Pulse Seismic Inc. — Management Reports 2018

Apr 20, 2018

This is the Company We Have Built

2018 Investment Guide

2018 INVESTMENT GUIDE

1

Pulse Generates Cash throughout the Economic Cycle… And Allocates it Prudently.

Pulse Seismic Inc. is a cash-based business. Headquartered in Calgary, Alberta, Pulse is a pure-play provider of digital seismic data to Western Canada’s oil and natural gas sector. Continuous discipline over spending makes the most of Pulse’s revenue. This results in a high cash margin, enabling Pulse to deliver cash EBITDA and shareholder free cash flow.

$ 29.5mm

All-time record seismic data library sale, closed in Q3 2017. A “transaction-based” sale driven by M&A activity in Western Canada’s oil and natural gas sector.

Pulse deploys cash to increase its revenue-generating capacity by increasing the size of its seismic data library, and to provide returns to its shareholders. Improved financial results last year facilitated a special dividend equivalent to a 6% annual yield, plus significant buybacks of Pulse’s shares, and further strengthened the balance sheet. With business conditions strengthening in Western Canada’s oil and natural gas sector, the Company is optimistic about the rest of 2018 and 2019.

Why is shareholder free cash flow (SFCF) Pulse’s most important metric?

SFCF provides investors with clarity regarding how much cash is being generated that can benefit them: to invest in growing Pulse’s seismic data library, pay down debt and to generate shareholder returns by buying back shares or paying dividends. A non-GAAP metric, SFCF is what remains after deducting all cash costs, encumbered revenues used to fund participation surveys, and non-discretionary spending such as interest and taxes. SFCF is a window into Pulse’s ability to create value.

SHAREHOLDER FREE CASH FLOW

Total ($ millions) Per Share (¢)

==> picture [240 x 161] intentionally omitted <==

----- Start of picture text -----

50 100
50
40 80
80 [¢]
30
30 28 60
24
21 54 [¢]
20 47 [¢]
20 40
15
35 [¢] 36 [¢] 34 [¢]
26 [¢] 9
10 20
16 [¢]
0 0
2010 2011 2012 2013 2014 2015 2016 2017
----- End of picture text -----

PULSE SEISMIC INC.

SPECIAL DIVIDEND

20[[¢/][share]][[share]]

20[[¢/][share]][[share]] Special dividend totalling $10.9 million paid in December 2017. Reflects $29.5 million record sale, strong balance sheet and large cash position.

Dividend Payments [$] 30.0MM Unallocated Working Capital [$] 22.3MM Debt Repayments [$] 73.4MM Net CAPEX [$] 123.1MM Common Share Purchases [$] 37.9MM

FUNDS ALLOCATED 2010 - 2017

FUNDS AVAILABLE 2010 - 2017

2017 CASH MARGIN

85[%] Highly levered to revenues, thanks to Pulse’s low cash costs. 2017 was up from 64% in 2016 and outperformed 8-year average of 78%.

==> picture [167 x 61] intentionally omitted <==

$195.6MM Shareholder Free Cash Flow (SFCF)

$23.3MM Equity Financing

$45.0MM Long-term Debt Drawings

$22.8MM Cash and Working Capital

Notes to Reader

1. Please see Pulse’s annual President’s Message starting on page 13 for a discussion of the performance metrics and key concepts introduced on these pages.

2. Please see Pulse’s Management’s Discussion and Analysis for the year ended December 31, 2017 for further information on Pulse’s financial results, key performance metrics, capital structure, the nature and use of seismic data by the oil and natural gas industry, the business risks to which Pulse is subject, and other important topics.

2018 INVESTMENT GUIDE 1

Has a Unique Asset with Enduring Value… Fortified by High Barriers to Entry.

Pulse has Western Canada’s second-largest licensable dataset of three-dimensional (3D) and two-dimensional (2D) seismic data. Seismic is a key technology for oil and natural gas exploration and development.

==> picture [187 x 254] intentionally omitted <==

----- Start of picture text -----

SASKATCHEWAN
ALBERTA
3D Seismic
28,956 km [2]
2D Seismic
450,000 km
BRITISH COLUMBIA
At March 1, 2018
----- End of picture text -----

KEY ASPECTS OF PULSE’S SEISMIC DATA LIBRARY

• [ High in technical quality – “High-fold” surface-to-basement ] 2D data and 3D data

• [Excellent geographical coverage – Both in traditional producing ] areas where assets change hands and in newer exploration and development areas or “plays” where companies need new seismic

• [ Key asset is digital data – We are not a software developer. ] Seismic data does not deteriorate/expire and can be resold indefinitely an unlimited number of times

• [ Can generate sales of any size and type at any time]

• [ Unlimited data lifespan and the high costs of shooting new data:]

• Create high barriers to entry by potential new competitors

• Increase the replacement value of Pulse’s seismic data library

• Protect the pricing of Pulse’s seismic data licences

REVENUE ($ millions) Total 2D Sales 3D Sales Participation Surveys

SEISMIC DATA LIBRARY

==> picture [495 x 180] intentionally omitted <==

----- Start of picture text -----

90 $
80
2B
70 Estimated
Replacement Value
60
50 Pulse’s
40 Cumulative
Acquisition Cost
30 $444mm
20
Book
10 $
18mm Value
0
2010 2011 2012 2013 2014 2015 2016 2017
----- End of picture text -----

Pulse generates revenue in three ways. Pulse sells licences to use its seismic data to oil and natural gas companies. There are two forms of licensing sale: “regular” or “traditional” sales, and “transaction-based sales” linked to industry M&A activity. In addition, Pulse organizes shoots of new seismic data called “participation surveys”, in which one or more customers co-fund a significant portion of the survey costs.

2 PULSE SEISMIC INC.

SEISMIC DATA LIBRARY SIZE AND SALES BY DATA VINTAGE

==> picture [472 x 679] intentionally omitted <==

----- Start of picture text -----

This graphic depicts when the seismic data in 3D 2D 1960s
Pulse’s library was originally “shot” (recorded)
1970s
and, by illustrating how data shot as far back
as the 1970s continue to make new sales, 1980s
it demonstrates that seismic data
1990s
remains valuable indefinitely.
2000s
2010+
3D 2D
Pulse has a strong track record of success in growing its seismic data library. By increasing the chances that Pulse
will have the coverage a given customer needs, enlarging the library expands Pulse’s revenue-generating capacity.
GROWTH IN SEISMIC DATA LIBRARY 3D library (km [2] ) 2D library (km)
35,000 600,000
30,000
500,000
25,000
20,000 400,000
15,000
300,000
10,000
5,000 200,000
2009 2010 2011 2012 2013 2014 2015 2016 2017
2
28,956 KM 450,000 KM
SIZE SIZE
SALES 2010-2017 SALES 2010-2017
$219 MM $54 MM
----- End of picture text -----

2018 INVESTMENT GUIDE 3

Offers a Window into the Energy Sector…But is Unlike most Energy Services Companies.

Pulse’s business is less volatile than the rest of the energy services sector — and our share price reflects this. Why? Our unique business model creates exposure to the capital spending of Western Canada’s oil and natural gas producers, while buffering us against the boom-and-bust cycles suffered by most energy services providers.

==> picture [490 x 253] intentionally omitted <==

----- Start of picture text -----

Pulse Share Price S&P/TSX Composite — Oil and Gas Equipment and Services
3,000 $5.00
2,500 $4.00
2,000 $3.00
1,500 $2.00
1,000 $1.00
2010 2011 2012 2013 2014 2015 2016 2017
A $27.8 MM transaction-based sale led to record annual A new record deal of $29.5 MM lifted Pulse’s share price
SFCF, attracting new investors and interest in the Company despite ongoing economic weakness that continued to
and driving the share price to a record high of nearly $5.00. affect the rest of the energy services sector.
----- End of picture text -----

==> picture [154 x 110] intentionally omitted <==

==> picture [154 x 110] intentionally omitted <==

==> picture [154 x 110] intentionally omitted <==

Pulse differs from other energy services companies. Our primary asset is digital — as the seismic renderings above illustrate. We have a lean staff of seventeen people — and our revenues are scalable without “staffing up”. We do not have costly seismic crews and equipment, because we use subcontractors when we conduct participation surveys. We have very low fixed and variable cash costs. We don’t

need to make capital expenditures to keep operating and create revenue. We’re not subject to the cost spirals common during growth periods in the energy sector. That’s why Pulse’s share price is determined less by industry cycles and more by our actual financial results and the returns we provide for shareholders through dividends, share buybacks and accretive acquisitions.

4 PULSE SEISMIC INC.

==> picture [32 x 5] intentionally omitted <==

----- Start of picture text -----

Fort St. John
----- End of picture text -----

Montney Deep Basin Duvernay Cardium

==> picture [33 x 5] intentionally omitted <==

----- Start of picture text -----

Grande Prairie
----- End of picture text -----

over some of Western Canada’s most active and growing unconventional light oil and natural gas reservoirs or “play areas”. With their highly productive wells, their massive, long-life reserves and their improving processing and egress infrastructure, these plays are the main focus of industry capital investment.

==> picture [24 x 5] intentionally omitted <==

----- Start of picture text -----

Edmonton
----- End of picture text -----

==> picture [19 x 6] intentionally omitted <==

----- Start of picture text -----

Calgary
----- End of picture text -----

==> picture [426 x 235] intentionally omitted <==

==> picture [422 x 173] intentionally omitted <==

==> picture [64 x 48] intentionally omitted <==

Liquids Pipelines Natural Gas Pipelines Proposed Pipelines

2018 INVESTMENT GUIDE 5

Has an Excellent Balance Sheet… Exercises Strict Control of its Shares, and Pays a Dividend when Prudent.

Pulse works continually to deliver real returns to its shareholders. Our balance sheet is the foundation. In an industry where excessive debt can kill, Pulse stands out for its strength. Entering 2018 we had zero long-term debt, borrowing capacity of $30 million (expandable to $70 million) and a cash balance of $27.4 million.

PULSE GENERATES RETURNS FOR ITS SHAREHOLDERS BY:

Holding down costs (including interest 1. costs). Pulse’s annual cash costs have been reduced from $9.3 million per year in 2013 to only $6.3 million in 2017, including cutting interest costs to virtually zero.

1. Buying back common shares.through year-end 2017 Pulse returned From 2006 $45.2 million in capital to shareholders by repurchasing a total of 17.8 million common shares.

2. Shooting new seismic and/or conducting acquisitions of existing seismic datasets that meet Pulse’s strict technical and economic criteria — thereby increasing Pulse’s revenue-generating capacity.

Paying dividends when it is financially prudent 4. to do so. Pulse has paid quarterly dividends for sustained periods in the past. Based on its strong results in 2017, Pulse issued a special dividend of $0.20 per share in December, providing $10.9 million to shareholders — equivalent to a 6% yield for 2017.

DIVIDENDS (per share)

==> picture [490 x 136] intentionally omitted <==

----- Start of picture text -----

20 [¢] $30
MM
52 [¢]
per share
2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢] 2 [¢]
2010 2011 2012 2013 2014 2015 2016 2017 Cumulative
¢1.25 ¢1.25 ¢1.25
----- End of picture text -----

YEAR-END DEBT ($ millions)

==> picture [241 x 105] intentionally omitted <==

----- Start of picture text -----

62
47
27
22
6
0 0 0
2010 2011 2012 2013 2014 2015 2016 2017
----- End of picture text -----

SPECIAL DIVIDEND PER SHARE 20[¢]

On November 1, 2017, Pulse’s Board of Directors approved and declared a special dividend of $0.20 per share, enabling shareholders to benefit directly and immediately from the record sale of $29.5 million in August 2017.

6 PULSE SEISMIC INC.

==> picture [485 x 660] intentionally omitted <==

----- Start of picture text -----

NCIB SHARE PURCHASES
Purchased maximum allowable number
of shares through the NCIB. Record
year resulted in increased ability to
Successful in
return capital to shareholders.
purchasing 55% of
maximum allowable
for the year.
2017
2016
2015
2014
2013
2012
2011
2010
SHARES OUTSTANDING AT YEAR END Diligent use of NCIB since its inception in
2006 has driven significant reduction in
shares outstanding, down by more than
13 million shares since the end of 2010.
2017
2016
2015
2014
2013
2012
2011
2010
4,992,180
2,447,222
1,900,243
2,101,277
1,625,400
1,156,100 341,272
154,712
67,201,671
66,045,571
61,140,442
59,349,120
57,247,843
55,921,060
55,592,689
54,020,817
----- End of picture text -----

2018 INVESTMENT GUIDE 7

Knows How to Sell… And Makes Sales Throughout the Industry Cycle.

Pulse generates revenue in two main ways: through sales of its data and through customer co-funding of new data shoots. Data sales take two main forms: “traditional” sales and “transaction-based” sales. This revenue mix enables Pulse to realize significant sales in weaker as well as stronger times — and to experience large-scale, surprising upside, such as the record sale of Q3 2017.

“TRADITIONAL” SALES

Seismic is a universal technology used by oil and natural gas producers to gain clear geological understanding of areas they wish to explore and develop. Pulse’s traditional seismic data sales are straightforward licensing arrangements in which a producer chooses from Pulse’s enormous coverage of high-quality data to support their drilling in a particular area.

Traditional sales tend to rise during periods of vigorous capital investment, high rates of drilling and continuous churn of assets and land positions. Western Canada has

$ 29.5mm

All-time record seismic data library sale, closed in Q3 2017. A “transaction-based” sale driven by M&A activity in Western Canada’s oil and natural gas sector.

been coming out of an extended cyclical low and Pulse is cautiously optimistic about higher traditionalbased sales in 2018 and 2019.

“TRANSACTION-BASED” SALES

These are relicensing events triggered by changes in control involving the licensee and their assets covered by Pulse’s seismic data. Transaction-based sales reflect deal-making within the highly competitive oil and natural gas industry. This includes changes to corporate structures and sizes, the movement of assets between companies, the addition of joint venture partners and the entry of new companies to Western Canada.

The enormous capital requirements

of the large unconventional plays being widely pursued in Western Canada encourage asset owners to seek external capital; the resulting deals often trigger transactionbased relicensing sales. Whether a given M&A event will result in a transaction-based sale depends on multiple variables, ranging from whether the acquiring company already holds the same data to whether it even wishes to drill on the acquired assets.

73[%]

Proportion of total revenue from transactionbased sales in 2017. Since 2010, these sales have ranged from 8% to 73% of total sales.

3D PARTICIPATION SURVEYS

These are programs of new 3D data that Pulse conducts and which customers co-fund in return for a licensed copy of the new data.

Since 2010 Pulse has conducted ten 3D participation surveys. Any prospective survey must meet Pulse’s key criteria of high technical quality, surveying of all potential zones, high ratio of customer pre-funding, and location in a multi-zone play area with available processing and pipeline capacity and competitive industry activity creating high probability of data relicensing. No participation surveys are underway to date in 2018.

8 PULSE SEISMIC INC.

TOTAL REVENUE BREAKDOWN ($ millions)

==> picture [496 x 292] intentionally omitted <==

----- Start of picture text -----

Each classification In 2012 we achieved The 2012/2013 Traditional data Participation
Survey Revenue
of revenue a record transaction- winter participation library sales
can fluctuate based sale of $27.8 survey season was decreased when the Transaction-
based Sales
significantly from million. This record was our largest ever, with downturn started
Traditional
year to year, this surpassed in 2017 with a revenue of $35 million at the end of Sales
is the nature of $29.5 million sale. achieved in total for 2014. Less capital
our business. the two years. spending in the oil
$86
and gas industry
drives down
traditional sales.
22
$51
$44
$40
$33 15 45 $36
3 $24
13
3
32
17 $14
15 8 3
11
4
15 33 19 19 19 10 10 12
2010 2011 2012 2013 2014 2015 2016 2017
----- End of picture text -----

UNDERSTANDING PULSE’S TRANSACTION-BASED SALES

==> picture [50 x 51] intentionally omitted <==

==> picture [46 x 43] intentionally omitted <==

==> picture [49 x 49] intentionally omitted <==

Asset Owner: Wishes to monetize a particular producing or non-producing asset package to reduce risks or raise capital for use elsewhere.

Asset Owner: A producer needing to realize immediate shareholder value places itself for sale or is subject to a hostile takeover.

Asset Owner: Needs additional capital or expertise to develop an oil or natural gas property, to avoid expiry of mineral leases or to reduce risks.

New Entrant: Purchases entire property or mineral rights to particular geological zones.

Licensing Trigger: Asset sale does not trigger change-of-control clause, but data licences are not transferred with the asset and the new owner may need seismic data.

Benefit to Pulse: Asset sale creates prospects of selling a new data licence and potential for a new customer relationship.

New Entrant: Acquires the previous owner’s assets — but not the seismic data licence.

Licensing Trigger: Acquirer has 30 days to act on the change-of-control clause triggered in Pulse’s seismic data licensing agreement.

Benefit to Pulse: Strong prospects for transfer fees as acquirer may not have data over the same area (especially if a new entrant to Western Canada).

New Entrant(s): Participate(s) in the play through partnership or joint venture arrangement. Group pools the assets, expertise and capital.

Licensing Trigger: Under Pulse’s licensing agreements, any new technical or operational participant must purchase a data licence.

Benefit to Pulse: Strong prospects of selling a second or third licence for the same data.

2018 INVESTMENT GUIDE 9

Has an Experienced and Tested Management Team…Committed to Long-term, Profitable Growth

Pulse operates efficiently with a lean team of under 20 staff and a flat management structure headed by executives with longstanding experience in the seismic data business. The longterm strategic objective of the management team and Board of Directors is to grow Pulse into Western Canada’s largest licensable seismic dataset while maintaining the pure-play focus that has been key to our success.

DATA LIBRARY MILESTONES

==> picture [486 x 136] intentionally omitted <==

----- Start of picture text -----

Three surveys completed by March 2013 made up the largest survey
program in Pulse’s history. They provided a wealth of development
opportunities, formed the basis for future re-sales of the new 3D data and
improved our data library coverage of the important Duvernay play.
2009 2010 2011 2012 2013 2014 2015 2016 2017
$76 million acquisition of seismic data doubled the size of the 3D 107,000 km of 2D seismic data was acquired for $3.65 million, using a
library, increased the 2D library by 30%, increased the Company’s combination of $2.15 million in cash and $1.5 million worth of shares.
market cap significantly and raised Pulse’s profile in the Marketplace. The newly acquired data began generating sales in the first year.
----- End of picture text -----

==> picture [486 x 246] intentionally omitted <==

Seismic interpretation and visualization software allows oil and natural gas companies to plan their well drilling programs.

10 PULSE SEISMIC INC.

WITH THE STRONGEST BALANCE SHEET IN ITS HISTORY, PULSE IS AS WELL-POSITIONED TO GROW AS IT HAS EVER BEEN.

2018 INVESTMENT GUIDE 11

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS
(thousands of dollars except per share data, numbers of shares and kilometres of seismic data)	Three months ended December 31,		Years ended December 31,
	2017	2016	2017	2016
Revenue — Data library sales	5,449	4,176	43,525	14,339
Amortization of seismic data library Net earnings (loss) Per share basic and diluted Cash provided by operating activities Per share basic and diluted Cash EBITDA(a) Per share — basic and diluted(a) Shareholder free cash fow(a) Per share — basic and diluted(a) Capital expenditures Seismic data purchases, digitization and related costs Property and equipment	1, 9 58 1, 3 1 1 0.02 2,080 0.04 3,791 0.07 3,301 0.06 1,450 8	4,657 (1,253) (0.02) 2,517 0.04 2,996 0.05 3,003 0.05 64 —	15,870 15,087 0.27 38,755 0.70 37,070 0.67 29,729 0.54 1,575 48	18,973 (7,490) (0.13) 9,471 0.17 9,119 0.16 9,029 0.16 2,444 6
Total capital expenditures Special dividend paid Weighted average shares outstanding Basic and diluted Shares outstanding at year-end Seismic library at year-end 2D in kilometres 3D in square kilometres FINANCIAL POSITION AND (thousands of dollars except ratio)	1,458 10,915 54,404,433 RATIO AT	64 1,623 — 10,915 56,042,673 55,135,035 54,020,817 447,000 28,956 YEAR-END 2017		2,450 — 56,105,593 55,921,060 447,000 28,647 2016
Working capital Working capital ratio Cash and cash equivalents Total assets Shareholders’ equity		22,486 3.1:1 27,422 51,693 37,810		10,674 8.9:1 5,847 44,957 38,646

(a) These non-GAAP financial measures are defined, calculated and reconciled to the nearest GAAP financial measures in the Management’s Discussion and Analysis for the year ended December 31, 2017.

12 PULSE SEISMIC INC.

Generating Cash and Allocating it Prudently

2018 INVESTMENT GUIDE 13

A Unique Asset with Enduring Value

Pulse’s core asset takes up almost no space, existing digitally on secure servers and tape back-up. It depreciates but does not deteriorate. It ages but does not “age-out” into obsolescence. It seems like a commodity, but is priced like a scarce good. Its usefulness remains steady, it generates high-margin, recurring revenue for year upon year, its functionality grows as other technology improves, and it becomes arguably more valuable as it becomes ever-harder to replace.

These are some of the intriguing competitive strengths of Pulse’s library of seismic data — three-dimensional (3D) as well as two-dimensional (2D) (please see pages 2-3 for geographical coverage and key statistics). The data library is the source of Pulse’s long-term value. Yet how can a collection of data with virtually zero book value, in an era when state-of-the-art software can be rendered obsolete and worthless within a few years, be so valuable? It requires understanding a few points about seismic data:

• [Nearly all oil and natural gas exploration and ] development requires the use of 3D and/or 2D seismic to map and visualize underground geology (please see Pulse’s Management’s Discussion and Analysis for the year ended December 31, 2017 for additional technical information on seismic data). This is particularly so as oil and gas producers have worked to better manage risks and as the average size of geological targets has shrunk over time (Pulse’s business is not linked to the oil sands);

• [Pulse has Western Canada’s second-largest ] licensable dataset, providing access to over 7 million acres — over 28,000 square kilometres. We have maintained a commitment to high technical quality, including “high-fold” 2D data encompassing all geological zones of interest from surface to basement, and modern three-wave 3D data. Pulse’s library covers many traditional producing pools as well as the most resource-rich “unconventional” plays such as the Montney (truly among North America’s top long-term reservoirs), Duvernay, Deep Basin and Cardium;

• [Seismic data is pure information, not software. It ] does not deteriorate or expire. It can be used at will, indefinitely, as many times as we can license it. Every year, we generate sales of 2D or 3D data that was shot up to 40 years ago;

• [As the software used to process and interpret ] seismic data and to visualize underground geology continually improves (a job done by other companies, not Pulse), seismic data in some respects actually grows in value;

• [Competition is limited. Although Western Canada ] has several other seismic data providers, there is little overlap between 3D datasets. This gives each dataset unique value. Seismic is too expensive to “overshoot” (duplicate) except in rare instances where the initial shoot was zone or play-specific or the sole owner will not license the data to others. When an oil or gas producer decides to drill in an area covered by Pulse’s seismic, chances are we have the only 3D data;

• [Shooting seismic is expensive. In Alberta, costs ] for a new 3D shoot can range from $30,000 to $50,000 per square kilometre. Seismic shoots also face increasing regulatory burdens, including ever-increasing environmental restrictions and no-go zones, as well as landowner and community opposition. Any prospective competitor would face very high barriers to entry, while an oil and gas producer considering a proprietary shoot would have to invest months of time and several times the cost of licensing Pulse’s data. Among other benefits, the high barriers to entry avert downward pricing pressure faced by “commodity”-style businesses.

That is why, with a book value of only $18 million at December 31, 2017, Pulse has an asset of enduring value that has generated anywhere from 80 percent to 350 percent of that amount in any given year, and that would require decades of work and capital investment of over $2 billion to replicate — if it could be done at all.

14 PULSE SEISMIC INC.

An Exception in a Volatile Sector

Delivering Value to Shareholders

2018 INVESTMENT GUIDE 15

1. We are into the 12[th] year of our NCIB. Pulse issues equity from time to time to help finance additions to its seismic data library, then allocates a portion of the resulting cash flow to steadily repurchase the shares. Since 2006 Pulse has repurchased 17.8 million shares, returning $45.2 million of capital to shareholders, including $5.3 million in 2017.

The NCIB is an efficient use of funds, generating a better than dollar-for-dollar return by immediately using available cash, without imposing any commitments on Pulse, as it can be scaled back or suspended whenever we wish. Buying back shares increases future SFCF per share and reduces future dividend costs at a given per-share level.

1. We pay a dividend when we can do so without weakening Pulse’s financial position. In 12 of the past 15 years, Pulse paid a quarterly dividend that typically generated a yield of 3-4 percent. Our shareholders like the dividend, and we are pleased to pay it. But we avoided becoming wedded to paying a dividend at all costs. In times of economic weakness or lower sales, we have not hesitated to suspend the dividend, and we did so in November 2015 and for 2009 and 2010.

Last year, our record $29.5 million transactionbased sale brought in so much cash that the Board concluded our shareholders deserved an immediate return of a portion of this sale. Accordingly, we declared a special dividend of $0.20 per common share, which was paid in December. The special dividend equalled 10 regular quarterly dividends, thereby making up for the suspended dividend from its suspension through the first quarter of this year. Another way of looking at the special dividend was that it provided a yield of approximately 6 percent for 2017.

Proven Management Team

Pulse’s management team is experienced, tested, and has demonstrated long-term strategic continuity. I’m proud of them. The team has proved its ability to:

• [Grow the Company through well-timed, ] transformative acquisitions that add high-quality, well-situated, re-sellable data at favourable

valuations. Growth increases coverage, and more data over more land area strengthens the chances of providing customers with what they need, increasing Pulse’s revenue-generating capacity. The current corporate structure can manage significantly higher revenue levels in any given year;

• [Protect the Company’s finances — and shareholders’ ] interests — by limiting long-term debt, avoiding unsuitable or unfavourably priced acquisitions, negotiating favourable lending agreements, and paying down debt whenever possible. Pulse’s clean balance sheet proved key to surviving the recent downturn. Currently, our ample borrowing capacity is a major advantage in maximizing SFCF and enabling us to act on any growth opportunities we might find;

• [ Hold costs down. In the period 2013-2017, the team ] reduced Pulse’s annual fixed cash operating costs by approximately $2.0 million per year;

• [Keep the business focused as a pure-play seismic ] data library provider; and

• [ Make the best use of the Company’s internal capital ] by appropriately allocating cash in furtherance of increasing shareholder value.

Pulse’s management team is well-suited to Pulse’s current business. We are focused where a publicly traded data library provider should be: on serving the evolving needs of our valued, loyal customers, and on growing the library with a disciplined focus on profitability which will lead to returns for our shareholders.

Outlook

Following a 2017 that delivered more upside than we expected, Pulse’s optimism is strengthening. While Western Canada’s oil and gas producing sector has lagged the strong recovery experienced in the U.S., things are picking up. Higher crude oil prices and lower Canada-U.S price differentials (offset only slightly by a strengthening Canadian dollar) have been positive for producers focused on crude oil and natural gas liquids, and the price outlook remains positive. Industry capital spending announcements so far this year have been relatively strong and drilling rates are forecast to climb

16 PULSE SEISMIC INC.

==> picture [100 x 60] intentionally omitted <==

2018 INVESTMENT GUIDE 17

Advisories

FORWARD-LOOKING INFORMATION

This document contains information that constitutes “forward-looking information” or “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities legislation. The forward-looking information and material risk factors that could affect this forward-looking information are discussed in detail in the Forward-Looking Information and Risk Factors sections of Pulse’s MD&A for the most recent calendar year and interim periods, which can be found on SEDAR at www.sedar.com and on Pulse’s corporate website at www.pulseseismic.com.

NON-GAAP MEASURES

This document makes use of non-GAAP measures. The Company’s continuous disclosure documents provide discussion and analysis of “cash EBITDA”, “cash EBITDA per share”, “shareholder free cash flow” and “shareholder free cash flow per share”. These financial measures do not have standard definitions prescribed by International Financial Reporting Standards and, therefore, may not be comparable to similar measures disclosed by other companies. The Company has included these non-GAAP financial measures because management, investors, analysts and others use them as measures of the Company’s financial performance. The non-GAAP measures are discussed in detail in the Non-GAAP Financial Measures and Reconciliations section of Pulse’s MD&A for the most recent calendar year and interim periods, which can be found on SEDAR at www.sedar.com and on Pulse’s corporate website at www.pulseseismic.com.

18 PULSE SEISMIC INC.

www.pulseseismic.com

20 PULSE SEISMIC INC.