Mr. Carey Ford reports

PRECISION DRILLING MEETS 2023 DEBT REPAYMENT AND SHARE REPURCHASE TARGETS AND PROVIDES CAPITAL ALLOCATION, FINANCIAL AND OPERATIONAL UPDATES

Precision Drilling Corp. has provided a series of positive announcements including: 1) 2023 debt repayment and year-end liquidity update; 2) capital allocation framework update; and 3) financial and operational update.

2023 debt repayment and year-end liquidity update

Precision reduced total debt by $152-million in 2023, meeting its debt reduction goal. As at Dec. 31, 2023, Precision's outstanding debt obligations included:

• $273-million (U.S.) -- 7.125 per cent unsecured senior notes due Jan. 15, 2026;
• $400-million (U.S.) -- 6.875 per cent unsecured senior notes due Jan. 15, 2029;
• $28-million (U.S.) of real estate credit facilities.

Precision ended 2023 with a cash balance of approximately $55-million and total liquidity of approximately $615-million.

Capital allocation framework update

Over the past two years, Precision has reduced its debt by $258-million and lowered its net debt to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) leverage ratio, which it expects to be below 1.5 times as at Dec. 31, 2023. Precision is well on track to exceed its long-term debt reduction target of repaying $500-million between 2022 and 2025 and reaching a sustained net debt to adjusted EBITDA leverage ratio of below one time by the end of 2025. During 2023, Precision returned $30-million to shareholders through share repurchases under its normal course issuer bid and as at Dec. 31, 2023, had 14,336,539 shares outstanding. With a robust free cash flow outlook, Precision plans to improve its capital returns to shareholders in 2024 by increasing its debt reduction and share buyback allocations. In early February, the company will provide specific capital allocation plans and targets for 2024.

Financial and operational update

Financial results

Precision intends to release its 2023 fourth quarter results before markets open on Tuesday, Feb. 6, 2024. These results will include contributions from the acquisition of CWC Energy Services Corp., which closed on Nov. 8, 2023. Fourth quarter drilling field margins in Canada and the United States are expected to align with previous guidance. With a closing share price of $71.96 on Dec. 31, 2023, share-based compensation expense for the fourth quarter and year-end 2023 is expected to be approximately $12-million and $34-million, respectively, which also aligns with previous guidance. Following the closing of the CWC acquisition in the fourth quarter, Precision added 18 high-quality drilling rigs to its fleet and decommissioned 27 legacy rigs. Accordingly, the company expects to recognize a non-cash asset decommissioning charge of approximately $11-million in 2023.

Drilling activity

In Canada, Precision continues to experience strong customer demand for drilling services, particularly when Alpha technologies and EverGreen environmental solutions are included. In the fourth quarter, the company's average active rig count was 63 in Canada. It currently has 74 rigs active and expects its rig count to peak between the low to mid-80s during this winter drilling season. By mid-January, the company expects to activate an additional Super Triple rig, bringing its Canadian Super Triple rig count to 30.

In the U.S., Precision's average active rig count was 42 in the fourth quarter and it has 43 rigs operating today. Based on recent conversations with customers, it expects drilling activity to begin to rebound in the second quarter of 2024.

Internationally, Precision activated an additional rig in mid-November and currently has a total of eight active rigs, with three in the Kingdom of Saudi Arabia and five in Kuwait. Year-over-year, its international activity is expected to increase by approximately 40 per cent in 2024.

Chief financial officer quote

Carey Ford, Precision's CFO, commented: "Precision generated strong free cash flow in 2023, which we expect to continue in 2024, driven by margin progression in Canada, integration of our CWC Energy Services acquisition and international growth. With a robust free cash flow outlook, we plan to improve our capital returns to shareholders in 2024 by increasing our debt reduction and share buyback allocations. Since the beginning of 2018, our debt reduction and share repurchases have totalled nearly $1-billion and I am confident Precision's high-performance, high-value strategy, exceptional field results, capital discipline and capital allocation will continue to support increased shareholder value."

About Precision Drilling Corp.

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. The company's drilling services are enhanced by its EverGreen suite of environmental solutions, which bolsters its commitment to reducing the environmental impact of its 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, Alta., 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.

We seek Safe Harbor.