Investor Presentation November, 2016 *Rig 580, Oklahoma SCOOP 1
Forward-looking statements Certain statements contained in this presentation, 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 statement"). In particular, forward looking information and statements include, but are not limited to, the following: our contract log for 2016 and 2017; expectations on the delivery of 2 additional rigs to Kuwait; our capital expenditure plan for 2016; and the potential amount in annual fixed cost savings due to the steps taken by Management to position Precision for a prolonged downturn. 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: low oil and natural gas prices will continue to pressure customers into reducing or limiting their drilling budgets; the status of current negotiations with our customers and vendors; continuing demand for Tier 1 rigs; customer focus on safety performance; existing term contracts being neither renewed nor terminated prematurely; our ability to deliver rigs to customers on a timely basis; and the general stability of the economic and political environments in the jurisdictions where we operate. 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 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; the effects of seasonal and weather conditions on operations and facilities; the availability of qualified personnel and management; a decline in our safety performance which could result in lower demand for our services; changes in environmental laws and regulations such as increased regulation of hydraulic fracturing or restrictions on the burning of fossil fuels and greenhouse gas emissions, which could have an adverse impact on the demand for oil and gas; terrorism, social, civil and political unrest in the foreign jurisdictions 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 Report, Annual Information Form and 40-F for the year ended December 31, 2015, which may be accessed on Precision s SEDAR profile at www.sedar.com, under Precision s EDGAR profile at www.sec.gov, or on our website at www.precision.com. The forward-looking information and statements contained in this presentation 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 results of new information, future events or otherwise, unless so requires by applicable securities laws. 2
Historical North American Drilling Activity U.S. Land Rig Count 10 Year History Canadian Land Rig Count 5 Year History 2,000 1,800 1,600 1804 2014 Average Active Rigs 800 700 600 1,400 500 1,200 1,000 800 600 943 2015 Average Active Rigs 400 378 2014 Average +49% increase in rig count since May lows 300 200 Active Rigs 189 2015 Average Active Rigs 400 200 471 2016 Year to Date Average 100 0 118 2016 Year to Date Average Jan, 2006 Jan, 2008 Jan, 2010 Jan, 2012 Jan, 2014 Jan, 2016 Jan, 2018 January February March April May June July August September October November December Source: Baker Hughes land rig count as of November 18 th, 2016 3
Market Share Growth Active North American Drilling Rigs 300 250 200 150 100 50 Precision continues to deliver High Performance, High Value services, operating the second most active fleet in North America. PD Canadian Based Peer A U.S. Based Peer B U.S. Based Peer C U.S. Based Peer D 0 Jan/15 Mar/15 May/15 Jul/15 Sep/15 Nov/15 Jan/16 Mar/16 May/16 Jul/16 Sep/16 Nov/16 Jan/17 Peers A, B, and C operate in Canada and the U.S. Peer D operates only in the U.S. Source: Company disclosure, CAODC, and RigData as of November 28 th, 2016 4
Precision Responding to Improving Outlook Reactivated 50 rigs in Canada from low of 10 rigs to 60 rigs Reactivated 20 rigs in the U.S. from low of 21 rigs to 41 rigs Filled ~1,000 positions 120 100 80 60 Canada - 60 Rigs 40 20 U.S. - 41 Rigs 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Source: Company disclosure as of November 28 th, 2016 2016 Precision Average Active Rigs 5
Financial Performance Precision s Resilient Margins Despite a ~50% decline in drilling days from the first 9 months of 2015 to the first nine months of 2016, EBITDA margin declined by only 20% due to aggressive cost management and rig contract performance Nine months ended Sept. 30 ($ in millions) 2016 2015 Fiscal 2015 Revenue $668 $1,211 $1,556 EBITDA $163 $363 $474 Margin 24% 30% 30% Drilling Utilization Days Canada 8,050 13,062 17,238 U.S. 7,773 17,063 21,172 International 2,044 3,262 4,084 Total Days 17,867 33,387 42,494 *Rig 575, Permian 6
Recent Financing Actions Issued US$350 million Senior Notes due 2023 Retired $200 million Senior Notes due 2019 Redeemed US$250 million of 2020 Senior Notes Redeemed US$53 million of 2021 Senior Notes Reduced total debt by $213 1 million YTD No maturities until November 2020 *Rig 570, Duvernay 1. Using CAD/USD exchange rate and balance sheet numbers as at 9/30/2016 7
Precision s 2016 Strategic Priorities Manage strong liquidity position Sustain High Performance, High Value competitive positioning Position for a rebound 8
Manage Strong Liquidity Position Reduced total debt by $213 1 million YTD Improved financial flexibility Liquidity as of 9/30/2016 1 Pro-forma 2016 Debt Offering $736 Million $193 Million $929 Million Expanded maturity profile Revolver/ Operating Facilities (Matures June 3, 2019) Cash Senior Debt Maturity Profile Attractive Capital Structure 2 Net debt to total capital: 42% Interest coverage: 2.0x Long maturity, low cost debt Average interest rate of 6.4% No Maturities Until November 2020 US$372 US$319 US$350 US$400 2016 2017 2018 2019 2020 2021 2022 2023 2024 1) Calculated as undrawn portion of revolver (adjusted for LCs outstanding) and cash using CAD/USD exchange rate and balance sheet numbers as at 9/30/2016 (pro-forma October 31 st 2016 high yield offering and related transaction costs. 2) Statistics refer to balance sheet and trailing twelve months income statement as of 9/30/2016. Net debt to total capital equals ratio of long-term debt less cash to long-term debt less cash plus equity. Interest coverage equals EBITDA divided by interest. Available liquidity, adjusted for amendment of revolver post quarter end. 3) Current blended cash interest cost of our debt is approximately 6.4%. 9
Sustain High Performance, High Value Competitive Advantage Added 11 rig years to 2017 contract book, improving visibility next year Reactivated 70 rigs throughout North America, including the Permian, Niobrara, Marcellus, Viking, Canadian Bakken, Montney, Duvernay Majority of the rigs reactivated have been Super Triple 1500s in the U.S. and Super Triple 1200s in Canada Currently operating 101 rigs in North America, 12% market share up from 8% market share in Q3 2014 *Rig 556, Louisiana, Drilling with fully integrated Directional Drilling services 10
Position for the Rebound Toughnecks Recruiting Program 102,224 Applications processed 2013-2015 (16,000 Applications in 2016 1 ) 1,200 1,400 Screened candidates in the system ready to work 517 Drillers ~50% at lower positions 280 Rig Managers ~40% at lower positions 1 1 Brand & Advertising Targeted Selection Interviews System Screening & Testing New Hire Rig Placement 70 drilling rigs reactivated from Q2 lows, ~1000 positions filled 1. As of September 30 th 2016. 11 10 *Houston training rig
Position for the Rebound 239 High Performance Super Series Rigs $2.8 Billion in Drilling Expansion and Upgrade Capital Investment from 2011 2016E Super Series Rigs Designed for Today s Unconventional Development Drilling Programs 119 1,2,3 Tier 1 Rigs Added 6 8 5 2 72 International $702 2 79 88 Expansion & Upgrade Capital $619 101 102 U.S. $530 $409 $359 2 43 114 119 125 128 129 2012 2013 2014 2015 2016E $180 Canada 75 2011 2011 1) As of October 21st 2016 - Includes 1 newbuild rigs for Kuwait to be delivered late 2016. Excludes 16 upgrade candidates. 2) Includes 98 newbuild rigs and 21 major upgrades. 3) Decommissioned 36 rigs in 2011, 52 rigs in 2012, 29 rigs in 2014 and 79 rigs in 2015 total of 196 rigs. 2012 2013 2014 2015 2016E 12 11
High Performance Precision Super Triple Efficiency U.S. Downtime 2.09% 1.73% 1.65% 1.58% 1.39% Reducing well cost while improving performance and efficiency Average Canada downtime of 0.42% and 1.39% for U.S. 2011 2012 2013 2014 2015 74% improvements in recordable frequency 57% efficiency gain in average rig move days Canadian Downtime 0.59% 0.61% 0.41% 0.50% 0.42% 6 days faster wells on PD integrated services with reduced headcount on location 2011 2012 2013 2014 2015 0 Competitor A Competitor B 2,000 PD Planned Well PD Well Recordable Frequency West Texas Avg. Move Days 2011 2012 2013 2014 2015 Feb/15 Apr/15 Jun/15 Aug/15 Oct/15 Dec/15 Feb/16 Hole Depth (Feet) 4,000 6,000 8,000 2-Man Directional Crew w/ Remote MWD & DD 10,000 12,000 6 days faster 0 4 8 12 16 20 24 28 32 Drilling Days 13
Lowering Cost and Improving Performance Leverage Scale Centralized Support Vertically Integrated Centralized Procurement Repair & Maintenance Rig Build & Construction State of the Art Training Rigs Houston Texas Nisku - Alberta 14 13 *Houston Technical Centre
Comprehensive North American Footprint / Targeted International Markets Dots representative of areas where Precision has had operations in 2014 and 2015 15
Geographical Diversification 2007 to 2016YTD Geographical Diversification Canadian revenue diversified from 95% to 36% U.S. revenue increased from 5% to 47% International expansion from 0% to 17% 100% 80% International 60% U.S. 40% 20% Canada 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD 16 Rig 89, Saudi Arabia
Strong Contract Book backed by Well Capitalized Customers Average Term Contracts 61 2016YTD Top 50 Customers 1 7 23 42 8 Public 64% 26% Private International US Canada 31 2016 Average 15 19 2017 Average To date in 2016, have added 11 rig years to 2017 contract book. 10% National Oil Companies Average market cap. of ~$40 billion (median ~$12 billion). 2 Credit risk of contract book remains low. All contracts have performed. 1 Includes Canada, U.S. and International operations and accounts for 82% of total revenue. 2 As of October 27 th, 2016. 17
Responsive Capital Allocation 2016 Capital $222 million $43 $179 million for Expansion and Upgrade 2 new-build rigs for Kuwait $179 $43 million for Maintenance and Infrastructure 2017 Capital Expansion & Upgrades $187 Maintenance & Infrastructure No anticipated growth capital $320 $1,000 $721 $500 $0 2009 2010 2011 2012 2013 2014 2015 2016E Annual Capital Spending 18 ($ in millions) 17 *Rig 904, Kuwait
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 $193 * million of cash Contract position backed by excellent customer base Experienced organization and management team Delivering Shareholder Value * Cash balance as at 9/30/2016, pro-forma October 31 st 2016 high yield offering and related transaction costs. TSX: PD NYSE: PDS 19
Questions? 20