Precision Drilling Corporation Announces 2013 Second Quarter Financial Results and 2013 Third Quarter Dividend

Precision Drilling Corporation Announces 2013 Second Quarter Financial Results 
and 2013 Third Quarter Dividend 
CALGARY, ALBERTA -- (Marketwired) -- 07/25/13 --  
(Canadian dollars except as indicated)  
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.  
The Board of Directors of Precision Drilling Corporation (TSX:PD)
(NYSE:PDS) ("Precision" or the "Corporation") has declared a third
quarter dividend on its common shares of $0.05 per share, payable on
August 15, 2013, to shareholders of record on August 6, 2013. For
Canadian income tax purposes, all dividends paid by Precision on its
common shares are designated as "eligible dividends", unless
otherwise indicated by the Corporation.  
Net earnings this quarter were $0.5 million or $nil per diluted share
compared to $18 million or $0.06 per diluted share in the second
quarter of 2012.  
Revenue this quarter was $379 million, or 1% lower than the second
quarter of 2012, mainly due to lower North American activity
partially offset by higher average dayrates and increased
international and directional drilling activity. 
Earnings before income taxes, finance charges, foreign exchange, and
depreciation and amortization ("adjusted EBITDA") this quarter was
$88 million or 9% lower than the second quarter of 2012. Our adjusted
EBITDA margin was 23% this quarter, compared to 25% in the second
quarter of 2012. The decrease in adjusted EBITDA margin was mainly
the result of lower activity levels across most North American
business lines partially offset by higher dayrates and increased
international profitability. Our activity in this quarter, as
measured by drilling rig utilization days, decreased 10% in Canada
and 17% in the United States compared to the second quarter of 2012. 
North American drilling activity was down this quarter versus the
prior year quarter as a result of wet weather in Canada, continuing
low natural gas prices and lower levels of customer activity.  
Revenue and adjusted EBITDA for the qua
rter were lower than the first
quarter 2013 revenue and adjusted EBITDA of $596 million and $215
million, respectively, primarily as a result of decreased seasonal
activity levels in Canada.  
Precision is adding five contracted new build Super Series rigs to
its North American drilling fleet bringing the total number of
announced new build rigs in 2013 to six. Also, we have signed an
upgrade contract for an existing drilling rig for operations in
Mexico. The 2013 capital expenditures are expected to increase from
$533 million to $654 million as a result of these additional capital
commitments. 
Kevin Neveu, President and Chief Executive Officer, stated: "I am
pleased that several years of aggressive fleet repositioning,
highlighted by Super Series rig investments, continues to generate
sustained financial returns which are reflected in our resilient
activity levels and firm day rates despite the competitive pressures
in the U.S. and weather related delays in the Canadian post break-up
seasonal recovery." 
"We have a long history of drilling horizontal wells, pushing
efficiency boundaries and ultimately creating more economic drilling
opportunities for our customers and for Precision. Many believe that
the drilling efficiency achievements necessary for cost effective
resource development is a losing proposition for the land drillers.
Precision's reputation for excellence in safety, environmentally
responsible operations and, most importantly, the efficiency of our
Super Series rigs are well recognized by our customers and invariably
make us a winner in this highly competitive game." 
"In the second quarter of 2013, about 90 percent of our active North
American rigs were drilling horizontal wells and our scale was
demonstrated by our activity in essentially all unconventional basins
in North America."    
"I am encouraged by continued customer demand for our High
Performance, High Value rigs and services and particularly pleased by
our ability to deploy additional capital for five new build Super
Series rigs in Canada and the United States.  These rigs are all
well-supported with firm customer contracts and will generate
financial returns in line with our long term expectations." 
"In the United States, Precision contracted three ST-1500 rigs, all
intended for oil and gas liquids targets and one of these is working
for a new customer for Precision's Super Series rig design.  In
Canada, the two ST-1500 rigs are contracted for northwestern Alberta
natural gas drilling.  Additionally, this summer Precision expects to
experience increased activity supporting delineation drilling in
northeastern British Columbia, related to potential LNG export
projects.  Including delivery of these five new build rigs and the
previously announced 2013 new build rig, we will have a fleet of 196
Tier 1 drilling rigs in North America." 
"On the international front, we are growing our presence and have
successfully deployed the two drilling rigs to Northern Iraq in the
Kurdistan region, one of which has been drilling for several weeks
and one of which is expected to begin drilling before the end of
July. Also, we have entered into an agreement with an integrated
service provider for an upgraded 3,000 horsepower drilling rig to
work in Mexico under long-term contract. Upon delivery of this rig,
which is expected to be late in the third quarter of this year,
Precision's international drilling fleet will consist of 13 rigs with
eight rigs in Mexico, three in Saudi Arabia and two in the Kurdistan
region of Iraq. The construction of two high capacity Super Series
rigs for Kuwait is ongoing and the rigs are expected to be deployed
in the middle of 2014." 
"Our Completion and Production Services business is driven primarily
by fundamentals in the Canadian oilfield, which in this quarter, like
most second quarters, were slow due to spring break-up. However, we
have made meaningful investments in our rental fleet and in coil
tubing operations and believe we are well positioned to capture
business in the second half of the year with seasonal activity
increases.  The planned addition of two large diameter coil rigs
targeted for the Marcellus, bringing our fleet in the region to eight
units, further underlines the strength and value of our emerging
presence in this strategic market."  
"With today's dividend announcement, Precision has announced $55
million in dividend payments to shareholders in the past eight
months," concluded Mr. Neveu.   
SELECT FINANCIAL AND OPERATING INFORMATION 
Financial Highlights 


 
----------------------------------------------------------------------------
                   Three months ended              Six months ended         
                             June 30,                      June 30,         
(Stated in                                                                  
 thousands of                                                               
 Canadian dollars,                                                          
 except where                               %                             % 
 noted)                2013      2012  Change      2013        2012  Change 
----------------------------------------------------------------------------
Revenue          
   378,898   381,966    (0.8)  974,618  1 ,022,032    (4.6)
Adjusted EBITDA(1)   88,248    97,192    (9.2)  303,429     342,766   (11.5)
Adjusted EBITDA %                                                           
 of revenue            23.3%     25.4%             31.1%       33.5%        
Net earnings            473    18,261   (97.4)   93,786     129,342   (27.5)
Cash provided by                                                            
 operations         182,345   275,346   (33.8)  245,293     437,786   (44.0)
Funds provided by                                                           
 operations(1)       33,791    62,373   (45.8)  178,473     310,112   (42.4)
Capital spending:                                                           
  Expansion          81,788   158,876   (48.5)  158,303     295,348   (46.4)
  Upgrade            34,117    29,962    13.9    71,658      84,221   (14.9)
  Maintenance and                                                           
   infrastructure    20,332    32,236   (36.9)   36,881      63,188   (41.6)
  Proceeds on sale   (4,148)   (3,730)   11.2    (6,686)     (8,809)  (24.1)
----------------------------------------------------------------------------
Net capital                                                                 
 spending           132,089   217,344   (39.2)  260,156     433,948   (40.0)
                                                                            
Net earnings - per                                                          
 share ($):                                                                 
  Basic                0.00      0.07  (100.0)     0.34        0.47   (27.7)
  Diluted              0.00      0.06  (100.0)     0.33        0.45   (26.7)
Dividend paid per                                                           
 share ($)             0.05         -     n/m      0.10           -     n/m 
----------------------------------------------------------------------------
(1) Adjusted EBITDA and funds provided by operations are additional GAAP    
    measures. See "ADDITIONAL GAAP MEASURES".                               
 n/m - calculation not meaningful.                                          
 

 
                                                                            
Operating Highlights                                                        
----------------------------------------------------------------------------
                     Three months ended           Six months ended          
                         June 30,                     June 30,              
                                             %                            % 
                         2013      2012 Change       2013       2012 Change 
----------------------------------------------------------------------------
Contract drilling                                                           
 rig fleet                324       352   (8.0)       324        352   (8.0)
Drilling rig                                                                
 utilization days:                                                          
 Canada                 3,606     4,005  (10.0)    14,707     16,375  (10.2)
 United States          7,320     8,827  (17.1)    14,598     18,278  (20.1)
 International            815       398  104.8      1,534        583  163.1 
Service rig fleet         219       211    3.8        219        211    3.8 
Service rig                                                                 
 operating hours       51,677    50,560    2.2    141,069    144,602   (2.4)
----------------------------------------------------------------------------

 
Financial Position 


 
----------------------------------------------------------------------------
(Stated in thousands of Canadian                 June 30,       December 31,
 dollars, except ratio)                              2013               2012
----------------------------------------------------------------------------
Working capital                                   243,126            278,021
Long-term debt(1)                               1,279,167          1,218,796
Total long-term financial liabilities           1,310,857          1,245,290
Total assets                                    4,370,678          4,300,263
Long-term debt to long-term debt plus                                       
 equity ratio(1)                                     0.36               0.36
----------------------------------------------------------------------------
(1) Net of unamortized debt issue costs.                                    

 
Revenue in the second quarter of this year was $3 million lower than
the second quarter in 2012 mainly due to a decrease in activity days
in both Canada and the United States, partially offset by higher
dayrates in both markets, increased international activity and growth
in our U.S. Completion and Production Services division. Compared to
the second quarter of 2012, revenue from our Contract Drilling
Services segment was down 1% while revenue in our Completion and
Production Services segment was up 6%.  
Adjusted EBITDA margin (adjusted EBITDA as a percentage of revenue)
was 23% this quarter, compared to 25% in the second quarter of 2012.
The 23% adjusted EBIDTA margin was a result of higher dayrates from
the new build and upgraded Tier 1 rigs that we have deployed over the
past few years offset by the impact of lower utilization on fixed
costs. Our portfolio of term customer contracts, a highly variable
operating cost structure and economies achieved through vertical
integration of the supply chain all help in managing our adjusted
EBITDA margins. 
Our vision is to be recognized as the High Performance, High Value
provider of services for global energy exploration and development.
We work toward that vision by defining and measuring our results
against strategic priorities. Our 2013 priorities are threefold: 


 
1.  Execute our High Performance, High Value strategy 

 
Continue to drive execution excellence in our people, internal
systems and infrastructure supporting our world class safety,
training and development programs, upgrading and consolidating our
Nisku operations and leveraging our investments in our Houston and
Red Deer Tech Centers. 
To June 30, 2013 our safety performance and mechanical downtime have
shown improvement over the same period in 2012 and we are continuing
to invest in our systems and infrastructure. 


 
2.  Execute on existing organic growth opportunities 

 
Remain poised to seize growth opportunities, leveraging our balance
sheet strength and flexibility. Deliver new build rigs to the North
American market and upgrade existing drilling rigs to higher
specification assets on customer contracts globally. 
To June 30, 2013 we have delivered the two remaining rigs from the
2012 new build program, announced six new build rigs for 2013 and we
continue to deliver upgraded rigs to customers under contract. 
Grow High Performance, High Value service lines for unconventional
field development, such as integrated directional drilling, coil
tubing and rentals.  
To June 30, 2013 we have increased our coil tubing fleet to ten units
from five as at December 31, 2012.  In the second half of 2013, we
expect our coil tubing fleet to grow by two units and we expect to
e
xecute integrated directional drilling projects in Canada and the
United States.   


 
3.  Build our brand 

 
Uphold our reputation and market breadth in North America while
strengthening our presence in select oilfield markets
internationally. 
To June 30, 2013 we continue to operate a high percentage of our rigs
drilling directional or horizontal wells in unconventional basins
across North America and have expanded our activities in Mexico and
entered a new market in Northern Iraq. 
For the second quarter of 2013, the West Texas Intermediate price of
oil was consistent with the 2012 average while natural gas prices
were higher. 


 
                                          Three months ended      Year ended
                                                    June 30,    December 31,
                                              2013      2012            2012
----------------------------------------------------------------------------
Average oil and natural gas prices                                          
Oil                                                                         
  West Texas Intermediate (per barrel)                                      
   (US$)                                     94.16     93.43           94.13
Natural gas                                                                 
  Canada                                                                    
    AECO (per MMBtu) (Cdn$)                   3.53      1.90            2.39
  United States                                                             
    Henry Hub (per MMBtu) (US$)               4.01      2.28            2.75
----------------------------------------------------------------------------

 
Summary for the three months ended June 30, 2013: 


 
--  Operating earnings (see "Additional GAAP Measures" in this news release)
    this quarter were $16 million and 4% of revenue, compared to $31 million
    and 8% of revenue in 2012. Operating earnings were negatively impacted
    by the decrease in activity in most of our North American based
    operations compared to the second quarter in 2012.
    
    
--  General and administrative expenses this quarter were $32 million or $7
    million higher than the second quarter of 2012 primarily because 
    incentive compensation costs tied to the price of our common shares
    increased over the comparable quarter.  During the second quarter of
    2012 our common share price fell, resulting in a recovery of previously
    expensed amounts. 
    
    
--  Net finance charges were $24 million, an increase of $3 million compared
    with the second quarter of 2012 primarily because of a non-recurring
    gain recognized in 2012 and interest related to prior year commodity tax
    audits. 
    
    
--  Average revenue per utilization day for contract drilling rigs increased
    in the second quarter of 2013 to US$23,850 from the prior year second
    quarter of US$23,145 in the United States and increased in Canada to
    $22,276 from $20,649 for the second quarter of 2012. The increase in
    revenue rates for the second quarter in Canada and the United States was
    due to rig mix in part from Tier 1 and upgraded rigs entering the fleet
    compared to the prior year quarter. In Canada, for the second quarter of
    2013, 50% of Precision's utilization days were achieved from drilling
    rigs working under term contracts compared to 44% in the 2012
    comparative period. In the United States, for the second quarter of
    2013, 58% of Precision's utilization days were generated from rigs
    working under term contracts compared to 78% in the 2012 comparative
    period. Turnkey revenue for the second quarter of 2013 was US$18
    million, compared with US$15 million in the 2012 comparative period.
    Within Precision's Completion and Production Services segment, average
    hourly rates for service rigs were $817 in the second quarter of 2013
    compared to $734 in the second quarter of 2012. The increase in the
    average hourly rate is the result of an increase in coil tubing hours.
    
    
--  Average operating costs per utilization day for drilling rigs increased
    in the second quarter of 2013 to US$14,912 from the prior year second
    quarter of US$14,548 in the United States while in Canada costs
    increased to $13,497 in 2013 from $12,799 in 2012. The cost increase per
    day in the United States was primarily due to turnkey and fixed costs
    spread over a lower activity base. The cost increase in Canada was
    primarily due to a labour rate increase that became effective in the
    fourth quarter of 2012. Within Precision's Completion and Production
    Services segment, average hourly operating costs for service rigs
    increased to $769 in the second quarter of 2013 as compared to $621 in
    the second quarter of 2012 primarily due to costs associated with coil
    tubing and fixed costs spread over a lower activity base.
    
    
--  Precision realized revenue from directional services of $27 million in
    the second quarter of 2013 a $5 million increase over the prior year
    period. 
    
    
--  Funds provided by operations (see "Additional GAAP Measures" in this
    news release) in the second quarter of 2013 were $34 million, a decrease
    of $29 million from the prior year comparative quarter of $62 million.
    The decrease is the result of lower earnings for the quarter compared to
    last year and more income tax paid in the current year quarter.
    
    
--  Capital expenditures for the purchase of property, plant and equipment
    were $136 million in the second quarter, a decrease of $85 million over
    the same period in 2012. Capital spending for the second quarter of 2013
    included $82 million for expansion capital, $34 million for upgrade
    capital and $20 million for the maintenance of existing assets and
    infrastructure spending. 

 
Summary for the six months ended June 30, 2013: 


 
--  Revenue for the first half of 2013 was $975 million, a decrease of 5%
    from the 2012 period. 
    
--  Operating earnings were $146 million, a decrease of $55 million or 27%
    from 2012. Operating earnings were 15% of revenue in 2013 compared to
    20% in 2012. 
    
--  General and administrative costs were $71 million, an increase of $7
    million over the first half of 2012 primarily as a result of the
    increase in incentive compensation costs tied to the performance of
    Precision's common shares in 2013. 
    
--  Net finance charges were $47 million, an increase of $4 million from the
    first half of 2012. 
    
--  Funds provided by operations (see "Additional GAAP Measures" in this
    news release) in the first half of 2013 were $175 million, a decrease of
    $135 million from the prior year comparative period of $310 million. 
    
--  Capital expenditures for the purchase of property, plant and equipment
    were $267 million in the first half of 2013, a decrease of $176 million
    over the same period in 2012. Capital spending for 2013 to date included
    $158 million for expansion capital, $72 million for upgrade capital and
    $37 million for the maintenance of existing assets and infrastructure. 

 
OUTLOOK 
Contracts  
Our portfolio of term customer contracts provides a base level of
activity and revenue, and as of July 24, 2013 we have term contracts
in place for an average of 53 rigs in Canada, 40 in the United States
and 11 internationally for the third quarter of 2013 and an average
of 54 rig contracts in Canada, 42 in the United States and 10
internationally for the full year. In Canada, term contracted rigs
normally generate 250 utilization days per rig year because of the
seasonal nature of well access. In most regions in the United States
and internationally, term contracts normally generate 365 utilization
days per rig year.  
Drilling Activity  
In the United States, our average active rig count in the quarter was
80 rigs,
 down 17 rigs over the second quarter in 2012 and down one
rig over the first quarter of 2013. We currently have 80 rigs active
in the United States.   
In Canada, our average active rig count in the quarter was 40 rigs,
down four rigs over the second quarter in 2012 and down 84 rigs over
the first quarter of 2013. We currently have 74 rigs active in Canada
and expect typical seasonal volatility through the third quarter, but
in general, during the second half of the year we expect to benefit
from the fleet enhancements made over the past few years when
compared to the prior year period. 
Internationally, our average active rig count in the quarter was nine
rigs, up five over the second quarter in 2012 and in line with the
first quarter of 2013. Our active rig count internationally is
expected to grow by two rigs over the next two quarters as our second
of two rigs goes to work in Northern Iraq and we have an additional
rig going to work in Mexico. We expect to have 12 rigs working
internationally under contract by the end of the year. 
Industry Conditions  
To date in 2013, drilling activity has been lower in Canada and the
United States compared to this time last year. According to industry
sources, as of July 19, 2013, the U.S. active land drilling rig count
was down about 9% from the same point last year and the Canadian
active land drilling rig count was in line with the prior year.
Despite the active industry rig count softness, demand for Tier 1
assets continues to be strong, benefiting the drilling contractors
with a high percentage of Tier 1 assets.   
The trend toward oil-directed drilling in North America has continued
in 2013. To date approximately 71% of the Canadian industry's active
rigs and 78% of the U.S. industry's active rigs were drilling for oil
targets, compared to 71% for Canada and 68% for the U.S. at the same
time last year.   
Capital Spending  
We expect capital spending in 2013 to be approximately $654 million,
of which $267 million was spent during the first six months of the
year: 


 
--  $330 million for expansion capital, which includes the cost to complete
    the two remaining new build drilling rigs from the 2012 new build rig
    program, six new build rigs for the North American market, the cost to
    complete about 60% of two new build rigs going to Kuwait, long lead
    equipment and new equipment for our Completion and Production Services
    segment; 
--  $139 million for upgrade capital, which includes the upgrade of
    approximately 20 rigs, including international and North American rigs
    and to purchase long lead time items for our capital inventory; and  
--  $185 million for sustaining and infrastructure expenditures, which is
    based on currently anticipated activity levels and some of the cost to
    consolidate and upgrade our operating facilities. 

 
SEGMENTED FINANCIAL RESULTS  
Precision's operations are reported in two segments: the Contract
Drilling Services segment which includes the drilling rig,
directional drilling, oilfield supply and manufacturing divisions;
and the Completion and Production Services segment which includes the
service rig, rental, camp and catering and wastewater treatment
divisions.  


 
                    Three months ended             Six months ended         
                              June 30,                     June 30,         
(Stated in                                                                  
 thousands of                                                               
 Canadian                                    %                            % 
 dollars)              2013       2012  Change      2013       2012  Change 
----------------------------------------------------------------------------
Revenue:                                                                    
 Contract                                                                   
  Drilling                                                                  
  Services          327,336    332,181    (1.5)  823,574    863,247    (4.6)
 Completion and                                                             
  Production                                                                
  Services           55,420     52,263     6.0   159,008    163,348    (2.7)
 Inter-segment                                                              
  eliminations       (3,858)    (2,478)   55.7    (7,964)    (4,563)   74.5 
----------------------------------------------------------------------------
                    378,898    381,966    (0.8)  974,618  1,022,032    (4.6)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Adjusted                                                                    
 EBITDA:(1)                                                                 
 Contract                                                                   
  Drilling                                                                  
  Services          101,555    103,476    (1.9)  308,760    331,032    (6.7)
 Completion and                                                             
  Production                                                                
  Services            2,293      8,985   (74.5)   32,408     48,189   (32.8)
 Corporate and                                                              
  other             (15,600)   (15,269)    2.2   (37,739)   (36,455)    3.5 
----------------------------------------------------------------------------
                     88,248     97,192    (9.2)  303,429    342,766   (11.5)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         

 
SEGMENT REVIEW OF CONTRACT DRILLING SERVICES 


 
                     Three months ended            Six months ended         
                               June 30,                    June 30,         
(Stated in                                                                  
 thousands of                                 %                           % 
 Canadian dollars)      2013       2012  Change      2013      2012  Change 
----------------------------------------------------------------------------
Revenue              327,336    332,181    (1.5)  823,574   863,247    (4.6)
Expenses:                                                                   
  Operating          213,320    222,059    (3.9)  490,366   513,193    (4.4)
  General and                                                               
   administrative     12,461      6,646    87.5    24,448    19,022    28.5 
----------------------------------------------------------------------------
Adjusted EBITDA                                                             
 (1)                 101,555    103,476    (1.9)  308,760   331,032    (6.7)
  Depreciation        63,398     58,672     8.1   137,109   126,007     8.8 
----------------------------------------------------------------------------
Operating                                                                   
 earnings(1)          38,157     44,804   (14.8)  171,651   205,025   (16.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings                                                          
 as a percentage                                                            
 of revenue             11.7%      13.5%             20.8%     23.8%        
----------------------------------------------------------------------------
Drilling rig                                                                
 revenue per                                                     
           
 utilization day                                                            
 in Canada (Cdn$)     22,276     20,649     7.9    22,293    20,983     6.2 
----------------------------------------------------------------------------
Drilling rig                                                                
 revenue per                                                                
 utilization day                                                            
 in the United                                                              
 States(2) (US$)      23,850     23,145     3.0    23,920    23,186     3.2 
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         
(2) Includes revenue from idle but contracted rig days.                     
 

 
                                                                            
                                      Three months ended June 30,           
Canadian onshore drilling                                                   
 statistics:(1)                       2013                    2012          
----------------------------------------------------------------------------
                             Precision  Industry(2)  Precision  Industry(2) 
----------------------------------------------------------------------------
Number of drilling rigs                                                     
 (end of period)                   188          820        197          817 
Drilling rig operating days                                                 
 (spud to release)               3,213       13,579      3,580       15,129 
Drilling rig operating day                                                  
 utilization                        19%          18%        20%          20%
Number of wells drilled            371        1,162        403        1,314 
Average days per well              8.7         11.7        8.9         11.5 
Number of metres drilled                                                    
 (000s)                            707        2,604        688        2,750 
Average metres per well          1,905        2,241      1,708        2,093 
Average metres per day             220          192        192          182 
----------------------------------------------------------------------------
                                                                            
                                       Six months ended June 30,            
Canadian onshore drilling                                                   
 statistics:(1)                       2013                    2012          
----------------------------------------------------------------------------
                             Precision  Industry(2)  Precision  Industry(2) 
----------------------------------------------------------------------------
Number of drilling rigs                                                     
 (end of period)                   188          820        197          817 
Drilling rig operating days                                                 
 (spud to release)              13,002       56,877     14,622       63,250 
Drilling rig operating day                                                  
 utilization                        38%          39%        42%          43%
Number of wells drilled          1,426        4,726      1,275        4,333 
Average days per well              9.1         12.0       11.5         14.6 
Number of metres drilled                                                    
 (000s)                          2,536        9,951      2,307        9,160 
Average metres per well          1,779        2,106      1,809        2,114 
Average metres per day             195          175        158          145 
----------------------------------------------------------------------------
(1) Canadian operations only.                                               
(2) Canadian Association of Oilwell Drilling Contractors ("CAODC") and      
    Precision - excludes non-CAODC rigs and non-reporting CAODC members.    
                                                                            
United States onshore                                                       
 drilling statistics:(1)              2013                    2012          
----------------------------------------------------------------------------
                              Precision  Industry(2)  Precision  Industry(2)
----------------------------------------------------------------------------
Average number of active                                                    
 land rigs for quarters                                                     
 ended:                                                                     
  March 31                           81        1,706        104        1,947
  June 30                            80        1,710         97        1,924
----------------------------------------------------------------------------
Year to date average                 81        1,708        100        1,935
----------------------------------------------------------------------------
(1) United States lower 48 land operations only.                            
(2) Baker Hughes rig counts.                                                

 
Revenue from Contract Drilling Services was $327 million this quarter
or 1% lower than the second quarter of 2012, while adjusted EBITDA of
$102 million decreased 2%. The decreases were mainly due to lower
drilling rig utilization in both Canada and the U.S. partially offset
by growth in our international contract drilling business and
increases in average dayrates in North America.  
Operating results for our international business improved as we began
to realize revenue from increased activity. On average, we had nine
rigs working internationally during the second quarter of 2013
compared with four in the corresponding quarter of 2012. Drilling
utilization days in our international operations were 815 days, 105%
higher than the prior year comparative period. 
Drilling rig utilization days in Canada (drilling days plus move
days) during the second quarter of 2013 were 3,606, a decrease of 10%
compared to 2012 while drilling rig utilization days in the United
States were 7,320 or 17% lower than the same quarter of 2012. The
declines in activity were primarily due to decreased market demand as
customers conserved cash and deferred drilling programs and in the
Western Canada Sedimentary Basin ("WCSB") we had an unusually high
number of rigs waiting on weather in June 2013. The majority of our
North America activity came from oil and liquids-rich natural gas
related plays. 
Drilling rig revenue per utilization day in Canada was up 8% and 3%
in the U.S. over 2012. The increase in average dayrates for Canada
and the U.S. was the result of improved rig mix and continued demand
for Tier 1 assets. In the U.S. the increase in the average dayrate
was primarily driven by turnkey revenue spread over lower activity
and idle but contracted rig revenue.  
In Canada, 50% of utilization days in the second quarter were
generated from rigs under term contract, compared to 44% in the
second quarter of 2012. In the U.S., 58% of utilization days were
generated from rigs under term contract as compared to 78% in the
second quarter of 2012. At the end of the quarter we had 55 drilling
rigs under contract in Canada, 47 in the U.S. and ten
internationally.  
Operating costs were 65% of revenue for the quarter, which was two
percentage points lower than the prior year period. On a per
utilization day basis, operating costs for the drilling rig division
in Canada were above the prior year primarily because of an increase
in crew wage expense. In the U.S., operating costs for the quarter on
a per day basis were up from the second quarter in 2012 as a result
of higher relative turnkey costs and the impact of fixed costs on
lower act
ivity partially offset by a reduction in repair and
maintenance costs.  
Depreciation expense in the quarter was 8% higher than in the second
quarter of 2012. Depreciation was higher, despite a decrease in
overall drilling activity, as a result of a greater proportion of
operating days from our Tier 1 drilling rigs in 2013 relative to 2012
and depreciation from the growth in directional drilling and
international contract drilling. With the exception of certain PSST
drilling rigs and directional drilling equipment, contract drilling
operations use the unit of production method of calculating
depreciation.  
SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES 


 
                     Three months ended            Six months ended         
                               June 30,                    June 30,         
(Stated in thousands                                                        
 of Canadian                                  %                           % 
 dollars)               2013       2012  Change      2013      2012  Change 
----------------------------------------------------------------------------
Revenue               55,420     52,263     6.0   159,008   163,348    (2.7)
Expenses:                                                                   
  Operating           49,307     39,932    23.5   118,205   107,469    10.0 
  General and                                                               
   administrative      3,820      3,346    14.2     8,395     7,690     9.2 
----------------------------------------------------------------------------
Adjusted EBITDA(1)     2,293      8,985   (74.5)   32,408    48,189   (32.7)
  Depreciation         7,073      6,101    15.9    16,318    14,135    15.4 
----------------------------------------------------------------------------
Operating                                                                   
 earnings(1)          (4,780)     2,884  (265.7)   16,090    34,054   (52.8)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Operating earnings                                                          
 as a percentage of                                                         
 revenue                (8.6%)      5.5%             10.1%     20.8%        
----------------------------------------------------------------------------
                                                                            
Well servicing                                                              
 statistics:                                                                
  Number of service                                                         
   rigs (end of                                                             
   period)               219        211     3.8       219       211     3.8 
  Service rig                                                               
   operating hours    51,677     50,560     2.2   141,069   144,602    (2.4)
  Service rig                                                               
   operating hour                                                           
   utilization            26%        26%               36%       39%        
  Service rig                                                               
   revenue per                                                              
   operating hour                                                           
   (Cdn$)                817        734    11.3       815       789     3.3 
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         

 
Revenue from Completion and Production Services was up $3 million or
6% compared to the second quarter of 2012 due to expansion of
services in the United States partially offset by lower activity in
Canada. Adjusted EBITDA was $7 million lower than the second quarter
of 2012 due to start-up costs associated with expanding activity in
the United States and lower activity in Canada. The decline in
industry activity was mainly because customers reduced spending to
work within cash flow, which reduced activity in the majority of our
service lines.  
Well servicing activity in the second quarter was 2% higher than the
second quarter of 2012 primarily due to our expansion in the United
States. Approximately 85% of the second quarter service rig activity
was oil related. Our rental division activity in the second quarter
was lower than the second quarter of 2012 mainly due to the excess
amount of surface storage capacity in the WCSB.   
Average service rig revenue per operating hour in the second quarter
was $817, or $83 higher than the second quarter of 2012. Increased
coil tubing operations in the current quarter, which operate at
higher rates, was only partially offset by a reduction in the average
service rig rate due to geographic mix. 
Operating costs as a percentage of revenue increased to 89% in the
second quarter of 2013, from 76% in the second quarter of 2012.
Operating costs per service rig operating hour were higher than in
the second quarter of 2012 mainly because of the higher cost
associated with the new coil tubing operations. 
Depreciation in the second quarter of 2013 was 16% higher than the
second quarter of 2012 because of the depreciation expense associated
with new equipment. We use the straight-line method of calculating
depreciation for our completion and production business lines, except
for the well servicing division, where we use the unit of production
method. 
SEGMENT REVIEW OF CORPORATE AND OTHER 
Our corporate segment is viewed as support functions that provide
assistance to more than one segment. The Corporate and other segment
had an adjusted EBITDA loss of $16 million for the second quarter of
2013, in line with the prior year comparative period. 
OTHER ITEMS  
Net financial charges for the quarter were $24 million, an increase
of $3 million from the second quarter of 2012. The increase was
primarily because of a non-recurring gain recognized in 2012 and
interest related to prior year commodity tax audits. 
We had a foreign exchange gain of $5 million during the second
quarter of 2013 due to the weakening of the Canadian dollar versus
the U.S. dollar and the impact thereof on the net U.S. dollar
denominated monetary position in the Canadian dollar-based companies. 
Income taxes for the quarter were a recovery of $4 million in line
with the prior year comparative period. Our effective tax rate on
earnings before income taxes for the first half of 2013 was 13%. 
In June 2013, a wholly owned subsidiary of Precision lost a tax
appeal in the Ontario Superior Court of Justice related to a
reassessment of Ontario income tax for the subsidiary's 2001 thru
2004 taxation years. Precision has appealed the decision to the
Ontario Court of Appeal and we expect this appeal to be heard by
mid-2014. Despite the decision in the Superior Court, management
believes it is more likely than not that Precision will prevail on
appeal. Should Precision lose on appeal, approximately $55 million of
the long-term income tax recoverable related to this issue would be
expensed. 
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 we need to continue to manage our
growth and cash flow, no matter where we are in the business cycle. 
We apply a disciplined approach to managing and tracking results of
our operations to keep costs down. We maintain a variable cost
structure so we can be responsive to changes in demand.  
Our maintenance capital expenditures are tightly governed by and
highly responsive to activity levels with additional cost savings
leverage provided through our internal manufacturi
ng and supply
divisions. Term contracts on expansion capital for new build rig
programs provide more certainty of future revenues and return on our
capital investments.  
Liquidity  
As at June 30, 2013 our liquidity is supported by a cash balance of
$127 million, a senior secured credit facility of US$850 million,
operating facilities totaling approximately $55 million and a US$25
million secured facility for letters of credit.  
At June 30, 2013, including letters of credit, we had approximately
$1,349 million outstanding under our secured and unsecured credit
facilities and $25 million in unamortized debt issue costs. 


 
Amount               Availability     Used for           Maturity           
----------------------------------------------------------------------------
Senior facility                                                             
 (secured)                                                                  
----------------------------------------------------------------------------
US$850 million       Undrawn, except  General corporate  November 17, 2017  
 (extendible,        US$27 million in purposes                              
 revolving term      outstanding                                            
 credit facility     letters of                                             
 with US$250 million credit                                                 
 accordion feature)                                                         
----------------------------------------------------------------------------
Operating facilities (secured)                                              
----------------------------------------------------------------------------
$40 million          Undrawn, except  Letters of credit                     
                     $17 million in   and general                           
                     outstanding      corporate purposes                    
                     letters of                                             
                     credit                                                 
----------------------------------------------------------------------------
US$15 million        Undrawn          Short term working                    
                                      capital                               
                                      requirements                          
----------------------------------------------------------------------------
Demand letter of credit facility (secured)                                  
----------------------------------------------------------------------------
US$25 million        Undrawn          Letters of credit                     
----------------------------------------------------------------------------
Senior notes (unsecured)                                                    
----------------------------------------------------------------------------
$200 million         Fully drawn      Debt repayment     March 15, 2019     
----------------------------------------------------------------------------
US$650 million       Fully drawn      Debt repayment and November 15, 2020  
                                      general corporate                     
                                      purposes                              
----------------------------------------------------------------------------
US$400 million       Fully drawn      Capital            December 15, 2021  
                                      expenditures and                      
                                      general corporate                     
                                      purposes                              
----------------------------------------------------------------------------

 
Our secured facility includes financial ratio covenants that are
tested quarterly and we are compliant with these covenants and expect
to remain compliant. 
The current blended cash interest cost of our debt is about 6.6%. 
Hedge of investments in U.S. operations  
We have designated our U.S. dollar denominated long-term debt as a
hedge of our investment in our operations in the U.S. 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 earnings. 
Average shares outstanding  
The following tables reconcile the weighted average shares
outstanding used in computing basic and diluted earnings per share: 


 
                                  Three months ended     Six months ended   
                                       June 30,              June 30,       
                                       2013       2012       2013       2012
----------------------------------------------------------------------------
Weighted average shares                                                     
 outstanding - basic                276,617    276,301    276,558    276,207
Effect of warrants                    9,425      9,068      9,486      9,914
Effect of share options and                                                 
 other equity compensation plans        814        812        867      1,120
----------------------------------------------------------------------------
Weighted average shares                                                     
 outstanding - diluted              286,856    286,181    286,911    287,241
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
QUARTERLY FINANCIAL SUMMARY  
(Stated in thousands of Canadian dollars, except per share amounts)  


 
                                 2012                         2013          
----------------------------------------------------------------------------
Quarters ended         September 30   December 31      March 31      June 30
----------------------------------------------------------------------------
Revenue                     484,761       533,948       595,720      378,898
Adjusted EBITDA(1)          151,000       177,026       215,181       88,248
Net earnings (loss):         39,357      (116,339)       93,313          473
  Per basic share              0.14         (0.42)         0.34         0.00
  Per diluted share            0.14         (0.42)         0.33         0.00
Funds provided by                                                           
 operations(1)              146,124       142,576       144,682       33,791
Cash provided by                                                            
 operations                  61,183       136,317        62,948      182,345
Dividends per share               -          0.05          0.05         0.05
----------------------------------------------------------------------------
                                 2011                        2012           
----------------------------------------------------------------------------
Quarters ended         September 30    December 31     March 31      June 30
----------------------------------------------------------------------------
Revenue                     492,944        587,408      640,066      381,966
Adjusted EBITDA(1)          186,248        229,839      245,574       97,192
Net earnings:                83,468         28,046      111,081       18,261
  Per basic share              0.30           0.10         0.40         0.07
  Per diluted share            0.29           0.10         0.39         0.06
Funds provided by                                                           
 operations(1)               73,182        256,103      247,739       62,373
Cash provided by                                                            
 operations                  20,281        218,857      162,440      275,346
---------------------------------------
-------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         

 
ADDITIONAL GAAP MEASURES 
We reference Generally Accepted Accounting Principles (GAAP) measures
that are not defined terms under International Financial Reporting
Standards to assess performance because we believe they provide
useful supplemental information to investors.   
Adjusted EBITDA  
We believe that adjusted EBITDA (earnings before income taxes,
financing charges, foreign exchange, and depreciation and
amortization) as reported in the Interim Consolidated Statement of
Earnings 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 non-cash depreciation and amortization
charges. 
Operating Earnings  
We believe that operating earnings, as reported in the Interim
Consolidated Statements of Earnings, is a useful measure because it
provides an indication of the results of our principal business
activities before consideration of how those activities are financed
and the impact of foreign exchange and taxation. 
Funds Provided by Operations  
We believe that funds provided by operations, as reported in the
Interim Consolidated Statements of Cash Flow is a useful measure
because it provides an indication of the funds our principal business
activities generated prior to consideration of working capital, which
is primarily made up of highly liquid balances. 
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"). 
In particular, forward looking information and statements include,
but are not limited to, the following: payment of a third quarter
dividend; Precision expects the 2013 capital expenditures to increase
from $533 million to $654 million as a result of certain additional
capital commitments; the five new build Super Series rigs in Canada
and the United States will generate financial returns in line with
our long term expectations; this summer Precision expects to
experience increased activity supporting delineation drilling in
northeastern British Columbia, related to potential LNG export
projects; including delivery of all five of the new build rigs and
the previously announced 2013 new build rig, Precision will have a
fleet of 196 Tier 1 drilling rigs in North America; a drilling rig
deployed to Northern Iraq in the Kurdistan region is expected to
begin drilling before the end of July; upon delivery of the upgraded
3,000 horsepower drilling rig to work in Mexico, which is expected to
be late in the third quarter of this year, Precision's international
drilling fleet will consist of 13 rigs with eight rigs in Mexico,
three in Saudi Arabia and two in the Kurdistan region of Iraq; the
construction of two high capacity Super Series rigs for Kuwait is
ongoing and the rigs are expected to be developed in the middle of
2014; Precision believes it is well positioned to capture business in
the second half of the year with seasonal activity increases;
Precision's 2013 priorities; in the second half of 2013, Precision
expects its coil tubing fleet to grow by two units and Precision
expects to execute projects in Canada and the United States;
Precision expects it's expected rig count in the Unites States to
remain relatively unchanged over the coming months; Precision expects
to benefit from the fleet enhancements made over the past few years
when compared to the prior year period; Precision's active rig count
internationally is expected to grow by two rigs over the next two
quarters as its second of two rigs goes to work in Northern Iraq and
Precision has an additional rig going to work in Mexico; Precision
expects to have 12 rigs working internationally under contract by the
end of the year; the amount and use of planned capital expenditures;
Precision expects the appeal to the Ontario Court of Appeal related
to an assessment of Ontario income tax to be heard by mid-2014 and
management of Precision believes it is more likely than not that
Precision will prevail on the appeal; should Precision lose on
appeal, approximately $55 million of the long-term income tax
recoverable related to this issue would be expensed; and Precision
expects to remain compliant with the financial ratio covenants of its
secured facility. 
These forward-looking information and statements are based on certain
assumptions and analysis made by the Corporation in light of its
experience and its perception of historical trends, current
conditions and expected future developments as well as other factors
it believes are appropriate in the circumstances. However, whether
actual results, performance or achievements will conform to the
Corporation's expectations and predictions is subject to a number of
known and unknown risks and uncertainties which could cause actual
results to differ materially from the Corporation's expectations.
Such risks and uncertainties include, but are not limited to:
fluctuations 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; capital
market liquidity available to fund customer drilling programs;
availability of cash flow, debt and/or equity sources to fund the
Corporation's capital and operating requirements, as needed;
sustainability of our dividend; the effects of seasonal and weather
conditions on operations and facilities; the existence of competitive
operating risks inherent in its businesses; general economic, market
or business conditions; changes in laws or regulations; the
availability of qualified personnel, management or other key inputs;
currency exchange fluctuations; and other unforeseen conditions which
could impact the use of services supplied by Precision and
Precision's ability to respond to such conditions. 
Consequently, all of the forward-looking information and statements
made in this report are qualified by these cautionary statements and
there can be no assurance that the actual results or developments
anticipated by the Corporation will be realized or, even if
substantially realized, that they will have the expected consequences
to, or effects on, the Corporation or its business or operations.
Readers are therefore cautioned not to place undue reliance on such
forward-looking information and statements. Except as may be required
by law, the Corporation assumes no obligation to update publicly any
such forward-looking information and statements, whether as a result
of new information, future events or otherwise. 
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)     


 
                                                    June 30,    December 31,
(Stated in thousands of Canadian dollars)               2013            2012
----------------------------------------------------------------------------
                                                                            
ASSETS                                                                      
Current assets:                                                             
  Cash                                       $       127,394 $       152,768
  Accounts receivable                            
    396,442         509,547
  Income taxes recoverable                             7,484               -
  Inventory                                            9,278          13,787
----------------------------------------------------------------------------
Total current assets                                 540,598         676,102
                                                                            
Non-current assets:                                                         
  Income tax recoverable                              64,579          64,579
  Property, plant and equipment                    3,449,040       3,242,929
  Intangibles                                          4,431           6,101
  Goodwill                                           312,030         310,552
----------------------------------------------------------------------------
Total non-current assets                           3,830,080       3,624,161
----------------------------------------------------------------------------
Total assets                                 $     4,370,678 $     4,300,263
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
  Accounts payable and accrued liabilities   $       297,472 $       333,893
  Income tax payable                                       -          64,188
----------------------------------------------------------------------------
Total current liabilities                            297,472         398,081
                                                                            
Non-current liabilities:                                                    
  Share based compensation                             9,409           8,676
  Provisions and other                                22,281          17,818
  Long-term debt                                   1,279,167       1,218,796
  Deferred tax liabilities                           491,839         485,592
----------------------------------------------------------------------------
Total non-current liabilities                      1,802,696       1,730,882
                                                                            
                                                                            
Shareholders' equity:                                                       
  Shareholders' capital                            2,253,713       2,251,982
  Contributed surplus                                 27,064          24,474
  Retained earnings (deficit)                         21,508        (44,621)
  Accumulated other comprehensive loss              (31,775)        (60,535)
  --------------------------------------------------------------------------
  Total shareholders' equity                       2,270,510       2,171,300
----------------------------------------------------------------------------
Total liabilities and shareholders' equity   $     4,370,678 $     4,300,263
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) 


 
                             Three months ended        Six months ended     
                                   June 30,                 June 30,        
                                                                            
(Stated in thousands of                                                     
 Canadian dollars, except                                                   
 per share amounts)              2013         2012        2013         2012 
----------------------------------------------------------------------------
                                                                            
Revenue                    $  378,898  $   381,966  $  974,618  $ 1,022,032 
Expenses:                                                                   
  Operating                   258,769      259,513     600,607      616,099 
  General and                                                               
   administrative              31,881       25,261      70,582       63,167 
----------------------------------------------------------------------------
Earnings before income                                                      
 taxes, finance charges,                                                    
 foreign exchange and                                                       
 depreciation and                                                           
 amortization                  88,248       97,192     303,429      342,766 
Depreciation and                                                            
 amortization                  72,580       66,669     157,473      141,493 
----------------------------------------------------------------------------
Operating earnings             15,668       30,523     145,956      201,273 
Foreign exchange               (5,015)      (5,034)     (8,309)         333 
Finance charges                23,950       21,061      46,509       42,981 
----------------------------------------------------------------------------
Earnings (loss) before                                                      
 income                        (3,267)      14,496     107,756      157,959 
Income taxes:                                                               
  Current                       2,455        9,186      20,550       32,025 
  Deferred                     (6,195)     (12,951)     (6,580)      (3,408)
----------------------------------------------------------------------------
                               (3,740)      (3,765)     13,970       28,617 
----------------------------------------------------------------------------
                                                                            
Net earnings               $      473  $    18,261  $   93,786  $   129,342 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings per share:                                                     
  Basic                    $     0.00  $      0.07  $     0.34  $      0.47 
  Diluted                  $     0.00  $      0.06  $     0.33  $      0.45 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) 


 
                              Three months ended        Six months ended    
                                   June 30,                 June 30,        
(Stated in thousands of                                                     
 Canadian dollars)               2013         2012        2013         2012 
----------------------------------------------------------------------------
Net earnings               $      473  $    18,261  $   93,786    $ 129,342 
Unrealized gain on                                                          
 translation of assets and                                                  
 liabilities of operations                                                  
 denominated in foreign                                                     
 currency                      55,755       28,972      87,875        3,948 
Foreign exchange loss on                                                    
 net investment hedge with                                                  
 U.S. denominated debt,                                                     
 net of tax                   (37,380)     (21,000)    (59,115)      (2,205)
-------------------------------------------------
---------------------------
Comprehensive income       $   18,848  $    26,233  $  122,546    $ 131,085 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) 


 
                              Three months ended        Six months ended    
                                   June 30,                 June 30,        
(Stated in thousands of                                                     
 Canadian dollars)               2013         2012        2013         2012 
----------------------------------------------------------------------------
Cash provided by (used                                                      
 in):                                                                       
Operations:                                                                 
  Net earnings             $      473  $    18,261  $   93,786  $   129,342 
  Adjustments for:                                                          
    Long-term compensation                                                  
     plans                      4,240        1,776      10,757       11,227 
    Depreciation and                                                        
     amortization              72,580       66,669     157,473      141,493 
    Foreign exchange           (5,246)      (5,346)     (8,548)         206 
    Finance charges            23,950       21,061      46,509       42,981 
    Income taxes               (3,740)      (3,765)     13,970       28,617 
    Other                         224        2,186       1,162        2,357 
    Income taxes paid         (24,045)      (3,764)    (94,724)      (4,574)
    Income taxes recovered      1,960          306       1,960          342 
    Interest paid             (36,787)     (35,523)    (44,280)     (42,783)
    Interest received             182          512         408          904 
----------------------------------------------------------------------------
Funds provided by                                                           
 operations                    33,791       62,373     178,473      310,112 
Changes in non-cash                                                         
 working capital balances     148,554      212,973      66,820      127,674 
----------------------------------------------------------------------------
                              182,345      275,346     245,293      437,786 
Investments:                                                                
  Business acquisitions,                                                    
   net of cash acquired             -          (25)          -          (25)
  Purchase of property,                                                     
   plant and equipment       (136,237)    (221,074)   (266,842)    (442,757)
  Proceeds on sale of                                                       
   property, plant and                                                      
   equipment                    4,148        3,730       6,686        8,809 
  Changes in non-cash                                                       
   working capital                                                          
   balances                   (10,774)     (35,594)      4,967      (73,705)
----------------------------------------------------------------------------
                             (142,863)    (252,963)   (255,189)    (507,678)
Financing:                                                                  
  Dividends paid              (13,832)           -     (27,657)           - 
  Issuance of common                                                        
   shares on the exercise                                                   
   of options                     240          133         720        1,305 
----------------------------------------------------------------------------
                              (13,592)         133     (26,937)       1,305 
----------------------------------------------------------------------------
Effect of exchange rate                                                     
 changes on cash and cash                                                   
 equivalents                    6,667        6,184      11,459         (545)
----------------------------------------------------------------------------
Increase (decrease) in                                                      
 cash and cash equivalents     32,557       28,700     (25,374)     (69,132)
Cash and cash equivalents,                                                  
 beginning of period           94,837      369,644     152,768      467,476 
----------------------------------------------------------------------------
Cash and cash equivalents,                                                  
 end of period             $  127,394  $   398,344  $  127,394  $   398,344 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) 


 
----------------------------------------------------------------------------
                                                                            
                                                                            
(Stated in thousands of              Shareholders'              Contributed 
 Canadian dollars)                         capital                  surplus 
----------------------------------------------------------------------------
Balance at January 1,                                                       
 2013                    $               2,251,982 $                 24,474 
Net earnings for the                                                        
 period                                          -                        - 
Other comprehensive                                                         
 income for the period                           -                        - 
Dividends                                        -                        - 
Issued on redemption of                                                     
 non-management                                                             
 directors DSUs                                634                     (598)
Share options exercised                      1,097                     (377)
Share based compensation                                                    
 expense                                         -                    3,565 
----------------------------------------------------------------------------
Balance at June 30, 2013 $               2,253,713 $                 27,064 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                             Accumulated                                    
                                   other          Retained                  
(Stated in thousands of    comprehensive          earnings            Total 
 Canadian dollars)                  loss         (deficit)           equity 
----------------------------------------------------------------------------
Balance at January 1,                                                       
 2013                    $       (60,535) $        (44,621) $     2,171,300 
Net earnings for the                                                        
 period                                -            93,786           93,786 
Other comprehensive                                                         
 income for the period            28,760                 -           28,760 
Dividends                              -           (27,657)         (27,657)
Issued on redemption of                          
                           
 non-management                                                             
 directors DSUs                        -                 -               36 
Share options exercised                -                 -              720 
Share based compensation                                                    
 expense                               -                 -            3,565 
----------------------------------------------------------------------------
Balance at June 30, 2013 $       (31,775) $         21,508  $     2,270,510 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
(Stated in thousands of              Shareholders'              Contributed 
 Canadian dollars)                         capital                  surplus 
----------------------------------------------------------------------------
Balance at January 1,                                                       
 2012                    $               2,248,217 $                 18,396 
Net earnings for the                                                        
 period                                          -                        - 
Other comprehensive                                                         
 income for the period                           -                        - 
Share options exercised                      1,993                     (688)
Issued on redemption of                                                     
 non-management                                                             
 directors DSUs                                221                     (221)
Issued on waiver of                                                         
 right to dissent by                                                        
 dissenting unitholder                           9                       (3)
Share based compensation                                                    
 expense                                         -                    4,363 
----------------------------------------------------------------------------
Balance at June 30, 2012 $               2,250,440 $                 21,847 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
                                                                            
----------------------------------------------------------------------------
                             Accumulated                                    
                                   other          Retained                  
(Stated in thousands of    comprehensive          earnings             Total
 Canadian dollars)                  loss         (deficit)            equity
----------------------------------------------------------------------------
Balance at January 1,                                                       
 2012                    $       (50,862) $        (83,160) $      2,132,591
Net earnings for the                                                        
 period                                -           129,342           129,342
Other comprehensive                                                         
 income for the period             1,743                 -             1,743
Share options exercised                -                 -             1,305
Issued on redemption of                                                     
 non-management                                                             
 directors DSUs                        -                 -                 -
Issued on waiver of                                                         
 right to dissent by                                                        
 dissenting unitholder                 -                 -                 6
Share based compensation                                                    
 expense                               -                 -             4,363
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Balance at June 30, 2012 $       (49,119) $         46,182  $      2,269,350
----------------------------------------------------------------------------
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SECOND QUARTER 2013 EARNINGS 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, July 25, 2013. 
The conference call dial in numbers are 1-800-766-6630 or
416-695-6622. 
A live webcast of the conference call will be accessible on
Precision's website at www.precisiondrilling.com by selecting
"Investor Centre", then "Webcasts". Shortly after the live webcast,
an archived version will be available for approximately 30 days. 
An archived recording of the conference call will be available
approximately one hour after the completion of the call until August
1, 2013 by dialing 1-800-408-3053 or 905-694-9451, passcode 7578848. 
About Precision 
Precision is a leading provider of safe and High Performance, High
Value services to the oil and gas industry. Precision provides
customers with access to an extensive fleet of contract drilling
rigs, directional drilling services, well service & snubbing rigs,
coil tubing services, camps, rental equipment, and wastewater
treatment units backed by a comprehensive mix of technical support
services and skilled, experienced personnel. 
Precision is headquartered in Calgary, Alberta, Canada. Precision is
listed on the Toronto Stock Exchange under the trading symbol "PD"
and on the New York Stock Exchange under the trading symbol "PDS".
Contacts:
Precision Drilling Corporation
Carey Ford
Vice President, Finance and Investor Relations
403.716.4575
403.716.4755 (FAX) 
Precision Drilling Corporation
Suite 800, 525 - 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
www.precisiondrilling.com
 
 
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