Precision Drilling : April 2024 Investor Presentation

PRECISION DRILLING

CORPORATION

April 2024 Investor Presentation

FORWARD-LOOKING STATEMENT

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 strategic priorities for 2024; our future capital expenditure plans; anticipated activity levels and our scheduled infrastructure projects; anticipated demand for rigs; the number of term contracts in place; and our future debt reduction plans beyond 2024.

Certain of the information in this presentation is "financial outlook" within the meaning of applicable securities laws. The purpose of this financial outlook is to provide readers with disclosure regarding our reasonable expectations as to the anticipated results of its proposed business activities. Readers are cautioned that this financial outlook may not be appropriate for other purposes.

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; our ability to deliver rigs to customers on a timely basis; the general stability of the economic and political environments in the jurisdictions where we operate; and the impact of an increase/decrease in capital spending.

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; ability to enhance our rig technology to improve drilling efficiency; 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 rates, 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 foregoing 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, 2023, which may be accessed on Precision's SEDAR+ profile at www.sedarplus.ca or under Precision's EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this news release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking information and statements, whether as a result of new information, future events or otherwise, except as required by law.

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CREATING SHAREHOLDER VALUE

DELIVERING HIGH PERFORMANCE, HIGH VALUE SERVICES

GENERATING SIGNIFICANT FREE CASH FLOW

MAINTAINING STRICT COST CONTROL & CAPITAL DISCIPLINE

HIGHER EQUITY VALUATION THROUGH STRONG FCF YIELD,

DELEVERAGING, & SHARE REPURCHASES

DISCIPLINED INVESTMENTS IN OUR PEOPLE & EQUIPMENT

3

ROBUST 2024 FREE CASH FLOW YIELD POTENTIAL

> 20%

FREE CASH FLOW YIELD POTENTIAL

STILL TO COME IN 2024

Analyst Estimates for	$310M
2024 Free Cash Flow1
Equity Market Cap2	$1,333M
Estimated FCF Yield	23%

2024 FREE CASH FLOW DRIVERS

1. INTERNATIONAL GROWTH
2. • ~ 40% activity increase
   • Increased profitability
3. INTEGRATION OF CWC ENERGY SERVICES3
4. • Growth in C&P and U.S. & Canada drilling
   • Expect $20M in annual synergies
   • Estimated $20M asset sales
5. MARGIN PROGRESSION EXPECTED IN CANADA
6. • Market fundamentals supporting strong demand
   • High demand for Super Triple & pad Super Single rigs
   • Addition of Super Triple upgrade
7. LEVERAGE OPERATING SCALE, DISCIPLINED COST CONTROL & CASH MANAGEMENT

1. 2024 Estimated FCF: FY Consensus EBITDA less FY Consensus Interest Expense less FY Consensus CAPEX; Consensus numbers from Nasdaq IR as of April 1, 2024
2. As of April 1, 2024 (Equity Market Capitalization was $1.029B on January 3, 2024)
3. Transaction closed November 8, 2023

4

DIFFERENTIATED EXPOSURE TO ATTRACTIVE CANADIAN MARKET1

UNIQUE CANADIAN MARKET FUNDAMENTALS SUPPORTING POSITIVE OUTLOOK FOR PRECISION

PRECISION IS THE MARKET LEADER

• Most active driller in Canada

		Q1/24
	Preferred Rig	Peak Rig Activity
Montney/LNG	Super Triple	30
Oil Sands/Clearwater	Super Single	43
Other Plays	Tele Double		10
Total Canada		83

• Most advanced land rig with rig floor robotics activated in January 2024
• Largest well service provider in Canada with 173 registered rigs
• High Performance Rentals and Camps business

ATTRACTIVE MARKET FUNDAMENTALS

• Natural gas market improving with LNG outlook
• Expect oil market to be bolstered by significant expansion to tidewater access

IMPROVED MARKET ACCESS

LNG Canada

• 2.1 bcf/d facility
• start-upto begin in 2024

TMX Expansion

• ~600,000 bbls/d
• start-upexpected Q2/24

1. See Slide 23 for more information on Canadian Market Fundamentals

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2024 STRATEGIC PRIORITIES

1	FOCUS ON GENERATING FREE CASH FLOW
•	Leverage our scale across drilling and well service operations
	•	Continued focus on strict cost control

2	IMPROVE CAPITAL RETURNS TO SHAREHOLDERS
•	Reduce total debt by $150 - $200 million in 2024
	•	Allocate 25-35% of free cash flow to share repurchases in 2024

• Increased debt reduction target -> $600 million from 2022-2026
• Moving direct shareholder returns towards 50% of free cash flow

3	FOCUS ON OPERATIONAL EXCELLENCE
• Continue to strengthen our competitive position
• Extend market penetration for AlphaTM and EverGreenTM products

6

APRIL PRECISION MARKET UPDATE

FIRM COMMITMENT TO DEBT

REDUCTION & SHARE BUYBACK TARGETS

DRILLING ACTIVITY UPDATE

TIGHT SUPER-SPEC RIG MARKET

SUPPORTING STRONG MARGINS

ALPHATM & EVERGREENTM DRIVING

MARGIN EXPANSION & COMPETITIVE

ADVANTAGE

1. Non-GAAPmeasure; see our Quarterly Report for more information
2. As of April 1, 2024
3. Defined as Revenue per utilization day less Operating cost per utilization day

• Targeting to reduce debt $150-$200 million in 2024 ($152 million in 2023)
• Targeting 25-35% free cash flow for share buybacks in 2024 (15% in 2023)
• On track to reach a Net Debt to Adjusted EBITDA ratio1 of <1.0x in 2025 (1.4x in 2023) & reduce total debt by $600 million between 2022 and 2026
• Canada's YTD in 2024 activity tracking ahead of 2023
• US activity remains steady near 40 active rigs
• 8 rigs active Internationally2; ~40% activity increase expected in '24 vs '23
• In Canada, Precision's Super Triples and pad Super Singles in high demand
• Canada Q1/24 margins3 expected to remain strong >$15,000/day
• US Q1/24 margins3 expected between US$9,000 to $10,000/day
• Strong customer uptake of our AlphaTM and EverGreenTM products
• Generate revenue incremental to daily contract rates and at high margins
• ~75% of North American Super Triple fleet equipped with AlphaTM and majority of the fleet has at least one EverGreenTM product

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BALANCE SHEET & CASH FLOW PROFILE STRENGTHENING

DEBT MATURITY PROFILE1

DEBT REDUCTION PROGRESS2

	$500
MILLIONSUS$	▪ 2023 total debt repayment of $152m, including US$75m 2026 senior notes
$300	▪ Combined average cost of debt is ~7.0%		$286			$400
DEBT	$400
$200
-TERM	$100
LONG						$8			$7
	$0
	2021	2022	2023	2024	2025	2026	2027	2028	2029

SIGNIFICANT FREE CASH FLOW3 POTENTIAL

$400

MILLIONSC$		▪ Higher day rates & margins and lower debt levels, contributing to significant free cash flow
$300
FCF	$200
pre-COVID
	$100
	$0
	2019	2020	2021	2022	2023	2024E

	$1.6								Net Debt to Adj EBITDA
BILLIONS									~1.4x end of 2023
$1.4
														Targeting Net Debt
US$	$1.2													to Adj EBITDA < 1.0x
														end of 2025
DEBT
$1.0
-TERM
$0.8
$0.6
LONG
$0.4
	2015	2016	2017	2018	2019	2020	2021	2022	2023 2024E 2025E 2026E

ANNUAL INTEREST EXPENSE2

MILLIIONS	$110
$100
US$	$90
$80
EXPENSE
$70
INTEREST
$50
	$60
	$40

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E2025E2026E

1. US$701 million total includes 2026 & 2029 senior notes, revolver draw ($nil) and three real estate mortgages with maturities in 2025 (US$8 million), 2026 (C$16 million), and 2028 (C$10 million) as of 12/31/2023
2. 2024E based on mid-point of debt reduction target of $150 million to $200 million; 2025E & 2026E based on debt reduction target of C$600 million between 2022 & 2026; Annual Interest Expense estimates based on Consensus
3. Actual FCF: Adj EBITDA less CapEx and Interest Expense. 2024E Estimated FCF: Consensus EBITDA less Consensus Interest Expense less Consensus CAPEX; Consensus numbers from Nasdaq IR as of April 1, 2024

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DAY RATE INCREASES DRIVING REVENUE & EBITDA GROWTH

REVENUE1

ADJUSTED EBITDA1

REVENUE (C$ MILLIONS)

$2,500

$2,000

$1,500

$1,000

$500

$0

Revenue continues to

increase after COVID-low

2019

2020

2021

2022

2023

2024E

ADJ. EBITDA (C$ MILLIONS)

$700
	Significant rebound in 2023
$600
	& 2024E from COVID-low
$500
$400
$300
$200
$100
$0
2019	2020	2021	2022	2023	2024E

		U.S. DAY RATES
	$35,000	69%
(US$)	Increase last 9 quarters
$30,000
RATE	$25,000
$20,000
DAY	$15,000
$10,000
U.S.
$5,000
	$0

1. 2023E and 2024E Consensus numbers from Nasdaq IR as of February 29, 2024

CANADIAN DAY RATE

$35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000

$0

CANADIAN DAY RATES

78%

Increase last 9 quarters

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CANADIAN FUNDAMENTALS STRONGEST IN A DECADE

LEADING DRILLING RIG SERVICE PROVIDER IN WCSB

▪ 33% market share in 2023 and has grown in Q1/24

• Fleet of 98 drilling rigs2 including:
• • 30 AC Super Triples
  • 48 Super Singles
• AC Super Triple fleet preferred Montney rig
• Super Single preferred rig in Oil Sands & Clearwater heavy oil play

STRONG MARKET FUNDAMENTALS

• Imminent additional oil and natural gas takeaway capacity from

TMX expansion and Coastal GasLink pipelines

• Industry Super-Spec rigs & PD Super Triples nearly fully utilized
• PD pad capable Super Singles fully utilized prior to spring break up
• PD Super Series rig demand expected to exceed supply in 2024

OPERATING LEVERAGE & GROWING CASH FLOW POTENTIAL

• Benefit from High Performance fleet and operating scale
• AlphaTM technologies and EverGreenTM solutions are competitive differentiators and improve cash flow and margins
• Tight supply of Super-Spec rigs supports potential margin expansion

1. Dots on map representative of areas where Precision has operations in 2023 with its Super Series rigs
2. Adjusted for 20 rigs decommissioned in 2023 and includes 7 rigs acquired with CWC acquisition
3. Defined as revenue per utilization day less operating costs per utilization day; Q2 margins impacted by seasonality (ie. spring break up)

Precision Canada Activity1

CANADIAN DAYRATE MARGINS3

	18,000
				147%
(C$)	16,000
			Increase last 9 quarters
14,000
MARGIN/DAY	12,000
10,000
	8,000
	6,000
	4,000
	2,000
	000
		Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4

2021

2022

2023

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