CES Energy Solutions Corp.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

The following management's discussion and analysis ("MD&A") of the financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto of CES Energy Solutions Corp. ("CES" or the "Company") for years ended December 31, 2024, and 2023, and CES' 2024 Annual Information Form. Readers should also refer to the "Forwardlooking Information & Statements" legal advisory and the sections regarding "Non-GAAP Measures and Other Financial Measures" and "Operational Definitions" at the end of this MD&A. This MD&A is dated March 6, 2025, and incorporates all relevant Company information to that date. Amounts are stated in Canadian dollars unless otherwise noted.

USE OF NON-GAAP MEASURES AND OTHER FINANCIAL MEASURES

This MD&A contains certain financial measures that are not recognized by Canadian generally accepted accounting principles ("GAAP"), and which are used by Management to evaluate CES' financial performance, financial position and cash flow. These nonGAAP measures and other financial measures do not have a standardized meaning prescribed under IFRS[®] Accounting Standards as issued by the International Accounting Standards Board ("IASB"), and therefore may not be comparable to similar measures presented by other entities. Securities regulations require that non-GAAP financial measures are clearly defined, qualified and reconciled with their most closely comparable GAAP measure. Please refer to the section titled "Non-GAAP Measures and Other Financial Measures" for further information on the definition, calculation and reconciliation of the non-GAAP measures and other financial measures contained in this MD&A.

BUSINESS OF CES

CES is a leading provider of technically advanced consumable chemical solutions throughout the life-cycle of the oilfield. This includes total solutions at the drill-bit, at the point of completion and stimulation, at the wellhead and pump-jack, and finally through to the pipeline and midstream market. Key solutions include corrosion inhibitors, demulsifiers, H2S scavengers, paraffin control products, surfactants, scale inhibitors, biocides and other specialty products. Further, specialty chemicals are used throughout the pipeline and midstream industry to aid in hydrocarbon movement and manage transportation and processing challenges including corrosion, wax build-up and H2S.

CES operates in all major basins throughout the United States ("US"), including the Permian, Eagleford, Bakken, Marcellus and Scoop/Stack, as well as in the Western Canadian Sedimentary Basin ("WCSB") with an emphasis on servicing the ongoing major resource plays: Montney, Duvernay, Deep Basin and SAGD. In the US, CES operates under the trade names AES Drilling Fluids ("AES"), AES Completion Services, Jacam Catalyst LLC ("Jacam Catalyst"), Proflow Solutions ("Proflow"), and Superior Weighting Products ("Superior Weighting"). In Canada, CES operates under the trade names Canadian Energy Services, CES Completion Services, PureChem Services ("PureChem"), StimWrx Energy ("StimWrx"), Sialco Materials ("Sialco"), and Clear Environmental Solutions ("Clear").

CES continues to invest in research and development of new technologies and in the top-end scientific talent that can develop and refine these technologies. CES operates 13 separate lab facilities across North America: two in Houston, Texas; one in each of Midland, Texas; Gardendale, Texas; Sterling, Kansas; Casper, Wyoming; Roosevelt, Utah; Dickinson, North Dakota, Johnstown, Colorado; Calgary, Alberta; Grande Prairie, Alberta; Carlyle, Saskatchewan; and Delta, British Columbia. In the US, CES' main chemical manufacturing and reacting facility is located in Sterling, Kansas with additional low temperature reacting and chemical blending capabilities just outside of Midland, Texas and chemical blending capabilities in Sonora, Texas. In Canada, CES has a chemical manufacturing and reacting facility located in Delta, British Columbia with additional chemical blending capabilities located in Carlyle, Saskatchewan; Nisku, Alberta; and Grande Prairie, Alberta. CES also leverages third party partner relationships to drive innovation in the consumable fluids and chemicals business.

CES Energy Solutions Corp. Management's Discussion and Analysis Three and Twelve Months Ended December 31, 2024 (stated in thousands of Canadian dollars, except for share counts, per share amounts and operational metrics)

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS
	Three Months Ended December 31, Year Ended December 31,
	2024 2023 % Change 2024 2023 % Change
Revenue United States(1) Canada(1)	390,203 361,091 8 % 1,571,433 1,466,990 7 % 215,181 192,366 12 % 782,244 696,522 12 %
Total Revenue	605,384 553,457 9 % 2,353,677 2,163,512 9 %
Net income per share – basic per share - diluted	41,855 49,187 (15) % 191,106 154,642 24 % *0.18* 0.21 (14) % *0.82* 0.62 32 % *0.18* 0.20 (10)% *0.81* 0.61 33 %
Adjusted EBITDAC(2) Adjusted EBITDAC(2)% of Revenue	103,174 84,607 22 % 403,190 315,821 28 % *17.0 %* 15.3 % 1.7 % *17.1 %* 14.6 % 2.5 %
Funds Flow from Operations(2) Change in non-cash working capital Cashprovided by (used in)operatingactivities	68,774 68,180 1 % 293,009 251,651 16 % (6,543) (28,888) (77) % 11,655 50,128 (77) % 62,231 39,292 58 % 304,664 301,779 1 %
Free Cash Flow(2)	34,648 15,230 128 % 186,932 211,584 (12)%
Capital expenditures Expansion Capital(1) Maintenance Capital(1)	15,155 16,541 (8) % 68,078 55,835 22 % 5,818 2,345 148 % 22,918 17,575 30 %
Total capital expenditures	20,973 18,886 11 % 90,996 73,410 24 %
Dividends declared per share	6,760 5,901 15 % 27,738 23,337 19 % *0.030* 0.025 20 % *0.120* 0.095 26 %
Common Shares Outstanding End of period - basic End of period - fully diluted(2) Weighted average - basic Weighted average - diluted	225,329,085 236,042,566 225,329,085 236,042,566 228,948,223 241,385,242 228,948,223 241,385,242 226,704,896 239,160,013 232,341,309 249,108,042 230,379,790 244,555,366 236,577,679 254,909,191
Financial Position		As at
		December 31, 2024 September 30,2024 % Change December 31,2023 % Change
Total assets Total long-term debt Long-term financial liabilities(3) Total Debt(2) Working Capital Surplus(2) Net Debt(2) Shareholders' equity		1,539,331 1,473,994 4 % 1,377,265 12 % 344,888 332,999 4 % 390,616 (12) % 412,608 399,630 3 % 419,416 (2) % 452,588 439,334 3 % 469,619 (4) % 681,085 633,262 8 % 632,764 8 % (228,497) (193,928) 18 % (163,145) 40 % 814,230 746,309 9 % 657,995 24 %

1Supplementary Financial Measure. Supplementary Financial Measures are provided in this MD&A because Management believes they assist the reader in understanding CES' results. Refer to the section entitled "Non-GAAP Measures and Other Financial Measures" contained within this MD&A. 2Non-GAAP measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. The most directly comparable GAAP measure for Adjusted EBITDAC is Net income, for Funds Flow from Operations is Cash provided by (used in) operating activities, for Shares Outstanding, End of period - fully diluted is Common Shares outstanding, and for Total Debt, Net Debt, and Working Capital Surplus is Long-term financial liabilities. Refer to the section entitled "Non-GAAP Measures and Other Financial Measures" contained within this MD&A. 3Includes long-term portion of the Senior Facility, the Senior Notes, the Canadian Term Loan Facility, lease obligations, deferred acquisition consideration, and longterm portion of cash settled incentive obligations.

Management's Discussion and Analysis � 2

Highlights for the three and twelve months ended December 31, 2024, in comparison to the three and twelve months ended December 31, 2023, for CES are as follows:

Revenue: In the fourth quarter, CES generated revenue of $605.4 million, representing a sequential decrease of $1.1 million from the record quarterly revenue set in Q3 2024, and an increase of $51.9 million or 9% compared to $553.5 million in Q4 2023. For the twelve months ended December 31, 2024, CES generated revenue of $2.4 billion, an increase of $190.2 million or 9% relative to the year ended December 31, 2023. Increasing service intensity levels, higher industry rig counts in Canada, and strong market share positions, resulted in an overall uptick in revenue compared to prior year, despite softening industry rig counts in the US.
Revenue - US: Revenue generated in the US during Q4 2024 was $390.2 million, representing a sequential decrease of $12.4 million or 3% compared to Q3 2024, and an increase of $29.1 million or 8% compared to Q4 2023. For the twelve months ended December 31, 2024, revenue generated in the US was up 7% to $1.6 billion relative to the twelve months ended December 31, 2023. US revenues for both the three and twelve month periods benefited from higher production levels and increased service intensity, which more than offset the impact of decreased industry drilling activity. CES continued to maintain its strong industry positioning, achieving US Drilling Fluids Market Share of 21% and 22% for the three and twelve months ended December 31, 2024, respectively, compared to 22% and 21% for the three and twelve months ended December 31, 2023, respectively.
Revenue - Canada: Revenue generated in Canada during Q4 2024 set a new quarterly record at $215.2 million, representing a sequential increase of $11.3 million or 6% compared to Q3 2024, and an increase of $22.8 million or 12% compared to Q4 2023. For the twelve months ended December 31, 2024, revenue generated in Canada was up 12% to $782.2 million relative to the twelve months ended December 31, 2023. Canadian revenues for both the three and twelve month periods benefited from higher industry activity and production chemical volumes year over year. Canadian Drilling Fluids Market Share of 36% and 34% for the three and twelve months ended December 31, 2024, respectively, compared to 33% and 34% for the three and twelve months ended December 31, 2023, respectively.
Adjusted EBITDAC: Adjusted EBITDAC set a quarterly record at $103.2 million, representing a sequential increase of 1% compared to Q3 2024, and an increase of 22% compared to Q4 2023. Adjusted EBITDAC as a percentage of revenue of 17.0% in Q4 2024 came in ahead of 16.9% and 15.3% recorded in Q3 2024 and Q4 2023, respectively. For the twelve months ended December 31, 2024, Adjusted EBITDAC was up 28% to a record $403.2 million from $315.8 million in 2023, and Adjusted EBITDAC as a percentage of revenue increased to 17.1% from 14.6% a year ago. Adjusted EBITDAC improvements for both the three and twelve month periods were driven by strong revenue levels combined with improved margins, resulting from increased service intensity, an attractive product mix, effective supply chain management, and continued adoption of innovative, technologically advanced products, supported by a prudent cost structure and vertically integrated business model.
Net Income: Net income for the three months ended December 31, 2024, decreased 15% to $41.9 million and net income for the twelve months ended December 31, 2024, increased 24% to $191.1 million relative to the comparative 2023 periods. Both the three and twelve month periods benefited from strong activity levels combined with improved margins and prudent management of expenses, partly offset by increased foreign exchange losses associated with the appreciation of the US dollar, which was more pronounced in Q4 2024, and higher stock based compensation expenses relating to the appreciation of the Company's share price on associated cash-settled awards throughout the year.
Shareholder Returns: During the quarter, CES returned $44.6 million to shareholders (Q4 2023 - $25.1 million), through $37.7 million in shares repurchased under its NCIB and its quarterly dividend of $6.9 million (2023 - $19.1 million and $6.0 million, respectively). For the twelve months ended December 31, 2024, CES returned $128.4 million to shareholders (2023 - $93.5 million), through $101.5 million in share repurchases under its NCIB and $26.9 million in dividends paid (2023 - $70.9 million and $22.5 million, respectively).
Cash Flow From Operations: For Q4 2024, net cash provided by operating activities totaled $62.2 million compared to $39.3 million during the three months ended December 31, 2023. For the twelve months ended December 31, 2024, net cash provided by operating activities of $304.7 million compared to $301.8 million for the twelve months ended December 31, 2023. The increases in net cash provided by operating activities for both the three and twelve month periods were driven by strong financial performance with higher contribution margins on associated activity levels relative to the comparative reference periods.

Management's Discussion and Analysis � 3

Management's Discussion and Analysis Three and Twelve Months Ended December 31, 2024 (stated in thousands of Canadian dollars, except for share counts, per share amounts and operational metrics)

Funds Flow from Operations: CES generated $68.8 million in Funds Flow from Operations in Q4 2024, compared to $88.5 million generated in Q3 2024 and $68.2 million generated in Q4 2023. For the twelve months ended December 31, 2024, CES generated $293.0 million of Funds Flow from Operations compared to $251.7 million in 2023. Funds Flow from Operations excludes the impact of working capital, and is reflective of the continued strong surplus free cash flow generated in 2024.
Free Cash Flow: CES generated $34.6 million in Free Cash Flow in Q4 2024, compared to $40.1 million generated in Q3 2024, and $15.2 million generated in Q4 2023. The increase in Q4 2024 was driven by strong financial performance with higher contributions margins on associated activity levels, relative to the comparable period in 2023. For the twelve months ended December 31, 2024, CES generated $186.9 million of Free Cash Flow compared to $211.6 million in 2023.The decrease for the twelve months ended December 31, 2024, was driven by larger required capital expenditures to support record revenue levels, relative to 2023. Free Cash Flow includes the impact of quarterly working capital variations, net of capital expenditures and lease repayments.
Working Capital Surplus: As at December 31, 2024, CES had a Working Capital Surplus of $681.1 million, which increased from $633.3 million at September 30, 2024, and $632.8 million as at December 31, 2023. The movement during the three and twelve months ended December 31, 2024, was primarily driven by a rapid appreciation of the US dollar which resulted in increases to working capital on the revaluation of balances held in the Company's US subsidiaries. Excluding the impact of foreign exchange rates, the movement in the quarter was driven by increases to inventory and accounts receivable to support the year over year increases in activity levels. The Company continues to focus on working capital optimization benefiting from the high quality of its customers and diligent internal credit monitoring processes.
Total Debt: As at December 31, 2024, CES had Total Debt of $452.6 million compared to $469.6 million at December 31, 2023. Included in Total Debt at December 31, 2024, is the Senior Facility of $148.8 million (December 31, 2023 - $140.6 million), $200.0 million of Senior Notes, which replaced the previously outstanding Canadian Term Loan for $250.0 million, and lease obligations of $91.9 million (December 31, 2023 - $73.1 million). The decrease in Total Debt during the year was driven by the repayment of the Canadian Term Loan using the proceeds from the Senior Notes issuance, resulting in a permanent reduction in the Company’s fixed term debt, and the continued strong financial performance and ongoing efforts to optimize working capital cycles. These benefits were partly offset by increased levels of lease obligations and deferred acquisition consideration associated with the acquisition of Hydrolite.
Net Debt: Working Capital Surplus exceeded Total Debt at December 31, 2024, by $228.5 million (December 31, 2023 - $163.1 million). As of the date of this MD&A, the Company had total long-term debt of approximately $360.0 million, comprised of a net draw on its Senior Facility of approximately $160.0 million and its outstanding $200.0 million Senior Notes due May 24, 2029.
Strategic Acquisition: On July 1, 2024, CES closed the acquisition of all of the business assets of Hydrolite Operating LLC. ("Hydrolite"). Hydrolite provides comprehensive completion fluids solutions, including advanced mixing plant services, onsite solids processing, and wholesale chemicals and kill mud, with a focus on servicing the Permian basin. Operating as AES Completion Services, the acquisition augments the full-cycle service offerings of the Company's operations by providing solutions between the drilling and production phases and will be enhanced by CES' advanced technology and supply chain capabilities, extensive customer reach in its North American platform, and vertically integrated business model. The aggregate purchase price was $15.0 million consisting of $10.2 million in cash consideration and $4.8 million in deferred consideration, which is payable in cash as an earn-out upon achieving certain EBITDA thresholds over a twenty-four month period post close.

Management's Discussion and Analysis � 4

OUTLOOK

The demand trends of developing countries and global demand requirements to support eventual energy transition initiatives, combined with depletion of existing resources, reduced investment in the upstream oil and gas sector over recent years, and diminished available inventory quality has necessitated increased service intensity for available resources thereby resulting in continued constructive end markets for CES services which enhance drilling and production performance. This constructive environment supports a favorable outlook for CES' primary North American target market.

Despite economic uncertainty and ongoing global conflicts, energy industry fundamentals continue to support critical drilling and production activity for oil and natural gas. Moreover, current depressed global inventories and fewer high-quality drilling locations provide cautious optimism for suitable pricing, despite potential economic headwinds and geopolitical instability impacting customer spending plans. Currently, oil prices are sustained by increasing global demand and limited supply growth and while natural gas has demonstrated price weakness since early 2023, we anticipate a sustained period of elevated gas drilling activity in the US and Canada as projects under construction come online. While the current political landscape and potential impact of recently imposed tariffs in both the US and Canada continues to generate uncertainty, including within the energy sector, CES' business model provides relative protection due to its significant proportion of revenue derived in the US versus Canada, its vertically integrated business models in both countries, and flexible supply chain capabilities.

CES continues to be optimistic in its outlook for the next year as it expects to benefit from stable upstream activity, increased service intensity levels, adoption of advanced critical chemical solutions, and continued strength in commodity pricing across North America by capitalizing on its established infrastructure, industry leading positioning, vertically integrated business model, and strategic procurement practices.

Commensurate with current record revenue levels, CES expects 2025 capital expenditures, net of proceeds on disposals of assets, to be approximately $80.0 million, evenly weighted between maintenance and expansion capital to support sustained activity levels and business development opportunities. CES plans to continue its disciplined and prudent approach to capital expenditures and will adjust its plans as required to support prudent growth initiatives throughout divisions.

CES has proactively managed both the duration and the flexibility of its debt. In May 2024, CES successfully issued $200.0 million of Senior Notes due May 24, 2029. The net proceeds from the issuance of the Senior Notes, together with draws on the Company's Senior Facility were used to repay the $250.0 million secured Canadian Term Loan Facility on more attractive terms, and provided maturity extension to 2029. This further strengthens the Company's capital structure and reduces the cost of capital alongside its previously amended and extended Senior Facility due April 2026. The combination of the Senior Notes and the Senior Facility effectively addresses CES' near-term and foreseeable longer-term requirements. CES routinely considers its capital structure, including increasing or decreasing the capacity of its Senior Facility, issuance or redemption of Senior Notes, and other potential financing options.

CES' underlying business model is capex light and asset light, enabling the generation of significant surplus free cash flow. As our customers endeavor to maintain or grow production in the current environment, CES will leverage its established infrastructure, business model, and nimble customer-oriented culture to deliver superior products and services to the industry. CES sees the consumable chemical market increasing its share of the oilfield spend as operators continue to: drill longer reach laterals and drill them faster; expand and optimize the utilization of pad drilling; increase the intensity and size of their fracs; and require increasingly technical and specialized chemical treatments to effectively maintain existing cash flow generating wells and treat growing production volumes and water cuts from new wells.

Management's Discussion and Analysis � 5

RESULTS FOR THE PERIODS

Revenue and Operating Activities

Geographical revenue information relating to the Company's activities and key operating metrics are as follows:

	Revenue
	Three Months Ended December 31, Year Ended December 31,
	2024 2023 % Change 2024 2023 % Change
United States(1) Canada(1)	390,203 361,091 8 % 1,571,433 1,466,990 7 % 215,181 192,366 12 % 782,244 696,522 12 %
	605,384 553,457 9 % 2,353,677 2,163,512 9 %
Top five customers as a % of total revenue(1) Topcustomer as a % of total revenue(1)	27 % 28 % (1) % 27 % 27 % — % 9 % 9 % — % 9 % 9 % — %

	KeyOperatingMetrics
	Three Months Ended December 31, Year Ended December 31,
	2024 2023 % Change 2024 2023 % Change
US Canada	34,851 31,913 9 % 33,650 30,391 11 % 10,067 8,752 15 % 9,259 7,641 21 %
Total Treatment Points(1)	44,918 40,665 10 % 42,909 38,032 13 %
US Canada	11,169 12,340 (9) % 46,865 51,087 (8) % 6,816 5,908 15 % 24,935 23,780 5 %
Total OperatingDays(1)	17,985 18,248 (1)% 71,800 74,867 (4)%
US Canada	121 134 (10) % 129 140 (8) % 74 64 16 % 68 65 5 %
Total Average RigCount(1)	195 198 (2)% 197 205 (4)%
US industry rig count(2) Canadian industryrigcount(3)	569 601 (5) % 580 670 (13) % 205 193 6 % 200 189 6 %
US DF Market Share(1) Canadian DF Market Share(1)	21 % 22 % (1) % 22 % 21 % 1 % 36 % 33 % 3 % 34 % 34 % — %

1 Refer to "Operational Definitions" for further detail.

2 Based on the monthly average of Baker Hughes published weekly land data for the United States in the referenced period.

3 Based on the monthly average of CAODC published weekly data for Western Canada in the referenced period.

Revenue in the US for both the three and twelve months ended December 31, 2024, benefited from higher production levels and increased service intensity, despite a slowdown in drilling activity year over year driven by continued capital discipline by producers and consolidation of customers. CES' US average rig count decreased by 10% in Q4 2024 compared Q4 2023, and despite the larger industry decline for the twelve month comparative period, only decreased by 8% year over year, illustrating CES' presence in attractive markets and favorable customer exposure. CES was able to participate in this drilling environment with US DF Market Share of 21% and 22% for the three and twelve months ended December 31, 2024, respectively, compared with 22% and 21%, respectively, for the three and twelve months ended December 31, 2023. The US production chemicals business saw an increase in sales in the three and twelve months ended December 31, 2024, relative to the 2023 comparative periods, as actual volumes continued to increase, leading to higher contributions following 9% and 11% increases in treatment points, respectively, as compared to the prior periods in 2023.

Management's Discussion and Analysis � 6

CES Energy Solutions Corp.

Management's Discussion and Analysis Three and Twelve Months Ended December 31, 2024 (stated in thousands of Canadian dollars, except for share counts, per share amounts and operational metrics)

Revenue in Canada set an all-time quarterly record at $215.2 million, surpassing the previous high of $203.9 million in Q3 2024. Canadian revenues for both the three and twelve month periods benefited from higher industry activity and production chemical volumes year over year. The Canadian industry rig count increased by 6% for both the three and twelve month periods in 2024 from the comparable periods in 2023, as drilling activity was constructive year over year. CES' Canadian average rig count increased by 16% in Q4 2024 relative to Q4 2023, and by 5% for the twelve months ended December 31, 2024, for a resulting Canadian Drilling Fluids Market Share of 36% and 34%, respectively, compared with 33% and 34%, respectively, for the comparative 2023 periods. Canadian Treatment Points for the three and twelve months ended December 31, 2024, increased by 15% and 21%, respectively, relative to 2023, with increased production volumes and associated production related chemical sales year over year.

Although absolute Treatment Points are a guiding indicator of activity levels for the production chemical business, these individual treated wells increasingly exhibit higher volumes of produced oil, natural gas, and associated water, which correspondingly requires higher volumes of production chemicals. These favorable characteristics are associated with increased measured depths and higher production volume attributes of many modern wells. As evidenced by the graphs below, Treatment Points have continued to generally trend upward. The years 2020 and 2021 were negatively impacted by the economic effects of COVID-19, the lower commodity price environment seen throughout 2020, and the impact of extreme weather in the southern US in Q1 of 2021, with the subsequent periods demonstrating growth and stabilization.

Quarterly Treatment Points

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Canadian Treatment Points US Treatment Points
11,000 35,000
10,000
30,000
9,000
8,000 25,000
7,000
20,000
6,000
5,000
15,000
4,000
3,000 10,000
2,000
5,000
1,000
0 0
Q4-18 Q3-19 Q2-20 Q1-21 Q4-21 Q3-22 Q2-23 Q1-24 Q4-24 Q4-18 Q3-19 Q2-20 Q1-21 Q4-21 Q3-22 Q2-23 Q1-24 Q4-24
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Included in revenue generated in Canada for the three and twelve months ended December 31, 2024, is $2.9 million and $9.9 million (2023 - $3.7 million and $10.5 million) of revenue generated by Clear, the Company’s Environmental Services segment. Clear is a vertically integrated environmental service provider, providing environmental consulting, water management and water transfer services, as well as drilling fluids waste disposal services. The financial results of Clear are otherwise not material and as such have been aggregated with the consolidated results of the Company throughout this MD&A.

Cost of Sales and Gross Margin

Gross Margin represents the operating profit earned on revenue after deducting the associated costs of sales including cost of products, operational labour, operational related depreciation, transportation, and all other operational related costs. Margins vary due to changes in the type of products sold, relative product mix, well type, geographic area, and nature of activity. Generally, labour costs, although a significant component of cost of sales, have less of an impact on CES' margins than other cost elements such as product costs. Use of consultants and the variable component of compensation for employees provide CES with a means to manage seasonal activity swings, as well as overall fluctuations in the demand for CES' products and services.

Management's Discussion and Analysis � 7

CES Energy Solutions Corp.

Management's Discussion and Analysis Three and Twelve Months Ended December 31, 2024 (stated in thousands of Canadian dollars, except for share counts, per share amounts and operational metrics)

The table below details the calculation of Adjusted Gross Margin relative to Gross Margin determined in accordance with IFRS.

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 Change 2024 2023 Change
Gross Margin Gross Margin % of revenue(1)	147,823 126,975 20,848 581,084 479,349 101,735 24 % 23 % 1 % 25 % 22 % 3 %
Adjust for: Depreciation included in cost of sales	18,583 16,052 2,531 69,840 58,839 11,001
Adjusted Gross Margin(2) Adjusted Gross Margin(2)% of revenue	166,406 143,027 23,379 650,924 538,188 112,736 27 % 26 % 1 % 28 % 25 % 3 %

For the three and twelve months ended December 31, 2024, Adjusted Gross Margin increased to 27% and 28%, respectively, from 26% and 25% for the sames periods in 2023. These improvements to Adjusted Gross Margin in both the three and twelve month periods were driven by strong activity levels combined with improved margins as a result of increased service intensity, an attractive product mix, and the continued vertical integration of technologically advanced products supported by a prudent cost structure.

General and Administrative Expenses ("G&A")

The table below details the calculation of Adjusted General and Administrative Costs ("Adjusted G&A") relative to general and administrative expenses under IFRS.

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 Change 2024 2023 Change
General and administrative expenses G&A expenses % of revenue(1)	79,758 64,306 15,452 314,814 256,180 58,634 13 % 12 % 1 % 13 % 12 % 1 %
Adjust for: Stock-based compensation Depreciation & amortization	12,485 4,285 8,200 51,239 19,807 31,432 4,041 1,601 2,440 15,841 14,006 1,835
Adjusted General and Administrative Costs(2) Adjusted G&A costs(2)% of revenue	63,232 58,420 4,812 247,734 222,367 25,367 10 % 11 % (1)% 11 % 10 % 1 %

The increases in Adjusted General and Administrative Costs for both the three and twelve months ended December 31, 2024, are primarily reflective of increased activity levels and associated headcount. As a percentage of revenue, Adjusted G&A of 10% and 11% for the three and twelve months ended December 31, 2024, respectively, was in line with 11% and 10% for the same periods in 2023, as the increase in the fixed cost base was aligned with the increase in revenue levels year over year.

Stock-Based Compensation

Stock-based compensation expense increased by 191% and 159%, respectively, for the three and twelve months ended December 31, 2024, in comparison to the same periods in 2023. The increase was primarily driven by the Company's cash-settled compensation plan, reflecting a significant appreciation in the Company's share price throughout the referenced periods, along with the timing and price of equity-based and cash-based grants under the Company's stock-based compensation plans.

Management's Discussion and Analysis � 8

Finance Costs

For the three and twelve months ended December 31, 2024, and 2023, finance costs were comprised of the following:

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 2024 2023
Interest on debt, net of interest income Amortization of debt issue costs Foreign exchange loss (gain) Financial derivative (gain) loss Other finance costs	8,119 10,324 34,292 38,168 419 3,140 1,303 5,678 23,843 (5,113) 26,922 (6,041) (9,796) 2,085 (31,397) (4,242) 62 386 713 1,497
Finance costs	22,647 10,822 31,833 35,060

Interest expense

Finance costs for the three and twelve months ended December 31, 2024, include interest on debt, net of interest income, of $8.1 million and $34.3 million, respectively, compared to $10.3 million and $38.2 million, respectively, for the three and twelve months ended December 31, 2023. For the both the three and twelve months ended December 31, 2024, lower total long-term debt balances resulted in a correspondingly lower interest expense relative to the comparative periods in 2023. Included in these amounts is interest on the Company's Senior Notes and Canadian Term Loan Facility for the relevant periods.

Foreign exchange gains and losses

Finance costs for the three and twelve months ended December 31, 2024, include a foreign exchange loss of $23.8 million and $26.9 million, respectively, compared to a foreign exchange gain of $5.1 million $6.0 million for the three and twelve months ended December 31, 2023, respectively. Foreign exchange gains and losses are primarily related to the Company's USD denominated balances held in Canada and were impacted by the significant appreciation of the US dollar in Q4 2024.

Financial derivative gains and losses

Finance costs for the three and twelve months ended December 31, 2024, include a net derivative gain of $9.8 million and $31.4 million, respectively, compared to a net derivative loss of $2.1 million and a net derivative gain of $4.2 million, respectively, for the three and twelve months ended December 31, 2023, relating to the Company's foreign currency and equity derivative contracts. As of December 31, 2024, the Company had a financial derivative asset of $22.1 million (December 31, 2023 - financial derivative asset of $5.1 million and financial derivative liability of $0.1 million). CES has a Board approved hedging and derivative policy that sets out the guidelines and parameters Management follows when approaching its risk management strategies.

The Company periodically uses USD forward purchase contracts to manage its exposure to upcoming USD denominated purchases pursuant to its Canadian and US operations. At December 31, 2024, the Company had no outstanding foreign exchange contracts.

The Company periodically enters into equity derivative contracts to mitigate equity price risk, primarily related to the cash-based portion of the stock-based compensation plan. The equity derivatives mitigate exposure to fluctuations in share price by fixing the future settlement cost on a portion of the cash-settled plan. The following table details the outstanding equity derivative contracts as of December 31, 2024:

Period	Price	Contract	Notional Principal	Number of Shares
July 2025	$3.4268	Swap	$6,857	2,001,074
July 2026	$3.9882	Swap	$5,471	1,371,771
July2027	$7.5000	Swap	$2,970	396,000
Total	$4.0591		$15,298	3,768,845

Management's Discussion and Analysis � 9

Current and Deferred Income Taxes

Income tax expense is related to taxable income in Canada, the US, and other international jurisdictions.

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 2024 2023
Current income tax expense Deferred income tax(recovery)expense	6,900 5,768 35,733 15,637 (3,410) (2,602) 9,115 19,294
Total income tax expense	3,490 3,166 44,848 34,931

Current income tax expense increased for the three and twelve months ended December 31, 2024, relative to the comparable 2023 periods, primarily due to higher taxable earnings and lower tax loss utilization in the US and Canada and higher current taxes related to the Company's international jurisdictions. Deferred income tax expense decreased for the three and twelve months ended December 31, 2024, relative to the comparable 2023 periods, primarily due to temporary difference movements and lower tax loss utilization in the US and Canada and changes in the recognition of deferred tax assets.

Working Capital Surplus

CES had a Working Capital Surplus of $681.1 million as at December 31, 2024, which increased from $633.3 million as at September 30, 2024, and $632.8 million as at December 31, 2023. The movement during the three and twelve months ended December 31, 2024, was primarily driven by a rapid appreciation of the US dollar which resulted in increases to working capital on the revaluation of balances held in the Company's foreign subsidiaries. Excluding the impact of foreign exchange rates, the movement in the quarter was driven by increases to inventory and accounts receivable to support the year over year increases in activity levels. The Company continues to focus on working capital optimization benefiting from the high quality of its customers and diligent internal credit monitoring processes.

Total Debt

Total Debt as at December 31, 2024, of $452.6 million decreased from $469.6 million at December 31, 2023, and is primarily comprised of long-term debt, which totaled $344.9 million as at December 31, 2024, compared to $390.6 million at December 31, 2023. The decrease in Total Debt during the year is driven by the repayment of the Canadian Term Loan using the proceeds from the Senior Notes issuance, resulting in a permanent reduction in the Company’s fixed term debt, and the continued strong financial performance and ongoing efforts to optimize working capital cycles. These benefits were partly offset by increased levels of lease obligations and deferred acquisition consideration associated with the acquisition of Hydrolite. Additional discussion relating to the Company's Senior Facility, Senior Notes, and other long-term financial liabilities is included in the Liquidity and Capital Resources section of this MD&A.

Related Party Transactions

Included in general and administrative expenses is remuneration of key management personnel, which includes executive officers and directors of the Company. In addition to salaries and director fees, respectively, the Company also provides compensation to executive officers and directors under the Company's RSU plan. Remuneration of key management personnel is comprised of:

	Year Ended December 31,
	2024 2023
Salaries and cash-based compensation Stock-based compensation	17,902 14,905 10,336 8,543
	28,238 23,448

Management's Discussion and Analysis � 10

QUARTERLY FINANCIAL SUMMARY

The following is a summary of selected financial information of the Company for the last eight completed quarters:

	Three Months Ended
	Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023
Revenue United States(1) Canada(1)	390,203 402,632 390,924 387,674 361,091 361,469 375,455 368,975 215,181 203,887 162,272 200,904 192,366 175,048 140,387 188,721
Revenue Net income per share - basic per share - diluted Adjusted EBITDAC(2) Adjusted EBITDAC % of Revenue(2) per share - basic(2) per share - diluted(2) Dividends declared per share	605,384 606,519 553,196 588,578 553,457 536,517 515,842 557,696 41,855 46,638 48,155 54,458 49,187 38,552 33,901 33,002 *0.18* 0.20 0.20 0.23 0.21 0.15 0.13 0.13 *0.18* 0.20 0.20 0.23 0.20 0.15 0.13 0.13 103,174 102,537 95,447 102,032 84,607 80,218 73,893 77,103 17.0 % 16.9 % 17.3 % 17.3 % 15.3 % 15.0 % 14.3 % 13.8 % *0.46* 0.44 0.41 0.44 0.35 0.32 0.29 0.30 *0.45* 0.43 0.40 0.43 0.35 0.32 0.29 0.30 6,760 6,886 7,056 7,036 5,901 6,021 6,312 5,103 *0.030* 0.030 0.030 0.030 0.025 0.025 0.025 0.020
Common Shares Outstanding End of period - basic 225,329,085 229,525,039 235,188,873 234,519,860 236,042,566 240,859,525 252,463,642 255,129,525 End of period - fully diluted(2) 228,948,223 233,530,844 239,430,548 239,276,274 241,385,242 246,637,289 258,516,081 261,101,788 Weighted average - basic 226,704,896 233,176,879 235,162,870 234,373,347 239,160,013 248,808,899 253,756,497 254,882,825 Weighted average - diluted 230,379,790 237,181,631 239,402,896 238,934,382 244,555,366 254,588,996 258,297,780 260,850,689

1 Supplementary Financial Measure. Supplementary Financial Measures are provided in this MD&A because Management believes they assist the reader in understanding CES' results. Refer to "Non-GAAP Measures and Other Financial Measures" for further detail.

2Non-GAAP measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. The most directly comparable GAAP measure for Adjusted EBITDAC is Net income, and for Shares Outstanding, End of period - fully diluted is Common shares outstanding. Refer to the section entitled "Non-GAAP Measures and Other Financial Measures" contained within this MD&A.

Seasonality of Operations

The Western Canadian drilling industry is subject to seasonality with activity usually peaking during the winter months in the first and last quarters of any given calendar year. As temperatures rise in the spring, the ground thaws and becomes unstable, resulting in government road bans, which severely restrict activity in the second quarter. These seasonal trends typically lead to quarterly fluctuations in Canadian operating results and working capital requirements, which should be considered in any quarter over quarter analysis of the Company. The overall seasonality of the Company's operations has, and will continue to become less pronounced as a result of expansion in the US and increased diversification of operations away from the drill-bit.

Management's Discussion and Analysis � 11

SELECTED ANNUAL INFORMATION

The following is a summary of selected annual financial information of the Company for the last three completed years:

($000s, except per share amounts)	Year Ended December 31,
	2024 % Change 2023 % Change 2022
Revenue United States(1) Canada(1)	1,571,433 7 % 1,466,990 15 % 1,276,944 782,244 12 % 696,522 8 % 645,375
Total Revenue Income before taxes per share - basic per share - diluted Net income per share - basic per share - diluted Adjusted EBITDAC(2) Adjusted EBITDAC(2)% of Revenue per share - basic(2) per share - diluted(2) Dividends declared per share	2,353,677 9 % 2,163,512 13 % 1,922,319 235,954 24 % 189,573 50 % 126,754 *1.02* 34 % 0.76 52 % 0.50 *1.00* 35 % 0.74 54 % 0.48 191,106 24 % 154,642 62 % 95,218 *0.82* 32 % 0.62 68 % 0.37 *0.81* 33 % 0.61 89 % 0.36 403,190 28 % 315,821 23 % 257,022 *17.1 %* 17 % 14.6 % 9 % 13.4 % *1.74* 37 % 1.27 26 % 1.01 *1.70* 38 % 1.24 26 % 0.98 27,738 19 % 23,337 34 % 17,359 *0.120* 26 % 0.095 40 % 0.068

Financialposition($000s)	As at December 31,
	2024 % Change 2023 % Change 2022
Total assets Total long-term debt Long-term financial liabilities(3) Total Debt(2) Working Capital Surplus(2) Net Debt(2) Shareholders' equity	1,539,331 12 % 1,377,265 (2) % 1,411,003 344,888 (12) % 390,616 (21) % 491,482 412,608 (2) % 419,416 (21) % 532,771 452,588 (4) % 469,619 (16) % 557,531 681,085 8 % 632,764 (8) % 691,096 (228,497) 40 % (163,145) 22 % (133,565) 814,230 24 % 657,995 8 % 609,049

1Supplementary financial measure. Supplementary Financial Measures are provided in this MD&A because Management believes they assist the reader in understanding CES' results. Refer to "Non-GAAP Measures and Other Financial Measures" for further detail.

2Non-GAAP measure or ratio that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. The most directly comparable GAAP measure for Adjusted EBITDAC is Net income, and for Total Debt, Net Debt and Working Capital Surplus is Long-term financial liabilities. Refer to the section entitled "Non-GAAP Measures and Other Financial Measures" contained within this MD&A.

3Includes long-term portion of the Senior Facility, the Senior Notes, the Canadian Term Loan Facility, lease obligations, deferred acquisition consideration, and longterm portion of cash settled incentive obligations.

Management's Discussion and Analysis � 12

LIQUIDITY AND CAPITAL RESOURCES

Long-Term Debt

The Company's long-term debt is comprised of the following balances:

	As at
	December 31, 2024 December 31,2023
Senior Facility Canadian Term Loan Facility(1) Senior Notes	149,826 142,458 — 250,000 200,000 —
Less: net unamortized debt issue costs	349,826 392,458 (4,938) (1,842)
Total long-term debt	344,888 390,616

1Canadian Term Loan Facility as at December 31, 2023, includes current portion of $20.8 million.

Senior Facility

As at December 31, 2024, the Company has a syndicated and operating credit facility (the "Senior Facility") of approximately C$ equivalent $450.0 million. The Senior Facility matures on April 25, 2026, is secured by substantially all of the Company's assets, and includes customary terms, conditions and covenants. The Senior Facility is comprised of a Canadian facility of $300.0 million and a US facility of US$110.0 million and had a net draw of $148.8 million (December 31, 2023 - net draw of $140.6 million), with capitalized transaction costs of $1.1 million (December 31, 2023 - $1.8 million). Transaction costs attributable to the Senior Facility are recorded as part of the facility and amortized to finance costs over the remaining term.

Amounts drawn on the Senior Facility incur interest at the bank's prime rate or US base rate plus an applicable pricing margin ranging from 0.25% to 2.00% or the Canadian Bankers' Acceptance rate or the SOFR rate plus an applicable pricing margin ranging from 1.25% to 3.00%. The Senior Facility has a standby fee ranging from 0.281% to 0.675%. The applicable pricing margins and standby fees are based on a sliding scale of Total Net Debt to EBITDA ratio.

Under the Senior Facility, CES is subject to the following financial covenants:

The ratio of Total Net Debt to trailing EBITDA must not exceed 4.00:1.00 calculated on a rolling four-quarter basis;
The ratio of Net Senior Debt to trailing EBITDA must not exceed 3.00:1.00 calculated on a rolling four-quarter basis; and
The ratio of EBITDA to interest expense must be greater than 2.50:1.00, calculated on a rolling four-quarter basis.

The relevant definitions of key ratio terms as set forth in the syndicated and operating credit facilities agreement are as follows:

Total Net Debt is defined as all obligations, liabilities, and indebtedness excluding deferred income tax liabilities and deferred tax credits, office leases, other leases characterized as an operating lease, and accrued interest not yet due and payable.
Net Senior Debt is defined as Total Net Debt, as defined above, minus the principal amount owing on the Company's Senior Notes, any permitted vendor take-back debt, and all cash and cash equivalents.
EBITDA is defined as net income before interest, taxes, depreciation and amortization, gains and losses on disposal of assets, amortization of capitalized deferred financing costs, goodwill impairment, unrealized foreign exchange gains and losses, unrealized derivative gains and losses, equity settled stock-based compensation, and other gains and losses not considered reflective of underlying operations. EBITDA attributable to businesses acquired in the period are permitted to be added to EBITDA.

Management's Discussion and Analysis � 13

CES Energy Solutions Corp.

Management's Discussion and Analysis Three and Twelve Months Ended December 31, 2024 (stated in thousands of Canadian dollars, except for share counts, per share amounts and operational metrics)

The above noted definitions are not recognized under IFRS and are provided strictly for the purposes of the Company's Senior Facility covenant calculations. The covenant calculations as at December 31, 2024 and December 31, 2023, are as follows:

	As at
	December 31, 2024 December 31,2023
Total Net Debt EBITDA for the fourquarters ended	403,534 427,784 337,470 295,252
Ratio Maximum	1.196 1.449 4.000 4.000
Net Senior Debt EBITDA for the fourquarters ended	192,111 427,784 337,470 295,252
Ratio Maximum	0.569 1.449 3.000 3.000
EBITDA for the four quarters ended Interest Expense for the fourquarters ended	337,470 295,252 32,930 37,855
Ratio Minimum	10.248 7.800 2.500 2.500

Senior Notes

On May 24, 2024, the Company completed the private placement of $200.0 million of 6.875% senior unsecured notes (the "Senior Notes") due on May 24, 2029, for net proceeds after offering expenses and commission of $195.6 million. The Company used the proceeds from the issuance of the Senior Notes, along with amounts available under the Senior Facility, to repay the $250.0 million Canadian Term Loan Facility.

The Senior Notes contain certain early redemption options, whereby the Company can choose to redeem all of or a portion of at various redemption prices, which include the principal amount plus any accrued and unpaid interest to the applicable redemption date. The Company has the ability to redeem all of its outstanding Senior Notes on or after May 24, 2026. Interest is payable on the Senior Notes semi-annually on May 24 and November 24. The Senior Notes are unsecured, ranking equal in right of payment to all existing and future unsecured indebtedness, and have been guaranteed by the Company's current and future subsidiaries. Certain restrictions exist relating to items such as making restricted payments and incurring additional debt.

As at December 31, 2024, the Company was in compliance with the terms and covenants of its lending agreements. For the year ended December 31, 2024, the Company recorded $36.3 million (2023 - $44.8 million) in interest expense related to its long-term debt and lease balances, including the amortization of debt issue costs. Scheduled principal payments on the Company's long-term debt at December 31, 2024, are as follows:

2025		—
2026		149,826
2027		—
2028	and thereafter	200,000
		349,826

Management's Discussion and Analysis � 14

Leases

The Company incurs lease payments under a number of lease arrangements for which the underlying leased assets secure the lease obligations. Leases are entered into and exited in coordination with specific business requirements, which includes the assessment of the appropriate durations for the related leased assets. The Company's leases are for terms ranging from January 2025 through September 2034 with a weighted average interest rate of 7.08% (2023 - 6.15%).

As at December 31, 2023	73,101
Additions	50,998
Interest expense	5,487
Lease payments	(41,946)
Effects of movements in exchange rates	4,253
As at December 31,2024	91,893
Current portion of lease obligation	34,589
Long-termportion of lease obligation	57,304

Future minimum lease payments outstanding under the Company's lease obligations at December 31, 2024, are as follows:

Less than 1 year	39,857
1-5 years	59,210
5+years	4,016
Total lease payments	103,083
Amount representingimplicit interest	(11,190)
Lease obligations	91,893

Payments recognized in the financial statements relating to short-term leases, variable lease payments, and leases of low-value assets for the year ended December 31, 2024, were $4.7 million (2023 - $3.8 million). The Company's short-term leases and leases of lowvalue assets consist of leases of information technology, office equipment, and short-term facility rentals and variable lease payments relate to operating costs on office leases.

Management's Discussion and Analysis � 15

CES Energy Solutions Corp.

Management's Discussion and Analysis Three and Twelve Months Ended December 31, 2024 (stated in thousands of Canadian dollars, except for share counts, per share amounts and operational metrics)

Other Indebtedness

The following table details the remaining contractual maturities of the Company's financial liabilities as of December 31, 2024:

	Payments Due ByPeriod(1)
	Less than 3 months 3 months to 1year 1-2years 2-5years 5+years Total
Accounts payable and accrued liabilities Dividends payable(2) Income taxes payable Deferred acquisition consideration Senior Facility Senior Notes(3) Interest on Senior Notes Lease obligations(4) Commitments(5) Other long-term liabilities	230,073 18,071 — — — 248,144 6,760 — — — — 6,760 — 16,161 — — — 16,161 2,873 2,518 2,518 — — 7,909 — — 149,826 — — 149,826 — — — 200,000 — 200,000 — 13,750 13,750 34,375 — 61,875 5,767 28,822 27,549 26,122 3,633 91,893 5,117 7,605 22 239 — 12,983 — — 7,111 787 — 7,898
	250,590 86,927 200,776 261,523 3,633 803,449

1 Payments denominated in foreign currencies have been translated using the December 31, 2024, exchange rate. 2 Dividends declared as of December 31, 2024. 3 The Senior Notes are due on May 24, 2029. 4 Lease obligations reflect principal payments and excludes any associated interest portion. 5 Commitments include amounts relating to short-term leases, leases of low-value assets, variable payments associated with long-term leases, and inventory and capital commitments.

As of the date of this MD&A, Management is satisfied that CES has sufficient liquidity and capital resources to meet the long-term payment obligations of its outstanding loans and commitments. To support growth in the business and related working capital needs CES routinely considers its capital structure, including increasing or decreasing the capacity of its Senior Facility, issuing new senior notes, and other potential financing options. CES assesses its requirements for capital on an ongoing basis and there can be no guarantee that CES will not have to obtain additional capital to finance the expansion plans of the business or to finance future working capital requirements. In the event that additional capital is required, based on the market conditions at the time, it may be difficult to issue additional equity or increase credit capacity and the cost of any new capital may exceed historical norms and/or impose more stringent covenants and/or restrictions on CES. CES continues to focus on evaluating credit capacity, credit counterparties, and liquidity to ensure its ability to meet its ongoing commitments and obligations.

The Company is involved in litigation and disputes arising in the normal course of operations. Management is of the opinion that any potential litigation it is aware of will not have a material adverse impact on the Company's financial position or results of operations and therefore the above table does not include any provisions for any outstanding litigation or potential claims.

Summary of Statements of Cash Flows

The following table summarizes the Company's Statements of Cash Flows for the three and twelve months ended December 31, 2024, and 2023:

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 Change 2024 2023 Change
Net cash provided by (used in) Operating Activities Investing Activities FinancingActivities	62,231 39,292 22,939 304,664 301,779 2,885 (19,734) (15,885) (3,849) (95,218) (71,833) (23,385) (42,497) (23,407) (19,090) (209,446) (229,946) 20,500

Management's Discussion and Analysis � 16

Cash Flows from Operating Activities

For the three and twelve months ended December 31, 2024, net cash provided by operating activities totaled $62.2 million and $304.7 million, respectively, compared to $39.3 million and $301.8 million, respectively, for the comparable 2023 periods. The increases in net cash provided by operating activities for both the three and twelve month periods were driven by strong financial performance with higher contributions margins on associate activity levels relative to the comparative reference periods.

Cash Flows from Investing Activities

For the three and twelve months ended December 31, 2024, net cash flows used in investing activities totaled $19.7 million and $95.2 million, respectively, compared to $15.9 million and $71.8 million, respectively, for the comparable 2023 periods. The increases in net cash flows used in investing activities for both the three and twelve month periods were driven by higher capital expenditures in the current year, in support of sustained elevated revenue levels, and the acquisition of Hydrolite. Details of cash used for investment in property and equipment are as follows:

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 2024 2023
Expansion Capital(1) Maintenance Capital(1)	15,155 16,541 68,078 55,835 5,818 2,345 22,918 17,575
Total investment in property and equipment Change in non-cash investingworkingcapital	20,973 18,886 90,996 73,410 (169) (601) (2,354) (1,235)
Cash used for investment inpropertyand equipment	20,804 18,285 88,642 72,175
Adjust for: Proceeds on disposal of assets	(2,706) (2,952) (7,534) (11,159)
Net cash used for investment inpropertyand equipment(2)	18,098 15,333 81,108 61,016

1 Supplementary Financial Measure. Supplementary Financial Measures are provided in this MD&A because Management believes they assist the reader in understanding CES' results. Refer to "Non-GAAP Measures and Other Financial Measures" for further detail. 2Non-GAAP measure or ratio that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. The most directly comparable GAAP measure for Net cash used for investment in property and equipment is Cash used for investment in property and equipment. Refer to the section entitled "Non-GAAP Measures and Other Financial Measures" contained within this MD&A.

Expansion Capital expenditures in Q4 2024 included $0.8 million (twelve months ended December 31, 2024 - $7.5 million) in respect of a new barite grinding facility in the Superior Weighting division and $0.7 million (twelve months ended December 31, 2024 - $3.7 million) in respect of the Gardendale distribution expansion in the Jacam Catalyst division, in addition to spending incurred for field equipment, processing and warehouse equipment, and vehicles and rolling stock to support growth throughout the business for the three and twelve months ended December 31, 2024, particularly in the US. Maintenance Capital expenditures in Q4 2024 primarily included the replacement of field and warehouse equipment, and vehicles and rolling stock throughout the business to support existing activity levels.

Historically, the long-term capital investments required for CES to execute its business plan are not significant in relation to the total revenue and EBITDAC generated by the Company and the majority of capital expenditures are made at the discretion of CES based on the timing and the expected overall return on the investment. CES expects 2025 capital expenditures, net of proceeds on disposals of assets, to be approximately $80.0 million, evenly weighted between maintenance and expansion capital to support sustained activity levels and business development opportunities. CES plans to continue its disciplined and prudent approach to capital expenditures and will adjust its plans as required to support prudent growth initiatives throughout divisions.

Cash Flows from Financing Activities

For the three months ended December 31, 2024, cash flows used by financing activities totaled $42.5 million compared to $23.4 million for the comparable 2023 period, resulting from increased common share repurchases under the Company's NCIB. For the twelve months ended December 31, 2024, cash flows used by financing activities totaled $209.4 million, compared to $229.9 million for the comparable 2023 period. The decrease is primarily impacted by the reduction in the net draw on the Senior Facility by $68.4 million in 2023 as required investments in working capital were lower than in 2022. In 2024, the increase in the net draw on the Senior Facility was driven by working capital investments to support elevated activity levels, partly offset by increased common share repurchases under the Company's NCIB.

Management's Discussion and Analysis � 17

CES Energy Solutions Corp.

Management's Discussion and Analysis Three and Twelve Months Ended December 31, 2024 (stated in thousands of Canadian dollars, except for share counts, per share amounts and operational metrics)

Dividend Policy

The Company declared dividends to holders of common shares for the twelve months ended December 31, 2024, as follows:

	Dividend	Dividend	Per Common
	Record Date	Payment Date	Share	Total
March	Mar 29	Apr 15	$0.030	7,036
June	Jun 28	Jul 15	$0.030	7,056
September	Sept 30	Oct 15	$0.030	6,886
December	Dec 31	Jan 15	$0.030	6,760
Total dividends declared			$0.120	27,738

During the three and twelve months ended December 31, 2024, the Company's Dividend Payout Ratio averaged 13% and 12%, respectively, compared to 10% and 11% in the comparable periods in 2023. For the three month period the increase in the Company's Dividend Payout Ratio was driven by lower distributable earnings on a smaller working capital harvest, and an increase to the dividends declared per share. For the twelve month period the increase in the Company's Dividend Payout Ratio was driven by an increase to the dividends declared per share, partially offset by higher distributable earnings and a reduction in common shares outstanding relative to the, comparable period. Refer to "Non-GAAP Measures and Other Financial Measures" for further details on the calculation of Dividend Payout Ratio.

CES will continue to be protective of its balance sheet and provide liquidity to fund potential growth initiatives by being prudent with its cash dividend going forward. Through the course of the year, dividends declared as a proportion of net income and Distributable Earnings will vary based on the Company's financial performance. During periods of relatively strong financial performance, typically associated with higher activity levels, dividends declared as a percentage of net income and Distributable Earnings will decrease, and likewise, during periods of relatively weaker financial performance dividends declared as a percentage of net income and Distributable Earnings will increase. Dividends are funded by cash provided by operating activities. During periods of insufficient cash availability, due to relatively weaker financial performance or changes in the level of working capital, dividends may be funded by available cash or through CES' credit facilities.

Management and the Board of Directors review the appropriateness of dividends on a quarterly basis taking into account, among other considerations, the applicable solvency requirements under corporate legislation; current and anticipated industry conditions; and particularly, growth opportunities requiring Expansion Capital, management's forecast of Distributable Earnings, its forecasted Dividend Payout Ratio, and forecasted capital to be deployed under its NCIB. At this time, CES intends to continue to pay cash dividends to shareholders. In addition, future expansion, investments, acquisitions, or future share repurchases under CES' NCIB program may be funded internally by allocating a portion of cash flow in conjunction with, or in replacement of, external sources of capital such as debt or the issuance of equity. To the extent that CES deploys cash flow to finance these activities, the amount of cash dividends to shareholders may be affected. Alternatively, to the extent that CES' sustainable operating after tax cash flow improves, the amount of cash dividends to shareholders may be increased. Over the long-term, CES' business model has historically shown it can support a proportion of cash flow from operations being paid out as a dividend or through share repurchases as the long-term Expansion Capital investments and Maintenance Capital expenditures required for CES to execute its business plan have not been significant in relation to the total revenue and Adjusted EBITDAC generated. Refer to "Non-GAAP Measures and Other Financial Measures" for further details on the calculation of Distributable Earnings.

Management's Discussion and Analysis � 18

NCIB

On July 22, 2024, the Company renewed its previous NCIB, which ended July 20, 2024, to repurchase for cancellation up to 19,198,719 common shares, being 10% of the public float of common shares at the time of renewal. The renewed NCIB will terminate on July 21, 2025, or such earlier date as the maximum number of common shares are purchased pursuant to the NCIB or the NCIB is completed or is terminated at the Company's election. A summary of the Company's NCIB program, excluding any associated taxes on share repurchases, is presented below:

share repurchases, is presented below:
	Renewed NCIB		Since Inception
	July 21, 2023 to	Year Ended	July 17, 2018 to
	December 31,2024	December 31,2024	December 31,2024
Common shares repurchased and canceled through NCIB	10,600,100	15,176,230	69,229,487
Amount	83,726	101,492	237,772
Averagepriceper share	7.67	6.69	3.43

As at December 31, 2024, the Company has repurchased 69,229,487 or approximately 26% of the common shares outstanding since inception of the NCIB programs on July 17, 2018. Subsequent to December 31, 2024, the Company repurchased 940,000 additional shares at a weighted average price of $8.97 for a total of $8.4 million.

Share Capital and Stock-Based Compensation Plans

A summary of the Company's common shares and stock-based compensation plans outstanding is as follows:

	As at
	March 6,2025 December 31,2024 December 31,2023
Common shares outstanding Restricted Share Unit Plan ("RSU") Phantom Share Unit Plan("PSU")	224,685,116 225,329,085 236,042,566 3,338,680 3,619,138 5,342,676 5,009,102 5,025,015 6,480,451

NON-GAAP MEASURES AND OTHER FINANCIAL MEASURES

The accompanying consolidated financial statements have been prepared in accordance with IFRS. Certain supplementary information and measures not recognized under IFRS are also provided in this MD&A where Management believes they assist the reader in understanding CES' results. These measures are calculated by CES on a consistent basis unless otherwise specifically explained. These measures do not have a standardized meaning under IFRS and may therefore not be comparable to similar measures used by other issuers.

Non-GAAP financial measures and non-GAAP ratios have the definition set out in National Instrument 52-112 "Non-GAAP and Other Financial Measures Disclosure". The non-GAAP measures, non-GAAP ratios and supplementary financial measures used in this MD&A, with IFRS measures, are the most appropriate measures for reviewing and understanding the Company's financial results. The non-GAAP measures and non-GAAP ratios are further defined for use throughout this MD&A as follows:

EBITDAC - is a non-GAAP measure that has been reconciled to net income for the financial periods, being the most directly comparable measure calculated in accordance with IFRS. EBITDAC is defined as net income before interest, taxes, depreciation and amortization, finance costs, other income (loss), stock-based compensation, and impairment of goodwill, which are not reflective of underlying operations. EBITDAC is a metric used to assess the financial performance of an entity's operations. Management believes that this metric provides an indication of the results generated by the Company's business activities prior to how these activities are financed, how the Company is taxed in various jurisdictions, and how the results are impacted by foreign exchange and non-cash charges. This non-GAAP financial measure is also used by Management as a key performance metric supporting decision making and assessing divisional results.

Adjusted EBITDAC - is a non-GAAP measure that is defined as EBITDAC noted above, adjusted for specific items that are considered to be non-recurring in nature. Management believes that this metric is relevant when assessing normalized operating performance.

Management's Discussion and Analysis � 19

Adjusted EBITDAC % of Revenue - is a non-GAAP ratio calculated as Adjusted EBITDAC divided by revenue. Management believes that this metric is a useful measure of the Company's normalized operating performance relative to its top line revenue generation and a key industry performance measure.

Adjusted EBITDAC per share (basic and diluted) - is a non-GAAP ratio calculated as Adjusted EBITDAC divided by the weighted average number of basic and diluted shares outstanding, respectively. Adjusted EBITDAC is a non-GAAP measure. Management believes it is a useful measure of the Company's normalized operating performance on a per share basis.

Readers are cautioned that EBITDAC and Adjusted EBITDAC should not be considered to be more meaningful than net income determined in accordance with IFRS. EBITDAC, Adjusted EBITDAC, Adjusted EBITDAC % of Revenue and Adjusted EBITDAC per share are calculated as follows:

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 2024 2023
Net income Adjust for: Depreciation and amortization Current income tax expense Deferred income tax (recovery) expense Stock-based compensation Finance costs Other loss(income)	41,855 49,187 191,106 154,642 22,624 17,653 85,681 72,845 6,900 5,768 35,733 15,637 (3,410) (2,602) 9,115 19,294 12,485 4,285 51,239 19,807 22,647 10,822 31,833 35,060 73 (506) (1,517) (1,464)
EBITDAC	103,174 84,607 403,190 315,821
Adjusted EBITDAC	103,174 84,607 403,190 315,821
Adjusted EBITDAC % of Revenue Adjusted EBITDAC per share - basic Adjusted EBITDACper share - diluted	*17.0 %* 15.3 % *17.1 %* 14.6 % *0.46* 0.35 *1.74* 1.27 *0.45* 0.35 *1.70* 1.24

Distributable Earnings - is a non-GAAP measure that is defined as cash provided by operating activities, adjusted for change in noncash operating working capital less Maintenance Capital and repayment of lease obligations. Distributable Earnings is a measure used by Management and investors to analyze the amount of funds available to distribute to shareholders as dividends or through the NCIB program before consideration of funds required for growth purposes.

Dividend Payout Ratio - is a non-GAAP ratio that is defined as dividends declared as a percentage of Distributable Earnings. Management believes it is a useful measure of the proportion of available funds committed to being returned to shareholders in the form of a dividend relative to the Company's total Distributable Earnings.

Readers are cautioned that Distributable Earnings should not be considered to be more meaningful than cash provided by operating activities determined in accordance with IFRS.

Management's Discussion and Analysis � 20

Distributable Earnings and Dividend Payout Ratio are calculated as follows:

	Three Months Ended December 31,	Year Ended December 31,
	2024 2023	2024 2023
Cash provided by (used in) operating activities	62,231 39,292 6,543 28,888 (5,818) (2,345) (9,316) (8,128)	304,664 301,779 (11,655) (50,128) (22,918) (17,575) (34,271) (27,944)
Adjust for:
Change in non-cash operating working capital
Maintenance Capital(1)
Repayment of lease obligations
Distributable Earnings	53,640 57,707 6,760 5,901	235,820 206,132 27,738 23,337
Dividends declared
Dividend Payout Ratio	13 % 10 % 12 % 11 %

- Adjusted Gross Margin is a non-GAAP measure that has been reconciled to Gross Margin for the financial periods, being the most directly comparable measure calculated in accordance with IFRS. It represents Gross Margin under IFRS adjusted to exclude depreciation included in cost of sales as it relates to assets associated with operations and operating related activities, as well as adjusted for specific items that are considered to be non-recurring in nature. Management believes that this metric assists in determining CES' profitability prior to charges for depreciation. This non-GAAP financial measure is also used by Management to quantify the operating costs inherent in the Company's business activities, prior to operational related depreciation.

Adjusted Gross Margin % of Revenue - is a non-GAAP ratio that is calculated as Adjusted Gross Margin divided by revenue. Management believes that this metric is a useful measure of the Company's normalized cost of sales relative to its top line revenue generation. Readers are cautioned that Adjusted Gross Margin should not be considered to be more meaningful than Gross Margin

$000s	Three Months Ended December 31, Year Ended December 31,
	2024 2023 2024 2023
Gross Margin Gross Margin % of revenue	147,823 126,975 581,084 479,349 24 % 23 % 25 % 22 %
Adjust for: Depreciation included in cost of sales	18,583 16,052 69,840 58,839
Adjusted Gross Margin Adjusted Gross Margin % of revenue	166,406 143,027 650,924 538,188 27 % 26 % 28 % 25 %

Adjusted General & Administrative Costs - is a non-GAAP measure that has been reconciled to General and Administrative expenses for the financial periods, being the most directly comparable measure calculated in accordance with IFRS. Adjusted G&A costs excludes stock-based compensation, which is not reflective of underlying operations, depreciation and amortization, as it relates to assets not associated with operations and operating related activities, and specific items that are considered to be non-recurring in nature. Management believes that Adjusted G&A costs and Adjusted G&A costs % of Revenue assist in demonstrating CES' profitability.

Adjusted General & Administrative Costs % of Revenue - is a non-GAAP ratio that is calculated as Adjusted General and Administrative costs divided by revenue. Management believes that this metric is a useful measure of the Company's normalized G&A relative to its top line revenue generation. Readers are cautioned that Adjusted G&A costs should not be considered to be more meaningful than G&A expenses determined in accordance with IFRS.

Management's Discussion and Analysis � 21

Adjusted G&A costs and Adjusted G&A costs % of Revenue are calculated as follows:

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 2024 2023
General and administrative expenses G&A expenses % of revenue	79,758 64,306 314,814 256,180 13 % 12 % 13 % 12 %
Adjust for: Stock-based compensation Depreciation & amortization	12,485 4,285 51,239 19,807 4,041 1,601 15,841 14,006
Adjusted General and Administrative Costs Adjusted G&A Costs % of revenue	63,232 58,420 247,734 222,367 10 % 11 % 11 % 10 %

Funds Flow from Operations - is a non-GAAP measure that has been reconciled to Cash provided by (used in) operating activities for the financial periods, being the most directly comparable measure calculated in accordance with IFRS. Funds Flow from Operations is defined as cash flow from operations before changes in non-cash operating working capital and represents the Company's after tax operating cash flows. Readers are cautioned that this measure is not intended to be considered more meaningful than cash provided by operating activities or other measures of financial performance calculated in accordance with IFRS. Funds Flow from Operations is used by Management to assess operating performance and leverage, and is calculated as follows:

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 2024 2023
Cash provided by (used in) operating activities Adjust for: Change in non-cash operatingworkingcapital	62,231 39,292 304,664 301,779 6,543 28,888 (11,655) (50,128)
Funds Flow from Operations	68,774 68,180 293,009 251,651

Free Cash Flow - is a non-GAAP measure that has been reconciled to Cash provided by (used in) operating activities for the financial periods, being the most directly comparable measure calculated in accordance with IFRS. Free Cash Flow is defined as cash flow from operations adjusted for capital expenditures and repayment of lease obligations, net of proceeds on disposal of assets, and represents the Company's core operating results in excess of required capital expenditures. Readers are cautioned that this measure is not intended to be considered more meaningful than cash provided by operating activities, comprehensive income (loss), or other measures of financial performance calculated in accordance with IFRS. Free Cash Flow is used by Management to assess operating performance and leverage, and is calculated as follows:

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 2024 2023
Cash provided by (used in) operating activities Adjust for: Expansion Capital(1) Maintenance Capital(1) Repayment of lease obligations Proceeds on disposal of assets	62,231 39,292 304,664 301,779 (15,155) (16,541) (68,078) (55,835) (5,818) (2,345) (22,918) (17,575) (9,316) (8,128) (34,270) (27,944) 2,706 2,952 7,534 11,159
Free Cash Flow	34,648 15,230 186,932 211,584

1Supplementary Financial Measure. Supplementary Financial Measures are provided in this MD&A because Management believes they assist the reader in understanding CES' results.

Management's Discussion and Analysis � 22

Net Cash Used for Investment in Property and Equipment - is a non-GAAP measure that has been reconciled to Cash used for investment in property and equipment, being the most directly comparable measure calculated in accordance with IFRS. Management believes that this metric is a key measure to assess the total capital required to support ongoing business operations. Readers are cautioned that this measure is not intended to be considered more meaningful than cash used for investment in property and equipment or other measures of financial performance calculated in accordance with IFRS. Net Cash Used for Investment in Property and Equipment is calculated as follows:

	Three Months Ended December 31, Year Ended December 31,
	2024 2023 2024 2023
Cash used for investment in property and equipment Adjust for: Proceeds on disposal of assets	20,804 18,285 88,642 72,175 (2,706) (2,952) (7,534) (11,159)
Net Cash used for investment inpropertyand equipment	18,098 15,333 81,108 61,016

Working Capital Surplus - is a non-GAAP measure that is calculated as current assets less current liabilities, excluding the current portion of lease obligations, current portion of long-term debt, and deferred acquisition consideration. Management believes that this metric is a key measure to assess operating performance and leverage of the Company and uses it to monitor its capital structure.

Net Debt and Total Debt - are non-GAAP measures that Management believes are key metrics to assess liquidity of the Company and uses them to monitor its capital structure. Net Debt represents Total Debt, which includes the Senior Facility, The Canadian Term Loan Facility, the Senior Notes, both current and non-current portions of lease obligations, both current and non-current portions of deferred acquisition consideration, non-current portion of cash settled incentive obligations, offset by the Company's cash position, less Working Capital Surplus.

Readers are cautioned that Total Debt, Working Capital Surplus, and Net Debt should not be construed as alternative measures to Long-term financial liabilities as determined in accordance with IFRS. Total Debt, Working Capital Surplus, and Net Debt are calculated as follows:

	As at
	December 31, 2024 December 31,2023
Long-term financial liabilities(1) Current portion of lease obligations Current portion of long-term debt Currentportion of deferred acquisition consideration	412,608 419,416 34,589 27,980 — 20,800 5,391 1,423
Total Debt Deduct Working Capital Surplus: Current assets Current liabilities(2)	452,588 469,619 952,150 880,772 (271,065) (248,008)
WorkingCapital Surplus	681,085 632,764
Net Debt	(228,497) (163,145)

1Includes long-term portion of the Senior Facility, the Senior Notes, the Canadian Term Loan Facility, lease obligations, deferred acquisition consideration, and cash settled incentive obligations.

2Excludes current portion of lease liabilities, long-term debt and deferred acquisition consideration.

Management's Discussion and Analysis � 23

Shares outstanding, End of period - Fully Diluted - is a non-GAAP measure that has been reconciled to Common Shares outstanding for the financial periods, being the most directly comparable measure calculated in accordance with IFRS. This measure is not intended to be considered more meaningful than Common shares outstanding. Management believes that this metric is a key measure to assess the total potential shares outstanding for the financial periods and is calculated as follows:

	As at
	December 31, 2024 December 31,2023
Common shares outstanding Restricted share units outstanding,end ofyear	225,329,085 236,042,566 3,619,138 5,342,676
Shares outstanding,end ofyear - fullydiluted	228,948,223 241,385,242

Supplementary Financial Measures

A Supplementary Financial Measure: (a) is, or is intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of the Company; (b) is not presented in the financial statements of the Company; (c) is not a non-GAAP financial measure; and (d) is not a non-GAAP ratio. Supplementary financial measures found within this MD&A are as follows:

Revenue - United States - comprises a component of total revenue, as determined in accordance with IFRS, and is calculated as revenue recorded from the Company's US divisions.

Revenue - Canada - comprises a component of total revenue, as determined in accordance with IFRS, and is calculated as revenue recorded from the Company's Canadian divisions.

Top 5 customers as a % of total revenue - calculated as revenue recorded from the five customers comprising the largest individual components of revenue divided by total revenue, as determined in accordance with IFRS, for the period.

Top customer as a % of total revenue - calculated as revenue recorded from the one customer comprising the largest individual components of revenue divided by total revenue, as determined in accordance with IFRS, for the period.

Gross Margin % of Revenue - calculated as gross margin, as determined in accordance with IFRS, divided by revenue, as determined in accordance with IFRS, for the period.

General and Administrative Expenses % of Revenue - calculated as general and administrative expenses, as determined in accordance with IFRS, divided by revenue, as determined in accordance with IFRS, for the period.

Expansion Capital - comprises a component of total investment in property and equipment as determined in accordance with IFRS, and represents the amount of capital expenditure that has been or will be incurred to grow or expand the business or would otherwise improve the productive capacity of the operations of the business.

Maintenance Capital - comprises a component of total investment in property and equipment as determined in accordance with IFRS, and represents the amount of capital expenditure that has been or will be incurred to sustain the current level of operations.

OPERATIONAL DEFINITIONS

Operational terms used throughout this MD&A include:

Canadian DF Market Share - CES estimates its market share in Canada for its drilling fluids operations by comparing, on a semiweekly basis, active rigs where CES was contracted to provide services to the total active rigs for Western Canada. The number of total active rigs for Western Canada is based on Canadian Association of Energy Contractors ("CAOEC") published data for Western Canada.

US DF Market Share - CES estimates its market share in the US for its drilling fluids operations by comparing, on a semi-weekly basis, active rigs where CES was contracted to provide services to the total active land rigs in the United States. The number of total active rigs in the United States is based on the weekly land based Baker Hughes North American Rotary Rig Count.

Management's Discussion and Analysis � 24

Operating Days - For its drilling fluids operations, CES estimates its Operating Days, which are revenue generating days, by multiplying the average number of active rigs where CES was providing drilling fluid services by the number of days in the period.

Average Rig Count - For its drilling fluids operations, CES estimates its Average Rig Count, which is the average monthly number of active rigs where CES was providing drilling fluids in the referenced period.

Treatment Points - Represents the average estimated number of unique wells or oilfield sites serviced monthly by CES in the referenced period with production and specialty chemicals.

CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATES

As a routine element of the financial statement preparation process, Management is required to make estimates and assumptions based on information available as at the financial statement date. These estimates and assumptions affect the reported amounts of assets and liabilities, and the possible disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses for the period. Although estimates and assumptions must be made during the financial statement preparation process, it is Management's opinion that none of the estimates or assumptions were highly uncertain at the time they were made. Actual outcomes may differ from these estimates, which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and the revision affects both current and future periods.

Management has made significant assumptions about the future and other sources of estimation uncertainty at the reporting date that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ. Assumptions made relate to, but are not limited to, the following:

Significant judgments

Determining CGUs

For the purpose of assessing impairment of non-financial assets, the Company must determine its CGUs. Assets and liabilities are grouped into CGUs at the lowest level of separately identified cash flows. Determination of what constitutes a CGU and the respective allocation of shared corporate carrying values is subject to management judgment. The asset composition of a CGU can directly impact the recoverability of assets included within the CGU. Management has determined that the appropriate CGUs for the Company are the Canadian Operations and the US Operations.

Segment Reporting

Management has determined that the Company has a single reportable segment, Oilfield Chemicals. The CEO, as the chief operating decision maker, reviews consolidated financial information when making decisions about resource allocation and assessing performance.

Significant estimates

Accounts receivable

Accounts receivable are recorded at the estimated recoverable amount, which requires management to estimate uncollectible accounts, taking into consideration the customer's payment history, their credit worthiness and the current economic environment in which the customer operates. The primary input in CES' expected credit loss model on trade receivables is historical credit losses incurred in the US and Canada, adjusted as appropriate to reflect current conditions and estimates of future economic conditions. The Company's historical bad debt expenses have not been significant and are usually limited to specific customer circumstances. However, significant or unexpected changes in economic conditions could impact the Company's future expected credit losses.

Property and equipment

Management estimates the useful lives and residual value of property and equipment based on the period during which the assets are expected to be available for use. The amounts and timing of recorded expenses for depreciation of property and equipment for any period are affected by these estimated useful lives. The estimates are reviewed at least annually and are updated if expectations change as a result of physical wear and tear, technical or commercial obsolescence, and legal or other limits to use. It is possible that changes in these factors may cause significant changes in the estimated useful lives of the Company's property and equipment in the future.

Management's Discussion and Analysis � 25

Recoverability of asset carrying values

The recoverability of the Company's asset carrying values is assessed at the CGU level. The determination of the CGUs is subject to management judgments taking into consideration: the nature of the underlying business operations, geographical proximity of operations, shared infrastructure, and exposure to market risk.

The assessment of any impairment of property and equipment, intangible assets and goodwill is dependent upon estimates of the recoverable amount that take into account factors such as economic and market conditions, timing of cash flows, the useful lives of assets, and their related salvage values. The estimated future cash flows are dependent upon a number of factors including, among others, future activity levels within the oil and natural gas industry, current economic and market conditions, potential changes in government regulations, long term projections of future financial performance and the selection of appropriate discount rates used to determine the present value of future cash flows. Future activity cannot be predicted with certainty and, as such, actual results may differ from these estimates. Changes to these estimates may affect the recoverable amounts of the Company's CGUs, which may then require a material adjustment to their related carrying values.

Purchase price allocations

The assets acquired and liabilities assumed are recognized at fair value on the date the Company obtains control of a business. The measurement of each business combination is based on the information available on the acquisition date. The estimate of fair value of the acquired intangible assets, including goodwill, property and equipment, other assets, and the liabilities assumed are based on assumptions. The measurement is largely based on projected cash flows, discount rates, and market conditions at the date of acquisition.

Derivatives

The fair value of outstanding derivatives is based on forward prices, forward foreign exchange rates, and the Company's share price as at the reporting date and may differ from what will eventually be realized. Changes in the fair value of the derivative contracts are recognized in net income. The actual gains and losses realized on eventual cash settlement will vary due to subsequent fluctuations in realized prices.

Cash Settled Stock-based compensation

Stock-based compensation expense and the corresponding liability for PSUs is based on the estimated fair value of the units outstanding at the end of each quarter, which is based on the Company's share price. Large fluctuations in the actual stock-based compensation expense and associated liability may occur due to changes in the underlying share price, and actual amounts settled may differ from these estimates.

Income taxes

Management evaluates tax positions, annually or when circumstances require, which involves judgment and could be subject to differing interpretations of applicable tax legislation. The Company recognizes a tax provision when a payment to tax authorities is considered probable. However, the results of audits and reassessments and changes in the interpretations of tax laws and regulations may result in changes to those positions and, potentially, a material increase or decrease in the Company's income tax assets, liabilities and net income.

Deferred income tax assets are recognized when it is considered probable that deductible temporary differences will be recovered in the foreseeable future. To the extent that future taxable income and the application of existing tax laws in each jurisdiction differ significantly from the Company's estimate, the ability of the Company to realize the deferred income tax assets could be impacted.

Deferred income tax liabilities are recognized when there are taxable temporary differences that will reverse and result in a future outflow of funds to a taxation authority. The Company records a provision for the amount that is expected to be settled, which requires judgment as to the ultimate outcome. Deferred income tax liabilities could be impacted by changes in the Company's judgment of the likelihood of a future outflow and estimates of the expected settlement amount, timing of reversals, and the tax laws in the jurisdictions in which the Company operates.

Management's Discussion and Analysis � 26

Other Provisions & Contingencies

The determination of other provisions and contingent liabilities is a complex process that involves judgments about the outcomes of future events, estimates of timing and amount of future expenditures, the interpretation of laws and regulations, and discount rates. The amount recognized as a provision is management's best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

MATERIAL ACCOUNTING POLICY INFORMATION

The Company's material accounting policy information can be found in Note 3 of the consolidated financial statements for the year ended December 31, 2024. There have been no new standards or interpretations issued during the three and twelve months ended December 31, 2024, that materially impact the Company.

CORPORATE GOVERNANCE

Disclosure Controls and Procedures ("DC&P")

DC&P have been designed to provide reasonable assurance that information required to be reported by CES is gathered, recorded, processed, summarized and reported to senior management, including the President and Chief Executive Officer and Chief Financial Officer of CES, to allow timely decisions regarding required public disclosure by CES in its annual filings, interim filings, or other reports filed or submitted in accordance with Canadian securities legislation.

As at December 31, 2024, Management, under the direction and supervision of the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, evaluated the effectiveness of CES' disclosure controls and procedures, as detailed by National Instrument 52-109 – Certification of Disclosure in Issuers' Annual and Interim Filings as required by Canadian securities laws. Based on that evaluation, the President and Chief Executive Officer and the Chief Financial Officer have concluded that, as at December 31, 2024, the disclosure controls and procedures were effective.

Internal Controls over Financial Reporting ("ICFR")

Management of CES is responsible for establishing and maintaining ICFR for CES to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with CES' GAAP and includes those policies and procedures that (a) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of CES; (b) are designed to provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the CES' GAAP, and that receipts and expenditures of CES are being made only in accordance with authorizations of management and directors of CES; and (c) are designed to provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the CES' assets that could have a material effect on the annual financial statements or interim financial statements.

Management, under the direction and supervision of the President and Chief Executive Officer and the Chief Financial Officer and based on criteria set out in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, conducted an evaluation of the design and effectiveness of CES' ICFR as at December 31, 2024. Based on their assessment, Management determined that ICFR were effective as at December 31, 2024.

There have been no changes to CES' internal controls over financial reporting during the year ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

While the President and Chief Executive Officer and Chief Financial Officer believe that CES' DC&P and ICFR provide a reasonable level of assurance that they are effective, they do not expect that the DC&P or ICFR will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

For information regarding the corporate governance policies and practices of CES, the reader should refer to CES' 2024 Annual Report, CES' Annual Information Form dated March 6, 2025, in respect of the year ended December 31, 2024, and CES' Information Circular in respect of the June 18, 2024, Annual General and Special Meeting of shareholders each of which are available on the CES' SEDAR+ profile at www.sedarplus.ca.

Management's Discussion and Analysis � 27

RISKS AND UNCERTAINTIES AND NEW DEVELOPMENTS

CES' financial results described herein demonstrated the Company's capabilities in the markets in which the Company operates along with a proven defensible balance sheet and business model.

CES' customers are primarily North American oil and gas producers. Activity in the oil and gas industry is cyclical in nature. CES is directly affected by fluctuations in the level and complexity of oil and gas exploration and development activity carried on by its clients. In Canada, drilling activity is seasonal and, in turn, throughout North America it is directly affected by a variety of factors including: weather; natural disasters such as floods, tornadoes, and hurricanes; oil, natural gas, and natural gas liquids commodity prices; pipeline takeaway capacity; outcomes of major LNG projects; access to capital markets; government policies including, but not limited to, royalty, environmental, and industry regulations; and oil and natural gas demand fluctuations, which may be impacted by global political, military, economic, and social factors. Any prolonged or significant decrease in energy prices, economic activity or demand, or an adverse change in government regulations could have a significant negative impact on exploration and development drilling and completion activity in North America and, in turn, demand for CES' products and services.

As a provider of technically advanced consumable chemical solutions throughout the life-cycle of the oilfield, the volatility in activity experienced at the drill-bit, fracturing and completion stages is somewhat muted by the long-term and less variable revenue generated by CES at the pump-jack and wellhead during the production stage and in the mid-stream, pipeline and transportation phases. As CES grows these facets of its business, the predictability of its earnings should also increase. The revenue and general market consumption of consumable chemicals in these market segments is more stable and predictable than the drilling fluids market, however a material reduction in the demand for oil and gas may impact the demand for consumable chemicals as operators shut-in production.

The volatility in the financial markets has impacted the general availability of both credit and equity financing in the marketplace. World-wide political and economic risks are also intensifying, including the significant shift in US foreign policy and the use and threat of tariffs to achieve political and economic objectives. Should there be significant economic contraction as a result of changes to US foreign policy, if the conflict in Ukraine escalates or expands beyond Ukraine's borders, if the conflict between Israel, Hamas, Hezbollah in Lebanon and Iran reignites into a broader conflict in the Middle East, or if tensions between China and the United States develop into a more significant trade and economic dispute, this could have a significant impact not only on credit and equity markets, but also on global supply chains and demand for CES' products and services.

Although there has been a significant recovery in capital markets as it relates to the oil and gas industry, if there is a significant economic slowdown, restrictive regulatory regimes, or increased ESG concerns, it may prove to be difficult under future market conditions to issue additional equity, maintain or increase credit capacity, or re-finance existing credit without significant costs. CES is also reliant on its Senior Facility to fund working capital and other growth initiatives. In the event CES' lenders are unable to, or choose not to continue to fund CES, it would impair CES' ability to operate until alternative sources of financing were obtained, as access to the Senior Facility is critical to the effective execution of CES' business plan. At December 31, 2024, CES is in compliance with terms and covenants of all of its lending agreements including the Senior Facility and Senior Notes indenture.

The ability of CES to sell and expand its services will also depend upon the ability to attract and retain qualified personnel as needed. The demand for skilled employees has increased in recent years and the supply of top quality, experienced talent has been limited. The unexpected loss of CES' key personnel, the inability to retain or recruit skilled personnel, or potential disruptions to our employees' ability to perform their duties as a result of unforeseen events such as natural disasters or impacts from global pandemics, could have an adverse effect on CES' results. CES addresses these risks by:

attracting well trained and experienced professionals;
offering competitive compensation at all levels;
providing a variety of tools and technologies to enable employees to work remotely;
ensuring a safe working environment with clearly defined standards and procedures; and
offering its employees both internal and external training programs.

CES takes its health, safety, and environmental responsibilities seriously and has standards, policies, and procedures to address these risks. In addition, CES maintains insurance policies with respect to its operations providing coverage over what it considers to be material insurable risks. Although the Company maintains insurance policies, such insurance may not provide adequate coverage in all circumstances, nor are all such risks insurable. There can also be assurance that the Company will be able to maintain adequate insurance in the future at rates it considers reasonable and commercially justifiable. It is possible that the Company's insurance coverage will not be sufficient to address the costs arising out of the allocation of liabilities and risk of loss.

Management's Discussion and Analysis � 28

Management's Discussion and Analysis Three and Twelve Months Ended December 31, 2024 (stated in thousands of Canadian dollars, except for share counts, per share amounts and operational metrics)

CES Energy Solutions Corp.

Significant changes in the oil and gas industry including economic conditions, commodity prices, environmental regulations, government policy, pipeline takeaway capacity, and other factors may adversely affect CES' ability to realize the full value of its accounts receivable. In addition, a concentration of credit risk exists in trade accounts receivable since they are predominantly with companies operating in the WCSB in Canada and in the Texas, Mid-continent, Rockies, and Northeast regions of the US. CES continues to attempt to mitigate the credit risk associated with its customer receivables by performing credit checks as considered necessary, managing the amount and timing of exposure to individual customers, reviewing its credit procedures on a regular basis, reviewing and actively following up on older accounts, and insuring trade credit risks where deemed appropriate. CES does not anticipate any significant issues in the collection of its customer receivables at this time outside of those which have already been provided for, but continues to monitor these risks on an ongoing basis. If a low oil and natural gas price environment returns, particularly with respect to pricing differentials affecting producers in the WCSB, and if access to capital markets remains weak for CES' customers, there would be a risk of increased bad debts. It is not possible at this time to predict the likelihood, or magnitude, of this risk.

CES' US footprint and size of operations continues to make up the majority of CES' business. CES' significant US presence provides for upside potential and reduces certain risks through diversification of operations. It also exposes the Company to additional specific risks including: currency risk with added exposure to fluctuations in the USD; regulatory risks associated with environmental concerns; and the future impact of increased regulatory requirements. In addition, the outcome of the US election has created additional uncertainty with respect to the regulatory environment as well as tariffs and other policies impacting trade between the US, Canada, and the rest of the world.

The Company's ability to provide services to its customers is also dependent upon the availability at reasonable prices of raw materials, which the Company purchases from various suppliers, many of whom are located in North America but also increasingly from overseas including Asia and the Middle East. The availability and supply of materials has been consistent in the past; however since the COVID-19 pandemic, there have been increasing supply chain issues and disruptions. Coupled with increasing demand from the Company's customers, periodic shortages of certain materials have been experienced and costs have been affected. The Company does source some limited, non-exclusive products from the Middle East, however, the specific source countries do not appear to be impacted by the conflict in Israel and the Company does not anticipate these countries to be impacted going forward. The Company can source these products from other regions should the conflict in the Middle East expand in a significant way. Additionally, increased political tensions relating to China and Taiwan, as well as China's relationship with the rest of the western world, could cause significant supply chain disruptions, particularly as the Company sources more materials from Asia. Moreover, disruptions to transportation networks, impacts from pandemics, shortages of transportation infrastructure (including container availability), or other disruptions to global supply chains may impact the Company's ability to deliver products and services to its customers. These disruptions may also impact global demand for oil and gas, which may in turn result in a reduction in drilling activity and production economics globally. CES continues to evaluate potential changes to customer activity levels and the potential impacts to our business.

The foregoing risks and uncertainties are not intended to be exhaustive. Reference should be made to CES' Annual Information Form dated March 6, 2025, for the year ended December 31, 2024, and in particular to the heading "Risk Factors" for further risks associated with the business, operations, and structure of CES, which is available on CES' SEDAR+ profile at www.sedarplus.ca.

FORWARD-LOOKING INFORMATION & STATEMENTS

Certain statements in this MD&A may constitute forward-looking information or forward-looking statements (collectively referred to as "forward-looking information"), which involves known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of CES, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. When used in this MD&A, such information uses such words as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate", and other similar terminology. This information reflects CES' current expectations regarding future events and operating performance and speaks only as of the date of the MD&A. Forward-looking information involves significant risks and uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, including, but not limited to, the factors discussed below. Management of CES believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking information contained in this document speaks only as of the date of the document, and CES assumes no obligation to publicly update or revise such information to reflect new events or circumstances, except as may be required pursuant to applicable securities laws or regulations.

Management's Discussion and Analysis � 29

In particular, this MD&A contains forward-looking information pertaining to the following: the seasonality of CES' business and the ability of CES to manage seasonal activity swings; the certainty and predictability of future cash flows, profitability, and earnings; Management's proposed corporate strategy for the Company; ability of CES to manage overall fluctuations in demand for CES' products and services; expectations regarding industry conditions; expectations regarding CES' revenue and free cash flow generation and the use of such free cash flow including to increase its dividend or repurchase the common shares of the Company; expectations regarding end market activity levels; expectations regarding CES' customer's capital expenditures and exploration and development activities; expectations regarding the impact of economic policy and tariffs on the energy sector and specifically the Company, including the degree of impact to the Company; CES' ability to execute on financial goals relating to its balance sheet, liquidity, working capital and cost structure; expectations regarding the performance of CES' business model and counter cyclical balance sheet during downturns; the expectation that cash interest costs and maintenance capital will be funded from available cash or through CES' credit facilities; future estimates as to dividend levels; the business strategy regarding cash dividend payments in the future; the sufficiency of liquidity and capital resources to meet long-term payment obligations or other commitments not included as liabilities on its statement of financial position; potential M&A opportunities; the long-term capital investments required for CES to execute on its business plan; the amount of CES' non-acquisition related capital expenditures in 2025, including maintenance capital and discretionary expansion capital and the anticipated timing for spending such capital; the repurchase of CES' common shares pursuant to the NCIB; Management's opinion of the impact of any potential litigation or disputes; the application of critical accounting estimates and judgements; the timing of adoption of new accounting standards and the potential impact of new accounting standards on CES' financial statements; the collectability of accounts receivable; the effectiveness of CES' credit risk mitigation strategies; CES' ability to increase or maintain its market share; expectations regarding the number of Treatment Points in Canada and the US; CES' ability to leverage third party partner relationships to drive innovation in the consumable fluids and chemicals business; supply and demand for CES' products and services, including expectations for growth in CES' production and specialty chemical sales, expected growth in the consumable chemicals market, and the impact of such increased sales on operating leverage and cost structure; impact of new drilling techniques, longer reach laterals and the increased intensity and size of hydraulic fracturing; industry activity levels and divergence in activity levels between Canada and the US; expectations regarding service intensity in the upstream oil and gas sector; expectations regarding the adoption of advanced critical chemical solutions; continued strength in commodity prices, reduced availability of high quality drilling locations; anticipated drilling activity for natural gas projects; any forward curves for commodity prices; treatment under governmental regulatory and taxation regimes; expectations regarding expansion of services in Canada and the US; development of new technologies; expectations regarding CES' growth opportunities in Canada, the US and overseas; the effect of acquisitions on the Company; expectations regarding the performance or expansion of CES' operations; expectations regarding end markets for production chemicals and drilling fluids in Canada and the US including anticipated volatility throughout 2025; expectations regarding the demand for oil and natural gas; expectations relating to general economic conditions, interest rates and geopolitical risk; expectations regarding the diversification of operations away from the drill-bit; expectations regarding demand for CES' services and technology; investments in research and development and technology advancements; access to debt and capital markets and cost of capital; impacts of the Company's issuance of Senior Notes on the Company's capital structure and reduced cost of capital; CES' ability to continue to comply with covenants in debt facilities; expectations regarding the timing and amount of common shares repurchased pursuant to the Company's NCIB; and competitive conditions.

CES' actual results could differ materially from those anticipated in the forward-looking information as a result of the following factors: general economic conditions in the US, Canada, and internationally; geopolitical risk; fluctuations in demand for consumable fluids and chemical oilfield services, downturn in oilfield activity; oilfield activity in the Permian, the WCSB, and other basins in which the Company operates; a decline in frac related chemical sales; a decline in operator usage of chemicals on wells; decreased service intensity levels; an increase in the number of customer well shut-ins; a shift in types of wells drilled; volatility in market prices for oil, natural gas, and natural gas liquids and the effect of this volatility on the demand for oilfield services generally; declines in prices for natural gas, natural gas liquids, and oil, and pricing differentials between world pricing, pricing in North America, and pricing in Canada; decisions by OPEC regarding production quotas; the impact of the removal of sanctions on Russia and the potential for additional oil and gas supply to the global markets; competition, and pricing pressures from customers in the current commodity environment; conflict, war and political and societal unrest that may impact CES' operations, supply chains as well as impact the market for oil and natural gas generally; currency risk as a result of fluctuations in value of the US or Canadian dollar; liabilities and risks, including environmental liabilities and risks inherent in oil and natural gas operations; sourcing, pricing and availability of raw materials, consumables, component parts, equipment, suppliers, facilities, shipping containers, and skilled management, technical and field personnel; the collectability of accounts receivable; ability to integrate technological advances and match advances of competitors; ability to protect the Company's proprietary technologies; availability of capital; uncertainties in weather and temperature affecting the duration of the oilfield service periods and the activities that can be completed; the ability to successfully integrate and achieve synergies from the Company's acquisitions; changes in legislation and the regulatory environment, including uncertainties

Management's Discussion and Analysis � 30

with respect to oil and gas royalty regimes, programs to reduce greenhouse gas and other emissions and regulations restricting the use of hydraulic fracturing; pipeline capacity and other transportation infrastructure constraints; changes to government mandated production curtailments; reassessment and audit risk and other tax filing matters; changes and proposed changes to US policies including tax policies or policies relating to the oil and gas industry, or trade policies; impact of tariffs on the global economy, the energy industry, and the Company; international and domestic trade disputes, including restrictions on the transportation of oil and natural gas and regulations governing the sale and export of oil, natural gas and refined petroleum products; the impact of climate change policies in the regions which CES operates; the impact and speed of adoption of low carbon technologies; potential changes to the crude by rail industry; changes to the fiscal regimes applicable to entities operating in the US and WCSB; access to capital and the liquidity of debt markets; fluctuations in foreign exchange and interest rates, including the impact of changing interest rates on the broader economy; CES' ability to maintain adequate insurance at rates it considers reasonable and commercially justifiable; and the other factors considered under "Risk Factors" in CES' Annual Information Form for the year ended December 31, 2024, and "Risks and Uncertainties" in this MD&A.

Without limiting the foregoing, the forward-looking information contained in this MD&A is expressly qualified by this cautionary statement.

MARKET AND INDUSTRY DATA

Unless otherwise indicated, the market and industry data contained in this MD&A is based upon independent industry publications and websites or was based on estimates derived from the same along with the knowledge of and experience of management in the markets in which the Company operates. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. None of these sources have provided any form of consultation, advice or counsel regarding any aspect of, or is in any way whatsoever associated with, CES. Actual outcomes may vary materially from those forecasted in such reports or publications, and the prospect for material variation can be expected to increase as the length of the forecast period increases. While the Company believes this data can be reasonably relied on, market and industry data is subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. The Company has not independently verified any of the data from third party sources referred to in this MD&A or ascertained the underlying assumptions relied upon by such sources.

ADDITIONAL INFORMATION

Additional information related to CES can be found on the System for Electronic Document Analysis and Retrieval (SEDAR+) at www.sedarplus.ca. Information is also accessible on CES' web site at www.cesenergysolutions.com.

Management's Discussion and Analysis � 31

CES Energy Solutions Corp. Management's Discussion and Analysis Information

STOCK EXCHANGE LISTINGS

Toronto Stock Exchange Trading Symbol: CEU

OTC Trading Symbol: CESDF

LEGAL COUNSEL

Stikeman Elliot, LLP, Calgary, AB Crowe & Dunlevy, Oklahoma City, OK

REGISTRAR & TRANSFER AGENT Computershare Investor Services Inc. Calgary, AB and Toronto, ON

BOARD OF DIRECTORS

Kyle D. Kitagawa[1,2] Chairman

John M. Hooks[2,3]

Spencer D. Armour III[2,3] Stella Cosby[3,4] Ian Hardacre[1,4] Joe Wright[1,4]

Kenneth E. Zinger

¹Member of the Audit Committee 2Member of the Compensation Committee 3Member of the Corporate Governance and Nominating Committee 4Member of the Health, Safety and Environment Committee

CORPORATE OFFICE

Suite 1400, 332 – 6[th] Avenue SW Calgary, AB T2P 0B2 Phone: 403-269-2800 Toll Free: 1-888-785-6695 Fax: 403-266-5708

US BUSINESS UNITS

AES Drilling Fluids Suite 800, 575 N Dairy Ashford Houston, TX 77079 Phone: 281-556-5628 Toll Free: 1-888-556-4533 Fax: 281-589-7150

Jacam Catalyst, LLC 11999 East Highway 158 Gardendale, TX 79758 Phone: 432-563-0727 Fax: 432-224-1038

CANADIAN BUSINESS UNITS

EXECUTIVE OFFICERS

Kenneth E. Zinger President & Chief Executive Officer President, Canadian Operations

Anthony M. Aulicino Executive Vice President & Chief Financial Officer

James F. Strickland President, US Drilling Fluids

Vernon J. Disney President, US Production Chemicals

CORPORATE SECRETARY

Matthew S. Bell

AUDITORS

Deloitte LLP Calgary, AB

BANKERS

Scotiabank Canada, Calgary, AB

Canadian Energy Services Suite 1400, 332 – 6[th] Avenue SW Calgary, AB T2P 0B2 Phone: 403-269-2800 Toll Free: 1-888-785-6695 Fax: 403-266-5708

PureChem Services Suite 1400, 332 – 6[th] Avenue SW Calgary, AB T2P 0B2 Phone: 403-269-2800 Toll Free: 1-888-785-6695 Fax: 403-266-5708

Sialco Materials Ltd. 6605 Dennett Place Delta, BC V4G 1N4 Phone: 604-940-4777 Toll Free: 1-800-335-0122 Fax: 604-940-4757

Clear Environmental Solutions Suite 720, 736 – 8[th] Avenue SW Calgary, AB T2P 1H4 Phone: 403-263-5953 Fax: 403-229-1306

www.cesenergysolutions.com

Management's Discussion and Analysis � 32

AI assistant

CES Energy Solutions Corp. — Management Reports 2025

43728_rns_2025-03-06_f296298e-a89f-4a98-80f2-d4581f1f3d6b.pdf

MANAGEMENT'S DISCUSSION AND ANALYSIS

USE OF NON-GAAP MEASURES AND OTHER FINANCIAL MEASURES

BUSINESS OF CES

FINANCIAL HIGHLIGHTS

CES Energy Solutions Corp.

OUTLOOK

RESULTS FOR THE PERIODS

Revenue and Operating Activities

CES Energy Solutions Corp.

Quarterly Treatment Points

Cost of Sales and Gross Margin

CES Energy Solutions Corp.

General and Administrative Expenses ("G&A")

Stock-Based Compensation

Finance Costs

Interest expense

Foreign exchange gains and losses

Financial derivative gains and losses

Current and Deferred Income Taxes

Working Capital Surplus

Total Debt

Related Party Transactions

QUARTERLY FINANCIAL SUMMARY

Seasonality of Operations

SELECTED ANNUAL INFORMATION

LIQUIDITY AND CAPITAL RESOURCES

Long-Term Debt

Senior Facility

CES Energy Solutions Corp.

Senior Notes

Leases

CES Energy Solutions Corp.

Other Indebtedness

Summary of Statements of Cash Flows

Cash Flows from Operating Activities

Cash Flows from Investing Activities

Cash Flows from Financing Activities

CES Energy Solutions Corp.

Dividend Policy

NCIB

Share Capital and Stock-Based Compensation Plans

NON-GAAP MEASURES AND OTHER FINANCIAL MEASURES

Supplementary Financial Measures

OPERATIONAL DEFINITIONS

CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATES

Significant judgments

Determining CGUs

Segment Reporting

Significant estimates

Accounts receivable

Property and equipment

Recoverability of asset carrying values

Purchase price allocations

Derivatives

Cash Settled Stock-based compensation

Income taxes

Other Provisions & Contingencies

MATERIAL ACCOUNTING POLICY INFORMATION

CORPORATE GOVERNANCE

Disclosure Controls and Procedures ("DC&P")

Internal Controls over Financial Reporting ("ICFR")

RISKS AND UNCERTAINTIES AND NEW DEVELOPMENTS

CES Energy Solutions Corp.

FORWARD-LOOKING INFORMATION & STATEMENTS

MARKET AND INDUSTRY DATA

ADDITIONAL INFORMATION

STOCK EXCHANGE LISTINGS

LEGAL COUNSEL

BOARD OF DIRECTORS

CORPORATE OFFICE

US BUSINESS UNITS

CANADIAN BUSINESS UNITS

EXECUTIVE OFFICERS

CORPORATE SECRETARY

AUDITORS

BANKERS

www.cesenergysolutions.com

CES Energy Solutions Corp. Management Reports 2025