Precision Drilling Announces 2026 Second Quarter Unaudited Financial Statements

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CALGARY, Alberta, July 28, 2026 (GLOBE NEWSWIRE) — This news release contains “forward-looking information and statements” within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in this news release. This news release contains references to certain Financial Measures and Ratios, including Adjusted EBITDA (earnings before income taxes, (gain) 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 restructuring 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.”}

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™ and EverGreen™ 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 Alpha™ 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 customer relationships and support sustainable revenue and profitability growth.

“Internationally, our teams continue to execute safely and reliably despite geopolitical uncertainty in the region. During the 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, market 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, disciplined capital allocation, and a continued focus on shareholder returns,” concluded Mr. Ford.

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.}

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 payments of $3 million compared with $7 million in 2025. U.S. revenue increased 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 useful 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.”}

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.

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.
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.
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.
- 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 natural 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 contributed 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

SEGMENTED FINANCIAL RESULTS

Precision’s operations are reported in two segments: Contract Drilling Services, which includes our drilling rigs, procurement 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.}

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 advisors 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 issue has been resolved. If Precision is ultimately successful in defending its position, then any taxes and interest paid to the CRA 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.

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 Statements 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

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 consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.
*Long-term debt to long-term debt plus equity*		We believe that long-term debt (as reported in our Condensed Interim Consolidated Statements of Financial Position) to long-term debt plus equity (total 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.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements contained in this report, including statements that contain words such as “could”, “should”, “can”, “anticipate”, “estimate”, “intend”, “plan”, “expect”, “believe”, “will”, “may”, “continue”, “project”, “potential” and similar expressions and statements relating to matters that are not historical facts constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information and statements”).

In particular, forward-looking information and statements include, but are not limited to, the following:

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 Alpha™ technologies and EverGreen™ 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;
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 regulatory 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 statements contained in this report are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Stated in thousands of Canadian dollars)	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

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

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

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

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

Precision Drilling Announces 2026 Second Quarter Unaudited Financial Statements

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