Investor Presentation

January 2016
1

Forward-looking statements

Statements that are not historical facts are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and forward looking information within the meaning of applicable
Canadian legislation. These forward-looking statements are based on current expectations, estimates and
assumptions concerning future events and are subject to a number of uncertainties and factors, many of which
are outside Precision's control, which could cause actual results to differ materially from those anticipated by
Precision and described in the forward looking statements. These forward-looking statements are also affected
by the risk factors, challenges and uncertainties described in Precision's Annual Report on Form 40-F (Annual
Information Form in Canada) for the fiscal year ended December 31, 2014, and those set forth from time to time
in Precision's filings with the Securities and Exchange Commission and the securities regulatory authorities in
each of the Provinces of Canada, which are available through Precision's website at www.precisiondrilling.com.
No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or
occur or, if any of them do so, what benefits will be derived therefrom. Security holders, potential investors and
other readers are urged to consider these factors carefully in evaluating the forward-looking statements which
speak only as of the date made. Except as may be required by law, Precision expressly disclaims any intention
or obligation to revise or update any forward-looking statements and information whether as a result of new
information, future events or otherwise.

Historical North American Drilling Activity

U.S. Land Rig Count
10 Year History

Canadian Land Rig Count

5 Year History

2,000

800

1,800

700

1,600

600
500

1,400

400
1,200

300
1,000

Source: Baker Hughes land rig count

December

November

October

September

August

July

June

May

April

March

February

Jan, 2016

Jan, 2014

Jan, 2012

0
Jan, 2010

600

Jan, 2008

100

Jan, 2006

800

January

200

Management of Business Through Downturn

Rig Capability
_

238 Tier 1 Rigs

Maintain High Performance
operations

Liquidity

Strong Balance Sheet with $439

million Cash

Variable operating and capital

expenditures
Reduce overhead and G&A costs

Revenue Security

105 Contracts for 2015

64 Contracts for 2016

Revenue Diversification

Diverse customer base

Geographical diversification

__

Variable Cost Structure

Creates
Shareholder Value

High Performance Rig Fleet

238

145 Tier 1
Rigs Added

International

101

U.S.

129

Canada

93

1 Jan, 2009

1)

22 October, 2015

As of October 22nd 2015 - Includes 1 newbuild for Canada to be delivered in Q4

2015 and 2 newbuild rigs for Kuwait to be delivered in early 2017, does not
include prospective tier upgrades.

Precision HR Training and Processes

Career Path Management
Long-term
Compensation
Programs

Field Training
Investments

Structured Promotion
Programs
EXPERIENCED,
HIGHLY SKILLED
PRECISION CREWS

World-Class
Safety Culture
and Processes

Permanent Training
Facilities with Fully
Functioning Rigs

Tier 1 Assets

Leadership Development Programs

Structured Competency Standards

Structured Measured Retention Programs for Key Personnel

Strong Contract Book backed by Well Capitalized Customers

Average Term Contracts

2014 Top 50 Customers 1

105
12

87
9

5% Private
47

64

Public 87%

37

46

41

Q315

8% National Oil
Companies

2015
Average

International

2016
Average

US

Average market cap. of $21 billion

(median $12 billion).2

Accounts for 77% of total revenue.

Canada

1 Includes
2 As

Canada, U.S. and International operations.

of December 31st 2015.

Increasing Diversification of Revenue Contribution

International revenue was 8% of total in 2014, up from 3% in 2012.

2012
3%

Canada

U.S.

44%

YTD 2015

8%

7%

51%

46%

2014

2013

49%

46%

14%
46%

51%
35%

International

Historical Annual Revenue and EBITDA

Annual Revenue

Annual EBITDA

(millions)

(millions)

$2,351

$1,951

$800

$2,041 $2,030

$695

$671

$1,829

$639

$597

$1,430
$1,197

2009

1)

$407

2010

2011

As of September 30th 2015

2012

2013

2014

TTM

2009

$435

2010

2011

2012

2013

2014

TTM

Capital Spending Highlights 1

2016 Capital $180 million
$60

$120 million for Expansion capital

2 new-build rigs for Kuwait

$60 million for Maintenance & Infrastructure

$120
$187

$320
2015

Capital $531 million

$721Constructed and delivered 18 newbuild Super Series rigs

13 to U.S.

$59
$472

4 to Canada
1 to Kuwait
$392 million spent in the first nine months of 2015

Expansion & Upgrades

Maintenance & Infrastructure
1)

Canadian dollar amount in millions. As of October 22, 2015

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Balance Sheet Strength

Attractive Capital Structure (1)

Total debt to total capital: 47%
Net debt to total capital: 37%
Interest coverage: 4.6x

Available liquidity as of
9/30/2015 2
$1,166

$439

Cash

$727

Revolver /
operating facilities
Availability

Long maturity, low cost debt

Average interest rate of 6.2%

First Principal Payment due 2019 (3)

2019:
2020:
2021:
2024:

$200 million
US$650 million
US$400 million
US$400 million

Flexibility to react to market upturn

or downturn

1)
2)
3)

Statistics refer to balance sheet and annual income statement as of 9/30/2015. Debt to total capital equals
long-term debt to long-term debt plus equity. Interest coverage equals EBITDA divided by interest. Available
liquidity, adjusted for amendment of revolver post quarter end.
Calculated as undrawn portion of revolver (adjusted for LCs outstanding) and cash using CAD/USD exchange
rate and balance sheet numbers as at 9/30/2015.
Current blended cash interest cost of our debt is approximately 6.2%.

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Downturn Initiatives

Variable Cost Structure

Reduced Maintenance Capex

Limited Growth Capex
Variable Field Cost
Overhead Reductions of more
than $40 million Annualized

Operating Centre
Consolidation

Six facilities closed and

consolidated in Canada &

U.S.

Positioned for Prolonged Downturn

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Precision Drilling Investment Merits

Leading North American driller with global diversification

High Performance Tier 1 fleet of rigs with Tier 1 crews
Strong balance sheet with $439 million of cash
Contract position backed by excellent customer base

Experienced organization and management team

TSX: PD

NYSE: PDS

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Appendix

14

Positioned
InNorth
Most
ActiveCoverage
North American Regions
Comprehensive
American

Dots representative of areas where Precision has had operations in 2015

15

Canadian Activity Update

Canadian Active Land Rig Count

800

700
600
500
400
300

200
100
0

Source: BHI

5 Year Range 2010 - 2014

2013

2014

2015
16

Oil Drilling Dominates Activity

Total rig count
has dropped
64% from Peak

2,000
1,800

Oil rig count

has dropped
66% from Peak

U.S. Active Land Rig Count

1,600
1,400

1,200
1,000
800
600
400
200
0
2000

2001

Source: BHI
Source: BHI, as of November 25th, 2015

2002

2003

2004

2005

2006
Oil

2007

2008

2009

2010

2011

2012

2013

2014

2015

Gas
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Delivers Shareholder Value

Key
Financial
Metrics

Key
Operational
Metrics

Operating Earnings

Safety Performance

Return on Capital Employed

Mechanical Downtime

Total Shareholder Return

Employee Retention

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PEOPLE
SYSTEMS & SCALE
DRILLING TECHNOLOGY
PRODUCES

LOWER RISK
MAXIMUM EFFICIENCY

ATTRACTIVE RETURNS

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Balance Sheet Strength

Available liquidity as of
9/30/2015 1
$1,166

$1.2 billion in available liquidity

$439

Cash

$727

Revolver /
Operating Facilities
Availability

Staggered long-term maturities

starting 2019 to 2024
Average interest rate of 6.2%

Long track record of maintaining

financial flexibility

1.Calculated as undrawn portion of revolver (adjusted for LCs outstanding) and cash
using CAD/USD exchange rate and balance sheet numbers as at 9/30/2015.
Available liquidity, adjusted for amendment of revolver post quarter end.

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Technical Support centres

Asset Integrity
Maintenance Standard
Centralized Support
In House Repair & Rebuild

Supply Chain
Management
Leverage Procurement
Vendor Management
Centralized Support

SYSTEMS
&
SCALE

IT Infrastructure
and ERP

Manufacturing + Capital Projects

Engineering
Project Management
Equipment Manufacturing (Rostel)

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6,987 employees completed training through Precision Tech centres in 2013 & 2014

22

 Global recruitment

7 Countries
10 Provinces
50 States
Toughnecks program
processed 44,461
applications and hired
4,013 people in 2014

90% retention target

of key field positions

23

Nisku Drilling Support Centre

Repair &
Maintenance

Safety &
Operations
Training

Rig Build &

Construction

24

Fully Industrialized Development Drilling

Maximum Efficiency
Repeatability + Predictability

Risk Minimization
Technology Deployment
Long-term Economic Mindset

Precision Super Triple rigs operating in Duvernay, 2015.

25

Completion & Production Segment: Full Well Cycle Exposure

Largest well service provider in Canada and

established presence in U.S.
Over 170 Well Service, Snubbing and Coil
Tubing rigs
Large fleet of high value rental equipment

Camps and Catering

Excellent footprint in Canada and Northern U.S.

Existing asset base supports solid cash flow

generation

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Focused International Footprint

North America

129 Tier 1 Rigs in Canada

Middle East

4 rigs in Saudi Arabia

101 Tier 1 Rigs in U.S.

2 rigs in Kurdistan

Focused on development drilling

5 rigs in Kuwait

3 currently

2 to be deployed in early 2017

1 rig in Georgia

Focus on deep high pressure drilling

Specialized customer needs

Mexico

6 rigs in Mexico

Focus on IPM support

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Deployed
additional 1 rig to
Kuwait

International Revenue Growth

Initiated Georgia
with 1 rig

International Revenue (millions)

$70

$60

Late Q2 2014 - Initiated

Kuwait with 2 Rigs

Deployed
additional 1 rig
to Saudi

+18%

$50
Initiated Kurdistan
with 2 Rigs

$40

$30

Deployed additional
3 Rigs to Mexico

Initiated Saudi
with 3 Rigs

$20

$10

$0
Q112

Q212

Revenue

Q312

Q412

Q113

Compounded
Quarterly Growth Rate

Q213

Q313

Q413

Q114

Q214

Q314

Q414

Q115

Q215

Q315

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North American Market Has Transitioned To Industrialized Resource Drilling

1985-2005

2005-2010

Reservoir Drilling

2010-PRESENT

Resource Drilling Emergence

Industrial Resource Drilling

Commodity

Vertical gas

Vertical gas
Vertical oil
Horizontal gas emerges

Horizontal gas, development mode

Horizontal oil/liquids growth
Vertical oil
Vertical gas declining

Customers

Small independents
Highly cyclic customer
demand

Large cap independents

Mid cap independents
Small cap independents

Integrated oil companies

National oil companies
Large cap independents
Mid cap independents
More stable demand

Unconventional
Basins

Oil Sands

U.S. focused
3 to 5 basins

U.S. and Canada

Emerging Internationally
20+ basins

Barriers to Entry
& Competitive
Advantage

Low barriers
No differentiation

Rig ownership
Capital
Technology bifurcation
emerging
High performance contractors
emerge
Shortage of Tier 1 rigs

Technology bifurcation complete

Rig efficiency dominates
Scale benefits apparent
Capital needs large
Established track record
Robust support systems
Tier 1 rigs in demand

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Precision Commands Leadership In Canadian LNG Opportunity

Approved export capacity of 26Bcf/day
Opportunity for 20 to 25 rigs per Bcf of
export capacity

Longer-term demand source

Require deeper Tier 1 rigs

ST-1200 and ST-1500 rigs ideal for type
of development
Pad walking
Potential year around operations
Well capitalized players funding projects
Want long-term partners with proven
track record

ST-1500 deployed in Northwestern Alberta in

February 2014

Precision has won approximately half of

the awarded LNG related new builds

1. Source: Risky Business: This issue of timing, entry and performance in the Asia-Pacific LNG Market, The School of Public Policy SPP Research Papers, University of Calgary

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PD Tier 1 + Tier 2 & PSST 1

PSST
Tier 2
Tier 1
352

355
337
322

103

109

67

26

333

327

24

313

22

22
73

108

103

74

126
140

126

188
109

2009

1)

120

2010

200

217

238

144

2011

As of October 22nd 2015 - Includes 1 newbuild for Canada to be delivered in Q4

2015 and 2 newbuild rigs for Kuwait to be delivered in early 2017, does not
include prospective tier upgrades.

2012

2013

2014

2015E

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Precisions Tier 1 Super Series Fleet

High Performance Development Drilling Technology

INDUSTRY LEADING RIGS

Delivering unrivaled economics through High Performance

Rapid Mobility

Smart Design

Automation & Safety

Features

Super Single

Super Triple
1200

Super Triple
1500 1

Walking/skidding system
Location to location
Sophisticated connections

Small footprint
Integrated components
Cold weather operations

Pipe handling
Electronics and hydraulics
Advanced control systems

1) ST-1500 Requires as few as 42 truck loads in addition to 12 loads of tubular and any operator rental loads
2) Requires as few as 36 truck loads in addition to 10 loads of tubular and any operator rental loads

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800, 525-8th Avenue S.W.

Calgary, Alberta, Canada T2P 1G1
Telephone: 403.716.4500
Facsimile: 403.264.0251
www.precisiondrilling.com

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