SYS-CON MEDIA Authors: Adrian Bridgwater, Yeshim Deniz, Elizabeth White, Sean Houghton, Glenn Rossman

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Precision Drilling Corporation Announces 2014 First Quarter Dividend and 2013 Fourth Quarter and Year End Financial Results

CALGARY, ALBERTA -- (Marketwired) -- 02/13/14 --

(Canadian Dollars Except as Indicated)

This news release contains "forward-looking information and statements" within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Cautionary Statement Regarding Forward-Looking Information and Statements" later in this news release.

The Board of Directors of Precision Drilling Corporation (TSX:PD) (NYSE:PDS) ("Precision" or the "Corporation") has declared a first quarter dividend on Precision's common shares of $0.06 per share, payable on March 14, 2014, to shareholders of record on February 27, 2014. For Canadian income tax purposes, all dividends paid by Precision on its common shares are designated as "eligible dividends", unless otherwise indicated by the Corporation.

Net earnings this quarter were $68 million, or $0.24 per diluted share, compared to a net loss of $116 million, or $0.42 per diluted share, in the fourth quarter of 2012. In the fourth quarter of 2012, we recognized charges associated with asset decommissioning and a goodwill impairment that, combined, reduced net earnings by $179 million and net earnings per diluted share by $0.63.

Revenue this quarter was $567 million, or 6% higher than the fourth quarter of 2012, mainly because of higher international and U.S. drilling activity and higher pricing in Canadian contract drilling partially offset by lower turnkey activity in the United States.

Earnings before income taxes, finance charges, foreign exchange, impairment of goodwill, loss on asset decommissioning and depreciation and amortization ("adjusted EBITDA") this quarter were $198 million or 12% higher than the fourth quarter of 2012. Our adjusted EBITDA margin was 35% this quarter, compared to 33% in the fourth quarter of 2012. The increase in adjusted EBITDA margin was mainly due to increases in international and U.S. contract drilling activity and lower costs in U.S. contract drilling. Our activity for the quarter, as measured by drilling rig utilization days, increased 3% in the United States and 43% internationally, and decreased 1% in Canada compared to the fourth quarter of 2012.

For the year ended December 31, 2013, net earnings were $191 million or $0.66 per diluted share compared to net earnings of $52 million or $0.18 per diluted share in 2012. Revenue for the year was $2,030 million compared to $2,041 million in 2012. Adjusted EBITDA totaled $639 million for 2013 compared to $671 million in 2012, a decrease of 5%. Improved pricing in Canada and increased activity internationally were offset by lower activity levels in both the Contract Drilling and Completion and Production Services segments. Activity for Precision in 2013, as measured by drilling rig utilization days, decreased 6% in Canada and 13% in the United States compared to 2012, while international activity increased 70%.

Kevin Neveu, Precision's President and Chief Executive Officer, stated: "Precision's fourth quarter financial performance was a result of strengthening demand for our Tier 1 rigs, continued improvement in dayrates and excellent cost control by our drilling groups. Precision's High Performance, High Value strategy and our position as a preeminent driller for North America's unconventional resources is beginning to deliver the financial returns we expect."

"In the United States our activity bottomed in the second quarter at 77 rigs and today we are operating 95 rigs and our fourth quarter results reflect strengthening dayrates and margins. Our customers clearly recognize the efficiency and performance of Precision's Tier 1 rig fleet and we are pleased to see this value realized in our results."

"In our Canadian operations, Precision's focused investments are providing strong returns from new build and upgraded rigs for deeper unconventional drilling and pad drilling for heavy oil. These opportunities provide higher long-term returns compared to managing our business to meet short-term utilization targets. Fourth quarter activity was slightly lower than 2012, but Precision's increasing share of the Tier 1 market is driving dayrates, which continue to trend upwards with nearly a $1,000 per day increase year over year."

"The fourth quarter was the first time our international drilling division delivered results from as many as 12 rigs active, with modest startup expense drag, contributing to our results at a more normal run rate. We are optimistic about this division's performance in 2014 with the two ST-3000 rig deployments in Kuwait later this year. Additionally, the recent integrated project management awards could lead to several more rigs in Mexico for Precision."

"While our Completion and Production Services group continues to be challenged by low customer demand, I am pleased with our move into the northern U.S. during 2013. This geographic expansion leveraged our core completion and production capabilities, diversified our footprint, and continues to provide the opportunity to create value for a larger customer base."

"While 2013 may be seen as disappointing in some respects, as customer demand and activity waned for the first half of the year, the momentum that began to build in our third quarter and gained real traction for Precision in the fourth quarter, sets up a strong start to 2014. The consistently firm oil prices and the weather-driven improved natural gas prices should prove to be positive short-term catalysts. Furthermore, crude transportation debottlenecking and the potential for natural gas exports are encouraging long-term catalysts for Precision."

"With today's dividend announcement, Precision will have declared $89 million in dividend payments to shareholders in the past 14 months," concluded Mr. Neveu.

SELECT FINANCIAL AND OPERATING INFORMATION

Financial Highlights


----------------------------------------------------------------------------
(Stated in thousands                                                        
 of Canadian             Three months                                       
 dollars, except                ended                    Year ended         
 where noted)            December 31,                  December 31,         
                                                                            
                                            %                             % 
                        2013     2012  Change       2013       2012  Change 
----------------------------------------------------------------------------
Revenue              566,909  533,948     6.2  2,029,977  2,040,741    (0.5)
Adjusted EBITDA(1)   197,744  177,026    11.7    638,833    670,792    (4.8)
Adjusted EBITDA % of                                                        
 revenue                34.9%    33.2%              31.5%      32.9%        
Net earnings (loss)   67,921 (116,339)    n/m    191,150     52,360   265.1 
Cash provided by                                                            
 operations           94,452  136,317   (30.7)   428,086    635,286   (32.6)
Funds provided by                                                           
 operations(1)       155,816  142,576     9.3    461,973    598,812   (22.9)
Capital spending:                                                           
 Expansion            53,734  123,063   (56.3)   282,145    596,194   (52.7)
 Upgrade              29,926   22,706    31.8    141,132    130,094     8.5 
 Maintenance and                                                            
  infrastructure      39,382   40,881    (3.7)   112,527    141,769   (20.6)
 Proceeds on sale     (3,351) (17,603)  (81.0)   (13,372)   (31,423)  (57.4)
----------------------------------------------------------------------------
Net capital spending 119,691  169,047   (29.2)   522,432    836,634   (37.6)
                                                                            
Net earnings (loss)                                                         
 - per share ($):                                                           
 Basic                  0.24    (0.42)    n/m       0.69       0.19   263.2 
 Diluted                0.24    (0.42)    n/m       0.66       0.18   266.7 
Dividend paid per                                                           
 share ($)              0.06     0.05    20.0       0.21       0.05   320.0 
----------------------------------------------------------------------------
(1) Adjusted EBITDA and funds provided by operations are additional GAAP    
    measures. See "ADDITIONAL GAAP MEASURES".                               
n/m - calculation not meaningful                                            
                                                                            
Operating Highlights                                                        
----------------------------------------------------------------------------
                        Three months ended                Year ended        
                              December 31,              December 31,        
                                                %                         % 
                             2013     2012 Change      2013     2012 Change 
----------------------------------------------------------------------------
Contract drilling rig                                                       
 fleet                        327      321    1.9       327      321    1.9 
Drilling rig utilization                                                    
 days:                                                                      
 Canada                     8,201    8,242   (0.5)   30,530   32,352   (5.6)
 United States              8,258    8,014    3.0    30,268   34,597  (12.5)
 International              1,052      736   42.9     3,555    2,086   70.4 
Service rig fleet             222      214    3.7       222      214    3.7 
Service rig operating                                                       
 hours                     71,981   77,234   (6.8)  283,576  294,681   (3.8)
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Financial Position                                                          
----------------------------------------------------------------------------
(Stated in thousands of Canadian dollars,       December 31,    December 31,
 except ratio)                                          2013            2012
----------------------------------------------------------------------------
Working capital                                      305,783         278,021
Long-term debt(1)                                  1,323,268       1,218,796
Total long-term financial liabilities              1,355,535       1,245,290
Total assets                                       4,579,123       4,300,263
Long-term debt to long-term debt plus equity                                
 ratio(1)                                               0.36            0.36
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(1) Net of unamortized debt issue costs.                                    

Revenue in the fourth quarter of this year was $33 million higher than in 2012 mainly because of higher international and U.S. drilling activity and higher pricing in Canadian contract drilling partially offset by lower turnkey activity in the United States. In addition, activity levels in our Completion and Production Services segment were higher in the United States and lower in Canada. Compared to the fourth quarter of 2012, revenue from our Contract Drilling Services segment increased 7% while revenue in our Completion and Production Services segment remained consistent.

Adjusted EBITDA margin (adjusted EBITDA as a percentage of revenue) was 35% this quarter, compared to 33% in the fourth quarter of 2012. The increase in adjusted EBIDTA margin was mainly due to improved profitability in international and U.S. contract drilling operations, and new build and upgraded rigs that we have deployed over the past few years offset by weaker demand for our completion and production services. Our portfolio of term customer contracts, a highly variable operating cost structure and economies achieved through vertical integration of our supply chain all support the sustainability of our adjusted EBITDA margins.

Our vision is to be recognized as the High Performance, High Value provider of services for global energy exploration and development. We work toward that vision by defining and measuring our results against strategic priorities. Our 2014 priorities are to:


1.  Continue to execute our High Performance, High Value strategy. Invest in
    Precision's physical and human capital infrastructure to advance field
    level professional development, provide industry leading service to
    customers and demand safe operations. Continue to measure and benchmark
    performance with a view to exceed the high standards we set. 

2.  Leverage our scale in operations. Utilize established systems to promote
    consistent and reliable service and to reduce operating costs across all
    geographies and service lines.  

3.  Seize the growth opportunities in front of us. Deliver new build and
    upgraded rigs to customer contracts, expand international activity in
    existing theatres of operation and grow our Canadian LNG drilling
    leadership position. Be a recognized leader in the integrated
    directional drilling transformation. Grow U.S. presence in Completion
    and Production Services segments. 

4.  Increase returns for our investors. 

For the fourth quarter of 2013, the average West Texas Intermediate price of oil was down slightly from the 2013 yearly averages while average AECO and Henry Hub natural gas prices were higher.


                                  Three months ended             Years ended
                                        December 31,            December 31,
                                    2013        2012        2013        2012
----------------------------------------------------------------------------
Average oil and natural gas                                                 
 prices                                                                     
Oil                                                                         
 West Texas Intermediate                                                    
  (per barrel) (US$)               97.50       88.10       98.02       94.13
Natural gas                                                                 
 Canada                                                                     
  AECO (per MMBtu) (Cdn$)           3.53        3.20        3.18        2.39
 United States                                                              
  Henry Hub (per MMBtu)                                                     
   (US$)                            3.85        3.40        3.73        2.75
----------------------------------------------------------------------------

Summary for the three months ended December 31, 2013:


--  Operating earnings (see "Additional GAAP Measures" in this news release)
    this quarter were $108 million, or 19% of revenue, compared to a loss of
    $105 million in 2012. In the fourth quarter of 2012, we recorded a
    charge of $192 million related to the decommissioning of 52 drilling
    rigs, which reduced 2012 operating earnings. Operating earnings for 2013
    were positively impacted by the increase in activity in our
    international and U.S. operations offset by weaker demand for our
    Canadian completion and production services, when compared to the fourth
    quarter in 2012. 

--  General and administrative expenses this quarter were $34 million, or $4
    million higher than the fourth quarter of 2012 primarily because of the
    year to date true up of incentive compensation costs tied to the price
    of our common shares and operating results.  

--  Net finance charges were $23 million, an increase of $1 million compared
    with the fourth quarter of 2012 due to the increase in average
    outstanding debt stated in Canadian dollars. 

--  Average revenue per utilization day for contract drilling rigs in Canada
    increased in the fourth quarter of 2013 to $22,932 from the prior year
    fourth quarter of $21,997 and decreased in the United States to
    US$23,841 from US$25,465 for the fourth quarter of 2012. The increase in
    revenue rates for the fourth quarter in Canada was due to rig mix in
    part from increased activity days from Tier 1 rigs compared to the prior
    year quarter as new build and upgraded rigs entered the fleet. In the
    United States, the average daily rate was down from the prior year
    because of a reduction in turnkey activity. Excluding turnkey results,
    the average U.S. contract drilling revenue per utilization day increased
    US$318 from the fourth quarter of the prior year. In Canada, for the
    fourth quarter of 2013, 44% of Precision's utilization days were
    achieved from drilling rigs working under term contracts compared to 41%
    in the 2012 comparative period. In the United States, for the fourth
    quarter of 2013, 62% of Precision's utilization days were generated from
    rigs working under term contracts compared to 64% in the 2012
    comparative period. Turnkey revenue for the fourth quarter of 2013 was
    US$17 million, compared with US$32 million in the 2012 comparative
    period. Within our Completion and Production Services segment, average
    hourly rates for service rigs were $878 in the fourth quarter of 2013
    compared to $795 in the fourth quarter of 2012. The increase in the
    average hourly rate was the result of an increase in coil tubing hours. 

--  Average operating costs per utilization day for drilling rigs in Canada
    increased in the fourth quarter of 2013 to $10,391 from the prior year
    fourth quarter of $10,141 while in the United States costs decreased to
    US$14,150 in 2013 from US$16,103 in 2012. The cost increase in Canada
    was primarily due to the October crew wage increase. The cost decrease
    per day in the United States was primarily due to lower turnkey activity
    and cost efficiencies gained throughout the year. Excluding turnkey
    results, the average U.S. contract drilling operating cost per
    utilization day decreased US$882 from the fourth quarter of the prior
    year. Within Precision's Completion and Production Services segment,
    average hourly operating costs for service rigs increased to $703 in the
    fourth quarter of 2013 as compared to $594 in the fourth quarter of 2012
    primarily due to costs associated with coil tubing and fixed costs
    spread over a lower activity base. 

--  Precision realized revenue from international contract drilling of $47
    million in the fourth quarter of 2013, a $24 million increase over the
    prior year period. During the fourth quarter of 2013, one rig contract
    in Mexico was terminated resulting in lump sum recognition of revenue of
    US$3 million with no associated costs. 

--  Precision realized revenue from directional services of $31 million in
    the fourth quarter of 2013, a $4 million decrease from the prior year
    period.  

--  Funds provided by operations (see "Additional GAAP Measures" in this
    news release) in the fourth quarter of 2013 were $156 million, an
    increase of $13 million from the prior year comparative quarter of $143
    million. The increase is the result of higher earnings for the quarter
    compared to last year. 

--  During December 2013, all of Precision's outstanding warrants were
    exercised providing proceeds to Precision of $48 million. 

--  Capital expenditures for the purchase of property, plant and equipment
    were $123 million in the fourth quarter, a decrease of $64 million over
    the same period in 2012. Capital spending for the fourth quarter of 2013
    included $54 million for expansion capital, $30 million for upgrade
    capital and $39 million for the maintenance of existing assets and
    infrastructure spending. 

Summary for the year ended December 31, 2013:


--  Revenue for 2013 was $2,030 million, a decrease of 1% from 2012. 

--  Operating earnings were $306 million, an increase of $135 million or 79%
    from 2012. Operating earnings were 15% of revenue in 2013 compared to 8%
    in 2012. In 2012, we recorded a charge of $192 million related to the
    decommissioning of 52 drilling rigs, which reduced 2012 operating
    earnings. 

--  General and administrative costs were $143 million, an increase of $16
    million over 2012 primarily as a result of the increase in incentive
    compensation costs tied to the performance of Precision's common shares
    and costs associated with administration of increased international and
    U.S. activities in 2013. 

--  Net finance charges were $93 million, an increase of $6 million from
    2012. The increase is primarily due to the increase in average
    outstanding debt stated in Canadian dollars.  

--  Funds provided by operations (see "Additional GAAP Measures" in this
    news release) in 2013 were $462 million, a decrease of $137 million from
    2012. 

--  Capital expenditures for the purchase of property, plant and equipment
    were $536 million in 2013 a decrease of $332 million over 2012. Capital
    spending for 2013 included $282 million for expansion capital, $141
    million for upgrade capital and $113 million for the maintenance of
    existing assets and infrastructure. 

OUTLOOK

Contracts

Our portfolio of term customer contracts provides a base level of activity and revenue and, as of February 12, 2014, we have term contracts in place for an average of 57 rigs in Canada, 53 in the United States and eight internationally for the first quarter of 2014 and an average of 51 rig contracts in Canada, 41 in the United States and seven internationally for the full year. 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 United States and internationally, term contracts normally generate 365 utilization days per year.

Drilling Activity

In the United States, our average active rig count in the quarter was 90 rigs, up three rigs over the fourth quarter in 2012 and up nine rigs over the third quarter of 2013. We currently have 95 rigs active in the United States.

In Canada, our average active rig count in the quarter was 89 rigs, the same as the fourth quarter in 2012 and up six rigs over the third quarter of 2013. We currently have 144 rigs active in Canada and expect the strength of drilling activity in the first quarter to be driven in large part by weather. We expect to benefit from the fleet enhancements made over the past few years when compared to the prior year period.

Internationally, our average active rig count in the quarter was 11 rigs, up three rigs over the fourth quarter in 2012 and in line with the third quarter of 2013. We currently have 11 rigs active internationally and expect our active rig count to grow over the next two quarters as two new build rigs for the Kuwait market are delivered late in the second quarter, and we see potential for additional rigs going to work in Mexico.

Industry Conditions

To date in 2014, drilling activity has been similar to this time last year for both Canada and the United States. According to industry sources, as of February 7, 2014, the U.S. active land drilling rig count was up about 1% from the same point last year and the Canadian active land drilling rig count had decreased about 2%. Despite the active industry rig count softness, demand for Tier 1 assets continues to be strong, benefiting drilling contractors, like Precision, with a high percentage of Tier 1 assets.

Canada has been experiencing an increase in natural gas and gas liquids drilling activity related to deep basin drilling in northwestern Alberta and northeastern British Columbia while the trend towards oil-directed drilling in the United States has continued in 2014. To date in 2014, approximately 64% of the Canadian industry's active rigs and 80% of the U.S. industry's active rigs were drilling for oil targets, compared to 73% for Canada and 76% for the U.S. at the same time last year.

Capital Spending

Capital spending in 2014 is expected to be $515 million:


--  The 2014 capital expenditure plan includes $268 million for expansion
    capital, $195 million for sustaining and infrastructure expenditures,
    and $52 million to upgrade existing rigs. We expect that the $515
    million will be split $478 million in the Contract Drilling segment and
    $37 million in the Completion and Production Services segment. 

--  Precision's expansion capital plan includes 11 new build drilling rigs
    including six for Canada, two for the United States, two for Kuwait and
    one Super Triple ST-1500 rig which will only be completed once a firm
    customer contract is secured. The six rigs for Canada include five ST-
    1500 rigs for northern gas and gas liquids drilling and one Precision
    Super Single for heavy oil development drilling. The U.S. new builds
    consist of two ST-1500 rigs while in Kuwait two ST-3000 rigs are
    expected to be deployed late in the second quarter. Additional expansion
    capital is allocated to equipment for Completion and Production Service,
    and long-lead items. 

--  The 2014 capital plan includes 10 to 14 rig upgrades, four of which
    represent the completion of the 2013 rig upgrade program. 

--  Precision's sustaining and infrastructure capital plan is based upon
    currently anticipated activity levels for 2014 and includes a technical
    and operational support centre in Nisku, Alberta along with regional
    support facilities and corporate systems. The Nisku centre consolidates
    Precision's existing Canadian operations and technical support centres
    and will contain a new employee training centre complete with a fully
    functional training rig equipped with the latest drilling technology.
    The Nisku facility is expected to support Canadian operations for
    several decades, provide increased capacity and efficiency, and ensure
    that we continue to deliver services with highly skilled and well
    trained field personnel. The portion of the 2014 budget allocated to
    this facility is approximately $30 million. 

SEGMENTED FINANCIAL RESULTS

Precision's operations are reported in two segments: the Contract Drilling Services segment, which includes the drilling rig, directional drilling, trucking, oilfield supply and manufacturing operations; and the Completion and Production Service segment which includes the service rig, snubbing, coil tubing, rental, camp and catering and wastewater treatment operations.


(Stated in thousands     Three months                                       
 of Canadian                    ended                    Year ended         
 dollars)                December 31,                  December 31,         
                                                                            
                                            %                             % 
                        2013     2012  Change       2013       2012  Change 
----------------------------------------------------------------------------
Revenue:                                                                    
 Contract Drilling                                                          
  Services           484,349  452,104     7.1  1,719,910  1,725,240    (0.3)
 Completion and                                                             
  Production                                                                
  Services            85,385   85,225     0.2    323,353    326,079    (0.8)
 Inter-segment                                                              
  eliminations        (2,825)  (3,381)  (16.4)   (13,286)   (10,578)   25.6 
----------------------------------------------------------------------------
                     566,909  533,948     6.2  2,029,977  2,040,741    (0.5)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Adjusted EBITDA:(1)                                                         
 Contract Drilling                                                          
  Services           200,271  172,169    16.3    653,664    649,281     0.7 
 Completion and                                                             
  Production                                                                
  Services            16,261   22,222   (26.8)    61,032     93,554   (34.8)
 Corporate and Other (18,788) (17,365)    8.2    (75,863)   (72,043)    5.3 
----------------------------------------------------------------------------
                     197,744  177,026    11.7    638,833    670,792    (4.8)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         
                                                                            
SEGMENT REVIEW OF CONTRACT DRILLING SERVICES                                
                                                                            
(Stated in thousands                                                        
 of Canadian            Three months                                        
 dollars, except               ended                     Year ended         
 where noted)           December 31,                   December 31,         
                                                                            
                                            %                             % 
                        2013    2012   Change       2013       2012  Change 
----------------------------------------------------------------------------
Revenue              484,349 452,104      7.1  1,719,910  1,725,240    (0.3)
Expenses:                                                                   
 Operating           273,107 270,804      0.9  1,019,156  1,036,553    (1.7)
 General and                                                                
  administrative      10,971   9,131     20.2     47,090     39,406    19.5 
----------------------------------------------------------------------------
Adjusted EBITDA(1)   200,271 172,169     16.3    653,664    649,281     0.7 
 Depreciation         79,687  78,327      1.7    292,217    271,993     7.4 
 Loss on asset                                                              
  decommissioning          - 192,469   (100.0)         -    192,469  (100.0)
----------------------------------------------------------------------------
Operating earnings                                                          
 (loss)(1)           120,584 (98,627)     n/m    361,447    184,819    95.6 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings                                                          
 (loss) as a                                                                
 percentage of                                                              
 revenue                24.9%  (21.8%)              21.0%      10.7%        
----------------------------------------------------------------------------
Drilling rig revenue                                                        
 per utilization day                                                        
 in Canada (Cdn$)     22,932  21,997      4.3     22,108     21,030     5.1 
----------------------------------------------------------------------------
Drilling rig revenue                                                        
 per utilization day                                                        
 in the United                                                              
 States(2) (US$)      23,841  25,465     (6.4)    23,575     23,696    (0.5)
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         
(2) Includes revenue from idle but contracted rig days.                     
n/m - calculation not meaningful                                            
                                                                            
                                     Three months ended December 31,        
Canadian onshore drilling                                                   
 statistics:(1)                       2013                    2012          
----------------------------------------------------------------------------
                               Precision Industry(2)   Precision Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs (end                                                
 of period)                          187         819         186         822
Drilling rig operating days                                                 
 (spud to release)                 7,202      32,517       7,269      30,849
Drilling rig operating day                                                  
 utilization                         42%         43%         39%         40%
Number of wells drilled              873       2,975         862       2,813
Average days per well                8.2        10.9         8.4        11.0
Number of metres drilled                                                    
 (000s)                            1,489       6,301       1,435       5,856
Average metres per well            1,706       2,118       1,665       2,082
Average metres per day               207         194         197         190
----------------------------------------------------------------------------
                                                                            
                                         Year ended December 31,            
Canadian onshore drilling                                                   
 statistics:(1)                       2013                    2012          
----------------------------------------------------------------------------
                               Precision Industry(2)   Precision Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs (end                                                
 of period)                          187         819         186         822
Drilling rig operating days                                                 
 (spud to release)                26,983     120,043      28,848     124,319
Drilling rig operating day                                                  
 utilization                         39%         40%         40%         42%
Number of wells drilled            3,211      10,903       3,085      10,753
Average days per well                8.4        11.0         9.4        11.6
Number of metres drilled                                                    
 (000s)                            5,576      22,733       5,233      20,869
Average metres per well            1,736       2,085       1,696       1,941
Average metres per day               207         189         181         168
----------------------------------------------------------------------------
(1) Canadian operations only.                                               
(2) Canadian Association of Oilwell Drilling Contractors ("CAODC") and      
    Precision - excludes non-CAODC rigs and non-reporting CAODC members.    
                                                                            
United States onshore                                                       
 drilling statistics:(1)              2013                    2012          
----------------------------------------------------------------------------
                               Precision Industry(2)   Precision Industry(2)
----------------------------------------------------------------------------
Average number of active                                                    
 land rigs for quarters                                                     
 ended:                                                                     
 March 31                             81       1,706         104       1,947
 June 30                              80       1,710          97       1,924
 September 30                         81       1,709          90       1,855
 December 31                          90       1,697          87       1,759
----------------------------------------------------------------------------
Annual average                        83       1,705          95       1,871
----------------------------------------------------------------------------
(1) United States lower 48 land operations only.                            
(2) Baker Hughes rig counts.                                                

Revenue from Contract Drilling Services was $484 million this quarter, or 7% higher than the fourth quarter of 2012, while adjusted EBITDA increased by 16% to $200 million. The increases were mainly due to higher drilling rig utilization in our international business and in the United States as well as higher average dayrates in the Canadian market partially offset by lower turnkey activity in the United States.

Operating results for our international business improved as we averaged 11 rigs working compared to eight in the prior year comparative quarter. Drilling utilization days in our international operations for the quarter were 1,052 days, 43% higher than the prior year comparative period.

Drilling rig utilization days in Canada (drilling days plus move days) during the fourth quarter of 2013 were 8,201, a decrease of 1% compared to 2012 while drilling rig utilization days in the United States were 8,258, or 3% higher than the same quarter of 2012. The increase in U.S. activity was primarily due to strong demand for Tier 1 assets and resulted in market share gains by Precision during the second half of the year. The majority of our North America activity came from oil and liquids-rich natural gas related plays.

Drilling rig revenue per utilization day was up 4% in Canada and down 6% in the U.S. compared to the same quarter in 2012. The increase in average dayrates for Canada was the result of improved rig mix and continued demand for Tier 1 assets. In the U.S., the decrease in the average dayrate was driven by lower turnkey revenue.

In Canada, 44% of utilization days in the fourth quarter were generated from rigs under term contract, compared to 41% in the fourth quarter of 2012. In the U.S., 62% of utilization days were generated from rigs under term contract as compared to 64% in the fourth quarter of 2012. At the end of the quarter, we had 57 drilling rigs under contract in Canada, 58 in the U.S. and 10 internationally.

Operating costs were 56% of revenue for the quarter, which was four percentage points lower than the prior year period. On a per utilization day basis, operating costs for the drilling rig division in Canada were above the prior year primarily because of an increase in crew wage expense. In the U.S., operating costs for the quarter on a per day basis were down from the fourth quarter in 2012 as a result of proportionately lower turnkey activity and cost savings from operational efficiencies.

Depreciation expense in the quarter was 2% higher than in the fourth quarter of 2012 due to an increase in overall drilling activity and a greater proportion of operating days from our Tier 1 drilling rigs in 2013 relative to 2012. With the exception of certain PSST drilling rigs and directional drilling equipment, contract drilling operations use the unit of production method of calculating depreciation.

SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES


(Stated in thousands                                                        
 of Canadian             Three months                                       
 dollars, except                ended                    Year ended         
 where noted)            December 31,                  December 31,         
                                                                            
                                            %                             % 
                        2013     2012  Change       2013       2012  Change 
----------------------------------------------------------------------------
Revenue               85,385   85,225     0.2    323,353    326,079    (0.8)
Expenses:                                                                   
 Operating            65,199   59,383     9.8    242,768    217,326    11.7 
 General and                                                                
  administrative       3,925    3,620     8.4     19,553     15,199    28.6 
----------------------------------------------------------------------------
Adjusted EBITDA(1)    16,261   22,222   (26.8)    61,032     93,554   (34.8)
 Depreciation          8,324    8,983    (7.3)    32,630     30,758     6.1 
----------------------------------------------------------------------------
Operating                                                                   
 earnings(1)           7,937   13,239   (40.0)    28,402     62,796   (54.8)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Operating earnings                                                          
 as a percentage of                                                         
 revenue                 9.3%    15.5%               8.8%      19.3%        
----------------------------------------------------------------------------
                                                                            
Well servicing                                                              
 statistics:                                                                
 Number of service                                                          
  rigs (end of                                                              
  period)                222      214     3.7        222        214     3.7 
 Service rig                                                                
  operating hours     71,981   77,234    (6.8)   283,576    294,681    (3.8)
 Service rig                                                                
  operating hour                                                            
  utilization             35%      38%                36%        38%        
 Service rig revenue                                                        
  per operating hour                                                        
  (Cdn$)                 878      795    10.4        854        744    14.8 
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         

Revenue from Completion and Production Services was in line with the fourth quarter of 2012, as weaker demand in the Canadian market offset the expansion of services in the United States. Activity in Canadian well servicing was down 16% but was offset by a 158% increase is U.S. well servicing activity and higher average hourly rates in both Canada and the United States. Adjusted EBITDA was $6 million lower than the fourth quarter of 2012 due to weaker demand in Canada and higher costs in the United States.

Well servicing activity in the fourth quarter was 7% lower than the fourth quarter of 2012, as lower customer demand in Canada partially offset our growing U.S. presence. Approximately 83% of the fourth quarter service rig activity was oil related. Our rental division activity in the fourth quarter was lower than the fourth quarter of 2012 mainly due to the excess amount of surface storage capacity in Western Canada.

Average service rig revenue per operating hour in the fourth quarter was $878, or $83 higher than the fourth quarter of 2012. The increase was primarily the result of increased coil tubing operations in the current quarter, which operate at higher rates.

Operating costs as a percentage of revenue increased to 76% in the fourth quarter of 2013, from 70% in the fourth quarter of 2012. Operating costs per service rig operating hour were higher than in the fourth quarter of 2012 mainly because of the increase in costs associated with the new coil tubing operations and fixed costs spread over a lower activity base.

Depreciation in the fourth quarter of 2013 was 7% lower than the fourth quarter of 2012 because of lower equipment utilization and losses on disposal realized in the prior year comparative quarter. We use the straight-line method of calculating depreciation for our completion and production business lines, except for the well servicing division, where we use the unit of production method.

SEGMENT REVIEW OF CORPORATE AND OTHER

Our Corporate and Other segment provides support functions to our operating segments. The Corporate and Other segment had an adjusted EBITDA loss of $19 million for the fourth quarter of 2013, $1 million higher than the prior year comparative period due to higher incentive plan compensation.

OTHER ITEMS

Net financial charges for the quarter were $23 million, an increase of $1 million from the fourth quarter of 2012.

We had a foreign exchange gain of $4 million during the fourth quarter of 2013 due to the weakening of the Canadian dollar versus the U.S. dollar, which affected the net U.S. dollar denominated monetary position in the Canadian dollar-based companies.

Income tax expense for the quarter was $20 million compared with a recovery of $61 million in the same quarter in 2012. The increase is primarily the result of an increase in operating results.

In June 2013, a wholly owned subsidiary of Precision lost a tax appeal in the Ontario Superior Court of Justice related to a reassessment of Ontario income tax for the subsidiary's 2001 through 2004 taxation years. Precision has appealed the decision to the Ontario Court of Appeal and we expect this appeal to be heard in the latter half of 2014. Despite the decision in the Superior Court, management believes it is more likely than not that Precision will prevail on appeal. Should Precision lose on appeal, approximately $55 million of the long-term income tax recoverable related to this issue would be expensed.

LIQUIDITY AND CAPITAL RESOURCES

The oilfield services business is inherently cyclical in nature. To manage this, we focus on maintaining a strong balance sheet so we have the financial flexibility we need to continue to manage our growth and cash flow, no matter where we are in the business cycle.

We apply a disciplined approach to managing and tracking results of our operations to keep costs down. We maintain a variable cost structure so we can be responsive to changes in demand.

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

Liquidity

As at December 31, 2013, our liquidity was supported by a cash balance of $81 million, an undrawn balance on our senior secured credit facility of approximately US$793 million availability on our operating facilities totaling approximately $40 million and approximately US$25 million available on a secured facility for letters of credit

At December 31, 2013, including letters of credit, we had approximately $1,394 million outstanding under our secured and unsecured credit facilities and $23 million in unamortized debt issue costs.


Amount              Availability       Used for           Maturity          
----------------------------------------------------------------------------
Senior facility                                                             
(secured)                                                                   
----------------------------------------------------------------------------
US$850 million      Drawn US$28        General corporate  November 17, 2018 
(extendible,        million and US$28  purposes                             
revolving term      million in                                              
credit facility     outstanding                                             
with US$250 million letters of credit                                       
accordion feature)                                                          
----------------------------------------------------------------------------
Operating facilities (secured)                                              
----------------------------------------------------------------------------
$40 million         Undrawn, except    Letters of credit                    
                    $17 million in     and general                          
                    outstanding        corporate purposes                   
                    letters of credit                                       
----------------------------------------------------------------------------
US$15 million       Undrawn            Short term working                   
                                       capital                              
                                       requirements                         
----------------------------------------------------------------------------
Demand letter of credit facility (secured)                                  
----------------------------------------------------------------------------
US$25 million       Undrawn, except    Letters of credit                    
                    $0.2 million in                                         
                    outstanding                                             
                    letters of credit                                       
----------------------------------------------------------------------------
Senior notes  (unsecured)                                                   
----------------------------------------------------------------------------
$200 million        Fully drawn        Debt repayment     March 15, 2019    
----------------------------------------------------------------------------
US$650 million      Fully drawn        Debt repayment and November 15, 2020 
                                       general corporate                    
                                       purposes                             
----------------------------------------------------------------------------
US$400 million      Fully drawn        Capital            December 15, 2021 
                                       expenditures and                     
                                       general corporate                    
                                       purposes                             
----------------------------------------------------------------------------

Our secured facility includes financial ratio covenants that are tested quarterly; we are compliant with these covenants and expect to remain compliant.

The current blended cash interest cost of our debt is about 6.5%.

Hedge of investments in U.S. operations

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

Average shares outstanding

In December 2013, we issued 15 million shares upon the exercise of warrants for cash of $48 million. The following table reconciles the weighted average shares outstanding used in computing basic and diluted earnings per share:


----------------------------------------------------------------------------
                                  Three months ended              Year ended
                                        December 31,            December 31,
                                    2013        2012        2013        2012
----------------------------------------------------------------------------
Weighted average shares                                                     
 outstanding - basic             280,388     276,372     277,583     276,276
Effect of warrants                 7,710       8,661       9,327       9,418
Effect of share options and                                                 
 other equity compensation                                                  
 plans                               913         780         971         933
----------------------------------------------------------------------------
Weighted average shares                                                     
 outstanding - diluted           289,011     285,813     287,881     286,627
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
QUARTERLY FINANCIAL SUMMARY                                                 
(Stated in thousands of Canadian dollars, except per share amounts)         
                                                2013                        
----------------------------------------------------------------------------
Quarters ended              March 31      June 30  September 30  December 31
----------------------------------------------------------------------------
Revenue                      595,720      378,898       488,450      566,909
Adjusted EBITDA(1)           215,181       88,248       137,660      197,744
Net earnings:                 93,313          473        29,443       67,921
 Per basic share                0.34         0.00          0.11         0.24
 Per diluted share              0.33         0.00          0.10         0.24
Funds provided by                                                           
 operations(1)               144,682       33,791       127,684      155,816
Cash provided by                                                            
 operations                   62,948      182,345        88,341       94,452
Dividends per share             0.05         0.05          0.05         0.06
----------------------------------------------------------------------------
                                                                            
                                               2012                         
----------------------------------------------------------------------------
Quarters ended              March 31      June 30  September 30 December 31 
----------------------------------------------------------------------------
Revenue                      640,066      381,966       484,761     533,948 
Adjusted EBITDA(1)           245,574       97,192       151,000     177,026 
Net earnings (loss):         111,081       18,261        39,357    (116,339)
  Per basic share               0.40         0.07          0.14       (0.42)
  Per diluted share             0.39         0.06          0.14       (0.42)
Funds provided by                                                           
 operations(1)               247,739       62,373       146,124     142,576 
Cash provided by                                                            
 operations                  162,440      275,346        61,183     136,317 
Dividends per share                -            -             -        0.05 
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".                                         

ADDITIONAL GAAP MEASURES

We reference Generally Accepted Accounting Principles (GAAP) measures that are not defined terms under International Financial Reporting Standards to assess performance because we believe they provide useful supplemental information to investors.

Adjusted EBITDA

We believe that adjusted EBITDA (earnings before income taxes, financing charges, foreign exchange, impairment of goodwill, loss on asset decommissioning and depreciation and amortization) as reported in the 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 non-cash depreciation and amortization charges.

Operating Earnings (Loss)

We believe that operating earnings (loss), as reported in the Consolidated Statements of 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.

Funds Provided by Operations

We believe that funds provided by operations, as reported in the 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.

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: the payment of our declared first quarter dividend; the expected deployment of two additional rigs to Kuwait and our increased market penetration in Mexico; our plans to continue executing our High Performance, High Value strategy; our plans to leverage our scale in operations to promote consistent and reliable service and to reduce our operating costs; our ability to deliver new build and upgraded rigs to our customers on a timely basis; our plans to expand our international activity in existing theatres of operation, to grow our Canadian LNG drilling leadership position and to grow our Completion and Production Services segment in the U.S.; delivering increased returns for our investors; the expected weather impact on our Canadian drilling operations; our capital spending plans and projections including plans to expand our fleet with 11 new build drilling rigs and the upgrading of 10 to 14 existing rigs; the expected completion of our Nisku technical support centre and its future impact on our operational capabilities; the appeal process and potential liability arising from the income tax reassessment in Ontario of one of our wholly-owned subsidiaries; and our ability to remain compliant with our financial ratio covenants under our secured facility.

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 and expected future developments as well as other factors we believe are appropriate in the circumstances. However, 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: fluctuations in the price and demand for oil and natural gas; fluctuations in the level of oil and natural gas exploration and development activities; fluctuations in the demand for contract drilling, well servicing and ancillary oilfield services; capital market liquidity available to fund customer drilling programs; availability of cash flow, debt and/or equity sources to fund Precision's capital and operating requirements, as needed; sustainability of our dividend; the effects of seasonal and weather conditions on operations and facilities; the existence of competitive operating risks inherent in our businesses; general economic, market or business conditions; changes in laws or regulations; the availability of qualified personnel, management or other key inputs; currency exchange fluctuations; and other unforeseen conditions which could impact the use of services supplied by Precision and Precision's ability to respond to such conditions.

Consequently, all of the forward-looking information and statements made in this report are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by Precision will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Precision or its business or operations. Readers are therefore cautioned not to place undue reliance on such forward-looking information and statements. Except as may be required by law, Precision assumes no obligation to update publicly any such forward-looking information and statements, whether as a result of new information, future events or otherwise.

table


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION                               
 (UNAUDITED)                                                                
                                                  December 31, December 31, 
(Stated in thousands of Canadian dollars)                 2013         2012 
----------------------------------------------------------------------------
                                                                            
ASSETS                                                                      
Current assets:                                                             
  Cash                                                 $80,606    $ 152,768 
  Accounts receivable                                  549,697      509,547 
  Inventory                                             12,378       13,787 
----------------------------------------------------------------------------
Total current assets                                   642,681      676,102 
Non-current assets:                                                         
  Income tax recoverable                                58,435       64,579 
  Property, plant and equipment                      3,561,734    3,242,929 
  Intangibles                                            3,917        6,101 
  Goodwill                                             312,356      310,552 
----------------------------------------------------------------------------
Total non-current assets                             3,936,442    3,624,161 
----------------------------------------------------------------------------
Total assets                                        $4,579,123   $4,300,263 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND EQUITY                                                      
Current liabilities:                                                        
  Accounts payable and accrued liabilities            $332,838     $333,893 
  Income tax payable                                     4,060       64,188 
----------------------------------------------------------------------------
Total current liabilities                              336,898      398,081 
                                                                            
Non-current liabilities:                                                    
  Share based compensation                              14,431        8,676 
  Provisions and other                                  17,836       17,818 
  Long-term debt                                     1,323,268    1,218,796 
  Deferred tax liabilities                             487,347      485,592 
----------------------------------------------------------------------------
Total non-current liabilities                        1,842,882    1,730,882 
                                                                            
Shareholders' equity:                                                       
  Shareholders' capital                              2,305,227    2,251,982 
  Contributed surplus                                   29,175       24,474 
  Retained earnings (deficit)                           88,416      (44,621)
  Accumulated other comprehensive loss                 (23,475)     (60,535)
----------------------------------------------------------------------------
  Total shareholders' equity                         2,399,343    2,171,300 
----------------------------------------------------------------------------
Total liabilities and shareholders' equity          $4,579,123   $4,300,263 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (UNAUDITED)                      
                                                                            
                               Three months ended                Year ended 
                                     December 31,              December 31, 
(Stated in thousands of                                                     
 Canadian dollars,                                                          
 except per share                                                           
 amounts)                       2013         2012         2013         2012 
----------------------------------------------------------------------------
                                                                            
Revenue                  $   566,909  $   533,948  $ 2,029,977  $ 2,040,741 
Expenses:                                                                   
  Operating                  335,480      326,806    1,248,637    1,243,301 
  General and                                                               
   administrative             33,685       30,116      142,507      126,648 
----------------------------------------------------------------------------
Earnings before income                                                      
 taxes, finance charges,                                                    
 foreign exchange,                                                          
 impairment of goodwill,                                                    
 loss on asset                                                              
 decommissioning and                                                        
 depreciation and                                                           
 amortization                197,744      177,026      638,833      670,792 
Depreciation and                                                            
 amortization                 90,142       89,278      333,159      307,525 
Loss on asset                                                               
 decommissioning                   -      192,469            -      192,469 
----------------------------------------------------------------------------
Operating earnings                                                          
 (loss)                      107,602     (104,721)     305,674      170,798 
Impairment of goodwill             -       52,539            -       52,539 
Foreign exchange              (3,687)      (1,857)      (9,112)       3,753 
Finance charges               23,328       22,107       93,248       86,829 
----------------------------------------------------------------------------
Earnings (loss) before                                                      
 income taxes                 87,961     (177,510)     221,538       27,677 
Income taxes:                                                               
  Current                     14,681       23,416       45,017       70,576 
  Deferred                     5,359      (84,587)     (14,629)     (95,259)
----------------------------------------------------------------------------
                              20,040      (61,171)      30,388      (24,683)
----------------------------------------------------------------------------
                                                                            
Net earnings (loss)      $    67,921  $  (116,339) $   191,150  $    52,360 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings (loss) per                                                     
 share:                                                                     
  Basic                  $      0.24  $     (0.42) $      0.69  $      0.19 
  Diluted                $      0.24  $     (0.42) $      0.66  $      0.18 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)          
                                                                            
                               Three months ended                Year ended 
                                     December 31,              December 31, 
(Stated in thousands of                                                     
 Canadian dollars)              2013         2012         2013         2012 
----------------------------------------------------------------------------
Net earnings (loss)      $    67,921  $  (116,339) $   191,150  $    52,360 
Unrealized gain (loss)                                                      
 on translation of                                                          
 assets and liabilities                                                     
 of operations                                                              
 denominated in foreign                                                     
 currency                     57,780       16,598      109,195      (32,878)
Foreign exchange gain                                                       
 (loss) on net                                                              
 investment hedge with                                                      
 U.S. denominated debt,                                                     
 net of tax                  (36,855)     (10,228)     (72,135)      23,205 
----------------------------------------------------------------------------
Comprehensive income                                                        
 (loss)                  $    88,846  $  (109,969) $   228,210  $    42,687 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)                            


                               Three months ended                Year ended 
                                     December 31,              December 31, 
(Stated in thousands of                                                     
 Canadian dollars)               2013        2012        2013          2012 
----------------------------------------------------------------------------
Cash provided by (used                                                      
 in):                                                                       
Operations:                                                                 
 Net earnings (loss)       $   67,921  $ (116,339) $  191,150  $     52,360 
 Adjustments for:                                                           
  Long-term compensation                                                    
   plans                        4,231       4,293      20,708        19,350 
  Depreciation and                                                          
   amortization                90,142      89,278     333,159       307,525 
  Loss on asset                                                             
   decommissioning                  -     192,469           -       192,469 
  Impairment of goodwill            -      52,539           -        52,539 
  Foreign exchange             (4,703)     (1,689)     (9,216)        4,403 
  Finance charges              23,328      22,107      93,248        86,829 
  Income taxes                 20,040     (61,171)     30,388       (24,683)
  Other                        (3,345)     (1,019)     (3,754)        1,018 
  Income taxes paid            (6,651)     (3,088)   (109,326)      (10,403)
  Income taxes recovered        1,674         108       3,761           721 
  Interest paid               (37,276)    (35,287)    (89,156)      (85,251)
  Interest received               455         375       1,011         1,935 
----------------------------------------------------------------------------
Funds provided by                                                           
 operations                   155,816     142,576     461,973       598,812 
Changes in non-cash                                                         
 working capital balances     (61,364)     (6,259)    (33,887)       36,474 
----------------------------------------------------------------------------
                               94,452     136,317     428,086       635,286 
Investments:                                                                
 Business acquisitions,                                                     
  net of cash acquired              -           -           -           (25)
 Purchase of property,                                                      
  plant and equipment        (123,042)   (186,650)   (535,804)     (868,057)
 Proceeds on sale of                                                        
  property, plant and                                                       
  equipment                     3,351      17,603      13,372        31,423 
 Changes in income tax                                                      
  recoverable                   6,144           -       6,144             - 
 Changes in non-cash                                                        
  working capital balances    (26,690)    (31,052)    (10,247)      (93,462)
----------------------------------------------------------------------------
                             (140,237)   (200,099)   (526,535)     (930,121)
Financing:                                                                  
 Dividends paid               (16,618)    (13,821)    (58,113)      (13,821)
 Debt issue costs                   -           -        (883)       (2,855)
 Debt facility amendment                                                    
  costs                             -           -           -          (149)
 Increase in long-term                                                      
  debt                         14,781           -      29,781             - 
 Issuance of common shares                                                  
  on the exercise of                                                        
  options                         278         436       2,432         1,926 
 Issuance of common shares                                                  
  on the exercise of                                                        
  warrants                     48,300           -      48,300             - 
----------------------------------------------------------------------------
                               46,741     (13,385)     21,517       (14,899)
----------------------------------------------------------------------------
Effect of exchange rate                                                     
 changes on cash and cash                                                   
 equivalents                   (2,165)      3,094       4,770        (4,974)
----------------------------------------------------------------------------
Decrease in cash and cash                                                   
 equivalents                   (1,209)    (74,073)    (72,162)     (314,708)
Cash and cash equivalents,                                                  
 beginning of period           81,815     226,841     152,768       467,476 
----------------------------------------------------------------------------
Cash and cash equivalents,                                                  
 end of period             $   80,606  $  152,768  $   80,606  $    152,768 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)                    
                                                                            
(Stated in thousands of Canadian dollars)                                   
----------------------------------------------------------------------------
                                                                Accumulated 
                                                                      other 
                                 Shareholders'   Contributed  comprehensive 
                                       capital       surplus           loss 
----------------------------------------------------------------------------
Balance at January 1, 2013         $ 2,251,982      $ 24,474      $ (60,535)
Net earnings for the period                  -             -              - 
Other comprehensive income for                                              
 the period                                  -             -         37,060 
Dividends                                    -             -              - 
Share options exercised                  3,707        (1,275)             - 
Shares issued on redemption of                                              
 non-management directors DSUs           1,238        (1,031)             - 
Warrants exercised                      48,300             -              - 
Share based compensation                                                    
 expense                                     -         7,007              - 
----------------------------------------------------------------------------
Balance at December 31, 2013       $ 2,305,227      $ 29,175      $ (23,475)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            

----------------------------------------------------------------------------
                                                                            
                                                    Retained                
                                                    earnings          Total 
                                                    (deficit)        equity 
----------------------------------------------------------------------------
Balance at January 1, 2013                         $ (44,621)   $ 2,171,300 
Net earnings for the period                          191,150        191,150 
Other comprehensive income for                                              
 the period                                                -         37,060 
Dividends                                            (58,113)       (58,113)
Share options exercised                                    -          2,432 
Shares issued on redemption of                                              
 non-management directors DSUs                             -            207 
Warrants exercised                                         -         48,300 
Share based compensation                                                    
 expense                                                   -          7,007 
----------------------------------------------------------------------------
Balance at December 31, 2013                        $ 88,416    $ 2,399,343 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(Stated in thousands of Canadian dollars)                                   
----------------------------------------------------------------------------
                                                                Accumulated 
                                                                      other 
                                 Shareholders'   Contributed  comprehensive 
                                       capital       surplus           loss 
----------------------------------------------------------------------------
Balance at January 1, 2012         $ 2,248,217      $ 18,396      $ (50,862)
Net earnings for the period                  -             -              - 
Other comprehensive loss for                                                
 the period                                  -             -         (9,673)
Dividends                                    -             -              - 
Share options exercised                  3,050        (1,124)             - 
Shares issued on redemption of                                              
 non-management directors DSUs             706          (706)             - 
Shares issued on waiver of                                                  
 right to dissent by dissenting                                             
 unitholder                                  9            (3)             - 
Share based compensation                                                    
 expense                                     -         7,911              - 
----------------------------------------------------------------------------
Balance at December 31, 2012       $ 2,251,982      $ 24,474      $ (60,535)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                      Total 
                                                     Deficit         equity 
----------------------------------------------------------------------------
Balance at January 1, 2012                         $ (83,160)   $ 2,132,591 
Net earnings for the period                           52,360         52,360 
Other comprehensive loss for                                                
 the period                                                -         (9,673)
Dividends                                            (13,821)       (13,821)
Share options exercised                                    -          1,926 
Shares issued on redemption of                                              
 non-management directors DSUs                             -              - 
Shares issued on waiver of                                                  
 right to dissent by dissenting                                             
 unitholder                                                -              6 
Share based compensation                                                    
 expense                                                   -          7,911 
----------------------------------------------------------------------------
Balance at December 31, 2012                       $ (44,621)   $ 2,171,300 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

FOURTH QUARTER 2014 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, February 13, 2014.

The conference call dial in numbers are 1-866-226-1793 or 416-340-2216.

A live webcast of the conference call will be accessible on Precision's website at www.precisiondrilling.com by selecting "Investor Centre", then "Webcasts". Shortly after the live webcast, an archived version will be available for approximately 30 days.

An archived recording of the conference call will be available approximately one hour after the completion of the call until March 13, 2014 by dialing 1-800-408-3053 or 905-694-9451, passcode 5078039.

About Precision

Precision is a leading provider of safe and High Performance, High Value services to the oil and gas industry. Precision provides customers with access to an extensive fleet of contract drilling rigs, directional drilling services, well service and snubbing rigs, coil tubing services, camps, rental equipment, and wastewater treatment units backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada. Precision is listed on the Toronto Stock Exchange under the trading symbol "PD" and on the New York Stock Exchange under the trading symbol "PDS".

Contacts:
Precision Drilling Corporation
Carey Ford
Vice President, Finance and Investor Relations
403.716.4575
403.716.4755 (FAX)

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

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