Mr. Lyle Whitmarsh reports

STAMPEDE DRILLING INC. ANNOUNCES 2023 FIRST QUARTER RESULTS

Stampede Drilling Inc. has released its consolidated financial and operational results for the three-month period ended March 31, 2023.

This release should be read in conjunction with the corporation's consolidated financial statements and the notes thereto for the year ended Dec. 31, 2022, related management's discussion and analysis and annual information form, each of which are available on SEDAR.

All amounts or dollar figures are denominated in thousands of Canadian dollars except for per-share amounts, number of drilling rigs and operating days, or unless otherwise noted.

First quarter 2023 operational highlights

For the three months ended March 31, 2023, the corporation recorded its highest ever quarterly revenue, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and net income.

• Revenue for the three-month period ended March 31, 2023, was $25,697, up $11,129 (76 per cent) compared with $14,658 for the corresponding 2022 period.
• Adjusted EBITDA for the three-month period ended March 31, 2023, was $5,990, up $2,233 (59 per cent) compared with $3,757 for the corresponding 2022 period.
• Net income for the three-month period ended March 31, 2023, was $3,765, up $1,443 (62 per cent) compared with $2,322 for the corresponding 2022 period.

The corporation's results were driven by higher operating days and higher revenue per day partially offset by higher operating expenses and general and administrative expenses. Total operating days in the quarter were 918, up 275 (43 per cent) from the 643 operating days in the corresponding period of 2022. The increase in operating days was the result of an increase in the number of marketed rigs in the first quarter of 2023 compared with the first quarter of 2022.

Total revenue per day of $28.0 was up $5.3 (23 per cent) from the revenue per day of $22.7 in the corresponding period of 2022. Revenue per day increased as a result of improved customer demand and higher prices.

Outlook

Throughout the first quarter of 2023, Stampede's customers have continued to strengthen their balance sheets and remain disciplined on spending while growing production within their operating cash flows. While macroeconomic factors such as the war in Ukraine, worldwide inflationary pressures, possible near-term recession and overall demand globally will continue to create continuing uncertainty for energy markets, Stampede anticipates the current commodity price environment will continue to drive producer cash flows and increased drilling activity in Western Canada throughout 2023.

The corporation is on pace with another strong start to the year with 17 out of its 19 rig fleet operational and fully crewed in the first quarter of 2023. Access to qualified field labour will continue to be an industry wide challenge in 2023, however management has proven their ability to crew underutilized assets since Stampede's inception. The corporation will continue to assess additional acquisition opportunities as they arise, as well as making focused capital expenditures to further enhance customer desirability of its current fleet in 2023 while maintaining a strong balance sheet and debt facility.

Description of Stampede's business

Stampede is an energy services company that provides premier contract drilling services in Western Canada. Stampede operates a fleet of 18 telescopic double drilling rigs and one high spec triple drilling rig suited for most formations within the Western Canadian sedimentary basin (WCSB). The corporation's head office is located in Calgary, Alta., with operations based out of Nisku, Alta., and Estevan, Sask. The corporation's common shares trade on the TSX Venture Exchange under the symbol SDI.

• Revenue of $25,697 -- an increase of $11,129 (76 per cent) compared with $14,568 for the corresponding 2022 period. The increase was primarily related to the addition of nine drilling rigs to the corporation's fleet throughout 2022, combined with increased revenue per day.
• Operating days of 918 -- an increase of 275 operating days (43 per cent) from the 643 operating days in the corresponding 2022 period. Operating days increased as a result of higher demand along with the increase in rig count compared with the prior period. Drilling rig utilization for the three-month period ended March 31, 2023, was 60 per cent, which was a 15-per-cent decrease from the corresponding 2022 period and 33-per-cent higher than the CAOEC industry average utilization rate of 45 per cent for the first quarter of 2023.
• Gross margin percentage of 32 per cent -- a decrease of 6 per cent from 34 per cent as compared with the corresponding 2022 period. The gross margin decrease was primarily related to higher rig operating expenses due to inflationary pressures partially offset by the increase in revenue per day.
• Adjusted EBITDA of $5,990 -- an increase of $2,233 (59 per cent) from $3,757 from the corresponding 2022 period. The increase is primarily related to higher revenue due to increased revenue per day and partially offset by higher operating expenses and general and administrative expenses.
• Net income of $3,765 -- an increase of $1,443 (62 per cent) from $2,322 from the corresponding 2022 period. The increase is primarily related to increased operating days and revenue per day and partially offset by higher operating expenses, general and administrative expenses, and finance costs.
• General and administrative expenses of $2,650 -- an increase of $1,278 (93 per cent) from $1,372 compared with the corresponding 2022 period. The increase is primarily related to increased headcount and administration expenses due to the increased activity levels.

We seek Safe Harbor.