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

Precision Drilling Corporation Announces 2013 Third Quarter Financial Results 
and 2013 Fourth Quarter Dividend 
CALGARY, ALBERTA -- (Marketwired) -- 10/24/13 --  
(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 fourth
quarter dividend on its common shares of $0.06 per share, a 20%
increase over the prior quarter. The dividend is payable on November
15, 2013, to shareholders of record on November 4, 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 $29 million or $0.10 per diluted share
compared to $39 million or $0.14 per diluted share in the third
quarter of 2012.  
Revenue this quarter was $488 million, or 1% higher than the third
quarter of 2012. Increased international activity and higher average
dayrates in Canadian contract drilling were substantially offset by
lower North American activity as a result of lower levels of customer
spending. 
Earnings before income taxes, finance charges, foreign exchange, and
depreciation and amortization ("adjusted EBITDA") this quarter was
$138 million, 9% lower than the third quarter of 2012. Our adjusted
EBITDA margin was 28% this quarter, compared to 31% in the third
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 average dayrates and
increased international profitability. Our activity in this quarter,
as measured by drilling rig utilization days, decreased 1% in Canada
and 11% in the United States compared to the third quarter of 2012. 
Revenue and adjusted EBITDA for the quarter were higher than the
second quarter 2013 revenue and adjusted EBITDA of $379 million and
$88 million, respectively, primarily as a result of improved seasonal
activity levels in Canada.  
Precision has firm customer commitments to add three new build Super
Series rigs to its North American drilling fleet bringing the total
number of announced new build rigs in 2013 to nine. Capital
expenditures in 2013 are expected to decrease from $654 million
announced in July to $609 million primarily as a result of decreased
activity based maintenance and discretionary expansion capital
expenditures offset by the additional new build rigs. 
Kevin Neveu, President and Chief Executive Officer, stated:
"Precision's third quarter results reflect overall softness in
customer demand and weak demand for Canadian completion and
production services. Additionally a non-recurring vendor issue and a
difficult turnkey project weighed negatively on the quarter.
Precision continues to exercise capital discipline by linking near
term capital expenditures with industry activity and as such we are
reducing our 2013 planned capital expenditures by $45 million."   
"Tempering these short term issues is Precision's resurgent activity
levels in the U.S. where our current rig count is at 87, up seven, or
9%, since the beginning of the third quarter, while overall industry
activity levels have remained flat. In addition, our North American
and international contract coverage has improved with an expected
average of 115 rigs under contract in the fourth quarter, compared to
the second quarter of this year when an average of 107 rigs worked
under contract." 
"Precision's strong market share in horizontal drilling and three new
build customer commitments announced today for the U.S. demonstrate
our customers' increasing acceptance of our High Performance, High
Value strategy and the overall efficiency gains our services deliver
to the customer. We are also encouraged by the prospect of several
additional new build pad walking rigs for delivery to Canada over the
next nine months related to increased Canadian emphasis on natural
gas exports and natural gas liquids development. Precision's fleet of
Super Series Tier 1 rigs and horizontal capable Tier 2 rigs ensures
that we are well positioned as a driller of choice in unconventional
oil and gas resource drilling across North America."   
"Our Canadian drilling operations delivered higher daily operating
revenues and margins relative to the third quarter in 2012, a direct
result of the investment in our drilling rig fleet over the past
several years. Our Canadian drilling operations were able to generate
higher overall revenue and profitability despite slightly weaker
activity in Canada." 
"Our U.S. rig count increase over the past several weeks has resulted
from new build and upgraded rig deliveries to customer contracts and
reactivation of Tier 1 rigs for customers. Our increase in activity
is due to unconventional development and we have seen our position
strengthen in several unconventional U.S. basins. For the third
quarter, an average of 87% of our active rigs in the U.S. were
drilling horizontal or directional wells." 
"Our international operations posted the highest revenue quarter
since we began our international expansion in 2012. We deployed our
second rig to the Kurdistan region of Iraq during the quarter and
deployed an additional rig to Mexico that will begin drilling in the
fourth quarter. The construction of our two ST-3000 rigs for Kuwait
is going as planned and we expect the rigs to begin drilling in
mid-2014. We currently have 11 rigs active internationally and see
opportunities to deploy existing and new build rigs to our operating
areas in Mexico and the Middle East." 
"The dividend increase is supported by our confidence in Precision's
business outlook and high percentage of contracted Tier 1 drilling
rigs and growing international presence. Today, we have a total of
197 Tier 1 drilling rigs and expect to have 202 by the end of 2013,
an increase of 109 Tier 1 rigs from the 93 we had in our fleet at the
beginning of 2009, just five years ago. Additionally, the dividend
increase is consistent with our commitment to maximize returns for
our shareholders through both share price appreciation and return of
capital. With today's dividend announcement, Precision has announced
$72 million in dividend payments to shareholders in the past eleven
months," concluded Mr. Neveu.  
SELECT FINANCIAL AND OPERATING INFORMATION 
Financial Highlights 


 
----------------------------------------------------------------------------
(Stated in                                                                  
 thousands of                                                               
 Canadian dollars,                                                          
 except where      Three months ended            Nine months ended          
 noted)                 September 30,                September 30,          
                                                                            
                       2013      2012 % Change      2013      2012 % Change 
----------------------------------------------------------------------------
Revenue             488,450   484,761      0.8 1,463,068 1,506,793     (2.9)
Adjusted EBITDA(1)  137,660   151,000     (8.8)  441,089   493,766    (10.7)
Adjusted EBITDA %                                                           
 of revenue            28.2%     31.1%              30.1%     32.8%         
Net earnings         29,443    39,357    (25.2)  123,229   168,699    (27.0)
Cash provided by                                                            
 operations          88,341    61,183     44.4   333,634   498,969    (33.1)
Funds provided by                                                           
 operations(1)      127,684   146,124    (12.6)  306,157   456,236    (32.9)
Capital spending:                                                           
 Expansion           70,108   177,783    (60.6)  228,411   473,131    (51.7)
 Upgrade             39,548    23,166     70.7   111,206   107,388      3.6 
 Maintenance and                                                            
  infrastructure     36,264    37,701     (3.8)   73,145   100,888    (27.5)
 Proceeds on sale    (3,335)   (5,011)   (33.4)  (10,021)  (13,820)   (27.5)
----------------------------------------------------------------------------
Net capital                                                                 
 spending           142,585   233,639    (39.0)  402,741   667,587    (39.7)
                                                                            
Net earnings - per                                                          
 share ($):                                                                 
 Basic                 0.11      0.14    (21.4)     0.45      0.61    (26.2)
 Diluted               0.10      0.14    (28.6)     0.43      0.59    (27.1)
Dividend paid per                                                           
 share ($)             0.05         -      n/m      0.15         -      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           Nine months ended          
                         September 30,               September 30,          
                         2013     2012 % Change      2013     2012 % Change 
----------------------------------------------------------------------------
Contract drilling                                                           
 rig fleet                326      363    (10.2)      326      363    (10.2)
Drilling rig                                                                
 utilization days:                                                          
 Canada                 7,622    7,735     (1.5)   22,329   24,110     (7.4)
 United States          7,412    8,305    (10.8)   22,010   26,583    (17.2)
 International            969      736     31.7     2,503    1,319     89.8 
Service rig fleet         222      210      5.7       222      210      5.7 
Service rig                                                                 
 operating hours       70,526   72,766     (3.1)  211,595  217,368     (2.7)
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Financial Position                                                          
                                                                            
----------------------------------------------------------------------------
(Stated in thousands of Canadian dollars,       September 30,   December 31,
 except ratio)                                           2013           2012
----------------------------------------------------------------------------
Working capital                                       208,255        278,021
Long-term debt(1)                                   1,270,976      1,218,796
Total long-term financial liabilities               1,302,883      1,245,290
Total assets                                        4,424,413      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 third quarter of this year was $4 million higher than
the third quarter in 2012 mainly due to growth in our international
drilling activity and U.S. Completion and Production Services
division and higher average dayrates in Canadian contract drilling
substantially offset by a decrease in activity days in both Canada
and the United States. Compared to the third quarter of 2012, revenue
from our Contract Drilling Services segment was up 1% and revenue in
our Completion and Production Services segment was up 2%.   
Adjusted EBITDA margin (adjusted EBITDA as a percentage of revenue)
was 28% this quarter, compared to 31% in the third quarter of 2012.
The decrease in adjusted EBITDA margin was a result of the impact of
lower utilization on fixed costs, a non-recurring vendor issue and a
difficult turnkey project, partially offset by higher dayrates from
the new build and upgraded Tier 1 rigs that we have deployed over the
past few years. 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 September 30, 2013 our safety performance and mechanical downtime
have shown improvement over the same period in 2012 and we continue
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 September 30, 2013 we have delivered the two remaining rigs from
the 2012 new build program, announced nine 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 September 30, 2013 we have increased our coil tubing fleet to 12
units from five as at December 31, 2012.  
We continue to promote our integrated directional drilling services
to oil and gas customers and have invested in people and equipment to
execute the strategy. Although overall industry adoption has been
slower than expected, we are currently experiencing an increase in
the percentage of integrated service jobs on Precision drilling rigs,
particularly in Canada. 
3. Build our brand 
Uphold our reputation and market breadth in North America while
strengthening our presence in select oilfield markets
internationally. 
To September 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 third quarter of 2013, natural gas prices and the West Texas
Intermediate price of oil were higher than the 2012 averages. 


 
                                            Three months ended    Year ended
                                                 September 30,  December 31,
                                            2013          2012          2012
----------------------------------------------------------------------------
Average oil and natural gas                                                 
 prices:                                                                    
Oil                                                                         
  West Texas Intermediate (per                                              
   barrel) (US$)                          105.94         92.26         94.13
                                                                            
Natural gas                                                                 
  Canada                                                                    
    AECO (per MMBtu) (Cdn$)                 2.45          2.28          2.39
  United States                                                             
    Henry Hub (per MMBtu) (US$)             3.55          2.88          2.75
----------------------------------------------------------------------------

 
Summary for the three months ended September 30, 2013: 


 
--  Operating earnings (see "Additional GAAP Measures" in this news release)
    this quarter were $52 million and 11% of revenue, compared to $74
    million and 15% 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 third quarter in 2012 and higher depreciation
    as a result of a greater proportion of operating days from our Tier 1
    drilling rigs and depreciation on rigs working internationally. 
 
--  General and administrative expenses this quarter were $38 million or $5
    million higher than the third quarter of 2012 primarily because of a
    vendor insolvency issue.  
 
--  Net finance charges were $23 million, an increase of $2 million compared
    with the third quarter of 2012 primarily because of foreign exchange on
    our U.S. dollar denominated interest payments and lower interest income.
 
--  Average revenue per utilization day for contract drilling rigs increased
    in the third quarter of 2013 to $20,862 from the prior year third
    quarter of $20,099 in Canada and decreased in the United States to
    $22,595 from $23,110 for the third quarter of 2012. The increase in
    revenue rates for the third quarter in Canada 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 third quarter of 2013, 46% of
    Precision's utilization days were achieved from drilling rigs working
    under term contracts compared to 42% in the 2012 comparative period. In
    the United States, the decrease in dayrates for the third quarter was
    due to rig mix as we experienced lower turnkey activity and a higher
    proportion of rigs working in the spot market. In the United States, for
    the third quarter of 2013, 60% of Precision's utilization days were
    generated from rigs working under term contracts compared to 73% in the
    2012 comparative period. Turnkey revenue for the third quarter of 2013
    was US$7 million, compared with US$11 million in the 2012 comparative
    period. Within Precision's Completion and Production Services segment,
    average hourly rates for service rigs were $863 in the third quarter of
    2013 compared to $769 in the third quarter of 2012. The increase in the
    average hourly rate is the result of rig mix with the introduction of
    coil tubing rigs in the United States. Canadian well servicing rig
    average hourly rate decreased by $6 per hour quarter over quarter due to
    competitive pressure in the industry resulting from lower industry
    activity. 
 
--  Average operating costs per utilization day for drilling rigs decreased
    in the third quarter of 2013 to US$14,789 from the prior year third
    quarter of US$14,816 in the United States while in Canada costs
    increased to $10,310 in 2013 from $9,828 in 2012. The cost decrease per
    day in the United States was primarily due to lower turnkey activity.
    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 $674 in the third quarter of 2013 as
    compared to $535 in the third quarter of 2012 primarily due to costs
    associated with coil tubing and fixed costs spread over a lower activity
    base. Operating costs were also impacted by rig mix with eight coil
    tubing rigs operating in the United States in the third quarter of 2013.
    Canadian well servicing rig average hourly operating costs were up $55
    per hour in the current quarter over the prior year comparative, due to
    higher repairs and maintenance costs and fixed costs spread over a lower
    activity base. 
 
--  We realized revenue from directional services of $32 million in the
    third quarter of 2013, in line with the prior year period.  
 
--  Funds provided by operations (see "Additional GAAP Measures" in this
    news release) in the third quarter of 2013 were $128 million, a decrease
    of $18 million from the prior year comparative quarter of $146 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 $146 million in the third quarter, a decrease of $93 million over
    the same period in 2012. Capital spending for the third quarter of 2013
    included $70 million for expansion capital, $40 million for upgrade
    capital and $36 million for the maintenance of existing assets and
    infrastructure spending. 

 
Summary for the nine months ended September 30, 2013: 


 
--  Revenue for the nine months ended September 30, 2013 was $1,463 million,
    a decrease of 3% from the 2012 period. 
 
--  Operating earnings were $198 million, a decrease of $77 million or 28%
    from 2012. Operating earnings were 14% of revenue in 2013 compared to
    18% in 2012. 
 
--  General and administrative costs were $109 million, an increase of $12
    million over the first nine months of 2012 primarily as a result of the
    increase in incentive compensation costs tied to the performance of
    Precision's common shares in 2013 and costs associated with a vendor's
    insolvency problem. 
 
--  Net finance charges were $70 million, an increase of $5 million over the
    first nine months of 2012. 
 
--  Funds provided by operations (see "Additional GAAP Measures" in this
    news release) in the first nine months of 2013 were $306 million, a
    decrease of $150 million from the prior year comparative period of $456
    million. 
 
--  Capital expenditures for the purchase of property, plant and equipment
    were $413 million in the first nine months of 2013, a decrease of $269
    million over the same period in 2012. Capital spending for 2013 to date
    included $229 million for expansion capital, $111 million for upgrade
    capital and $73 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 October 23, 2013 we have term
contracts in place for an average of 54 rigs in Canada, 50 in the
United States and 11 internationally for the fourth quarter of 2013
and an average of 56 rig contracts in Canada, 46 in the United States
and 10 internationally for the full 2013 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
81 rigs, down nine rigs over the third quarter in 2012 and up one rig
over the second quarter of 2013. We currently have 87 rigs active in
the United States.   
In Canada, our average active rig count in the quarter was 83 rigs,
down one rig over the third quarter in 2012 and up 43 rigs over the
second quarter of 2013. We currently have 96 rigs active in Canada
and expect activity to increase moderately through the fourth
quarter. 
Internationally, our average active rig count in the quarter was 11
rigs, up three over the third quarter in 2012 and up two rigs over
the second quarter of 2013. Our active rig count internationally is
expected to grow by one rig before the end of the year as a rig is
going to work in Mexico during the fourth quarter.  
Industry Conditions  
According to industry sources, as of October 18, 2013, the U.S.
active land drilling rig count was down about 6% from the same point
last year and the Canadian active land drilling rig count was up 9%
over the prior year. Despite the active industry rig count softness,
demand for Tier 1 assets continues to be strong, benefiting those
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 69% of the Canadian industry's active
rigs and 78% of the U.S. industry's active rigs were drilling for oil
targets, compared to 72% for Canada and 70% for the U.S. at the same
time last year.  
Capital Spending 
We expect capital spending in 2013 to be approximately $609 million,
of which $413 million was spent during the first nine months of the
year: 


 
--  $322 million for expansion capital, which includes the cost to complete
    the two remaining new build drilling rigs from the 2012 new build rig
    program, more than 85% of the costs to complete the 2013 nine 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; 
--  $145 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 
--  $142 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.  


 
(Stated in                                                                  
 thousands of      Three months ended            Nine months ended          
 Canadian dollars)      September 30,                September 30,          
                                                                            
                       2013      2012 % Change      2013      2012 % Change 
----------------------------------------------------------------------------
Revenue:                                                                    
 Contract Drilling                                                          
  Services          411,987   409,889      0.5 1,235,561 1,273,136     (3.0)
 Completion and                                                             
  Production                                                                
  Services           78,960    77,506      1.9   237,968   240,854     (1.2)
 Inter-segment                                                              
  eliminations       (2,497)   (2,634)    (5.2)  (10,461)   (7,197)    45.4 
----------------------------------------------------------------------------
                    488,450   484,761      0.8 1,463,068 1,506,793     (2.9)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Adjusted                                                                    
 EBITDA:(1)                                                                 
 Contract Drilling                                                          
  Services          144,633   146,080     (1.0)  453,393   477,112     (5.0)
 Completion and                                                             
  Production                                                                
  Services           12,363    23,143    (46.6)   44,771    71,332    (37.2)
 Corporate and                                                              
  other             (19,336)  (18,223)     6.1   (57,075)  (54,678)     4.4 
----------------------------------------------------------------------------
                    137,660   151,000     (8.8)  441,089   493,766    (10.7)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         
                                                                            
SEGMENT REVIEW OF CONTRACT DRILLING SERVICES                                
                                                                            
(Stated in                                                                  
 thousands of                                                               
 Canadian dollars,                                                          
 except where      Three months ended            Nine months ended          
 noted)                 September 30,                September 30,          
                                                                            
                       2013      2012 % Change      2013      2012 % Change 
----------------------------------------------------------------------------
Revenue             411,987   409,889      0.5 1,235,561 1,273,136     (3.0)
Expenses:                                                                   
 Operating          255,683   252,556      1.2   746,049   765,749     (2.6)
 General and                                                                
  administrative     11,671    11,253      3.7    36,119    30,275     19.3 
----------------------------------------------------------------------------
Adjusted EBITDA(1)  144,633   146,080     (1.0)  453,393   477,112     (5.0)
 Depreciation        75,421    67,659     11.5   212,530   193,666      9.7 
----------------------------------------------------------------------------
Operating                                                                   
 earnings(1)         69,212    78,421    (11.7)  240,863   283,446    (15.0)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings                                                          
 as a percentage of                                                         
 revenue               16.8%     19.1%              19.5%     22.3%         
----------------------------------------------------------------------------
Drilling rig                                                                
 revenue per                                                                
 utilization day in                                                         
 Canada (Cdn$)       20,862    20,099      3.8    21,805    20,699      5.3 
----------------------------------------------------------------------------
Drilling rig                                                                
 revenue per                                                                
 utilization day in                                                         
 the United                                                                 
 States(2) (US$)     22,595    23,110     (2.2)   23,474    23,162      1.3 
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         
(2) Includes revenue from idle but contracted rig days.                     
                                                                            
                                    Three months ended September 30,        
Canadian onshore drilling                                                   
 statistics:(1)                       2013                    2012          
----------------------------------------------------------------------------
                              Precision  Industry(2)  Precision  Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs (end                                                
 of period)                         188         821         202         825 
Drilling rig operating days                                                 
 (spud to release)                6,779      30,649       6,957      30,220 
Drilling rig operating day                                                  
 utilization                         39%         41%         38%         40%
Number of wells drilled             912       3,202         948       3,607 
Average days per well               7.4         9.6         7.3         8.4 
Number of metres drilled                                                    
 (000s)                           1,550       6,481       1,491       5,853 
Average metres per well           1,700       2,024       1,573       1,623 
Average metres per day              229         211         214         194 
----------------------------------------------------------------------------
                                    Nine months ended September 30,         
Canadian onshore drilling                                                   
 statistics:(1)                       2013                    2012          
----------------------------------------------------------------------------
                              Precision  Industry(2)  Precision  Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs (end                                                
 of period)                         188         821         202         825 
Drilling rig operating days                                                 
 (spud to release)               19,781      87,527      21,579      93,470 
Drilling rig operating day                                                  
 utilization                         39%         39%         41%         42%
Number of wells drilled           2,338       7,928       2,223       7,940 
Average days per well               8.5        11.0         9.7        11.8 
Number of metres drilled                                                    
 (000s)                           4,086      16,433       3,798      15,013 
Average metres per well           1,748       2,073       1,708       1,891 
Average metres per day              207         188         176         161 
----------------------------------------------------------------------------
(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
 September 30                         81       1,709          90       1,855
----------------------------------------------------------------------------
Year to date average                  81       1,708          97       1,909
----------------------------------------------------------------------------
(1) United States lower 48 land operations only.                            
(2) Baker Hughes rig counts.                                                

 
Revenue from Contract Drilling Services was $412 million this quarter
or 1% higher than the third quarter of 2012, while adjusted EBITDA of
$145 million decreased 1%. The decreases were mainly due to lower
drilling rig utilization in both Canada and the United States and
lower average dayrates in the United States offset by growth in our
international contract drilling business and increases in average
dayrates in Canada.  
Operating results for our international business improved as a result
of increased activity. On average, we had 11 rigs working
internationally during the third quarter of 2013 compared with eight
in the corresponding quarter of 2012. Drilling utilization days in
our international operations were 969 days, 32% higher than the prior
year comparative period. 
Drilling rig utilization days in Canada (drilling days plus move
days) during the third quarter of 2013 were 7,622, a decrease of 1%
compared to 2012 while drilling rig utilization days in the United
States were 7,412 or 11% 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. The majority
of our North America activity came from oil and liquids-rich natural
gas related plays. 
Drilling rig revenue per utilization day during the third quarter was
up 4% in Canada while in the U.S. drilling rig revenue per
utilization day was down 2% over 2012. The increase in average
dayrates for Canada was the result of improved rig mix and continued
demand for Tier 1 assets. In the United States, the decrease in
revenue per utilization day for the third quarter was due to rig mix
as we experienced lower turnkey activity and a higher proportion of
rigs working in the spot market.  
In Canada, 46% of utilization days in the third quarter were
generated from rigs under term contract, compared to 42% in the third
quarter of 2012. In the U.S., 60% of utilization days were generated
from rigs under term contract as compared to 73% in the third quarter
of 2012. At the end of the quarter we had 56 drilling rigs under
contract in Canada, 53 in the U.S. and 11 internationally.  
Operating costs were 62% of revenue for the quarter, which was in
line with 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
in line with the third quarter in 2012 as the impact of fixed costs
on lower activity was offset by turnkey costs.   
Depreciation expense in the quarter was 11% higher than in the third
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 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 


 
(Stated in thousands                                                        
 of Canadian                                                                
 dollars, except     Three months ended          Nine months ended          
 where noted)             September 30,              September 30,          
                                                                            
                         2013      2012 % Change     2013     2012 % Change 
----------------------------------------------------------------------------
Revenue                78,960    77,506      1.9  237,968  240,854     (1.2)
Expenses:                                                                   
 Operating             59,364    50,474     17.6  177,569  157,943     12.4 
 General and                                                                
  administrative        7,233     3,889     86.0   15,628   11,579     35.0 
----------------------------------------------------------------------------
Adjusted EBITDA(1)     12,363    23,143    (46.6)  44,771   71,332    (37.2)
 Depreciation           7,988     7,640      4.6   24,306   21,775     11.6 
----------------------------------------------------------------------------
Operating                                                                   
 earnings(1)            4,375    15,503    (71.8)  20,465   49,557    (58.7)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Operating earnings                                                          
 as a percentage of                                                         
 revenue                  5.5%     20.0%              8.6%    20.6%         
----------------------------------------------------------------------------
                                                                            
Well servicing                                                              
 statistics:                                                                
 Number of service                                                          
  rigs (end of                                                              
  period)                 222       210      5.7      222      210      5.7 
 Service rig                                                                
  operating hours      70,493    72,766     (3.1) 211,595  217,368     (2.7)
 Service rig                                                                
  operating hour                                                            
  utilization              32%       37%               34%      38%         
 Service rig revenue                                                        
  per operating hour                                                        
  (Cdn$)                  863       769     12.2      844      794      6.3 
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         

 
Revenue from Completion and Production Services was up $1 million or
2% compared to the third quarter of 2012 due to expansion of services
in the United States partially offset by lower activity in Canada.
Adjusted EBITDA was $11 million lower than the third quarter of 2012
due to start-up costs associated with expanding activity in the
United States and lower activity in Canada and a loss recognized due
to a vendor's insolvency. The decline in industry activity was mainly
because customers reduced spending to work within their cash flow,
which reduced activity in the majority of our service lines.  
Well servicing activity in the third quarter was 3% lower than the
third quarter of 2012 primarily due to reduced activity in Canada
partially offset by our expansion in the United States. Approximately
84% of our third quarter Canadian service rig activity was oil
related. Our rental division activity in the third quarter was lower
than the third quarter of 2012 mainly due to the excess amount of
surface storage capacity in the Western Canadian Sedimentary Basin.  
Average service rig revenue per operating hour in the third quarter
was $863, or $94 higher than the third quarter of 2012. Increased
coil tubing operations in the current quarter, which operate at
higher rates, were partially offset by a reduction in the average
service rig rate due to industry competition with less activity. 
Operating costs as a percentage of revenue increased to 75% in the
third quarter of 2013, from 65% in the third quarter of 2012.
Operating costs per service rig operating hour were higher than in
the third quarter of 2012 because of higher repairs and maintenance,
fixed costs spread over a lower activity base and cost associated
with start-up of the new coil tubing operations. 
Depreciation in the third quarter of 2013 was 5% higher than the
third 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 $19 million for the third quarter of
2013, $1 million higher than the prior period.  
OTHER ITEMS  
Net financial charges for the quarter were $23 million, an increase
of $2 million from the third quarter of 2012. The increase was
primarily because of foreign exchange on U.S. dollar denominated
interest payments and lower interest income. 
We had a foreign exchange loss of $3 million during the third quarter
of 2013 due to the strengthening of the Canadian dollar versus the
U.S. dollar from June 30, 2013 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 compared
to an $8 million expense in the prior year period. Our effective tax
rate on earnings before income taxes for the first nine months of
2013 was 8%. 
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 in the
latter half of 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 manufacturing 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 September 30, 2013 our liquidity is supported by a cash balance
of $82 million, an undrawn balance on our senior secured credit
facility of approximately US$805 million, availability on our
operating facilities totaling approximately $40 million and a US$25
million secured facility for letters of credit.  
At September 30, 2013, including letters of credit, we had
approximately $1,341 million outstanding under our senior notes and
secured and unsecured credit facilities and $24 million in
unamortized debt issue costs. 


 
Amount              Availability        Used for            Maturity        
----------------------------------------------------------------------------
Senior facility                                                             
(secured)                                                                   
----------------------------------------------------------------------------
US$850 million      $15 million drawn,  General corporate   November 17,    
(extendible,        and US$29 million   purposes            2018            
revolving term      in outstanding                                          
credit facility     letters of credit                                       
with US$250 million                                                         
accordion feature)                                                          
----------------------------------------------------------------------------
Operating facilities (secured)                                              
----------------------------------------------------------------------------
$40 million         Undrawn, except $17 Letters of credit                   
                    million in          and general                         
                    outstanding letters corporate purposes                  
                    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,    
                                        general corporate   2020            
                                        purposes                            
----------------------------------------------------------------------------
US$400 million      Fully drawn         Capital             December 15,    
                                        expenditures and    2021            
                                        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 6.5%. 
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 table reconciles the weighted average shares
outstanding used in computing basic and diluted earnings per share: 


 
----------------------------------------------------------------------------
                                  Three months ended       Nine months ended
                                       September 30,           September 30,
                                    2013        2012        2013        2012
----------------------------------------------------------------------------
Weighted average shares                                                     
 outstanding - basic             276,794     276,318     276,638     276,244
Effect of warrants                10,325       8,897       9,823       9,655
Effect of share options and                                                 
 other equity compensation                                                  
 plans                             1,052         805         991       1,025
----------------------------------------------------------------------------
Weighted average shares                                                     
 outstanding - diluted           288,171     286,020     287,452     286,924
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
QUARTERLY FINANCIAL SUMMARY                                                 
                                                                            
(Stated in thousands of Canadian dollars, except per share amounts)         
                                                                            
                               2012                     2013                
----------------------------------------------------------------------------
Quarters ended             December 31     March 31     June 30 September 30
----------------------------------------------------------------------------
Revenue                        533,948      595,720     378,898      488,450
Adjusted EBITDA(1)             177,026      215,181      88,248      137,660
Net earnings (loss):          (166,339)      93,313         473       29,443
 Per basic share                 (0.42)        0.34        0.00         0.11
 Per diluted share               (0.42)        0.33        0.00         0.10
Funds provided by                                                           
 operations(1)                 142,576      144,682      33,791      127,684
Cash provided by operations    136,317       62,948     182,345       88,341
Dividends per share               0.05         0.05        0.05         0.05
----------------------------------------------------------------------------
                                                                            
                               2011                     2012                
----------------------------------------------------------------------------
Quarters ended              December 31    March 31     June 30 September 30
----------------------------------------------------------------------------
Revenue                         587,408     640,066     381,966      484,761
Adjusted EBITDA(1)              229,839     245,574      97,192      151,000
Net earnings:                    28,046     111,081      18,261       39,357
 Per basic share                   0.10        0.40        0.07         0.14
 Per diluted share                 0.10        0.39        0.06         0.14
Funds provided by                                                           
 operations(1)                  256,103     247,739      62,373      146,124
Cash provided by operations     218,857     162,440     275,346       61,183
----------------------------------------------------------------------------
(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: announced payment of a fourth
quarter dividend; that firm customer commitments to build three new
build Super Series rigs will result in term contracts; 2013 capital
expenditures are expected to decrease from $654 million to $609
million; Precision continues to exercise capital discipline by
linking near term capital expenditures with industry activity and as
such we are reducing our 2013 planned capital expenditures by $45
million; we are also encouraged by the prospect of several additional
new-build pad walking rigs for delivery to Canada over the next nine
months related to increased Canadian emphasis on natural gas exports
and natural gas liquids development; we deployed a rig to Mexico that
will begin drilling in the fourth quarter; the construction of our
two ST-3000 rigs for Kuwait is going as planned and we expect the
rigs to begin drilling in mid-2014; we currently have 11 rigs active
internationally and see opportunities to deploy existing and new
build rigs to our operating areas in Mexico and the Middle East;
today, we have a total of 197 Tier 1 drilling rigs and expect to have
202 by the end of 2013; we currently have 96 rigs active in Canada
and expect activity to increase moderately through the fourth
quarter; our active rig count internationally is expected to grow by
one rig before the end of the year as a rig is going to work in
Mexico during the fourth quarter; despite the active industry rig
count softness, demand for Tier 1 assets continues to be strong,
benefiting those drilling contractors with a high percentage of Tier
1 assets; we expect capital spending in 2013 to be approximately $609
million, of which $413 million was spent during the first nine months
of the year; the anticipated uses and timing of this capital
spending; Precision expects the appeal to the Ontario Court of Appeal
related to an assessment of Ontario income tax to be heard in the
latter half of 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 our 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;
viability of its vendors; 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)           
                                                                            
                                               September 30,   December 31, 
(Stated in thousands of Canadian dollars)               2013           2012 
----------------------------------------------------------------------------
                                                                            
ASSETS                                                                      
Current assets:                                                             
  Cash                                        $       81,815 $      152,768 
  Accounts receivable                                478,544        509,547 
  Income taxes recoverable                             6,046              - 
  Inventory                                           12,745         13,787 
----------------------------------------------------------------------------
Total current assets                                 579,150        676,102 
                                                                            
Non-current assets:                                                         
  Income tax recoverable                              64,579         64,579 
  Property, plant and equipment                    3,464,748      3,242,929 
  Intangibles                                          4,501          6,101 
  Goodwill                                           311,435        310,552 
----------------------------------------------------------------------------
Total non-current assets                           3,845,263      3,624,161 
----------------------------------------------------------------------------
Total assets                                  $    4,424,413 $    4,300,263 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
  Accounts payable and accrued liabilities    $      370,895 $      333,893 
  Income tax payable                                       -         64,188 
----------------------------------------------------------------------------
Total current liabilities                            370,895        398,081 
                                                                            
Non-current liabilities:                                                    
  Share based compensation                            12,347          8,676 
  Provisions and other                                19,560         17,818 
  Long-term debt                                   1,270,976      1,218,796 
  Deferred tax liabilities                           473,933        485,592 
----------------------------------------------------------------------------
Total non-current liabilities                      1,776,816      1,730,882 
                                                                            
Shareholders' equity:                                                       
  Shareholders' capital                            2,256,517      2,251,982 
  Contributed surplus                                 27,472         24,474 
  Retained earnings (deficit)                         37,113        (44,621)
  Accumulated other comprehensive loss               (44,400)       (60,535)
----------------------------------------------------------------------------
  Total shareholders' equity                       2,276,702      2,171,300 
----------------------------------------------------------------------------
Total liabilities and shareholders' equity    $    4,424,413 $    4,300,263 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)                     
                                                                            
                                Three months ended        Nine months ended 
                                      September 30,           September 30, 
(Stated in thousands of                                                     
 Canadian dollars, except                                                   
 per share amounts)                2013        2012        2013        2012 
----------------------------------------------------------------------------
                                                                            
Revenue                     $   488,450 $   484,761 $ 1,463,068 $ 1,506,793 
Expenses:                                                                   
  Operating                     312,550     300,396     913,157     916,495 
  General and administrative     38,240      33,365     108,822      96,532 
----------------------------------------------------------------------------
Earnings before income                                                      
 taxes, finance charges,                                                    
 foreign exchange and                                                       
 depreciation and                                                           
 amortization                   137,660     151,000     441,089     493,766 
Depreciation and                                                            
 amortization                    85,544      76,754     243,017     218,247 
----------------------------------------------------------------------------
Operating earnings               52,116      74,246     198,072     275,519 
Foreign exchange                  2,884       5,277      (5,425)      5,610 
Finance charges                  23,411      21,741      69,920      64,722 
----------------------------------------------------------------------------
Earnings before income taxes     25,821      47,228     133,577     205,187 
Income taxes:                                                               
  Current                         9,786      15,135      30,336      47,160 
  Deferred                      (13,408)     (7,264)    (19,988)    (10,672)
----------------------------------------------------------------------------
                                 (3,622)      7,871      10,348      36,488 
----------------------------------------------------------------------------
                                                                            
Net earnings                $    29,443 $    39,357 $   123,229 $   168,699 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings per share:                                                     
  Basic                     $      0.11 $      0.14 $      0.45 $      0.61 
  Diluted                   $      0.10 $      0.14 $      0.43 $      0.59 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)         
                                                                            
                                 Three months ended       Nine months ended 
                                      September 30,           September 30, 
(Stated in thousands of                                                     
 Canadian dollars)                 2013        2012        2013        2012 
----------------------------------------------------------------------------
Net earnings                $    29,443 $    39,357 $   123,229   $ 168,699 
Unrealized gain (loss) on                                                   
 translation of assets and                                                  
 liabilities of operations                                                  
 denominated in foreign                                                     
 currency                       (36,460)    (53,424)     51,415     (49,476)
Foreign exchange gain (loss)                                                
 on net investment hedge                                                    
 with U.S. denominated debt,                                                
 net of tax                      23,835      35,638     (35,280)     33,433 
----------------------------------------------------------------------------
Comprehensive income        $    16,818 $    21,571 $   139,364   $ 152,656 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)                    
 
                                Three months ended       Nine months ended  
                                      September 30,           September 30, 
(Stated in thousands of                                                     
 Canadian dollars)                 2013        2012        2013        2012 
----------------------------------------------------------------------------
Cash provided by (used in):                                                 
Operations:                                                                 
  Net earnings              $    29,443 $    39,357 $   123,229 $   168,699 
  Adjustments for:                                                          
    Long-term compensation                                                  
     plans                        5,720       3,830      16,477      15,057 
    Depreciation and                                                        
     amortization                85,544      76,754     243,017     218,247 
    Foreign exchange              4,035       5,886      (4,513)      6,092 
    Finance charges              23,411      21,741      69,920      64,722 
    Income taxes                 (3,622)      7,871      10,348      36,488 
    Other                        (1,571)       (320)       (409)      2,037 
    Income taxes paid            (7,951)     (2,741)   (102,675)     (7,315)
    Income taxes recovered          127         271       2,087         613 
    Interest paid                (7,600)     (7,181)    (51,880)    (49,964)
    Interest received               148         656         556       1,560 
----------------------------------------------------------------------------
Funds provided by operations    127,684     146,124     306,157     456,236 
Changes in non-cash working                                                 
 capital balances               (39,343)    (84,941)     27,477      42,733 
----------------------------------------------------------------------------
                                 88,341      61,183     333,634     498,969 
Investments:                                                                
  Business acquisitions, net                                                
   of cash acquired                   -           -           -         (25)
  Purchase of property,                                                     
   plant and equipment         (145,920)   (238,650)   (412,762)   (681,407)
  Proceeds on sale of                                                       
   property, plant and                                                      
   equipment                      3,335       5,011      10,021      13,820 
  Changes in non-cash                                                       
   working capital balances      11,476      11,295      16,443     (62,410)
----------------------------------------------------------------------------
                               (131,109)   (222,344)   (386,298)   (730,022)
Financing:                                                                  
  Dividends paid                (13,838)          -     (41,495)          - 
  Debt issue costs                 (883)     (2,855)       (883)     (2,855)
  Debt facility amendment                                                   
   costs                              -        (149)          -        (149)
  Increase in long-term debt     15,000           -      15,000           - 
  Issuance of common shares                                                 
   on the exercise of                                                       
   options                        1,434         185       2,154       1,490 
----------------------------------------------------------------------------
                                  1,713      (2,819)    (25,224)     (1,514)
----------------------------------------------------------------------------
                                                                            
Effect of exchange rate                                                     
 changes on cash and cash                                                   
 equivalents                     (4,524)     (7,523)      6,935      (8,068)
----------------------------------------------------------------------------
Decrease in cash and cash                                                   
 equivalents                    (45,579)   (171,503)    (70,953)   (240,635)
Cash and cash equivalents,                                                  
 beginning of period            127,394     398,344     152,768     467,476 
----------------------------------------------------------------------------
Cash and cash equivalents,                                                  
 end of period              $    81,815 $   226,841 $    81,815 $   226,841 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)            
                                                                            
(Stated in thousands of Canadian dollars)                                   
----------------------------------------------------------------------------
                                          Accumulated                       
                                                other  Retained             
              Shareholders' Contributed comprehensive  earnings       Total 
                    capital     surplus          loss  (deficit)     equity 
----------------------------------------------------------------------------
Balance at                                                                  
 January 1,                                                                 
 2013           $ 2,251,982    $ 24,474     $ (60,535)$ (44,621)$ 2,171,300 
Net earnings                                                                
 for the                                                                    
 period                   -           -             -   123,229     123,229 
Other                                                                       
 comprehensive                                                              
 income for                                                                 
 the period               -           -        16,135         -      16,135 
Dividends                 -           -             -   (41,495)    (41,495)
Share options                                                               
 exercised            
3,297      (1,143)            -         -       2,154 
Issued on                                                                   
 redemption of                                                              
 non-                                                                       
 management                                                                 
 directors                                                                  
 DSUs                 1,238      (1,031)            -         -         207 
Share based                                                                 
 compensation                                                               
 expense                  -       5,172             -         -       5,172 
----------------------------------------------------------------------------
Balance at                                                                  
 September 30,                                                              
 2013           $ 2,256,517    $ 27,472     $ (44,400) $ 37,113 $ 2,276,702 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(Stated in thousands of Canadian dollars)                                   
----------------------------------------------------------------------------
                                          Accumulated                       
                                                other  Retained             
              Shareholders' Contributed comprehensive  earnings       Total 
                    capital     surplus          loss  (deficit)     equity 
----------------------------------------------------------------------------
Balance at                                                                  
 January 1,                                                                 
 2012           $ 2,248,217    $ 18,396     $ (50,862)$ (83,160)$ 2,132,591 
Net earnings                                                                
 for the                                                                    
 period                   -           -             -   168,699     168,699 
Other                                                                       
 comprehensive                                                              
 loss for the                                                               
 period                   -           -       (16,043)        -     (16,043)
Share options                                                               
 exercised            2,372        (882)            -         -       1,490 
Issued on                                                                   
 redemption of                                                              
 non-                                                                       
 management                                                                 
 directors                                                                  
 DSUs                   221        (221)            -         -           - 
Issued on                                                                   
 waiver of                                                                  
 right to                                                                   
 dissent by                                                                 
 dissenting                                                                 
 unitholder               9          (3)            -         -           6 
Share based                                                                 
 compensation                                                               
 expense                  -       6,178             -         -       6,178 
----------------------------------------------------------------------------
Balance at                                                                  
 September 30,                                                              
 2012           $ 2,250,819    $ 23,468     $ (66,905) $ 85,539 $ 2,292,921 
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THIRD 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, October 24, 2013. 
The conference call dial in numbers are 1-866-226-1793 or
416-340-2216. 
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 October
31, 2013 by dialing 1-800-408-3053 or 905-694-9451, passcode 5078039. 
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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