Precision is a leading provider of safe, efficient, and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. As we mark our 75th anniversary in 2026, Precision continues to build on a legacy of operational excellence, innovation, and disciplined execution. Precision offers an industry-leading digital technology portfolio known as AlphaTM technologies that leverages advanced automation software and analytics to generate more efficient, predictable, and repeatable results for our customers. Our drilling services are further enhanced by our EverGreenTM suite of environmental solutions, which bolsters our commitment to reducing the environmental impact of our operations. Additionally, Precision's services include a broad range of well service rigs, camps, and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

From our founding as a private drilling contractor in 1951, Precision has spent 75 years evolving alongside our customers and the energy industry, growing to become one of the most active drillers in North America. Our vision is to be globally recognized as the High Performance, High Value provider of land drilling services. Our mission is to deliver leading High Performance through passionate people supported by quality business systems, superior equipment and technologies designed to optimize results and reduce environmental, human and operational risks. We create High Value by operating sustainably, lowering our customers' risks and costs while improving efficiency, developing our people, and generating long-term financial returns for our investors.

Our High Performance, High Value competitive advantage is underpinned by five distinguishing features:

CORPORATE RESPONSIBILITY

Corporate Responsibility is a fundamental element of Precision’s High Performance, High Value strategy and critical to our long-term success. Our foundation was shaped by a commitment to operate with the highest ethical standards, prioritize the health and safety of our workforce, minimize our environmental impact, and better the communities where we operate. Our employees, investors and customers reward our commitment to Corporate Responsibility and recognize that it provides us the ability to attract talent and capital, while earning a premium for our services.

To learn more about Precision’s commitment to Corporate Responsibility, we invite you to explore our website showcasing our progress in Environmental, Social and Governance (ESG) initiatives. The site offers annual updates on our ESG initiatives and performance data.

OUR VISION AND 2025 STRATEGIC PRIORITY ACHIEVEMENTS

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 established at the beginning of each year.

In 2025, Precision focused on three strategic priorities:

We successfully delivered on each of these priorities in 2025, a milestone year as we continue to demonstrate the execution discipline that has defined the company for 75 years. We generated cash from operations of $413 million, allowing us to fund major rig upgrades, meet our debt reduction and share purchase goals while increasing our cash balance by $12 million year over year. We delivered resilient operating margins in Canada and the U.S. even though average industry activity declined versus 2024. With a strict focus on cost management, we proactively reduced our fixed costs and expect to achieve $10 million in annual savings. We also wound down our U.S. well service operations, while sustaining Completion and Production Services Adjusted EBITDA and free cash flow generation year over year.

We enhanced shareholder returns by reducing debt by $101 million and ended the year with a Net Debt to Adjusted EBITDA ratio of 1.2 times. Over the past four years, Precision has reduced debt by $535 million and is well on track to meet its long-term debt repayment target of $700 million between 2022 and 2027 and achieve a Net Debt to Adjusted EBITDA ratio of below 1.0 times. We also returned $76 million to shareholders through share repurchases, achieving the mid point of our target range, and reduced our outstanding shares by 6%.

To grow revenue in existing service lines, we invested $107 million in expansion and upgrade capital(2), which provided for 27 major customer-funded rig upgrades and included two AC Super Triple rigs moved from the U.S. to Canada under long-term contracts. In Canada, we grew our drilling rig market share year over year and maintained strong pricing with revenue per utilization day improving 2%. In the U.S., even with declining industry activity, we improved our rig utilization from a low of 27 active rigs in February to a peak of 40 active rigs in October and exited the year with 36 active rigs. During the year, we continued to expand our EverGreenTM product offering across our Super Series fleet and increased our EverGreenTM revenue by 22% year over year.

Demand for our services remains robust, as our High Performance, High Value strategy, underpinned by our Super Series rigs, AlphaTM technologies, EverGreenTM suite of environmental solutions, and people, continues to differentiate our services and support sustainable value creation for customers and shareholders alike.

With a robust cash flow outlook, we plan to reduce debt by another $100 million in 2026 while allocating up to 50% of our free cash flow, before debt principal payments, directly to shareholders.

(1) See Financial Measures and Ratios on page 44 of this report.

(2) See Supplementary Financial Measures on page 45 of this report.

This Management’s Discussion and Analysis (MD&A) contains information to help you understand our business and financial performance. Information is as of March 6, 2026, unless otherwise stated. This MD&A focuses on our Consolidated Financial Statements and Notes and includes a discussion of known risks and uncertainties relating to our business and the oilfield services sector.

You should read this MD&A with the accompanying audited Consolidated Financial Statements and Notes, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and with information contained in the Cautionary Statement About Forward-Looking Information and Statements on page 43. In this MD&A, we reference certain Non-Generally Accepted Accounting Principles (Non-GAAP) financial measures and ratios that are not defined terms under IFRS to assess our performance as we believe they provide useful supplemental information to investors. Non-GAAP financial measures and ratios do not have a standardized meaning under IFRS and might not be comparable to similar financial measures disclosed by other issuers. Our Non-GAAP financial measures and ratios are defined on page 44.

The terms we, us, our, Corporation, Company, Precision and Precision Drilling mean Precision Drilling Corporation and our subsidiaries and include any partnerships of which we are a part.

All amounts are in Canadian dollars unless otherwise stated.

BUSINESS SEGMENTS

We have two business segments, Contract Drilling Services and Completion and Production Services, which share business support systems and corporate and administrative services.

Precision Drilling Corporation Contract Drilling Services Drilling Rig Operations Canada U.S. International Directional Drilling Operations Canada Completion and Production Services Canada and U.S. Service Rigs Canada Camps and ing Equipment Rentals Business Support Systems Sales and Marketing Procurement and Distribution Manufacturing Equipment Maintenance and Certification Engineering Corporate Support Information Systems Health, Safety and Environment Human Resources Finance Legal and Enterprise Risk Management

Contract Drilling Services

We provide onshore drilling services to exploration and production companies in the oil and natural gas and geothermal industries, operating in Canada, the U.S., and internationally. In 2025, we were one of the most active drillers in North America, driven by our leading market share in Canada and owning the fourth largest fleet of marketable rigs in the U.S. We also have an international presence with operations in the Middle East. At December 31, 2025, our Contract Drilling Services segment consisted of 184 land drilling rigs, including 95 in Canada, 80 in the U.S., six in Kuwait and three in the Kingdom of Saudi Arabia.

We offer customers access to an extensive fleet of Super Series drilling rigs ideally suited for industrialized development drilling. Our rigs are strategically deployed across the most active drilling regions in North America, including all major unconventional oil and natural gas basins.

Our Super Series drilling rigs are enhanced by our AlphaTM technologies and EverGreenTM suite of environmental solutions. Our AlphaTM technologies drive performance by integrating data insights, human ingenuity, automation consistency and intelligent algorithms, increasing drilling performance and cost efficiencies for our customers. At December 31, 2025, over 90% of our active AC Super Triple and Super Single rigs based in North America were equipped with AlphaTM. Our EverGreenTM suite of environmental solutions bolsters our commitment to reducing the environmental impact of oilfield operations and offers customers products and applications to measure and reduce their Greenhouse Gas (GHG) emissions during drilling operations. We have multiple commercial agreements in place for our EverGreenTM products as over 90% of our active AC Super Triple rigs were equipped with at least one EverGreenTM product at December 31, 2025.

Completion and Production Services

We provide well completion, workover, abandonment, and re-entry preparation services to oil and natural gas exploration and production companies in Canada, along with equipment rentals and camp services. Our well service fleet is strategically located across western Canada and in 2025, we held the industry‑leading Canadian market share with 145 registered rigs, including four held within a partnership with two Indigenous groups. Workovers and abandonments represented approximately 88% of activity, while completions accounted for roughly 12%. During the year, we wound down our U.S. well service operations, selling select assets and mobilizing others into the Canadian fleet.

We also support customers through our rentals and camp services, with more than 2,100 pieces of equipment, including surface equipment, wellsite accommodations, power generation units, and solids control equipment, all supported by a central technical service center. Our camp services provide food and accommodation for workers in remote locations, operating eight drill camps and four dormitory facilities at year‑end 2025. These services play an essential role in supporting drilling and completions activity as operators continue to explore and develop resources in remote areas.

Production Ad

strategic priorities

Our 2025 strategic priorities focused on generating free cash flow, continuing to strengthen our financial position with debt repayments, increasing our direct capital returns to shareholders, and delivering operational excellence with our High Performance, High Value services to strengthen our competitive position and extend market penetration of our AlphaTM and EverGreenTM products. We successfully delivered on each of these priorities in 2025 and our results are summarized in the table below.

We have established the following strategic priorities for 2026:

ENERGY INDUSTRY OVERVIEW

Precision operates in the energy services business. Our primary customers are oil and natural gas exploration and production companies, who contract our services as part of their exploration and development activities. The economics of their upstream businesses are largely dictated by the current and expected future margin between their finding and development costs and the eventual market price for the commodities they produce: crude oil, natural gas, and Natural Gas Liquids (NGLs).

Commodity Prices

Our customers’ capital expenditures for exploration and development are largely dependent on current and expected future prices of crude oil and natural gas. Crude oil is generally priced in a global market that is influenced by an array of economic and political factors. Natural gas is generally priced more regionally and, in North America, largely depends on the weather. Colder winter temperatures, and to a lesser extent, warmer summer temperatures, result in greater natural gas demand. Beyond heating and cooling, natural gas demand has become increasingly sensitive to Liquefied Natural Gas (LNG) production and domestic natural gas-fired power generation. Both commodities have historically been, and we expect them to continue to be cyclical and highly volatile.

Historically, there has been a strong correlation between crude oil and natural gas prices and the demand for drilling rigs with the rig count increasing and decreasing with movements in commodity prices. However, beginning in 2021, rig activity has not moved in tandem with crude oil prices to the same extent it has historically, as a large portion of our customers instituted and adhered to a more disciplined approach to their operations and capital spending in order to enhance their own financial returns.

Average Oil and Natural Gas Prices

Drilling Activity

In 2025, global energy demand growth was tempered by several geopolitical events including OPEC+ easing of curtailments, trade and tariff uncertainty, international conflicts, and concerns over excess supply. In the U.S., West Texas Intermediate (WTI) fell 14%, averaging US$64.81 per barrel compared to US$75.73 in 2024. In contrast, Henry Hub natural gas prices increased 51% and averaged US$3.63 per MMBtu as demand is expected to increase with the build out of LNG projects and AI data centers. Canadian and U.S. producers remained focused on capital discipline and shareholder returns versus production growth and as a result, average drilling activity decreased in both Canada and the U.S. in 2025.

According to Baker Hughes, the onshore Canadian average active rig count in 2025 decreased approximately 5% year over year. The Canadian Association of Energy Contractors (CAOEC) reported on December 1, 2025, that approximately 5,500 wells were expected to be drilled in 2025, compared with 5,800 in 2024 and 5,400 in 2023. In the U.S., Baker Hughes reported the onshore Lower 48 rig count average for 2025 was 6% lower than 2024. In early 2026, Enverus reported that approximately 13,400 wells were started onshore in the U.S. in 2025, compared with approximately 14,800 in 2024 and 16,100 in 2023. In Canada, drilling activity is supported by strong fundamentals from pipeline capacity including the Trans Mountain expansion pipeline which was completed in 2024 providing additional take away capacity and improved Western Canadian Select (WCS) pricing for oil, and the start-up of LNG Canada in mid-2025 providing additional natural gas takeaway capacity. While Canadian drilling fundamentals supported additional activity in 2025, tariff and commodity price uncertainty tempered producers' drilling plans. In the U.S. drilling activity continued to weaken throughout 2025 due to oil and natural gas price volatility, exacerbated by drilling and completion efficiencies. In both Canada and the U.S., producers continue to prioritize capital discipline and returns to shareholders over production growth.

The following graphs show oil and natural gas drilling activity since 2021, in both the U.S. and Canada. The Canadian drilling rig activity graph also shows the seasonality of the Canadian drilling activity which fluctuates with spring breakup, a market dynamic that generally is not present in the U.S.

Competition

The land drilling industry is highly competitive, with technology increasingly differentiating the market as customers have transitioned to increasingly complex directional and horizontal drilling programs. These wells require higher capacity rigs, which typically include AC power, digital control systems, integrated top drives, pad walking systems, highly mechanized pipe handling equipment, and high capacity mud pumps. These rigs are referred to as Super Specification (Super-Spec). Consequently, the rig market has been shedding older, low-technology rigs in favour of these Super-Spec rigs.

In Canada, the top four land drillers own virtually all of these Super-Spec rigs, while in the U.S., the top five land drillers own the majority of these rigs.

Drilling Contracts

We market our drilling rigs mainly on a regional basis through sales and marketing personnel. We secure contracts to drill wells either through competitive bidding or as a result of business development efforts and negotiations with customers. Our drilling contracts provide for payment on a daywork basis, pursuant to which we provide the drilling rig and crew to the customer. The customer provides the drilling program and is responsible for managing the downhole operation. Our compensation is based on a contracted rate per day (day rate) during the period the drilling rig is utilized, and several of our contracts also include performance-based compensation clauses. Generally, we do not bear any of the costs arising from downhole risks or loss of oil and natural gas reserves.

Products and services provided by our Alpha™ technologies and EverGreen™ suite of environmental solutions earn revenue that is incremental to the contracted day rate.

Seasonality

Drilling and well servicing activity is affected by seasonal weather patterns and ground conditions. In Canada and the northern U.S., wet weather and the spring thaw make the ground unstable resulting in road restrictions that may limit the movement of heavy oilfield equipment and reduce the level of drilling and well servicing activity primarily during the second quarter of the year. In Canada, some drilling sites can only be accessed in the winter once the terrain is frozen, which usually begins late in the fourth quarter. Our business activity depends, in part, on the severity and duration of the winter drilling season. In recent years, however, many of our customers have shifted to working through the seasonal low depending on their specific drilling program. This has been enabled in part by our highly mobile fleet, namely our Super Triples and Super Singles, upgraded to allow for optimized pad drilling. Our customers historically drilled approximately 250 days per year in Canada, however with advancements in rig design and technology many of our rigs now drill more than 300 days per year.

COMPETITIVE OPERATING MODEL

The core of our competitive strategy lies in our commitment to provide High Performance, High Value services to our customers. We deliver High Performance through the dedication of our passionate people bolstered by our robust business systems, cutting-edge drilling technology, quality equipment and infrastructure designed to optimize results and mitigate risks. We create High Value by prioritizing safety and sustainability, thereby reducing risks and costs to our customers while enhancing efficiency, developing our people and striving to generate superior financial returns for our investors.

Employees

Our people strategies focus on initiatives that provide a safe and productive work environment, opportunities for advancement, and strong wage security. In 2025, we employed an average of 5,007 people, with a peak workforce of 5,245. Even with a competitive labor market, our safety performance, training programs, and industry reputation help us attract and retain experienced talent during periods of high activity.

Talent Management

We are committed to recruiting and developing high-performing employees across both field and corporate roles. We maintain competitive compensation, strong recruitment practices, and robust talent management systems to build a capable, well‑trained workforce through all market cycles. Our Talent Management and Field Training & Development teams leverage innovative technology platforms and in‑house expertise to deliver comprehensive learning opportunities and maintain a strong leadership pipeline.

Employee Safety and Training

Safety is embedded in every aspect of our operations, supporting our commitment to deliver High Performance, High Value services without compromising employee well‑being. In 2025, 1,760 field employees completed nearly 50,000 hours of development, supplemented by over 16,100 hours of on‑site coaching. Our Short Service Employee program supported 624 new workers with mentorship and 17,000 hours of instruction, while corporate and field leaders participated in 125 hours of leadership training. Employees also completed more than 3,500 hours of online learning through our Learning Management Systems (LMS) and external platforms.

Technology and Innovation

Precision's long-standing commitment to technology and innovation leadership has shaped the evolution of our Super Series rig designs. Beginning with our Super Single rig in the early 1990s, purpose-built for long-term conventional heavy oil development in the oil sands and other heavy oil plays, we expanded the portfolio in 2010 with the Super Triple rig, now the preferred rig in Canada's Montney and well suited for large pad horizontal drilling in the U.S. Our Super Series fleet meets or exceeds the industry term Super-Spec and as of December 31, 2025, our global fleet of 184 rigs included 48 Super Single rigs and 105 AC Super Triple rigs.

Precision’s Alpha™ platform further modernizes drilling by integrating digital automation and real‑time analytics, now active on 78 rigs across North America. Through AlphaAutomation™, AlphaApps™, and AlphaAnalytics™, we reduce human error, improve consistency, and enhance operational efficiency across multiple basins. In 2024, we expanded these capabilities with the first Super Triple rig equipped with AlphaArms™ robotics, automating more than 95% of rig floor activities to improve safety and productivity while supporting crews with advanced, human‑complementary technology.

Complementing our automation initiatives, is our EverGreen™ suite of environmental solutions that include a diverse range of technologies specifically designed to quantify and reduce GHG emissions during rig operations. In 2022, we commissioned our Battery Energy Storage Systems (BESS) and fuel monitoring system for our AC Super Triple rigs, and in 2024 we extended our EverGreenTM product offerings to our Super Single rigs with LED mast lighting and hydrogen enabled power generation systems. EverGreen™ products were installed on approximately 80% of our AC Super Triple rigs by year‑end 2025. These advancements reaffirm Precision’s commitment to innovation, operational excellence, and responsible energy development.

Diversity and Respect

Delivering strong operational and financial results in today’s environment requires the expertise and positive contributions of every Precision employee. We are committed to developing a diverse range of thoughts, experiences, and points of view to complement our strategy and decision-making processes. Precision is an inclusive workplace that strives to be free of discrimination, harassment, workplace violence, and retaliation. Our policies prohibit discrimination of any kind and promote diversity and respect among our employees, management, and Board of Directors (Board).

Contracts

Term customer contracts provide a base level of activity and revenue. In 2025, we had an average of 43 drilling rigs working under term contracts: 17 in the U.S., 19 in Canada and seven internationally. Utilization days from these contracts represented approximately 40% of our total contract drilling utilization days for the year. As of March 6, 2026, we had term contracts in place for an average of 34 rigs: nine in the U.S., 18 in Canada and seven internationally for 2026. In most regions in the U.S. and internationally, term contracts normally generate 365 utilization days per rig year. In Canada, term contracted rigs normally generate 250-300 utilization days per rig year because of the seasonal nature of wellsite access.

Pricing, Demand and Utilization

Near-term expectations for global energy demand growth remain tempered by persistent geopolitical and economic uncertainties. However, this narrative has started to soften as demand indicators stabilize, particularly in natural gas markets, where accelerating LNG supply growth and strengthening consumption in key regions, including Asia and Europe, are expected to support a more constructive demand outlook in 2026.

Looking further ahead, we believe the long‑term fundamentals for energy remain favorable, underpinned by economic expansion, rising energy needs from emerging economies, and sustained global appetite for LNG, driven by the continued build‑out of LNG infrastructure and trade flows. Additionally, natural gas‑fired power generation is poised for multi-year structural growth as data centers scale rapidly to meet AI driven electricity demand.

In Canada, constructive commodity prices for heavy oil and condensate, plus additional takeaway capacity for both oil and natural gas continue to support Canadian activity. LNG Canada made its first shipment at the beginning of July and as customers take a long-term view of this business, demand for our Super Triple rigs is near full capacity. The Trans Mountain pipeline expansion continues to support improved pricing and heavy oil production, driving our Super Single rig utilization toward full capacity. We expect our winter drilling season activity to exceed last year's levels.

In the U.S., while volatile WTI oil prices and drilling efficiencies continue to suppress oil-targeted rig activity, the natural gas rig count increased approximately 20% in 2025 as customers became more constructive on LNG off-take and AI demand. We capitalized on these emerging opportunities in natural gas basins such as the Haynesville and Marcellus and increased our U.S. drilling rig utilization days 25% over the last nine months of 2025. We continue to have encouraging customer conversations that could result in additional activity increases in 2026.

Internationally, we currently have seven active rigs, including four in Kuwait and three in the Kingdom of Saudi Arabia, supported by contracts that extend into 2027 and 2028. In early 2026, one Kuwait rig was demobilized and activity was backfilled by reactivating our rig in Saudi Arabia that had been temporarily suspended in 2025. While our Saudi Arabia rig generates a lower

operating margin, this transition maintains overall utilization levels in 2026. We continue to seek opportunities to increase our international utilization by pursuing long‑term, contract‑backed investments.

As the premier well service provider in Canada, the long-term outlook for this business is positive, driven by increased takeaway capacity from the Trans Mountain pipeline expansion and LNG Canada, and our High Performance, High Value service offering. We expect customer demand and pricing to remain strong into the foreseeable future, assuming no significant change in market conditions.

High Performance Rig Fleet

The industry trend toward more complex drilling programs has accelerated the retirement of older generation, less capable drilling rigs. Over the past several years, we have been upgrading our drilling rig fleets primarily through the upgrade of existing rigs and the decommissioning of lower capacity rigs. Expansion and upgrade capital includes the cost of long-lead items purchased for our capital inventory, such as integrated top drives, drill pipe, control systems, engines, and other items used to complete new-build projects or upgrade our rigs in North America and internationally. In more recent years, drilling rigs have been equipped with automation systems and emission reduction technologies to further drive time and cost efficiencies and improve environmental performance in the well construction process. We believe this retooling of the industry-wide fleet has made legacy rigs virtually obsolete in North America. In 2025, as part of our regular review of our drilling rig fleet to ensure they continued to meet our advanced technology and performance standards, we decommissioned 31 marketable drilling rigs that no longer aligned with those requirements.

Capital Spending and Free Cash Flow Allocation

Capital spending in 2026 is expected to be $245 million and capital spending by spend category(1) includes $182 million for maintenance, infrastructure, and intangibles and $63 million for expansion and upgrades. We expect to spend $221 million in the Contract Drilling Services segment, $21 million in the Completion and Production Services segment and $3 million in the Corporate and Other segment. The 2026 capital plan may fluctuate with activity levels and customer contract upgrade opportunities. At December 31, 2025, we had capital commitments of $153 million with payments expected through 2027.

We remain committed to our debt reduction plans in 2026 and expect to reduce debt by $100 million, positioning us one step closer to our long-term target of reducing debt by $700 million between 2022 and 2027 and achieving a sustained Net Debt to Adjusted EBITDA ratio of below 1.0 times. In 2026, we intend to allocate up to 50% of free cash flow before debt repayments to share repurchases.

(1) See Financial Measures and Ratios on page 44 of this report.

Financial Highlights

(1) See Financial Measures and Ratios on page 44 of this report.

Operating Highlights

(1) The service rig fleet and service rig operating hours exclude our U.S. operations that we wound down in second quarter of 2025.

Financial Position and Ratios

(1) See Financial Measures and Ratios on page 44 of this report.

(2) Net of unamortized debt issue costs.

(3) See page 23 for more information.

Consolidated Statements of Net Earnings Summary

(1) See Financial Measures and Ratios on page 44 of this report.

Results by Geographic Segment

2025 COMPARED WITH 2024

In the U.S., WTI oil prices averaged US$64.81 per barrel and Henry Hub natural gas prices averaged US$3.63 per MMBtu, representing a 14% decrease and a 51% increase from 2024, respectively. In Canada, WCS oil and AECO natural gas prices averaged US$53.88 per barrel and $1.69 per MMBtu in 2025. AECO pricing increased by 22% year over year, while WCS declined by 12%. Despite this commodity price volatility, Precision's operating performance has become less correlated with price movements than in the past, reflecting customers' increasingly disciplined approach to operations and capital allocation, focused on enhancing returns and cash flow durability.

Revenue for the year was $1,844 million, representing a 3% decrease from $1,902 million in 2024. Our 2025 revenue was negatively impacted by lower U.S. drilling activity and day rates and lower U.S. completions activity as we wound down our U.S. well service operations in the second quarter of 2025.

We recognized Adjusted EBITDA in 2025 of $490 million versus $521 million in 2024. The decrease was primarily driven by lower U.S. drilling activity, which was partially offset by lower share-based compensation expense of $24 million compared to $47 million in 2024. Our Net Debt to Adjusted EBITDA ratio was 1.2 times, slightly above our target of 1.0 times set at the end of 2022, due to foreign exchange impacts, as the weakened Canadian dollar increased the translated value of our U.S. dollar denominated debt.

Net earnings attributable to shareholders was $3 million or $0.14 per share compared to $111 million or $7.81 per share in 2024. The decrease was due to lower Adjusted EBITDA, decommissioning charges of $67 million, change in useful life estimates resulting in additional depreciation expense of $17 million, and higher deferred income taxes related to our U.S. operations, partially offset by lower finance charges.

Debt Repayments and Shareholder Returns

In 2025, we reduced debt by $101 million, redeeming $222 million (US$160 million) of 2026 unsecured senior notes, while drawing $122 million on our Senior Credit Facility, compared to a reduction of debt in 2024 of $176 million.

Pursuant to our NCIB in 2025, we repurchased and cancelled 1,024,002 common shares for $76 million and in 2024, we repurchased and cancelled 833,614 common shares for $75 million.

Finance Charges

Finance charges were $57 million and decreased $13 million as a result of our lower outstanding debt, partially offset by the impact of the weakening Canadian dollar on our U.S. dollar-denominated interest expense.

Capital Spending and Long-Lived Assets

Capital expenditures for the purchase of property, plant and equipment were $263 million and included $157 million for maintenance, infrastructure, and intangible assets, and $107 million for upgrades, including 27 major rig upgrades. By comparison, in 2024 capital expenditures were $217 million and included $165 million for maintenance, infrastructure, and intangible assets, and $52 million for upgrades. The overall $47 million increase was driven by strong demand for customer-funded upgrades, offset in part by reduced maintenance expenditures due to lower U.S. and international activity.

Through the completion of normal course business operations, we sold non-core assets for proceeds of $39 million resulting in a gain on asset disposal of $9 million.

In accordance with IFRS, we review the carrying value of our long-lived assets for indications of impairment at the end of each reporting period. At December 31, 2025, we reviewed each of our Cash-Generating Units (CGU) and did not identify indications of impairment and, therefore, did not test our CGUs for impairment.

Drill Pipe 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 $17 million (2024 - nil).

Loss on Asset Decommissioning

In 2025, we decommissioned 31 of our 215 marketable drilling rigs that were no longer aligned with Precision's advanced technology and performance standards, resulting in a loss on asset decommissioning of $67 million (2024 - nil).

Income Taxes

In 2025, we recognized an income tax expense of $53 million, an increase of $10 million from 2024. A significant portion was related to a higher deferred income tax expense related to our U.S. operations as we waived certain U.S. tax deductions to mitigate minimum taxes that the Corporation became subject to as a result of stronger operating results. We continue to not recognize deferred income tax assets for certain international locations.

Partnership

Precision holds a controlling interest in our well servicing partnership with two Indigenous groups. The share of net earnings and equity not attributable to Precision's controlling interest are shown separately as Non-Controlling Interests (NCI) in the Consolidated Statements of Net Earnings and Consolidated Statements of Financial Position. In 2025, net earnings attributable to NCI was $1 million (2024 - nil).

2024 COMPARED WITH 2023

In the U.S., 2024 WTI oil prices averaged US$75.73 per barrel and Henry Hub natural gas prices averaged US$2.41 per MMBtu, representing decreases of 2% and 10% from 2023, respectively. In Canada, WCS and AECO natural gas prices averaged US$61.24 and $1.39 in 2024, respectively. Average WCS pricing was 4% higher than 2023 while AECO decreased by 47%.

As compared with 2023, our revenue decreased by 2% to $1,902 million. Our lower revenue in 2024 was primarily the result of decreased drilling activity and lower revenue per utilization day rates in the U.S., partially offset by stronger Canadian drilling and well service and international activity.

We recognized Adjusted EBITDA in 2024 of $521 million, 15% lower than 2023. Our lower Adjusted EBITDA in 2024 was primarily due to decreased U.S drilling results and higher share-based compensation charges, partially offset by stronger Canadian and international activity.

As compared with 2023, our U.S. drilling activity decreased 28%, Canadian activity increased 12% and international activity increased 37%. Our service rig operating hours in 2024 increased 28% as compared with 2023.

Net earnings attributable to shareholders was $111 million or $7.81 per share compared to $289 million or $21.03 per share in the prior year. Our lower net earnings in 2024 was due to the impact of decreased U.S. drilling results, higher income tax expense of $67 million and the gain on acquisition of $26 million recognized in 2023.

Debt Repayments and Shareholder Returns

In 2024, we reduced debt by $176 million, comprised of US$113 million of 2026 unsecured senior note redemptions and the repayment and termination of our Canadian and U.S. Real Estate Credit Facilities for $38 million, partially offset by US$12 million of drawings on our Senior Credit Facility.

Pursuant to our NCIB in 2024, we repurchased and cancelled 833,614 common shares for $75 million.

Finance Charges

Finance charges were $70 million as compared with $83 million in 2023. Our decreased finance charges in 2024 were the result of our lower interest expense on our outstanding debt balance.

Capital Spending and Long-Lived Assets

Our 2024 capital expenditures for the purchase of property, plant and equipment were $217 million, a decrease of $10 million from 2023. Capital spending by spend category included $52 million for expansion and upgrades and $165 million for the maintenance of existing assets, infrastructure and intangibles. Capital expenditures were $7 million higher than guidance due to the timing of the strategic purchase of drill pipe before new import tariffs took effect and additional customer-backed upgrades.

Through the completion of normal course business operations, we sold non-core assets for proceeds of $30 million resulting in a gain on asset disposal of $16 million for the year ended December 31, 2024.

At December 31, 2024, we reviewed each of our CGUs and did not identify indications of impairment and, therefore, did not test our CGUs for impairment.

Income Taxes

In 2024, we recognized an income tax expense of $43 million as compared with an income tax recovery of $23 million in 2023. During the fourth quarter of 2023, we recorded a deferred income tax asset of $73 million for the expected future use of certain Canadian operating losses. We continue to not recognize deferred income tax assets for certain international locations.

Partnership

In 2024, Precision formed a partnership with two Indigenous partners to provide well servicing operations in northeast British Columbia. Precision contributed $4 million in assets to the partnership. Net earnings attributable to NCI was nil in 2024.

SEGMENTED RESULTS

Contract Drilling Services

Financial Results

(1) See Financial Measures and Ratios on page 44 of this report.

Operating Statistics

2025 Compared with 2024

Revenue from Contract Drilling Services was $1,576 million compared to $1,618 million in 2024 due to lower North American and international drilling activity. Commodity price volatility, trade and tariff uncertainty, and a focus on customer capital discipline resulted in lower industry activity in both Canada and the U.S. in 2025. Internationally, in May 2025, one drilling rig was temporarily suspended in the Kingdom of Saudi Arabia, reducing our active rig count to seven for the remainder of the year. During the fourth quarter of 2025, we incurred costs to reactivate this rig, which began operating in early February 2026.

Operating expenses in 2025 were 66% of segment revenue compared to 64% in the prior year as we reactivated 17 drilling rigs in the U.S. during the year.

General and administrative expenses for 2025 were largely consistent with 2024 and included share-based compensation of $3 million in 2025 compared with $4 million in 2024.

Our Adjusted EBITDA was $489 million in 2025 as compared with $532 million in 2024, primarily due to lower drilling activity.

Canadian Drilling

Revenue from Canadian drilling was $823 million and similar to 2024 as drilling rig activity and revenue per utilization day remained largely consistent. Demand for our AC Super Triple and Super Single rigs was robust in 2025 and we increased our drilling rig market share even though average industry activity declined 5%.

Adjusted EBITDA in 2025 was consistent with the prior year.

Drilling Statistics – Canada

We ended the year with a Canadian rig count of 95. Our average active rig count decreased to 63 rigs in 2025, down from 65 rigs in 2024, and was consistent with decreased industry activity as the average active land rigs decreased from 186 to 176.

(1) Source: Baker Hughes.

U.S. Drilling

Revenue from U.S. drilling was US$391 million compared to US$422 million in 2024 due to lower drilling rig utilization and revenue per utilization day. Drilling rig utilization fell by 4% compared to the U.S. average industry activity which decreased by 6% year over year. With declining activity, revenue per utilization day compressed.

Adjusted EBITDA was 22% lower than 2024 as a result of lower drilling activity and day rates and additional rig reactivations in 2025. Even with declining industry activity, we improved our rig utilization from a low of 27 in February, reactivating several rigs to reach a peak of 40 in October and exited 2025 with 36 active rigs.

Drilling Statistics – U.S.

We ended the year with a U.S. rig count of 80. We averaged 34 rigs working in 2025, down from 36 rigs in 2024 and consistent with decreased industry activity as the average active land rigs decreased from 580 to 545.