<SEC-DOCUMENT>0001171843-19-000905.txt : 20190214
<SEC-HEADER>0001171843-19-000905.hdr.sgml : 20190214
<ACCEPTANCE-DATETIME>20190214073717
ACCESSION NUMBER:		0001171843-19-000905
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20190214
FILED AS OF DATE:		20190214
DATE AS OF CHANGE:		20190214

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PRECISION DRILLING Corp
		CENTRAL INDEX KEY:			0001013605
		STANDARD INDUSTRIAL CLASSIFICATION:	DRILLING OIL & GAS WELLS [1381]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A0
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14534
		FILM NUMBER:		19600745

	BUSINESS ADDRESS:	
		STREET 1:		150 - 6TH AVENUE S.W.
		STREET 2:		SUITE 4200
		CITY:			CALGARY
		STATE:			A0
		ZIP:			T2P 3Y7
		BUSINESS PHONE:		403-716-4500

	MAIL ADDRESS:	
		STREET 1:		150 - 6TH AVENUE S.W.
		STREET 2:		SUITE 4200
		CITY:			CALGARY
		STATE:			A0
		ZIP:			T2P 3Y7

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PRECISION DRILLING TRUST
		DATE OF NAME CHANGE:	20051121

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PRECISION DRILLING CORP
		DATE OF NAME CHANGE:	19960506
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>f6k_021419.htm
<DESCRIPTION>FORM 6-K
<TEXT>
<html><head><title></title></head><body style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><div align="center"><div style="margin-top: 3pt; margin-bottom: 12pt;"><div style="font-size: 1pt; border-top: Black 2.5pt solid; border-bottom: Black 1.1pt solid; width: 100%;">&#160;</div></div><p style="font-size: 14pt;" align="center"><strong>UNITED STATES</strong><br /><strong>SECURITIES AND EXCHANGE COMMISSION</strong><br /><strong>Washington, D.C. 20549</strong></p><p style="font-size: 14pt; text-transform: uppercase;" align="center"><strong>Form 6-K</strong></p><p style="text-align: center;"><strong></strong></p><p style="text-align: center;"><strong>REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934</strong></p><p style="text-align: center;"><strong></strong><strong>For the month of, February 2019</strong></p><p style="text-align: center;">Commission File Number: 001-14534</p><p style="text-align: center;"><font style="font-size: 12pt;"><strong>Precision Drilling Corporation</strong></font><br />(Translation of registrant's name into English)</p><p style="text-align: center;"><strong>800, 525 - 8 Avenue S.W.<br />Calgary, Alberta<br />Canada T2P 1G1</strong><br />(Address of principal executive office)</p></div><p>Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.<br />Form 20-F [&#160;&#160; ] &#160;&#160;&#160;&#160;&#160;Form 40-F [&#160;X ]</p><p>Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): </p><p>Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): </p><hr style="page-break-after: always;" noshade="noshade" /><p style="text-align: center;"><strong>SIGNATURES</strong></p><p>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</p><table style="font-family: Times New Roman; font-size: 10pt;" border="0" width="100%" cellspacing="0" cellpadding="0"><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td style="text-decoration: underline;" align="center" width="47%"><strong>&#160;&#160;&#160;&#160;Precision Drilling Corporation&#160;&#160;&#160;&#160;</strong></td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td align="center" width="47%">(Registrant)</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td align="center" width="47%">&#160;</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td align="center" width="47%"></td></tr><tr valign="top"><td width="47%">Date: <strong>February 14, 2019</strong></td><td width="6%">&#160;</td><td style="text-decoration: underline;" align="center" width="47%">&#160;&#160;&#160;&#160;/s/ Carey T Ford&#160;&#160;&#160;&#160;</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td align="center" width="47%">Carey T Ford</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td align="center" width="47%">Senior Vice President and Chief Financial Officer</td></tr><tr valign="top"><td width="47%">&#160;</td><td width="6%">&#160;</td><td align="center" width="47%"></td></tr></table><p>
 <hr noshade="noshade" style="page-break-after: always;" />  <p align="center" style="text-align: center;"><font style="font-size:10pt; font-family:&quot;times new roman&quot;;">&#160;</font><br /></p> <table style="border-collapse:collapse !important;;border-collapse: collapse; "><tr><td style="vertical-align: bottom ; "><font style="font-size:10pt; font-family:&quot;times new roman&quot;;"><u>Exhibit</u></font></td><td style="vertical-align: bottom ; "><font style="font-size:10pt; font-family:&quot;times new roman&quot;;">&#160;</font></td><td style="vertical-align: bottom ; "><font style="font-size:10pt; font-family:&quot;times new roman&quot;;"><u>DESCRIPTION</u></font></td></tr><tr><td style="vertical-align: bottom ; "><font style="font-size:10pt; font-family:&quot;times new roman&quot;;">&#160;</font></td><td style="vertical-align: bottom ; "><font style="font-size:10pt; font-family:&quot;times new roman&quot;;">&#160;</font></td><td style="vertical-align: bottom ; "><font style="font-size:10pt; font-family:&quot;times new roman&quot;;">&#160;</font></td></tr><tr><td style="vertical-align: bottom ; "><font style="font-size:10pt; font-family:&quot;times new roman&quot;;"><font style="font-size:10pt; font-family:&quot;times new roman&quot;;"><a href="exh_991.htm" rel="nofollow">99.1</a></font></font></td><td style="vertical-align: bottom ; "><font style="font-size:10pt; font-family:&quot;times new roman&quot;;">&#160;</font></td><td style="vertical-align: bottom ; "><font style="font-size:10pt; font-family:&quot;times new roman&quot;;"><a href="exh_991.htm" rel="nofollow">PRECISION DRILLING CORPORATION ANNOUNCES 2018 FOURTH QUARTER AND YEAR END UNAUDITED FINANCIAL RESULTS</a></font></td></tr></table> <p><br /></p> </p></body></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exh_991.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"><html lang="en-US"><head><title>EdgarFiling</title><meta content="text/html; charset=windows-1252" ><meta name="GENERATOR" content="MSHTML 8.00.7601.18094" ></head><body bgcolor="#ffffff"><p style="text-align: right;"><strong>EXHIBIT 99.1</strong></p><p style="text-align: center;"><font style="font-size: 14pt;"><strong>Precision Drilling Corporation Announces 2018 Fourth Quarter and Year End Unaudited Financial Results</strong></font></p><p style="text-align: center;"><strong></strong></p><p>
 <p align="justify">CALGARY, Alberta, Feb.  14, 2019  (GLOBE NEWSWIRE) -- (Canadian dollars except as indicated)<br ></p>  <p align="justify"><em>This news release contains &#8220;forward-looking information and statements&#8221; 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 &#8220;Cautionary Statement Regarding Forward-Looking Information and Statements&#8221; later in this news release. </em><em>This news release contains references to Adjusted EBITDA, Covenant EBITDA, Operating Earnings (Loss), Funds Provided by (Used in) Operations and Working Capital. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies, see &#8220;Non-GAAP Measures&#8221; later in this news release.</em><br ></p>  <p>Precision Drilling announces 2018 fourth quarter financial results:</p>  <ul type="disc"><li>Revenue of $427 million was an increase of 23% over the prior year comparative quarter.</li><li>Net loss of $198 million ($0.68 per share) compares to a net loss of $47 million ($0.16 per share) in the fourth quarter of 2017. During the quarter we incurred goodwill impairment charges totaling $208 million that, after-tax, reduced net earnings by $199 million and net earnings per diluted share by $0.68. Excluding the impact of the goodwill impairment net earnings would have been $1 million ($0.00 per share).</li><li>Earnings before income taxes, loss or gain on redemption and repurchase of unsecured senior notes, finance charges, foreign exchange, impairment of goodwill, impairment of property, plant and equipment and depreciation and amortization (adjusted EBITDA see &#8220;NON-GAAP MEASURES&#8221;) of $134 million was 48% higher than the fourth quarter of 2017. During the quarter we realized a transaction recovery, net of costs, of $14 million.</li><li>Funds provided by operations (see &#8220;NON-GAAP MEASURES&#8221;) of $93 million versus $28 million in the prior year comparative quarter.</li><li>During the fourth quarter we reduced the principal amount of our outstanding debt by US$74 million through redemptions and repurchases for a gain of $7 million. Fourth quarter ending cash balance was $97 million, up $32 million from the December 31, 2017 balance of $65 million.</li><li>Fourth quarter capital expenditures were $30 million.</li><li>As at December 31, 2018 we have classified 22 North American drilling rigs (18 in Canada and four in the U.S.) as assets held for sale and reported these assets at their carrying value of $20 million.</li></ul>  <p align="justify">Precision&#8217;s President and CEO Kevin Neveu stated: &#8220;Precision executed on its 2018 business plan and delivered operating and financial results far exceeding our expectations. This execution was clear in all key financial and operating metrics; delivering strong rig and crew operating and safety performance, diligent variable and fixed cost control, growth in U.S. market share and forging the path to commercializing our technology initiatives, all while strictly controlling our capital spending. Precision&#8217;s execution in 2018 resulted in better than expected cash flow, allowing us to accelerate our debt repayment plan well beyond our stated target range for the year, retiring $174 million of debt in 2018.&#8221;</p>  <p align="justify">&#8220;In the fourth quarter, strong demand for our Super Series rigs and firm pricing in the U.S. combined with aggressive cost management in our Canadian businesses drove better than expected financial results. We enter 2019 with liquidity of over $800 million and remain firmly committed to our deleveraging plan, recently increasing our longer-term debt reduction target range by $100 million to $400 million to $600 million by the end of 2021.&#8221;</p>  <p align="justify">&#8220;While customer sentiment has recently improved with firming WTI pricing, the extreme volatility and widened Canadian differentials experienced during the fourth quarter weighed heavily on our customers&#8217; planning as we entered 2019. We see the effects sharply in Canada as winter drilling activity is trending down 30% from last winter. In Canada, currently we have 58 rigs operating and do not expect activity to strengthen until the second half of the year as oil inventories decline and takeaway capacity improves. Canadian differentials have narrowed substantially following the Government of Alberta&#8217;s mandatory production curtailment program driving improved cash flows for many of our customers and potentially strengthening the outlook for later in the year. Despite near-term softness, our Canadian business is well positioned to generate strong cash flow through leveraging our scale with unmatched rig fleet quality and Precision&#8217;s High Performance operations.&#8221;</p>  <p align="justify">&#8220;In the U.S. we have 81 rigs operating, 16 more than this time last year representing 25% year-over-year growth. While our U.S. activity is steady, our customers are still cautiously assessing 2019 spending plans. Precision has signed eight term contracts year-to-date, in addition to 11 in the fourth quarter of 2018, indicative of continued strength in high spec rig demand. Over the last year we have increased our AC Super Triple 1500 rig fleet in the U.S. by five, including two rigs redeployed from Canada and three new builds largely assembled from spare components and vendor credits. Additionally, we completed 31 rig upgrades including pad-walking systems, third mud pump additions and Process Automation Control upgrades. All cash deployed to mobilize, build new and upgrade rigs was backed with take or pay customer contracts at leading edge rates and we managed these U.S. fleet enhancements with relatively modest capital spending.&#8221;</p>  <p align="justify">&#8220;Currently we have eight rigs operating in the Middle East all performing exceedingly well. In Saudi Arabia we expect to sign long-term contracts on the two rigs currently up for renewal by the end of the quarter, and in Kuwait we are on time and on budget to deploy a sixth new build rig in June. By mid-year we expect to have nine rigs operating in the Middle East, all under long-term contracts providing stable cash flow visibility.&#8221;</p>  <p align="justify">&#8220;Precision&#8217;s technology strategy displayed significant progress throughout 2018, with 33 Process Automation Control systems installed, 31 of which are active in the field. During the year, we were able to demonstrate to our customers our system&#8217;s ability to deliver consistent and repeatable, high-quality results while improving safety, performance and operational efficiency. Going into 2019, our priorities revolve around further commercialization of the Process Automation Control platform, PD-Apps and PD-Analytics as Precision remains a leader in advanced rig technology offerings.&#8221;</p>  <p align="justify">&#8220;Precision remains focused on the things in which it can control, namely, allocating free cash flow toward debt repayment, capital discipline, cost management and operational excellence. Commodity price volatility is likely to persist throughout 2019; however, we believe we are well-positioned across each of our geographies to manage our business and create value for our customers and investors,&#8221; concluded Mr. Neveu.</p>  <p align="justify"><strong><br >SELECT FINANCIAL AND OPERATING INFORMATION</strong></p>  <p align="justify">Adjusted EBITDA and funds provided by operations are Non-GAAP measures. 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The increase in revenue is primarily the result of higher activity and higher average day rates in our U.S. contract drilling business. Compared with the fourth quarter of 2017 our activity for the quarter, as measured by drilling rig utilization days increased 36% in the U.S., decreased 9% in Canada and remained constant internationally. Revenue from our Contract Drilling Services segment increased over the comparative prior year period by 27% while revenue in our Completion and Production Services segment was down 10%.<br ><br ></li><li>Adjusted EBITDA (see &#8220;NON-GAAP MEASURES&#8221;) of $134 million this quarter is an increase of $44 million from the fourth quarter of 2017. Our adjusted EBITDA as a percentage of revenue was 31%, compared with 26% in the comparative quarter of 2017. Adjusted EBITDA was positively impacted by higher activity and day rates in the U.S., the receipt of a transaction fee and lower share-based incentive compensation partially offset by lower activity in our Canadian contract drilling operations versus the comparative prior year period. Total share-based incentive compensation recorded in the quarter was a recovery of $12 million compared to a recovery of $0.4 million in the fourth quarter of 2017. See discussion on share-based incentive compensation under &#8220;Other Items&#8221; later in this release for additional details.<br ><br ></li><li>Operating earnings (see &#8220;NON-GAAP MEASURES&#8221;) were $35 million compared with an operating loss of $19 million in the fourth quarter of 2017. In addition to the operating items impacting Adjusted EBITDA (see &#8220;NON-GAAP MEASURES&#8221;) we realized increased depreciation in our Contract Drilling segment from a review and subsequent accelerated depreciation of a portion of our spare equipment in 2018.<br ><br ></li><li>General and administrative expenses this quarter were $21 million, $1 million lower than the fourth quarter of 2017. The decrease is due to lower share-based incentive compensation expense tied to the price of our common shares (see &#8220;Other Items&#8221; later in this release) partially offset by a weakening of the Canadian dollar on our U.S. dollar denominated costs.<br ><br ></li><li>During the quarter we terminated an arrangement agreement to acquire an oil and gas drilling contractor. Subsequent to the termination a transaction fee was paid to us which, net of transaction costs, amounted to $14 million.<br ><br ></li><li>Under International Financial Reporting Standards, we are required to assess the carrying value of our assets in cash generating units containing goodwill annually. Due to the decrease in oil and natural gas well drilling in Canada and the outlook for activity in Canada and in our directional drilling division in the U.S., we recognized a $208 million goodwill impairment charge in the quarter. The charge represents the full amount of goodwill attributable to our Canadian contract drilling operations and our U.S. directional drilling operations.<br ><br ></li><li>Net finance charges were $32 million, a decrease of $6 million compared with the fourth quarter of 2017, primarily due to a reduction in interest expense related to debt retired in 2017 and 2018 partially offset by the weakening of the Canadian dollar on our U.S. dollar denominated interest.<br ><br ></li><li>During the quarter we redeemed US$30 million of our 6.5% unsecured senior notes due 2021 and repurchased and cancelled US$44 million principal amount of our 5.25% unsecured senior notes due 2024 resulting in a net gain of $7 million.<br ><br ></li><li>In Canada, average revenue per utilization day for contract drilling rigs was $22,802 compared to $23,457 in the fourth quarter of 2017. Overall, shortfall payments received in the prior year comparative quarter were partially offset by higher spot market day rates and higher expenses recovered through the day rate in the current quarter. During the quarter, we recognized shortfall payments in revenue of $1 million compared with $13 million in the prior year comparative period. Excluding the impact of shortfall payments, average day rates were up 8%, or $1,601. Revenue per utilization day in the U.S. increased in the fourth quarter of 2018 to US$23,369 from US$20,226 in the prior year fourth quarter. The increase in the U.S. revenue rate was the result of higher day rates and turnkey revenue compared with the prior year quarter and higher expenses recovered through the day rate. During the quarter, we had turnkey revenue of US$11 million compared with US$3 million in the 2017 comparative period and revenue from idle but contracted rigs of US$0.3 million compared with US$1 million in the prior year comparative period. Excluding the impact of turnkey and idle but contracted rig revenue, average day rates were up 13%, or US$2,428. On a sequential basis, revenue per utilization day excluding revenue from turnkey and idle but contracted rigs increased by US$521 compared with the third quarter of 2018 due to higher average day rates.<br ><br ></li><li>Average operating costs per utilization day for drilling rigs in Canada increased to $15,115 compared with the prior year fourth quarter of $13,544. The increase in average costs was due to timing of equipment certification and maintenance costs and higher expenses recovered through the day rate. On a sequential basis, operating costs per day increased by $951 compared to the third quarter of 2018 due to the timing of certification costs. In the U.S., operating costs for the quarter on a per day basis increased to US$15,042 compared with US$13,647 in 2017 due to higher expenses recovered through the day rate and higher turnkey activity. On a sequential basis, operating costs per day increased by US$891 compared to the third quarter of 2018 due to higher turnkey activity in the current quarter partially offset by fewer rig activations.<br ><br ></li><li>We realized revenue from international contract drilling of US$38 million in the fourth quarter of 2018, US$1 million higher than the prior year period. Average revenue per utilization day in our international contract drilling business was US$51,982, up 3% when compared with the prior year quarter.<br ><br ></li><li>Directional drilling services realized revenue of $9 million in the fourth quarter of 2018 compared with $4 million in the prior year period.&#160;<br ><br ></li><li>Funds provided by operations (see &#8220;NON-GAAP MEASURES&#8221;) in the fourth quarter of 2018 were $93 million, an increase of $65 million from the prior year comparative quarter. The increase was primarily the result of improved operating results and the timing of interest payments and tax refunds.<br ><br ></li><li>Capital expenditures were $30 million in the fourth quarter, a decrease of $5 million over the same period in 2017.&#160;Capital spending for the quarter included $11 million for upgrade and expansion capital, $18 million for the maintenance of existing assets and infrastructure spending and $1 million for intangibles.</li></ul>  <p><strong><em>Summary for the year ended December 31, 2018:</em></strong></p>  <ul type="disc"><li>Revenue for 2018 was $1,541 million, an increase of 17% from 2017.<br ><br ></li><li>Operating earnings (see &#8220;NON-GAAP MEASURES&#8221;) were $9 million compared with an operating loss of $88 million in 2017. Operating earnings were 1% of revenue in 2018 compared with an operating loss of 7% of revenue in 2017. Operating results this year were positively impacted by higher activity and day rates in the U.S., the receipt of a transaction fee paid to us and lower share-based incentive compensation partially offset by lower shortfall payments received in our Canadian contract drilling operations. Total share-based incentive compensation recorded in the year was an expense of $16 million compared to an expense of $2 million in 2017. See discussion on share-based incentive compensation under &#8220;Other Items&#8221; later in this release for additional details.<br ><br ></li><li>General and administrative costs were $112 million, an increase of $22 million from 2017. 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The increase was primarily the result of improved operating earnings and the timing of tax refunds.<br ><br ></li><li>Capital expenditures for the purchase of property, plant and equipment were $126 million for 2018, an increase of $28 million over the same period in 2017. Capital spending for 2018 included $66 million for upgrade and expansion capital, $48 million for the maintenance of existing assets and infrastructure and $12 million for intangibles related to a new ERP system.</li></ul>  <p><strong>STRATEGY</strong></p>  <p>Precision&#8217;s strategic priorities for 2018 were as follows:</p>  <ol type="1"><li><strong>Reduce debt by generating free</strong><strong> cash flow while continuing to fund only the most attractive investment opportunities</strong> &#8211; we generated $311 million in funds provided by operations (see &#8220;NON-GAAP MEASURES&#8221;) in 2018, representing a $127 million increase over the prior year. Utilizing cash generated in 2018, we reduced debt by $174 million through a partial redemption of our 2021 unsecured senior notes and open market debt repurchases of our 2021 and 2024 notes, exceeding our targeted debt reduction goal of $75 million to $125 million. In addition, we ended the fourth quarter with $97 million of cash on the balance sheet. In 2018 we continued to invest in our fleet adding two new build drilling rigs in the U.S., completing 31 rig upgrades, and commenced the build of our sixth Kuwait rig, all of which were backed by long-term contracts and within a constrained expansion and upgrade capital spend of approximately $66 million.<br ><br ></li><li><strong>Reinforce Precision&#8217;s High Performance competitive advantage by deploying Process Automation Controls (PAC), Directional Guidance Systems (DGS) and Drilling Performance Apps (Apps) on a wide scale basis</strong> &#8211; in 2018 we drilled 119 wells using our DGS compared to 58 wells in 2017. We have 31 rigs currently running in the field with PAC and have drilled approximately 365 wells with this technology in 2018 compared to 154 in 2017.&#160;Earlier this year we also equipped our training rigs in Nisku and Houston with PAC technology. We are deploying revenue generating Apps on several rigs and currently have over 15 Apps in varying stages of commercial development showcasing the open platform of our PAC system. 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According to industry sources, as of February 8, 2019, the U.S. active land drilling rig count was up approximately 7% from the same point last year while the Canadian active land drilling rig count was down approximately 26%. To date in 2019, approximately 60% of the Canadian industry&#8217;s active rigs and 81% of the U.S. industry&#8217;s active rigs are drilling for oil targets, compared with 66% for Canada and 80% for the U.S. at the same time last year.</p>  <p><strong><em>Industry Conditions</em></strong></p>  <p align="justify">We expect Tier 1 rigs to remain the preferred rigs of customers globally. The economic value created by the significant drilling and mobility efficiencies delivered by the most advanced XY pad-walking rigs has been highlighted and widely accepted by our customers. The trend to longer-reach horizontal completions and importance of the rig delivering these complex wells consistently and efficiently has been well established by the industry. We expect demand for leading edge high efficiency Tier 1 rigs will continue to strengthen, as drilling rig capability has been a key economic facilitator of horizontal/unconventional resource exploitation. Development and field application of drilling equipment process automation coupled with closed loop drilling controls and de-manning of rigs will continue this technical evolution while creating further cost efficiencies and performance value for customers.</p>  <p><strong><em>Capital Spending</em></strong></p>  <p align="justify">Capital spending in 2019 is expected to be $169 million and includes $53 million for sustaining and infrastructure and $116 million for upgrade and expansion, approximately $68 million of which relates to the completion of our sixth new build rig in Kuwait. 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These terms do not have standardized meanings prescribed under International Financial Reporting Standards (<strong>IFRS</strong>) and may not be comparable to similar measures used by other companies.</p>  <p align="justify"><strong><em>Adjusted EBITDA </em></strong></p>  <p align="justify">We believe that adjusted EBITDA (earnings before income taxes, loss or gain on redemption and repurchase of unsecured senior notes, finance charges, foreign exchange, impairment of goodwill, impairment of property, plant and equipment and depreciation and amortization), as reported in the Interim Consolidated Statement of Loss, is a useful measure, because it gives an indication of the results from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.</p>  <p align="justify"><strong><em>Covenant EBITDA </em></strong></p>  <p align="justify">Covenant EBITDA, as defined in our senior credit facility agreement, is used in determining the Corporation&#8217;s compliance with its covenants. Covenant EBITDA differs from Adjusted EBITDA by the exclusion of bad debt expense, restructuring costs and certain foreign exchange amounts.</p>  <p><strong><em>Operating Earnings (Loss)</em></strong></p>  <p align="justify">We believe that operating earnings (loss), as reported in the Interim Consolidated Statements of 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.</p>  <p align="justify"><strong><em>Funds Provided By (Used In) Operations </em></strong></p>  <p align="justify">We believe that funds provided by (used in) operations, as reported in the Interim Consolidated Statements of Cash Flow, is a useful measure because it provides an indication of the funds our principal business activities generate prior to consideration of working capital, which is primarily made up of highly liquid balances.</p>  <p align="justify"><strong><em>Working Capital</em></strong></p>  <p align="justify">We define working capital as current assets less current liabilities as reported on the Interim Consolidated Statement of Financial Position.</p>  <p><strong>CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS</strong></p>  <p align="justify">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 historic 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").</p>  <p align="justify">In particular, forward looking information and statements include, but are not limited to, the following:</p>  <ul type="disc"><li>our strategic priorities for 2019;</li><li>our capital expenditure plans for 2019;</li><li>anticipated activity levels in 2019 and our scheduled infrastructure projects;</li><li>anticipated demand for Tier 1 rigs;</li><li>the average number of term contracts in place for 2019 and 2020; and</li><li>our future debt reduction plans beyond 2018.</li></ul>  <p align="justify">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:</p>  <ul type="disc"><li>the fluctuation in oil prices may pressure customers into reducing or limiting their drilling budgets;</li><li>the status of current negotiations with our customers and vendors;</li><li>customer focus on safety performance;</li><li>existing term contracts are neither renewed nor terminated prematurely;</li><li>our ability to deliver rigs to customers on a timely basis; and</li><li>the general stability of the economic and political environments in the jurisdictions where we operate.</li></ul>  <p align="justify">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:</p>  <ul type="disc"><li>volatility in the price and demand for oil and natural gas;</li><li>fluctuations in the demand for contract drilling, well servicing and ancillary oilfield services;</li><li>our customers&#8217; inability to obtain adequate credit or financing to support their drilling and production activity;</li><li>changes in drilling and well servicing technology which could reduce demand for certain rigs or put us at a competitive disadvantage;</li><li>shortages, delays and interruptions in the delivery of equipment supplies and other key inputs;</li><li>the effects of seasonal and weather conditions on operations and facilities;</li><li>the availability of qualified personnel and management;</li><li>a decline in our safety performance which could result in lower demand for our services;</li><li>changes in environmental laws and regulations such as increased regulation of hydraulic fracturing or restrictions on the burning of fossil fuels and greenhouse gas emissions, which could have an adverse impact on the demand for oil and gas;</li><li>terrorism, social, civil and political unrest in the foreign jurisdictions where we operate;</li><li>fluctuations in foreign exchange, interest rates and tax rates; and</li><li>other unforeseen conditions which could impact the use of services supplied by Precision and Precision&#8217;s ability to respond to such conditions.</li></ul>  <p align="justify">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&#8217;s Annual Information Form for the year ended December 31, 2018, which may be accessed on Precision&#8217;s SEDAR profile at www.sedar.com or under Precision&#8217;s EDGAR profile at www.sec.gov. 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vertical-align: bottom ; "><strong>)</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(98,690</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">)</td></tr><tr><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>(2,335</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>)</strong></td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="border-bottom: solid black 1pt ; 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 vertical-align: bottom; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>$</strong></td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>(294,270</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>)</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(132,036</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">)</td></tr><tr><td style="vertical-align: bottom ; ">Loss per share:</td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td></tr><tr><td style="vertical-align: bottom;   text-align: left;   padding-left: 20.0px; 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vertical-align: bottom ; "><strong>175,630</strong></td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(146,545</td><td style="vertical-align: bottom ; ">)</td></tr><tr><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">Foreign&#160;exchange&#160;gain&#160;(loss)&#160;on&#160;net&#160;investment&#160;hedge<br >&#160; with&#160;U.S.&#160;denominated&#160;debt, net of tax</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>(104,716</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>)</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; 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"><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td></tr><tr><td style="vertical-align: bottom ; ">Financing:</td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td></tr><tr><td style="vertical-align: bottom;   text-align: left;   padding-left: 20.0px; vertical-align: bottom ; ">Redemption and repurchase of unsecured senior<br >&#160; notes</td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>(92,065</strong></td><td style="vertical-align: bottom ; "><strong>)</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(571,975</td><td style="vertical-align: bottom ; ">)</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>(168,722</strong></td><td style="vertical-align: bottom ; "><strong>)</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(571,975</td><td style="vertical-align: bottom ; ">)</td></tr><tr><td style="vertical-align: bottom;   text-align: left;   padding-left: 20.0px; vertical-align: bottom ; ">Debt issuance costs</td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>&#8212;</strong></td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(9,196</td><td style="vertical-align: bottom ; ">)</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>&#8212;</strong></td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(9,196</td><td style="vertical-align: bottom ; ">)</td></tr><tr><td style="vertical-align: bottom;   text-align: left;   padding-left: 20.0px; vertical-align: bottom ; ">Debt amendment fees</td><td style="vertical-align: bottom ; "><strong>&#160;</strong></td><td style="text-align: right ; 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vertical-align: bottom ; "><strong>)</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(73,784</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">)</td></tr><tr><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">Effect of exchange rate changes on cash and cash<br >&#160; equivalents</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>5,529</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">934</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; "><strong>8,090</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; "><strong>&#160;</strong></td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(2,245</td><td style="border-bottom: solid black 1pt ; 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">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">1,800</td><td style="vertical-align: bottom ; ">&#160;</td></tr><tr><td style="vertical-align: bottom ; ">Share options exercised</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">378</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">(103</td><td style="vertical-align: bottom ; ">)</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">&#8212;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">&#8212;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="vertical-align: bottom ; ">&#160;</td><td style="text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">275</td><td style="vertical-align: bottom ; ">&#160;</td></tr><tr><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">Share based compensation expense</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">&#8212;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-bottom: solid black 1pt ; 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border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td><td style="border-top: solid black 1pt ; border-bottom: solid black 1pt ; vertical-align: bottom ; ">$</td><td style="border-top: solid black 1pt ; border-bottom: solid black 1pt ; text-align: right ;  vertical-align: bottom; vertical-align: bottom ; ">1,810,336</td><td style="border-top: solid black 1pt ; border-bottom: solid black 1pt ; vertical-align: bottom ; ">&#160;</td></tr><tr><td colspan="20" style="vertical-align: bottom ; ">&#160;</td></tr><tr><td colspan="20" style="vertical-align: bottom ; ">&#160;</td></tr></table> <p><strong>FOURTH QUARTER 2018 EARNINGS CONFERENCE CALL AND WEBCAST</strong><br ></p>  <p>Precision Drilling Corporation has scheduled a conference call and webcast to begin promptly at 1:00 p.m. MT (3:00 p.m. ET) on Thursday, February 14, 2019.</p>  <p align="center"><strong>The conference call dial in numbers are 1-844-515-9176 or 614-999-9312.</strong></p>  <p align="justify">A live webcast of the conference call will be accessible on Precision&#8217;s website at www.precisiondrilling.com by selecting &#8220;Investor Relations&#8221;, then &#8220;Webcasts &amp; Presentations&#8221;. Shortly after the live webcast, an archived version will be available for approximately 60 days.</p>  <p align="justify">An archived recording of the conference call will be available approximately one hour after the completion of the call until February 20, 2019 by dialing 1-855-859-2056 or 404-537-3406, pass code 4578429.</p>  <p align="justify"><u>About Precision</u></p>  <p align="justify">Precision is a leading provider of safe and <em>High Performance, High Value</em> 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, camps, rental equipment, and wastewater treatment units backed by a comprehensive mix of technical support services and skilled, experienced personnel.</p>  <p align="justify">Precision is headquartered in Calgary, Alberta, Canada. Precision is listed on the Toronto Stock Exchange under the trading symbol &#8220;PD&#8221; and on the New York Stock Exchange under the trading symbol &#8220;PDS&#8221;.</p>  <p align="justify">For further information, please contact:</p>  <p align="justify">Carey Ford, Senior Vice President and Chief Financial Officer<br >713.435.6111</p>  <p align="justify">Ashley Connolly, Manager, Investor Relations<br >403.716.4725</p>  <p align="justify">800, 525 - 8th Avenue S.W.<br >Calgary, Alberta, Canada T2P 1G1<br >Website:&#160; www.precisiondrilling.com</p>  <p>&#160;<br ></p> </p><p ></p></body></html>
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