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SECURE INVESTOR PRESENTATION August 2010 www.secure-energy.ca TSX: SES

Investor Presentation - August 11, 2010

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Secure Energy Investor Presentation - August 11, 2010

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Page 1: Investor Presentation - August 11, 2010

SECURE INVESTOR PRESENTATION

August 2010

www.secure-energy.ca TSX: SES

Page 2: Investor Presentation - August 11, 2010

HISTORY

• Secure’s first facility opened October 2007

• Over $155 million equity raised since inception

• Over 100 employees in the field and 25 in head office

• Secure’s network has grown to 11 facilities in Western

Canada

• IPO completed and listed on the TSX March 30, 2010

• Current Market Cap value approx. $230 million

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Page 3: Investor Presentation - August 11, 2010

EXECUTIVE TEAM

Rene Amirault, President and Chief Executive Officer 29 years experienceIOL, CCS, Consultant

Nick Wieler, V.P. CFO 20 years experience IOL, Newalta, CCS

Karen Myrheim, V.P. Sales & Marketing24 years experience, CCS, Enerland, Triumph EPCM

Gary Perras, V.P. Operations15 years experience, Sask Energy, CCS

Dan Steinke, V.P. Business Development25 years experience, Koch, CCS, SCF Partners

Allen Gransch, V.P. Finance10 years experiencePrice Waterhouse

Gord Getzinger, GM of Sales 20 years experienceNelson Bros., Trottier Trucking, CCS

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Page 4: Investor Presentation - August 11, 2010

BOARD OF DIRECTORS

Rene Amirault

President & CEO of Secure Energy Services Inc.

Murray Cobbe (Lead Director) Executive Chairman of Trican Well Service Ltd.

Dave JohnsonExecutive Chairman of Progress Energy Resources Corp.

Brad MunroFormer CCS lead director, Director of Galleon, 49 North Resource Fund, Winalta,

Kevin Nugent C.A.Former CEO of NQL Energy Services Inc., Director of Savanna & Trican

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Page 5: Investor Presentation - August 11, 2010

CORE SERVICES

Secure Energy Services is a Western Canadian

Company that provides:

• Crude Oil Emulsion Treatment

• Clean Oil Terminaling

• Crude Oil Marketing and Storage

• Oilfield Waste Processing

• Produced and Waste Water Disposal

• Oilfield Solids Disposal

• Tank and Truck Wash

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Page 6: Investor Presentation - August 11, 2010

FULL SERVICE TERMINAL (FST)

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Page 7: Investor Presentation - August 11, 2010

STAND-ALONE WATER DISPOSAL FACILITY (SWD)

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[Dawson Creek]

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Page 8: Investor Presentation - August 11, 2010

CLASS II OILFIELD LANDFILL

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Page 9: Investor Presentation - August 11, 2010

Secure Pembina Area Class I & II Landfill

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Page 10: Investor Presentation - August 11, 2010

SECURE FACILITY LOCATIONS

**

* Pipeline connected

(Waste Q4)

(Waste Q4)

(Waste Q4)

(Oil treatment)

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Page 11: Investor Presentation - August 11, 2010

SECURE VALUE CHAIN

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Page 12: Investor Presentation - August 11, 2010

WESTERN CANADA PRODUCING OIL & GAS WELLS

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Page 13: Investor Presentation - August 11, 2010

AB & BC OIL & GAS WATER PRODUCTION

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Page 14: Investor Presentation - August 11, 2010

WELLS DRILLED VS DIRECTIONAL DRILLING

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Page 15: Investor Presentation - August 11, 2010

BUSINESS STRATEGY

• Exploit the value chain from cradle to grave focusing on

disposal and treating energy services

• Organic growth in key under serviced and capacity constrained markets

• Add environmental recycling services at existing plants

• Increase mid-stream offerings

• Acquire small independents

• Acquire surplus assets and facilities from producers

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Page 16: Investor Presentation - August 11, 2010

COMPETITIVE ADVANTAGES

• Lower cost structure than competitors

• Field relationships – Consultants, Truckers, Oil & Gas

Producers

• Customer driven invoicing and daily reports

• Regulatory knowledge and ability to get timely approvals

• Executive teams’ experience throughout the energy

cycle

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Page 17: Investor Presentation - August 11, 2010

LATEST DEVELOPMENTS

• Acquired PAL Drayton Class I & II Landfill

• Opened Class IB Disposal Well facility at Dawson B.C. (Montney Area) and waste facility expansion started

• Re-completed Drayton (Brazeau) Disposal Well and started construction on the facility

• Started construction on Obed Waste facility expansion

• South GP waste facility expansion close to receiving regulatory approval

• Drayton FST in regulatory stage

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Page 18: Investor Presentation - August 11, 2010

Q2 2010 FINANCIAL RESULTS (MM$)

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Q2/2010 Q2/2009Revenue

Core services $9.8 $3.5Oil Purchase/resale 1.4

ExpensesCore services $4.7 $1.9Oil Purchase/resale 1.4

Operating Margin $5.1 $1.6Operating Margin (Core) 52% 47%Operating Margin (Total) 46% 47%

G & A (1.7) (0.9)

EBITDA $3.4 $0.7

Funds from Operations $3.5 $0.8

Page 19: Investor Presentation - August 11, 2010

2010 YTD FINANCIAL RESULTS (MM$)

YTD/2010 YTD/2009Revenue

Core services $22.0 $9.9Oil Purchase/resale 1.4

ExpensesCore services $9.2 $4.1Oil Purchase/resale 1.4

Operating Margin $12.8 $5.8Operating Margin (Core) 58% 59%Operating Margin (Total) 55% 59%

G & A (3.0) (2.0)

EBITDA $9.8 $3.8

Funds from Operations $9.9 $3.9

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Page 20: Investor Presentation - August 11, 2010

June 30, 2010 BALANCE SHEET (MM$)

Current Assets $ 52.6 Cash, A/R, Inventory, Prepaid

Assets $ 85.5 Plant & Equipment

$ 21.4 Assets under construction

$ 7.5 Other (Intangible, goodwill, FIT)

Total Assets $167.0

Liabilities $ 10.9 A/P

$ 0.9 Lease Obligations

$ 5.6 ARO

$ 0.0 Long Term Debt

Shareholders' Equity $149.6

Total Liabilities/Equity $167.020

Page 21: Investor Presentation - August 11, 2010

BORROWING CAPACITY

ATB Corporate Bank

Loan Facility Max. $35 million

Prime plus 1.5% to 2.5%*

*(rate is based on Funded Debt to EBITDA level, adjusted quarterly)

Multi-use Facility Operating, letters of credit, Capex,

Acquisitions

Renewal May 2011

Major Covenants Debt to T-12 EBITDA: < 3.5 to 1.0

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Page 22: Investor Presentation - August 11, 2010

CAPITAL PLANS (MM$)

Projects / Acquisitions for 2010

Dawson SWD and other services 15.0

Brazeau Water Disposal 5.0

Drayton FST 25.0

Facility Expansions 12.0

PAL acquisition 11.7

Total Capex $ 68.7

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Page 23: Investor Presentation - August 11, 2010

SUMMARY

• Market growing with increased wells and byproducts as the conventional basin matures

• Environmental Recycling services to complement existing facility base

• Profitable growth will come from mostly organic and timely acquisitions

• Track record with eleven facilities executed on schedule and on budget

• Experienced team that knows how to deliver throughout the oil and gas cycle

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Page 24: Investor Presentation - August 11, 2010

FORWARD LOOKING STATEMENTS

• Certain statements contained in this presentation regarding 2010 construction plans, capital expenditures, future facilities and expansions of services constitute "forward-looking statements". Such statements reflect the current views of Secure with respect to future events and are subject to certain risks, uncertainties and assumptions, including, without limitation, general market conditions, commodity prices, interest rates and exchange rates, seasonality of operations, growth, acquisition strategy, integration of businesses into Secure's operations, potential liabilities from acquisitions, dependence on senior management, regulation, landfill operations, competition, risk of pending and future legal proceedings, employees, labour unions, fuel costs, access to industry and technology, insurance, future capital needs, debt service and sales of additional common shares.

• Many other factors could also cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements and readers are cautioned that the foregoing list of factors is not exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from the projections described herein. The forward-looking statements in this presentation are expressly qualified by this cautionary statement. Secure does not undertake any obligation to update or revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

• The forward-looking statements in this document are provided for the limited purpose of enabling potential

investors to evaluate an investment in the shares of Secure. Readers are cautioned that such statements

may not be appropriate, and should not be used, for other purposes.

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