CALGARY, Alberta, May 14, 2020 — Precision Drilling Corporation (“Precision”) announces that all resolutions considered by shareholders at its 2020 Annual and Special Meeting of Shareholders, held on May 14, 2020 (the “Annual Meeting”), have been approved.

Shareholders approved the election of 8 board members (7 of whom are independent), with shares represented at the meeting voting in favour of individual directors as follows:

Nominee	# Votes For	% Votes For	# Votes Withheld	% Votes Withheld
Michael R. Culbert	138,278,231	97.99	2,838,675	2.01
William T. Donovan	133,209,455	94.40	7,907,451	5.60
Brian J. Gibson	134,678,627	95.44	6,438,279	4.56
Steven W. Krablin	136,294,758	96.58	4,822,148	3.42
Susan M. MacKenzie	137,452,424	97.40	3,664,482	2.60
Kevin O. Meyers	136,391,981	96.65	4,724,925	3.35
David W. Williams	138,257,892	97.97	2,859,014	2.03
Kevin A. Neveu	132,971,418	94.23	8,145,488	5.77

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 Super Series drilling rigs supported by an industry leading technology platform that offers innovative drilling solutions to deliver efficient, predictable and repeatable results through service differentiation. Precision also offers well service rigs, camps, rental equipment and directional drilling services all 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”.

For further information, please contact:

Carey Ford, Senior Vice President & Chief Financial Officer
713.435.6100

Dustin Honing, Manager, Investor Relations & Corporate Development
403.716.4500

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

CALGARY, Alberta, May 04, 2020 — Precision Drilling Corporation (“Precision”) reminds shareholders that it is holding its 2020 Annual and Special Meeting of Shareholders (“Annual Meeting”) on Thursday, May 14, 2020 at 10:00 a.m. MT. As previously announced, due to the novel coronavirus (“COVID-19”) and to mitigate against any health emergency risks, the Annual Meeting will be held in a virtual-only meeting format. The virtual-only meeting format will provide all shareholders an equal opportunity to participate in the Annual Meeting regardless of their geographic location or concerns related to COVID-19.

The Annual Meeting can be accessed by logging in online at https://web.lumiagm.com/227450298. Registered shareholders and duly appointed proxyholders who participate in the Annual Meeting online will be able to listen to the Annual Meeting, ask questions and vote, all in real time, provided that they are connected to the internet. In all cases, shareholders must follow the instructions set out in their applicable proxy or voting instruction forms. Shareholders can vote by proxy in advance of the Annual Meeting as in prior years. Guests can listen to the Annual Meeting but will not be able to communicate or vote.

Additional information regarding shareholder participation in the Annual Meeting (including voting instructions) may be found in Precision’s Management Information Circular, dated April 1, 2020, which is available on our website (www.precisiondrilling.com). Additionally, detailed instructions for shareholders to participate in the meeting are provided in Precision’s Virtual AGM User Guide available on Precision’s website by selecting “Investor Relations”, then “Webcasts & Presentations”.

If you have questions regarding your ability to participate or vote at the Annual Meeting, please contact Precision’s registrar and transfer agent, Computershare, at 1-800-564-6253.

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 Super Series drilling rigs supported by an industry leading technology platform that offers innovative drilling solutions to deliver efficient, predictable and repeatable results through service differentiation. Precision also offers well service rigs, camps, rental equipment and directional drilling services all 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”.

For further information, please contact:

Carey Ford, Senior Vice President & Chief Financial Officer
713.435.6100

Dustin Honing, Manager, Investor Relations & Corporate Development
403.716.4500

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

CALGARY, Alberta, April 30, 2020 — This news release contains “forward-looking information and statements” within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in this news release. This news release contains references to Adjusted EBITDA, Covenant EBITDA, Operating Earnings (Loss), Funds Provided by (Used in) Operations and Working Capital. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies, see “Non-GAAP Measures” later in this news release.

Precision Drilling announces 2020 first quarter financial results:

• Revenue of $379 million was a decrease of 13% compared with the first quarter of 2019.
• Net loss of $5 million or negative $0.02 per diluted share compared to net earnings of $25 million or $0.08 per diluted share in the comparable 2019 period.
• Earnings before income taxes, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, impairment reversal, gain on asset disposals and depreciation and amortization (Adjusted EBITDA, see “NON-GAAP MEASURES”) of $102 million was 6% lower than the first quarter of 2019.
• Generated cash and funds provided by operations (see “NON-GAAP MEASURES”) of $75 million and $81 million, respectively.
• First quarter ending cash balance was $97 million, an increase of $22 million from December 31, 2019.
• First quarter capital expenditures were $12 million.
• Reduced our unsecured senior notes balance by $41 million and repurchased and cancelled 3 million common shares for $5 million.
• Recognized restructuring charges of $10 million, comprised of $9 million of severance and $1 million of costs associated with the shutdown of our U.S. directional drilling operations.
• To secure our liquidity position, on April 9, 2020, we amended our Senior Credit Facility to provide temporary covenant relief through March 31, 2022.

Precision’s President and CEO Kevin Neveu stated.

“The COVID-19 virus outbreak and associated mitigation efforts, including travel and economic restrictions, has led to a severe destruction in global oil demand. This has been compounded by an oil price war, led by major oil producing countries, resulting in collapsed commodity prices and the deepest downturn the oil and gas services industry has ever experienced. While Precision’s first quarter results were only nominally impacted by the commodity price collapse, we expect a significant and sustained reduction in customer demand for oil and gas services well into next year.”

“Precision first responded by implementing comprehensive safety protocols to protect the health and welfare of our people and stakeholders from the risks of COVID-19. As a result of acting quickly and aggressively, Precision has not suffered a shut down, interruption in services, or any capability reduction due to the pandemic. We previously announced a series of steps to substantially reduce our fixed costs and capital spending plans, while continuing to support our High Performance, High Value business model. We believe these expenditure reductions and other cash preservation measures will reduce our 2020 annualized cash outflow by more than $100 million, continue to generate substantial savings in 2021 and improve our existing liquidity position. Furthermore, we worked with our banking group to amend the covenants on our revolving credit facility to maintain revolver access during these uncertain times with relief through the first quarter of 2022. We will continue to prioritize Precision’s cash liquidity during this downturn and will actively pursue any additional cash generating opportunities within the organization.”

“Despite the weakening North American industry rig activity during the first quarter, Precision generated better than expected financial results with Adjusted EBITDA of $102 million and cash provided by operations of $75 million. We executed on our deleveraging strategic priority, retiring $41 million of debt, while increasing our cash balance by $22 million to $97 million. Combined with our undrawn Senior Credit Facility, we exited the quarter with over $800 million in available liquidity. We have positioned our business to operate through lower activity periods and believe our cash flow generation profile will allow us to maintain strong liquidity, manage our debt maturities and reduce financial leverage over time.”

“Our other strategic priorities of demonstrating operational excellence and leveraging our Alpha technology platform as a differentiator remain critical in today’s operating environment. We believe our strong North American market share achieved during the first quarter and sustained through the current downturn demonstrates Precision’s competitive positioning and operational excellence.”

“Once rig activity stabilizes, we expect our customers’ attention will shift back to capital efficiency and rig performance. We expect Precision’s modern Super Triple rig fleet and industry leading technology offering will continue to position us well to reliably meet these requirements. Precision’s AlphaAutomation continues to perform very well and is generating commercial returns. During the quarter, we installed six systems bringing our installed base up to 40 rigs, including our two training rigs. We recently partnered with a large U.S. customer to launch AlphaAnalytics on their full fleet of Precision rigs. During the first quarter an IOC standardized all U.S. Precision rigs to have AlphaAutomation and will be utilizing several apps on each rig. We believe our High Performance, High Value service offering will continue to appeal to customers requiring predictable and repeatable results.”

“We are encouraged by the Canadian federal government’s $1.7 billion well abandonment and site rehabilitation program, which we anticipate will be largely allocated to well service providers. We believe that we are very well positioned to capture these opportunities.”

“The voracity of this downturn is felt most by the many thousands of dedicated men and women working in this industry and especially those who through no fault of their own are now without jobs. It is my, and the Precision organization’s hope, that as our industry recovers, we can attract those people back. We have faced significant challenges to start 2020 and Precision’s people have responded exceptionally well by executing our enhanced safety protocols and cost reduction initiatives while ensuring we continue to support our customers’ needs. We are thankful for their continued strong performance despite the ongoing challenges of this pandemic event” concluded Mr. Neveu.

IMPACT OF COVID-19

In March 2020, the coronavirus (“COVID-19”) outbreak was declared a pandemic by the World Health Organization (WHO). Governments worldwide, including those countries in which Precision operates, have enacted emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused a material disruption to businesses globally resulting in an economic slowdown and decreased demand for oil. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions; however, the success of these interventions is not yet determinable. In response to the dramatic reduction in demand, governments of oil-producing nations and national oil companies are working together to limit supply, but to date in 2020 there has been a significant decline in the global price of oil. The situation remains dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on us is not known at this time.

SELECT FINANCIAL AND OPERATING INFORMATION

Financial Highlights

	Three months ended March 31,
(Stated in thousands of Canadian dollars, except per share amounts)	2020				2019				% Change
Revenue		379,484				434,043				(12.6	)
Adjusted EBITDA(1)		101,904				107,967				(5.6	)
Operating earnings(1)		22,599				62,074				(63.6	)
Net earnings (loss)		(5,277	)			25,014				(121.1	)
Cash provided by operations		74,953				40,587				84.7
Funds provided by operations(1)		81,317				95,993				(15.3	)
Capital spending:
Expansion		145				62,443				(99.8	)
Upgrade		1,508				3,674				(59.0	)
Maintenance and infrastructure		9,832				4,845				102.9
Intangibles		57				438				(87.0	)
Proceeds on sale		(5,690	)			(57,877	)			(90.2	)
Net capital spending		5,852				13,523				(56.7	)
Net earnings (loss) per share:
Basic		(0.02	)			0.09				(122.2	)
Diluted		(0.02	)			0.08				(125.0	)

(1) See “NON-GAAP MEASURES”.

Operating Highlights

	Three months ended March 31,
	2020				2019				% Change
Contract drilling rig fleet		227				232				(2.2	)
Drilling rig utilization days:
U.S.		4,984				7,123				(30.0	)
Canada		5,769				4,344				32.8
International		728				720				1.1
Revenue per utilization day:
U.S.(1) (US$)		23,878				23,202				2.9
Canada(2) (Cdn$)		21,444				22,977				(6.7	)
International (US$)		54,294				49,940				8.7
Operating cost per utilization day:
U.S. (US$)		14,534				14,368				1.2
Canada (Cdn$)		14,239				14,455				(1.5	)
Service rig fleet		123				135				(8.9	)
Service rig operating hours		34,365				42,898				(19.9	)

(1) Includes revenue from idle but contracted rig days.
(2) 2019 period includes lump sum revenue from contract shortfall payments.

Financial Position

(Stated in thousands of Canadian dollars, except ratios)	March 31, 2020				December 31, 2019
Working capital(1)		226,947				201,696
Cash		97,002				74,701
Long-term debt		1,504,969				1,427,181
Total long-term financial liabilities		1,574,439				1,500,950
Total assets		3,372,574				3,269,840
Long-term debt to long-term debt plus equity ratio		0.49				0.48

(1) See “NON-GAAP MEASURES”.

Summary for the three months ended March 31, 2020:

• Revenue this quarter was $379 million which is 13% lower than the first quarter of 2019. Our decreased revenue was primarily the result of lower activity in our U.S. drilling and Canadian completion and production services lines. Compared with the first quarter of 2019, our activity for the quarter, as measured by drilling rig utilization days, decreased by 30% in the U.S. while Canada increased by 33% and international activity remained consistent.
• Adjusted EBITDA (see “NON-GAAP MEASURES”) for the quarter was $102 million, a decrease of $6 million from the previous year. Our Adjusted EBITDA as a percentage of revenue was 27% this quarter, compared with 25% in the comparative quarter. Adjusted EBITDA in the quarter was negatively impacted by higher restructuring charges partially offset by share-based compensation recoveries. See discussion on share-based incentive compensation under “Other Items” later in this release for additional details.
• Operating earnings (see “NON-GAAP MEASURES”) this quarter were $23 million compared with $62 million in the first quarter of 2019. Our operating earnings in the prior year quarter were positively impacted by the US$24 million gain on asset disposal and US$4 million impairment reversal from the disposition of our Mexico drilling equipment.
• General and administrative expenses this quarter were $20 million, $12 million lower than in 2019. Our lower general and administrative costs in 2020 were primarily due to share-based compensation recoveries and lower overhead costs as we continued to align our cost structure to reflect reduced global activity.
• Restructuring charges were $10 million as compared to $6 million in 2019. Our restructuring charges were comprised of severance costs of $9 million and $1 million of other costs associated with the shutdown of our U.S. directional drilling operations.
• Net finance charges were $28 million, a decrease of $4 million compared with the first quarter of 2019, primarily due to reduced interest expense related to retired debt, offset by the impact of the weakening of the Canadian dollar on our U.S. dollar denominated interest.
• Revenue per utilization day in the U.S. increased in the first quarter of 2020 to US$23,878 from US$23,202 in the prior year quarter. The increase was the result of higher revenues from idle but contracted rigs, AlphaAutomation and turnkey drilling. Operating costs on a per day basis increased to US$14,534 in the first quarter of 2020 compared with US$14,368 in 2019. The increase was mainly due to fixed operating overheads spread over fewer drilling rig activity days. On a sequential basis, revenue per utilization day, excluding revenue from turnkey and idle but contracted rigs, decreased by US$355 due to lower fleet average day rates, while operating costs per day increased by US$108 due to fixed operating overheads spread over fewer drilling rig activity days.
• In Canada, average revenue per utilization day for contract drilling rigs was $21,444 compared with $22,977 in the first quarter of 2019. The lower average revenue per utilization day in the first quarter of 2020 was primarily because of lower spot market day rates and fewer shortfall payments received. During the quarter, we did not receive any shortfall revenue payments compared with $3 million in the prior year comparative period. Average operating costs per utilization day for drilling rigs in Canada decreased to $14,239 compared with the prior year quarter of $14,455. The decrease was mainly caused by smaller crew formations from our rig mix and overhead costs spread over a higher number of drilling rig utilization days.
• We realized revenue from international contract drilling of US$40 million in the first quarter of 2020, as compared to US$36 million in the prior year period. Average revenue per utilization day in our international contract drilling business increased 9% to US$54,294 from the comparable prior year quarter, primarily due to rate increases from the renewal and extension of drilling contracts.
• Cash and funds provided by operations (see “NON-GAAP MEASURES”) in the first quarter of 2020 were $75 million and $81 million, respectively, compared to $41 million and $96 million in the prior year comparative.
• Capital expenditures were $12 million in the first quarter, a decrease of $60 million over the same period in 2019. Capital spending for the quarter included $2 million for upgrade and expansion capital and $10 million for the maintenance of existing assets, infrastructure spending and intangibles.

STRATEGY

Precision’s strategic priorities for 2020 are as follows:

1. Generate strong free cash flow and reduce debt by $100 million to $150 million in 2020 – In the first quarter of 2020, Precision generated $75 million of cash provided by operations (see “NON-GAAP MEASURES”) and $6 million of cash proceeds from the divestiture of non-core assets. Using cash on hand and free cash flow generated in 2020, we reduced our debt balance by $41 million through a combination of redemptions and open market repurchases of our unsecured senior notes. We exited the quarter with a cash balance of $97 million, compared to $75 million at December 31, 2019. We will place a high priority on maintaining a strong liquidity position and further reduce debt levels when visibility improves or cash on hand exceeds our expectations.
2. Demonstrate operational excellence in all aspects of our business – In Canada, we continued at record level market share and reported operating margins (revenue less operating costs) of $7,205 per utilization day. In the U.S., we maintained strong activity with a market share of over 7% and reported operating margins of US$9,344 per utilization day. Internationally, we maintained stable activity, averaging eight active drilling rigs, and recorded average day rates of US$54,294.
3. Leverage our Alpha Technology platform as a competitive differentiator and source of financial returns – In the first quarter of 2020, we had 38 field-deployed rigs equipped with our AlphaAutomation platform and drilled approximately 200 wells. We have partnered with a major U.S. customer to trial AlphaAnalytics on all their Precision rigs and have a large international oil company (IOC) customer in the U.S. standardizing AlphaAutomation and several AlphaApps on all their Precision rigs. Since 2017, we have drilled over 1,200 wells with AlphaAutomation and currently have 15 AlphaApps either deployed or in development, further allowing us to differentiate Precision’s High Performance, High Value offering.

OUTLOOK

The energy industry faces a challenging outlook as the abrupt demand destruction caused by the COVID-19 pandemic has resulted in significant global oil supply imbalances and a collapse in near-term crude oil prices. The oil market volatility has created uncertainty for our customers and they have responded by announcing material reductions to capital spending, which has begun a rapid reduction in global oilfield service activity levels. In a reduced-activity environment, we anticipate our customers will further stress operational efficiencies, accelerating the industry transition towards service providers with the highest performing assets and competitive digital technology offerings. Pursuit of predictable and repeatable results will further drive field application of drilling automation processes to create additional cost efficiencies and performance value for customers.

Precision continues to closely monitor announcements of available government financial support and economic stimulus programs. We are encouraged by the Canadian federal government’s announced $1.7 billion well site abandonment and rehabilitation program funding, which will support industry activity levels and provide thousands of jobs throughout western Canada. Precision believes our well servicing business is well positioned to capture coming opportunities as a result of our scale, operational performance and strong safety record.

Contracts

Year to date in 2020 we have entered into nine term contracts. The following chart outlines the average number of drilling rigs under contract by quarter as of April 29, 2020. For those quarters ending after March 31, 2020, this chart represents the minimum number of long-term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional contracts and certain customers elect to pay contract cancellation fees.

		Average for the quarter ended 2019																Average for the quarter ended 2020
		Mar. 31				June 30				Sept. 30				Dec. 31				Mar. 31				June 30				Sept. 30				Dec. 31
Average rigs under term contract as of April 29, 2020:
U.S.			56				52				49				41				41				33				25				21
Canada			8				5				5				5				5				5				4				4
International			8				8				9				9				8				8				6				6
Total			72				65				63				55				54				46				35				31

The following chart outlines the average number of drilling rigs that we had under contract for 2019 and the average number of rigs we have under contract as of April 29, 2020.

		Average for the year ended
		2019				2020				2021
Average rigs under term contract as of April 29, 2020:
U.S.			49				30				6
Canada			6				5				1
International			9				7				6
Total			64				42				13

In Canada, term contracted rigs normally generate 250 utilization days per year because of the seasonal nature of well site access. In most regions in the U.S. and internationally, term contracts normally generate 365 utilization days per year.

Drilling Activity

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

	Average for the quarter ended 2019																2020
	Mar. 31				June 30				Sept. 30				Dec. 31				Mar. 31
Average Precision active rig count:
U.S.		79				77				72				63				55
Canada		48				27				42				43				63
International		8				8				9				9				8
Total		135				112				123				115				126

According to industry sources, as of April 29, 2020, the U.S. active land drilling rig count is down 54% from the same point last year and the Canadian active land drilling rig count is down 60%. To date in 2020, approximately 85% of the U.S. industry’s active rigs and 61% of the Canadian industry’s active rigs were drilling for oil targets, compared with 81% for the U.S. and 59% for Canada at the same time last year.

Capital Spending

Capital spending in 2020 is expected to be $48 million and includes $36 million for sustaining, infrastructure and intangibles and $12 million for upgrade and expansion. We expect that the $48 million will be split $43 million in the Contract Drilling Services segment, $4 million in the Completion and Production Services segment and $1 million to the Corporate segment.

SEGMENTED FINANCIAL RESULTS

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

	Three months ended March 31,
(Stated in thousands of Canadian dollars)	2020				2019				% Change
Revenue:
Contract Drilling Services		346,549				379,264				(8.6	)
Completion and Production Services		33,663				55,819				(39.7	)
Inter-segment eliminations		(728	)			(1,040	)			(30.0	)
		379,484				434,043				(12.6	)
Adjusted EBITDA:(1)
Contract Drilling Services		110,733				118,455				(6.5	)
Completion and Production Services		3,235				10,518				(69.2	)
Corporate and Other		(12,064	)			(21,006	)			(42.6	)
		101,904				107,967				(5.6	)

(1) See “NON-GAAP MEASURES”.

SEGMENT REVIEW OF CONTRACT DRILLING SERVICES

	Three months ended March 31,
(Stated in thousands of Canadian dollars, except where noted)	2020				2019				% Change
Revenue		346,549				379,264				(8.6	)
Expenses:
Operating		222,329				246,515				(9.8	)
General and administrative		8,770				11,248				(22.0	)
Restructuring		4,717				3,046				54.9
Adjusted EBITDA(1)		110,733				118,455				(6.5	)
Depreciation		75,724				77,999				(2.9	)
Gain on asset disposals		(2,842	)			(35,001	)			(91.9	)
Impairment reversal		–				(5,810	)			(100.0	)
Operating earnings(1)		37,851				81,267				(53.4	)
Operating earnings(1) as a percentage of revenue		10.9	%			21.4	%

(1) See “NON-GAAP MEASURES”.

United States onshore drilling statistics:(1)	2020								2019
	Precision				Industry(2)				Precision				Industry(2)
Average number of active land rigs for quarters ended:
March 31		55				764				79				1,023

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

Canadian onshore drilling statistics:(1)	2020								2019
	Precision				Industry(2)				Precision				Industry(2)
Average number of active land rigs for quarters ended:
March 31		63				196				48				183

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

SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES

	Three months ended March 31,
(Stated in thousands of Canadian dollars, except where noted)	2020				2019				% Change
Revenue		33,663				55,819				(39.7	)
Expenses:
Operating		26,626				43,133				(38.3	)
General and administrative		1,479				1,711				(13.6	)
Restructuring		2,323				457				408.3
Adjusted EBITDA(1)		3,235				10,518				(69.2	)
Depreciation		4,283				4,949				(13.5	)
Gain on asset disposals		(739	)			(56	)			1,219.6
Operating earnings (loss)(1)		(309	)			5,625				(105.5	)
Operating earnings (loss)(1) as a percentage of revenue		(0.9	)%			10.1	%
Well servicing statistics:
Number of service rigs (end of period)		123				135				(8.9	)
Service rig operating hours		34,365				42,898				(19.9	)
Service rig operating hour utilization		31	%			35	%

(1) See “NON-GAAP MEASURES”.

SEGMENT REVIEW OF CORPORATE AND OTHER

Our Corporate and Other segment provides support functions to our operating segments. The Corporate and Other segment had negative Adjusted EBITDA (see “NON-GAAP MEASURES”) of $12 million, a $9 million decrease compared with the first quarter of 2019 primarily due to share-based compensation recoveries. Consistent with 2019, we incurred $3 million of restructuring charges as we continued to align our cost structure.

OTHER ITEMS

Share-based Incentive Compensation Plans

We have several cash and equity-settled share-based incentive plans for non-management directors, officers, and other eligible employees. Our accounting policies for each share-based incentive plan can be found in our 2019 Annual Report.

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

	Three months ended March 31,
(Stated in thousands of Canadian dollars)	2020				2019
Cash settled share-based incentive plans		(6,393	)			5,804
Equity settled share-based incentive plans:
Executive PSU		2,735				2,372
Stock option plan		386				731
Total share-based incentive compensation plan expense		(3,272	)			8,907
Allocated:
Operating		(973	)			2,429
General and Administrative		(2,299	)			6,478
		(3,272	)			8,907

Cash settled shared-based compensation expense decreased by $12 million in the current quarter primarily due to our decreasing share price. Our total equity settled share-based compensation expense for the first quarter of 2020 was $3 million, consistent with the prior year period.

Finance Charges

Net finance charges were $28 million, a decrease of $4 million compared with the first quarter of 2019, primarily due to reduced interest expense related to retired debt, offset by the impact of the weakening of the Canadian dollar on our U.S. dollar denominated interest.

Interest charges on our U.S. denominated long-term debt in the first quarter of 2020 were US$19 million ($26 million) as compared with US$22 million ($29 million) in 2019.

Income Tax

Income tax recovery for the quarter was $2 million compared with an expense of $8 million in the same quarter in 2019. The higher tax expense in the first quarter of 2019 was the result of higher before income tax earnings primarily from the gain on disposition of our Mexico-based rigs.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Amount		Availability		Used for		Maturity
Senior credit facility (secured)
US$500 million (extendible, revolving term credit facility with US$300 million accordion feature)		Undrawn, except US$38 million in outstanding letters of credit		General corporate purposes		November 21, 2023
Operating facilities (secured)
$40 million		Undrawn, except $10 million in outstanding letters of credit		Letters of credit and general corporate purposes
US$15 million		Undrawn		Short term working capital requirements
Demand letter of credit facility (secured)
US$30 million		Undrawn, except US$2 million in outstanding letters of credit		Letters of credit
Unsecured senior notes (unsecured)
US$66 million – 6.5%		Fully drawn		Capital expenditures and general corporate purposes		December 15, 2021
US$345 million – 7.75%		Fully drawn		Debt redemption and repurchases		December 15, 2023
US$303 million – 5.25%		Fully drawn		Capital expenditures and general corporate purposes		November 15, 2024
US$368 million – 7.125%		Fully drawn		Debt redemption and repurchases		January 15, 2026

As at March 31, 2020, we had US$1,081 million ($1,522 million) outstanding under our unsecured senior notes as compared with US$1,113 million ($1,445 million) at December 31, 2019. During the first quarter of 2020, Precision redeemed US$25 million principal amount of its 6.50% unsecured senior notes due 2021 and repurchased and cancelled US$2 million of the 7.125% unsecured senior notes due 2026 and US$5 million of the 5.25% unsecured senior notes due 2024. The weakening of the Canadian dollar resulted in $118 million of additional stated debt such that at March 31, 2020, we had $1,522 million of outstanding unsecured senior notes and $17 million in unamortized debt issue costs.

The current blended cash interest cost of our debt is approximately 6.8%.

Covenants

Following is a listing of our applicable Senior Credit Facility financial covenants and the calculations as at March 31, 2020:

	Covenant		At March 31, 2020
Senior Credit Facility
Consolidated senior debt to consolidated covenant EBITDA(1)	< 2.50			0.00
Consolidated covenant EBITDA to consolidated interest expense(1)	> 2.50			3.43

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

At March 31, 2020, we were in compliance with the covenants of our Senior Credit Facility.

Senior Credit Facility

On April 9, 2020 we agreed with the lenders of our Senior Credit Facility to reduce the consolidated Covenant EBITDA to consolidated interest expense coverage ratio for the most recent four consecutive quarters from the greater than or equal to 2.5:1 to 2.0:1 for the period ending September 30, 2020, 1.75:1 for the period ending December 31, 2020, 1.25:1 for the periods ending March 31, June 30 and September 30, 2021, 1.75:1, for the period ending December 31, 2021, 2.0:1 for the period ending March 31, 2022 and 2.5:1 for periods ending thereafter.

During the covenant relief period, Precision’s distributions in the form of dividends, distributions and share repurchases are restricted to a maximum of US$15 million in 2020 and US$25 million in each of 2021 and 2022, subject to a pro forma senior net leverage ratio (as defined in the credit agreement) of less than or equal to 1.75:1.

In addition, during 2021, the North American and acceptable secured foreign assets must directly account for at least 65% of consolidated Covenant EBITDA calculated quarterly on a rolling twelve-month basis, increasing to 70% thereafter. Precision also has the option to voluntarily terminate the covenant relief period prior to its March 31, 2022 end date.

The Senior Credit Facility limits the redemption and repurchase of junior debt subject to a pro forma senior net leverage covenant test of less than or equal to 1.75:1.

Impact of foreign exchange rates

As summarized below, for the three months ended March 31, 2020, the Canadian dollar weakened by 1% from the comparable 2019 period and 8% from December 31, 2019. The weakening resulted in higher translated U.S. denominated revenue and costs during the quarter and net monetary assets at March 31, 2020.

	Three months ended March 31,								As at December 31,
	2020				2019				2019
Canada-U.S. foreign exchange rates
Average		1.34				1.33				–
Closing		1.41				1.33				1.30

Average shares outstanding

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

	Three months ended March 31,
(Stated in thousands)	2020				2019
Weighted average shares outstanding – basic		275,427				293,783
Effect of stock options and other equity compensation plans		–				6,419
Weighted average shares outstanding – diluted		275,427				300,202

NON-GAAP MEASURES

In this release we reference non-GAAP (Generally Accepted Accounting Principles) measures. Adjusted EBITDA, Covenant EBITDA, Operating Earnings (Loss), Funds Provided by (Used in) Operations and Working Capital are terms used by us to assess performance as we believe they provide useful supplemental information to investors. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies.

Adjusted EBITDA

We believe that Adjusted EBITDA (earnings before income taxes, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, impairment reversal, gain on assets disposals and depreciation and amortization), as reported in the Interim Consolidated Statement of Net Earnings (Loss), is a useful measure, because it gives an indication of the results from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.

Covenant EBITDA

Covenant EBITDA, as defined in our Senior Credit Facility agreement, is used in determining the Corporation’s compliance with its covenants. Covenant EBITDA differs from Adjusted EBITDA by the exclusion of bad debt expense, restructuring costs, certain foreign exchange amounts and the deduction of cash lease payments incurred after December 31, 2018.

Operating Earnings (Loss)

We believe that operating earnings (loss) 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. Operating earnings is calculated as follows:

	Three months ended March 31,
(Stated in thousands of Canadian dollars)	2020				2019
Revenue		379,484				434,043
Expenses:
Operating		248,227				288,608
General and administrative		19,535				31,030
Restructuring		9,818				6,438
Depreciation and amortization		82,914				86,753
Gain on asset disposals		(3,609	)			(35,050	)
Impairment reversal		–				(5,810	)
Operating earnings		22,599				62,074
Foreign exchange		2,691				(2,123	)
Finance charges		27,580				31,303
Gain on repurchase of unsecured senior notes		(850	)			(313	)
Earnings (loss) before income taxes		(6,822	)			33,207

Funds Provided By (Used In) Operations

We believe that funds provided by (used in) 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 generate prior to consideration of working capital, which is primarily made up of highly liquid balances.

Working Capital

We define working capital as current assets less current liabilities as reported on the Interim Consolidated Statement of Financial Position.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

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

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

• our strategic priorities for 2020;
• our capital expenditure plans for 2020;
• anticipated activity levels in 2020 and our scheduled infrastructure projects;
• anticipated demand for Tier 1 rigs;
• the average number of term contracts in place for 2020 and 2021;
• anticipated cash outflows, savings and liquidity; and
• our future debt reduction plans.

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

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

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

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

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2019, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Stated in thousands of Canadian dollars)		March 31, 2020				December 31, 2019
ASSETS
Current assets:
Cash		$	97,002			$	74,701
Accounts receivable			314,363				310,204
Inventory			31,754				31,718
Income tax recoverable			1,238				1,142
Total current assets			444,357				417,765
Non-current assets:
Deferred tax assets			4,260				4,724
Right of use assets			68,266				66,142
Property, plant and equipment			2,825,129				2,749,463
Intangibles			30,562				31,746
Total non-current assets			2,928,217				2,852,075
Total assets		$	3,372,574			$	3,269,840
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	199,137			$	199,478
Income taxes payable			5,081				4,142
Current portion of lease obligation			13,192				12,449
Total current liabilities			217,410				216,069
Non-current liabilities:
Share-based compensation			1,769				8,830
Provisions and other			10,862				9,959
Lease obligation			56,839				54,980
Long-term debt			1,504,969				1,427,181
Deferred tax liabilities			23,339				25,389
Total non-current liabilities			1,597,778				1,526,339
Shareholders’ equity:
Shareholders’ capital			2,291,134				2,296,378
Contributed surplus			67,878				66,255
Deficit			(974,733	)			(969,456	)
Accumulated other comprehensive income			173,107				134,255
Total shareholders’ equity			1,557,386				1,527,432
Total liabilities and shareholders’ equity		$	3,372,574			$	3,269,840

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

		Three Months Ended March 31,
(Stated in thousands of Canadian dollars, except per share amounts)		2020				2019
Revenue		$	379,484			$	434,043
Expenses:
Operating			248,227				288,608
General and administrative			19,535				31,030
Restructuring			9,818				6,438
Earnings before income taxes, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, impairment reversal, gain on asset disposals and depreciation and amortization			101,904				107,967
Depreciation and amortization			82,914				86,753
Gain on asset disposals			(3,609	)			(35,050	)
Impairment reversal			–				(5,810	)
Foreign exchange			2,691				(2,123	)
Finance charges			27,580				31,303
Gain on repurchase of unsecured senior notes			(850	)			(313	)
Earnings (loss) before income taxes			(6,822	)			33,207
Income taxes:
Current			1,059				1,610
Deferred			(2,604	)			6,583
			(1,545	)			8,193
Net earnings (loss)		$	(5,277	)		$	25,014
Net earnings (loss) per share:
Basic		$	(0.02	)		$	0.09
Diluted		$	(0.02	)		$	0.08

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

		Three Months Ended March 31,
(Stated in thousands of Canadian dollars)		2020				2019
Net earnings (loss)		$	(5,277	)		$	25,014
Unrealized gain (loss) on translation of assets and liabilities of operations denominated in foreign currency			157,008				(48,518	)
Foreign exchange gain (loss) on net investment hedge with U.S. denominated debt, net of tax			(118,156	)			39,014
Comprehensive income		$	33,575			$	15,510

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

		Three Months Ended March 31,
(Stated in thousands of Canadian dollars)		2020				2019
Cash provided by (used in):
Operations:
Net earnings (loss)		$	(5,277	)		$	25,014
Adjustments for:
Long-term compensation plans			(703	)			7,312
Depreciation and amortization			82,914				86,753
Gain on asset disposals			(3,609	)			(35,050	)
Impairment reversal			–				(5,810	)
Foreign exchange			2,872				(2,238	)
Finance charges			27,580				31,303
Income taxes			(1,545	)			8,193
Other			60				122
Gain on repurchase of unsecured senior notes			(850	)			(313	)
Income taxes paid			(820	)			(337	)
Income taxes recovered			–				1,071
Interest paid			(19,495	)			(20,233	)
Interest received			190				206
Funds provided by operations			81,317				95,993
Changes in non-cash working capital balances			(6,364	)			(55,406	)
			74,953				40,587
Investments:
Purchase of property, plant and equipment			(11,485	)			(70,962	)
Purchase of intangibles			(57	)			(438	)
Proceeds on sale of property, plant and equipment			5,690				57,877
Changes in non-cash working capital balances			(3,526	)			(3,263	)
			(9,378	)			(16,786	)
Financing:
Repurchase of unsecured senior notes			(40,554	)			(16,672	)
Share repurchase			(5,244	)			–
Lease payments			(1,728	)			(1,672	)
Debt amendment fees			(21	)			–
			(47,547	)			(18,344	)
Effect of exchange rate changes on cash and cash equivalents			4,273				(1,053	)
Increase in cash and cash equivalents			22,301				4,404
Cash and cash equivalents, beginning of period			74,701				96,626
Cash and cash equivalents, end of period		$	97,002			$	101,030

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(Stated in thousands of Canadian dollars)		Shareholders’ capital				Contributed surplus				Accumulated other comprehensive income				Deficit				Total equity
Balance at January 1, 2020		$	2,296,378			$	66,255			$	134,255			$	(969,456	)		$	1,527,432
Net loss for the period			–				–				–				(5,277	)			(5,277	)
Other comprehensive income for the period			–				–				38,852				–				38,852
Share repurchases			(5,244	)			–				–				–				(5,244	)
Share-based compensation reclassification			–				(1,498	)			–				–				(1,498	)
Share-based compensation expense			–				3,121				–				–				3,121
Balance at March 31, 2020		$	2,291,134			$	67,878			$	173,107			$	(974,733	)		$	1,557,386

(Stated in thousands of Canadian dollars)		Shareholders’ capital				Contributed surplus				Accumulated other comprehensive income				Deficit				Total equity
Balance at January 1, 2019		$	2,322,280			$	52,332			$	162,014			$	(978,874	)		$	1,557,752
Lease transition adjustment			–				–				–				2,800				2,800
Net earnings for the period			–				–				–				25,014				25,014
Other comprehensive loss for the period			–				–				(9,504	)			–				(9,504	)
Share-based compensation expense			–				3,103				–				–				3,103
Balance at March 31, 2019		$	2,322,280			$	55,435			$	152,510			$	(951,060	)		$	1,579,165

FIRST QUARTER 2020 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, April 30, 2020.

The conference call dial in numbers are 1-844-515-9176 or 614-999-9312.

A live webcast of the conference call will be accessible on Precision’s website at www.precisiondrilling.com by selecting “Investor Relations”, then “Webcasts & Presentations”. Shortly after the live webcast, an archived version will be available for approximately 60 days.

An archived version of the webcast will be available for approximately 60 days. An archived recording of the conference call will be available approximately one hour after the completion of the call until May 6, 2020 by dialing 855-859-2056 or 404-537-3406, passcode 7087264.

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 Super Series drilling rigs supported by an industry leading technology platform that offers innovative drilling solutions to deliver efficient, predictable and repeatable results through service differentiation. Precision also offers well service rigs, camps, rental equipment and directional drilling services all 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”.

For further information, please contact:

Carey Ford, Senior Vice President and Chief Financial Officer
713.435.6100

Dustin Honing, Manager, Investor Relations and Corporate Development
403.716.4500

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

CALGARY, Alberta, April 09, 2020 — Precision Drilling Corporation (“Precision”) intends to release its 2020 first quarter results before the market opens on Thursday, April 30, 2020, and has scheduled a conference call and webcast to begin promptly at 12:00 Noon MT (2:00 p.m. ET) on the same day.

The conference call dial in numbers are 844-515-9176 or 614-999-9312 (International) or a live webcast is accessible on our website at www.precisiondrilling.com

An archived version of the webcast will be available for approximately 60 days. An archived recording of the conference call will be available approximately one hour after the completion of the call until May 6, 2020 by dialing 855-859-2056 or 404-537-3406, passcode 7087264.

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 Super Series drilling rigs supported by an industry leading technology platform that offers innovative drilling solutions to deliver efficient, predictable and repeatable results through service differentiation. Precision also offers well service rigs, camps, rental equipment and directional drilling services all 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”.

For further information, please contact:

Carey Ford, Senior Vice President & Chief Financial Officer
713.435.6100

Dustin Honing, Manager, Investor Relations & Corporate Development
403.716.4500

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

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

CALGARY, Alberta, April 01, 2020 — Precision Drilling Corporation (“Precision” or “the Company”) (TSX:PD; NYSE:PDS) announces today the filing and publication of its Management Information Circular (the “Circular”) issued in connection with the 2020 Annual and Special Meeting (the “Annual Meeting”) and its proposed share consolidation. A copy of the Circular can be downloaded from the Company’s SEDAR profile at www.sedar.com and the Company’s EDGAR profile at www.sec.gov/edgar.shtml. The Circular is also available on Precision’s website.

Precision also announces its Annual Meeting for holders (the “Shareholders”) of common shares (“Common Shares”) is to be held on Thursday, May 14, 2020 at 10:00 a.m. (Mountain Time). Precision considers the health, welfare and safety of our employees and the communities where we operate as a foundation of our business. Due to the novel coronavirus (“COVID-19”) and to mitigate against any health emergency risks, the Annual Meeting will be held in a virtual-only meeting format. The virtual-only meeting format will provide all Shareholders an equal opportunity to participate in the Annual Meeting regardless of their geographic location or health emergencies they may be facing as a result of COVID-19.

The Annual Meeting can be accessed by logging in online at https://web.lumiagm.com/227450298. As detailed in the Circular, registered Shareholders are entitled to participate in the Annual Meeting if they held their common shares as of the close of business on March 25, 2020, the record date. Non-registered (beneficial) Shareholders who wish to vote at the Annual Meeting will be required to appoint themselves as proxyholder in advance of the Annual Meeting by writing their own name in the space provided on the voting instruction form provided by their intermediary, generally being a bank, trust company, securities broker, trustee or other institution. Registered Shareholders and duly appointed proxyholders who participate in the Annual Meeting online will be able to listen to the Annual Meeting, ask questions and vote, all in real time, provided that they are connected to the internet. Guests can listen to the Annual Meeting but will not be able to communicate or vote. In all cases, Shareholders must follow the instructions set out in their applicable proxy or voting instruction forms. If you have questions regarding your ability to participate or vote at the Annual Meeting, please contact Computershare at 1-800-564-6253.

Proposed Share Consolidation

In addition to Precision’s customary business items to be considered at the Annual Meeting, Shareholders will be asked to consider, and if deemed advisable, pass a special resolution (the “Share Consolidation Resolution”) authorizing the Company’s board of directors (the “Board”) to determine, at its discretion, to consolidate (or reverse split) the Company’s issued and outstanding Common Shares as more fully described in the Circular (the “Common Share Consolidation”). The Share Consolidation Resolution will authorize the Board to select a Common Share Consolidation ratio of between 5 old Common Shares for 1 new Common Share and 40 old Common Shares for 1 new Common Share. If the Share Consolidation Resolution is approved by the Shareholders, the Board will retain the discretion to elect not to proceed with the Common Share Consolidation.

The Share Consolidation Resolution is a special resolution and requires approval by not less than two-thirds (66 2/3%) of the votes cast by the Shareholders present in person, or represented by proxy, at the Annual Meeting.

On March 25, 2020, Precision announced that the Company received a formal notice of non-compliance from the New York Stock Exchange (the “NYSE”) regarding share price continued listing standards, which require a listed common stock to maintain a minimum average closing price of US$1.00 per share for 30 consecutive trading days. For reasons outlined in the Circular, the Company believes that curing the minimum price deficiency and avoiding a delisting of the Common Shares from the NYSE is in the best interests of the Company and Shareholders, and the Common Share Consolidation is the most effective means of curing the deficiency.

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, this press release includes forward-looking information and statements related to the Common Share Consolidation.

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

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

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2019, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this news release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

About Precision
Precision is a leading provider of safe and High Performance, High Value services to the oil and gas industry. Precision provides customers with access to an extensive fleet of Super Series drilling rigs supported by an industry leading technology platform that offers innovative drilling solutions to deliver efficient, predictable and repeatable results through service differentiation. Precision also offers directional drilling services, well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel. Precision is headquartered in Calgary, Alberta, Canada. 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”.

For further information, please contact:

Carey Ford, CFA
Senior Vice President and Chief Financial Officer
713.435.6136

Dustin Honing, CPA
Manager, Investor Relations and Corporate Development
403.716.4515

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

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

CALGARY, Alberta, March 25, 2020 — Precision Drilling Corporation (“Precision” or “the Company”) (TSX:PD; NYSE:PDS) announces that on March 24 it received formal notice of non-compliance with the New York Stock Exchange (the “NYSE”) share price continued listing standards, which require a listed common stock to maintain a minimum average closing price of US$1.00 per share for 30 consecutive trading days.

Precision intends to respond to the NYSE with its objective to satisfy all specified requirements to cure the deficiency. In accordance with NYSE’s rules, the Company has a six-month timeframe from the date of the notice to bring its share price and 30 trading-day average share price above US$1.00 and regain compliance. This can be achieved if Precision’s closing price reaches at least US$1.00 per ordinary share on the last trading day of any calendar month during the six month cure period and an average closing price of at least US$1.00 per common share over the 30 trading-day period ending on the last trading day of that month.

Precision’s common shares will continue to be listed and traded on the NYSE during the cure period outlined above, subject to the Company’s compliance with other continued listing requirements. The Company’s common shares will also continue to trade on the Toronto Stock Exchange under the symbol “PD” and that listing is not affected by the receipt of the NYSE notification.

The Company is considering all available options to regain compliance with the NYSE’s continued listing standards, which may include a reverse stock split, subject to approval of the company’s shareholders. Failure to satisfy the conditions of the cure period or to maintain other listing requirements could lead to a delisting from the NYSE only.

The current non-compliance notice from the NYSE does not indicate or affect Precision’s operations, debt obligations or any associated reporting requirements.

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, this document contains forward-looking information and statements pertaining to, the Company’s intent to respond to the NYSE with its object to cure the deficiency; and potential for a reverse stock split.

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

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

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2019, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this news release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

About Precision
Precision is a leading provider of safe and High Performance, High Value services to the oil and gas industry. Precision provides customers with access to an extensive fleet of Super Series drilling rigs supported by an industry leading technology platform that offers innovative drilling solutions to deliver efficient, predictable and repeatable results through service differentiation. Precision also offers well service rigs, camps and rental equipment and directional drilling services, all 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”.

For further information, please contact:

Carey Ford, CFA
Senior Vice President and Chief Financial Officer
713.435.6136

Dustin Honing, CPA
Manager, Investor Relations and Corporate Development
403.716.4515

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

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

CALGARY, Alberta, March 24, 2020 — Precision Drilling Corporation (“Precision” or “the Company”) (TSX:PD; NYSE:PDS) provides a series of announcements in response to the COVID-19 pandemic and current market conditions. These include: 1) risk mitigation and employee health plan; 2) changes to 2020 capital expenditure plan; 3) reductions to fixed costs; 4) liquidity update; and 5) updated strategic priorities.

COVID-19 Transmission Risk Mitigation and Employee Health

Precision considers the health, welfare and safety of our employees and the communities where we operate as a foundation of our business. Beginning in February, Precision implemented a comprehensive global pandemic response plan to ensure the wellbeing of our employees and our communities, while continuing to deliver our customary industry leading High Performance, High Value services to our customers.

Our response plan includes:

• Providing all employees access to clear and consistent communications, a Crisis Management Response Plan and a Crisis Management Website
• Implementing prescriptive personal hygiene, distancing and self-quarantine standards along with work area disinfecting requirements based on CDC and WHO standards
• Implementing employee health support and revised leave plans to assist employees who may be at risk
• Banning non-essential travel globally
• Strongly encouraging staff to work remotely
• Ensuring that all employees are fit-for-duty on a regular basis by checking for health and wellness and prior social contacts
• Implementing standards for interacting with third party contractors and visitors to minimize risk of exposure
• Establishing Operational Recovery and Disinfecting Plans for rigs and facilities in case of an infectious virus contamination event

Precision’s operations and supply chain functions have experienced minimal disruptions and we do not anticipate any supply chain impacts for the foreseeable future. The Company will continue to monitor the situation and will adjust business and safety management procedures if conditions change. We remain firmly committed to providing support to our people and operations as the Company continues to meet the needs of our customers.

Capital Expenditure Plan Reduction

In response to the expected reduction in demand as customers reduce spending due to lower than anticipated commodity prices, Precision is reducing its 2020 capital expenditure plan to $48 million, down approximately 50% from its previously set plan of $95 million. Further adjustments may be considered depending on activity levels realized as the year progresses.

Fixed Cost Reductions

Precision is taking measures to enhance free cash flow by reducing fixed operating overhead and G&A costs throughout the organization, including:

• CEO salary reduction of 20%
• Board of Director compensation reductions of 20%
• Executive officer salary reductions of 10%
• Staff headcount and salary reductions
• Elimination of all non-essential travel, entertaining and other discretionary spending

We expect these fixed cost reduction measures will reduce annualized fixed costs by over 30%, including up to a $30 million reduction in G&A expense.

Liquidity Update

Preserving Precision’s strong liquidity profile will remain a key financial priority in 2020. At 2019 year-end, Precision reported a cash balance of $75 million and the completion of a one-year extension of its US$500 million revolving credit facility, maturing November 2023. Excluding letters of credit, the Company’s revolving credit facility remains undrawn, and with the year-end cash balance, Precision reported access to over $700 million in liquidity.

In addition, the Company has materially reduced share repurchase activity under its Normal Course Issuer Bid program to maintain liquidity.

During the second quarter of this year, Precision is estimating receipt of an additional $80 million to $100 million of cash from released working capital as a result of seasonal and commodity price driven activity declines in North America. The Company remains well in line with its covenants and will continue to ensure full access to its credit facility.

Strategic Priorities

Considering the new macro environment with highly volatile commodity prices, Precision reaffirms its strategic priorities for 2020:

1. Generate strong free cash flow and utilize $100 million to $150 million to reduce debt in 2020.

   Precision reaffirms its 2020 debt reduction targeted range. As a component of this priority, in the near term, the Company will focus on maximizing free cash flow by reducing capital spending by 50% and fixed costs by over 30%. As of today, the Company has redeemed $41 million of its debt in 2020 and will continue prioritizing its 2021 senior notes during the year.

2. Demonstrate operational excellence in all aspects of our business including operational, financial and ESG (environmental, social and governance) metrics.

   Precision believes its comprehensive actions to mitigate the health risks to our employees and our communities while supporting and sustaining our business operations is in full alignment with our operational excellence strategic priority.

3. Leverage our Alpha technology platform as a competitive differentiator and source of financial returns for Precision.

   Precision will continue to focus on optimization and customer interface with our technology offerings during 2020. We will continue to pursue further customer traction with our AlphaAutomation and AlphaApps; however, will temporarily scale back our previously disclosed plans to roll out an additional 24 AlphaAutomation systems during the year.

Regarding the above announcements, Precision’s CEO, Kevin Neveu stated: “Precision extends our thoughts to those affected by the COVID-19 pandemic and we remain committed to doing our part to minimize the spread of this very serious virus. Our top priority is the well-being of our people and local communities and we have taken comprehensive proactive measures to make sure that their health and safety is not compromised while we continue to provide our High Performance, High Value service to our customers.”

“Financially, the progress we have achieved over the last three years to generate free cash flow, prioritize aggressive debt reduction, manage debt maturities and preserve cash liquidity through stringent cost management and responsible capital deployment, leaves Precision well positioned to navigate this challenging environment. Our reaffirmed debt reduction targets demonstrate the financial flexibility of the company and we will continue to ensure that our liquidity needs are not compromised. With future drilling activity levels uncertain, the capital spending and fixed cost reductions announced today will continue to support Precision’s strong free cash flow capability and financial flexibility. We remain actively engaged in managing the business accordingly and will continue to heavily scrutinize all expenditures to further protect the interests of our stakeholders.”

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:

• our planned capital expenditures for 2020;
• anticipated positive cash flows and fixed cost savings; and
• future debt repayments and liquidity.

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

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

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2019, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this news release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

About Precision
Precision is a leading provider of safe and High Performance, High Value services to the oil and gas industry. Precision provides customers with access to an extensive fleet of Super Series drilling rigs supported by an industry leading technology platform that offers innovative drilling solutions to deliver efficient, predictable and repeatable results through service differentiation. Precision also offers directional drilling services, well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel. Precision is headquartered in Calgary, Alberta, Canada. 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”.

For further information, please contact:

Carey Ford, CFA
Senior Vice President and Chief Financial Officer
713.435.6136

Dustin Honing, CPA
Manager, Investor Relations and Corporate Development
403.716.4515

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

CALGARY, Alberta, March 09, 2020 — Precision Drilling Corporation (“Precision”) announced that it has filed its annual disclosure documents with the securities commissions in each of the provinces of Canada and the United States Securities and Exchange Commission (“SEC”).

Precision’s 2019 Annual Report contains the audited consolidated financial statements and management’s discussion and analysis for the year ended December 31, 2019. Precision’s financial results for the year ended December 31, 2019 were previously released on February 13, 2020.

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

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

Precision’s 2020 Annual and Special Meeting of Shareholders will be held at 10:00 a.m. MDT on Thursday, May 14, 2020 at Suite 410, 525 – 8^th Avenue S.W., Calgary, Alberta T2P 1G1.

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 Super Series drilling rigs supported by an industry leading technology platform that offers innovative drilling solutions to deliver efficient, predictable and repeatable results through service differentiation. Precision also offers directional drilling services, well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada. 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”.

For further information, please contact:

Carey Ford, Senior Vice President & Chief Financial Officer
713.435.6100

Dustin Honing, Manager, Investor Relations
403.716.4500

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

CALGARY, Alberta, Feb. 13, 2020 — (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. This news release contains references to Adjusted EBITDA, Covenant EBITDA, Operating Earnings (Loss), Funds Provided by (Used in) Operations and Working Capital. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies, see “Non-GAAP Measures” later in this news release.

Precision Drilling announces 2019 fourth quarter and year end highlights:

• Revenue of $372 million was a decrease of 13% compared with the fourth quarter of 2018.
• Net loss of $1 million or $0.00 per diluted share compared to a net loss of $198 million or $0.68 per diluted share in the fourth quarter of 2018. Our 2019 earnings per diluted share were $0.02, compared with a net loss of $1.00 per diluted share in 2018. In the quarter we decommissioned certain drilling and ancillary equipment that no longer met our High-Performance technology standards for a loss on asset decommissioning of $20 million that, after-tax, increased our net loss by $15 million and net loss per diluted share by $0.05. During the fourth quarter of 2018, we incurred goodwill impairment charges that, after-tax, reduced net earnings by $199 million or net earnings per diluted share by $0.68.
• Earnings before income taxes, gain on repurchase and redemption of unsecured senior notes, finance charges, foreign exchange, impairment of goodwill, reversal of impairment of property, plant and equipment, loss on asset decommissioning, gain on asset disposals and depreciation and amortization (Adjusted EBITDA, see “NON-GAAP MEASURES”) of $105 million was 22% lower than the fourth quarter of 2018.
• Funds provided by operations (see “NON-GAAP MEASURES”) was $76 million versus $93 million in the prior year quarter. Cash provided by operations was $75 million versus $93 million in the prior year quarter. The decrease in funds and cash provided by operations was primarily the result of lower activity and the non-recurring transaction termination fee that was received in the fourth quarter of 2018.
• During the quarter we reduced our debt by $59 million bringing our 2019 debt reduction total to $205 million with an additional US$25 million of our 6.5% unsecured seniors notes due 2021 redeemed subsequent to year end. Our 2019 debt repayments are expected to reduce our 2020 interest expense by US$10 million.
• Capital expenditures were $22 million in the fourth quarter, $8 million lower than the prior year quarter and consisted of opportunistic deployment of capital on long-lead items, pull-forward spend on certain maintenance capital and $2 million of capitalized recertification costs.
• Pursuant to our Normal Course Issuer Bid, we purchased and cancelled 16 million common shares for $26 million in 2019. Subsequent to December 31, 2019, we purchased and cancelled an additional 2 million common shares for $3 million, leaving us with 275 million common shares outstanding at February 12, 2020.
• Our 2019 Adjusted EBITDA from our Contract Drilling Services and Completion and Production Services segments were $429 million and $24 million, respectively, representing a 4% and 62% increase from 2018.
• We commercialized our AlphaAutomation technology offering with our 32 field-deployed systems earning commercial rates, drilling approximately 613 wells in 2019, an increase of 69% over the prior year.

Precision’s President and CEO Kevin Neveu stated: “During the fourth quarter, Precision’s strong financial results were led by rising Canadian activity in our Contract Drilling Services and Completion and Production Services segments, firm international activity, and flattening customer demand in the U.S. As a result of Precision’s High Performance, High Value strategy, market positioning in key basins, commercialization of AlphaAutomation, intense cost control and cash management efforts, we generated Adjusted EBITDA of $105 million and cash provided by operations of $75 million. Results delivered this quarter demonstrate Precision’s ability to consistently generate cash, reduce debt and repurchase shares.”

“In Canada, Precision maintained its record level market share, supported by leading market positions in the Montney, Duvernay and heavy oil regions. Our 26 AC Super Triples and over 60 Super Singles provide Precision an unmatched scale efficiency and competitive advantage throughout all key regions in the Western Canadian market. This momentum has continued into the first quarter of 2020, as seasonal customer demand has remained strong well into February. The Company reached a peak of 83 active rigs in January, compared with a peak of 62, up 34% from the first quarter of 2019 and has 80 rigs running today compared to 55 this time last year. Although longer-term Canadian demand will be driven by customer capital discipline and commodity prices, we expect our market positioning and scale in our Canadian Drilling segment to continue to generate strong cash flows throughout the course of the year.”

“In the U.S., Precision’s fourth quarter average rig count was in-line with our expectations and generated sequentially improved margins supported by firm day rates and aggressive cost management. Our rig count ended the year softer than anticipated, due to a large customer reducing operations and idling three contracted AC ST-1500’s. Precision remains confident in its ability to redeploy these rigs as the oil and gas operators continue to high grade drilling operations in 2020. We anticipate capital discipline, operating efficiency and industrial scale will remain central themes in the U.S. market and customer spending behavior will be largely defined by remaining within cash flow and maximizing drilling efficiencies. These market trends align well with Precision’s High Performance, High Value strategy, our Alpha technologies offering and our ability to deliver industrial efficiencies to our customers.”

“Internationally, the business remains a stable source of cash generation. Looking to 2020, Precision will continue to leverage its expanded scale in Kuwait and will prioritize reactivating idle assets in the Middle East region.”

“Precision’s Completion and Production Services segment finished the year on firm footing, generating strong free cash flow, improved margins and good progress on both pricing and market share despite a highly fractured market. Our team has focused and delivered on effectively managing all elements within their control including reducing fixed and variable costs, strong operational performance, training and crewing rigs and ensuring the integrity of the assets, all while continuing to effectively manage customer relationships. We expect customer spending in 2020 will largely be tied to the commodity macro and our scale and operational efficiency will continue to support free cash flow generation in the current environment.”

“Precision delivered on its 2019 strategic priorities established at the beginning of the year. First, the Company generated substantial free cash flow, allowing us to exceed our annual debt repayment targets for the second consecutive year by paying down $205 million of debt. Since the beginning of 2018, Precision has reduced its debt levels by $412 million, already eclipsing the low end of our four-year targeted debt reduction range of $400 million to $600 million by end of year 2021. For 2020, we plan to reduce debt by $100 million to $150 million and are now providing guidance for an additional year with a goal to reduce debt by $700 million between 2018 and 2022. Second, Precision continued to leverage its scale and High-Performance Super Series fleet to drive both strong operating margins and market share gains in the U.S. and Canada. Finally, the Company delivered on its technology initiatives for the year, achieving full commercialization of our AlphaAutomation system.”

“Achieving our AlphaAutomation commercialization milestone was a result of three years of field-hardening the technology with over 1,100 wells drilled to date, extensive training of over 100 crews and close collaboration with our customers to demonstrate the efficiency and value this technology delivers. Looking to 2020, we plan to deploy an additional 24 AlphaAutomation systems, driven by continued customer demand to maximize drilling efficiencies. Additionally, Precision remains focused on commercializing 15 or more AlphaApps, which will further expand our portfolio of technology offerings,” concluded Mr. Neveu.

IMPACT OF IFRS 16 – LEASES ON FINANCIAL INFORMATION

On January 1, 2019, Precision applied IFRS 16 using the modified retrospective approach under which comparative information has not been restated and continues to be reported under IAS 17 and related interpretations. Please refer to “CHANGES IN ACCOUNTING POLICY” for additional information on the impact to our financial information.

SELECT FINANCIAL AND OPERATING INFORMATION

Financial Highlights

	Three months ended December 31,												Year ended December 31,
(Stated in thousands of Canadian dollars, except per share amounts)	2019				2018				% Change				2019				2018				% Change
Revenue		372,301				427,010				(12.8	)			1,541,320				1,541,189				0.0
Adjusted EBITDA (1)		105,006				134,492				(21.9	)			391,905				375,131				4.5
Operating earnings (loss)(1)		7,699				(172,093	)			(104.5	)			94,577				(198,073	)			(147.7	)
Net earnings (loss)		(1,061	)			(198,328	)			(99.5	)			6,618				(294,270	)			(102.2	)
Cash provided by operations		74,981				93,489				(19.8	)			288,159				293,334				(1.8	)
Funds provided by operations(1)		75,779				92,595				(18.2	)			292,652				311,214				(6.0	)
Capital spending:
Expansion		7,916				9,064				(12.7	)			108,064				35,444				204.9
Upgrade		199				2,402				(91.7	)			12,846				30,757				(58.2	)
Maintenance and infrastructure		13,426				18,128				(25.9	)			38,976				48,375				(19.4	)
Intangibles		332				687				(51.7	)			808				11,567				(93.0	)
Proceeds on sale		(4,931	)			(12,020	)			(51.1	)			(90,768	)			(24,457	)			275.0
Net capital spending		16,942				18,261				(12.4	)			69,926				101,686				(32.2	)
Net earnings (loss) per share:
Basic		(0.00	)			(0.68	)			(99.4	)			0.02				(1.00	)			(102.3	)
Diluted		(0.00	)			(0.68	)			(99.4	)			0.02				(1.00	)			(102.2	)

(1) See “NON-GAAP MEASURES”.

Operating Highlights

	Three months ended December 31,												Year ended December 31,
	2019				2018				% Change				2019				2018				% Change
Contract drilling rig fleet		226				236				(4.2	)			226				236				(4.2	)
Drilling rig utilization days:
U.S.		5,814				7,318				(20.6	)			26,544				26,714				(0.6	)
Canada		3,919				4,517				(13.2	)			14,498				18,617				(22.1	)
International		818				736				11.1				3,093				2,920				5.9
Revenue per utilization day:
U.S.(1) (US$)		23,949				23,369				2.5				23,397				21,864				7.0
Canada (Cdn$)		22,182				22,802				(2.7	)			21,569				21,644				(0.3	)
International (US$)		52,283				51,982				0.6				51,360				50,469				1.8
Operating cost per utilization day:
U.S. (US$)		14,073				15,042				(6.4	)			14,447				14,337				0.8
Canada (Cdn$)		14,791				15,115				(2.1	)			15,240				14,493				5.2
Service rig fleet(2)		123				210				(41.4	)			123				210				(41.4	)
Service rig operating hours		39,865				35,773				11.4				147,154				157,467				(6.5	)
Revenue per operating hour (Cdn$)		746				753				(0.9	)			739				709				4.2

(1) Includes revenue from idle but contracted rig days.
(2) In 2019, 75 rigs were not registered with the industry association and 12 snubbing units were sold.

Financial Position

(Stated in thousands of Canadian dollars, except ratios)	December 31, 2019				December 31, 2018
Working capital(1)		201,696				240,539
Cash		74,701				96,626
Long-term debt		1,427,181				1,706,253
Total long-term financial liabilities		1,500,950				1,723,350
Total assets		3,269,840				3,636,043
Long-term debt to long-term debt plus equity ratio		0.48				0.52

(1) See “NON-GAAP MEASURES”.

Summary for the three months ended December 31, 2019:

• Revenue was $372 million, 13% lower than the fourth quarter of 2018. Revenue decreased due to lower activity in the U.S. and Canada, partially offset by higher average day rates in the U.S. and higher international activity. Compared with the fourth quarter of 2018, our drilling activity decreased 21% in the U.S., 13% in Canada and grew 11% internationally. Our 2019 fourth quarter revenue from our Contract Drilling Services and Completion and Production Services segments decreased 14% and 5%, respectively, from the comparable 2018 quarter.
• General and administrative expenses were $26 million, $4 million higher than the fourth quarter of 2018. Excluding the effect of share-based incentive compensation expense for the quarter, our general and administrative expenses decreased by $8 million from 2018. The lower expenses in the current quarter were primarily the result of continued fixed cost control initiatives and the impact of lease-related charges due to the adoption of IFRS 16. See discussion on share-based incentive compensation under “Other Items” later in this release for additional details.
• Adjusted EBITDA (see “NON-GAAP MEASURES”) was $105 million, a decrease of $29 million from the fourth quarter of 2018. Our Adjusted EBITDA as a percentage of revenue was 28% this quarter, compared with 31% in the comparative quarter of 2018. Operating earnings (see “NON-GAAP MEASURES”) were $8 million compared with negative $172 million in the fourth quarter of 2018. Lower Adjusted EBITDA and operating earnings in 2019 were primarily due to reduced U.S. and Canadian activity, higher share-based incentive compensation expense and the non-recurring receipt of the transaction termination fee in the fourth quarter of 2018. In the 2019 quarter, we decommissioned 29 drilling rigs resulting in a loss on asset decommissioning of $20 million. With the adoption of IFRS 16, lease-related charges of $3 million in the quarter were recognized through finance charges and depreciation and amortization expense. Historically, these charges were reflected in operating and general and administrative expense. Total share-based incentive compensation expense for the quarter was $7 million compared with a recovery of $12 million in the fourth quarter of 2018. See discussion on rig decommissioning and share-based incentive compensation under “Other Items” for additional details.
• Net finance charges were $28 million, a decrease of $4 million compared with the fourth quarter of 2018, primarily due to a reduction in interest expense related to retired debt, partially offset by $1 million of lease accretion charges resulting from the adoption of IFRS 16.
• Revenue per utilization day in the U.S. increased in the fourth quarter of 2019 to US$23,949 from US$23,369 in the prior year quarter. The increase was the result of higher day rates, idle but contracted rig revenue and rig technology revenue, partially offset by lower turnkey activity. During the quarter, we had US$3 million of revenue from each of idle but contracted rigs and turnkey projects as compared with fourth quarter 2018 idle but contracted rig and turnkey revenue of US$0.3 million and US$11 million, respectively. On a sequential basis, revenue per utilization day, excluding revenue from turnkey and idle but contracted rigs, was consistent with the third quarter of 2019. Operating costs on a per day basis decreased to US$14,073 in the fourth quarter of 2019 compared with US$15,042 in 2018. The decrease was mainly due to lower turnkey activity, the impact from the reversal of prior period provisions and the componentization of rig recertification costs. Excluding the impact of the provision reversals and componentization of recertification costs, our operating costs on a per day basis for the quarter were US$14,974. See discussion on change of rig components under “Other Items” for additional details
• In Canada, average revenue per utilization day for contract drilling rigs was $22,182 compared with $22,802 in the fourth quarter of 2018. The lower average revenue per utilization day in the fourth quarter of 2019 was primarily due to lower rates from a higher proportion of Super Singles in our rig mix and lower shortfall payments, partially offset by higher technology revenue. We did not receive shortfall payments in the fourth quarter of 2019 as compared to $1 million in the 2018 quarter. Average operating costs per utilization day for drilling rigs in Canada decreased to $14,791 compared with the prior year quarter of $15,115. The decrease was mainly caused by the impact of lower repair and maintenance costs due to the componentization of rig recertification costs. Excluding the impact of componentization of recertifications, our operating costs on a per day basis for the quarter were $15,044.
• We realized revenue from international contract drilling of US$43 million in the fourth quarter of 2019, an increase of US$4 million over the prior year period. Average revenue per utilization day in our international contract drilling business was US$52,283 compared with US$51,982 in the respective prior year quarter. The higher average rate in 2019 was primarily due to day rate increases from the renewal and extension of drilling contracts and the deployment of our sixth Kuwait rig.
• Funds provided by operations (see “NON-GAAP MEASURES”) in the fourth quarter of 2019 were $76 million, a decrease of $17 million from the prior year comparative quarter. Cash provided by operations was $75 million versus $93 million in the prior year quarter. The decrease in funds and cash provided by operations was primarily the result of lower activity and the non-recurring transaction termination fee that was received in the fourth quarter of 2018.
• Capital expenditures were $22 million in the fourth quarter, $8 million lower than the same period in 2018. Capital spending for the quarter included $8 million for upgrade and expansion capital and $14 million for the maintenance of existing assets, infrastructure spending and intangibles.

Summary for the year ended December 31, 2019:

• Revenue for the year ended December 31, 2019 totaled $1,541 million, consistent with 2018.
• Operating earnings (see “NON-GAAP MEASURES”) were $95 million, an increase of $293 million from 2018. As a percentage of revenue, operating earnings improved to 6% compared to negative 13% in 2018. In 2019, operating earnings were positively impacted by increased international drilling activity, higher U.S. and international average day rates, gains on asset disposals, partially offset by lower Canadian drilling activity, the non-recurring transaction termination fee and loss on asset decommissioning and higher share-based compensation expense. In addition, during the fourth quarter of 2018, we incurred goodwill impairment charges of $208 million.
• General and administrative costs were $104 million, a decrease of $8 million from 2018. The decrease in costs was primarily the result of continued fixed cost control initiatives and the impact of lease-related charges due to the adoption of IFRS 16, partially offset by higher share-based incentive compensation and the weakening of the Canadian dollar on our U.S. dollar denominated costs (see “Other Items” later in this release).
• Net finance charges were $118 million, a decrease of $9 million from 2018 primarily due to a reduction in interest expense related to debt retired in 2018 and 2019, partially offset by the weakening of the Canadian dollar on our U.S. dollar denominated interest expense.
• Funds provided by operations (see “NON-GAAP MEASURES”) in 2019 were $293 million, a decrease of $19 million from $311 million in the prior year. Cash provided by operations was $288 million in 2019 as compared to $293 million in 2018. The decrease in funds and cash provided by operations was primarily the result of the non-recurring transaction termination fee that was received in the fourth quarter of 2018.
• Capital expenditures were $161 million in 2019, an increase of $35 million over 2018. Capital spending for 2019 included $121 million for upgrade and expansion capital and $40 million on the maintenance of existing assets, infrastructure and intangibles. Our 2019 upgrade and expansion capital were mainly comprised of one U.S. new-build, one U.S. SCR to AC Triple upgrade, the Kuwait new-build rig and long-lead capital items. Our new-build and upgraded rigs were backed by long-term drilling contracts.

STRATEGY

Precision’s strategic priorities for 2019 were as follows:

1. Generate strong free cash flow and utilize $200 million to reduce debt in 2019 – In the fourth quarter of 2019, we generated $75 million in cash provided by operations and further reduced our debt balance by $59 million through open market repurchases and redemptions of our unsecured senior notes. For the full year 2019, Precision exceeded our 2019 debt reduction target with total debt repayments of $205 million.
2. Maximize financial results by leveraging our High Performance, High Value Super Series rig fleet and scale with disciplined cost management – In the fourth quarter of 2019, Precision continued operating at record market share levels in the U.S. and Canada and have leveraged our size and scale to maximize cash flow. In the U.S., operating margins (revenue less operating costs) were up 19% compared to the prior year quarter. Despite decreased Canadian industry activity levels, our Canadian drilling operations generated strong cash flow and our Completion and Production Services business contributed $6 million of Adjusted EBITDA. Precision also continued to leverage its expanded footprint in Kuwait, with our sixth Kuwait rig commencing drilling on July 1, 2019, increasing our economies of scale and operating margins in the region.

   For the full year 2019, Precision reported Adjusted EBITDA of $392 million, up 5% from 2018 despite a 22% reduction in Canadian drilling activity levels.

3. Full scale commercialization and implementation of our AlphaAutomation platform, AlphaApps and AlphaAnalytics – In the fourth quarter, we announced full commercialization of our AlphaAutomation offering, with its 32 systems over 90% utilized and earning commercial rates. We currently have our AlphaAutomation platform deployed throughout various basins in the U.S. and Canada, drilling 613 wells in 2019, an increase of 69% over the prior year comparative. With more than 15 revenue generating AlphaApps commercialized or in development, our portfolio of technology offerings continues to expand. We have demonstrated to our customers our system’s ability to deliver consistent, high-quality results, and as a result of continued demand to lower well costs and maximize efficiencies, Precision intends to deploy an additional 24 AlphaAutomation systems in North America during 2020.

Precision’s strategic priorities for 2020 are as follows:

1. Generate strong free cash flow and reduce debt by $100 million to $150 million in 2020 and by $700 million between 2018 and 2022.
2. Demonstrate operational excellence in all aspects of our business including operational, financial and ESG (environmental, social and governance) metrics.
3. Leverage our Alpha technology platform as a competitive differentiator and source of financial returns for Precision.

OUTLOOK

For the fourth quarter of 2019, the average price of West Texas Intermediate and Henry Hub were down 3% and 37%, respectively. The average price of Western Canadian Select and AECO gas prices were 111% and 66% higher, respectively.

	Three months ended December 31,								Year ended December 31,
	2019				2018				2019				2018
Average oil and natural gas prices
Oil
West Texas Intermediate (per barrel) (US$)		57.02				58.89				57.07				64.88
Western Canadian Select (per barrel) (US$)		41.12				19.47				44.28				38.46
Natural gas
United States
Henry Hub (per MMBtu) (US$)		2.40				3.81				2.56				3.12
Canada
AECO (per MMBtu) (Cdn$)		2.47				1.49				1.77				1.49

Contracts

During 2019 we entered into 56 term contracts. The following chart outlines the average number of drilling rigs by quarter that we had under contract for 2019 and 2020 as of February 12, 2020. For those quarters ended after December 31, 2019, this chart represents the minimum number of term contracts where we will be earning revenue. We expect the actual number of contracted rigs to be higher in future periods as we continue to sign contracts.

		Average for the quarter ended 2019																Average for the quarter ended 2020
		Mar. 31				June 30				Sept. 30				Dec. 31				Mar. 31				June 30				Sept. 30				Dec. 31
Average rigs under term contract as of February 12, 2020:
U.S.			56				52				49				41				41				34				26				20
Canada			8				5				5				5				5				4				3				3
International			8				8				9				9				8				8				6				6
Total			72				65				63				55				54				46				35				29

The following chart outlines the average number of drilling rigs under contract for 2019 and the average number of rigs we have under contract for 2020 and 2021 as of February 12, 2020.

		Average for the year ended
		2019				2020				2021
Average rigs under term contract as of February 12, 2020:
U.S.			49				30				5
Canada			6				4				1
International			9				7				6
Total			64				41				12

In Canada, term contracted rigs normally generate 250 utilization days per year because of the seasonal nature of well site access. In most regions in the U.S. and internationally, term contracts normally generate 365 utilization days per year.

Drilling Activity

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

	Average for the quarter ended 2018															Average for the quarter ended 2019
	Mar. 31				June 30				Sept. 30				Dec. 31			Mar. 31				June 30				Sept. 30				Dec. 31
Average Precision active rig count:
U.S.		64				72				76				80			79				77				72				63
Canada		72				31				52				49			48				27				42				43
International		8				8				8				8			8				8				9				9
Total		144				111				136				137			135				112				123				115

To start 2020, drilling activity has decreased relative to the prior year in the U.S. and Canada. According to industry sources, as of February 12, 2020, the U.S. active land drilling rig count was down 26% compared with the same point last year and the Canadian active land drilling rig count was up approximately 8%. Furthermore, approximately 85% of the U.S. industry’s active rigs and 61% of the Canadian industry’s active rigs were drilling for oil targets, compared with 81% for the U.S. and 60% for Canada at the same time last year.

Industry Conditions

We expect Tier 1 rigs to remain the preferred rigs of customers globally. The economic value created by the significant drilling and mobility efficiencies delivered by the most advanced XY pad walking rigs has been highlighted and widely accepted by our customers. The trend to longer-reach horizontal completions and importance of the rig delivering these complex wells consistently and efficiently has been well established by the industry. We expect demand for leading edge high efficiency Tier 1 rigs will continue to strengthen relative to less capable rigs, as drilling rig capability has been a key economic facilitator of horizontal/unconventional resource exploitation. Development and field application of drilling equipment process automation coupled with closed loop drilling controls and de-manning of rigs will continue this technical evolution while creating further cost efficiencies and performance value for customers.

Capital Spending

Capital spending in 2020 is expected to be $95 million and includes $58 million for sustaining, infrastructure and intangibles and $37 million for upgrade and expansion. We expect our spending to be split $86 million in the Contract Drilling Services segment, $7 million in the Completion and Production Services segment and $2 million to the Corporate segment.

SEGMENTED FINANCIAL RESULTS

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

	Three months ended December 31,												Year ended December 31,
(Stated in thousands of Canadian dollars)	2019				2018				% Change				2019				2018				% Change
Revenue:
Contract Drilling Services		338,886				391,843				(13.5	)			1,399,068				1,396,492				0.2
Completion and Production Services		34,985				36,715				(4.7	)			147,829				150,760				(1.9	)
Inter-segment eliminations		(1,570	)			(1,548	)			1.4				(5,577	)			(6,063	)			(8.0	)
		372,301				427,010				(12.8	)			1,541,320				1,541,189				0.0
Adjusted EBITDA:(1)
Contract Drilling Services		112,566				122,131				(7.8	)			429,483				412,134				4.2
Completion and Production Services		6,259				7,011				(10.7	)			24,155				14,881				62.3
Corporate and Other		(13,819	)			5,350				(358.3	)			(61,733	)			(51,884	)			19.0
		105,006				134,492				(21.9	)			391,905				375,131				4.5

(1) See “NON-GAAP MEASURES”.

SEGMENT REVIEW OF CONTRACT DRILLING SERVICES

	Three months ended December 31,												Year ended December 31,
(Stated in thousands of Canadian dollars, except where noted)	2019				2018				% Change				2019				2018				% Change
Revenue		338,886				391,843				(13.5	)			1,399,068				1,396,492				0.2
Expenses:
Operating		216,305				258,255				(16.2	)			927,612				945,203				(1.9	)
General and administrative		10,015				11,457				(12.6	)			38,927				39,155				(0.6	)
Restructuring		–				–			n/m					3,046				–			n/m
Adjusted EBITDA(1)		112,566				122,131				(7.8	)			429,483				412,134				4.2
Depreciation		73,196				98,460				(25.7	)			300,882				341,712				(11.9	)
Gain on asset disposals		(3,621	)			(2,526	)			43.3				(46,849	)			(7,157	)			554.6
Loss on asset decommissioning		20,263				–			n/m					20,263				–			n/m
Reversal of impairment of property, plant and equipment		–				–			n/m					(5,810	)			–			n/m
Impairment of goodwill		–				207,544				(100.0	)			–				207,544				(100.0	)
Operating earnings (loss)(1)		22,728				(181,347	)			(112.5	)			160,997				(129,965	)			(223.9	)
Operating earnings (loss)(1) as a percentage of revenue		6.7	%			(46.3	)%							11.5	%			(9.3	)%

(1) See “NON-GAAP MEASURES”.
n/m Calculation not meaningful.

United States onshore drilling statistics:(1)	2019								2018
	Precision				Industry(2)				Precision				Industry(2)
Average number of active land rigs for quarters ended:
March 31		79				1,023				64				951
June 30		77				967				72				1,021
September 30		72				896				76				1,032
December 31		63				798				80				1,050
Year to date average		73				921				73				1,014

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

		Three months ended December 31,
Canadian onshore drilling statistics:(1)		2019								2018
		Precision				Industry(2)				Precision				Industry(2)
Number of drilling rigs (end of period)			109				517				117				574
Drilling rig operating days (spud to release)			3,496				11,392				4,020				15,235
Drilling rig operating day utilization			33	%			23	%			33	%			28	%
Number of wells drilled			350				1,160				401				1,602
Average days per well			10.0				9.8				10.0				9.5
Number of metres drilled (000s)			1,100				3,600				1,153				4,609
Average metres per well			3,143				3,103				2,874				2,877
Average metres per day			315				316				287				303

		Year ended December 31,
Canadian onshore drilling statistics:(1)		2019								2018
		Precision				Industry(2)				Precision				Industry(2)
Number of drilling rigs (end of period)			109				517				117				574
Drilling rig operating days (spud to release)			12,900				45,334				16,479				64,491
Drilling rig operating day utilization			31	%			22	%			34	%			29	%
Number of wells drilled			1,314				4,769				1,663				6,781
Average days per well			9.8				9.5				9.9				9.5
Number of metres drilled (000s)			3,968				14,241				4,694				19,313
Average metres per well			3,020				2,986				2,823				2,848
Average metres per day			308				314				285				299

(1) Canadian operations only.
(2) Canadian Association of Oilwell Drilling Contractors (“CAODC”), and Precision – excludes non-CAODC rigs and non-reporting CAODC members.

Revenue from Contract Drilling Services for the fourth quarter of 2019 was $339 million, $53 million lower than the fourth quarter of 2018, while Adjusted EBITDA (see “NON-GAAP MEASURES”) decreased 8% to $113 million. The lower revenue in 2019 was primarily due to lower U.S. and Canada utilization days, partially offset by higher international activity and U.S. pricing. During the quarter, we had US$3 million of revenue from each of idle but contracted rigs and turnkey projects as compared with fourth quarter 2018 idle but contracted rig and turnkey revenue of US$0.3 million and US$11 million, respectively.

Drilling rig utilization days (drilling days plus move days) in both the U.S. and Canada were down in the fourth quarter of 2019 as compared to 2018. In the U.S., we had 5,814 drilling rig utilization days, 21% lower than the same quarter of 2018. Canada had 3,919 days in the quarter, a decrease of 13% compared to 2018. The reduced activity in both regions was consistent with lower industry activity. Drilling rig utilization days in our international business was 818, 11% higher than the same quarter of 2018, as we deployed our sixth Kuwait rig in the third quarter of 2019.

Revenue per utilization day in the U.S. increased in the fourth quarter of 2019 to US$23,949 from US$23,369 in the prior year quarter. The increase was the result of higher day rates, idle but contracted rig revenue and rig technology revenue, partially offset by lower turnkey activity. On a sequential basis, U.S. revenue per utilization day, excluding revenue from turnkey and idle but contracted rigs, was consistent with the third quarter of 2019. In Canada, average revenue per utilization day for contract drilling rigs was $22,182 compared with $22,802 in the fourth quarter of 2018. The lower average revenue per utilization day in the fourth quarter of 2019 was primarily due to lower rates from a higher proportion of Super Singles in our rig mix and lower shortfall payments, partially offset by higher technology revenue. We did not receive shortfall payments in the fourth quarter of 2019 as compared to $1 million in the 2018 quarter. Average revenue per utilization day in our international contract drilling business was US$52,283 compared with US$51,982 in the respective prior year quarter. The higher average rate in 2019 was primarily due to day rate increases from the renewal and extension of drilling contracts and the deployment of the sixth Kuwait rig, partially offset by lower amortization of the initial upfront mobilization revenue. Directional drilling services realized revenue of $9 million in the fourth quarter of 2019, consistent with 2018.

In the U.S., 66% of utilization days were generated from rigs under term contract as compared with 70% in the fourth quarter of 2018. In Canada, 9% of our utilization days in the quarter were generated from rigs under term contract, compared with 15% in the fourth quarter of 2018.

Operating costs were 64% of revenue for the quarter, 2% lower than the prior year quarter. Our U.S. operating costs on a per day basis decreased to US$14,073 in the fourth quarter of 2019 compared with US$15,042 in 2018. The decrease was mainly due to lower turnkey activity, the impact from the reversal of prior period provisions and the componentization of rig recertification costs. Excluding the impact of the provision reversals and componentization of recertification costs, our operating costs on a per day basis for the quarter were US$14,974. In the U.S., on a sequential basis, operating costs per day decreased by US$414 due to lower repair and maintenance costs, third party charges partially offset by higher turnkey costs. Average operating costs per utilization day for drilling rigs in Canada decreased to $14,791 compared with the prior year quarter of $15,115. The decrease was mainly caused by the impact of lower repair and maintenance costs due to the componentization of rig recertification costs. Excluding the impact of componentization of recertifications, our operating costs on a per day basis for the quarter were $15,044.

Depreciation expense in the quarter was 26% lower than the fourth quarter of 2018. The lower 2019 expense was primarily due to asset sales, assets becoming fully depreciated and non-recurring accelerated depreciation of excess spare equipment recorded in the fourth quarter of 2018. In 2019, we recognized a loss on the decommissioning of drilling rigs and ancillary equipment of $20 million. See discussion on rig decommissioning under “Other Items” for additional details.

In the fourth quarter of 2019, through the completion of normal course business operations, we sold used assets resulting in a gain on asset disposals of $4 million as compared to $3 million in the 2018 quarter.

SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES

	Three months ended December 31,												Year ended December 31,
(Stated in thousands of Canadian dollars, except where noted)	2019				2018				% Change				2019				2018				% Change
Revenue		34,985				36,715				(4.7	)			147,829				150,760				(1.9	)
Expenses:
Operating		26,982				28,515				(5.4	)			116,932				128,124				(8.7	)
General and administrative		1,744				1,189				46.7				6,285				6,591				(4.6	)
Restructuring		–				–			n/m					457				1,164				(60.7	)
Adjusted EBITDA(1)		6,259				7,011				(10.7	)			24,155				14,881				62.3
Depreciation		4,309				5,416				(20.4	)			17,881				22,801				(21.6	)
Loss (gain) on asset disposals		(201	)			(65	)			209.2				(3,767	)			1,078				(449.4	)
Operating earnings (loss)(1)		2,151				1,660				29.6				10,041				(8,998	)			(211.6	)
Operating earnings (loss)(1) as a percentage of revenue		6.1	%			4.5	%							6.8	%			(6.0	)%
Well servicing statistics:
Number of service rigs (end of period)(2)		123				210				(41.4	)			123				210				(41.4	)
Service rig operating hours		39,865				35,773				11.4				147,154				157,467				(6.5	)
Service rig operating hour utilization		35	%			19	%							32	%			21	%
Service rig revenue per operating hour		746				753				(0.9	)			739				709				4.2

(1) See “NON-GAAP MEASURES”.
(2) In 2019, 75 rigs were not registered with the industry association and 12 snubbing units were sold.
n/m Calculation not meaningful.

Revenue from Completion and Production Services decreased $2 million compared with the fourth quarter of 2018 due to lower activity in our rental and camp and catering divisions and the impact of the disposal of our snubbing units and waste water assets partially offset by higher well service activity in Canada and the U.S. Our service rig operating hours in the quarter were up 11% from the fourth quarter of 2018 while average service rig revenue per operating hour decreased slightly to $746. Excluding the impact of snubbing assets, which were disposed in the first quarter, our fourth quarter 2019 service activity and rates increased 20% and 5%, respectively, over the comparative 2018 period. Approximately 78% of our fourth quarter Canadian service rig activity was oil related.

Adjusted EBITDA (see “NON-GAAP MEASURES”) of $6 million in the fourth quarter of 2019 was 11% lower than the 2018 quarter primarily due to lower activity in our non-well servicing divisions and the impact of asset disposals, partially offset by higher well service activity and lower costs resulting from our cost control measures.

During the fourth quarter, the segment generated 81% of its revenue from Canadian operations and 19% from U.S. operations compared with 90% from Canada and 10% in the U.S. in the 2018 quarter.

Operating costs as a percentage of revenue was 77% compared with the prior year comparative quarter of 78%. The reduction of operating costs as a percentage of revenue was primarily the result of a higher proportion of 24-hour well service work and continued cost control.

Depreciation expense in the quarter was 20% lower than the prior year comparative period. The decrease in depreciation expense was primarily due to a lower capital asset base resulting from the disposition of snubbing units and waste water assets and assets becoming fully depreciated.

In the first quarter of 2019, as a cost control measure, Precision did not renew the registration of 75 Canadian-based well service rigs with industry associations due to low anticipated activity levels for the year.

SEGMENT REVIEW OF CORPORATE AND OTHER

Our Corporate and Other segment provides support functions to our operating segments. The Corporate and Other segment had negative Adjusted EBITDA (see “NON-GAAP MEASURES”) of $14 million compared with Adjusted EBITDA of $5 million in the comparative 2018 quarter. The lower Adjusted EBITDA in 2019 was primarily the result of higher share-based incentive compensation in the current quarter and the non-recurring receipt of the transaction termination fee in the fourth quarter of 2018.

OTHER ITEMS

Share-based Incentive Compensation Plans

We have several cash-settled share-based incentive plans and two equity-settled share-based incentive plans. Details of vesting conditions, fair value determination and accounting policy for each plan can be found in the notes to our consolidated annual financial statements for the year ended December 31, 2018.

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

	Three months ended December 31,								Year ended December 31,
(Stated in thousands of Canadian dollars)	2019				2018				2019				2018
Cash settled share-based incentive plans		3,529				(14,208	)			8,193				6,391
Equity settled share-based incentive plans:
Executive PSU		3,149				1,527				11,648				5,871
Stock option plan		524				681				2,275				3,336
Total share-based incentive compensation plan expense		7,202				(12,000	)			22,116				15,598
Allocated:
Operating		1,711				(5,437	)			5,025				3,656
General and Administrative		5,491				(6,563	)			17,091				11,942
		7,202				(12,000	)			22,116				15,598

Cash settled shared-based compensation expense for the fourth quarter of 2019 was an expense of $4 million compared to a recovery of $14 million in the comparable 2018 quarter. The higher share-based compensation expense in 2019 was the result of our share price increasing in the 2019 fourth quarter versus a decline in the 2018 quarter.

Executive PSU share-based incentive compensation expense for the quarter was $3 million compared with $2 million in the same quarter in 2018. The increased compensation expense was the result of additional Executive PSUs granted in 2019 offset partially by lower fair values for the 2019 grants.

Finance Charges

Net finance charges were $28 million, a decrease of $4 million compared with the fourth quarter of 2018, primarily due to a reduction in interest expense related to the debt retired in 2018 and 2019, partially offset by the impact of the adoption of IFRS 16. Interest charges on our U.S. denominated long-term debt in the fourth quarter of 2019 were US$20 million ($26 million) compared with US$23 million ($30 million) in 2018.

Normal Course Issuer Bid

In 2019, the Toronto Stock Exchange approved our application to implement a Normal Course Issuer Bid. As at December 31, 2019, we purchased and cancelled a total of 16 million common shares for $26 million. Subsequent to December 31, 2019, we purchased and cancelled an additional 2 million common shares for $3 million.

Rig Decommissioning

In the fourth quarter of 2019, we decommissioned certain drilling and ancillary equipment that no longer met our High-Performance technology standards. Included in the decommissioned assets were those drilling rigs previously held for sale. We recognized a $20 million loss on the decommissioning of these assets.

Change in Rig Components

In the fourth quarter of 2019, we performed our annual review of estimated useful lives, residual values and methods and components of depreciation of property, plant and equipment. Due to changes in circumstance surrounding the timing, nature and complexity of rig recertifications, we determined the associated costs represent a separate component of property, plant and equipment. This change has been recognized prospectively and is expected to increase our 2020 depreciation expense by approximately $3 million.

Income Tax

Income tax recovery for the quarter was $12 million compared with $2 million in the same quarter in 2018. In 2019, the Province of Alberta announced various reductions to corporate income tax rates, that when fully implemented over the next three years will decrease the provincial corporate income tax rate from 12% to 8% by 2022. The increase in the income tax recovery for the quarter was mainly due to a larger fourth quarter loss prior to the non-taxable portion of the goodwill impairment in 2018; adjustments for prior period taxes; reversal of unrecognized tax benefits; and U.S. tax reform legislation clarification enacted in December 2019, offset by a reduction in the benefit from the Alberta income tax rate reductions.

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, regardless of where we are in the business cycle. We maintain a variable operating cost structure so we can be responsive to changes in demand.

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

Liquidity

Amount		Availability		Used for		Maturity
Senior credit facility (secured)
US$500 million (extendible, revolving term credit facility with US$300 million accordion feature)		Undrawn, except US$25 million in outstanding letters of credit		General corporate purposes		November 21, 2023
Operating facilities (secured)
$40 million		Undrawn, except $26 million in outstanding letters of credit		Letters of credit and general corporate purposes
US$15 million		Undrawn		Short term working capital requirements
Demand letter of credit facility (secured)
US$30 million		Undrawn, except US$2 million in outstanding letters of credit		Letters of credit
Unsecured senior notes (unsecured)
US$91 million – 6.5%		Fully drawn		Capital expenditures and general corporate purposes		December 15, 2021
US$345 million – 7.75%		Fully drawn		Debt redemption and repurchases		December 15, 2023
US$308 million – 5.25%		Fully drawn		Capital expenditures and general corporate purposes		November 15, 2024
US$370 million – 7.125%		Fully drawn		Debt redemption and repurchases		January 15, 2026

As of December 31, 2019, we had US$1,113 million ($1,445 million) outstanding under our unsecured senior notes as compared with US$1,267 million ($1,729 million) at December 31, 2018. The current blended cash interest cost of our debt is approximately 6.8%.

During 2019, we repurchased and cancelled US$30 million of our 7.125% unsecured senior notes due 2026, US$5 million of our 7.75% notes due 2023 and US$43 million of our 5.25% notes due 2024. In addition, we redeemed US$75 million principal amount of our 6.50% unsecured senior notes due 2021.

Subsequent to December 31, 2019, we redeemed an additional US$25 million of our 6.5% unsecured senior notes due 2021.

Covenants

Following is a listing of our currently applicable covenants and the calculations as of December 31, 2019:

	Covenant		At December 31, 2019
Senior Credit Facility
Consolidated senior debt to consolidated covenant EBITDA(1)	2.50			0.00
Consolidated covenant EBITDA to consolidated interest expense(1)	2.50			3.39
Unsecured Senior Notes
Consolidated interest coverage ratio	2.00			3.30

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

At December 31, 2019, we were in compliance with the covenants of our senior credit facility and unsecured senior notes.

Senior Credit Facility

The senior credit facility requires that we comply with certain restrictive and financial covenants including a leverage ratio of consolidated senior debt to consolidated Covenant EBITDA (see “NON-GAAP MEASURES”) of less than 2.5:1. For purposes of calculating the leverage ratio consolidated senior debt only includes secured indebtedness.

Under the senior credit facility, we are required to maintain a ratio of consolidated Covenant EBITDA (see “NON-GAAP MEASURES”) to consolidated interest expense, for the most recent four consecutive quarters, of greater than 2.5:1.

Unsecured Senior Notes

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

The unsecured senior notes contain a restricted payment covenant that limits our ability to make payments in the nature of dividends, distributions and for repurchases from shareholders. This restricted payment basket grows from a starting point of October 1, 2010 for the 2021 and 2024 unsecured senior notes, from October 1, 2016 for the 2023 unsecured senior notes and October 1, 2017 for the 2026 unsecured senior notes by, among other things, 50% of consolidated cumulative net earnings and decreases by 100% of consolidated cumulative net losses, as defined in the note agreements, and payments made to shareholders. Beginning with the December 31, 2015 calculation the governing net restricted payments basket was negative which limits our ability to declare and make dividend payments or share repurchases until such time as the governing restricted payments basket becomes positive.

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

Impact of foreign exchange rates

On average, the Canada-U.S. foreign exchange rate was consistent in the fourth quarter of 2019 as compared to 2018. For the year ended December 31, 2019, the Canadian dollar weakened by 2% from 2018. The devaluation of the Canadian dollar resulted in higher translated U.S. denominated revenue and costs. The following table summarizes the average and closing Canada-U.S. foreign exchanges rates:

	Three months ended December 31,								Year ended December 31,
	2019				2018				2019				2018
Canada-U.S. foreign exchange rates
Average		1.32				1.32				1.33				1.30
Closing		1.30				1.37				1.30				1.37

Hedge of investments in foreign operations

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

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

Average shares outstanding

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

	Three months ended December 31,								Year ended December 31,
(Stated in thousands)	2019				2018				2019				2018
Weighted average shares outstanding – basic		282,850				293,782				290,782				293,560
Effect of stock options and other equity compensation plans		–				–				6,397				–
Weighted average shares outstanding – diluted		282,850				293,782				297,179				293,560

QUARTERLY FINANCIAL SUMMARY

(Stated in thousands of Canadian dollars, except per share amounts)		2019
Quarters ended		March 31				June 30				September 30				December 31
Revenue			434,043				359,424				375,552				372,301
Adjusted EBITDA(1)			107,967				81,037				97,895				105,006
Net earnings (loss)			25,014				(13,801	)			(3,534	)			(1,061	)
Net earnings (loss) per basic share			0.09				(0.05	)			(0.01	)			(0.00	)
Net earnings (loss) per diluted share			0.08				(0.05	)			(0.01	)			(0.00	)
Funds provided by operations(1)			95,993				40,950				79,930				75,779
Cash provided by operations			40,587				106,035				66,556				74,981

(Stated in thousands of Canadian dollars, except per share amounts)		2018
Quarters ended		March 31				June 30				September 30				December 31
Revenue			401,006				330,716				382,457				427,010
Adjusted EBITDA(1)			97,469				62,182				80,988				134,492
Net loss			(18,077	)			(47,217	)			(30,648	)			(198,328	)
Net loss per basic			(0.06	)			(0.16	)			(0.10	)			(0.68	)
Net loss per diluted share			(0.06	)			(0.16	)			(0.10	)			(0.68	)
Funds provided by operations(1)			104,026				50,225				64,368				92,595
Cash provided by operations			38,189				129,695				31,961				93,489

(1) See “NON-GAAP MEASURES”.

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

Because of the nature of our business, we are required to make judgments and estimates in preparing our Condensed Interim Consolidated Financial Statements that could materially affect the amounts recognized. Our judgments and estimates are based on our past experiences and assumptions we believe are reasonable in the circumstances. The critical judgments and estimates used in preparing the Condensed Interim Consolidated Financial Statements are described in our 2018 Annual Report and there have been no material changes to our critical accounting judgments and estimates during the three months and year ended December 31, 2019 except for those impacted by the adoption of new accounting standards.

CHANGES IN ACCOUNTING POLICY

New standards adopted

The following standards became effective on January 1, 2019:

• IFRS 16 Leases

• IFRIC 23 Uncertainty over Income Tax Treatments

Precision adopted these standards using the modified retrospective method on January 1, 2019. Please see the unaudited September 30, 2019 Condensed Interim Consolidated Financial Statements and related notes for further details on the adoption of these standards.

Impact of IFRS 16 Leases on Adjusted EBITDA

With the adoption of IFRS 16, the accounting treatment for operating leases when Precision is the lessee, changed effective January 1, 2019. Precision adopted IFRS 16 using the modified retrospective approach and our comparative information was not restated. As a result, the comparability of our 2019 Adjusted EBITDA to periods prior to January 1, 2019 is impacted.

Under IFRS 16, leases classified as operating leases were recognized on our statement of financial position with a right of use asset and corresponding lease obligation representing the present value of Precision’s future lease payments. Once recognized, right of use assets are depreciated over the shorter of their useful life and the term of the lease. The lease obligation is measured at amortized cost using the effective interest method. Under this approach, an interest charge is applied to accrete the lease obligation to the present value of future lease payments. As lease payments are made, the lease obligation is reduced.

Historically, operating lease obligations were accounted for as ‘off-balance sheet’ and lease expenses were only recognized at the time of payment in either operating or general and administrative expense. However, under IFRS 16, lease costs are reflected on the statement of earnings (loss) through depreciation and interest expense, resulting in an increase to Adjusted EBITDA.

Upon transition, we recognized right of use assets and corresponding lease obligations of $73 million. For the three months and year ended December 31, 2019, we recorded lease interest charges of $1 million and $3 million and depreciated our right of use assets by $2 million and $8 million, respectively. As a result of the new lease standard, our Adjusted EBITDA was positively impacted for the three months and year ended December 31, 2019 by $3 million and $11 million, respectively.

NON-GAAP MEASURES

In this release we reference non-GAAP (Generally Accepted Accounting Principles) measures. Adjusted EBITDA, Covenant EBITDA, Operating Earnings (Loss), Funds Provided by (Used in) Operations and Working Capital are terms used by us to assess performance as we believe they provide useful supplemental information to investors. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies.

Adjusted EBITDA

We believe that Adjusted EBITDA (earnings before income taxes, gain on repurchase and redemption of unsecured senior notes, finance charges, foreign exchange, impairment of goodwill, reversal of impairment of property, plant and equipment, loss on asset decommissioning, gain on asset disposals and depreciation and amortization), as reported in the Interim Consolidated Statement of Earnings (Loss), is a useful measure, because it gives an indication of the results from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.

Covenant EBITDA

Covenant EBITDA, as defined in our senior credit facility agreement, is used in determining the Corporation’s compliance with its covenants. Covenant EBITDA differs from Adjusted EBITDA by the exclusion of bad debt expense, restructuring costs, certain foreign exchange amounts and with the adoption of the new lease standard IFRS 16 – Leases, the deduction of cash lease payments incurred after December 31, 2018.

Operating Earnings (Loss)

We believe that operating earnings (loss) 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. Operating earnings (loss) is calculated as follows:

	Three months ended December 31,								Year ended December 31,
(Stated in thousands of Canadian dollars)	2019				2018				2019				2018
Revenue		372,301				427,010				1,541,320				1,541,189
Expenses:
Operating		241,717				285,222				1,038,967				1,067,264
General and administrative		25,578				21,496				104,010				111,830
Restructuring		–				–				6,438				1,164
Other		–				(14,200	)			–				(14,200	)
Depreciation and amortization		80,932				106,946				333,616				377,044
Gain on asset disposals		(3,888	)			(7,905	)			(50,741	)			(11,384	)
Loss on asset decommissioning		20,263				–				20,263				–
Reversal of impairment of property, plant and equipment		–				–				(5,810	)			–
Impairment of goodwill		–				207,544				–				207,544
Operating earnings (loss)		7,699				(172,093	)			94,577				(198,073	)
Foreign exchange		(4,306	)			3,198				(8,722	)			4,017
Finance charges		28,275				32,220				118,453				127,178
Gain on repurchase and redemption of unsecured notes		(3,178	)			(6,848	)			(6,815	)			(5,672	)
Loss before income taxes		(13,092	)			(200,663	)			(8,339	)			(323,596	)

Funds Provided By (Used In) Operations

We believe that funds provided by (used in) 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 generate prior to consideration of working capital, which is primarily made up of highly liquid balances.

Working Capital

We define working capital as current assets less current liabilities as reported on the Condensed Interim Consolidated Statement of Financial Position.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

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

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

• our strategic priorities for 2020;
• our capital expenditure plans for 2020;
• anticipated activity levels in 2020;
• anticipated demand for Tier 1 rigs;
• the average number of term contracts in place for 2020 and 2021;
• our future debt reduction plans; and
• our commercialization and expansion of technology offerings.

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

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

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

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

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2018, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Stated in thousands of Canadian dollars)		December 31, 2019				December 31, 2018
ASSETS
Current assets:
Cash		$	74,701			$	96,626
Accounts receivable			310,204				372,336
Income tax recoverable			1,142				–
Inventory			31,718				34,081
Assets held for sale			–				19,658
Total current assets			417,765				522,701
Non-current assets:
Income tax recoverable			–				2,449
Deferred tax assets			4,724				36,880
Right of use assets			66,142				–
Property, plant and equipment			2,749,463				3,038,612
Intangibles			31,746				35,401
Total non-current assets			2,852,075				3,113,342
Total assets		$	3,269,840			$	3,636,043
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	199,478			$	274,489
Income taxes payable			4,142				7,673
Lease obligation			12,449				–
Total current liabilities			216,069				282,162
Non-current liabilities:
Share-based compensation			8,830				6,520
Provisions and other			9,959				10,577
Lease obligation			54,980				–
Long-term debt			1,427,181				1,706,253
Deferred tax liabilities			25,389				72,779
Total non-current liabilities			1,526,339				1,796,129
Shareholders’ equity:
Shareholders’ capital			2,296,378				2,322,280
Contributed surplus			66,255				52,332
Deficit			(969,456	)			(978,874	)
Accumulated other comprehensive income			134,255				162,014
Total shareholders’ equity			1,527,432				1,557,752
Total liabilities and shareholders’ equity		$	3,269,840			$	3,636,043

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

		Three Months Ended December 31,								Year Ended December 31,
(Stated in thousands of Canadian dollars, except per share amounts)		2019				2018				2019				2018
Revenue		$	372,301			$	427,010			$	1,541,320			$	1,541,189
Expenses:
Operating			241,717				285,222				1,038,967				1,067,264
General and administrative			25,578				21,496				104,010				111,830
Restructuring			–				–				6,438				1,164
Other recoveries			–				(14,200	)			–				(14,200	)
Earnings before income taxes, gain on repurchase and redemption of unsecured senior notes, finance charges, foreign exchange, impairment of goodwill, reversal of impairment of property, plant and equipment, loss on asset decommissioning, gain on asset disposals and depreciation and amortization			105,006				134,492				391,905				375,131
Depreciation and amortization			80,932				106,946				333,616				377,044
Gain on asset disposals			(3,888	)			(7,905	)			(50,741	)			(11,384	)
Loss on asset decommissioning			20,263				–				20,263				–
Reversal of impairment of property, plant and equipment			–				–				(5,810	)			–
Impairment of goodwill			–				207,544				–				207,544
Foreign exchange			(4,306	)			3,198				(8,722	)			4,017
Finance charges			28,275				32,220				118,453				127,178
Gain on repurchase and redemption of unsecured senior notes			(3,178	)			(6,848	)			(6,815	)			(5,672	)
Loss before income taxes			(13,092	)			(200,663	)			(8,339	)			(323,596	)
Income taxes:
Current			(3,473	)			2,177				1,080				8,573
Deferred			(8,558	)			(4,512	)			(16,037	)			(37,899	)
			(12,031	)			(2,335	)			(14,957	)			(29,326	)
Net earnings (loss)		$	(1,061	)		$	(198,328	)		$	6,618			$	(294,270	)
Net earnings (loss) per share:
Basic		$	(0.00	)		$	(0.68	)		$	0.02			$	(1.00	)
Diluted		$	(0.00	)		$	(0.68	)		$	0.02			$	(1.00	)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

		Three Months Ended December 31,								Year Ended December 31,
(Stated in thousands of Canadian dollars)		2019				2018				2019				2018
Net earnings (loss)		$	(1,061	)		$	(198,328	)		$	6,618			$	(294,270	)
Unrealized gain (loss) on translation of assets and liabilities of operations denominated in foreign currency			(41,849	)			128,674				(106,781	)			175,630
Foreign exchange gain (loss) on net investment hedge with U.S. denominated debt, net of tax			28,941				(104,716	)			79,022				(145,226	)
Comprehensive loss		$	(13,969	)		$	(174,370	)		$	(21,141	)		$	(263,866	)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)

		Three Months Ended December 31,								Year Ended December 31,
(Stated in thousands of Canadian dollars)		2019				2018				2019				2018
Cash provided by (used in):
Operations:
Net earnings (loss)		$	(1,061	)		$	(198,328	)		$	6,618			$	(294,270	)
Adjustments for:
Long-term compensation plans			6,072				(1,599	)			19,457				17,401
Depreciation and amortization			80,932				106,946				333,616				377,044
Gain on asset disposals			(3,888	)			(7,905	)			(50,741	)			(11,384	)
Loss on asset decommissioning			20,263				–				20,263				–
Reversal of impairment of property, plant and equipment			–				–				(5,810	)			–
Impairment of goodwill			–				207,544				–				207,544
Foreign exchange			(4,263	)			2,556				(8,585	)			2,341
Finance charges			28,275				32,220				118,453				127,178
Income taxes			(12,031	)			(2,335	)			(14,957	)			(29,326	)
Other			(783	)			(27	)			(981	)			(1,269	)
Gain on repurchase and redemption of unsecured senior notes			(3,178	)			(6,848	)			(6,815	)			(5,672	)
Income taxes paid			(316	)			(477	)			(5,060	)			(4,446	)
Income taxes recovered			1,337				1,775				2,479				33,283
Interest paid			(35,919	)			(41,369	)			(116,655	)			(108,622	)
Interest received			339				442				1,370				1,412
Funds provided by operations			75,779				92,595				292,652				311,214
Changes in non-cash working capital balances			(798	)			894				(4,493	)			(17,880	)
			74,981				93,489				288,159				293,334
Investments:
Purchase of property, plant and equipment			(21,541	)			(29,594	)			(159,886	)			(114,576	)
Purchase of intangibles			(332	)			(687	)			(808	)			(11,567	)
Proceeds on sale of property, plant and equipment			4,931				12,020				90,768				24,457
Changes in non-cash working capital balances			609				(1,190	)			(4,574	)			892
			(16,333	)			(19,451	)			(74,500	)			(100,794	)
Financing:
Redemption and repurchase of unsecured senior notes			(55,812	)			(92,065	)			(198,387	)			(168,722	)
Share repurchase			(17,719	)			–				(25,902	)			–
Lease payments			(1,699	)			–				(6,823	)			–
Debt amendment fees			(702	)			(638	)			(702	)			(638	)
Issuance of common shares on the exercise of options			–				–				–				275
			(75,932	)			(92,703	)			(231,814	)			(169,085	)
Effect of exchange rate changes on cash			(1,776	)			5,529				(3,770	)			8,090
Increase (decrease) in cash			(19,060	)			(13,136	)			(21,925	)			31,545
Cash, beginning of period			93,761				109,762				96,626				65,081
Cash, end of period		$	74,701			$	96,626			$	74,701			$	96,626

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(Stated in thousands of Canadian dollars)		Shareholders’ capital				Contributed surplus				Accumulated other comprehensive income				Deficit				Total equity
Balance at January 1, 2019		$	2,322,280			$	52,332			$	162,014			$	(978,874	)		$	1,557,752
Lease transition adjustment			–				–				–				2,800				2,800
Net earnings for the period			–				–				–				6,618				6,618
Other comprehensive loss for the period			–				–				(27,759	)			–				(27,759	)
Share repurchase			(25,902	)			–				–				–				(25,902	)
Share-based compensation expense			–				13,923				–				–				13,923
Balance at December 31, 2019		$	2,296,378			$	66,255			$	134,255			$	(969,456	)		$	1,527,432

(Stated in thousands of Canadian dollars)		Shareholders’ capital				Contributed surplus				Accumulated other comprehensive income				Deficit				Total equity
Balance at January 1, 2018		$	2,319,293			$	44,037			$	131,610			$	(684,604	)		$	1,810,336
Net loss for the period			–				–				–				(294,270	)			(294,270	)
Other comprehensive income for the period			–				–				30,404				–				30,404
Shares issued on redemption non-management directors’ DSUs			2,609				(809	)			–				–				1,800
Share options exercised			378				(103	)			–				–				275
Share-based compensation expense			–				9,207				–				–				9,207
Balance at December 31, 2018		$	2,322,280			$	52,332			$	162,014			$	(978,874	)		$	1,557,752

FOURTH QUARTER 2019 EARNINGS CONFERENCE CALL AND WEBCAST

Precision Drilling Corporation (“Precision”) intends to release its 2019 fourth quarter results before the market opens on Thursday, February 13, 2020, and has scheduled a conference call and webcast to begin promptly at 12:00 Noon MT (2:00 p.m. ET) on the same day.

The conference call dial in numbers are 844-515-9176 or 614-999-9312.

A live webcast of the conference call will be accessible on Precision’s website at www.precisiondrilling.com by selecting “Investor Relations”, then “Webcasts & Presentations”. Shortly after the live webcast, an archived version will be available for approximately 60 days.

An archived recording of the conference call will be available approximately one hour after the completion of the call until February 19, 2020 by dialing 855-859-2056 or 404-537-3406, passcode 9196243.

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 Super Series drilling rigs supported by an industry leading technology platform that offers innovative drilling solutions to deliver efficient, predictable and repeatable results through service differentiation. Precision also offers directional drilling services, well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada. 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”.

For further information, please contact:

Carey Ford, Senior Vice President and Chief Financial Officer
713.435.6100

Dustin Honing, Manager, Investor Relations
403.716.4500

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