Earnings release
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1 PRECISION DRILLING ANNOUNCES 2026 SECOND QUARTER UNAUDITED FINANCIAL STATEMENTS Calgary, Alberta, Canada – July 28, 2026 – 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) loss on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), 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) Accounting Standards and may not be comparable to similar measures used by other companies. See “Financial Measures and Ratios” later in this news release. Precision Drilling Corporation ("Precision" or the "Company") (TSX:PD; NYSE:PDS) announces its 2026 second quarter results, highlighted by robust heavy oil drilling and well service activity in Canada and improving rig utilization in the U. S. Financial Highlights • Revenue increased 11% to $453 million, compared with $407 million in the second quarter of 2025, supported by stronger activity in Canada and the U.S., which more than offset lower international results and reduced Canadian upfront capital payments. • Adjusted EBITDA(1) was $97 million, down 10% from $108 million in 2025, primarily due to higher U.S. rig reactivation costs and lower international margins related to geopolitical tensions and a change in rig mix. Results in 2026 also included $3 million of one -time restruc turing charges, plus a $2 million share -based compensation recovery. In comparison, share-based compensation was a $4 million expense in 2025. • Net loss attributable to shareholders in the second quarter was $1 million compared with net earnings of $16 million in 2025. Our net loss in 2026 was primarily due to increased depreciation expense of $11 million from a previously communicated change in useful life estimates. • Cash provided by operations during the quarter was $146 million, allowing the Company to reduce debt by $50 million and repurchase $12 million of common shares. • Capital expenditures were $76 million compared to $53 million in the second quarter of 2025. Year-to-date, we have invested $141 million in our equipment and continue to expect capital expenditures of $265 million in 2026. Operational Highlights • Canada averaged 61 active rigs, up 22% compared to 50 active rigs in the second quarter of 2025, outpacing Canadian industry activity, which increased 16%(2). • Canadian revenue per utilization day decreased to $35,448 from $37,725 in 2025, primarily due to lower upfront capital payments of $3 million in 2026 compared to $7 million in same period last year and a higher Super Single rig mix, as robust heavy oil activity increased utilization of these rigs 31% year over year. • U.S. averaged 35 active rigs in the second quarter of 2026 versus 33 in 2025, outperforming U.S. industry activity, which declined 3%(2). • U.S. revenue per utilization day increased to US$32,802 from US$31,113 in the same period last year, driven by higher day rates on new contracts and increased technology revenue. • Internationally, we had seven active rigs during the quarter, with three in Saudi Arabia and four in Kuwait, compared with two and five rigs, respectively, in the second quarter of 2025. The resulting change in rig mix lowered revenue per utilization day to US$50,524 from US$53,129 in the same period last year. • Internationally, we secured an additional five -year drilling rig contract in Kuwait for an existing rig, increasing our active rig count to eight by mid-2027 following planned recertifications and upgrades. • Canadian well servicing rig operating hours increased 25% compared to the same quarter in 2025, primarily due to stronger customer demand driven by higher oil prices, resulting in a 38% increase in Adjusted EBITDA. (1) See "FINANCIAL MEASURES AND RATIOS." (2) See "SEGMENT REVIEW OF CONTRACT DRILLING SERVICES."
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2 MANAGEMENT COMMENTARY Precision’s President and CEO, Carey Ford, provided the following commentary: "Precision delivered another quarter of solid operational execution. We continued to advance our 2026 strategic priorities, driving revenue growth through competitive differentiation and deeper customer relationships, free cash flow generation, and returning capital to shareholders. Revenue increased 11% year over year, reflecting increased North American activity levels, higher Alpha TM and EverGreenTM contributions, and improved pricing. Higher than expected rig reactivations in the quarter, scheduled upgraded rig deliveries in the second half of the year, and continued growth in our contract book position Precision to deliver stronger financial performance through the balance of 2026 and into 2027. "During the first half of the year, Precision generated consistent operating cash flow, allowing us to reduce debt by $75 million and repurchase $16 million of our shares. At the same time, we continued to invest in high -return fleet upgrades and technology initiatives that support our recent activity gains, strengthen our competitive position, and ensure long-term value creation for our shareholders. "In Canada, activity increased 22% year over year, supported by robust customer demand for our Super Triple and Super Single rigs. Improving producer economics and expanded market access continue to support an attractive Canadian drilling environment, most notably in the condensate and heavy oil basins. We expect activity during the second half of the year to remain above prior year levels. "In the U.S., our business is reaching an inflection point with our active rig count steadily increasing through the quarter and standing at 43 rigs today. Higher day rates, increased technology adoption, and improving oil-directed activity supported year over year revenue growth. We are encouraged by improving customer sentiment and continue to see opportunities to deepen relationships with new and existing customers. While second quarter margins were below our long -term expectations, the actions we are taking position us for meaningful margin expansion, with fourth quarter margins expected to approach US$10,000 per utilization day. "Technology remains a key competitive differentiator for Precision. Our AlphaTM digital platform and automation systems are improving drilling performance, minimizing downtime, and delivering measurable value for our customers. Combined with our high -performance fleet and experienced crews, these capabilities continue to strengthen c ustomer relationships and support sustainable revenue and profitability growth. "Internationally, our teams continue to execute safely and reliably despite geopolitical uncertainty in the region. During th e quarter, we secured an additional five -year contract for an existing Kuwait rig, reinforcing resiliency of our customer relationships and our operational reputation in the region. With this new contract, we expect our international rig count to increase from seven to eight during mid-2027. "Our Completion and Production Services business delivered outstanding results during the quarter. Operating hours increased 25% year over year as favorable oil prices and robust producer activity drove increased demand for our well servicing fleet. As Canada's premier well service provider, our scale, m arket position, and customer relationships position us to capture value from increased customer demand through the remainder of the year. "Looking ahead, we remain optimistic about the remainder of 2026. Constructive commodity prices, elevated customer demand for high -performance drilling rigs and well service equipment, improving contract coverage, and continued momentum across our businesses support a positive outlook. While geopolitical developments and commodity price volatility remain important considerations, we believe Precision is well positioned to generate long -term value through operational excellence, technology leadership, discip lined capital allocation, and a continued focus on shareholder returns,” concluded Mr. Ford.
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3 SELECT FINANCIAL AND OPERATING INFORMATION Financial Highlights For the three months ended June 30, For the six months ended June 30, (Stated in thousands of Canadian dollars, except per share amounts. Weighted average shares outstanding are stated in thousands.) 2026 2025 % Change 2026 2025 % Change Revenue 452,800 406,615 11.4 978,851 902,946 8.4 Adjusted EBITDA(1) 97,055 108,100 (10.2 ) 221,002 245,597 (10.0 ) Net earnings (loss) (893 ) 16,487 (105.4 ) 16,952 51,434 (67.0 ) Net earnings (loss) attributable to shareholders (1,195 ) 16,267 (107.3 ) 16,181 50,778 (68.1 ) Cash provided by operations 145,569 147,495 (1.3 ) 208,723 210,914 (1.0 ) Cash used in investing activities 54,761 36,049 51.9 129,463 93,251 38.8 Capital spending by spend category(1) Expansion and upgrade 30,267 26,757 13.1 60,541 46,303 30.7 Maintenance and infrastructure 46,097 26,016 77.2 80,823 66,435 21.7 Proceeds on sale (12,013 ) (11,829 ) 1.6 (14,300 ) (15,594 ) (8.3 ) Net capital spending(1) 64,351 40,944 57.2 127,064 97,144 30.8 Net earnings (loss) attributable to shareholders per share: Basic (0.09 ) 1.21 (107.4 ) 1.25 3.75 (66.7 ) Diluted (0.52 ) 1.07 (148.6 ) 1.25 3.28 (61.9 ) Weighted average shares outstanding: Basic 12,927 13,401 (3.5 ) 12,929 13,541 (4.5 ) Diluted 13,413 13,987 (4.1 ) 12,938 14,158 (8.6 ) (1) See "FINANCIAL MEASURES AND RATIOS." Operating Highlights For the three months ended June 30, For the six months ended June 30, 2026 2025 % Change 2026 2025 % Change Contract drilling rig fleet 184 215 (14.4 ) 184 215 (14.4 ) Drilling rig utilization days: Canada 5,510 4,580 20.3 12,626 11,260 12.1 U.S. 3,216 3,033 6.0 6,548 5,724 14.4 International 637 680 (6.3 ) 1,248 1,400 (10.9 ) Revenue per utilization day: Canada (Cdn$) 35,448 37,725 (6.0 ) 35,208 36,465 (3.4 ) U.S. (US$) 32,802 31,113 5.4 33,267 32,074 3.7 International (US$) 50,524 53,129 (4.9 ) 51,048 51,221 (0.3 ) Operating costs per utilization day: Canada (Cdn$) 21,593 22,419 (3.7 ) 21,112 21,471 (1.7 ) U.S. (US$) 26,590 22,087 20.4 25,488 22,784 11.9 Service rig fleet(1) 146 135 8.1 145 135 7.4 Service rig operating hours(1) 54,654 43,779 24.8 122,873 109,414 12.3 (1) The service rig fleet and service rig operating hours exclude our U.S. operations that we wound down in the second quarter of 2025. Drilling Activity Average for the quarter ended 2025 Average for the quarter ended 2026 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Average Precision active rig count(1): Canada 74 50 63 66 79 61 U.S. 30 33 36 37 37 35 International 8 7 7 7 7 7 Total 112 90 106 110 123 103 (1) Average number of drilling rigs working or moving.
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4 Financial Position (Stated in thousands of Canadian dollars, except ratios) June 30, 2026 December 31, 2025 Working capital(1) 146,912 186,815 Cash 66,292 85,781 Long-term debt 626,327 679,291 Total long-term financial liabilities(1) 692,988 746,944 Total assets 2,726,689 2,726,690 Long-term debt to long-term debt plus equity ratio(1) 0.28 0.30 (1) See "FINANCIAL MEASURES AND RATIOS." Summary for the three months ended June 30, 2026: • Revenue in the second quarter was $453 million, up $46 million from 2025. Canadian revenue increased by $36 million, as higher oil prices supported increased demand for drilling and well servicing activity, partially offset by lower upfront capital payment s of $3 million compared with $7 million in 2025. U.S. revenue increas ed by $15 million, driven by higher rig utilization and average day rates. • Adjusted EBITDA decreased 10% to $97 million from $108 million in the second quarter of 2025, primarily due to higher U.S. rig reactivation costs and lower international margins resulting from geopolitical tensions and a change in rig mix. Adjusted EBITDA also included $3 million of international restructuring costs to better align our organizational structure, partially offset by a $2 million share -based compensation recovery. For additional information on share-based compensation, please refer to "Other Items" later in this news release. • Net loss attributable to shareholders was $1 million or $0.09 per share compared to net earnings of $16 million or $1.21 per share for the same period last year. The decrease was due to increased depreciation expense of $11 million from the change in usefu l life estimates. For additional information on depreciation, please refer to "Other Items" later in this news release. • Cash provided by operations was $146 million in the second quarter of 2026. During the quarter, the Company repurchased 99,416 shares for $12 million and reduced long -term debt by $50 million. Precision ended the quarter with $66 million of cash and more than $500 million in available liquidity. • In Canada, our operating margin (1) was $13,855 compared to $15,306 in the same period last year, primarily due to lower upfront capital payments and a higher Super Single rig mix, as robust heavy oil activity increased utilization of these rigs 31% year over year. • In the U.S., our operating margin was US$6,212, down from US$9,026 in 2025. Although revenue increased during the quarter, margins were impacted by higher rig reactivations. Reactivation costs averaged US$2,387 per utilization day as we reactivated seven rigs and positioned the business to support higher activity levels, compared with US$648 per utilization day in 2025 when four rigs were reactivated. • Internationally, we had seven active rigs during the quarter, with three in Saudi Arabia and four in Kuwait compared with two and five rigs, respectively, in the second quarter of 2025. The resulting change in rig mix lowered revenue per utilization day to US$50,524 from US$53,129 in the same period last year. We realized revenue of US$32 million in the second quarter of 2026 compared to US$36 million in 2025 primarily due to the change in rig mix combined with a 6% decline in drilling activity. • Completion and Production Services revenue was $66 million, an increase of $12 million compared with 2025, primarily due to stronger customer demand driven by higher oil prices. Adjusted EBITDA was $14 million, representing 21%(2) of revenue, compared to 18% in the second quarter of 2025. • Capital expenditures were $76 million compared to $53 million in the second quarter of 2025 and included $46 million for the maintenance of existing assets and infrastructure and $30 million for upgrades (2). • Subsequent to quarter end, Precision received a Notice of Reassessment ( NOR) from the Canada Revenue Agency (CRA) relating to its 2018 tax year, denying certain deductions. The Company and its tax advisors believe the Company's tax filing position is appropriate and intends to vigorously contest the 2018 NOR and any additional reassessments. Please refer to "Other Items" later in this news release for more information. (1) Defined as revenue per utilization day less operating costs per utilization day. (2) See "FINANCIAL MEASURES AND RATIOS."
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5 Summary for the six months ended June 30, 2026: • Revenue for the first six months of 2026 was $979 million, an increase of $76 million from the same period in 2025. Canadian revenue increased by $49 million due to higher North America drilling and well servicing activity, while U.S. revenue increased by $40 million due to improved drilling activity. These increases were partially offset by lower international drilling results and upfront capital payments in Canada. • Adjusted EBITDA decreased 10% to $221 million from $246 million in 2025, primarily due to higher share -based compensation expense as our share price appreciated 11% during the first six months of 2026, and increased operating costs in the U.S. and internationally. For additional information on share-based compensation, please refer to "Other Items" later in this news release. • Net earnings attributable to shareholders was $16 million or $1.25 per share, compared to $51 million or $3.75 per share, in the same period last year. The decrease was primarily due to increased depreciation expense of $22 million from the change in useful life estimates. For additional information on depreciation, please refer to "Other Items" later in this news release. • General and administrative expenses were $68 million compared to $55 million in the first six months of 2025, with the increase primarily due to higher share-based compensation expense and international restructuring costs. • Cash provided by operations was $209 million and the Company repurchased 136,290 shares for $16 million and reduced long-term debt by $75 million. Precision ended the quarter with $66 million of cash and more than $500 million in available liquidity. • Capital expenditures were $141 million compared to $113 million in the first six months of 2025 and included $81 million for the maintenance of existing assets and infrastructure and $61 million for upgrades. 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. Precision’s 2026 strategic priorities and the progress made during the second quarter are summarized below. 1. Drive revenue growth and deepen customer relationships through contracted upgrades, continuous operational excellence, and by leveraging our performance-driven technology as a key competitive differentiator. • Grew rig utilization 20% in Canada and 6% in the U.S. year over year, outpacing industry activity in each region. • Maintained strong pricing in Canada for our Super Triple and Super Single rigs compared to the previous quarter and the second quarter of 2025. • Since the end of April 2026, we have improved our 2026 contract book, increasing the average number of drilling rigs under term contract for 2026 by 33% in Canada and 45% in the U.S. • Secured an additional five -year drilling rig contract in Kuwait for an existing rig, which is expected to increase our international active rig count to eight by mid-2027 after completing required rig recertifications and upgrades. 2. Maximize free cash flow through strategic capital deployment and sustained cost discipline. • Generated cash from operations of $146 million, allowing Precision to reduce debt and buy back shares. • Restructured our international operations to better align our organizational structure within countries where we operate, strengthen execution, improve efficiency, and reduce general operating costs. • Reiterated capital budget of $265 million, with $93 million allocated to strategic upgrades in Canada and the U.S. 3. Enhance shareholder returns by reducing debt by $100 million in 2026 and allocating up to 50% of free cash flow, before debt repayments, directly to shareholders. • Reduced debt by $50 million in the quarter and $75 million year -to-date, as we continue to target a sustained Net Debt to Adjusted EBITDA ratio(1) of below 1.0 times. • Returned $12 million to shareholders by repurchasing 99,416 shares during the quarter. Year to date, we have repurchased $16 million shares and remain committed to our annual guidance target.
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6 • Well positioned to meet our long-term debt reduction target of $700 million between 2022 and 2027. As of June 30, 2026, we have reduced our debt by $610 million since the beginning of 2022. (1) See "FINANCIAL MEASURES AND RATIOS." OUTLOOK Ongoing geopolitical uncertainty and relatively tight global crude oil inventories have reinforced the importance of secure and reliable energy supply, supporting constructive oil prices and customer investment confidence. While customers remain focused on capital discipline and returns, we continue to see sustained demand for high -performance drilling rigs and well service equipment. Assuming commodity prices remain supportive and market conditions do not materially change, we expect North American drilling and completion activity to improve modestly through the remainder of the year. In Canada, demand for our Super Series rigs remains robust, supporting one of the most active drilling environments we have experienced in recent years. Improving heavy oil and condensate prices continue to enhance producer economics and support steady upstream investment in both oil and natur al gas formations. Assuming a constructive commodity price environment, we expect our Super Triple and Super Single rigs to be nearly fully utilized through the fall drilling season. In the U.S., increasing oil prices, disruptions in global crude supply, and concerns over low inventory levels have contribut ed to a more constructive outlook for oil-directed drilling activity. As a result, U.S. land drilling activity has strengthened in recent months and we increased our oil-weighted activity while maintaining a strong position in key natural gas basins, including the Haynesville and Marcellus. We currently have 43 active rigs and expect our active rig count to remain in the low 40s with continued rig churn during the third quarter. We remain focused on deepening customer relationships and strengthening margins, which we expect to increase throughout the remainder of the year. Internationally, our crews continue to safely deliver services to our customers despite minor activity disruptions and incremental costs related to the Middle East conflict. We have seven active rigs, including four in Kuwait and three in the Kingdom of Saudi Arabia, all under five-year term contracts that extend into 2027 and 2028. Activity is expected to remain at seven rigs until mid-2027, when one of our idle Kuwait rigs is scheduled to return to work under a five-year contract following planned recertifications and upgrades. Crew-related operating costs are expected to remain elevated while regional tensions persist. We continue to seek opportunities for our one idle international rig. As Canada's premier well service provider, we remain optimistic about the long -term outlook for our Completion and Production Services business. Expanded market access, robust heavy oil drilling and production activity, favorable oil prices and our High Performance, High Value service offering continue to support customer investment and demand for our services. We believe these factors position us well to benefit from strong activity levels and pricing, assuming no significant change in market conditions. Overall, our outlook for the remainder of the year is optimistic, with potential upside supported by sustained strength in oil prices and continued customer investment. In Canada, we expect third quarter operating margins to average between $12,000 and $13,000 per utilization day, with a higher proportion of Super Singles working this fall compared with the prior year. In the U.S., revenue per utilization day is expected to remain stable, while operating margins are anticipated to range between US$7,000 and US$8,000 per utilization day with cost pressures persisting due to additional rig reactivation expenses. While U.S. margin performance in the second and third quarters remains below our long -term expectations, fourth quarter margins are expected to approach US$10,000 per utilization day. Contracts The following chart outlines the average number of drilling rigs under term contract by quarter as of July 28, 2026. For the quarter ending after June 30, 2026, 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 July 28, 2026 Average for the quarter ended 2025 Average Average for the quarter ended 2026 Average Mar. 31 June 30 Sept. 30 Dec. 31 2025 Mar. 31 June 30 Sept. 30 Dec. 31 2026 Average rigs under term contract: Canada 20 18 16 21 19 21 19 27 28 24 U.S. 16 16 17 17 17 15 15 18 14 16 International 8 7 7 7 7 7 7 7 7 7 Total 44 41 40 45 43 43 41 52 49 47
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7 SEGMENTED FINANCIAL RESULTS Precision’s operations are reported in two segments: Contract Drilling Services, which includes our drilling rigs, procuremen t and distribution of oilfield supplies, and the manufacture, sale and repair of drilling equipment; and Completion and Production Services, which includes our service rigs, oilfield equipment rental, and camp services. SEGMENT REVIEW OF CONTRACT DRILLING SERVICES For the three months ended June 30, For the six months ended June 30, (Stated in thousands of Canadian dollars, except where noted) 2026 2025 % Change 2026 2025 % Change Revenue 389,844 355,352 9.7 838,853 774,809 8.3 Expenses: Operating 282,456 234,448 20.5 586,029 506,860 15.6 General and administrative 12,706 9,482 34.0 25,147 20,511 22.6 Adjusted EBITDA(1) 94,682 111,422 (15.0 ) 227,677 247,438 (8.0 ) Adjusted EBITDA as a percentage of revenue(1) 24.3 % 31.4 % 27.1 % 31.9 % (1) See "FINANCIAL MEASURES AND RATIOS." Canadian onshore drilling statistics:(1) 2026 2025 Precision Industry(2) Precision Industry(2) Average number of active land rigs for quarters ended: March 31 79 199 74 214 June 30 61 147 50 127 Year to date average 70 173 62 171 (1) Canadian operations only. (2) Source: Baker Hughes rig counts. United States onshore drilling statistics:(1) 2026 2025 Precision Industry(2) Precision Industry(2) Average number of active land rigs for quarters ended: March 31 37 530 30 572 June 30 35 538 33 556 Year to date average 36 534 32 564 (1) United States lower 48 operations only. (2) Source: Baker Hughes rig counts. SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES For the three months ended June 30, For the six months ended June 30, (Stated in thousands of Canadian dollars, except where noted) 2026 2025 % Change 2026 2025 % Change Revenue 65,632 53,936 21.7 145,563 133,266 9.2 Expenses: Operating 49,513 41,970 18.0 109,188 101,082 8.0 General and administrative 2,476 2,090 18.5 5,120 4,762 7.5 Adjusted EBITDA(1) 13,643 9,876 38.1 31,255 27,422 14.0 Adjusted EBITDA as a percentage of revenue(1) 20.8 % 18.3 % 21.5 % 20.6 % Well servicing statistics: Number of service rigs (end of period)(2) 146 135 8.1 145 135 7.4 Service rig operating hours(2) 54,654 43,779 24.8 122,873 109,414 12.3 (1) See "FINANCIAL MEASURES AND RATIOS." (2) The service rig fleet and service rig operating hours exclude our U.S. operations that we wound down in the second quarter of 2025.
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8 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 2025 Annual Report. A summary of expense (recovery) amounts under these plans during the reporting periods are as follows: For the three months ended June 30, For the six months ended June 30, (Stated in thousands of Canadian dollars) 2026 2025 2026 2025 Cash settled share-based incentive plans (3,557 ) 2,662 12,404 3,065 Equity settled share-based incentive plans 2,005 1,551 4,917 3,978 Total share-based incentive compensation plan expense (recovery) (1,552 ) 4,213 17,321 7,043 Allocated: Operating 480 1,254 4,243 2,382 General and Administrative (2,032 ) 2,959 13,078 4,661 (1,552 ) 4,213 17,321 7,043 Contingencies In the 2018 to 2023 tax years, Precision deducted certain intercompany dividends received in connection with a preferred share financing. In late July 2026, Precision received a NOR from the CRA relating to its 2018 tax year, denying the deduction of such intercompany dividends. In addition to the 2018 NOR, Precision received a proposal from the CRA for the 2019 to 2022 tax years on the same basis, but no reassessments have been received at this time. Precision will file a Notice of Objection to the 2018 NOR and intends to vigorously contest the 2018 NOR as well as any additional reassessments that may be issued by the CRA in respect of the intercompany dividends received. The Company and its tax adviso rs believe that the Company’s tax filing position is appropriate. As such, Precision has not recognized a liability in its unaudited interim consolidated financial statements with respect to the reassessment. Due to existing tax pools, the CRA’s reassessment of the 2018 tax year and anticipated reassessments of the 2019 to 2023 tax years are not expected to impact taxes payable until the 2024 to 2027 tax years. Additional notices of reassessment for the subsequent tax years are expected to be issued over the next 24 months. If it is ultimately determined that the Company is not entitled to deduct the intercompany dividends, we estimate a maximum tax liability of approximately $155 million, excluding interest. Once reassessments are issued, Precision will be required to pay 50% of the assessed tax liability and interest, until the is sue has been resolved. If Precision is ultimately successful in defending its position, then any taxes and interest paid to the CR A will be refunded plus interest, and if the CRA is successful then any remaining taxes and interest payable will have to be remitted by Precision. Depreciation In 2025, we completed a detailed review of our drilling rig equipment and revised the estimated useful life of drill pipe as more complex drilling programs have reduced the useful life of this asset class. This revision resulted in additional depreciation expense of $11 million in the second quarter of 2026.
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9 FINANCIAL MEASURES AND RATIOS Non-GAAP Financial Measures We reference certain additional Non-Generally Accepted Accounting Principles (Non-GAAP) measures that are not defined terms under IFRS Accounting Standards to assess performance because we believe they provide useful supplemental information to investors. Adjusted EBITDA We believe Adjusted EBITDA (earnings before income taxes, (gain) loss on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), as reported in our Condensed Interim Consolidated Statemen ts of Net Earnings (Loss) 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 June 30, For the six months ended June 30, (Stated in thousands of Canadian dollars) 2026 2025 2026 2025 Adjusted EBITDA by segment: Contract Drilling Services 94,682 111,422 227,677 247,438 Completion and Production Services 13,643 9,876 31,255 27,422 Corporate and Other (11,270 ) (13,198 ) (37,930 ) (29,263 ) Adjusted EBITDA 97,055 108,100 221,002 245,597 Depreciation and amortization 82,678 74,858 167,008 149,894 Gain on asset disposals (467 ) (6,425 ) (2,180 ) (9,297 ) Foreign exchange 337 (1,617 ) 785 (1,250 ) Finance charges 12,301 14,857 24,657 30,617 (Gain) loss on investments and other assets (937 ) 1,674 530 1,625 Income taxes 4,036 8,266 13,250 22,574 Net earnings (loss) (893 ) 16,487 16,952 51,434 Non-controlling interest 302 220 771 656 Net earnings (loss) attributable to shareholders (1,195 ) 16,267 16,181 50,778 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 June 30, For the six months ended June 30, (Stated in thousands of Canadian dollars) 2026 2025 2026 2025 Capital spending by spend category Expansion and upgrade 30,267 26,757 60,541 46,303 Maintenance and infrastructure 46,097 26,016 80,823 66,435 Capital expenditures 76,364 52,773 141,364 112,738 Proceeds on sale of property, plant and equipment (12,013 ) (11,829 ) (14,300 ) (15,594 ) Net capital spending 64,351 40,944 127,064 97,144 Proceeds from sale of investments and other assets (400 ) — (400 ) — Purchase of investments and other assets — — 698 11 Receipt of finance lease payments (252 ) (209 ) (503 ) (417 ) Changes in non-cash working capital balances (8,938 ) (4,686 ) 2,604 (3,487 ) Cash used in investing activities 54,761 36,049 129,463 93,251
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10 Working Capital We 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: June 30, December 31, (Stated in thousands of Canadian dollars) 2026 2025 Current assets 469,469 486,915 Current liabilities (322,557 ) (300,100 ) Working capital 146,912 186,815 Total Long-term Financial Liabilities We 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: June 30, December 31, (Stated in thousands of Canadian dollars) 2026 2025 Total non-current liabilities 798,555 837,707 Deferred tax liabilities (105,567 ) (90,763 ) Total long-term financial liabilities 692,988 746,944 Non-GAAP Ratios We 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 (Loss), provides an indication of our profitability from our principal business activities prior to considerati on 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 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 plus current portion of 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 Measures We 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 or maintenance and infrastructure.
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11 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS Certain statements contained in this report, including statements that contain words such as "could", "should", "can", "anticipate", "estimate", "intend", "plan", "expect", "believe", "will", "may", "continue", "project", "potential" and similar expression s 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 2026 strategic priorities; • our capital expenditures, free cash flow allocation and debt reduction plans for 2026 and beyond; • anticipated activity levels, demand for our drilling rigs, day rates and daily operating margins in 2026; • the average number of term contracts in place for 2026; • customer adoption of AlphaTM technologies and EverGreenTM suite of environmental solutions; and • potential 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; • continued market demand for our drilling rigs; • our ability to deliver rigs to customers on a timely basis; • the impact of an increase/decrease in capital spending; • the general stability of the economic and political environments in the jurisdictions where we operate in; and • anticipated rig utilization, operating margins, active rig counts and customer activity levels. 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 disadvantage; • 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 physical, regulatory and transition impacts of climate change; • the impact of weather and seasonal conditions on operations and facilities; • the impact of tariffs, trade disputes, sanctions, export controls and other trade restrictions; • competitive operating risks inherent in contract drilling, well servicing and ancillary oilfield services; • geopolitical instability or armed conflicts, including in regions where we operate may impact operations, personnel, logistics, customer activity and commodity markets; • 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; • the impact of inflation and supply chain disruptions; • business interruptions related to cybersecurity risks;
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12 • 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, acts of war, social, civil and political unrest in the foreign jurisdictions or regions where we operate; • fluctuations in foreign exchange, interest rates and tax rates; and • other unforeseen conditions which could impact the use of services supplied by Precision and Precision’s ability to respond to such conditions. Readers are cautioned that the 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 reg ulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2025, which may be accessed on Precision’s SEDAR+ profile at or under Precision’s EDGAR profile. The forward -looking information and state ments contained in this report are made as of the date hereof and Precision undertakes no obligation to update publicly or revise a ny forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.
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13 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Stated in thousands of Canadian dollars) June 30, 2026 December 31, 2025 ASSETS Current assets: Cash $ 66,292 $ 85,781 Accounts receivable 348,477 352,142 Inventory 54,700 48,992 Total current assets 469,469 486,915 Non-current assets: Deferred tax assets 4,170 2,235 Property, plant and equipment 2,170,098 2,159,212 Intangibles 7,691 9,470 Right-of-use assets 64,331 56,817 Finance lease receivables 4,059 4,474 Investments and other assets 6,871 7,567 Total non-current assets 2,257,220 2,239,775 Total assets $ 2,726,689 $ 2,726,690 LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued liabilities $ 302,571 $ 280,652 Income taxes payable 441 1,670 Current portion of lease obligations 19,545 17,778 Total current liabilities 322,557 300,100 Non-current liabilities: Share-based compensation 8,568 13,780 Provisions and other 6,941 6,704 Lease obligations 51,152 47,169 Long-term debt 626,327 679,291 Deferred tax liabilities 105,567 90,763 Total non-current liabilities 798,555 837,707 Total liabilities 1,121,112 1,137,807 Equity: Shareholders’ capital 2,208,934 2,238,766 Contributed surplus 79,557 79,270 Accumulated other comprehensive income 187,425 165,020 Deficit (875,179 ) (898,992 ) Total equity attributable to shareholders 1,600,737 1,584,064 Non-controlling interest 4,840 4,819 Total equity 1,605,577 1,588,883 Total liabilities and equity $ 2,726,689 $ 2,726,690
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14 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF NET EARNINGS (LOSS) (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, (Stated in thousands of Canadian dollars, except per share amounts) 2026 2025 2026 2025 Revenue $ 452,800 $ 406,615 $ 978,851 $ 902,946 Expenses: Operating 329,293 273,745 689,652 602,813 General and administrative 26,452 24,770 68,197 54,536 Earnings before income taxes, (gain) loss on investments and other assets, finance charges, foreign exchange, gain on asset disposals, and depreciation and amortization 97,055 108,100 221,002 245,597 Depreciation and amortization 82,678 74,858 167,008 149,894 Gain on asset disposals (467 ) (6,425 ) (2,180 ) (9,297 ) Foreign exchange 337 (1,617 ) 785 (1,250 ) Finance charges 12,301 14,857 24,657 30,617 (Gain) loss on investments and other assets (937 ) 1,674 530 1,625 Earnings before income taxes 3,143 24,753 30,202 74,008 Income taxes: Current 696 1,068 1,398 2,174 Deferred 3,340 7,198 11,852 20,400 4,036 8,266 13,250 22,574 Net earnings (loss) $ (893 ) $ 16,487 $ 16,952 $ 51,434 Attributable to: Shareholders of Precision Drilling Corporation $ (1,195 ) $ 16,267 $ 16,181 $ 50,778 Non-controlling interest $ 302 $ 220 $ 771 $ 656 Net earnings (loss) per share attributable to share- holders of Precision Drilling Corporation: Basic $ (0.09 ) $ 1.21 $ 1.25 $ 3.75 Diluted $ (0.52 ) $ 1.07 $ 1.25 $ 3.28 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, (Stated in thousands of Canadian dollars) 2026 2025 2026 2025 Net earnings (loss) $ (893 ) $ 16,487 $ 16,952 $ 51,434 Unrealized gain (loss) on translation of assets and liabilities of operations denominated in foreign currency 24,919 (79,446 ) 43,163 (80,104 ) Foreign exchange gain (loss) on net investment hedge with U.S. denominated debt (11,844 ) 41,008 (20,758 ) 40,473 Comprehensive income (loss) $ 12,182 $ (21,951 ) $ 39,357 $ 11,803 Attributable to: Shareholders of Precision Drilling Corporation $ 11,880 $ (22,171 ) $ 38,586 $ 11,147 Non-controlling interest $ 302 $ 220 $ 771 $ 656
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15 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, (Stated in thousands of Canadian dollars) 2026 2025 2026 2025 Cash provided by (used in): Operations: Net earnings (loss) $ (893 ) $ 16,487 $ 16,952 $ 51,434 Adjustments for: Long-term compensation plans 2,539 3,374 11,800 6,390 Depreciation and amortization 82,678 74,858 167,008 149,894 Gain on asset disposals (467 ) (6,425 ) (2,180 ) (9,297 ) Foreign exchange 333 (1,631 ) 887 (2,414 ) Finance charges 12,301 14,857 24,657 30,617 Income taxes 4,036 8,266 13,250 22,574 Other 26 (21 ) 13 (21 ) (Gain) loss on investments and other assets (937 ) 1,674 530 1,625 Income taxes paid (1,811 ) (3,846 ) (2,153 ) (4,167 ) Interest paid (2,636 ) (3,621 ) (24,627 ) (33,258 ) Interest received 384 318 808 755 Funds provided by operations 95,553 104,290 206,945 214,132 Changes in non-cash working capital balances 50,016 43,205 1,778 (3,218 ) Cash provided by operations 145,569 147,495 208,723 210,914 Investments: Purchase of property, plant and equipment (76,364 ) (52,773 ) (141,364 ) (112,738 ) Proceeds on sale of property, plant and equipment 12,013 11,829 14,300 15,594 Proceeds from sale of investments and other assets 400 — 400 — Purchase of investments and other assets — — (698 ) (11 ) Receipt of finance lease payments 252 209 503 417 Changes in non-cash working capital balances 8,938 4,686 (2,604 ) 3,487 Cash used in investing activities (54,761 ) (36,049 ) (129,463 ) (93,251 ) Financing: Issuance of long-term debt — 10,000 3,000 10,000 Repayment of long-term debt (50,041 ) (83,854 ) (78,041 ) (100,964 ) Repurchase of share capital (12,010 ) (14,490 ) (16,025 ) (45,256 ) Issuance of common shares from the exercise of options — — 195 — Distributions to non-controlling interest — — (300 ) — Lease payments (4,361 ) (3,922 ) (8,454 ) (7,509 ) Cash used in financing activities (66,412 ) (92,266 ) (99,625 ) (143,729 ) Effect of exchange rate changes on cash 434 (727 ) 876 (1,007 ) Increase (decrease) in cash 24,830 18,453 (19,489 ) (27,073 ) Cash, beginning of period 41,462 28,245 85,781 73,771 Cash, end of period $ 66,292 $ 46,698 $ 66,292 $ 46,698
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16 CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) Attributable to shareholders of the Corporation (Stated in thousands of Canadian dollars) Shareholders’ Capital Contributed Surplus Accumulated Other Comprehensive Income Deficit Total Non- Controlling Interest Total Equity Balance at January 1, 2026 $ 2,238,766 $ 79,270 $ 165,020 $ (898,992 ) $ 1,584,064 $ 4,819 $ 1,588,883 Net earnings for the period — — — 16,181 16,181 771 16,952 Other comprehensive income for the period — — 22,405 — 22,405 — 22,405 Share options exercised 279 (84 ) — — 195 — 195 Settlement of Executive Performance and Restricted Share Units 4,095 (4,095 ) — — — — — Distributions to non-controlling interest — — — — — (750 ) (750 ) Share repurchases (23,657 ) — — 7,632 (16,025 ) — (16,025 ) Liability reversal for automated share purchase plan 10,000 — — — 10,000 — 10,000 Liability for automated share purchase plan (21,000 ) — — — (21,000 ) — (21,000 ) Redemption of non-management directors share units 451 (451 ) — — — — — Share-based compensation expense — 4,917 — — 4,917 — 4,917 Balance at June 30, 2026 $ 2,208,934 $ 79,557 $ 187,425 $ (875,179 ) $ 1,600,737 $ 4,840 $ 1,605,577 Attributable to shareholders of the Corporation (Stated in thousands of Canadian dollars) Shareholders’ Capital Contributed Surplus Accumulated Other Comprehensive Income Deficit Total Non- Controlling Interest Total Equity Balance at January 1, 2025 $ 2,301,729 $ 77,557 $ 199,020 $ (900,834 ) $ 1,677,472 $ 4,527 $ 1,681,999 Net earnings for the period — — — 50,778 50,778 656 51,434 Other comprehensive income for the period — — (39,631 ) — (39,631 ) — (39,631 ) Settlement of Executive Performance and Restricted Share Units 11,651 (2,790 ) — — 8,861 — 8,861 Distributions to Non-Controlling Interest — — — — — (519 ) (519 ) Share repurchases (45,921 ) — — — (45,921 ) — (45,921 ) Liability reversal for automated share purchase plan 10,000 — — — 10,000 — 10,000 Liability for automated share purchase plan (5,000 ) — — — (5,000 ) — (5,000 ) Redemption of non-management directors share units 361 (361 ) — — — — — Share-based compensation expense — 3,977 — — 3,977 — 3,977 Balance at June 30, 2025 $ 2,272,820 $ 78,383 $ 159,389 $ (850,056 ) $ 1,660,536 $ 4,664 $ 1,665,200
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17 2026 SECOND QUARTER 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 Wednesday, July 29, 2026. 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-conf.media-server.com/register/BI0caa23577c564e18afa1950d4e8a0869 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/3tuuogfm 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 and NYSE Texas, Inc., under the trading symbol “PDS”. Additional Information For further information, please contact: Lavonne Zdunich, CPA, CA Vice President, Investor Relations 403.716.4500 800, 525 - 8th Avenue S.W. Calgary, Alberta, Canada T2P 1G1 Website: www.precisiondrilling.com