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Precision Drilling Corporation Announces 2014 Third Quarter Dividend and 2014 Second Quarter Financial Results

CALGARY, ALBERTA -- (Marketwired) -- 07/24/14 -- (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 dividend on its common shares of $0.06 per common share, payable on August 20, 2014, to shareholders of record on August 8, 2014. For Canadian income tax purposes, all dividends paid by Precision on its common shares are designated as "eligible dividends", unless otherwise indicated by Precision.

We recorded a net loss this quarter of $7 million, or loss per diluted share of $0.02, compared to net earnings of $0.5 million, or $0.00 per diluted share, in the second quarter of 2013. Effective January 1, 2014 we began calculating depreciation on our drilling rigs and service rigs on a straight-line basis which reduced net earnings for the quarter by approximately $14 million or $0.05 per diluted share compared with what net earnings would have been using the previous depreciation method.

Revenue this quarter was $475 million or 25% higher than the second quarter of 2013, mainly due to higher pricing and drilling activity in the U.S. and internationally along with higher drilling activity in Canada.

Earnings before income taxes, finance charges, foreign exchange, and depreciation and amortization (adjusted EBITDA) this quarter were $130 million or 47% higher than the second quarter of 2013. Our activity for the quarter, as measured by drilling rig utilization days, increased 33% in Canada, 16% in the U.S. and 18% internationally, compared to the second quarter of 2013. Our adjusted EBITDA margin was 27% this quarter, compared to 23% in the second quarter of 2013. The increase in adjusted EBITDA margin was mainly due to increases in activity and profitability in our Contract Drilling Services segment partially offset by increases in share based compensation accruals, which were $14 million this quarter. EBITDA margin in our Completion and Production Services segment increased 4 percentage points over the prior year, while activity as measured by service rig hours was down 1%.

Net earnings for the first six months of 2014 were $94 million, or $0.32 per diluted share, compared to net earnings of $94 million, or $0.33 per diluted share in 2013, while revenue was $1,147 million, or 18% higher than in 2013. The impact of the change in calculating depreciation on our drilling and service rigs reduced net earnings by approximately $17 million or $0.06 per diluted share compared with what net earnings would have been using the previous depreciation method.

We are increasing our 2014 capital plan from $833 million to $934 million in response to strong customer demand for Precision new-build Super Series rigs. Today we are announcing firm customer commitments on an additional 13 new-build rigs consisting of two additional deliveries in 2014 and 11 additional deliveries in 2015. We are expanding our long-lead program to shorten construction times for new-build rigs that will provide capacity of three rig deliveries per month starting this October and as many as four rigs per month to start 2015 if U.S., Canadian and international customer demand continues at the current pace. With today's announcement, the number of new-build deliveries scheduled for Precision in 2014 totals 18 rigs (eight in the U.S., seven in Canada and three internationally). For 2015 deliveries, we have announced contracts or firm customer commitments for 16 new-build rigs (15 for the U.S. and one for Kuwait).

Kevin Neveu, Precision's President and Chief Executive Officer, stated: "It is rewarding to see Precision's investment in Super Series rigs deliver record revenue and EBITDA during the second quarter. The superior full cycle pricing performance of these rigs and our High Performance, High Value strategy is evidenced in our premium dayrates, improving margins and best confirmed by the strong customer demand for rig contracts. Precision now has firm customer commitments for 12 new-build rigs to be delivered in the second half of 2014 and 16 new-build rigs in 2015 with deliveries stretching into September of next year."

"Precision's recently announced technology and service agreement and marketing alliance with Schlumberger will serve to enhance the efficiency and performance of our directional drilling operations. I am particularly excited to have the full range of technology to combine with our Super Series rigs. This integrated service offering will create a meaningful value proposition for our customers and further reinforce our competitive advantage."

"Our U.S. drilling operations continued its recent momentum during the quarter with dayrates and margins increasing $470 and $1,880, respectively from the second quarter of 2013 and increasing $174 and $1,167, respectively from the first quarter of 2014. Our drilling activity remains strong with an average of 93 rigs operating this past quarter compared to an average of 80 in the second quarter of last year. Today's active rig count of 96 rigs and scheduled new-build and upgrade deliveries point to higher activity in the second half of the year if commodity prices remain at or near current levels."

"In Canada, our second quarter drilling activity was at the highest level since the second quarter of 2006 averaging 53 rigs, up 13 rigs over the second quarter last year. Our higher activity levels had a positive effect on our margins, which were up over $1,700 per day, while our dayrates were relatively flat versus the second quarter of 2013. The strong activity level for the spring break-up period reflects our recent fleet enhancements, including additional pad capable rigs, and was supported by more favourable weather than last year. Most encouragingly during the quarter, we saw strong customer demand that steadily increased into the beginning of the third quarter. Today's active rig count in Canada is 95 rigs and we expect our activity levels in the latter half of the year to be supported by five scheduled new-build deliveries and multiple upgraded rigs. Longer term we have our eyes on LNG development in Canada where we continue to see signs that development is likely. We expect to be a key player in developing this important energy resource."

"We continue to make progress in our international business with two recent deployments to Kuwait and two additional announced international deployments, one to the Kingdom of Saudi Arabia later this year and one to Kuwait in the middle of 2015. Once these deployments are completed we expect to have nine rigs operating in the Middle East with the scale much closer to the level necessary to generate returns similar to those we are used to in North America. In Mexico, we have four rigs running that were recently signed to long-term contracts and are pleased with that integrated project management work. Currently, we are moving two idle rigs from Mexico to the U.S. where we have secured contracted work."

"Our Completion and Production business continues to face market demand challenges as customer spending on workover of existing wells continue to lag drilling activity. We are confident this lower demand level will not persist and when the market turns, Precision will remain well positioned to take advantage of the opportunity."

"The continued success of Precision will be measured by our ability to execute in the field and our interaction with customers. We will build on our highly skilled employee base and support systems with continued investment in our workforce and management of our assets. Along these lines, we have seen an increase in utilization of our Houston Tech Centre and expect to open our new Nisku Centre later this fall."

"We are encouraged by the results Precision continues to report and the direction of our company within the industry. Most importantly, we are pleased with the size and performance of our Tier 1 drilling fleet, the geographic breadth of our operations and both oil and natural gas creating demand for our services. Our established position is generating robust operating cash flow and presenting a number of high return investment opportunities for future growth. With today's dividend announcement, Precision has declared approximately $125 million in dividends to shareholders since December 2012."

SELECT FINANCIAL AND OPERATING INFORMATION

Adjusted EBITDA and funds provided by operations are additional GAAP measures. See "ADDITIONAL GAAP MEASURES".

Financial Highlights


----------------------------------------------------------------------------
                      Three months ended June 30, Six months ended June 30,
(Stated in thousands
 of Canadian dollars,
 except per share                               %                         %
 amounts)                  2014     2013   Change      2014    2013  Change
----------------------------------------------------------------------------
Revenue                 475,174  378,898     25.4 1,147,423 974,618    17.7
Adjusted EBITDA         129,695   88,248     47.0   366,969 303,429    20.9
Adjusted EBITDA % of
 revenue                   27.3%    23.3%              32.0%   31.1%
Net earnings (loss)      (7,174)     473      n/m    94,383  93,786     0.6
Cash provided by
 operations             228,412  182,345     25.3   398,539 245,293    62.5
Funds provided by
 operations              97,805   33,791    189.4   329,198 178,473    84.5
Capital spending:
  Expansion             117,654   81,788     43.9   185,839 158,303    17.4
  Upgrade                25,593   34,117    (25.0)   45,450  71,658   (36.6)
  Maintenance and
   infrastructure        31,607   20,332     55.5    49,564  36,881    34.4
  Proceeds on sale       (9,979)  (4,148)   140.6   (17,236) (6,686)  157.8
----------------------------------------------------------------------------
Net capital spending    164,875  132,089     24.8   263,617 260,156     1.3

Earnings (loss) per
 share:
  Basic                   (0.02)    0.00      n/m      0.32    0.34    (5.9)
  Diluted                 (0.02)    0.00      n/m      0.32    0.33    (3.0)
Dividends paid per
 share                     0.06     0.05     20.0      0.12    0.10    20.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------

n/m - calculation not meaningful

Operating Highlights


----------------------------------------------------------------------------
                     Three months ended June 30,  Six months ended June 30,
                          2014     2013 % Change     2014     2013 % Change
----------------------------------------------------------------------------
Contract drilling rig
 fleet                     333      324      2.8      333      324      2.8
Drilling rig
 utilization days:
  Canada                 4,805    3,606     33.3   16,189   14,707     10.1
  U.S.                   8,490    7,320     16.0   16,963   14,598     16.2
  International            962      815     18.0    1,952    1,534     27.2
Service rig fleet          221      219      0.9      221      219      0.9
Service rig operating
 hours                  51,270   51,677     (0.8) 133,834  141,069     (5.1)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Financial Position


----------------------------------------------------------------------------
(Stated in thousands of Canadian dollars,            June 30,   December 31,
 except ratios)                                          2014           2013
----------------------------------------------------------------------------
Working capital                                       746,261        305,783
Long-term debt(1)                                   1,716,314      1,323,268
Total long-term financial liabilities               1,752,815      1,355,535
Total assets                                        5,061,476      4,579,123
Long-term debt to long-term debt plus equity
 ratio(1)                                                0.41           0.36
----------------------------------------------------------------------------
(1) Net of unamortized debt issue costs.

Revenue this quarter was $475 million, or 25% higher than the second quarter of 2013. The increase, of $96 million, was primarily due to a year-over-year increase in activity and rates from our contract drilling operations. Revenue from our Contract Drilling Services and Completion and Production Services segments both increased over the comparative prior year period by 26% and 20%, respectively.

During the quarter we issued US$400 million of 5.25% Senior Notes due in 2024 (the "Notes") in a private offering. The Notes are guaranteed on a senior unsecured basis by current and future U.S. and Canadian subsidiaries that also guarantee our revolving credit facility and certain other indebtedness. We expect to use the net proceeds from this placement for general corporate purposes, including building new drilling rigs.

Our portfolio of term customer contracts, a scalable operating cost structure and economies achieved through vertical integration of the supply chain all help us manage our adjusted EBITDA margin.

Precision's strategic priorities are as follows:


1.  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 promote safe operations. Continue to measure and benchmark
    performance with a view to exceeding the high standards we set.

    The construction of our Nisku Centre is underway and we expect to
    complete construction in the fall of this year. Our Nisku Centre will
    support safety and training for our Canadian workforce.

    We recently entered into a technology and service agreement and
    marketing alliance with Schlumberger that enables us to market a full
    range of directional drilling downhole tools to our customers,
    significantly enhancing our technology and service offering to
    customers.

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

    We have demonstrated our ability to increase activity levels while
    driving down daily operating cost per rig in our operations.
    Additionally, we have increased the utilization of our centralized U.S.
    repair and maintenance facilities at our Houston Tech Centre.

3.  Execute on existing organic growth opportunities - Deliver new-build and
    upgraded rigs to customer contracts, expand international activity in
    existing operating regions and grow our Canadian LNG drilling leadership
    position. Be a recognized leader in the integrated directional drilling
    transformation.

    We have announced delivery or planned delivery for 18 new-build rigs in
    2014, including six ST-1500 rigs for deep basin and LNG related drilling
    in Canada. In addition, we have contracted two new-build rigs for the
    Middle East and four existing rigs to long-term contracts for integrated
    project management projects in Mexico and began operations with the two
    Kuwait new-build rigs near the end of the second quarter. In addition,
    we now have signed contracts or firm customer commitments for delivery
    of 16 new build rigs in 2015.

4.  Increase returns for our investors.

    We remain well positioned to increase returns for investors with our
    continued strong activity levels and margins, favourable contracted
    terms on new-build and upgraded rigs and our low cost and flexible
    capital structure.

For the second quarter of 2014, the average natural gas prices and the West Texas Intermediate price of oil were higher than the 2013 averages.


                                                                  Year ended
                                  Three months ended June 30,        Dec 31,
                                          2014           2013           2013
----------------------------------------------------------------------------
Average oil and natural gas
 prices
Oil
  West Texas Intermediate (per
   barrel) (US$)                        103.14          94.16          98.02

Natural gas
  Canada
    AECO (per MMBtu) (Cdn$)               4.69           3.53           3.18
  U.S.
    Henry Hub (per MMBtu) (US$)           4.58           4.01           3.73
----------------------------------------------------------------------------

Summary for the three months ended June 30, 2014:


--  As a result of our annual review of the estimated useful lives and
    method of depreciation for our property, plant and equipment, effective
    January 1, 2014 we are calculating depreciation on our drilling rigs and
    service rigs on a straight-line basis. Existing assets were assessed for
    their remaining useful lives and are being depreciated prospectively on
    a straight-line basis. New drilling rigs will be depreciated based on
    the expected life of individual asset components with an approximate
    weighted average life of 15 years and approximately 7% salvage value.
    New service rigs will be depreciated based on the expected life of the
    asset component with an approximate weighted average life of 20 years
    with approximately 10% salvage value. The move to straight-line reflects
    the demand for technologically advanced assets which are expected to
    depreciate over time rather than on a per unit basis. The use of
    straight-line depreciation will result in idle assets being more
    aggressively depreciated. In the second quarter of 2014 depreciation
    expense calculated using the straight-line method with revised asset
    life expectancy was $106 million. Had we continued to depreciate assets
    using units of production, depreciation would have been $86 million. The
    estimated additional depreciation expense for the year ending December
    31, 2014 from this change is approximately $45 million.

--  Operating earnings (see "Additional GAAP Measures" in this news release)
    this quarter were $24 million, or 5% of revenue, compared to $16 million
    and 4% of revenue in 2013. Operating earnings were positively impacted
    by the increase in drilling activity and dayrates in our contract
    drilling rig operations partially offset by an increase in depreciation
    from moving to the straight-line method and the depreciation on asset
    additions.

--  General and administrative expenses this quarter were $41 million, $9
    million higher than the second quarter of 2013. The increase is
    primarily due to higher costs associated with incentive compensation
    which are tied to the price of our common shares.

--  Net finance charges were $26 million, an increase of $2 million compared
    with the second quarter of 2013 due to the issuance of US$400 million of
    5.25% Senior Notes on June 3, 2014.

--  Average revenue per utilization day for contract drilling rigs decreased
    slightly in the second quarter of 2014 to $22,217 from the prior year
    second quarter of $22,276 in Canada and increased in the U.S. to
    US$24,320 from US$23,850. The decrease in revenue rates for Canada is
    primarily due to rig mix and competitive pricing in some rig segments
    during spring break-up, partially offset by additional Tier 1 and
    upgraded rigs entering the fleet compared to the prior year quarter. In
    Canada, for the second quarter of 2014, 53% of our utilization days were
    achieved from drilling rigs working under term contracts compared to 50%
    in the 2013 comparative period. The increase in revenue rates for the
    U.S. is primarily due to additional Tier 1 and upgraded rigs entering
    the fleet compared to the prior year quarter. In the U.S., for the
    second quarter of 2014, 72% of our utilization days were generated from
    rigs working under term contracts compared to 58% in the 2013
    comparative period. Turnkey revenue for the second quarter of 2014 was
    US$20 million compared with US$18 million in the 2013 comparative
    period. Within the Completion and Production Services segment, average
    hourly rates for service rigs were $961 in the second quarter of 2014
    compared to $842 in the second quarter of 2013. The increase in the
    average hourly rate is the result of rig mix with the introduction of
    coil tubing rigs in the U.S., which command a higher average hourly
    rate. Canadian well servicing rig average hourly rate increased by $58
    per hour from the second quarter of 2014 compared with the 2013
    comparative period.

--  Average operating costs per utilization day for drilling rigs decreased
    in the second quarter of 2014 to $11,695 from the prior year second
    quarter of $13,497 in Canada while in the U.S. costs decreased to
    US$13,502 in 2014 from US$14,912 in 2013. The cost decrease in Canada
    was primarily due to lower labour burden, lower repairs and maintenance
    expenditures, and a larger activity base to spread fixed costs. The cost
    decrease in the U.S. was primarily due to labour efficiencies, reduction
    in labour related costs and a larger activity base to spread fixed
    costs. Within the Completion and Production Services segment, average
    hourly operating costs for service rigs increased to $679 in the second
    quarter of 2014 as compared to $627 in the second quarter of 2013
    primarily due to costs associated with coil tubing.

--  Precision realized revenue from international contract drilling of $46
    million in the second quarter of 2014, a $17 million increase over the
    prior year period.

--  Directional drilling services realized revenue of $23 million in the
    second quarter of 2014 compared with $27 million in the prior year
    period.

--  Funds provided by operations in the second quarter of 2014 were $98
    million, an increase of $64 million from the prior year comparative
    quarter of $34 million. The increase was primarily the result of
    improved operations and a decrease in income tax installments paid.

--  Capital expenditures for the purchase of property, plant and equipment
    were $175 million in the second quarter, an increase of $39 million over
    the same period in 2013. Capital spending for the second quarter of 2014
    included $118 million for expansion capital, $26 million for upgrade
    capital and $32 million for the maintenance of existing assets and
    infrastructure spending.

Summary for the six months ended June 30, 2014:


--  Revenue for the first half of 2014 was $1,147 million, an increase of
    18% from the 2013 period.

--  For the first half of 2014 depreciation expense calculated using the
    straight-line method with revised asset life expectancy was $212
    million. Had we continued to depreciate assets using units of
    production, depreciation would have been $187 million.

--  Operating earnings were $155 million, an increase of $9 million or 6%
    from 2013. Operating earnings were 14% of revenue in 2014 compared to
    15% in 2013. Operating earnings were positively impacted by the increase
    in drilling activity and rates in our contract drilling rig operations
    partially offset by an increase in depreciation from moving to the
    straight-line method and the depreciation on asset additions.

--  General and administrative costs were $81 million, an increase of $10
    million over the first half of 2013 primarily as a result of the
    increase in incentive compensation costs tied to the performance of
    Precision's common shares in 2014.

--  Net finance charges were $50 million, an increase of $3 million from the
    first half of 2013. During the quarter we issued US$400 million of 5.25%
    Senior Notes.

--  The change in depreciation calculation added approximately $25 million
    to our depreciation expense over the prior period.

--  Funds provided by operations (see "Additional GAAP Measures" in this
    news release) in the first half of 2014 were $329 million, an increase
    of $151 million from the prior year comparative period of $178 million.

--  Capital expenditures for the purchase of property, plant and equipment
    were $281 million in the first half of 2014, an increase of $14 million
    over the same period in 2013. Capital spending for 2014 to date included
    $186 million for expansion capital, $45 million for upgrade capital and
    $50 million for the maintenance of existing assets and infrastructure.

OUTLOOK

Contracts

Our portfolio of term customer contracts provides a base level of activity and revenue and, as of July 23, 2014, we had term contracts in place for an average of 48 rigs in Canada, 51 in the U.S. and 11 internationally for the third quarter of 2014 and an average of 52 rig contracts in Canada, 51 in the U.S. and 11 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 U.S. and internationally, term contracts normally generate 365 utilization days per year.

Drilling Activity

In the U.S., our average active rig count in the quarter was 93 rigs, up 13 rigs over the second quarter in 2013 and in line with the first quarter of 2014. We currently have 96 rigs active in the U.S.

In Canada, our average active rig count in the quarter was 53 rigs, an increase of 13 over the second quarter in 2013. We currently have 95 rigs active in Canada and expect typical seasonal volatility through the third quarter but in general we expect to benefit from the fleet enhancements over the past several years and the delivery of five contracted new-build rigs and several contracted upgrade rigs in the second half of this year.

Internationally, our average active rig count in the quarter was 11 rigs, up two rigs over the second quarter in 2013 and in line with the first quarter of 2014. During the quarter two new-build rigs went to work in Kuwait and both were operating at the end of the quarter. We currently have 11 rigs active internationally and expect delivery of two new-build rigs for the Middle East, one to begin operations in the Kingdom of Saudi Arabia in late 2014 and the other to begin operations in Kuwait in mid-2015. In Mexico, the four recently signed rigs for integrated project management contracts have all begun working while two rigs are currently idle. Two rigs are currently moving from Mexico back to the U.S. to work under contract.

Industry Conditions

To date in 2014, drilling activity has increased relative to this time last year for both Canada and the U.S. According to industry sources, as of July 18, 2014, the U.S. active land drilling rig count was up approximately 6% from the same point last year and the Canadian active land drilling rig count was up approximately 18%. The increase in the North American rig count has been driven by demand for Tier 1 assets, which 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 U.S. continues. To date in 2014, approximately 60% of the Canadian industry's active rigs and 82% of the U.S. industry's active rigs were drilling for oil targets, compared to 71% for Canada and 78% for the U.S. at the same time last year.

Capital Spending

Capital spending in 2014 is expected to be $934 million:


--  The 2014 capital expenditure plan includes $561 million for expansion
    capital, $199 million for sustaining and infrastructure expenditures,
    and $174 million to upgrade existing rigs. We expect that the $934
    million will be split $894 million in the Contract Drilling segment and
    $40 million in the Completion and Production Services segment.

--  Precision's expansion capital plan for 2014 includes 18 new-build
    drilling rigs delivered in 2014 including seven for Canada, eight for
    the U.S., and three for the Middle East.

    The seven rigs for Canada include six Super Triple 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 eight ST-1500 rigs.
    Internationally in Kuwait two ST-3000 rigs began operations in the
    second quarter with an additional new-build contracted rig, an ST-2000
    expected to be deployed to the Kingdom of Saudi Arabia late in 2014 and
    an ST-1500 expected to be deployed in Kuwait in mid-2015.

    The majority of the remainder of the expansion capital is allocated to
    long-lead items which we anticipate using for new-build drilling rigs
    for delivery in 2015.

    Following is a new-build delivery schedule for deliveries in the first
    half of 2014 and expected deliveries in the second half of 2014 and full
    year 2015 where we have either a long-term contract or a firm customer
    commitment for a long-term contract.

----------------------------------------------------------------------------
                              2014                          2015
                    Q1    Q2    Q3    Q4 Total    Q1    Q2    Q3    Q4 Total
----------------------------------------------------------------------------
Rig Deliveries
  Canada             2     -     1     4     7     -     -     -     -     -
  U.S.               1     1     1     5     8     6     7     2     -    15
  International      -     2     -     1     3     -     1     -     -     1
----------------------------------------------------------------------------
                     3     3     2    10    18     6     8     2     -    16
----------------------------------------------------------------------------
----------------------------------------------------------------------------

--  The 2014 capital plan includes approximately 20 rig upgrades and will
    vary depending on scope of the upgrades.

--  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 operations and technical support centres and will
    contain a new employee training centre complete with a fully functioning
    training rig equipped with the latest drilling technology. The centre 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.
    This centre accounts for approximately $30 million of the 2014 capital
    expenditure plan.

SEGMENTED FINANCIAL RESULTS

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


----------------------------------------------------------------------------
                    Three months ended June 30,   Six months ended June 30,
(Stated in thousands
 of Canadian                                  %                           %
 dollars)                2014     2013   Change      2014     2013   Change
----------------------------------------------------------------------------
Revenue:
  Contract Drilling
   Services           410,882  327,336     25.5   982,804  823,574     19.3
  Completion and
   Production
   Services            66,508   55,420     20.0   169,573  159,008      6.6
  Inter-segment
   eliminations        (2,216)  (3,858)   (42.6)   (4,954)  (7,964)   (37.8)
----------------------------------------------------------------------------
                      475,174  378,898     25.4 1,147,423  974,618     17.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted EBITDA:(1)
  Contract Drilling
   Services           148,491  101,555     46.2   388,189  308,760     25.7
  Completion and
   Production
   Services             5,137    2,293    124.0    24,590   32,408    (24.1)
  Corporate and
   other              (23,933) (15,600)    53.4   (45,810) (37,739)    21.4
----------------------------------------------------------------------------
                      129,695   88,248     47.0   366,969  303,429     20.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".

SEGMENT REVIEW OF CONTRACT DRILLING SERVICES


----------------------------------------------------------------------------
                      Three months ended June 30,  Six months ended June 30,
(Stated in thousands
 of Canadian dollars,
 except where noted)       2014     2013 % Change     2014     2013 % Change
----------------------------------------------------------------------------
Revenue                 410,882  327,336     25.5  982,804  823,574     19.3
Expenses:
  Operating             249,937  213,320     17.2  568,844  490,366     16.0
  General and
   administrative        12,454   12,461     (0.1)  25,771   24,448      5.4
----------------------------------------------------------------------------
Adjusted EBITDA(1)      148,491  101,555     46.2  388,189  308,760     25.7
  Depreciation           92,365   63,398     45.7  184,476  137,109     34.5
----------------------------------------------------------------------------
Operating earnings(1)    56,126   38,157     47.1  203,713  171,651     18.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings as
 a percentage of
 revenue                   13.7%    11.7%             20.7%    20.8%
----------------------------------------------------------------------------
Drilling rig revenue
 per utilization day
 in Canada               22,217   22,276     (0.3)  22,608   22,293      1.4
----------------------------------------------------------------------------
Drilling rig revenue
 per utilization day
 in the U.S.(2)(US$)     24,320   23,850      2.0   24,235   23,920      1.3
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
(2) Includes revenue from idle but contracted rig days and lump sum payouts
    in 2013.

                                      Three months ended June 30,
Canadian onshore drilling
 statistics:(1)                       2014                    2013
----------------------------------------------------------------------------
                              Precision  Industry(2)  Precision  Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs (end
 of period)                         189         810         188         820
Drilling rig operating days
 (spud to release)                4,312      18,293       3,213      13,579
Drilling rig operating day
 utilization                         25%         25%         19%         18%
Number of wells drilled             393       1,430         371       1,162
Average days per well              11.0        12.8         8.7        11.7
Number of metres drilled
 (000s)                             793       3,430         707       2,604
Average metres per well           2,018       2,399       1,905       2,241
Average metres per day              184         188         220         192
----------------------------------------------------------------------------

                                       Six months ended June 30,
Canadian onshore drilling
 statistics:(1)                       2014                    2013
----------------------------------------------------------------------------
                              Precision  Industry(2)  Precision  Industry(2)
----------------------------------------------------------------------------
Number of drilling rigs (end
 of period)                         189         810         188         820
Drilling rig operating days
 (spud to release)               14,366      63,070      13,002      56,877
Drilling rig operating day
 utilization                         42%         43%         38%         39%
Number of wells drilled           1,343       4,881       1,426       4,726
Average days per well              10.7        12.9         9.1        12.0
Number of metres drilled
 (000s)                           2,627      11,090       2,536       9,951
Average metres per well           1,956       2,272       1,779       2,106
Average metres per day              183         176         195         175
----------------------------------------------------------------------------
(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)              2014                    2013
----------------------------------------------------------------------------
                              Precision  Industry(2)  Precision  Industry(2)
----------------------------------------------------------------------------
Average number of active
 land rigs for quarters
 ended:
  March 31                           94       1,724          81       1,706
  June 30                            93       1,802          80       1,710
----------------------------------------------------------------------------
Year to date average                 94       1,763          81       1,708
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) United States lower 48 operations only.
(2) Baker Hughes rig counts.

Revenue from Contract Drilling Services was $411 million this quarter, or 26% higher than the second quarter of 2013, while adjusted EBITDA increased by 46% to $148 million. The increases were mainly due to higher drilling rig utilization days and dayrates in our U.S. and international drilling business and higher utilization days in Canada.

Operating results for our international business improved as we averaged 11 rigs active compared to nine in the prior year comparative quarter. Drilling rig utilization days in our international operations for the quarter were 962, 18% higher than the prior year comparative period.

Drilling rig utilization days in Canada (drilling days plus move days) during the second quarter of 2014 were 4,805, an increase of 33% compared to 2013 while drilling rig utilization days in the U.S. were 8,490, or 16% higher than the same quarter of 2013. The increase in Canadian and U.S. activity was primarily due to strong demand for Tier 1 assets and resulted in market share gains during the second half of 2013. The majority of our North American activity came from oil and liquids-rich natural gas related plays.

Compared to the same quarter in 2013, drilling rig revenue per utilization day was up 2% in the U.S. while Canada was down slightly. The increase in average dayrates for the U.S. was driven by improved rig mix and higher rates for well-to-well and re-contracted rigs. In Canada the $59 per day in dayrate decrease was the result of rig mix during the quarter and competitive pricing in some rig segments during spring break-up partially offset by additional Tier 1 and upgraded rigs entering the fleet compared to the prior year quarter.

In Canada, 53% of utilization days in the quarter were generated from rigs under term contract, compared to 50% in the second quarter of 2013. In the U.S., 72% of utilization days were generated from rigs under term contract as compared to 58% in the second quarter of 2013. At the end of the quarter, we had 54 drilling rigs under contract in Canada, 61 in the U.S. and 11 internationally.

Operating costs were 61% 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 down over the prior year primarily because of the impact of fixed costs on higher activity increase, lower labour burden and lower repair and maintenance costs. In the U.S., operating costs for the quarter on a per day basis were down from the second quarter in 2013 primarily as a result of labour efficiencies and reduction in labour related costs.

Depreciation expense in the quarter was 46% higher than in the second quarter of 2013 due to changes in the estimated remaining useful life of our capital equipment, a change to straight-line depreciation and depreciation expense associated with new equipment. The depreciation variance of moving to straight-line depreciation should be most significant in the second quarter due to lower activity in Canada from spring break-up.

SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES


----------------------------------------------------------------------------
                     Three months ended June 30,  Six months ended June 30,
(Stated in thousands
 of Canadian dollars,
 except where noted)     2014     2013  % Change     2014     2013 % Change
----------------------------------------------------------------------------
Revenue                66,508   55,420      20.0  169,573  159,008      6.6
Expenses:
  Operating            56,564   49,307      14.7  135,548  118,205     14.7
  General and
   administrative       4,807    3,820      25.8    9,435    8,395     12.4
----------------------------------------------------------------------------
Adjusted EBITDA(1)      5,137    2,293     124.0   24,590   32,408    (24.1)
  Depreciation         11,433    7,073      61.6   22,861   16,318     40.1
----------------------------------------------------------------------------
Operating earnings(1)
 (loss)                (6,296)  (4,780)     31.7    1,729   16,090    (89.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating earnings
 (loss) as a
 percentage of
 revenue                 (9.5%)   (8.6%)              1.0%    10.1%
----------------------------------------------------------------------------
Well servicing
 statistics:
  Number of service
   rigs (end of
   period)                221      219       0.9      221      219      0.9
  Service rig
   operating hours     51,270   51,677      (0.8) 133,834  141,069     (5.1)
  Service rig
   operating hour
   utilization             25%      26%                36%      36%
  Service rig revenue
   per operating
   hour(2)                961      842      14.1      920      834     10.3
----------------------------------------------------------------------------
(1) See "ADDITIONAL GAAP MEASURES".
(2) Prior year comparatives have changed to include U.S. based rig activity.

Revenue from Completion and Production Services was up $11 million or 20% compared to the second quarter of 2013, as higher rates and the expansion of services in the U.S was partially offset by lower demand in the Canadian market. Well servicing activity in the second quarter was 1% lower than the second quarter of 2013, as a decrease in Canadian well servicing activity was offset by an increase in the U.S. Approximately 93% of the second quarter Canadian service rig activity was oil related.

Average service rig revenue per operating hour in the second quarter was $961, or $119 higher than the second quarter of 2013. The increase was primarily the result of increased coil tubing and snubbing operations in the current quarter, which operate at higher rates.

Adjusted EBITDA was $3 million higher than the second quarter of 2013 due to higher average rates in both Canada and in the U.S.

Our rental division activity in the quarter was higher than the second quarter of 2013 mainly due to increased drilling activity.

Operating costs as a percentage of revenue decreased to 85% in the second quarter of 2014, from 89% in the second quarter of 2013. Operating costs per service rig operating hour were higher than in the second quarter of 2013 mainly because of the increase in costs associated with the new coil tubing operations.

Depreciation in the second quarter of 2014 was 62% higher than the second quarter of 2013 because of changes in the estimated remaining useful life of our capital equipment, a change to straight-line depreciation and depreciation expense associated with new equipment. The second quarter is generally the period with the most significant variance due to the lower activity in Canada with spring break-up.

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 $24 million for the second quarter of 2014, $8 million higher than 2013 comparative period due primarily to share based incentive compensation.

OTHER ITEMS

Net financial charges for the quarter were $26 million, an increase of $2 million from the second quarter of 2013, driven by the impact of the weaker Canadian dollar on the value of our U.S. dollar denominated debt and the issuance of US$400 million 5.25% Senior Notes on June 3, 2014. We had a foreign exchange gain of $0.3 million during the second quarter of 2014 due to the strengthening 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 $6 million compared with a recovery of $4 million in the same quarter in 2013. The increase is due to improved pretax earnings in the current quarter compared to the prior year period. Our effective tax rate on earnings before income taxes for the six months ended June 30, 2014 was 14%.

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 appealed the decision to the Ontario Court of Appeal and that appeal was heard in May 2014. We expect the Ontario Court of Appeal to render its decision in the second 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

During the quarter we issued US$400 million of 5.25% Senior Notes due in 2024 in a private offering. The Notes are guaranteed on a senior unsecured basis by current and future U.S. and Canadian subsidiaries that also guarantee our revolving credit facility and certain other indebtedness. We expect to use the net proceeds from this placement for general corporate purposes, including building new drilling rigs.

In addition, we amended our credit agreement governing our revolving credit facility to, among other things, voluntarily reduce the size of the revolving credit facility from US$850 million to US$650 million and extend the maturity to June 3, 2019.

In addition to a cash balance of $576 million as at June 30, 2014, we had available capacity of $718 million under our secured facilities.

As at June 30, 2014 we had $1,748 million outstanding under our senior unsecured notes.


Amount                          Availability   Used for       Maturity
----------------------------------------------------------------------------
Senior facility (secured)
----------------------------------------------------------------------------
US$650 million (extendible,     Drawn US$26    General        June 3, 2019
 revolving term credit facility million in     corporate
 with US$250 million accordion  outstanding    purposes
 feature)                       letters of
                                credit
----------------------------------------------------------------------------
Operating facilities (secured)
----------------------------------------------------------------------------
$40 million                     Undrawn,       Letters of
                                except $16     credit and
                                million in     general
                                outstanding    corporate
                                letters of     purposes
                                credit
----------------------------------------------------------------------------
US$15 million                   Undrawn        Short term
                                               working
                                               capital
                                               requirements
----------------------------------------------------------------------------
Demand letter of credit facility (secured)
----------------------------------------------------------------------------
US$25 million                   Undrawn,       Letters of
                                except US$14   credit
                                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 November 15,
                                               and general    2020
                                               corporate
                                               purposes
----------------------------------------------------------------------------
US$400 million                  Fully drawn    Capital        December 15,
                                               expenditures   2021
                                               and general
                                               corporate
                                               purposes
----------------------------------------------------------------------------
US$400 million                  Fully drawn    Capital        November 15,
                                               expenditures   2024
                                               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 approximately 6.2%.

Hedge of investments in U.S. operations

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

Average shares outstanding

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


                                      Three months ended    Six months ended
                                                June 30,            June 30,
                                          2014      2013      2014      2013
----------------------------------------------------------------------------
Weighted average shares outstanding -
 basic                                 292,511   276,617   292,287   276,558
Effect of warrants                           -     9,425         -     9,486
Effect of stock options and other
 equity compensation plans               1,415       814       424       867
----------------------------------------------------------------------------
Weighted average shares outstanding -
 diluted                               293,926   286,856   292,711   286,911
----------------------------------------------------------------------------
----------------------------------------------------------------------------

QUARTERLY FINANCIAL SUMMARY
(Stated in thousands of Canadian dollars, except per share amounts)
----------------------------------------------------------------------------
                                   2013                      2014
----------------------------------------------------------------------------
Quarters ended          September 30  December 31     March 31      June 30
----------------------------------------------------------------------------
Revenue                      488,450      566,909      672,249      475,174
Adjusted EBITDA(1)           137,660      197,744      237,274      129,695
Net earnings (loss):          29,443       67,921      101,557       (7,174)
  Per basic share               0.11         0.24         0.35        (0.02)
  Per diluted share             0.10         0.24         0.35        (0.02)
Funds provided by
 operations(1)               127,684      155,816      231,393       97,805
Cash provided by
 operations                   88,341       94,452      170,127      228,412
Dividends paid per share        0.05         0.06         0.06         0.06
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                                   2012                      2013
----------------------------------------------------------------------------
Quarters ended          September 30  December 31     March 31      June 30
----------------------------------------------------------------------------
Revenue                      484,761      533,948      595,720      378,898
Adjusted EBITDA(1)           151,000      177,026      215,181       88,248
Net earnings (loss):          39,357     (116,339)      93,313          473
  Per basic share               0.14        (0.42)        0.34         0.00
  Per diluted share             0.14        (0.42)        0.33         0.00
Funds provided by
 operations(1)               146,124      142,576      144,682       33,791
Cash provided by
 operations                   61,183      136,317       62,948      182,345
Dividends paid per share           -         0.05         0.05         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, 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

We believe that operating earnings, 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 second quarter dividend;
--  expansion of our new build rig program;
--  the expected benefits from our technology and service agreement and
    marketing alliance with Schlumberger;
--  the continued development of Canadian LNG and our expectations in
    becoming a key player in the sector;
--  the expected use of the net proceeds from our 2014 Notes offering;
--  our capital expenditure plans including the amounts allocated for
    expansion capital, sustaining and infrastructure expenditures and rig
    upgrades;
--  the timing on delivery and number of new build rigs to be deployed to
    Canada, the U.S. and internationally;
--  the expected completion of our Nisku technical support centre and its
    impact on our operational capabilities;
--  the outcome of the tax appeal proceedings in Ontario involving one of
    our subsidiaries; and
--  our expectations regarding 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. These include, among other things:


--  continued strong drilling demand in Canada, the U.S., and our target
    international markets;
--  continued market demand for our Super Series rigs;
--  the status of current negotiations with our customers;
--  the economic viability of unconventional North American oil and gas
    plays including the growing potential of LNG export development in
    Canada; and
--  the general stability of the economic and political environment 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 and its impact on customer spending;
--  the risks associated with our investments in capital assets and changing
    technology;
--  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;
--  the existence of competitive operating risks inherent in our businesses;
--  changes in environmental and safety rules or regulations including
    increased regulatory burden on horizontal drilling and hydraulic
    fracturing;
--  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 foregoing 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, 2014, 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 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, unless so required by applicable securities laws.

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)


----------------------------------------------------------------------------
                                                    June 30,   December 31,
(Stated in thousands of Canadian dollars)               2014           2013
----------------------------------------------------------------------------
ASSETS
Current assets:
  Cash                                           $   576,493    $    80,606
  Accounts receivable                                474,063        549,697
  Inventory                                           13,573         12,378
  Assets held for sale                                24,550              -
----------------------------------------------------------------------------
Total current assets                               1,088,679        642,681
Non-current assets:
  Income tax receivable                               58,435         58,435
  Property, plant and equipment                    3,598,286      3,561,734
  Intangibles                                          3,615          3,917
  Goodwill                                           312,461        312,356
----------------------------------------------------------------------------
Total non-current assets                           3,972,797      3,936,442
----------------------------------------------------------------------------
Total assets                                     $ 5,061,476    $ 4,579,123
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES AND EQUITY
Current liabilities:
  Accounts payable and accrued liabilities       $   342,235    $   332,838
  Income tax payable                                     183          4,060
----------------------------------------------------------------------------
Total current liabilities                            342,418        336,898
Non-current liabilities:
  Share based compensation                            19,369         14,431
  Provisions and other                                17,132         17,836
  Long-term debt                                   1,716,314      1,323,268
  Deferred income taxes                              497,519        487,347
----------------------------------------------------------------------------
Total non-current liabilities                      2,250,334      1,842,882
Shareholders' equity:
  Shareholders' capital                            2,314,033      2,305,227
  Contributed surplus                                 29,264         29,175
  Retained earnings                                  147,719         88,416
  Accumulated other comprehensive loss               (22,292)       (23,475)
----------------------------------------------------------------------------
Total shareholders' equity                         2,468,724      2,399,343
----------------------------------------------------------------------------
Total liabilities and shareholders' equity       $ 5,061,476    $ 4,579,123
----------------------------------------------------------------------------
----------------------------------------------------------------------------

INTERIM CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (UNAUDITED)


----------------------------------------------------------------------------
                                   Three months ended      Six months ended
                                             June 30,              June 30,
                                  ------------------------------------------
(Stated in thousands of Canadian
 dollars, except per share
 amounts)                              2014      2013        2014      2013
----------------------------------------------------------------------------
Revenue                            $475,174  $378,898  $1,147,423  $974,618

Expenses:
  Operating                         304,285   258,769     699,438   600,607
  General and administrative         41,194    31,881      81,016    70,582
----------------------------------------------------------------------------
Earnings before income taxes,
 finance charges, foreign exchange
 and depreciation and amortization  129,695    88,248     366,969   303,429
  Depreciation and amortization     105,923    72,580     211,628   157,473
----------------------------------------------------------------------------
Operating earnings                   23,772    15,668     155,341   145,956
Foreign exchange                       (298)   (5,015)     (3,927)   (8,309)
Finance charges                      25,562    23,950      49,994    46,509
----------------------------------------------------------------------------
Earnings (loss) before income
 taxes                               (1,492)   (3,267)    109,274   107,756
Income taxes:
  Current                               204     2,455       5,648    20,550
  Deferred                            5,478    (6,195)      9,243    (6,580)
----------------------------------------------------------------------------
                                      5,682    (3,740)     14,891    13,970
----------------------------------------------------------------------------
Net earnings (loss)                $ (7,174) $    473  $   94,383  $ 93,786
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings (loss) per share:
  Basic                            $  (0.02) $   0.00  $     0.32  $   0.34
  Diluted                          $  (0.02) $   0.00  $     0.32  $   0.33
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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


----------------------------------------------------------------------------
                                     Three months ended    Six months ended
                                               June 30,            June 30,
                                    ----------------------------------------
(Stated in thousands of Canadian
 dollars)                                2014      2013      2014      2013
----------------------------------------------------------------------------
Net earnings (loss)                  $ (7,174) $    473  $ 94,383  $ 93,786
Unrealized gain (loss) on
 translation of assets and
 liabilities of operations
 denominated in foreign currency      (64,952)   55,755     5,383    87,875
Foreign exchange gain (loss) on net
 investment hedge with U.S.
 denominated debt, net of tax          39,585   (37,380)   (4,200)  (59,115)
----------------------------------------------------------------------------
Comprehensive income (loss)          $(32,541) $ 18,848  $ 95,566  $122,546
----------------------------------------------------------------------------
----------------------------------------------------------------------------

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)


----------------------------------------------------------------------------
                                   Three months ended Six months ended June
                                             June 30,                   30,
                                --------------------------------------------
(Stated in thousands of Canadian
 dollars)                             2014       2013       2014       2013
----------------------------------------------------------------------------
Cash provided by (used in):
Operations:
  Net earnings (loss)            $  (7,174) $     473  $  94,383  $  93,786
  Adjustments for:
    Long-term compensation plans     8,480      4,240     18,791     10,757
    Depreciation and
     amortization                  105,923     72,580    211,628    157,473
    Foreign exchange                 2,080     (5,246)    (2,309)    (8,548)
    Finance charges                 25,562     23,950     49,994     46,509
    Income taxes                     5,682     (3,740)    14,891     13,970
    Other                           (3,427)       224     (1,928)     1,162
    Income taxes paid               (3,838)   (24,045)   (12,869)   (94,724)
    Income taxes recovered           3,342      1,960      3,354      1,960
    Interest paid                  (38,945)   (36,787)   (46,970)   (44,280)
    Interest received                  120        182        233        408
----------------------------------------------------------------------------
Funds provided by operations        97,805     33,791    329,198    178,473
Changes in non-cash working
 capital balances                  130,607    148,554     69,341     66,820
----------------------------------------------------------------------------
                                   228,412    182,345    398,539    245,293
Investments:
  Purchase of property, plant
   and equipment                  (174,854)  (136,237)  (280,853)  (266,842)
  Proceeds on sale of property,
   plant and equipment               9,979      4,148     17,236      6,686
  Changes in non-cash working
   capital balances                 16,612    (10,774)       304      4,967
----------------------------------------------------------------------------
                                  (148,263)  (142,863)  (263,313)  (255,189)
Financing:
  Increase in long-term debt       436,600          -    436,600          -
  Repayment of long-term debt      (13,942)         -    (30,670)         -
  Debt issue costs                 (10,166)         -    (10,166)         -
  Dividends paid                   (17,553)   (13,832)   (35,080)   (27,657)
  Issuance of common shares on
   the exercise of options           3,493        240      6,103        720
----------------------------------------------------------------------------
                                   398,432    (13,592)   366,787    (26,937)
----------------------------------------------------------------------------
Effect of exchange rate changes
 on cash and cash equivalents       (8,253)     6,667     (6,126)    11,459
----------------------------------------------------------------------------
Increase (decrease) in cash and
 cash equivalents                  470,328     32,557    495,887    (25,374)
Cash and cash equivalents,
 beginning of period               106,165     94,837     80,606    152,768
----------------------------------------------------------------------------
Cash and cash equivalents, end
 of period                       $ 576,493  $ 127,394  $ 576,493  $ 127,394
----------------------------------------------------------------------------
----------------------------------------------------------------------------

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)


----------------------------------------------------------------------------
(Stated in                                Accumulated
 thousands of                                   other
 Canadian     Shareholders' Contributed comprehensive  Retained       Total
 dollars)           capital     surplus          loss  earnings      equity
----------------------------------------------------------------------------
Balance at
 January 1,
 2014           $ 2,305,227    $ 29,175     $ (23,475) $ 88,416  $2,399,343
Net earnings
 for the
 period                   -           -             -    94,383      94,383
Other
 comprehensive
 income for
 the period               -           -         1,183         -       1,183
Dividends                 -           -             -   (35,080)    (35,080)
Share options
 exercised            8,806      (2,703)            -         -       6,103
Share based
 compensation
 expense                  -       2,792             -         -       2,792
----------------------------------------------------------------------------
Balance at
 June 30, 2014  $ 2,314,033    $ 29,264     $ (22,292)$ 147,719  $2,468,724
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
(Stated in                                Accumulated
 thousands of                                   other  Retained
 Canadian     Shareholders' Contributed comprehensive  earnings       Total
 dollars)           capital     surplus          loss  (deficit)     equity
----------------------------------------------------------------------------
Balance at
 January 1,
 2013           $ 2,251,982    $ 24,474     $ (60,535)$ (44,621) $2,171,300
Net earnings
 for the
 period                   -           -             -    93,786      93,786
Other
 comprehensive
 income for
 the period               -           -        28,760         -      28,760
Dividends                 -           -             -   (27,657)    (27,657)
Issued on
 redemption of
 non-
 management
 director DSUs          634        (598)                                 36
Share options
 exercised            1,097        (377)            -         -         720
Share based
 compensation
 expense                  -       3,565             -         -       3,565
----------------------------------------------------------------------------
Balance at
 June 30, 2013  $ 2,253,713    $ 27,064     $ (31,775) $ 21,508  $2,270,510
----------------------------------------------------------------------------
----------------------------------------------------------------------------

SECOND 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, July 24, 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 August 24, 2014 by dialing 1-800-408-3053 or 905-694-9451, pass code 4696487.

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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