6% compared to the third quarter of 2017
of $468.5 million, driven by an additional fleet deployment in October
2017, and price increases from contract re-openers on a portion of our
portfolio. Keane averaged 26 deployed hydraulic fracturing fleets for
the fourth quarter of 2017, of which 78% were bundled with wireline.
Keane exited the fourth quarter of 2017 with 26 hydraulic fracturing
fleets deployed.

Adjusted Gross Profit in Completion Services totaled $112.6 million for
the fourth quarter of 2017, compared to $87.9 million for the third
quarter of 2017.

Annualized revenue per average deployed hydraulic fracturing fleet for
the fourth quarter of 2017 was $76.2 million, compared to $75.9 million
for the third quarter of 2017. Annualized Adjusted Gross Profit per
fleet totaled $17.3 million, an increase of 22% as compared to $14.2
million for the third quarter of 2017.

Other Services

Revenue in Other Services for the fourth quarter of 2017 totaled $6.0
million, compared to $8.8 million for the third quarter of 2017. Revenue
during the fourth quarter of 2017 included contribution from the
company’s cementing assets, and partial-quarter contribution from its
workover rig assets, prior to their sale in November 2017.

As part of Keane’s ongoing portfolio optimization, the company executed
the sale of the remaining six of its workover rigs during the fourth
quarter of 2017, generating approximately $10 million of cash proceeds.
Keane also completed the sale of its idled coiled tubing assets for
approximately $10 million of cash proceeds. Together, and combined with
the previous sale of six workover rigs completed in the third quarter of
2017, Keane has generated approximately $27 million of cash proceeds,
while focusing on optimizing utilization of its cementing assets.

Fourth Quarter 2017 One-Time Items and Other Adjustments

Adjusted EBITDA for the fourth quarter of 2017 excludes $5.7 million of
one-time net gains, comprised of one-time gains of $12.7 million,
partially offset by one-time expenses of $7.0 million. One-time gains
primarily include a reduction in our contingent value right ("CVR")
liability from the acquisition of RockPile in July 2017, insurance
recoveries related to the acquisition of the Acquired Trican Operations
(as defined within) in 2016 and gains related to the sale of coiled
tubing assets. One-time expenses primarily include non-cash stock
compensation expense, secondary issuance costs and commissioning costs.

Balance Sheet and Capital

Total debt outstanding as of December 31, 2017 was $275.1 million, net
of unamortized debt discounts and unamortized deferred charges and
excluding capital lease obligations, compared to $275.6 million as of
September 30, 2017.

As of December 31, 2017, cash and equivalents totaled $96.1 million,
compared to $71.7 million as of September 30, 2017. Total available
liquidity as of December 31, 2017 was approximately $295.8 million,
which included availability under our asset-based credit facility, as
amended and further described below. Total operating cash flow for the
fourth quarter of 2017 was approximately $79.7 million.

In December 2017, Keane amended and restated its Asset-Based Revolving
Credit Facility (“New ABL Facility”). The New ABL Facility expands the
Company’s total availability by $150 million to a total of $300 million,
subject to a borrowing base. In addition, subject to approval by the
applicable lenders and other customary conditions, the New ABL Facility
also allows for an increase in commitments of up to an additional $150
million, up from a previous amount of up to $75 million. The New ABL
Facility also amended certain terms to reflect Keane’s growth and
provide additional flexibility under its covenants.

“We remain committed to running a conservative balance sheet position
that provides us the financial flexibility to capitalize on today’s
supportive market conditions,” said Mr. Powell. “This was further
evidenced by the successful amendment of our ABL facility completed
during the fourth quarter, which enhances our financial flexibility
through increased capacity and lower interest costs.”

Stock Repurchase Program

Keane’s Board of Directors has authorized a stock repurchase program of
up to $100 million of the Company’s outstanding common stock, subject to
Securities and Exchange Commission regulations, stock market conditions
and corporate working capital needs. The duration of the stock buy-back
program will be 12 months. The program does not obligate Keane to
purchase any particular number of shares of common stock during any
period and the program may be modified or suspended at any time at the
Company's discretion.

“2017 was about establishing our track record of execution, and because
of our success and continued market momentum, we are now in a position
to return additional value to shareholders,” said Greg Powell.
“Returning value through the implementation of a repurchase program
reflects the confidence we have in our business, including our
expectation for further growth and profitability.”

Outlook

For the first quarter of 2018, normalized revenue is expected to
increase to approximately $530 million, driven by price increases from
contract re-openers on a portion of our portfolio. Normalized annualized
Adjusted Gross Profit per fleet is expected to be approximately $18
million for the first quarter of 2018. Normalized expectations exclude
transitional factors, including inclement weather experienced early in
the first quarter, combined with ongoing frac sand supply challenges.
These factors are expected to impact first quarter results by up to
approximately $30 million of revenue and between $0.5 million and $2.0
million of annualized Adjusted Gross Profit per fleet. Keane expects to
remain at full utilization of 26 hydraulic fracturing fleets.

“The industry continues to face strain in frac sand supply, driven by
weather-induced rail congestion, combined with mine issues due to
rail-related output constraints, flooding impacts, delays on local mine
start-ups and continued growth in demand,” said Greg Powell. “We are
proactively managing these transitory issues facing the entire industry
to limit the impact to our customers and business.”

Keane recently entered into a dedicated agreement with an existing
customer for one of the newbuild fleets on order, and expects to deploy
the fleet upon delivery by the end of the second quarter of 2018. Keane
remains on schedule for the remaining two of its previously ordered
newbuild fleets, with one to be delivered and deployed by the end of the
second quarter of 2018, and a second by the end of the third quarter of
2018. We remain in advanced discussions with multiple existing and new
customers for the remaining two fleets, and expect to execute dedicated
agreements by the end of the first quarter of 2018. Keane continues to
expect all three newbuilds to initially generate annualized Adjusted
Gross Profit per fleet of greater than $20 million.

Within the Other Services segment, Keane expects to ramp activity in its
cementing business throughout the year, and by the end of 2018, expect
to generate run-rate revenue of between $70 and $90 million on margins
of between 20% and 25%.

Conference Call

On Tuesday, February 27, 2018, Keane will hold a conference call for
investors at 7:30 a.m. Central Time (8:30 a.m. Eastern Time) to discuss
Keane’s fourth quarter and full-year 2017 results. Hosting the call will
be James Stewart, Chairman and Chief Executive Officer and Greg Powell,
President and Chief Financial Officer. The call can be accessed live
over the telephone by dialing (877) 407-9208, or for international
callers, (201) 493-6784. A replay will be available shortly after the
call and can be accessed by dialing (844) 512-2921, or for international
callers (412) 317-6671. The passcode for the replay is 13675336. The
replay will be available until March 13, 2018.

About Keane Group, Inc.

Headquartered in Houston, Texas, Keane is one of the largest pure-play
providers of integrated well completion services in the U.S., with a
focus on complex, technically demanding completion solutions. Keane's
primary service offerings include horizontal and vertical fracturing,
wireline perforation and logging, engineered solutions and cementing, as
well as other value-added service offerings.

Definitions of Non-GAAP Financial Measures and Other Items

Keane has included both financial measures compiled in accordance with
GAAP and certain non-GAAP financial measures in this press release,
including Adjusted EBITDA and Adjusted Gross Profit and ratios based on
these financial measures. These measurements provide supplemental
information which Keane believes is useful to analysts and investors to
evaluate its ongoing results of operations, when considered alongside
GAAP measures such as net income and operating income. These non-GAAP
financial measures exclude the financial impact of items management does
not consider in assessing Keane’s ongoing operating performance, and
thereby facilitate review of Keane’s operating performance on a
period-to-period basis. Other companies may have different capital
structures, and comparability to Keane’s results of operations may be
impacted by the effects of acquisition accounting on its depreciation
and amortization. As a result of the effects of these factors and
factors specific to other companies, Keane believes Adjusted EBITDA and
Adjusted Gross Profit provide helpful information to analysts and
investors to facilitate a comparison of its operating performance to
that of other companies.

Adjusted EBITDA is defined as net income (loss) adjusted to eliminate
the impact of interest, income taxes, depreciation and amortization,
along with certain items management does not consider in assessing
ongoing performance. Adjusted Gross Profit is defined as Adjusted
EBITDA, further adjusted to eliminate the impact of all activities in
the Corporate segment, such as selling, general and administrative
expenses, along with cost of services that management does not consider
in assessing ongoing performance.

Forward-Looking Statements

The statements contained in this release that are not historical
facts are forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Words such as “may,”
“will,” “could,” “should,” “expect,” “plan,” “project,” “intend,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,”
“target,” “continue,” and similar expressions are intended to identify
such forward-looking statements. The statements in this press release
that are not historical statements, including statements regarding the
Company’s plans, objectives, future opportunities for the Company’s
services, future financial performance and operating results and any
other statements regarding Keane's future expectations, beliefs, plans,
objectives, financial conditions, assumptions or future events or
performance that are not historical facts, are forward-looking
statements within the meaning of the federal securities laws. These
statements are subject to numerous risks and uncertainties, many of
which are beyond Keane's control, which could cause actual results to
differ materially from the results expressed or implied by the
statements. These risks and uncertainties include, but are not limited
to the operations of Keane; the effects of the business combination of
Keane and RockPile, including the combined Company’s future financial
condition, results of operations, strategy and plans; potential adverse
reactions or changes to business relationships resulting from the
completion of the RockPile transaction; expected synergies and other
benefits from the transaction and the ability of Keane to realize such
synergies and other benefits; results of litigation, settlements and
investigations; actions by third parties, including governmental
agencies; volatility in customer spending and in oil and natural gas
prices, which could adversely affect demand for Keane's services and
their associated effect on rates, utilization, margins and planned
capital expenditures; global economic conditions; excess availability of
pressure pumping equipment, including as a result of low commodity
prices, reactivation or construction; liabilities from operations;
weather; decline in, and ability to realize, backlog; equipment
specialization and new technologies; shortages, delays in delivery and
interruptions of supply of equipment and materials; ability to hire and
retain personnel; loss of, or reduction in business with, key customers;
difficulty with growth and in integrating acquisitions; product
liability; political, economic and social instability risk; ability to
effectively identify and enter new markets; cybersecurity risk;
dependence on our subsidiaries to meet our long-term debt obligations;
variable rate indebtedness risk; and anti-takeover measures in our
charter documents.

Additional information concerning factors that could cause actual
results to differ materially from those in the forward-looking
statements is contained from time to time in Keane's Securities and
Exchange Commission (“SEC”) filings, including the most recently filed
Forms 10-Q and 10-K. Keane's filings may be obtained by contacting Keane
or the SEC or through Keane's website at http://www.keanegrp.com
or through the SEC's Electronic Data Gathering and Analysis Retrieval
System (EDGAR) at http://www.sec.gov.
Keane undertakes no obligation to publicly update or revise any
forward-looking statement.

KEANE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS) (in thousands, except per share data)
Three Months Ended	Three Months Ended
December 31,	September 30,
2017	2016(1)	2017
(Unaudited)	(Unaudited)	(Unaudited)
Revenue	$	501,490	$	151,033	$	477,302
Operating costs and expenses:
Cost of services	389,096	142,978	391,089
Depreciation and amortization	49,964	29,032	46,204
Selling, general and administrative expenses	24,611	7,948	28,592
(Gain) loss on disposal of assets	(2,418	)	(90	)	302
Impairment	—	185	—
Total operating costs and expenses	461,253	180,053	466,187
Operating income (loss)	40,237	(29,020	)	11,115
Other income (expenses):
Other income (expense), net	9,316	379	942
Interest expense	(7,318	)	(9,891	)	(7,195	)
Total other income (expenses)	1,998	(9,512	)	(6,253	)
Income (loss) before income taxes	42,235	(38,532	)	4,862
Income tax benefit (expenses)	1,712	—	(797	)
Net income (loss)	43,947	(38,532	)	4,065
Other comprehensive income (loss):
Foreign currency translation adjustments	(12	)	(35	)	64
Hedging activities	785	519	(178	)
Total comprehensive income (loss)	$	44,720	$	(38,048	)	$	3,951
Net income per share, basic	$	0.39	NM	$	0.04
Weighted average shares, basic	111,707	NM	111,509
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(1) Condensed Consolidated and Combined Financial Statements of Keane Group Holdings, LLC and Subsidiaries.
NM – Not measured as Keane Group, Inc. did not consummate its initial public offering ("IPO") until 1/25/2017.

KEANE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS & COMPREHENSIVE (LOSS) (in thousands, except per share data)
Year Ended December 31,
2017	2016(1)
(Unaudited)	(Unaudited)
Revenue	$	1,542,081	$	420,570
Operating costs and expenses:
Cost of services	1,282,561	416,342
Depreciation and amortization	159,280	100,979
Selling, general and administrative expenses	93,526	53,155
(Gain) loss on disposal of assets	(2,555	)	(387	)
Impairment	—	185
Total operating costs and expenses	1,532,812	570,274
Operating income (loss)	9,269	(149,704	)
Other income (expenses):
Other income (expense), net	13,963	916
Interest expense	(59,223	)	(38,299	)
Total other expenses	(45,260	)	(37,383	)
(Loss) before income taxes	(35,991	)	(187,087	)
Income tax (expenses)	(150	)	—
Net (loss)	(36,141	)	(187,087	)
Other comprehensive income (loss):
Foreign currency translation adjustments	96	22
Hedging activities	791	1,857
Total comprehensive (loss)	$	(35,254	)	$	(185,208	)
Net loss per share, basic	$	(0.34	)	NM
Weighted average shares, basic	106,321	NM
________________________________
(1) Condensed Consolidated and Combined Financial Statements of Keane Group Holdings, LLC and Subsidiaries.
NM – Not measured as Keane Group, Inc. did not consummate its IPO until 1/25/2017.

KEANE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (in thousands)
ASSETS	December 31,	December 31,
2017	2016(1)
(Unaudited)	(Audited)
Current Assets:
Cash and cash equivalents	$	96,120	$	48,920
Accounts receivable	238,018	66,277
Inventories, net	33,437	15,891
Prepaid and other current assets	8,519	14,618
Total current assets	376,094	145,706
Property and equipment, net	468,000	294,209
Goodwill	134,967	50,478
Intangible assets	57,280	44,015
Other noncurrent assets	6,776	2,532
Total Assets	$	1,043,117	$	536,940
LIABILITIES AND OWNERS’ EQUITY
Current liabilities:
Accounts payable	$	92,348	$	48,484
Accrued expenses	135,175	42,892
Current maturities of capital lease obligations	3,097	2,633
Current maturities of long-term debt	1,339	2,512
Stock based compensation – current	4,281	—
Deferred revenue	5,000	—
Other current liabilities	914	3,171
Total current liabilities	242,154	99,692
Capital lease obligations, less current maturities	4,796	5,442
Long-term debt, net(2) less current maturities	273,715	267,238
Stock based compensation – non-current	4,281	—
Other non-current liabilities	5,078	2,316
Total non-current liabilities	287,870	274,996
Total liabilities	530,024	374,688
Owners’ equity:
Members’ equity	—	453,810
Stockholders’ equity	542,192	—
Retained (deficit)	(27,371	)	(288,771	)
Accumulated other comprehensive (loss)	(1,728	)	(2,787	)
Total owners’ equity	513,093	162,252
Total liabilities and owners’ equity	$	1,043,117	$	536,940
___________________________
(1) Condensed Consolidated and Combined Financial Statements of Keane Group Holdings, LLC and Subsidiaries.
(2) Net of unamortized deferred financing costs and unamortized debt discounts.

KEANE GROUP, INC. AND SUBSIDIARIES ADDITIONAL SELECTED FINANCIAL AND OPERATING DATA (unaudited, amounts in thousands, except for non-financial statistics)
Three Months Ended December 31,	Three Months Ended September 30,
2017	2016	2017
Completion Services:
Revenues	$	495,519	$	147,973	$	468,479
Cost of services	382,880	139,626	384,007
Gross profit	112,639	8,347	84,472
Depreciation, amortization and administrative expenses, and impairment	44,711	23,956	41,542
Operating income (loss)	$	65,885	$	(15,650	)	$	42,362
Average hydraulic fracturing fleets deployed	26.0	12.0	24.7
Average hydraulic fracturing fleet utilization	100	%	52	%	99	%
Wireline – fracturing fleet bundling percentages	78	%	62	%	81	%
Average annualized revenue per fleet deployed	$	76,234	$	49,324	$	75,867
Average annualized adjusted gross profit per fleet deployed	$	17,316	$	4,436	$	14,239
Adjusted gross profit	$	112,554	$	13,309	$	87,926
Other Services (1):
Revenues	$	5,971	$	3,060	$	8,823
Cost of services	6,216	3,352	7,082
Gross profit (loss)	(245	)	(292	)	1,741
Depreciation, amortization and administrative expenses, and impairment	1,434	3,098	1,586
Operating income (loss)	$	2,850	$	(3,433	)	$	1,055
Adjusted gross profit (loss)	$	548	$	(141	)	$	1,798
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