PDS Notes:

Q3 Report 10/23/08

• Net earnings of $82m – 0.62 per unit – up 13% from Q3 2007

  • First time since Q4 2006 EPS has been > previous year

• Organic rig expansion in US and rebound in Canada activity

  • Increase of 2,440 operating days

• Canadian drilling fleet @220 rigs – operating days up 14% from last year.

  • Will be adding 19 new builds to fleet, 17 of which already under customer contracts

• Organizational changes and cost reduction measures from late last year will help weather economic storm

• Intention to purchase Grey Wolf will accelerate N. America growth plans

• Long-term debt $232m (Canadian) vs. 124m last year

• 8/25 Announced definitive agreement to acquire Grey Wolf for $5.00 plus $0.1883 PDS

  • 8/24 entered arrangement to fund deal through debt structure with four lenders

• 8/31 – non-compete agreement expired which allows PDS to fully pursue N. America expansion

• Spot market pricing for rigs has firmed

• Average daily rig rates essentially flat from last year

• Trend towards directional and horizontal drilling programs provides opportunity

• On schedule for 2008 Capex $290 (75m for upgrades, 215m for expansion)

  • Additional $130m in 2009 to finish expansion program

• Rig bookings for 2008-09 winter remain above last years levels

• Existing storage levels marginally lower than last year and prices roughly even with last year so demand should be stable

• Undrawn debt facilities provide access to $500m

Motley Fool Article Oct 24

• Precision Drilling Trust (PDS was in Canada but has moved sout to US

  • Company has 28 rigs I US – up from 17 last quarter

• Company also drills horizontally – demand for horizontal and directional drilling continues to grow

  • 70% of its Canadian rigs and 80% of its US rigs drill this way

  • Unconventional rigs increase days drilling per well – adds to revenue

  • But average meters per well showing company is efficient.