Precision Drilling Announces 2024 Fourth Quarter and Year End Unaudited Financial Results

CALGARY, Alberta, Feb. 12, 2025 (GLOBE NEWSWIRE) -- This news release contains “forward-looking information and statements” within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in this news release. This news release contains references to certain Financial Measures and Ratios, including Adjusted EBITDA (earnings before income taxes, gain on acquisition, loss on investments and other assets, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, loss on asset decommissioning, gain on asset disposals and depreciation and amortization), Funds Provided by (Used in) Operations, Net Capital Spending, Working Capital and Total Long-term Financial Liabilities. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies. See “Financial Measures and Ratios” later in this news release. Financial Highlights and 2025 Capital Allocation Plans Revenue in the fourth quarter was $468 million, an 8% decrease from 2023 as activity increases in Canadian drilling, well servicing, and international were more than offset by lower activity and day rates in the U.S.Adjusted EBITDA(1) was $121 million in the quarter and included $15 million of share-based compensation charges, $4 million for rig reactivation costs and $4 million of non-recurring charges. In 2023, fourth quarter Adjusted EBITDA was $151 million and included share-based compensation charges of $13 million.Net earnings attributable to shareholders was $15 million or $1.06 per share in the fourth quarter compared to $147 million or $10.42 per share as net earnings in 2023 included an income tax recovery of $69 million and a gain on acquisition of $26 million.In 2024, we invested $217 million into our fleet and infrastructure, including multiple contracted rig upgrades and the strategic purchase of drill pipe for use in 2025. We expect to invest $225 million into our fleet and infrastructure in 2025, which may fluctuate with activity levels and customer contract upgrade opportunities.For the year ended December 31, 2024, we achieved our annual debt reduction and return of shareholder capital targets, reducing debt by $176 million and repurchasing $75 million of common shares while building cash by $20 million. Precision has consistently met or exceeded its capital allocation goals since implementation in 2016.For 2025, we expect to reduce debt by at least $100 million in 2025 and have increased our long-term debt reduction target to $700 million and extended our debt reduction period to 2027. In 2025, we plan to increase direct shareholder returns to 35% to 45% of free cash flow, before debt repayments. To the extent excess cash is generated these allocations may be increased. Operational Highlights Demand for our services continues to be strong and in 2024 our Canadian and international drilling rig utilization days increased 12% and 37%, respectively, while our well servicing rig operating hours increased 26% over 2023.In the fourth quarter, Canada's activity averaged 65 active drilling rigs versus 64 in the same quarter last year. Our Super Triple and Super Single rigs remain in high demand and are nearly fully utilized. Canadian revenue per utilization day was $35,675, up from $34,616 in the fourth quarter of 2023.Our U.S. activity has remained relatively consistent since mid-2024. We averaged 34 drilling rigs in the fourth quarter with revenue per utilization day of US$30,991 versus 45 drilling rigs at US$34,452 in 2023's fourth quarter.International activity increased 6% over the same period last year while revenue per utilization day was US$49,636 compared to US$49,872 in the fourth quarter of 2023.Service rig operating hours in the fourth quarter totaled 59,834, representing a 6% increase over the same quarter last year partially driven by the CWC Energy Services Corp. (CWC) acquisition in November of 2023. (1) See “FINANCIAL MEASURES AND RATIOS." MANAGEMENT COMMENTARY “Through 2024 Precision demonstrated remarkable market resilience despite weaker than expected U.S. customer demand and late year customer budget exhaustion in Canada. We continued our long-term record of meeting or exceeding our capital allocation targets every year since 2016 with $176 million of debt reduction, $75 million of share buybacks, while increasing our cash balance by $20 million. In the fourth quarter, approximately $8 million of reactivation costs and non-recurring items impacted our financial results, along with slightly lower than expected Canadian customer demand. Despite these fourth quarter headwinds we continued investing in our core business lines, including purchasing approximately $18 million of drill pipe in advance of potential tariffs, investing $3 million to begin reactivating two idle Canadian Super Single rigs to meet demand in 2025, and upgrading one rig for Canadian heavy oil pad drilling opportunities. “The outlook for Canada remains very strong given robust heavy oil activity following the startup of the Trans Mountain pipeline expansion in May 2024 and the imminent startup of LNG Canada in mid-2025. My enthusiasm is further underpinned by the pace of rig reactivations following the seasonal Christmas break and the stable winter activity we have experienced to date with 81 rigs working since mid-January. The uncertainty introduced by potential U.S. tariffs on Canadian oil and gas exports, has been tempered and we have not experienced any change in customer demand or their longer-term capital spending plans. “In Canada, our drilling utilization days increased 12% over 2023 and our Super Triple and Super Single rigs, which represent approximately 80% of our Canadian fleet, are nearly fully utilized. Demand for our Super Triple fleet, which is the preferred rig for Montney drilling, is driven by robust condensate fundamentals and the startup of LNG Canada this year. Demand for our Super Single fleet is driven by increased activity in heavy oil targeted areas as customers are benefiting from improved commodity pricing, following the startup of Trans Mountain, and a softening Canadian dollar. “Internationally, our drilling utilization days increased 37% in 2024 following the recertification and reactivation of four rigs in 2023. In 2024, we had eight rigs working on term contracts, five in Kuwait and three in the Kingdom of Saudi Arabia. The majority of these rigs are under five-year term contracts that extend into 2027 and 2028, providing predictable cash flow for the next few years. “In our Completion and Production Services business, our well servicing operating hours increased 26% over 2023 levels following the successful integration of CWC, where we achieved significant operating synergies. Our Completion and Production Services Adjusted EBITDA increased 30% year over year, which was slightly below our expectation due to late year customer budget exhaustion impacting our activity and rental business. I am very pleased with how we have transformed our Completion and Production Services business with two strategic tuck-in acquisitions. The High Arctic and CWC acquisitions more than doubled our Completion and Production revenue and Adjusted EBITDA since 2021 and solidified Precision as the premier well service provider in Canada. “During the year, Precision generated $482 million of cash provided by operations, allowing us to meet our capital return targets and invest $217 million into our fleet and infrastructure, which included multiple drilling rig upgrades and the strategic purchase of drill pipe for use in 2025. We expect to invest approximately $225 million in 2025, which reflects a weaker Canadian dollar and includes expected customer funded upgrades across our North American operations, including approximately $30 million in US fleet upgrades for customers targeting extended reach laterals. “With sustained free cash flow as a key differentiator of our business, we remain focused on reducing debt and increasing direct returns to shareholders. In 2025, we expect to reduce debt by at least $100 million, reinforcing our commitment to achieving a sustained Net Debt to Adjusted EBITDA ratio(1) of below 1.0 times. As we continue to realize the benefits of lower debt levels, we have increased our long-term debt reduction target by $100 million to $700 million and extended the debt reduction period by one year to 2027. In 2025, our goal is to increase our direct capital returns to shareholders by allocating 35% to 45% of free cash flow, before debt repayments, while continuing to move towards 50% of free cash flow thereafter, with excess cash potentially used to increase these allocations. “I would like to thank our employees for their dedication and commitment to serving our customers, and our shareholders for their continued support. With positive long-term fundamentals associated with global oil and natural gas demand and particularly the unique fundamentals driving drilling activity in our core geographic markets, I am confident we will continue to drive shareholder value," concluded Mr. Neveu. (1) See “FINANCIAL MEASURES AND RATIOS." SELECT FINANCIAL AND OPERATING INFORMATIONFinancial Highlights For the three months ended December 31, For the year ended December 31, (Stated in thousands of Canadian dollars, except per share amounts) 2024 2023 % Change 2024 2023 % Change Revenue 468,171 506,871 (7.6) 1,902,328 1,937,854 (1.8)Adjusted EBITDA(1) 120,526 151,231 (20.3) 521,221 611,118 (14.7)Net earnings 14,930 146,722 (89.8) 111,330 289,244 (61.5)Net earnings attributable to shareholders 14,795 146,722 (89.9) 111,195 289,244 (61.6)Cash provided by operations 162,791 170,255 (4.4) 482,083 500,571 (3.7)Funds provided by operations(1) 120,535 145,189 (17.0) 463,372 533,409 (13.1) Cash used in investing activities 61,954 57,627 7.5 202,986 214,784 (5.5)Capital spending by spend category(1) Expansion and upgrade 21,565 24,459 (11.8) 52,066 63,898 (18.5)Maintenance and infrastructure 37,335 54,388 (31.4) 164,632 162,851 1.1 Proceeds on sale (8,570) (3,117) 174.9 (30,395) (23,841) 27.5 Net capital spending(1) 50,330 75,730 (33.5) 186,303 202,908 (8.2) Net earnings attributable to shareholders per share: Basic 1.06 10.42 (89.8) 7.81 21.03 (62.8)Diluted 1.06 9.81 (89.2) 7.81 19.53 (60.0)Weighted average shares outstanding: Basic 13,982 14,084 (0.7) 14,229 13,754 3.5 Diluted 13,987 15,509 (9.8) 14,234 15,287 (6.9) (1) See “FINANCIAL MEASURES AND RATIOS.”Operating Highlights For the three months ended December 31, For the year ended December 31, 2024 2023 % Change 2024 2023 % Change Contract drilling rig fleet 214 214 - 214 214 - Drilling rig utilization days: U.S. 3,084 4,138 (25.5) 12,969 17,961 (27.8)Canada 6,018 5,909 1.8 23,685 21,156 12.0 International 736 693 6.2 2,928 2,132 37.3 Revenue per utilization day: U.S. (US$) 30,991 34,452 (10.0) 32,531 35,040 (7.2)Canada (Cdn$) 35,675 34,616 3.1 34,797 33,151 5.0 International (US$) 49,636 49,872 (0.5) 51,227 50,840 0.8 Operating costs per utilization day: U.S. (US$) 21,698 21,039 3.1 22,009 20,401 7.9 Canada (Cdn$) 21,116 19,191 10.0 20,424 19,225 6.2 Service rig fleet 170 183 (7.1) 170 183 (7.1)Service rig operating hours 59,834 56,683 5.6 254,224 201,627 26.1 Drilling Activity Average for the quarter ended 2023 Average for the quarter ended 2024 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Average Precision active rig count(1): U.S. 60 51 41 45 38 36 35 34 Canada 69 42 57 64 73 49 72 65 International 5 5 6 8 8 8 8 8 Total 134 98 104 117 119 93 115 107 (1) Average number of drilling rigs working or moving. Financial Position (Stated in thousands of Canadian dollars, except ratios)December 31, 2024 December 31, 2023(2) Working capital(1) 162,592 136,872 Cash 73,771 54,182 Long-term debt 812,469 914,830 Total long-term financial liabilities(1) 888,173 995,849 Total assets 2,956,315 3,019,035 Long-term debt to long-term debt plus equity ratio (1) 0.33 0.37 (1) See "FINANCIAL MEASURES AND RATIOS."(2) Comparative period figures were restated due to a change in accounting policy. See "CHANGE IN ACCOUNTING POLICY." Summary for the three months ended December 31, 2024: Revenue decreased to $468 million compared with $507 million in the fourth quarter of 2023 as a result of lower U.S. activity and day rates, partially offset by higher Canadian and international activity.Adjusted EBITDA was $121 million in the quarter and included $15 million of share-based compensation charges, $4 million for rig reactivation costs and $4 million of non-recurring charges. In 2023, fourth quarter Adjusted EBITDA was $151 million and included share-based compensation of $13 million. Please refer to “Other Items” later in this news release for additional information on share-based compensation charges.Adjusted EBITDA as a percentage of revenue was 26% as compared with 30% in 2023.Net earnings attributable to shareholders was $15 million compared to $147 million in the same quarter last year as net earnings in 2023 included an income tax recovery of $69 million and a gain on acquisition of $26 million.Generated cash provided by operations of $163 million, reduced debt by $25 million through the partial redemption of our 2026 unsecured senior notes and repayment of our U.S. Real Estate Credit Facility, repurchased $25 million of common shares under our Normal Course Issuer Bid (NCIB), and ended the quarter with $74 million of cash and more than $575 million of available liquidity.U.S. revenue per utilization day, excluding the impact of idle but contracted rigs was US$30,813 compared with US$32,819 in 2023, a decrease of 6%. Sequentially, revenue per utilization day, excluding idle but contracted rigs, was down 6% compared with the third quarter of 2024. Fourth quarter U.S. revenue per utilization day was US$30,991 compared with US$34,452 in 2023. The decrease was primarily the result of lower fleet average day rates, idle but contracted rig revenue and recoverable costs. We recognized US$1 million of revenue from idle but contracted rigs in the quarter as compared with US$7 million in 2023.U.S. operating costs per utilization day increased to US$21,698 compared with US$21,039 in 2023. The increase was mainly due to higher rig operating costs and fixed costs spread over lower activity, offset by lower recoverable costs and repairs and maintenance. Sequentially, operating costs per utilization day were down 2% due to lower recoverable costs.Canadian revenue per utilization day was $35,675, an increase from the $34,616 realized in 2023 due to higher average day rates and recoverable costs. Sequentially, revenue per utilization day increased $3,350 due to higher boiler revenue and higher fleet-wide average day rates.Canadian operating costs per utilization day increased to $21,116, compared with $19,191 in 2023, resulting from higher repairs and maintenance, rig reactivation costs and impact of labour rate increases. Sequentially, daily operating costs increased $1,668 and were the result of higher labour expenses due to rate increases, recoverable expenses and repairs and maintenance.Internationally, fourth quarter revenue increased 6% from 2023 as we realized revenue of US$37 million versus US$35 million in the prior year. Our higher revenue was primarily the result of a 6% increase in activity, which was negatively impacted by a planned rig recertification accounting for 21 non-billable utilization days in October. International revenue per utilization day was US$49,636 compared with US$49,872 in 2023.Completion and Production Services revenue was $69 million, an increase of $6 million from 2023, as our fourth quarter service rig operating hours increased 6%, reflecting the successful integration of the CWC acquisition in November 2023.General and administrative expenses were $35 million as compared with $39 million in 2023 primarily due to lower non-recurring costs associated with our CWC acquisition in 2023, partially offset by higher share-based compensation charges.Net finance charges were $16 million, a decrease of $3 million compared with 2023 as a result of lower interest expense on our outstanding debt balance.Capital expenditures were $59 million compared with $79 million in 2023 and by spend category included $22 million for expansion and upgrades and $37 million for the maintenance of existing assets, infrastructure, and intangible assets.Income tax expense for the quarter was $6 million as compared with a recovery of $69 million in 2023. During the fourth quarter, we continue to not recognize deferred tax assets on certain international operating losses. Summary for the year ended December 31, 2024: Revenue for the year was $1,902 million, comparable with 2023.Adjusted EBITDA was $521 million as compared with $611 million in 2023. Our lower Adjusted EBITDA was primarily attributed to decreased U.S. drilling results and $13 million of higher share-based compensation, partially offset by the strengthening of Canadian and international results.Net earnings attributable to shareholders was $111 million compared to $289 million in the prior year. Our lower current year net earnings was due to the impact of decreased U.S. drilling results, higher income tax expense of $67 million and the gain on acquisition of $26 million recognized in 2023.Cash provided by operations was $482 million as compared with $501 million in 2023. Funds provided by operations were $463 million, a decrease of $70 million from the comparative period.General and administrative costs were $132 million, an increase of $10 million from 2023 primarily due to higher share-based compensation charges.Net finance charges were $70 million, $14 million lower than 2023 due to our lower interest expense on our outstanding debt balance.Capital expenditures were $217 million in 2024, a decrease of $10 million from 2023. Capital spending by spend category included $52 million for expansion and upgrades and $165 million for the maintenance of existing assets, infrastructure, and intangible assets.Reduced debt by $176 million from the partial redemption of our 2026 unsecured senior notes and repayment of our Canadian and U.S. Real Estate Credit Facilities.Repurchased $75 million of common shares under our NCIB. STRATEGY Precision’s vision is to be globally recognized as the High Performance, High Value provider of land drilling services. We work toward this vision by defining and measuring our results against strategic priorities that we establish at the beginning of every year. Below we summarize the results of our 2024 strategic priorities: Concentrate organizational efforts on leveraging our scale and generating free cash flow. Generated cash provided from operations of $482 million, allowing us to meet our debt reduction and share repurchase goals and build our cash balance by $20 million.Increased utilization of our Super Single and tele double rigs, driving Canadian drilling activity up 12% over 2023.Successfully integrated our 2023 CWC acquisition, increasing Completion and Production Services operating hours and Adjusted EBITDA 26% and 30%, respectively, year over year. Achieved our $20 million annual synergies target from the acquisition.Internationally, increased our activity 37% year over year and realized US$150 million of contract drilling revenue compared to US$108 million in 2023. Reduce debt by between $150 million and $200 million and allocate 25% to 35% of free cash flow before debt repayments for share repurchases. Reduced debt by $176 million and ended the year with a Net Debt to Adjusted EBITDA ratio of approximately 1.4 times. On track to achieve a sustained Net Debt to Adjusted EBITDA ratio of below 1.0 times.Returned $75 million to shareholders through share repurchases, achieving the midpoint of our target range.Renewed our NCIB in September, allowing repurchases of up to 10% of the public float. Continue to deliver operational excellence in drilling and service rig operations to strengthen our competitive position and extend market penetration of our AlphaTM and EverGreenTM products. Increased our Canadian drilling rig utilization days and well service rig operating hours year over year, maintaining our position as the leading provider of high-quality and reliable services in Canada.Invested $52 million in expansion and upgrade capital to enhance our drilling rigs.Nearly doubled our EverGreenTM revenue year over year.Continued to expand our EverGreenTM product offering on our Super Single rigs with LED mast lighting and hydrogen injection systems. 2025 Strategic Priorities Maximize free cash flow through disciplined capital deployment and strict cost management.Enhance shareholder returns through debt reduction and share repurchases. Reduce debt by at least $100 million in 2025 and debt by $700 million between 2022 and 2027, while remaining committed to achieving a sustained Net Debt to Adjusted EBITDA ratio of below 1.0 times.Allocate 35% to 45% of free cash flow, before debt repayments, directly to shareholders and continue moving direct shareholder capital returns toward 50% of free cash flow thereafter. Grow revenue in existing service lines through contracted upgrades, optimized pricing and utilization, and opportunistic consolidating tuck-in acquisitions. OUTLOOK The long-term outlook for global energy demand remains positive with rising demand for all types of energy including oil and natural gas driven by economic growth, increasing demand from third-world regions, and emerging energy sources of power demand. Oil prices are constructive as OPEC+ continues to honour its production quotas, producers remain committed to returning capital to shareholders versus increasing production, and geopolitical issues continue to threaten supply. In Canada, the Trans Mountain pipeline expansion, which became operational in May of 2024, combined with the imminent startup of LNG Canada are projected to provide significant tidewater access for Canadian crude oil and natural gas, supporting additional Canadian drilling activity. In the U.S., the next wave of Liquefied Natural Gas (LNG) export terminals is expected to add approximately 11 bcf/d of export capacity from 2025 to 2028, supporting additional U.S. natural gas drilling activity. Coal retirements and a build-out of artificial intelligence data centers could provide further support for natural gas drilling. Our Canadian drilling activity continues to be robust in 2025 and we currently have 81 rigs operating and expect this activity level to continue until spring breakup. Our Super Single fleet is near full utilization as heavy oil customers are benefiting from improved commodity pricing and a weak Canadian dollar. Our Super Triple fleet, the preferred rig for Montney drilling, is also nearly fully utilized, and with the expected startup of LNG Canada in mid-2025, rig demand could exceed supply. Overall, we expect our Canadian drilling activity to be up year over year with near full utilization of our Super Series rigs, which should support day rates and increase demand for term contracts as customers secure rigs to ensure fulfillment of their development programs. The uncertainty introduced by potential U.S. tariffs on Canadian oil and gas exports, has been tempered and we have not experienced any change in customer demand or their longer-term plans. In the U.S., we currently have 34 rigs earning revenue, which has been relatively consistent since mid-2024. Drilling activity growth remains constrained as producers continue to focus on shareholder returns rather than growth, while volatile commodity prices, customer consolidation, and drilling and completion efficiencies have restricted activity growth. If commodity prices remain stable and around today’s level, we expect drilling demand to begin to improve in the second half and gain momentum through the remainder of 2025 as new LNG export capacity is added and customers seek to maintain or possibly increase production levels. Internationally, we have eight rigs working on term contracts, five in Kuwait and three in the Kingdom of Saudi Arabia. The majority of these rigs are under five-year term contracts that extend into 2027 and 2028, providing predictable cash flow for the next few years. We continue to bid our remaining idle rigs within the region and remain optimistic in our ability to secure rig reactivations. As the premier well service provider in Canada, the outlook for this business remains positive. We expect the Trans Mountain pipeline expansion and LNG Canada to drive more service-related activity, while increased regulatory spending requirements are expected to result in more abandonment work. Customer demand should remain strong, and with continued labour constraints, we expect firm pricing into the foreseeable future. Contracts The following chart outlines the average number of drilling rigs under term contract by quarter as at February 12, 2025. For those quarters ending after December 31, 2024, this chart represents the minimum number of term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional term contracts. As at February 12, 2025 Average for the quarter ended 2024 Average Average for the quarter ended 2025 Average Mar. 31 June 30 Sept. 30 Dec. 31 2024 Mar. 31 June 30 Sept. 30 Dec. 31 2025 Average rigs under term contract: U.S. 20 17 17 16 18 15 13 8 6 11 Canada 24 22 23 23 23 20 19 18 14 18 International 8 8 8 8 8 8 8 7 7 8 Total 52 47 48 47 49 43 40 33 27 37 SEGMENTED FINANCIAL RESULTS Precision’s operations are reported in two segments: Contract Drilling Services, which includes our drilling rig, oilfield supply and manufacturing divisions; and Completion and Production Services, which includes our service rig, rental and camp and catering divisions. For the three months ended December 31, For the year ended December 31, (Stated in thousands of Canadian dollars) 2024 2023 % Change 2024 2023 % Change Revenue: Contract Drilling Services 402,610 446,503 (9.8) 1,617,735 1,704,265 (5.1)Completion and Production Services 68,830 62,459 10.2 294,817 240,716 22.5 Inter-segment eliminations (3,269) (2,091) 56.3 (10,224) (7,127) 43.5 468,171 506,871 (7.6) 1,902,328 1,937,854 (1.8)Adjusted EBITDA:(1) Contract Drilling Services 125,683 162,459 (22.6) 532,345 630,761 (15.6)Completion and Production Services 15,895 12,193 30.4 66,681 51,224 30.2 Corporate and Other (21,052) (23,421) (10.1) (77,805) (70,867) 9.8 120,526 151,231 (20.3) 521,221 611,118 (14.7) (1) See “FINANCIAL MEASURES AND RATIOS.” SEGMENT REVIEW OF CONTRACT DRILLING SERVICES For the three months ended December 31, For the year ended December 31, (Stated in thousands of Canadian dollars, except where noted) 2024 2023 % Change 2024 2023 % Change Revenue 402,610 446,503 (9.8) 1,617,735 1,704,265 (5.1)Expenses: Operating 264,858 270,303 (2.0) 1,041,068 1,030,053 1.1 General and administrative 12,069 13,741 (12.2) 44,322 43,451 2.0 Adjusted EBITDA(1) 125,683 162,459 (22.6) 532,345 630,761 (15.6)Adjusted EBITDA as a percentage of revenue(1) 31.2% 36.4% 32.9% 37.0% (1) See “FINANCIAL MEASURES AND RATIOS.” United States onshore drilling statistics:(1)2024 2023 Precision Industry(2) Precision Industry(2) Average number of active land rigs for quarters ended: March 31 38 602 60 744 June 30 36 583 51 700 September 30 35 565 41 631 December 31 34 569 45 603 Year to date average 36 580 49 670 (1) United States lower 48 operations only.(2) Baker Hughes rig counts. Canadian onshore drilling statistics:(1)2024 2023 Precision Industry(2) Precision Industry(2) Average number of active land rigs for quarters ended: March 31 73 208 69 221 June 30 49 134 42 117 September 30 72 207 57 188 December 31 65 194 64 181 Year to date average 65 186 58 177 (1) Canadian operations only.(2) Baker Hughes rig counts. SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES For the three months ended December 31, For the year ended December 31, (Stated in thousands of Canadian dollars, except where noted) 2024 2023 % Change 2024 2023 % Change Revenue 68,830 62,459 10.2 294,817 240,716 22.5 Expenses: Operating 50,714 48,297 5.0 217,842 181,622 19.9 General and administrative 2,221 1,969 12.8 10,294 7,870 30.8 Adjusted EBITDA(1) 15,895 12,193 30.4 66,681 51,224 30.2 Adjusted EBITDA as a percentage of revenue(1) 23.1% 19.5% 22.6% 21.3% Well servicing statistics: Number of service rigs (end of period) 170 183 (7.1) 170 183 (7.1)Service rig operating hours 59,834 56,683 5.6 254,224 201,627 26.1 Service rig operating hour utilization 38% 38% 42% 42% (1) See “FINANCIAL MEASURES AND RATIOS.” OTHER ITEMS Share-based Incentive Compensation Plans We have several cash and equity-settled share-based incentive plans for non-management directors, officers, and other eligible employees. Our accounting policies for each share-based incentive plan can be found in our 2023 Annual Report. A summary of expense amounts under these plans during the reporting periods are as follows: For the three months ended December 31, For the year ended December 31, (Stated in thousands of Canadian dollars)2024 2023 2024 2023 Cash settled share-based incentive plans 14,018 11,972 42,828 32,063 Equity settled share-based incentive plans 1,071 697 4,588 2,531 Total share-based incentive compensation plan expense 15,089 12,669 47,416 34,594 Allocated: Operating 3,709 2,765 11,868 9,497 General and Administrative 11,380 9,904 35,548 25,097 15,089 12,669 47,416 34,594 FINANCIAL MEASURES AND RATIOS Non-GAAP Financial MeasuresWe reference certain Non-Generally Accepted Accounting Principles (Non-GAAP) measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.Adjusted EBITDAWe believe Adjusted EBITDA (earnings before income taxes, gain on acquisition, loss on investments and other assets, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, loss on asset decommissioning, gain on asset disposals and depreciation and amortization), as reported in our Condensed Interim Consolidated Statements of Net Earnings and our reportable operating segment disclosures, is a useful measure because it gives an indication of the results from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.The most directly comparable financial measure is net earnings. For the three months ended December 31, For the year ended December 31, (Stated in thousands of Canadian dollars) 2024 2023 2024 2023 Adjusted EBITDA by segment: Contract Drilling Services 125,683 162,459 532,345 630,761 Completion and Production Services 15,895 12,193 66,681 51,224 Corporate and Other (21,052) (23,421) (77,805) (70,867)Adjusted EBITDA 120,526 151,231 521,221 611,118 Depreciation and amortization 82,210 78,734 309,314 297,557 Gain on asset disposals (1,913) (8,883) (16,148) (24,469)Loss on asset decommissioning — 9,592 — 9,592 Foreign exchange 1,487 (773) 2,259 (1,667)Finance charges 16,281 19,468 69,753 83,414 Gain on repurchase of unsecured notes — — — (137)Loss on investments and other assets 1,814 735 1,484 6,810 Gain on acquisition — (25,761) — (25,761)Incomes taxes 5,717 (68,603) 43,229 (23,465)Net earnings 14,930 146,722 111,330 289,244 Non-controlling interests 135 — 135 — Net earnings attributable to shareholders 14,795 146,722 111,195 289,244 Funds Provided by (Used in) Operations We believe funds provided by (used in) operations, as reported in our Condensed Interim Consolidated Statements of Cash Flows, is a useful measure because it provides an indication of the funds our principal business activities generate prior to consideration of working capital changes, which is primarily made up of highly liquid balances.The most directly comparable financial measure is cash provided by (used in) operations. Net Capital Spending We believe net capital spending is a useful measure as it provides an indication of our primary investment activities.The most directly comparable financial measure is cash provided by (used in) investing activities.Net capital spending is calculated as follows: For the three months ended December 31, For the year ended December 31, (Stated in thousands of Canadian dollars) 2024 2023 2024 2023 Capital spending by spend category Expansion and upgrade 21,565 24,459 52,066 63,898 Maintenance, infrastructure and intangibles 37,335 54,388 164,632 162,851 58,900 78,847 216,698 226,749 Proceeds on sale of property, plant and equipment (8,570) (3,117) (30,395) (23,841)Net capital spending 50,330 75,730 186,303 202,908 Business acquisitions — 646 — 28,646 Proceeds from sale of investments and other assets — — (3,623) (10,013)Purchase of investments and other assets 718 61 725 5,343 Receipt of finance lease payments (208) (191) (799) (255)Changes in non-cash working capital balances 11,114 (18,619) 20,380 (11,845)Cash used in investing activities 61,954 57,627 202,986 214,784 Working CapitalWe define working capital as current assets less current liabilities, as reported in our Condensed Interim Consolidated Statements of Financial Position.Working capital is calculated as follows: December 31, December 31, (Stated in thousands of Canadian dollars) 2024 2023 Current assets 501,284 510,881 Current liabilities 338,692 374,009 Working capital 162,592 136,872 Total Long-term Financial LiabilitiesWe define total long-term financial liabilities as total non-current liabilities less deferred tax liabilities, as reported in our Condensed Interim Consolidated Statements of Financial Position.Total long-term financial liabilities is calculated as follows: December 31, December 31, (Stated in thousands of Canadian dollars) 2024 2023 Total non-current liabilities 935,624 1,069,364 Deferred tax liabilities 47,451 73,515 Total long-term financial liabilities 888,173 995,849 Non-GAAP RatiosWe reference certain additional Non-GAAP ratios that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors. Adjusted EBITDA % of Revenue We believe Adjusted EBITDA as a percentage of consolidated revenue, as reported in our Condensed Interim Consolidated Statements of Net Earnings, provides an indication of our profitability from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges. Long-term debt to long-term debt plus equity We believe that long-term debt (as reported in our Condensed Interim Consolidated Statements of Financial Position) to long-term debt plus equity (total shareholders’ equity as reported in our Condensed Interim Consolidated Statements of Financial Position) provides an indication of our debt leverage. Net Debt to Adjusted EBITDA We believe that the Net Debt (long-term debt less cash, as reported in our Condensed Interim Consolidated Statements of Financial Position) to Adjusted EBITDA ratio provides an indication of the number of years it would take for us to repay our debt obligations. Supplementary Financial MeasuresWe reference certain supplementary financial measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors. Capital Spending by Spend Category We provide additional disclosure to better depict the nature of our capital spending. Our capital spending is categorized as expansion and upgrade, maintenance and infrastructure, or intangibles. CHANGE IN ACCOUNTING POLICY Precision adopted Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants - Amendments to IAS 1, as issued in 2020 and 2022. These amendments apply retrospectively for annual reporting periods beginning on or after January 1, 2024 and clarify requirements for determining whether a liability should be classified as current or non-current. Due to this change in accounting policy, there was a retrospective impact on the comparative Statement of Financial Position pertaining to the Corporation's Deferred Share Unit (DSU) plan for non-management directors which are redeemable in cash or for an equal number of common shares upon the director's retirement. In the case of a director retiring, the director's respective DSU liability would become payable and the Corporation would not have the right to defer settlement of the liability for at least twelve months. As such, the liability is impacted by the revised policy. The following changes were made to the Statement of Financial Position: As at January 1, 2023, accounts payable and accrued liabilities increased by $12 million and non-current share-based compensation liability decreased by $12 million.As at December 31, 2023, accounts payable and accrued liabilities increased by $8 million and non-current share-based compensation liability decreased by $8 million. The Corporation's other liabilities were not impacted by the amendments. The change in accounting policy will also be reflected in the Corporation's consolidated financial statements as at and for the year ending December 31, 2024. PARTNERSHIP On September 26, 2024, Precision formed a strategic Partnership with two Indigenous partners to provide well servicing operations in northeast British Columbia. Precision contributed $4 million in assets to the Partnership. Profit attributable to Non-Controlling Interests (NCI) was $0.1 million in 2024. Precision holds a controlling interest in the Partnership and the portions of the net earnings and equity not attributable to Precision's controlling interest are shown separately as NCI in the Consolidated Statements of Net Earnings and Consolidated Statements of Financial Position. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS Certain statements contained in this release, including statements that contain words such as "could", "should", "can", "anticipate", "estimate", "intend", "plan", "expect", "believe", "will", "may", "continue", "project", "potential" and similar expressions and statements relating to matters that are not historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking information and statements"). In particular, forward-looking information and statements include, but are not limited to, the following: our strategic priorities for 2025;our capital expenditures, free cash flow allocation and debt reduction plans for 2025 through to 2027;anticipated activity levels, demand for our drilling rigs, day rates and daily operating margins in 2025;the average number of term contracts in place for 2025;customer adoption of AlphaTM technologies and EverGreenTM suite of environmental solutions;timing and amount of synergies realized from acquired drilling and well servicing assets; andpotential commercial opportunities and rig contract renewals. These forward-looking information and statements are based on certain assumptions and analysis made by Precision in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. These include, among other things: our ability to react to customer spending plans as a result of changes in oil and natural gas prices;the status of current negotiations with our customers and vendors;customer focus on safety performance;existing term contracts are neither renewed nor terminated prematurely;our ability to deliver rigs to customers on a timely basis;the impact of an increase/decrease in capital spending; andthe general stability of the economic and political environments in the jurisdictions where we operate. Undue reliance should not be placed on forward-looking information and statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from our expectations. Such risks and uncertainties include, but are not limited to: volatility in the price and demand for oil and natural gas;fluctuations in the level of oil and natural gas exploration and development activities;fluctuations in the demand for contract drilling, well servicing and ancillary oilfield services;our customers’ inability to obtain adequate credit or financing to support their drilling and production activity;changes in drilling and well servicing technology, which could reduce demand for certain rigs or put us at a competitive advantage;shortages, delays and interruptions in the delivery of equipment supplies and other key inputs;liquidity of the capital markets to fund customer drilling programs;availability of cash flow, debt and equity sources to fund our capital and operating requirements, as needed;the impact of weather and seasonal conditions on operations and facilities;competitive operating risks inherent in contract drilling, well servicing and ancillary oilfield services;ability to improve our rig technology to improve drilling efficiency;general economic, market or business conditions;the availability of qualified personnel and management;a decline in our safety performance which could result in lower demand for our services;changes in laws or regulations, including changes in environmental laws and regulations such as increased regulation of hydraulic fracturing or restrictions on the burning of fossil fuels and greenhouse gas emissions, which could have an adverse impact on the demand for oil and natural gas;terrorism, social, civil and political unrest in the foreign jurisdictions where we operate;fluctuations in foreign exchange, interest rates and tax rates; andother unforeseen conditions which could impact the use of services supplied by Precision and Precision’s ability to respond to such conditions. Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2023, which may be accessed on Precision’s SEDAR+ profile at www.sedarplus.ca or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Stated in thousands of Canadian dollars) December 31, 2024 December 31, 2023(1) January 1, 2023(1) ASSETS Current assets: Cash $73,771 $54,182 $21,587 Accounts receivable 378,712 421,427 413,925 Inventory 43,300 35,272 35,158 Assets held for sale 5,501 — — Total current assets 501,284 510,881 470,670 Non-current assets: Income tax recoverable — 682 1,602 Deferred tax assets 6,559 73,662 455 Property, plant and equipment 2,356,173 2,338,088 2,303,338 Intangibles 12,997 17,310 19,575 Right-of-use assets 66,032 63,438 60,032 Finance lease receivables 4,806 5,003 — Investments and other assets 8,464 9,971 20,451 Total non-current assets 2,455,031 2,508,154 2,405,453 Total assets $2,956,315 $3,019,035 $2,876,123 LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued liabilities $314,355 $350,749 $404,350 Income taxes payable 3,778 3,026 2,991 Current portion of lease obligations 20,559 17,386 12,698 Current portion of long-term debt — 2,848 2,287 Total current liabilities 338,692 374,009 422,326 Non-current liabilities: Share-based compensation 13,666 16,755 47,836 Provisions and other 7,472 7,140 7,538 Lease obligations 54,566 57,124 52,978 Long-term debt 812,469 914,830 1,085,970 Deferred tax liabilities 47,451 73,515 28,946 Total non-current liabilities 935,624 1,069,364 1,223,268 Equity: Shareholders’ capital 2,301,729 2,365,129 2,299,533 Contributed surplus 77,557 75,086 72,555 Deficit (900,834) (1,012,029) (1,301,273)Accumulated other comprehensive income 199,020 147,476 159,714 Total equity attributable to shareholders 1,677,472 1,575,662 1,230,529 Non-controlling interest 4,527 — — Total equity 1,681,999 1,575,662 1,230,529 Total liabilities and equity $2,956,315 $3,019,035 $2,876,123 (1) Comparative period figures were restated due to a change in accounting policy. See "CHANGE IN ACCOUNTING POLICY."CONDENSED INTERIM CONSOLIDATED STATEMENTS OF NET EARNINGS (UNAUDITED) Three Months Ended December 31, Year Ended December 31, (Stated in thousands of Canadian dollars, except per share amounts) 2024 2023 2024 2023 Revenue $468,171 $506,871 $1,902,328 $1,937,854 Expenses: Operating 312,303 316,509 1,248,686 1,204,548 General and administrative 35,342 39,131 132,421 122,188 Earnings before income taxes, loss on investments and other assets, gain on acquisition, gain on repurchase of unsecured senior notes, finance charges, foreign exchange, loss on asset decommissioning, gain on asset disposals, and depreciation and amortization 120,526 151,231 521,221 611,118 Depreciation and amortization 82,210 78,734 309,314 297,557 Gain on asset disposals (1,913) (8,883) (16,148) (24,469)Loss on asset decommissioning — 9,592 — 9,592 Foreign exchange 1,487 (773) 2,259 (1,667)Finance charges 16,281 19,468 69,753 83,414 Gain on repurchase of unsecured senior notes — — — (137)Gain on acquisition — (25,761) — (25,761)Loss on investments and other assets 1,814 735 1,484 6,810 Earnings before income taxes 20,647 78,119 154,559 265,779 Income taxes: Current 2,811 486 7,470 4,494 Deferred 2,906 (69,089) 35,759 (27,959) 5,717 (68,603) 43,229 (23,465)Net earnings $14,930 $146,722 $111,330 $289,244 Attributable to: Shareholders of Precision Drilling Corporation $14,795 $146,722 $111,195 $289,244 Non-controlling interests $135 $— $135 $— Net earnings per share attributable to shareholders: Basic $1.06 $10.42 $7.81 $21.03 Diluted $1.06 $9.81 $7.81 $19.53 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended December 31, Year Ended December 31, (Stated in thousands of Canadian dollars) 2024 2023 2024 2023 Net earnings $14,930 $146,722 $111,330 $289,244 Unrealized gain (loss) on translation of assets and liabilities of operations denominated in foreign currency 89,412 (36,755) 119,821 (33,433)Foreign exchange gain (loss) on net investment hedge with U.S. denominated debt (49,744) 22,679 (69,027) 21,195 Tax related to net investment hedge of long-term debt 750 — 750 — Comprehensive income $55,348 $132,646 $162,874 $277,006 Attributable to: Shareholders of Precision Drilling Corporation $55,213 $132,646 $162,739 $277,006 Non-controlling interests $135 $— $135 $— CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended December 31, Year Ended December 31, (Stated in thousands of Canadian dollars) 2024 2023 2024 2023 Cash provided by (used in): Operations: Net earnings $14,930 $146,722 $111,330 $289,244 Adjustments for: Long-term compensation plans 4,398 (2,541) 18,888 6,659 Depreciation and amortization 82,210 78,734 309,314 297,557 Gain on asset disposals (1,913) (8,883) (16,148) (24,469)Loss on asset decommissioning — 9,592 — 9,592 Foreign exchange 1,477 (853) 2,442 (866)Finance charges 16,281 19,468 69,753 83,414 Income taxes 5,717 (68,603) 43,229 (23,465)Other (392) (9) (272) (229)Loss on investments and other assets 1,814 735 1,484 6,810 Gain on acquisition — (25,761) — (25,761)Gain on repurchase of unsecured senior notes — — — (137)Income taxes paid (1,617) (708) (6,459) (3,103)Income taxes recovered 27 17 85 24 Interest paid (2,806) (3,335) (72,241) (83,037)Interest received 409 614 1,967 1,176 Funds provided by operations 120,535 145,189 463,372 533,409 Changes in non-cash working capital balances 42,256 25,066 18,711 (32,838)Cash provided by operations 162,791 170,255 482,083 500,571 Investments: Purchase of property, plant and equipment (58,900) (78,582) (216,647) (224,960)Purchase of intangibles — (265) (51) (1,789)Proceeds on sale of property, plant and equipment 8,570 3,117 30,395 23,841 Proceeds from sale of investments and other assets — — 3,623 10,013 Business acquisitions — (646) — (28,646)Purchase of investments and other assets (718) (61) (725) (5,343)Receipt of finance lease payments 208 191 799 255 Changes in non-cash working capital balances (11,114) 18,619 (20,380) 11,845 Cash used in investing activities (61,954) (57,627) (202,986) (214,784) Financing: Issuance of long-term debt 17,078 — 27,978 162,649 Repayments of long-term debt (41,813) (86,699) (204,319) (375,237)Repurchase of share capital (25,023) (17,004) (75,488) (29,955)Issuance of common shares from the exercise of options — — 686 — Debt amendment fees (46) — (1,363) — Lease payments (3,266) (3,010) (13,271) (9,423)Funding from non-controlling interest — — 4,392 — Cash used in financing activities (53,070) (106,713) (261,385) (251,966)Effect of exchange rate changes on cash 1,700 (798) 1,877 (1,226)Increase in cash 49,467 5,117 19,589 32,595 Cash, beginning of period 24,304 49,065 54,182 21,587 Cash, end of period $73,771 $54,182 $73,771 $54,182 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) Attributable to shareholders of the Corporation (Stated in thousands of Canadian dollars) Shareholders’Capital ContributedSurplus AccumulatedOtherComprehensiveIncome Deficit Total Non-controlling interest TotalEquity Balance at January 1, 2024 $2,365,129 $75,086 $147,476 $(1,012,029) $1,575,662 $— $1,575,662 Net earnings for the period — — — 111,195 111,195 135 111,330 Other comprehensive income for the period — — 51,544 — 51,544 — 51,544 Share options exercised 978 (292) — — 686 — 686 Settlement of Executive Performance and Restricted Share Units 21,846 (1,479) — — 20,367 — 20,367 Share repurchases (86,570) — — — (86,570) — (86,570)Redemption of non-management directors share units 346 (346) — — — — — Share-based compensation expense — 4,588 — — 4,588 — 4,588 Funding from non-controlling interest — — — — — 4,392 4,392 Balance at December 31, 2024 $2,301,729 $77,557 $199,020 $(900,834) $1,677,472 $4,527 $1,681,999 Attributable to shareholders of the Corporation (Stated in thousands of Canadian dollars) Shareholders’Capital ContributedSurplus AccumulatedOtherComprehensiveIncome Deficit Total Non-controlling interest TotalEquity Balance at January 1, 2023 $2,299,533 $72,555 $159,714 $(1,301,273) $1,230,529 $— $1,230,529 Net earnings for the period — — — 289,244 289,244 — 289,244 Other comprehensive income for the period — — (12,238) — (12,238) — (12,238)Acquisition share consideration 75,588 — — — 75,588 — 75,588 Settlement of Executive Performance and Restricted Share Units 19,206 — — — 19,206 — 19,206 Share repurchases (29,955) — — — (29,955) — (29,955)Redemption of non-management directors share units 757 — — — 757 — 757 Share-based compensation expense — 2,531 — — 2,531 — 2,531 Balance at December 31, 2023 $2,365,129 $75,086 $147,476 $(1,012,029) $1,575,662 $— $1,575,662 2024 FOURTH QUARTER AND YEAR-END RESULTS CONFERENCE CALL AND WEBCAST Precision Drilling Corporation has scheduled a conference call and webcast to begin promptly at 11:00 a.m. MT (1:00 p.m. ET) on Thursday, February 13, 2025. To participate in the conference call please register at the URL link below. Once registered, you will receive a dial-in number and a unique PIN, which will allow you to ask questions. https://register.vevent.com/register/BI9168b4c0516f4409ab4f297340994ebc The call will also be webcast and can be accessed through the link below. A replay of the webcast call will be available on Precision’s website for 12 months. https://edge.media-server.com/mmc/p/8hij84aa About Precision Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as Alpha™ that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Our drilling services are enhanced by our EverGreen™ suite of environmental solutions, which bolsters our commitment to reducing the environmental impact of our operations. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel. Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS”. Additional Information For further information, please contact: Lavonne Zdunich, CPA, CAVice President, Investor Relations403.716.4500 800, 525 - 8th Avenue S.W.Calgary, Alberta, Canada T2P 1G1Website: www.precisiondrilling.com

Precision Drilling Announces 2024 Fourth Quarter and Year End Unaudited Financial Results

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