CALGARY, Alberta, April 26, 2023 — This news release contains “forward-looking information and statements” within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in this news release. This news release contains references to certain Financial Measures and Ratios, including Adjusted EBITDA (earnings before income taxes, loss (gain) on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), Funds Provided by (Used in) Operations, Net Capital Spending and Working Capital. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies, see “Financial Measures and Ratios” later in this news release.

Precision Drilling announces 2023 first quarter financial results:

• All key financial metrics including revenue, daily operating margins⁽¹⁾, Adjusted EBITDA⁽²⁾, and net earnings exceeded results from the same period last year and the fourth quarter of 2022, supported by stronger drilling activity and pricing increases in the U.S. and Canada.
• Precision’s North American drilling activity grew 13% over the first quarter of 2022.
• Revenue was $559 million, an increase of 59% over the first quarter of 2022 and 9% sequentially.
• Revenue per utilization day reached US$34,963 in the U.S. and $32,304 in Canada, while daily operating margins⁽¹⁾ increased to US$14,692 in the U.S. and $13,558 in Canada as drilling rigs continued to reprice at higher day rates.
• Precision continued to scale its Alpha™ and EverGreen™ product lines across its Super Triple rig fleet and grew revenue from these technological and environmental offerings by over 60% from the first quarter of 2022.
• Adjusted EBITDA⁽²⁾ increased to $203 million, significantly higher than the $37 million reported in the first quarter of 2022, and included a recovery from share-based compensation plans of $12 million compared to an expense of $48 million in the comparative quarter.
• Net earnings were $96 million or $7.02 per share compared with a net loss of $44 million or a $3.25 loss per share in the first quarter of 2022.
• Cash provided by operations was $28 million versus cash used in operations of $65 million in the first quarter of 2022. Funds provided by operations⁽²⁾ was $160 million compared to $30 million in the comparative quarter.
• Precision remains committed to its 2023 debt reduction target of $150 million and its longer-term targets of reducing debt by $500 million between 2022 and 2025 and achieving a normalized Net Debt to Adjusted EBITDA⁽²⁾ ratio of less than 1.0 times by the end of 2025.
• Returned $5 million of capital to shareholders through share repurchases.
• Ended the quarter with $42 million of cash and approximately $540 million of available liquidity.
• Completion and Production Services generated revenue of $75 million and Adjusted EBITDA⁽²⁾ of $17 million, representing increases of 95% and 166%, respectively, from the first quarter of 2022. Precision successfully integrated its 2022 High Arctic acquisition into its operations and is on track to achieve synergies of $5 million, on an annualized basis, in the second quarter.
• Internationally, we have five rigs currently active in the Middle East, increasing to eight by the middle of 2023 as we complete rig recertifications. These eight contracts represent approximately $755 million in backlog revenue that stretches into 2028.
• In April, Precision committed to a $5 million equity investment in CleanDesign Income Corp. (CleanDesign), a key supplier of Precision’s EverGreen™ Battery Energy Storage Systems (BESS). The investment provides Precision with key BESS and power management technologies and is aligned with the Company’s overall emissions reduction strategy.
• Precision decreased its 2023 capital spending budget to $195 million as compared to its initial budget of $235 million. The decrease mainly reflects fewer drilling rig upgrades and lower maintenance costs.
  ^{(1) Revenue less operating costs per utilization day.
  (2) See “FINANCIAL MEASURES AND RATIOS.”}

Precision’s President and CEO, Kevin Neveu, stated:

“Precision’s financial results exceeded expectations, delivering the highest first quarter revenue, Adjusted EBITDA, and net earnings since 2014, demonstrating our customers’ desire for our High Performance, High Value services and the earnings power of our Super Series fleet. During the quarter, we continued to expand margins, scaled our Alpha™ digital technologies and EverGreen™ suite of environmental solutions, and maintained strict cost control. Our efforts delivered returns to shareholders as we generated $7.02 of net earnings on a per-share basis.

“Precision’s current activity levels remain strong with 57 rigs running in the U.S. compared to 55 at the same time last year. First quarter activity was 17% higher, with normalized average day rates almost US$12,000 above day rates for the same period last year. In Canada, we are currently operating 38 rigs, which is 15% higher than the same time last year. Our first quarter activity was 9% higher than last year, with average day rates approximately $8,000 higher. In the Middle East, we are back to five rigs operating again, about one month ahead of plan, and expect to be running eight rigs by mid-year, slightly ahead of plan.

“We are confident in our business, both in the current year and long-term. Land drilling fundamentals remain strong, Super-Spec rig availability is tight, and Canadian drilling and completions momentum continues to build as the Trans Mountain Expansion project for oil export and the LNG Canada project for natural gas export are nearing completion. Although lower gas prices have introduced some uncertainty in the U.S., we expect this market to strengthen in the second half of the year.

“In 2023, we will continue to focus on what we can control, delivering High Performance, High Value service, maximizing free cash flow through margin expansion and revenue efficiency, scaling our Alpha™ and EverGreen™ offerings, and strengthening our balance sheet. I am confident that we will successfully execute these strategic priorities and continue to deliver returns for our shareholders,” concluded Mr. Neveu.

SELECT FINANCIAL AND OPERATING INFORMATION

Financial Highlights

	For the three months ended March 31,
(Stated in thousands of Canadian dollars, except per share amounts)	2023				2022				% Change
Revenue		558,607				351,339				59.0
Adjusted EBITDA(1)		203,219				36,855				451.4
Net earnings (loss)		95,830				(43,844	)			(318.6	)
Cash provided by (used in) operations		28,356				(65,294	)			(143.4	)
Funds provided by operations(1)		159,653				29,955				433.0
Cash used in investing activities		78,817				30,343				159.8
Capital spending by spend category(1)
Expansion and upgrade		16,345				9,615				70.0
Maintenance and infrastructure		34,450				26,787				28.6
Proceeds on sale		(7,765	)			(2,847	)			172.7
Net capital spending(1)		43,030				33,555				28.2
Net earnings (loss) per share:
Basic		7.02				(3.25	)			(316.0	)
Diluted		5.57				(3.25	)			(271.4	)

^{(1) See “FINANCIAL MEASURES AND RATIOS.”}

Operating Highlights

	For the three months ended March 31,
	2023				2022				% Change
Contract drilling rig fleet		225				227				(0.9	)
Drilling rig utilization days:
U.S.		5,382				4,590				17.3
Canada		6,168				5,653				9.1
International		433				540				(19.8	)
Revenue per utilization day:
U.S. (US$)		34,963				24,299				43.9
Canada (Cdn$)		32,304				24,263				33.1
International (US$)		51,753				50,235				3.0
Operating costs per utilization day:
U.S. (US$)		20,271				18,370				10.3
Canada (Cdn$)		18,746				15,398				21.7
Service rig fleet		118				123				(4.1	)
Service rig operating hours		58,341				38,265				52.5

Financial Position

(Stated in thousands of Canadian dollars, except ratios)	March 31, 2023				December 31, 2022
Working capital(1)		248,848				60,641
Cash		41,619				21,587
Long-term debt		1,161,626				1,085,970
Total long-term financial liabilities		1,238,741				1,206,619
Total assets		2,891,399				2,876,123
Long-term debt to long-term debt plus equity ratio (1)		0.46				0.47

^{(1) See “FINANCIAL MEASURES AND RATIOS.”}

Summary for the three months ended March 31, 2023:

• Revenue of $559 million was 59% higher than in 2022 and the result of increased North American drilling and service activity and day rates, partially offset by lower international activity. Drilling rig utilization days increased 17% in the U.S. and 9% in Canada, and well service activity increased 53% as compared with the first quarter of 2022.
• Adjusted EBITDA was $203 million, $166 million higher than 2022, mainly due to increased activity and day rates and lower share-based compensation. Share-based compensation recovery was $12 million, approximately $60 million lower than in 2022 as a result of our lower share price. Please refer to “Other Items” later in this news release for additional information on share-based compensation charges.
• Adjusted EBITDA as a percentage of revenue was 36% as compared with 10% in 2022.
• General and administrative expenses were $16 million, $40 million lower than in 2022 due to lower share-based compensation charges.
• Net finance charges were $23 million, an increase of $2 million from 2022 due to higher variable interest rates and the impact of the weakening of the Canadian dollar on our U.S. dollar denominated interest.
• Our U.S. revenue per utilization day was US$34,963 compared with US$24,299 in 2022. The increase was primarily the result of higher fleet average day rates, partially offset by lower turnkey revenue. We recognized revenue from turnkey projects of US$7 million compared with US$12 million in 2022. Revenue per utilization day, excluding the impact of turnkey, was US$33,721, compared to US$21,765 in the previous quarter, an increase of $11,956 or 55%. Revenue per utilization day, excluding turnkey revenue, increased US$3,169 from the fourth quarter of 2022.
• Our U.S. operating costs per utilization day increased to US$20,271, compared with US$18,370 in 2022 due to higher repairs and maintenance costs and field wages, partially offset by lower turnkey activity. Operating costs per utilization day, excluding turnkey, were US$19,421 compared with US$16,095 in the previous quarter. Sequentially, excluding the impact of turnkey activity, operating costs per utilization day increased US$766.
• In Canada, revenue per utilization day was $32,304 compared with $24,263 in 2022. The increase was a result of higher day rates and increased labor and cost recoveries. Sequentially, revenue per utilization day increased $2,418.
• Our Canadian operating costs per utilization day increased to $18,746, compared with $15,398 in 2022, due to higher field wages and repairs and maintenance expenses. Sequentially, our daily operating costs increased $1,208.
• Completion and Production Services revenue and Adjusted EBITDA were $75 million and $17 million, respectively, compared with $38 million and $7 million in 2022.
• We realized US$22 million of international contract drilling revenue compared with US$27 million in 2022.
• Cash provided by operations was $28 million compared with cash used in operations of $65 million in 2022. We generated $160 million of funds provided by operations compared with $30 million in 2022. Our increased activity, revenue efficiency, operational leverage and day rates contributed to higher cash generation in the current quarter.
• Capital expenditures were $51 million compared with $36 million in 2022. Capital spending by spend category (see “FINANCIAL MEASURES AND RATIOS”) included $16 million for expansion and upgrades and $35 million for the maintenance of existing assets and infrastructure.
• We ended the quarter with $42 million of cash and approximately $540 million of available liquidity.

STRATEGY

Precision’s 2023 strategic priorities and the progress made during the first quarter are as follows:

1. Deliver High Performance, High Value service through operational excellence.
   • Grew our average active rig count by 17% in the U.S. and 9% in Canada as compared with the same period last year.
   • Increased service rig operating hours 53% over the first quarter of 2022. With the successful acquisition of High Arctic’s well servicing business in July 2022, Precision is now the leading provider of high-quality and reliable services in Canada.
   • Reinvested $51 million into our equipment and infrastructure and expect a total investment of $195 million in 2023.
   • Subsequent to quarter end, we committed to a $5 million equity investment in CleanDesign, a key supplier of our EverGreen^TM BESS. The investment provides Precision with key BESS and power management technologies and is aligned with the Company’s overall ESG strategy.
2. Maximize free cash flow by increasing Adjusted EBITDA margins, revenue efficiency, and growing revenue from Alpha^TM technologies and EverGreen^TM suite of environmental solutions.
   • Realized daily operating margins (revenue less operating costs per utilization day) of US$14,692 in the U.S. and $13,558 in Canada. Sequentially, our daily operating margins have increased in the U.S. and Canada 23% and 10%, respectively.
   • Grew Alpha™ and EverGreen™ revenue by over 60% compared with the first quarter of 2022.
   • Ended the quarter with 73 of our AC Super Triple rigs equipped with Alpha™, representing a 46% increase over the same quarter last year.
   • Continued to scale our EverGreen™ product line, adding two EverGreen™ BESS, three EverGreen™ Integrated Power and Emissions Monitoring Systems and 11 high mast LED lighting systems to our fleet.
3. Reduce debt by at least $150 million and allocate 10% to 20% of free cash flow before debt repayments for share repurchases. Long-term debt reduction target of $500 million between 2022 and 2025 and sustained Net Debt to Adjusted EBITDA ratio of below 1.0 times by the end of 2025.
   • Returned $5 million of capital to shareholders by repurchasing and cancelling 67,073 common shares.
   • Cash provided by operations during the quarter was $28 million, $131 million lower than in the fourth quarter of 2022 due to the build-up of working capital from seasonal cash demands of our business, annual compensation payments and $39 million of cash interest payments.
   • Expect to generate positive cash flow from operations in the second quarter and repay the majority of the $78 million drawn on our Senior Credit Facility in the first quarter.
   • Remain committed to reducing debt by at least $150 million in 2023, with the majority of this expected to occur in the second half of the year.

OUTLOOK

Over the past few years, our customer base has shifted priorities from growth to shareholder returns. Similarly, the land drilling sector is demonstrating strict capital discipline, where despite strong customer demand and high utilization of Super Specification (Super-Spec) rigs, drilling contractors are funding only the most attractive capital investment opportunities and dismissing discussions of new rig builds. These dynamics are producing a more sustainable and predictable operating environment and ultimately generating better investor returns.

Energy industry fundamentals continue to support drilling activity for oil and natural gas despite broad economic concerns and geopolitical instability. Oil prices are supported by demand growth reemerging in China, OPEC holding steady on production quotas, and years of underinvestment and capital discipline by producers, which are limiting supply growth. We therefore expect drilling activity to improve in oil basins in the second half of the year as customers seek to generate appropriate investment returns, maintain production levels and replenish inventories. Natural gas is demonstrating short-term price weaknesses; however, this lower-carbon energy source is becoming increasingly favorable as countries around the world stress the importance of sustainability, decarbonization and energy security. With demand for Liquified Natural Gas (LNG) exports growing and the next wave of North America LNG projects expected to begin coming online in 2025 (including LNG Canada), we anticipate a sustained period of elevated natural gas drilling activity.

In Canada, industry activity is supported by imminent hydrocarbon export capacity increases with the Trans Mountain oil pipeline and the Coastal GasLink pipeline, each expected to begin operations within the next 12 months. Northwestern Alberta and northeastern British Columbia natural gas developments are prime beneficiaries of the LNG Canada project and the January 2023 agreement between the British Columbia government and the Blueberry River First Nation has facilitated a significant increase in 2023 drilling license approvals, which should lead to more drilling activity in the region. Large pad drilling programs are ideally suited for Super Triple drilling rigs, resulting in strong customer interest for these rigs for the next several years. On the oil side, we expect activity to remain strong as Canadian producers are benefitting from a favorable U.S. exchange rate and a reduced heavy oil differential. Precision’s Super Single rigs are well suited for long-term conventional heavy oil development in the oil sands and Clearwater formation. Looking at the second half of the year, we expect our Super Triple fleet to be fully utilized with demand exceeding supply and our Super Single pad capable rigs to be highly utilized. Accordingly, the tightening of available Super-Spec rigs is expected to drive higher day rates, increase demand for term contracts, and could necessitate customer-funded rig upgrades or rig moves from the U.S.

In the U.S., drilling activity has been increasing since mid-2020 but recently declined due to lower natural gas prices. We expect demand to improve in the second half of the year as customers continue to high-grade rigs to the latest pad drilling, AlphaAutomation^TM equipped rigs and modestly increase rig counts in oily basins to maintain production.

Our Alpha^TM technologies and EverGreen^TM suite of environmental solutions continue to gain momentum and have become key competitive differentiators for our rigs as these offerings deliver exceptional value to our customers by reducing risks, well construction costs and carbon footprint. We currently have nine EverGreen™ BESS deployed in the field and have commitments for two additional deployments in the second quarter as customer interest continues to rise for this low emission power source. We recently expanded our partnership with CleanDesign, a key supplier of EverGreen^TM BESS, through a $5 million equity investment commitment. This partnership will ensure we can meet the expected demand for BESS and is aligned with our overall emissions reduction strategy.

Internationally, we currently have five rigs working on term contracts, two in Kuwait and three in the Kingdom of Saudi Arabia, increasing to eight by the middle of the year following successful contracting in 2022. We continue to bid our remaining idle rigs within the region and remain optimistic in our ability to secure rig reactivations.

The outlook for our Precision Well Servicing business remains positive with strong customer demand supporting maintenance and completion activity. We have successfully integrated High Arctic’s well servicing assets and associated rental business that we acquired in July 2022. By leveraging our existing platform and continuing our strict focus on cost control, we have realized annual run-rate cost synergies of approximately $4 million and expect to achieve our $5 million target in the second quarter.

Commodity Prices

First quarter average West Texas Intermediate and Western Canadian Select oil prices decreased 19% and 29%, respectively, from 2022. Average Henry Hub and AECO natural gas prices declined 39% and 32%, respectively from 2022.

		For the three months ended March 31,								Year ended December 31,
		2023				2022				2022
Average oil and natural gas prices
Oil
West Texas Intermediate (per barrel) (US$)			76.11				94.29				94.23
Western Canadian Select (per barrel) (US$)			56.31				79.77				78.15
Natural gas
United States
Henry Hub (per MMBtu) (US$)			2.77				4.57				6.51
Canada
AECO (per MMBtu) (CDN$)			3.25				4.77				5.43

Contracts

The following chart outlines the average number of drilling rigs under term contract by quarter as at April 25, 2023. For those quarters ending after March 31, 2023, this chart represents the minimum number of term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional term contracts.

		Average for the quarter ended 2022																Average for the quarter ended 2023
		Mar. 31				June 30				Sept. 30				Dec. 31				Mar. 31				June 30				Sept. 30				Dec. 31
Average rigs under term contract as of April 25, 2023:
U.S.			27				29				31				35				40				37				26				18
Canada			6				8				10				16				19				20				18				15
International			6				6				6				6				4				6				8				8
Total			39				43				47				57				63				63				52				41

The following chart outlines the average number of drilling rigs that we had under term contract for 2022 and the average number of rigs we have under term contract as at April 25, 2023.

		Average for the year ended
		2022				2023
Average rigs under term contract as of April 25, 2023:
U.S.			31				30
Canada			10				18
International			6				7
Total			47				55

In Canada, term contracted rigs normally generate 250 utilization days per year because of the seasonal nature of well site access. In most regions in the U.S. and internationally, term contracts normally generate 365 utilization days per year. Internationally, we expect to have eight rigs under long term contract beginning in the second half of 2023.

Drilling Activity

The following chart outlines the average number of drilling rigs that we had working or moving by quarter for the periods noted.

	Average for the quarter ended 2022															Average for the quarter ended 2023
	Mar. 31				June 30				Sept. 30				Dec. 31				Mar. 31
Average Precision active rig count:
U.S.		51				55				57				60				60
Canada		63				37				59				66				69
International		6				6				6				6				5
Total		120				98				122				132				134

According to industry sources, as at April 25, 2023, the U.S. active land drilling rig count has increased 8% from the same point last year while the Canadian active land drilling rig count has increased 4%. To date in 2023, approximately 79% of the U.S. industry’s active rigs and 59% of the Canadian industry’s active rigs were drilling for oil targets, compared with 80% for the U.S. and 59% for Canada at the same time last year.

Capital Spending and Free Cash Flow Allocation

We remain committed to disciplined cash flow management, capital spending and returning capital to shareholders. We reduced our 2023 capital spending budget from $235 million to $195 million in response to lower expected capital upgrades and maintenance capital. Capital spending by spend category includes $146 million for sustaining, infrastructure and intangibles and $49 million for expansion and upgrades. We expect that the $195 million will be split as follows: $183 million in the Contract Drilling Services segment, $11 million in the Completion and Production Services segment, and $1 million in the Corporate segment. At March 31, 2023, Precision had capital commitments of approximately $199 million with payments expected through 2026.

We remain committed to our debt reduction plans and in 2023 expect to reduce debt by at least $150 million and allocate 10% to 20% of free cash flow before debt repayments for share repurchases. Our long-term debt reduction target from the beginning of 2022 through to the end of 2025 is $500 million and target Net Debt to Adjusted EBITDA leverage ratio of below 1.0 times, while continuing to allocate 10% to 20% of free cash flow before debt principal payments to shareholders.

On April 11, 2023, S&P Global Ratings raised our issuer credit rating on our Unsecured Senior Notes to ‘B+’ from ‘B’.

SEGMENTED FINANCIAL RESULTS

	For the three months ended March 31,
(Stated in thousands of Canadian dollars)	2023				2022				% Change
Revenue:
Contract Drilling Services		486,076				314,145				54.7
Completion and Production Services		74,523				38,238				94.9
Inter-segment eliminations		(1,992	)			(1,044	)			90.8
		558,607				351,339				59.0
Adjusted EBITDA:(1)
Contract Drilling Services		189,123				71,174				165.7
Completion and Production Services		17,406				6,539				166.2
Corporate and Other		(3,310	)			(40,858	)			(91.9	)
		203,219				36,855				451.4

^{(1) See “FINANCIAL MEASURES AND RATIOS.”}

SEGMENT REVIEW OF CONTRACT DRILLING SERVICES

	For the three months ended March 31,
(Stated in thousands of Canadian dollars, except where noted)	2023				2022				% Change
Revenue		486,076				314,145				54.7
Expenses:
Operating		287,067				230,051				24.8
General and administrative		9,886				12,920				(23.5	)
Adjusted EBITDA(1)		189,123				71,174				165.7
Adjusted EBITDA as a percentage of revenue(1)		38.9	%			22.7	%

^{(1) See “FINANCIAL MEASURES AND RATIOS.”}

United States onshore drilling statistics:(1)	2023								2022
	Precision				Industry(2)				Precision				Industry(2)
Average number of active land rigs for quarters ended:
March 31		60				744				51				603

^{(1) United States lower 48 operations only.
(2) Baker Hughes rig counts.}

Canadian onshore drilling statistics:(1)	2023								2022
	Precision				Industry(2)				Precision				Industry(2)
Average number of active land rigs for quarters ended:
March 31		69				221				63				205

^{(1) Canadian operations only.
(2) Baker Hughes rig counts.}

SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES

	For the three months ended March 31,
(Stated in thousands of Canadian dollars, except where noted)	2023				2022				% Change
Revenue		74,523				38,238				94.9
Expenses:
Operating		54,792				29,967				82.8
General and administrative		2,325				1,732				34.2
Adjusted EBITDA(1)		17,406				6,539				166.2
Adjusted EBITDA as a percentage of revenue(1)		23.4	%			17.1	%
Well servicing statistics:
Number of service rigs (end of period)		118				123				(4.1	)
Service rig operating hours		58,341				38,265				52.5
Service rig operating hour utilization		55	%			46	%

^{(1) See “FINANCIAL MEASURES AND RATIOS.”}

SEGMENT REVIEW OF CORPORATE AND OTHER

Our Corporate and Other segment provides support functions to our operating segments. The Corporate and Other segment had negative Adjusted EBITDA of $3 million as compared with $41 million in the first quarter of 2022. Our current quarter Adjusted EBITDA was positively impacted by decreased share-based compensation costs due to our lower share price.

OTHER ITEMS

Share-based Incentive Compensation Plans

We have several cash and equity-settled share-based incentive plans for non-management directors, officers, and other eligible employees. Our accounting policies for each share-based incentive plan can be found in our 2022 Annual Report.

A summary of amounts expensed under these plans during the reporting periods are as follows:

	For the three months ended March 31,
(Stated in thousands of Canadian dollars)	2023				2022
Cash settled share-based incentive plans		(12,095	)			47,211
Equity settled share-based incentive plans		480				427
Total share-based incentive compensation plan expense (recovery)		(11,615	)			47,638
Allocated:
Operating		(1,883	)			10,920
General and Administrative		(9,732	)			36,718
		(11,615	)			47,638

Cash settled share-based compensation recovery for the quarter was $12 million as compared with an expense of $47 million in 2022. Our 2023 recovery was primarily due to a 33% decrease in our share price from the start of the year, whereas the expense in 2022 reflected our share price increasing by approximately 100% over the comparable period.

As at March 31, 2023, the majority of our share-based compensation plans were classified as cash-settled and will be impacted by changes in our share price. Although accounted for as cash-settled, Precision retains the ability to settle certain vested units in common shares at its discretion.

Finance Charges

Finance charges were $23 million as compared with $21 million in 2022. Our increased finance charges were primarily due to higher variable interest rates and the impact of the weakening of the Canadian dollar on our U.S. dollar denominated interest. Interest charges on our U.S. denominated long-term debt were US$15 million ($21 million) as compared with US$15 million ($19 million) in 2022.

Income Tax

Income tax expense for the quarter was $18 million as compared with $1 million in 2022. During the first quarter, we did not recognize deferred tax assets on certain Canadian and international operating losses.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Amount		Availability		Used for		Maturity
Senior credit facility (secured)
US$500 million(1) (extendible, revolving term credit facility with US$300 million accordion feature)		US$102 million drawn and US$56 million in outstanding letters of credit		General corporate purposes		June 18, 2025(1)
Real estate credit facilities (secured)
US$9 million		Fully drawn		General corporate purposes		November 19, 2025
$17 million		Fully drawn		General corporate purposes		March 16, 2026
Operating facilities (secured)
$40 million		Undrawn, except $22 million in outstanding letters of credit		Letters of credit and general corporate purposes
US$15 million		Undrawn		Short-term working capital requirements
Demand letter of credit facility (secured)
US$40 million		Undrawn, except US$21 million in outstanding letters of credit		Letters of credit
Unsecured senior notes (unsecured)
US$348 million – 7.125%		Fully drawn		Debt redemption and repurchases		January 15, 2026
US$400 million – 6.875%		Fully drawn		Debt redemption and repurchases		January 15, 2029

^{(1) US$53 million expires on November 21, 2023.}

At March 31, 2022, we had $1,178 million outstanding under our Senior Credit Facility, Real Estate Credit Facilities and unsecured senior notes as compared with $1,103 million at December 31, 2022. The current blended cash interest cost of our debt is approximately 7.0%.

On April 11, 2023, S&P Global Ratings raised our issuer credit rating on our Unsecured Senior Notes to ‘B+’ from ‘B’.

Covenants

At March 31, 2023, we were in compliance with the covenants of our Senior Credit Facility and Real Estate Credit Facilities.

	Covenant		At March 31, 2023
Senior Credit Facility
Consolidated senior debt to consolidated covenant EBITDA(1)	< 2.50			0.36
Consolidated covenant EBITDA to consolidated interest expense	> 2.50			5.41
Real Estate Credit Facilities
Consolidated covenant EBITDA to consolidated interest expense	> 2.50			5.41

^{(1) For purposes of calculating the leverage ratio consolidated senior debt only includes secured indebtedness.}

Average shares outstanding

The following tables reconcile net earnings (loss) and the weighted average shares outstanding used in computing basic and diluted net earnings (loss) per share:

	For the three months ended March 31,
	2023				2022
Net earnings (loss) – basic		95,830				(43,844	)
Effect of share options and other equity compensation plans		(13,244	)			–
Net earnings (loss) – diluted		82,586				(43,844	)

	For the three months ended March 31,
(Stated in thousands)	2023				2022
Weighted average shares outstanding – basic		13,648				13,479
Effect of share options and other equity compensation plans		1,191				–
Weighted average shares outstanding – diluted		14,839				13,479

QUARTERLY FINANCIAL SUMMARY

(Stated in thousands of Canadian dollars, except per share amounts)		2022												2023
Quarters ended		June 30				September 30				December 31				March 31
Revenue			326,016				429,335				510,504				558,607
Adjusted EBITDA(1)			64,099				119,561				91,090				203,219
Net earnings (loss)			(24,611	)			30,679				3,483				95,830
Net earnings (loss) per basic share			(1.81	)			2.26				0.27				7.02
Net earnings (loss) per diluted share			(1.81	)			2.03				0.27				5.57
Funds provided by operations(1)			60,373				81,327				111,339				159,653
Cash provided by operations			135,174				8,142				159,082				28,356

(Stated in thousands of Canadian dollars, except per share amounts)		2021												2022
Quarters ended		June 30				September 30				December 31				March 31
Revenue			201,359				253,813				295,202				351,339
Adjusted EBITDA(1)			28,944				45,408				63,881				36,855
Net loss			(75,912	)			(38,032	)			(27,336	)			(43,844	)
Net loss per basic share			(5.71	)			(2.86	)			(2.05	)			(3.25	)
Net loss per diluted share			(5.71	)			(2.86	)			(2.05	)			(3.25	)
Funds provided by operations(1)			12,607				33,525				62,681				29,955
Cash provided by (used in) operations			42,219				21,871				59,713				(65,294	)

^{(1) See “FINANCIAL MEASURES AND RATIOS.”}

FINANCIAL MEASURES AND RATIOS

Non-GAAP Financial Measures
We reference certain additional Non-Generally Accepted Accounting Principles (Non-GAAP) measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
Adjusted EBITDA	We believe Adjusted EBITDA (earnings before income taxes, loss (gain) on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), as reported in our Condensed Interim Consolidated Statements of Net Loss and our reportable operating segment disclosures, is a useful measure, because it gives an indication of the results from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges. The most directly comparable financial measure is net earnings (loss).

	For the three months ended March 31,
(Stated in thousands of Canadian dollars)	2023				2022
Adjusted EBITDA by segment:
Contract Drilling Services		189,123				71,174
Completion and Production Services		17,406				6,539
Corporate and Other		(3,310	)			(40,858	)
Adjusted EBITDA		203,219				36,855
Depreciation and amortization		71,543				68,457
Gain on asset disposals		(9,276	)			(3,114	)
Foreign exchange		(483	)			(518	)
Finance charges		22,920				20,730
Loss (gain) on investments and other assets		4,230				(5,569	)
Incomes taxes		18,455				713
Net earnings (loss)		95,830				(43,844	)

Funds Provided by (Used in) Operations

We believe funds provided by (used in) operations, as reported in our Condensed Interim Consolidated Statements of Cash Flows, is a useful measure because it provides an indication of the funds our principal business activities generate prior to consideration of working capital changes, which is primarily made up of highly liquid balances. The most directly comparable financial measure is cash provided by (used in) operations.

Net Capital Spending

We believe net capital spending is a useful measure as it provides an indication of our primary investment activities. The most directly comparable financial measure is cash provided by (used in) investing activities. Net capital spending is calculated as follows:

		For the three months ended March 31,
(Stated in thousands of Canadian dollars)		2023				2022
Capital spending by spend category
Expansion and upgrade			16,345				9,615
Maintenance and infrastructure			34,450				26,787
			50,795				36,402
Proceeds on sale of property, plant and equipment			(7,765	)			(2,847	)
Net capital spending			43,030				33,555
Business acquisitions			28,000				–
Purchase of investments and other assets			55				–
Changes in non-cash working capital balances			7,732				(3,212	)
Cash used in investing activities			78,817				30,343

Working Capital

We define working capital as current assets less current liabilities, as reported in our Condensed Interim Consolidated Statements of Financial Position. Working capital is calculated as follows:

	At December 31,				At December 31,
(Stated in thousands of Canadian dollars)	2023				2022
Current assets		515,439				470,670
Current liabilities		266,591				410,029
Working capital		248,848				60,641

Non-GAAP Ratios
We reference certain additional Non-GAAP ratios that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
Adjusted EBITDA % of Revenue	We believe Adjusted EBITDA as a percentage of consolidated revenue, as reported in our Condensed Interim Consolidated Statements of Net Loss, provides an indication of our profitability from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.
Long-term debt to long-term debt plus equity	We believe that long-term debt (as reported in our Condensed Interim Consolidated Statements of Financial Position) to long-term debt plus equity (total shareholders’ equity as reported in our Condensed Interim Consolidated Statements of Financial Position) provides an indication to our debt leverage.
Net Debt to Adjusted EBITDA	We believe that the Net Debt (long-term debt less cash, as reported in our Condensed Interim Consolidated Statements of Financial Position) to Adjusted EBITDA ratio provides an indication to the number of years it would take for us to repay our debt obligations.
Supplementary Financial Measures
We reference certain supplementary financial measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
Capital Spending by Spend Category	We provide additional disclosure to better depict the nature of our capital spending. Our capital spending is categorized as expansion and upgrade, maintenance and infrastructure, or intangibles.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements contained in this release, including statements that contain words such as “could”, “should”, “can”, “anticipate”, “estimate”, “intend”, “plan”, “expect”, “believe”, “will”, “may”, “continue”, “project”, “potential” and similar expressions and statements relating to matters that are not historical facts constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information and statements”).

In particular, forward looking information and statements include, but are not limited to, the following:

• our strategic priorities for 2023;
• our capital expenditures, free cash flow allocation and debt reduction plan for 2023;
• anticipated activity levels, demand for our drilling rigs, day rates and margins in 2023;
• the average number of term contracts in place for 2023;
• customer adoption of Alpha^TM technologies and EverGreen^TM suite of environmental solutions;
• anticipated timing and amount of costs savings from acquired well servicing and rental assets;
• potential commercial opportunities and rig contract renewals; and
• our future debt reduction plans.

These forward-looking information and statements are based on certain assumptions and analysis made by Precision in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. These include, among other things:

• our ability to react to customer spending plans as a result of changes in oil and natural gas prices;
• the status of current negotiations with our customers and vendors;
• customer focus on safety performance;
• existing term contracts are neither renewed nor terminated prematurely;
• our ability to deliver rigs to customers on a timely basis;
• the impact of an increase/decrease in capital spending; and
• the general stability of the economic and political environments in the jurisdictions where we operate.

Undue reliance should not be placed on forward-looking information and statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from our expectations. Such risks and uncertainties include, but are not limited to:

• volatility in the price and demand for oil and natural gas;
• fluctuations in the level of oil and natural gas exploration and development activities;
• fluctuations in the demand for contract drilling, well servicing and ancillary oilfield services;
• our customers’ inability to obtain adequate credit or financing to support their drilling and production activity;
• the success of vaccinations for COVID-19 worldwide;
• changes in drilling and well servicing technology, which could reduce demand for certain rigs or put us at a competitive advantage;
• shortages, delays and interruptions in the delivery of equipment supplies and other key inputs;
• liquidity of the capital markets to fund customer drilling programs;
• availability of cash flow, debt and equity sources to fund our capital and operating requirements, as needed;
• the impact of weather and seasonal conditions on operations and facilities;
• competitive operating risks inherent in contract drilling, well servicing and ancillary oilfield services;
• ability to improve our rig technology to improve drilling efficiency;
• general economic, market or business conditions;
• the availability of qualified personnel and management;
• a decline in our safety performance which could result in lower demand for our services;
• changes in laws or regulations, including changes in environmental laws and regulations such as increased regulation of hydraulic fracturing or restrictions on the burning of fossil fuels and greenhouse gas emissions, which could have an adverse impact on the demand for oil and natural gas;
• terrorism, social, civil and political unrest in the foreign jurisdictions where we operate;
• fluctuations in foreign exchange, interest rates and tax rates; and
• other unforeseen conditions which could impact the use of services supplied by Precision and Precision’s ability to respond to such conditions.

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2022, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Stated in thousands of Canadian dollars)		March 31, 2023				December 31, 2022
ASSETS
Current assets:
Cash		$	41,619			$	21,587
Accounts receivable			437,258				413,925
Inventory			36,562				35,158
Total current assets			515,439				470,670
Non-current assets:
Income tax recoverable			695				1,602
Deferred tax assets			454				455
Right-of-use assets			59,493				60,032
Property, plant and equipment			2,280,492				2,303,338
Intangibles			18,550				19,575
Investments and other assets			16,276				20,451
Total non-current assets			2,375,960				2,405,453
Total assets		$	2,891,399			$	2,876,123
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	248,140			$	392,053
Income taxes payable			3,379				2,991
Current portion of lease obligations			12,787				12,698
Current portion of long-term debt			2,285				2,287
Total current liabilities			266,591				410,029
Non-current liabilities:
Share-based compensation			17,154				60,133
Provisions and other			7,518				7,538
Lease obligations			52,443				52,978
Long-term debt			1,161,626				1,085,970
Deferred tax liabilities			46,482				28,946
Total non-current liabilities			1,285,223				1,235,565
Shareholders’ equity:
Shareholders’ capital			2,313,746				2,299,533
Contributed surplus			73,035				72,555
Deficit			(1,205,443	)			(1,301,273	)
Accumulated other comprehensive income			158,247				159,714
Total shareholders’ equity			1,339,585				1,230,529
Total liabilities and shareholders’ equity		$	2,891,399			$	2,876,123

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF NET EARNINGS (LOSS) (UNAUDITED)

		Three Months Ended March 31,
(Stated in thousands of Canadian dollars, except per share amounts)		2023				2022
Revenue		$	558,607			$	351,339
Expenses:
Operating			339,867				258,974
General and administrative			15,521				55,510
Earnings before income taxes, loss (gain) on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization			203,219				36,855
Depreciation and amortization			71,543				68,457
Gain on asset disposals			(9,276	)			(3,114	)
Foreign exchange			(483	)			(518	)
Finance charges			22,920				20,730
Loss (gain) on investments and other assets			4,230				(5,569	)
Earnings (loss) before income taxes			114,285				(43,131	)
Income taxes:
Current			841				970
Deferred			17,614				(257	)
			18,455				713
Net earnings (loss)		$	95,830			$	(43,844	)
Net earnings (loss) per share:
Basic		$	7.02			$	(3.25	)
Diluted		$	5.57			$	(3.25	)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

		Three Months Ended March 31,
(Stated in thousands of Canadian dollars)		2023				2022
Net earnings (loss)		$	95,830			$	(43,844	)
Unrealized gain (loss) on translation of assets and liabilities of operations denominated in foreign currency			(4,140	)			(16,971	)
Foreign exchange gain (loss) on net investment hedge with U.S. denominated debt			2,673				12,768
Comprehensive income (loss)		$	94,363			$	(48,047	)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

		Three Months Ended March 31,
(Stated in thousands of Canadian dollars)		2023				2022
Cash provided by (used in):
Operations:
Net earnings (loss)		$	95,830			$	(43,844	)
Adjustments for:
Long-term compensation plans			(4,117	)			31,212
Depreciation and amortization			71,543				68,457
Gain on asset disposals			(9,276	)			(3,114	)
Foreign exchange			(502	)			(271	)
Finance charges			22,920				20,730
Income taxes			18,455				713
Loss (gain) on investments and other assets			4,230				(5,569	)
Income taxes paid			(171	)			(227	)
Interest paid			(39,375	)			(38,161	)
Interest received			116				29
Funds provided by operations			159,653				29,955
Changes in non-cash working capital balances			(131,297	)			(95,249	)
			28,356				(65,294	)
Investments:
Purchase of property, plant and equipment			(50,795	)			(36,402	)
Proceeds on sale of property, plant and equipment			7,765				2,847
Business acquisitions			(28,000	)			–
Purchase of investments and other assets			(55	)			–
Changes in non-cash working capital balances			(7,732	)			3,212
			(78,817	)			(30,343	)
Financing:
Issuance of long-term debt			139,049				88,124
Repayments of long-term debt			(61,344	)			(8,190	)
Repurchase of share capital			(4,993	)			–
Issuance of common shares on the exercise of options			–				1,396
Lease payments			(1,961	)			(1,567	)
			70,751				79,763
Effect of exchange rate changes on cash			(258	)			(612	)
Increase (decrease) in cash			20,032				(16,486	)
Cash, beginning of period			21,587				40,588
Cash, end of period		$	41,619			$	24,102

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(Stated in thousands of Canadian dollars)		Shareholders’ Capital				Contributed Surplus				Accumulated Other Comprehensive Income				Deficit				Total Equity
Balance at January 1, 2023		$	2,299,533			$	72,555			$	159,714			$	(1,301,273	)		$	1,230,529
Net loss for the period			–				–				–				95,830				95,830
Other comprehensive income for the period			–				–				(1,467	)			–				(1,467	)
Settlement of Executive Performance and Restricted Share Units			19,206				–				–				–				19,206
Share repurchases			(4,993	)			–				–				–				(4,993	)
Share-based compensation expense			–				480				–				–				480
Balance at March 31, 2023		$	2,313,746			$	73,035			$	158,247			$	(1,205,443	)		$	1,339,585

(Stated in thousands of Canadian dollars)		Shareholders’ Capital				Contributed Surplus				Accumulated Other Comprehensive Income				Deficit				Total Equity
Balance at January 1, 2022		$	2,281,444			$	76,311			$	134,780			$	(1,266,980	)		$	1,225,555
Net loss for the period			–				–				–				(43,844	)			(43,844	)
Other comprehensive loss for the period			–				–				(4,203	)			–				(4,203	)
Share options exercised			1,970				(574	)			–				–				1,396
Settlement of Executive Performance Share Units			14,083				–				–				–				14,083
Share-based compensation reclassification			–				(219	)			–				–				(219	)
Share-based compensation expense			–				646				–				–				646
Balance at March 31, 2022		$	2,297,497			$	76,164			$	130,577			$	(1,310,824	)		$	1,193,414

FOURTH QUARTER AND YEAR-END RESULTS CONFERENCE CALL AND WEBCAST

Precision Drilling Corporation has scheduled a conference call and webcast to begin promptly at 12:00 noon MT (2:00 p.m. ET) on Wednesday, April 26, 2023.

To participate in the conference call please register at the URL link below. Once registered, you will receive a dial-in number and a unique PIN, which will allow you to ask questions.

https://register.vevent.com/register/BI0f12c61ee4a84326802825fae40c640b

The call will also be webcast and can be accessed through the link below. A replay of the webcast call will be available on Precision’s website for 12 months.

https://edge.media-server.com/mmc/p/4jaytie7

About Precision

Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as Alpha™ that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS.”

For further information, please contact:

Lavonne Zdunich, CPA, CA
Director, Investor Relations
403.716.4500

800, 525 – 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com

CALGARY, Alberta, April 03, 2023 — Precision Drilling Corporation (“Precision”) intends to release its 2023 first quarter results before the market opens on Wednesday, April 26, 2023, and has scheduled a conference call to begin at 12:00 Noon MT (2:00 p.m. ET) on the same day.

To participate in the conference call please register at the URL link below. Once registered, you will receive a dial-in number and a unique PIN, which will allow you to ask questions.

https://register.vevent.com/register/BI0f12c61ee4a84326802825fae40c640b

The call will also be webcast and can be accessed through the link below. A replay of the webcast call will be available on Precision’s website for 12 months.

https://edge.media-server.com/mmc/p/4jaytie7

About Precision

Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as “Alpha™” that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Our drilling services are enhanced by our EverGreen™ suite of environmental solutions, which bolsters our commitment to reducing the environmental impact of our operations. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS”.

For further information, please contact:

Lavonne Zdunich, CPA, CA
Director, Investor Relations
403.716.4500

800, 525 – 8^th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com

CALGARY, Alberta, March 29, 2023 —

This news release contains “forward-looking information and statements” within the meaning of applicable securities laws. For important information with respect to such forward-looking information and statements and the further assumptions and risks to which they are subject, see the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in this news release.

Precision Drilling Corporation (“Precision” or the “Company”) (TSX:PD; NYSE:PDS) announces today the filing of its Management Information Circular (the “Circular”) issued in connection with the 2023 Annual Meeting of Shareholders (the “Annual Meeting”). A copy of the Circular can be downloaded from the Company’s SEDAR profile at www.sedar.com and the Company’s EDGAR profile at www.sec.gov. The Circular is also available on Precision’s website at www.precisiondrilling.com.

Precision’s Annual Meeting will be held on Thursday, May 11, 2023 at 10:00 a.m. (Mountain Time) for holders (“Shareholders”) of its common shares. The Annual Meeting will be held in a virtual-only meeting format. The virtual-only meeting format will provide all Shareholders an equal opportunity to participate in the Annual Meeting regardless of their geographic location. Please see below and the Circular for details and instructions on participating and voting at the Annual Meeting.

The Annual Meeting can be accessed by logging in online at https://web.lumiagm.com/220635712. As detailed in the Circular, registered Shareholders are entitled to participate in the Annual Meeting if they held their common shares as of the close of business on March 22, 2023, the record date. Non-registered (beneficial) Shareholders who wish to vote at the Annual Meeting will be required to appoint themselves as proxyholder in advance of the Annual Meeting by writing their own name in the space provided on the voting instruction form provided by their intermediary, generally being a bank, trust company, securities broker, trustee or other institution. Registered Shareholders and duly appointed proxyholders who participate in the Annual Meeting online will be able to listen to the Annual Meeting, ask questions and vote, all in real time, provided that they are connected to the internet. Guests can listen to the Annual Meeting but will not be able to communicate or vote. In all cases, Shareholders must follow the instructions set out in their applicable proxy or voting instruction forms. If you have questions regarding your ability to participate or vote at the Annual Meeting, please contact Computershare at 1-800-564-6253.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements contained in this report, including statements that contain words such as “could”, “should”, “can”, “anticipate”, “estimate”, “intend”, “plan”, “expect”, “believe”, “will”, “may”, “continue”, “project”, “potential” and similar expressions and statements relating to matters that are not historical facts constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information and statements”).

Undue reliance should not be placed on forward-looking information and statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from our expectations. Such risks and uncertainties include, but are not limited to:

• volatility in the price and demand for oil and natural gas;
• fluctuations in the demand for contract drilling, well servicing and ancillary oilfield services;
• our customers’ inability to obtain adequate credit or financing to support their drilling and production activity;
• changes in drilling and well servicing technology which could reduce demand for certain rigs or put us at a competitive disadvantage;
• shortages, delays and interruptions in the delivery of equipment supplies and other key inputs;
• the effects of seasonal and weather conditions on operations and facilities;
• the availability of qualified personnel and management;
• a decline in our safety performance which could result in lower demand for our services;
• changes in environmental laws and regulations such as increased regulation of hydraulic fracturing or restrictions on the burning of fossil fuels and greenhouse gas emissions, which could have an adverse impact on the demand for oil and gas;
• terrorism, social, civil and political unrest in the foreign jurisdictions where we operate;
• fluctuations in foreign exchange, interest rates and tax rates; and
• other unforeseen conditions which could impact the use of services supplied by Precision and Precision’s ability to respond to such conditions.

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2022, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this news release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

About Precision

Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as Alpha™ that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Our drilling services are enhanced by our EverGreen™ suite of environmental solutions, which bolsters our commitment to reducing the environmental impact of our operations. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS”.

For further information, please contact:

Lavonne Zdunich, CPA, CA
Director, Investor Relations
403.716.4500

800, 525 – 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com

CALGARY, Alberta, March 28, 2023 — Precision Drilling Corporation (“Precision” or the “Company”) (TSX:PD; NYSE:PDS) today announced it has released its 2022 Environmental, Social and Governance (ESG) performance data, which aligns with the Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD) and Global Reporting Initiative (GRI) frameworks.

All ESG disclosure information will now be available on our interactive webpage, which will serve as the primary platform for our ESG content. This new upgraded format will allow the Company to provide accurate, timely, and recurring updates on our ESG efforts and successes.

The webpage is available at www.precisiondrilling.com/esg and provides information on the following:

• 2022 ESG performance data,
• ESG governance structure, processes, and policies,
• emissions reduction efforts,
• climate risks and strategy,
• diversity, equity, and inclusion efforts, and
• community engagement, including partnerships with indigenous groups.

About Precision

Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as Alpha™ that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Our drilling services are enhanced by our EverGreen™ suite of environmental solutions, which bolsters our commitment to reducing the environmental impact of our operations. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS”.

For further information, please contact:

Lavonne Zdunich, CPA, CA
Director, Investor Relations
403.716.4500

800, 525 – 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com

CALGARY, Alberta, March 06, 2023 — Precision Drilling Corporation (“Precision”) announced that it has filed its annual disclosure documents with the securities commissions in each of the provinces of Canada and the United States Securities and Exchange Commission (“SEC”).

Precision’s 2022 Annual Report contains the audited consolidated financial statements and management’s discussion and analysis for the year ended December 31, 2022. Precision’s financial results for the year ended December 31, 2022 were previously released on February 9, 2023.

Precision’s Annual Report and Annual Information Form have been filed on the Canadian System for Electronic Document Analysis and Retrieval (“SEDAR”) and on Form 40-F on the SEC’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system.

The documents described above are also available on Precision’s website at www.precisiondrilling.com or by emailing Precision at [email protected].

Precision’s 2023 Annual Meeting of Shareholders will be held in a virtual-only format at 10:00 a.m. MDT on Thursday, May 11, 2023.

About Precision
Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as “Alpha™” that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS.”

For further information, please contact:

Lavonne Zdunich, CPA, CA
Director, Investor Relations
403.716.4500

800, 525 – 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com

CALGARY, Alberta, Feb. 09, 2023 — This news release contains “forward-looking information and statements” within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in this news release. This news release contains references to certain Financial Measures and Ratios, including Adjusted EBITDA (earnings before income taxes, gain (loss) on investments and other assets, loss on redemption and repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), Funds Provided by (Used in) Operations, Net Capital Spending and Working Capital. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies, see “Financial Measures and Ratios” later in this news release.

Precision Drilling announces 2022 fourth quarter and year-end financial results:

• Realized $511 million of revenue during the quarter, an increase of 73% over the same period last year and 19% compared with the third quarter of 2022.
• Increased North American drilling activity by 28% while revenue per utilization day was US$31,242 in the U.S. and $29,886 in Canada, increases of $9,266 and $6,938, respectively, as compared with the fourth quarter of 2021.
• Daily operating margins (revenue less operating costs per utilization day) in the U.S. and Canada increased 103% and 54%, respectively, as compared with the 2021 fourth quarter.
• Achieved Adjusted EBITDA (see “FINANCIAL MEASURES AND RATIOS”) of $91 million, a 43% increase from the 2021 quarter as we continue to maximize our operating leverage in a growing activity environment. Current quarter Adjusted EBITDA included $75 million of share-based compensation charges.
• Generated net earnings of $3 million or $0.27 per diluted share compared with a net loss of $27 million or a $2.05 loss per diluted share in the fourth quarter of 2021.
• Continued to scale our Alpha™ technologies across our Super Triple rig fleet, increasing our Alpha™ revenue over 50% compared to the same quarter last year.
• During the quarter, Completion and Production Services generated revenue of $59 million and Adjusted EBITDA of $12 million, representing increases of 84% and 91%, respectively, from the 2021 fourth quarter.
• Generated cash and funds from operations (see “FINANCIAL MEASURES AND RATIOS”) of $159 million and $111 million, respectively, as compared with $60 million and $63 million in the fourth quarter of 2021.
• Exceeded our $75 million debt reduction target for the year by repaying $106 million of debt, ending the year with $22 million of cash and approximately $600 million of available liquidity.
• Awarded four five-year drilling contracts in Kuwait and renewed three contracts in the Kingdom of Saudi Arabia for five years. Precision will increase its active rig count in the Middle East to eight rigs by the middle of 2023. These eight contracts represent approximately $800 million in backlog revenue that stretches into 2028.
• Increased our long-term debt reduction target from $400 million to $500 million from the beginning of 2022 through to the end of 2025 and decreased our target Net Debt to Adjusted EBITDA leverage ratio (see “FINANCIAL MEASURES AND RATIOS”) from below 1.5 times to 1.0 times while continuing to allocate 10% to 20% of free cash flow before debt principal payments to shareholders.

Precision’s President and CEO, Kevin Neveu, stated:

“Precision’s strong fourth quarter revenue and better than expected cash generated from operations are a result of the high level of focus the entire organization placed on our strategic objectives, not only in the quarter but over the full year. I am very proud of the results our people achieved to maximize our operating leverage, expand margins, scale our Alpha™ digital technologies and EverGreen™ suite of environmental solutions and improve our capital structure. These efforts have resulted in enhanced returns to our shareholders.

“During the year, we maximized our operating leverage and improved revenue efficiency, growing our daily operating margins 41% in the U.S. and 36% in Canada, bolstering cash flow and allowing us to exceed our $75 million debt reduction target and return $10 million to shareholders through share repurchases. In the second half of 2022, Precision returned to profitability, generating positive net earnings for the first time since 2019.

“Our fourth quarter revenue and Adjusted EBITDA increased an impressive 73% and 43%, respectively, compared to 2021 as our North American drilling activity and day rates continued to improve. Customers remained committed to their drilling plans and our fourth quarter drilling rig utilization days increased 31% in the U.S. and 26% in Canada compared with 2021. For five consecutive quarters our day rates have continued to climb and in the fourth quarter reached highs of US$31,242 in the U.S. and $29,886 in Canada. With robust demand for our services, increased customer recognition of the value we provide, tight super specification rig supply and an intense focus on cost control, we expect to continue to push day rates higher and expand margins toward 50% in 2023.

“In the U.S., we have 61 rigs active today, a 17% increase from this time last year. We expect weak natural gas prices could modestly impact industry rig demand over the coming weeks, but expect oil related activity to remain firm as customers continue to look to replace lower performing rigs and work to balance depleted drilled but uncompleted well inventories.

“In Canada, we have 78 rigs active today, representing an 18% increase over the same time last year. We expect demand to remain at high levels through the first part of March and are already observing better than expected bookings through spring breakup and into the second half of the year. Natural gas liquids production, recent northeastern British Columbia access resolution, and LNG related activity will continue to drive Super Triple demand in Canada, of which Precision’s fleet is 100% utilized today.

“Internationally, we have 5 rigs active, increasing to eight by the middle of the year after successful contracting in Kuwait and the Kingdom of Saudi Arabia. We continue to explore opportunities to deploy our remaining idle rigs in the region.

“Demand for our Alpha™ digital technologies continues to gain momentum as fourth quarter revenue increased over 50% as compared with 2021. Year-over-year, we increased our Super Triple rigs equipped with Alpha™ by 49%. Interest in our EverGreen^TM suite of environmental solutions continues to gain the attention of our customers as they seek meaningful solutions to achieve their emission reduction targets and improve their well economics. These service offerings will continue to enhance our margins in the future.

“Precision’s Completion and Production Services segment had its best annual performance since 2014, generating $38 million of Adjusted EBITDA in 2022 and increasing our service rig activity 34% year-over-year. Our acquisition of High Arctic’s well servicing business in July has been highly successful, allowing Precision to further leverage its operational scale, generate significant cash flow, and become the leading provider of high-quality and reliable services. We are on track to achieve our targeted synergies of $5 million early this year. For 2023, we expect healthy commodity prices will support improved activity levels through increased demand for our services.

“I am proud of our accomplishments in 2022. We delivered on our three strategic priorities, returned to profitability, and strengthened our return profile, all while maintaining our capital discipline. Our 2023 strategic priorities will build on these accomplishments as we focus on delivering High Performance, High Value service, maximizing free cash flow through margin expansion and revenue efficiency, and continuing to strengthen our balance sheet by reducing debt with increased debt reduction and reduced leverage targets.

“Notwithstanding near-term commodity price volatility, constructive long-term oil and gas industry fundamentals combined with well-defined capital discipline commitments from both customers and oilfield service providers support steady and modestly increasing activity levels for the foreseeable future. I am confident our High Performance, High Value strategy, exceptional field results, capital discipline and capital allocation framework will continue to support increased shareholder value,” concluded Mr. Neveu.

SELECT FINANCIAL AND OPERATING INFORMATION

Financial Highlights

	For the three months ended December 31,												For the year ended December 31,
(Stated in thousands of Canadian dollars, except per share amounts)	2022				2021				% Change				2022				2021				% Change
Revenue		510,504				295,202				72.9				1,617,194				986,847				63.9
Adjusted EBITDA(1)		91,090				63,881				42.6				311,605				192,772				61.6
Net earnings (loss)		3,483				(27,336	)			(112.7	)			(34,293	)			(177,386	)			(80.7	)
Cash provided by (used in) operations		159,082				59,713				166.4				237,104				139,225				70.3
Funds provided by operations(1)		111,339				62,681				77.6				282,994				152,243				85.9
Cash used in investing activities		45,579				19,025				139.6				144,415				56,613				155.1
Capital spending by spend category(1)
Expansion and upgrade		12,699				3,125				306.4				63,305				19,006				233.1
Maintenance and infrastructure		44,610				24,625				81.2				120,945				56,935				112.4
Proceeds on sale		(5,165	)			(2,696	)			91.6				(37,198	)			(13,086	)			184.3
Net capital spending(1)		52,144				25,054				108.1				147,052				62,855				134.0
Net earnings (loss) per share:
Basic		0.27				(2.05	)			(113.0	)			(2.53	)			(13.32	)			(81.0	)
Diluted		0.27				(2.05	)			(113.0	)			(2.53	)			(13.32	)			(81.0	)

(1) See “FINANCIAL MEASURES AND RATIOS.”

Operating Highlights

	For the three months ended December 31,												For the year ended December 31,
	2022				2021				% Change				2022				2021				% Change
Contract drilling rig fleet		225				227				(0.9	)			225				227				(0.9	)
Drilling rig utilization days:
U.S.		5,482				4,179				31.2				20,396				14,494				40.7
Canada		6,058				4,819				25.7				20,519				15,782				30.0
International		552				552				–				2,190				2,190				–
Revenue per utilization day:
U.S.(US$)		31,242				21,976				42.2				27,309				21,213				28.7
Canada(Cdn$)		29,886				22,948				30.2				27,037				21,105				28.1
International(US$)		49,918				52,069				(4.1	)			51,242				52,837				(3.0	)
Operating cost per utilization day:
U.S.(US$)		19,253				16,056				19.9				18,635				15,048				23.8
Canada(Cdn$)		17,538				14,935				17.4				17,007				13,734				23.8
Service rig fleet		135				123				9.8				135				123				9.8
Service rig operating hours		49,368				33,063				49.3				170,362				126,840				34.3

Financial Position

(Stated in thousands of Canadian dollars, except ratios)	December 31, 2022				December 31, 2021
Working capital(1)		60,641				81,637
Cash		21,587				40,588
Long-term debt		1,085,970				1,106,794
Total long-term financial liabilities		1,206,619				1,185,858
Total assets		2,876,123				2,661,752
Long-term debt to long-term debt plus equity ratio (1)		0.47				0.47

(1) See “FINANCIAL MEASURES AND RATIOS.”

Summary for the three months ended December 31, 2022:

• Revenue for the fourth quarter was $511 million, 73% higher than in 2021 and was the result of increased North American drilling and service activity and day rates. Drilling rig utilization days increased 31% in the U.S. and 26% in Canada and well service activity increased 49% as compared with the fourth quarter of 2021.
• Adjusted EBITDA for the quarter was $91 million, $27 million higher than 2021 mainly due to increased activity and day rates, partially offset by higher share-based compensation charges. Share-based compensation charges for the quarter were $75 million, $69 million higher than in 2021 with the increase primarily due to our higher share price and the impact of a higher performance multiplier applied to vesting Performance Share Units (PSU) that was impacted by Precision’s top quartile shareholder return of 186% over the three year period ending December 31, 2022. Please refer to “Other Items” later in this news release for additional information on share-based compensation charges.
• Adjusted EBITDA as a percentage of revenue (see “FINANCIAL MEASURES AND RATIOS”) was 18% as compared with 22% in 2021. The lower percentage in the current quarter was primarily the result of higher share-based compensation charges. Adjusted EBITDA as a percentage of revenue in our Contract Drilling Services increased 5% as compared with the prior year quarter, demonstrating our revenue efficiency and ability to outpace cost escalations through increased day rates.
• General and administrative expenses this quarter were $79 million, $60 million higher than in 2021 due to higher share-based compensation charges.
• Net finance charges for the quarter were $24 million, an increase of $3 million from 2021 due to higher variable interest rates on our Senior Credit Facility and the impact of higher foreign exchange rates on our U.S. dollar denominated long-term debt due to the weakening of the Canadian dollar.
• In the U.S., revenue per utilization day was US$31,242 compared with US$21,976 in 2021. The increase was primarily the result of improved pricing, partially offset by lower turnkey revenue. During the fourth quarter, we recognized revenue from turnkey projects of US$4 million compared with US$6 million in 2021. Revenue per utilization day in the quarter, excluding the impact of turnkey, was US$30,552, compared to US$20,564 in the prior year, an increase of $9,988 or 49%. On a sequential basis, compared with the third quarter of 2022, revenue per utilization day, excluding turnkey revenue, increased approximately US$2,700.
• Our U.S. operating costs per utilization day increased to US$19,253, compared with US$16,056 in 2021 due to higher repairs and maintenance, field wages and larger crew sizes. Our U.S. daily operating costs during the quarter, excluding turnkey, was US$18,655 compared with US$14,916 in the prior year. Sequentially, excluding the impact of turnkey activity, our daily operating costs increased approximately US$825 due to higher labor costs and related burden resulting from wage increases during the fourth quarter of 2022.
• In Canada, revenue per utilization day for contract drilling for the quarter was $29,886 compared with $22,948 in 2021, an increase of 30%. The increase was a result of higher day rates and increased labor and cost recoveries, partially offset by rig mix. Sequentially, revenue per utilization day increased $2,959 as we continued to drive revenue efficiency.
• Our Canadian operating costs per utilization day increased to $17,538, compared with $14,935 in 2021 due to higher field wages, larger crew sizes and higher repairs and maintenance expenses. Sequentially, our daily operating costs increased $645 primarily due to increased repairs and maintenance expense.
• Our daily operating margins in the U.S. and Canada increased 103% and 54%, respectively, as compared with the fourth quarter of 2021. Sequentially, our daily operating margins have increased in the U.S. and Canada 25% and 23%, respectively, with the results demonstrating our focus on maximizing cash flow and revenue efficiency.
• Completion and Production Services fourth quarter revenue and Adjusted EBITDA were $59 million and $12 million, respectively, compared with $32 million and $6 million in 2021. Our improved results were supported by higher service rates and activity as our fourth quarter operating hours increased 49% as compared with 2021.
• We realized fourth quarter revenue from international contract drilling of US$28 million, largely consistent with 2021, as activity remained constant.
• Fourth quarter cash provided by operations was $159 million as compared with $60 million in 2021. We generated $111 million of funds from operations as compared with $63 million in 2021. Our increased activity, revenue efficiency, operational leverage and day rates contributed to higher cash generation in the current quarter, partially offset by higher share-based compensation charges.
• Capital expenditures were $57 million as compared with $28 million in 2021. Capital spending by spend category (see “FINANCIAL MEASURES AND RATIOS”) included $13 million for expansion and upgrades and $45 million for the maintenance of existing assets and infrastructure.
• We reduced debt by $132 million, ending the quarter with $22 million of cash and approximately $600 million of available liquidity.

Summary for the twelve months ended December 31, 2022:

• Revenue for the year ended December 31, 2022 was $1,617 million, an increase of 64% from 2021.
• Adjusted EBITDA was $312 million as compared with $193 million in 2021. Our higher Adjusted EBITDA was attributable to higher activity and day rates, partially offset by higher share-based compensation charges and lower CEWS program assistance. Share-based compensation charges for the year were $134 million, $77 million higher than in 2021, with the increase primarily due to our share price appreciating 132% and the impact of a higher performance multiplier applied to vesting PSUs. Our 2021 Adjusted EBITDA was positively impacted by $24 million of CEWS program assistance. We did not recognize any CEWS program assistance in 2022.
• General and administrative costs were $181 million, an increase of $85 million from 2021 primarily due to higher share-based compensation charges and lower CEWS program assistance.
• Net finance charges were $88 million, a decrease of $4 million from 2021 due to lower debt issue costs, partially offset by the impact of higher variable interest rates and the weakening Canadian dollar. In 2021, we accelerated the amortization of issue costs associated with fully redeemed unsecured senior notes.
• Cash provided by operations was $237 million as compared with $139 million in 2021. Funds provided by operations in 2022 were $283 million, an increase of $131 million from the comparative period.
• Capital expenditures were $184 million in 2022, an increase of $108 million from 2021. Capital spending by spend category included $63 million for expansion and upgrades and $121 million for the maintenance of existing assets and infrastructure.
• Disposed of non-core assets for proceeds of $37 million.
• We reduced our debt by $106 million and repurchased and cancelled 130,395 common shares for $10 million under our Normal Course Issuer Bid (NCIB).

STRATEGY

Precision’s vision is to be globally recognized as the High Performance, High Value provider of land drilling services. We work toward this vision by defining and measuring our results against strategic priorities we establish at the beginning of every year.

Below we summarize the results of our 2022 strategic priorities:

1. Grow revenue through scaling Alpha^TM technologies and EverGreen^TM suite of environmental solutions across Precision’s Super Series rig fleet and further competitive differentiation through ESG initiatives.
   • Grew Alpha™ revenue by over 60% compared with 2021.
   • Increased total paid days for AlphaAutomation™ by over 50% from 2021.
   • Ended the year with 70 AC Super Triple Alpha™ rigs, a 49% increase from the beginning of the year.
   • Expanded our commercial AlphaApps™ to 21 versus 16 a year ago and increased paid AlphaApps^TM days by 15% from 2021.
   • Exited 2022 with seven field deployed EverGreen™ Battery Energy Storage Systems, 15 EverGreen™ Integrated Power and Emissions Monitoring Systems and 21 high mast LED lighting systems.
2. Grow free cash flow by maximizing operating leverage as demand for our High Performance, High Value services continues to rebound.
   • Generated cash provided by operations of $237 million, representing a 70% increase over the prior year.
   • Grew our average active rig count by 40% in the U.S. and 30% in Canada as compared with 2021.
   • Increased our daily operating margins (revenue less operating costs per utilization day) 41% in the U.S. and 36% in Canada.
   • Acquired High Arctic Energy Services Inc’s (High Arctic) well servicing business and associated rental assets and increased our Completion and Production Services’ Adjusted EBITDA to $38 million versus $24 million in 2021.
   • Awarded four five-year drilling contracts in Kuwait and renewed three contracts in the Kingdom of Saudi Arabia for five years, increasing our international rig count to eight by mid-2023. We expect our eight long-term contracts to generate steady and reliable cash flow into 2028.
3. Utilize free cash flow to continue strengthening our balance sheet while investing in our people, equipment and returning capital to shareholders.
   • Reduced debt by $106 million, ending the year with approximately $600 million in available liquidity.
   • Returned $10 million of capital to shareholders through share repurchases.
   • Reinvested $184 million into our equipment and infrastructure and disposed of non-core and underutilized assets for proceeds of $37 million.
   • Hired and trained over 1,300 people new to the industry and increased our number of field coaches who conducted 155 site visits and provided over 10,000 hours of training.

2023 Strategic Priorities

Precision’s strategic priorities for 2023 are focused on service delivery, maximizing free cash flow through margin expansion and revenue efficiency, and continuing to strengthen our balance sheet. Precision’s strategic priorities for 2023 are as follows:

1. Deliver High Performance, High Value services through operational excellence.
2. Maximize free cash flow by increasing Adjusted EBITDA margins and revenue efficiency.
3. Reduce debt by at least $150 million and allocate 10% to 20% of free cash flow before debt repayments for share repurchases. Increase long-term debt reduction target to $500 million between 2022 and 2025 and sustained Net Debt to Adjusted EBITDA ratio of below 1.0 times.

OUTLOOK

The rebound of global energy demand and the impact of a multi-year period of underinvestment in upstream oil and natural gas has resulted in reduced inventories of oil and natural gas and higher commodity prices, providing a supportive outlook for the oilfield services industry. The war in Ukraine and sanctions on Russian hydrocarbons have exacerbated the challenged supply situation and many importing countries are looking toward North America and the Middle East to fill the supply gap from exports of crude oil and natural gas through the global Liquified Natural Gas (LNG) market. Constrained natural gas production levels and low natural gas storage volumes have resulted in North American natural gas prices strengthening in the last year. With U.S. LNG exports growing as countries look to displace Russian natural gas and various Canadian LNG projects expected to come online by 2025, we anticipate a sustained period of elevated natural gas drilling activity.

A significant shift by the oil and gas exploration and development industry prioritizing shareholder returns over reinvestment for growth has taken hold and is core to the strategy of most industry participants. As a result, the reinvestment criteria for exploration and production companies are generally set at lower commodity prices, ensuring sustainable free cash flows that can be used to strengthen balance sheets and deliver direct returns to shareholders while maintaining or modestly growing production levels. Despite commodity price volatility, producer development programs and drilling rig demand have remained relatively stable and in the absence of a commodity price collapse we expect this stability will remain.

A strict focus on capital discipline extends through the oilfield service value chain and is evident in the land drilling sector, where despite strong customer demand and high utilization of pad drilling rigs, drilling companies remain reluctant to reinvest cash flows to build new rigs. This shift is a critically important change in the oilfield service supply fundamentals, driving a sustainable and predictable operating environment that generates better industry and investor returns.

At current commodity fundamentals, we anticipate higher demand for our services and improved fleet utilization as customers seek to maintain production levels and replenish inventories, as drilled but uncompleted wells have been depleted over the past several years. However, broad economic concerns exist with respect to recession risk, rising interest rates and geopolitical instability. Notwithstanding current economic uncertainty and commodity price volatility, we expect North American industry activity to further increase in 2023 but at a more modest pace and anticipate near full utilization in the high specification rig market with customers seeking term contracts to secure rigs and ensure fulfilment of their development programs. Accordingly, the tightening of available high specification rigs is expected to drive higher day rates and necessitate customer funded rig upgrades.

In Canada, industry activity is supported by imminent hydrocarbon export capacity increases with the Trans Mountain oil pipeline and LNG Canada that are expected to start-up in 2024 and 2025, respectively. Northwestern Alberta and northeastern British Columbia natural gas liquids and natural gas developments are prime beneficiaries of the LNG Canada project. Recent agreements reached in British Columbia with certain First Nations groups are expected to facilitate drilling license approvals and increased activity in that region. Additionally, large pad drilling programs are ideally suited for Super Triple drilling rigs that have strong customer interest indicated for the next several years. On the oil side, the Clearwater heavy oil play is being developed as a long-term conventional heavy oil development that is well suited for Precision’s Super Single rigs. Utilization of Precision’s Super Single and Super Triple rigs has reached record levels not seen in the last several years and customers are seeking multi-year rig contracts to ensure access to these rigs.

In the United States while customer demand flattened out late in 2022, there is continued interest to high grade rigs to the latest pad drilling, AlphaAutomation^TM equipped rigs as these rigs deliver the best drilling cost efficiency available in the industry. In 2023, we expect a modest increase in demand as lower performing rigs are displaced and rig counts modestly increase to balance with completion activity. Tight supply and firm demand are expected to continue to support drilling rig day rates migrating to leading edge rates.

Interest in our EverGreen^TM suite of environmental solutions continues to gain momentum as customers seek meaningful solutions to achieve their emission reduction targets and improve their well economics. We expect our growing Alpha^TM technologies offering, paired with our EverGreen^TM suite of environmental solutions, to be key competitive differentiators as our predictable and repeatable drilling results deliver exceptional value to our customers by reducing risks, well construction costs and carbon footprint.

The outlook for our Precision Well Servicing business remains positive with strong commodity prices supporting maintenance and completion activity. We successfully acquired and integrated High Arctic’s well servicing assets and associated rental business. By leveraging our existing platform and continuing our strict focus on cost control, we have realized annual run-rate cost synergies of approximately $4 million and expect to achieve our $5 million target early in 2023.

Commodity Prices

During the fourth quarter of 2022, average West Texas Intermediate and Western Canadian Select oil prices were higher by 7% and 5%, respectively, from the comparative quarter. While average Henry Hub and AECO natural gas prices improved by 26% and 11%, respectively from 2021.

		For the three months ended December 31,								Year ended December 31,
		2022				2021				2022		2021
Average oil and natural gas prices
Oil
West Texas Intermediate (per barrel) (US$)			82.77				77.10			94.23			67.91
Western Canadian Select (per barrel) (US$)			65.87				62.45			78.15			54.84
Natural gas
United States
Henry Hub (per MMBtu) (US$)			6.10				4.84			6.51			3.72
Canada
AECO (per MMBtu) (CDN$)			5.24				4.73			5.43			3.64

Contracts

Since the start of 2022, we have signed 80 term contracts. The following chart outlines the average number of drilling rigs under term contract by quarter as of February 8, 2023. For those quarters ending after December 31, 2022, this chart represents the minimum number of term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional term contracts.

		Average for the quarter ended 2022																Average for the quarter ended 2023
		Mar. 31				June 30				Sept. 30				Dec. 31				Mar. 31				June 30				Sept. 30				Dec. 31
Average rigs under term contract as of February 8, 2023:
U.S.			27				29				31				35				35				30				19				14
Canada			6				8				10				16				19				19				17				14
International			6				6				6				6				4				6				8				8
Total			39				43				47				57				58				55				44				36

The following chart outlines the average number of drilling rigs that we had under term contract for 2022 and the average number of rigs we have under term contract as of February 8, 2023.

		Average for the year ended
		2022				2023
Average rigs under term contract as of February 8, 2023:
U.S.			31				25
Canada			10				17
International			6				7
Total			47				49

In Canada, term contracted rigs normally generate 250 utilization days per year because of the seasonal nature of well site access. In most regions in the U.S. and internationally, term contracts normally generate 365 utilization days per year. Internationally, we expect to have eight rigs under long term contract beginning in the second half of 2023.

Drilling Activity

The following chart outlines the average number of drilling rigs that we had working or moving by quarter for the periods noted.

	Average for the quarter ended 2021															Average for the quarter ended 2022
	Mar. 31				June 30				Sept. 30				Dec. 31				Mar. 31				June 30				Sept. 30				Dec. 31
Average Precision active rig count:
U.S.		33				39				41				45				51				55				57				60
Canada		42				27				51				52				63				37				59				66
International		6				6				6				6				6				6				6				6
Total		81				72				98				103				120				98				122				132

According to industry sources, as of February 8, 2023, the U.S. active land drilling rig count has increased 25% from the same point last year while the Canadian active land drilling rig count has increased 14%. To date in 2023, approximately 79% of the U.S. industry’s active rigs and 63% of the Canadian industry’s active rigs were drilling for oil targets, compared with 81% for the U.S. and 62% for Canada at the same time last year.

Capital Spending and Free Cash Flow Allocation

We remain committed to disciplined cash flow management, capital spending and returning capital to shareholders. Capital spending in 2023 is expected to be $235 million and by spend category includes $163 million for sustaining, infrastructure and intangibles and $72 million for expansion and upgrades. We expect that the $235 million will be split $223 million in the Contract Drilling Services segment, $11 million in the Completion and Production Services segment and $1 million to the Corporate segment. At December 31, 2022, Precision had capital commitments of $184 million with payments expected through 2026.

We remain committed to our debt reduction plans and in 2023 expect to reduce debt by at least $150 million and allocate 10% to 20% of free cash flow before debt repayments for share repurchases. We have increased our long-term debt reduction target from the beginning of 2022 through to the end of 2025 to $500 million and decreased our target Net Debt to Adjusted EBITDA leverage ratio from below 1.5 times to 1.0 times, while continuing to allocate 10% to 20% of free cash flow before debt principal payments to shareholders.

SEGMENTED FINANCIAL RESULTS

Precision’s operations are reported in two segments: Contract Drilling Services, which includes our drilling rig, oilfield supply and manufacturing divisions; and Completion and Production Services, which includes our service rig, rental and camp and catering divisions.

	For the three months ended December 31,												For the year ended December 31,
(Stated in thousands of Canadian dollars)	2022				2021				% Change				2022				2021				% Change
Revenue:
Contract Drilling Services		453,225				264,911				71.1				1,436,134				877,943				63.6
Completion and Production Services		59,250				32,134				84.4				187,171				113,488				64.9
Inter-segment eliminations		(1,971	)			(1,843	)			6.9				(6,111	)			(4,584	)			33.3
		510,504				295,202				72.9				1,617,194				986,847				63.9
Adjusted EBITDA:(1)
Contract Drilling Services		137,551				68,414				101.1				397,753				231,532				71.8
Completion and Production Services		11,981				6,274				91.0				38,147				23,807				60.2
Corporate and Other		(58,442	)			(10,807	)			440.8				(124,295	)			(62,567	)			98.7
		91,090				63,881				42.6				311,605				192,772				61.6

(1) See “FINANCIAL MEASURES AND RATIOS.”

SEGMENT REVIEW OF CONTRACT DRILLING SERVICES

	For the three months ended December 31,												For the year ended December 31,
(Stated in thousands of Canadian dollars, except where noted)	2022				2021				% Change				2022				2021				% Change
Revenue		453,225				264,911				71.1				1,436,134				877,943				63.6
Expenses:
Operating		296,716				189,291				56.8				988,885				618,327				59.9
General and administrative		18,958				7,206				163.1				49,496				28,084				76.2
Adjusted EBITDA(1)		137,551				68,414				101.1				397,753				231,532				71.8
Adjusted EBITDA as a percentage of revenue(1)		30.3	%			25.8	%							27.7	%			26.4	%

(1) See “FINANCIAL MEASURES AND RATIOS.”

United States onshore drilling statistics:(1)	2022								2021
	Precision				Industry(2)				Precision				Industry(2)
Average number of active land rigs for quarters ended:
March 31		51				603				33				378
June 30		55				687				39				437
September 30		57				746				41				485
December 31		60				761				45				545
Year to date average		56				699				40				461

(1) United States lower 48 operations only.
(2) Baker Hughes rig counts.

Canadian onshore drilling statistics:(1)	2022								2021
	Precision				Industry(2)				Precision				Industry(2)
Average number of active land rigs for quarters ended:
March 31		63				205				42				145
June 30		37				113				27				72
September 30		59				199				51				151
December 31		66				187				52				160
Year to date average		56				176				43				132

(1) Canadian operations only.
(2) Baker Hughes rig counts.

Revenue from Contract Drilling Services was $453 million this quarter, 71% higher than 2021, while Adjusted EBITDA increased 101% to $138 million. The increase in revenue and Adjusted EBITDA was primarily due to higher North American activity and day rates.

Drilling rig utilization days (drilling days plus move days) in the U.S. were 5,482, 31% higher than 2021. Drilling rig utilization days in Canada were 6,058, 26% higher than 2021. The increase in utilization days in both the U.S. and Canada was consistent with higher industry activity. Drilling rig utilization days in our international business were 552, consistent with 2021.

Our fourth quarter revenue per utilization day in the U.S. increased 42% from the comparable quarter. The increase was primarily the result of improved pricing, partially offset by lower turnkey revenue. During the fourth quarter, we recognized revenue from turnkey projects of US$4 million compared with US$6 million in 2021. Compared with the same quarter in 2021, drilling rig revenue per utilization day in Canada increased 30% due to higher day rates and increased labor and cost recoveries, partially offset by rig mix. Our international revenue per utilization day for the quarter was slightly lower than 2021 primarily due to the expiration of drilling contracts.

In the U.S., 59% of utilization days were generated from rigs under term contract as compared with 51% in 2021. In Canada, 20% of our utilization days were generated from rigs under term contract, compared with 13% in 2021.

In the U.S., operating costs per utilization day for the quarter were higher by 20% compared with 2021 primarily due to higher repairs and maintenance, field wages and larger crew sizes. Our U.S. daily operating costs during the quarter, excluding turnkey, was US$18,655 compared with US$14,916 the prior year. Our Canadian operating costs on a per utilization day increased 17% as compared with 2021 due to higher field wages, larger crew sizes and higher repairs and maintenance expenses.

Our general and administrative expenses increased $12 million as compared with the fourth quarter of 2021. The higher expense for the quarter pertains to higher share-based compensation charges from our increasing share price and performance multiplier. In the fourth quarter, we recognized $8 million of share-based compensation charges as compared with $1 million in 2021.

SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES

	For the three months ended December 31,												For the year ended December 31,
(Stated in thousands of Canadian dollars, except where noted)	2022				2021				% Change				2022				2021
Revenue		59,250				32,134				84.4				187,171				113,488				64.9
Expenses:
Operating		45,462				24,698				84.1				141,827				84,401				68.0
General and administrative		1,807				1,162				55.5				7,197				5,280				36.3
Adjusted EBITDA(1)		11,981				6,274				91.0				38,147				23,807				60.2
Adjusted EBITDA as a percentage of revenue(1)		20.2	%			19.5	%							20.4	%			21.0	%
Well servicing statistics:
Number of service rigs (end of period)		135				123				9.8				135				123				9.8
Service rig operating hours		49,368				33,063				49.3				170,362				126,840				34.3
Service rig operating hour utilization		40	%			29	%							42	%			28	%

(1) See “FINANCIAL MEASURES AND RATIOS.”

Completion and Production Services revenue for the fourth quarter of 2022 increased to $59 million as compared with $32 million in 2021. The higher revenue was primarily due to increased average service rates and activity. Our fourth quarter service rig operating hours increased 49% from 2021.

During the quarter, Completion and Production Services generated 9% of its revenue from U.S. operations compared with 11% in the comparative period.

Operating costs as a percentage of revenue were 77%, consistent with 2021. As compared to 2021, our fourth quarter general and administrative expenses increased 56%. The higher expense for the quarter is primarily due to incremental costs resulting from our well servicing acquisition in the third quarter of 2022.

Our fourth quarter Adjusted EBITDA increased to $12 million as compared with $6 million in 2021, primarily due to increased average service rates and activity, partially offset by higher share-based compensation expense.

Subsequent to December 31, 2022, we made our remaining payment of $28 million to complete our acquisition of High Arctic’s well servicing business and associated rental assets.

SEGMENT REVIEW OF CORPORATE AND OTHER

Our Corporate and Other segment provides support functions to our operating segments. The Corporate and Other segment had negative Adjusted EBITDA of $58 million as compared with $11 million in the fourth quarter of 2021. Our current quarter Adjusted EBITDA was impacted by higher share-based compensation costs from our increased share price and the impact of the increased performance multiplier.

OTHER ITEMS

Share-based Incentive Compensation Plans

We have several cash and equity-settled share-based incentive plans for non-management directors, officers, and other eligible employees. Our accounting policies for each share-based incentive plan can be found in our 2021 Annual Report.

A summary of amounts expensed under these plans during the reporting periods are as follows:

	For the three months ended December 31,								For the year ended December 31,
(Stated in thousands of Canadian dollars)	2022				2021				2022				2021
Cash settled share-based incentive plans		75,438				2,055				133,240				48,592
Equity settled share-based incentive plans:
Executive PSU		–				4,282				407				7,921
Share option plan		–				33				20				232
Total share-based incentive compensation plan expense		75,438				6,370				133,667				56,745
Allocated:
Operating		18,913				1,551				33,607				12,988
General and Administrative		56,525				4,819				100,060				43,757
		75,438				6,370				133,667				56,745

We recognize a financial liability associated with our cash settled share-based incentive plans. The financial liability is remeasured each reporting period with the resultant change in fair value, caused primarily by movements in our share price and incremental vesting of units, recognized as share-based compensation expense in net earnings. As units vest, cash payments reduce the outstanding financial liability. In addition, our PSU plans incorporate performance criteria, established at the date of grant, that adjust the available number of PSUs for settlement from zero to two times the amount originally granted.

Cash settled share-based compensation expense for the quarter was $75 million as compared with $2 million in 2021. The higher expense in 2022 was primarily due to our increasing share price and the impact of a higher performance multiplier. Our closing fourth quarter share price increased 48% from the end of the third quarter. Calculated in accordance with our omnibus equity incentive plan, we increased the performance multiplier applied to vesting PSUs that were granted in the first quarter of 2020. The impact from our increased share price and PSU multiplier resulted in higher share-based compensation charges upon remeasurement at the end of the fourth quarter.

Our equity settled share-based compensation expense for the fourth quarter of 2022 was nil as our Executive PSUs and share options fully vested in the first quarter of 2022.

For the year, share-based compensation expense was $134 million as compared with $57 million in 2021 due primarily to our increased share price, which increased 132% from the start of the year, and the impact of the higher performance multiplier.

As at December 31, 2022, the majority of our share-based compensation plans were classified as cash-settled and will be impacted by changes in our share price. Although accounted for as cash-settled, Precision retains the ability to settle certain vested units in common shares at its discretion.

Finance Charges

Fourth quarter net finance charges were $24 million as compared with $21 million in 2021. The increased finance charges were primarily due to higher variable interest rates on our Senior Credit Facility and the impact of the weaker Canadian dollar on our U.S. dollar denominated long-term debt. Interest charges on our U.S. dollar denominated long-term debt in the fourth quarter were US$15 million ($21 million) as compared with US$15 million ($19 million) in 2021.

Income Tax

Income tax expense for the quarter was $9 million as compared with $1 million in 2021. During the fourth quarter, we did not recognize deferred tax assets on certain Canadian and international operating losses.

LIQUIDITY AND CAPITAL RESOURCES

The oilfield services business is inherently cyclical in nature. To manage this, we focus on maintaining a strong balance sheet, so we have the financial flexibility to manage our growth and cash flow regardless of where we are in the business cycle. We maintain a variable operating cost structure so we can be responsive to changes in demand.

Our maintenance capital expenditures are tightly governed and highly responsive to activity levels with additional cost savings leverage provided through our internal manufacturing and supply divisions. Term contracts on expansion capital for new-build and upgrade rig programs provide more certainty of future revenues and return on our capital investments.

Liquidity

Amount		Availability		Used for		Maturity
Senior credit facility (secured)
US$500 million(1) (extendible, revolving term credit facility with US$300 million accordion feature)		US$44 million drawn and US$56 million in outstanding letters of credit		General corporate purposes		June 18, 2025(1)
Real estate credit facilities (secured)
US$9 million		Fully drawn		General corporate purposes		November 19, 2025
$18 million		Fully drawn		General corporate purposes		March 16, 2026
Operating facilities (secured)
$40 million		Undrawn, except $28 million in outstanding letters of credit		Letters of credit and general corporate purposes
US$15 million		Undrawn		Short-term working capital requirements
Demand letter of credit facility (secured)
US$40 million		Undrawn, except US$31 million in outstanding letters of credit		Letters of credit
Unsecured senior notes (unsecured)
US$348 million – 7.125%		Fully drawn		Debt redemption and repurchases		January 15, 2026
US$400 million – 6.875%		Fully drawn		Debt redemption and repurchases		January 15, 2029

(1) US$53 million expires on November 21, 2023.

At December 31, 2022, we had $1,103 million outstanding under our Senior Credit Facility, Real Estate Credit Facilities and unsecured senior notes as compared with $1,126 million at December 31, 2021. The current blended cash interest cost of our debt is approximately 7.1%.

During the quarter, we increased the capacity of our secured demand letter of credit facility to US$40 million to allow us to issue additional letters of credit after securing certain international drilling contracts.

Senior Credit Facility

The Senior Credit Facility requires we comply with certain covenants including a leverage ratio of consolidated senior debt to consolidated Covenant EBITDA of less than 2.5:1. For purposes of calculating the leverage ratio, consolidated senior debt only includes secured indebtedness.

On June 18, 2021, we agreed with the lenders of our Senior Credit Facility to extend the facility’s maturity date and extend and amend certain financial covenants during the Covenant Relief Period. The Covenant Relief Period ended on September 30, 2022. The maturity date of the Senior Credit Facility was extended to June 18, 2025; however, US$53 million of the US$500 million will expire on November 21, 2023. The Senior Credit Facility limits the redemption and repurchase of junior debt subject to a pro forma senior net leverage covenant test of less than or equal to 1.75:1.

Unsecured Senior Notes

The unsecured senior notes require that we comply with certain restrictive and financial covenants including an incurrence based consolidated interest coverage ratio test of consolidated cash flow, as defined in the senior note agreements, to consolidated interest expense of greater than 2.0:1 for the most recent four consecutive fiscal quarters. In the event our consolidated interest coverage ratio is less than 2.0:1 for the most recent four consecutive fiscal quarters, the unsecured senior notes restrict our ability to incur additional indebtedness.

For further information, please see the unsecured senior note indentures which are available on SEDAR and EDGAR.

Covenants

At December 31, 2022, we were in compliance with the covenants of our Senior Credit Facility and Real Estate Credit Facilities.

	Covenant		At December 31, 2022
Senior Credit Facility
Consolidated senior debt to consolidated covenant EBITDA(1)	< 2.50			0.22
Consolidated covenant EBITDA to consolidated interest expense	> 2.50			4.80
Real Estate Credit Facilities
Consolidated covenant EBITDA to consolidated interest expense	> 2.50			4.80

(1) For purposes of calculating the leverage ratio consolidated senior debt only includes secured indebtedness.

Impact of foreign exchange rates

The following table summarizes the average and closing Canada-U.S. foreign exchanges rates.

	For the three months ended December 31,								For the year ended December 31,
	2022				2021				2022				2021
Canada-U.S. foreign exchange rates
Average		1.36				1.26				1.30				1.25
Closing		1.36				1.26				1.36				1.26

Hedge of investments in foreign operations

We utilize foreign currency long-term debt to hedge our exposure to changes in the carrying values of our net investment in certain foreign operations as a result of changes in foreign exchange rates.

We have designated our U.S. dollar denominated long-term debt as a net investment hedge in our U.S. operations and other foreign operations that have a U.S. dollar functional currency. To be accounted for as a hedge, the foreign currency denominated long-term debt must be designated and documented as such and must be effective at inception and on an ongoing basis. We recognize the effective amount of this hedge (net of tax) in other comprehensive income. We recognize ineffective amounts (if any) in net earnings (loss).

Average shares outstanding

The following table reconciles the weighted average shares outstanding used in computing basic and diluted net loss per share:

	For the three months ended December 31,								For the year ended December 31,
(Stated in thousands)	2022				2021				2022				2021
Weighted average shares outstanding – basic		13,538				13,304				13,546				13,315
Effect of stock options and other equity compensation plans		4				–				–				–
Weighted average shares outstanding – diluted		13,542				13,304				13,546				13,315

QUARTERLY FINANCIAL SUMMARY

(Stated in thousands of Canadian dollars, except per share amounts)		2022
Quarters ended		March 31				June 30				September 30				December 31
Revenue			351,339				326,016				429,335				510,504
Adjusted EBITDA(1)			36,855				64,099				119,561				91,090
Net earnings (loss)			(43,844	)			(24,611	)			30,679				3,483
Net earnings (loss) per basic share			(3.25	)			(1.81	)			2.26				0.27
Net earnings (loss) per diluted share			(3.25	)			(1.81	)			2.03				0.27
Funds provided by operations(1)			29,955				60,373				81,327				111,339
Cash provided by (used in) operations			(65,294	)			135,174				8,142				159,082

(Stated in thousands of Canadian dollars, except per share amounts)		2021
Quarters ended		March 31				June 30				September 30				December 31
Revenue			236,473				201,359				253,813				295,202
Adjusted EBITDA(1)			54,539				28,944				45,408				63,881
Net loss			(36,106	)			(75,912	)			(38,032	)			(27,336	)
Net loss per basic share			(2.70	)			(5.71	)			(2.86	)			(2.05	)
Net loss per diluted share			(2.70	)			(5.71	)			(2.86	)			(2.05	)
Funds provided by operations(1)			43,430				12,607				33,525				62,681
Cash provided by operations			15,422				42,219				21,871				59,713

(1) See “FINANCIAL MEASURES AND RATIOS.”

FINANCIAL MEASURES AND RATIOS

Non-GAAP Financial Measures
We reference certain additional Non-Generally Accepted Accounting Principles (Non-GAAP) measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
Adjusted EBITDA		We believe Adjusted EBITDA (earnings before income taxes, gain (loss) on investments and other assets, loss on redemption and repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), as reported in our Consolidated Statements of Net Earnings (Loss) and our reportable operating segment disclosures, is a useful measure, because it gives an indication of the results from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges. The most directly comparable financial measure is net earnings (loss).

	For the three months ended December 31,								For the year ended December 31,
(Stated in thousands of Canadian dollars)	2022				2021				2022				2021
Adjusted EBITDA by segment:
Contract Drilling Services		137,551				68,414				397,753				231,532
Completion and Production Services		11,981				6,274				38,147				23,807
Corporate and Other		(58,442	)			(10,807	)			(124,295	)			(62,567	)
Adjusted EBITDA		91,090				63,881				311,605				192,772
Depreciation and amortization		71,373				71,178				279,035				282,326
Gain on asset disposals		(7,774	)			(2,292	)			(29,926	)			(8,516	)
Foreign exchange		(84	)			289				1,278				393
Finance charges		23,519				20,648				87,813				91,431
Loss on redemption and repurchase of unsecured notes		–				–				–				9,520
Loss (gain) on investments and other assets		(8,714	)			727				(12,452	)			400
Incomes taxes		9,287				667				20,150				(5,396	)
Net earnings (loss)		3,483				(27,336	)			(34,293	)			(177,386	)

Funds Provided by (Used in) Operations		We believe funds provided by (used in) operations, as reported in our Consolidated Statements of Cash Flows, is a useful measure because it provides an indication of the funds our principal business activities generate prior to consideration of working capital changes, which is primarily made up of highly liquid balances. The most directly comparable financial measure is cash provided by (used in) operations.
Net Capital Spending		We believe net capital spending is a useful measure as it provides an indication of our primary investment activities. The most directly comparable financial measure is cash provided by (used in) investing activities. Net capital spending is calculated as follows:

		For the three months ended December 31,								For the year ended December 31,
(Stated in thousands of Canadian dollars)		2022				2021				2022				2021
Capital spending by spend category
Expansion and upgrade			12,699				3,125				63,305				19,006
Maintenance and infrastructure			44,610				24,625				120,945				56,935
			57,309				27,750				184,250				75,941
Proceeds on sale of property, plant and equipment			(5,165	)			(2,696	)			(37,198	)			(13,086	)
Net capital spending			52,144				25,054				147,052				62,855
Business acquisitions			–				–				10,200				–
Purchase of investments and other assets			8				500				617				3,500
Changes in non-cash working capital balances			(6,573	)			(6,529	)			(13,454	)			(9,742	)
Cash used in investing activities			45,579				19,025				144,415				56,613

Working Capital

We define working capital as current assets less current liabilities, as reported in our Consolidated Statements of Financial Position. Working capital is calculated as follows:

	At December 31,				At December 31,
(Stated in thousands of Canadian dollars)	2022				2021
Current assets		470,670				319,757
Current liabilities		410,029				238,120
Working capital		60,641				81,637

Non-GAAP Ratios
We reference certain additional Non-GAAP ratios that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
Adjusted EBITDA % of Revenue		We believe Adjusted EBITDA as a percentage of consolidated revenue, as reported in our Consolidated Statements of Net Earnings (Loss), provides an indication of our profitability from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.
Long-term debt to long-term debt plus equity		We believe that long-term debt (as reported in our Consolidated Statements of Financial Position) to long-term debt plus equity (total shareholders’ equity as reported in our Condensed Interim Consolidated Statements of Financial Position) provides an indication to our debt leverage.
Net Debt to Adjusted EBITDA		We believe that the Net Debt (long-term debt less cash, as reported in our Consolidated Statements of Financial Position) to Adjusted EBITDA ratio provides an indication to the number of years it would take for us to repay our debt obligations.
Supplementary Financial Measures
We reference certain supplementary financial measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
Capital Spending by Spend Category		We provide additional disclosure to better depict the nature of our capital spending. Our capital spending is categorized as expansion and upgrade, maintenance and infrastructure, or intangibles.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements contained in this release, including statements that contain words such as “could”, “should”, “can”, “anticipate”, “estimate”, “intend”, “plan”, “expect”, “believe”, “will”, “may”, “continue”, “project”, “potential” and similar expressions and statements relating to matters that are not historical facts constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information and statements”).

In particular, forward looking information and statements include, but are not limited to, the following:

• our strategic priorities for 2023;
• our capital expenditures, free cash flow allocation and debt reduction plan for 2023;
• anticipated activity levels, demand for our drilling rigs, day rates and margins in 2023;
• the average number of term contracts in place for 2023;
• customer adoption of Alpha^TM technologies and EverGreen^TM suite of environmental solutions;
• anticipated timing and amount of costs savings from acquired well servicing and rental assets;
• potential commercial opportunities and rig contract renewals; and
• our future debt reduction plans.

These forward-looking information and statements are based on certain assumptions and analysis made by Precision in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. These include, among other things:

• the fluctuation in oil prices may pressure customers into reducing or limiting their drilling budgets;
• the success of our response to the COVID-19 global pandemic;
• the status of current negotiations with our customers and vendors;
• customer focus on safety performance;
• existing term contracts are neither renewed nor terminated prematurely;
• our ability to deliver rigs to customers on a timely basis; and
• the general stability of the economic and political environments in the jurisdictions where we operate.

Undue reliance should not be placed on forward-looking information and statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from our expectations. Such risks and uncertainties include, but are not limited to:

• volatility in the price and demand for oil and natural gas;
• fluctuations in the level of oil and natural gas exploration and development activities;
• fluctuations in the demand for contract drilling, well servicing and ancillary oilfield services;
• our customers’ inability to obtain adequate credit or financing to support their drilling and production activity;
• the success of vaccinations for COVID-19 worldwide;
• changes in drilling and well servicing technology, which could reduce demand for certain rigs or put us at a competitive advantage;
• shortages, delays and interruptions in the delivery of equipment supplies and other key inputs;
• liquidity of the capital markets to fund customer drilling programs;
• availability of cash flow, debt and equity sources to fund our capital and operating requirements, as needed;
• the impact of weather and seasonal conditions on operations and facilities;
• competitive operating risks inherent in contract drilling, well servicing and ancillary oilfield services;
• ability to improve our rig technology to improve drilling efficiency;
• general economic, market or business conditions;
• the availability of qualified personnel and management;
• a decline in our safety performance which could result in lower demand for our services;
• changes in laws or regulations, including changes in environmental laws and regulations such as increased regulation of hydraulic fracturing or restrictions on the burning of fossil fuels and greenhouse gas emissions, which could have an adverse impact on the demand for oil and natural gas;
• terrorism, social, civil and political unrest in the foreign jurisdictions where we operate;
• fluctuations in foreign exchange, interest rates and tax rates; and
• other unforeseen conditions which could impact the use of services supplied by Precision and Precision’s ability to respond to such conditions.

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2021, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Stated in thousands of Canadian dollars)		December 31, 2022				December 31, 2021
ASSETS
Current assets:
Cash		$	21,587			$	40,588
Accounts receivable			413,925				255,740
Inventory			35,158				23,429
Total current assets			470,670				319,757
Non-current assets:
Income tax recoverable			1,602				–
Deferred tax assets			455				867
Right-of-use assets			60,032				51,440
Property, plant and equipment			2,303,338				2,258,391
Intangibles			19,575				23,915
Investments and other assets			20,451				7,382
Total non-current assets			2,405,453				2,341,995
Total assets		$	2,876,123			$	2,661,752
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	392,053			$	224,123
Income taxes payable			2,991				839
Current portion of lease obligations			12,698				10,935
Current portion of long-term debt			2,287				2,223
Total current liabilities			410,029				238,120
Non-current liabilities:
Share-based compensation			60,133				26,728
Provisions and other			7,538				6,513
Lease obligations			52,978				45,823
Long-term debt			1,085,970				1,106,794
Deferred tax liabilities			28,946				12,219
Total non-current liabilities			1,235,565				1,198,077
Shareholders’ equity:
Shareholders’ capital			2,299,533				2,281,444
Contributed surplus			72,555				76,311
Deficit			(1,301,273	)			(1,266,980	)
Accumulated other comprehensive income			159,714				134,780
Total shareholders’ equity			1,230,529				1,225,555
Total liabilities and shareholders’ equity		$	2,876,123			$	2,661,752

CONSOLIDATED STATEMENTS OF NET EARNINGS (LOSS) (UNAUDITED)

		Three Months Ended December 31,								Year Ended December 31,
(Stated in thousands of Canadian dollars, except per share amounts)		2022				2021				2022				2021
Revenue		$	510,504			$	295,202			$	1,617,194			$	986,847
Expenses:
Operating			340,207				212,146				1,124,601				698,144
General and administrative			79,207				19,175				180,988				95,931
Earnings before income taxes, loss (gain) on investments and other assets, loss on redemption and repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization			91,090				63,881				311,605				192,772
Depreciation and amortization			71,373				71,178				279,035				282,326
Gain on asset disposals			(7,774	)			(2,292	)			(29,926	)			(8,516	)
Foreign exchange			(84	)			289				1,278				393
Finance charges			23,519				20,648				87,813				91,431
Loss on redemption and repurchase of unsecured senior notes			–				–				–				9,520
Loss (gain) on investments and other assets			(8,714	)			727				(12,452	)			400
Earnings (loss) before income taxes			12,770				(26,669	)			(14,143	)			(182,782	)
Income taxes:
Current			1,799				741				4,362				3,203
Deferred			7,488				(74	)			15,788				(8,599	)
			9,287				667				20,150				(5,396	)
Net earnings (loss)		$	3,483			$	(27,336	)		$	(34,293	)		$	(177,386	)
Net earnings (loss) per share:
Basic		$	0.27			$	(2.05	)		$	(2.53	)		$	(13.32	)
Diluted		$	0.27			$	(2.05	)		$	(2.53	)		$	(13.32	)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

		Three Months Ended December 31,								Year Ended December 31,
(Stated in thousands of Canadian dollars)		2022				2021				2022				2021
Net earnings (loss)		$	3,483			$	(27,336	)		$	(34,293	)		$	(177,386	)
Unrealized gain (loss) on translation of assets and liabilities of operations denominated in foreign currency			(32,809	)			(2,074	)			106,669				(11,256	)
Foreign exchange gain (loss) on net investment hedge with U.S. denominated debt			23,388				1,460				(81,735	)			8,455
Comprehensive loss		$	(5,938	)		$	(27,950	)		$	(9,359	)		$	(180,187	)

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

		Three Months Ended December 31,								Year Ended December 31,
(Stated in thousands of Canadian dollars)		2022				2021				2022				2021
Cash provided by (used in):
Operations:
Net earnings (loss)		$	3,483			$	(27,336	)		$	(34,293	)		$	(177,386	)
Adjustments for:
Long-term compensation plans			25,247				3,264				60,094				31,952
Depreciation and amortization			71,373				71,178				279,035				282,326
Gain on asset disposals			(7,774	)			(2,292	)			(29,926	)			(8,516	)
Foreign exchange			(286	)			296				638				1,733
Finance charges			23,519				20,648				87,813				91,431
Income taxes			9,287				667				20,150				(5,396	)
Other			269				(410	)			542				(972	)
Loss (gain) on investments and other assets			(8,714	)			727				(12,452	)			400
Loss on redemption and repurchase of unsecured senior notes			–				–				–				9,520
Income taxes paid			(240	)			(799	)			(3,263	)			(5,999	)
Income taxes recovered			14				1				24				48
Interest paid			(4,972	)			(3,276	)			(85,678	)			(67,258	)
Interest received			133				13				310				360
Funds provided by operations			111,339				62,681				282,994				152,243
Changes in non-cash working capital balances			47,743				(2,968	)			(45,890	)			(13,018	)
			159,082				59,713				237,104				139,225
Investments:
Purchase of property, plant and equipment			(57,309	)			(27,750	)			(184,250	)			(75,941	)
Proceeds on sale of property, plant and equipment			5,165				2,696				37,198				13,086
Business acquisitions			–				–				(10,200	)			–
Purchase of investments and other assets			(8	)			(500	)			(617	)			(3,500	)
Changes in non-cash working capital balances			6,573				6,529				13,454				9,742
			(45,579	)			(19,025	)			(144,415	)			(56,613	)
Financing:
Issuance of long-term debt			–				–				144,889				696,341
Repayments of long-term debt			(132,163	)			(55,203	)			(250,749	)			(824,871	)
Repurchase of share capital			–				–				(10,010	)			(4,294	)
Issuance of common shares on the exercise of options			3,671				–				9,833				–
Debt issuance costs			–				–				–				(9,450	)
Debt amendment fees			–				–				–				(913	)
Lease payments			(1,948	)			(1,763	)			(7,134	)			(6,726	)
			(130,440	)			(56,966	)			(113,171	)			(149,913	)
Effect of exchange rate changes on cash			(1,524	)			(230	)			1,481				(883	)
Decrease in cash			(18,461	)			(16,508	)			(19,001	)			(68,184	)
Cash, beginning of period			40,048				57,096				40,588				108,772
Cash, end of period		$	21,587			$	40,588			$	21,587			$	40,588

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(Stated in thousands of Canadian dollars)		Shareholders’ Capital				Contributed Surplus				Accumulated Other Comprehensive Income				Deficit				Total Equity
Balance at January 1, 2022		$	2,281,444			$	76,311			$	134,780			$	(1,266,980	)		$	1,225,555
Net loss			–				–				–				(34,293	)			(34,293	)
Other comprehensive income			–				–				24,934				–				24,934
Share options exercised			14,016				(4,183	)			–				–				9,833
Share repurchases			(10,010	)			–				–				–				(10,010	)
Share-based compensation reclassification			14,083				(219	)			–				–				13,864
Share-based compensation expense			–				646				–				–				646
Balance at December 31, 2022		$	2,299,533			$	72,555			$	159,714			$	(1,301,273	)		$	1,230,529

(Stated in thousands of Canadian dollars)		Shareholders’ Capital				Contributed Surplus				Accumulated Other Comprehensive Income				Deficit				Total Equity
Balance at January 1, 2021		$	2,285,738			$	72,915			$	137,581			$	(1,089,594	)		$	1,406,640
Net loss			–				–				–				(177,386	)			(177,386	)
Other comprehensive loss			–				–				(2,801	)			–				(2,801	)
Share repurchases			(4,294	)			–				–				–				(4,294	)
Share-based compensation reclassification			–				(4,757	)			–				–				(4,757	)
Share-based compensation expense			–				8,153				–				–				8,153
Balance at December 31, 2021		$	2,281,444			$	76,311			$	134,780			$	(1,266,980	)		$	1,225,555

FOURTH QUARTER AND YEAR-END RESULTS CONFERENCE CALL AND WEBCAST

Precision Drilling Corporation has scheduled a conference call and webcast to begin promptly at 12:00 noon MT (2:00 p.m. ET) on Thursday, February 9, 2023.

To participate in the conference call please register at the URL link below. Once registered, you will receive a dial-in number and a unique PIN, which will allow you to ask questions.

https://register.vevent.com/register/BI0b15f60ffe674cc3958132c6f826d195

The call will also be webcast and can be accessed through the link below. A replay of the webcast call will be available on Precision’s website for 12 months.

https://edge.media-server.com/mmc/p/8gn8uxsa

About Precision

Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as “Alpha™” that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS.”

For further information, please contact:

Lavonne Zdunich, CPA, CA
Director, Investor Relations
403.716.4500

800, 525 – 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com