Mr. Carey Ford reports

PRECISION DRILLING MEETS 2024 DEBT REPAYMENT AND SHARE REPURCHASE TARGETS AND PROVIDES CAPITAL ALLOCATION, FINANCIAL AND OPERATIONAL UPDATES

Precision Drilling Corp. has provided a series of positive updates, including: (1) 2024 debt repayment and year-end liquidity update; (2) capital allocation framework update; and (3) financial and operational update.

2024 debt repayment and year-end liquidity update

Precision reduced debt by $176-million in 2024, achieving the midpoint of its debt reduction target range. As at Dec. 31, 2024, Precision's outstanding debt obligations included:

• $160-million (U.S.) in 7.125 per cent unsecured senior notes due Jan. 15, 2026;
• $400-million (U.S.) in 6.875 per cent unsecured senior notes due Jan. 15, 2029;
• $12-million (U.S.) drawn on the senior credit facility.

The company ended 2024 with a cash balance of approximately $74-million, compared with $54-million at year-end 2023, and total available liquidity of approximately $575-million.

Capital allocation framework update

Precision remains firmly committed to its long-term debt reduction target of repaying $600-million between 2022 and 2026 and reaching a sustained net debt to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) leverage ratio of below 1.0 times. Over the past three years, the company has reduced its debt by $435-million and lowered its net debt to adjusted EBITDA leverage ratio, which Precision expects to be approximately 1.4 times as at Dec. 31, 2024.

During 2024, Precision returned $75-million to shareholders through share repurchases under its normal course issuer bid and, as at Dec. 31, 2024, had 13,779,502 shares outstanding, compared with 14,336,539 as at Dec. 31, 2023, a decrease of 4 per cent.

Since 2015, Precision has prioritized its capital allocation plans, allocating $1.5-billion of its free cash flow to debt repayments and share buybacks while investing $1.3-billion in its fleet and completing two acquisitions. As at Dec. 31, 2024, Precision's annual run-rate interest expense is approximately $40-million (U.S.) compared with $104-million (U.S.) in 2016.

With a strong free cash flow outlook in 2025, Precision plans to further reduce its debt while increasing its share buyback allocation. In February, the company will provide specific capital allocation plans and targets for 2025.

Financial and operational update

Financial results

Precision intends to release its 2024 fourth quarter results after markets close on Wednesday, Feb. 12, 2025. Fourth quarter drilling field margins in Canada and the United States are expected to align with previous guidance. With a closing share price of $87.92 on Dec. 31, 2024, share-based compensation expense for the fourth quarter and full year is expected to be approximately $15-million and $47-million, respectively, which also aligns with previous guidance.

Operational activity

In Canada, Precision continues to experience strong customer demand for drilling services, particularly when Alpha technologies and EverGreen environmental solutions are included. While some customers deferred fourth quarter drilling plans to January, Precision's average active rig count remained robust at 65. Precision currently has 78 rigs active and expects its rig count to peak between the low to mid-80s during this winter drilling season, with the company's Super Triple and Super Single fleets nearly fully utilized.

In the United States, Precision averaged 34 rigs in the fourth quarter and has 32 rigs operating today, with an additional four rigs earning standby revenue. The company expects industry and Precision's active rig count to remain relatively steady in the mid-30s for the first half of 2025.

Internationally, Precision continues to have eight active rigs, with three in the Kingdom of Saudi Arabia and five in Kuwait. The company's international operations provide a stable foundation for earnings and cash flow as its rigs are under long-term contracts that extend into 2028.

As Precision enters 2025, the company expects continued high activity levels for its well service business. Eighty-five to 100 crews are projected to be operational in early January, with additional crews expected to be deployed after that.

Chief financial officer quote

Carey Ford, Precision's CFO, commented: "Precision generated robust free cash flow in 2024, driven by increased activity and margin progression in Canada, integration of our CWC Energy Services acquisition, and international growth. With a strong free cash flow outlook, we plan to improve our capital returns to shareholders in 2025 by continuing to reduce our debt and increasing the percentage of free cash flow returned directly to shareholders. I am proud of our people's commitment to Precision's high performance, high-value strategy, delivering exceptional services to our customers and increasing value for our shareholders."

About Precision Drilling Corp.

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. The company's drilling services are enhanced by its EverGreen suite of environmental solutions, which bolsters Precision's commitment to reducing the environmental impact of its 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, Alta., 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.

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