TSX PD - Un 2000

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Precision
Drilling
Corporation
Canadian eh...
2000
Annual Report
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OUR GUIDANCE AND SUPPORT
This year’s annual report celebrates 15 years of robust growth for

Precision. It focuses on the critical goals we have set and met over the
last year and the factors crucial to the continued growth of our
company.
It is no accident that today, Precision is at the forefront of the

drilling and service industry in Canada and making inroads globally.
Our achievement is the result of a decade of hard work, careful
planning, bold strategic moves and, as in any business, some good
fortune.
Precision Drilling Corporation is an international oilfield services Our Officers: from left to right Michael J. McNulty, Vice President Finance; Hank B. Swartout, Chairman,
President and Chief Executive Officer; W. Bruce Herron, Senior Vice President Rental and Production
company. In a 15 year span, Precision has grown from a three rig Services; Dale E. Tremblay, Senior Vice President Finance and Chief Financial Officer; Jan M. Campbell,
Corporate Secretary; Larry J. Comeau, Senior Vice President Oilfield Speciality Services.
drilling contractor in western Canada, with $4 million in revenue to
a multi-service international oil and gas service company with
revenues exceeding $1.3 billion. Through a series of targeted
acquisitions, the Corporation has expanded its suite of services and
now provides them on five continents.
In its steadfast pursuit of operational excellence in every endeavour,

Precision has emerged in this, a new millennium, as a strong and
tenacious competitor. We are well positioned to provide innovative
technology, unparalleled service and dedicated support to our
customers worldwide. We are committed to sustained strength and
profitability – enterprise wide – for the benefit of all shareholders. Our Board of Directors: from left to right back row W. C. (Mickey) Dunn; Murray K. Mullen; Brian E.
Roberts; H. Garth Wiggins; Robert J. S. Gibson. Seated front row Hank B. Swartout; Steven C. Grant.
PRECISION DRILLING CORPORATION 2000 ANNUAL REPORT PRECISION DRILLING CORPORATION CANADIAN
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...with a global presence

Lithuania
France Netherlands Germany Switzerland Austria Hungary Italy Turkey
Greece
UK
Russia
China
Russia
Canada UK Netherlands
Germany
Switzerland
France Austria Lithuania Kazakhstan
USA Kazakhstan
Italy Hungary
Turkmenistan
USA Greece India
Turkey China
Tunisia Syria
Mexico Egypt Saudi UAE India Bangladesh
Arabia
Mexico Oman Vietnam
Yemen Thailand
Nigeria
Bangladesh
Venezuela
Colombia
Indonesia
Venezuela
Brazil
Bolivia
Australia
Australia
Bolivia
Argentina Vietnam
Brazil Thailand
Colombia
Indonesia
Argentina Nigeria Syria Oman

Egypt Tunisia Yemen UAE
Turkmenistan
Saudi Arabia
IN THIS ANNUAL REPORT
... with a global presence ❚ Page 1 How We’ve Done This Year ❚ Page 2 Disclosure Matters ❚ Page 4
Tab 1 ❚ GROWING — Report of the Chief Executive Officer ❚ Page 5
Tab 2 ❚ DIVERSE — Operating Matters: Our knowledge, products and services and skill sets ❚ Page 13
Tab 3 ❚ I N V O LV E D — Our role in the workplace, environment and our communities ❚ Page 31
Tab 4 ❚ SOLID — Financial Matters: MD&A and our consolidated financial statements and notes ❚ Page 39
Tab 5 ❚ CANADIAN – How we’ve done historically, who we are and where to find us ❚ Page 73
PRECISION DRILLING CORPORATION GLOBAL PRESENCE 1

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HOW WE’VE DONE THIS YEAR
FINANCIAL PERFORMANCE SUMMARY
(Stated in thousands of dollars, except per share amounts which are presented on a fully diluted basis)
Years ended December 31, 2000 1999 % Change
Revenue $ 1,355,453 $ 734,740 84
Operating earnings 260,845 117,494 122
(1)
Cash flow 297,873 100,036 198
Per share 5.69 2.13 167
Earnings before goodwill amortization 154,321 50,081 208
Per share 2.98 1.09 173
Net earnings 131,560 34,250 284
Per share 2.55 0.76 236
Shareholders’ equity 1,206,895 908,795 33
Per share 23.08 19.27 20
(2)
Net capital expenditures 180,484 41,148 339
Long-term debt 548,096 226,815 142
Number of shares outstanding, end of year (000’s) 52,283 47,163 11
(1) Funds provided by operations
(2) Excludes acquisitions
THE TRACK RECORD
Share Performance TSE Share Performance NYSE Value of Shares Outstanding

Up 52% over 1999 Up 46% over 1999 Up 69% over 1999
$ Millions
3500 PDS
350 3000
PD S&P 500
TSE 300 OSX
3000 300 2500
2500 250
2000
2000 200
1500
1500 150
1000
1000 100
500 50 500
0 0 0
90 91 92 93 94 95 96 97 98 99 99 00 97 98 99 99 00 93 94 95 96 97 98 99 99 00
April 30 Dec. 31 April 30 Dec. 31 April 30 Dec. 31
2 PRECISION DRILLING CORPORATION SUMMARIES

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HOW WE’VE DONE THIS YEAR
QUARTERLY RESULTS SUMMARY
Year ended December 31, 2000 Q1 Q2 Q3 Q4 Total
Revenue $ 384,400 $ 223,812 $ 303,354 $ 443,887 $ 1,355,453
Operating earnings 93,847 24,131 48,141 94,726 260,845
(1)
Cash flow 107,148 35,096 56,092 99,537 297,873
Per share 2.10 0.68 1.09 1.82 5.69
Earnings before goodwill amortization 49,573 11,136 23,453 70,159 154,321
Per share 0.98 0.23 0.46 1.31 2.98
Net earnings 45,291 6,835 16,903 62,531 131,560
Per share 0.90 0.14 0.34 1.17 2.55
Year ended December 31, 1999 Q1 Q2 Q3 Q4 Total

Revenue $ 193,855 $ 98,134 $ 185,081 $ 257,670 $ 734,740
Operating earnings 41,259 4,766 25,802 45,667 117,494
(1)
Cash flow 2,489 7,692 39,606 50,249 100,036
Per share 0.06 0.18 0.85 1.04 2.13
Earnings before goodwill amortization 12,779 5,454 11,797 20,051 50,081
Per share 0.29 0.13 0.25 0.42 1.09
Net earnings 9,057 1,849 7,643 15,701 34,250
Per share 0.21 0.05 0.16 0.34 0.76
(1) Funds provided by operations
THE TRACK RECORD
Gross Revenue Cash Flow Net Earnings

Up 84% over 1999 Up 167% over 1999 Up 236% over 1999
$ Millions Dollars per share fully diluted Dollars per share fully diluted
1500 8 3.0
7
2.5
1200
6
2.0
5
900
4 1.5
600
3
1.0
2
300
0.5
1
0 0 0.0
93 94 95 96 97 98 99 99 00 93 94 95 96 97 98 99 99 00 93 94 95 96 97 98 99 99 00
April 30 Dec. 31 April 30 Dec. 31 April 30 Dec. 31
PRECISION DRILLING CORPORATION SUMMARIES 3

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DISCLOSURE
DISCLOSURE REGARDING FORWARD–LOOKING STATEMENTS
Certain statements contained in this annual report, including statements which may contain words such as “could”,
“should”, “expect”, “believe”, “will” and similar expressions and statements relating to matters that are not historical facts are
forward-looking statements including statements as to: future capital expenditures, including the amount and nature thereof; oil
and gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy; expansion and
growth of the Corporation’s business and operations, including the Corporation’s market share and position in the domestic and
international drilling markets; and other such matters.
These statements are based on certain assumptions and analyses made by the Corporation in light of its experience and its
perception of historical trends, current conditions and expected future developments as well as other factors it believes are
appropriate in the circumstances. However, whether actual results and developments will conform with the Corporation’s
expectations and predictions is subject to a number of risks and uncertainties which could cause actual results to differ materially
from the Corporation’s expectations, including: fluctuations in the price and demand of oil and gas; fluctuations in the level of
oil and gas exploration and development activities; fluctuations in the demand for well servicing, contract drilling and ancillary
oilfield services; the existence of competitors, technological changes and developments in the oil and gas industry; the ability of
oil and gas companies to raise capital; the effects of severe weather conditions on operations and facilities; the existence of
operating risks inherent in the well servicing, contract drilling and ancillary oilfield services; political circumstances impeding the
progress of work in any of the countries in which the Corporation does business; identifying and acquiring suitable acquisition
targets on reasonable terms; general economic, market or business conditions; changes in laws or regulations, including taxation,
environmental and currency regulations; the lack of availability of qualified personnel or management; and other unforeseen
conditions which could impact on the use of services supplied by the Corporation.
Consequently, all of the forward-looking statements made in this report are qualified by these cautionary statements and
there can be no assurance that the actual results or developments anticipated by the Corporation will be realized or, even if
substantially realized, that they will have the expected consequences to or effects on the Corporation or its business or operations.
The Corporation assumes no obligation to update publicly any such forward-looking statements, whether as a result of new
information, future events or otherwise.
4 PRECISION DRILLING CORPORATION DISCLOSURE

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Growing...
1
– big enough to meet

our customers’ needs
– anywhere!
PRECISION DRILLING CORPORATION GROWING 5
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REPORT OF THE CHIEF EXECUTIVE OFFICER
FELLOW SHAREHOLDERS, The delivery in August 2000, of Rig 709, one of our
By almost any measure fiscal 2000 was a great year for our Canadian designed and built Super Single™ drilling rigs to
company. It did not happen by chance. Kazakhstan, illustrates the desirability of our rig technology.
Our multinational client required a fast moving, fast drilling

Fifteen years ago we devised a strategy to build Precision
rig to help it meet its contractual commitments. Rig 709 has
into the premier drilling contractor in Canada. With the
been able to punch down holes in a few days where previous
execution of this strategy well in hand, we expanded our focus
contractors took weeks. In Venezuela, our fleet has expanded
to become the dominant player in the Canadian oilfield
and continues to be highly utilized, again underscoring the
services industry.
yields of our well planned investment in rig technology and
The key ingredients to success were technology, operating
rig management systems.
excellence and motivated people. From drilling rig design to
The same discipline is applied to our Oilfield Specialty
satellite transmission to downhole tools, Precision has
Services segment. Our wireline business developed and
developed a unique product mix. As far back as the late 80’s,
released several new tools, while expanding our open hole
we invested heavily in rig technology. Today that is paying off,
logging activities into the US to complement an established
giving us an efficient, modern and high-tech fleet that is
cased hole operation. Today’s underbalanced drilling (UBD)
second to none in the world. Along with new drilling
technology developed on the plains of southeastern
technology, we added complementary products and services.
Saskatchewan, has found its way to the production platforms
Part and parcel of this strategy was an unshaken commitment
of the southern North Sea. Using Precision’s new offshore
to safety throughout the entire expanding organization to
UBD separation design, our multinational client was able to
protect the employees and assets of both Precision and our
drill and profitably produce a previously unproducible
clients, while reducing costs and improving efficiency.
reservoir. The ultramodern Polar Completions tool facility has
MORE THAN CANADIAN
enabled Precision to win supply contracts from Australasia to
Precision has succeeded in executing this strategy and the Middle East through fast-track tool design and speedy
now is adding a global element to it. We are clearly in the delivery. The Western Canadian Sedimentary Basin (WCSB),
forefront of leading service companies in Canada. But one of the most actively drilled basins, is at the forefront of
through our focus on more exotic drilling technology, we are directional and horizontal activity. As a leader in this market,
now developing a new generation of products and services
that will address clients’ needs around the world.
6 PRECISION DRILLING CORPORATION GROWING

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Precision is exporting its expertise drilling deviated and lateral acquisitions and most importantly, a commitment to
wellbores in new and existing reservoirs in Latin America, the significant research and development. More specifically,
US, Europe and India. Precision last year spent $201.0 million in capital
expenditures (internal growth), $599.4 million on

As our technology becomes more widely accepted, we
believe our customers will take us to even more frontiers. We acquisitions (external growth) and $20.3 million on research
already have a presence in a number of countries around the and development. The total is $820.7 million, not an
world but, to effectively and efficiently deliver all of our inconsequential sum. These investments are bearing great fruit
services under one umbrella, the Oilfield Specialty Services and have positioned our company for what we believe will be
segment has developed an international structure. The significant upside potential.
position of Regional Director of Operations has been Revenues of $1,355.5 million rose $620.7 million or
established for five strategic geographical areas: US, 84% over the prior year. Operating cash flow and net earnings
Europe/Africa, Middle East, Asia Pacific and Latin America. of $297.9 million and $131.6 million were up $197.8 million
Each Regional Director will be located in their area with a or 198% and $97.3 million or 284% respectively over fiscal
local infrastructure to support the various product lines. 1999. Of this revenue growth, 73% was internal and 27%
Our Regional Directors are seasoned oilfield professionals came through acquisitions. It is also noteworthy that our
with experience and knowledge of all active local customers international revenue grew 109% from $119.5 million to
within their regions. $250.3 million while our domestic revenue grew by 80%.
With strong local familiarity, Precision will be able to Contributing to our earnings was a $19.9 million tax
more effectively develop business operations in each of these reduction, which is a result of substantively enacted Federal
geographical areas. Recent acquisitions have already tax changes. This reduction, plus the proposed Provincial tax
contributed to this network creating support services from cuts, are anticipated to have significant positive impact on
which the company can leverage. Precision’s earnings and cash flows in the future. This tax
reform represents the biggest incentive given to business by

RECORD PERFORMANCE
our governments in recent history and creates an environment

The results of fiscal year 2000 clearly reveal how our
for increased corporate profitability.
strategy is evolving. We depend and will continue to depend
on internal organic growth, external growth through

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Our financial success is due only in part to our corporate Our neighbour to the south, the United States, is hungry
prowess. The business environment clearly played a significant for gas. Rotating blackouts in California this winter highlight
role especially as rising oil and gas prices dictated greater a critical electrical shortage in certain areas of the US. The
service activity. Yet, Precision was ready to deliver and absence of new electrical capacity, strangled by the
prepared to capitalize on the business opportunities as they ineffectiveness of deregulation, and compounded by the ever-
presented themselves. increasing electrical demand for the Internet and e-business,
has sparked a flurry of announced additions to the US

OUR OPPORTUNITIES
electrical generation fleet. Analysts predict that over 95% of
We are positive about the continuing prospects for high
these projects will be fired by natural gas, for economic and
levels of both gas and oil exploration and production. We
environmental reasons. US gas consumption is predicted to
possess many of the products, services and technologies that
grow by 26% as we approach the end of the decade.
are in high demand now. The strategies we implemented
several years ago now position the Corporation to leverage off Canada will remain an important source of gas supply for
the strong economic fundamentals. the US and Precision stands to benefit. To meet short-term
demand, producers must develop their current reservoirs. This

Natural gas continues to be a good news story
translates into high utilization, especially for our shallow and
throughout the WCSB. In the last few years, the supply of
medium depth rigs. Our Oilfield Speciality Services and
North American gas has lagged behind the growth in demand.
Rental and Production business segments will also experience
The low oil price environment of 1997-98 reduced the cash
high activity levels. Producers in their search for new, longer-
flows of producers and contributed to curtailing gas drilling
life and more productive reservoirs will move west and north
activity. There was always the incentive for consumers to want
to drill deeper. With more than half the deep rigs in Canada,
“clean” natural gas as a fuel but there was little incentive to
Precision will capitalize on this shift to deeper gas drilling.
produce it at then prevailing prices. There were few new
utilities coming on stream even as the demand for natural gas The gas reserves of the Mackenzie Valley and other
grew and steeper decline curves appeared for reserves. This northern gas basins are another important source of supply for
implies a tight supply for natural gas for some time to come. burgeoning North American demand. Our participation with
Mackenzie Delta Integrated Oilfield Services, an Inuvialuit
company, qualifies Precision as one of the only two drilling

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contractors able to drill in the Canadian far north. We have The world reserves of light crude oil are in decline.
laid the necessary foundations for all our segments to Refineries in North America are continuing to upgrade their
participate in this vast northern expanse as explorers prove up plants as they switch their diets to heavier crudes. Heavy oil is
northern gas and build the necessary infrastructure to deliver abundant in Canada and its geological risk is minimal. As
it to voracious southern markets. North American demand for oil grows, the WCSB will
Further south, Mexico with its untapped gas basins, can increasingly be a significant source of supply. Both our Super
also be an important supplier to the US. Recently, Precision, Single™ rigs and the horizontal drilling capabilities of the
as a part of a joint venture, was awarded a US $270 million, Oilfield Specialty Services segment will be called upon more
240 gas well project, in the Burgos Basin in northern Mexico. as producers increase their use of Steam Assisted Gravity
As project manager and lead contractor, the Corporation will Drainage (SAGD) technology and multilateral technology in
supply drilling rigs, wireline, directional drilling, and well order to exploit the heavy oil reservoirs.
testing services, drill bits and downhole completion tools. In addition to heavy oil drilling, Precision’s downstream
This high profile project gives Precision a foothold in a new, businesses are already benefiting from the increased oil sands
expanding market eager for all the services and products we activity. Oil sands giants, with their multi-billion dollar
can deliver. expansions of their plant facilities, plan to increase their
We continue to observe a tight balance in the world combined output from around 300,000 bbl/day to over
demand and supply of crude. Such conditions should keep the 900,000 bbl/day by 2008 providing opportunities for new
price of crude relatively high, spurring on more oil drilling and ongoing maintenance requirements.
activity. Analysts predict that overall exploration and ACQUISITIONS
production spending will increase 20% world wide for this In 2000, Precision completed a number of significant
coming year and that the majority of all regions in the world acquisitions worth almost $600 million, which strengthened
will increase their drilling numbers for a second straight year. our market position in several sectors, and provided additional
The demand for our oil-related technology, services and platforms for future growth.
products both domestically and in international markets
The Plains Energy Services acquisition underscores our
should continue to be robust.
belief in the strength and longevity of Canadian oil and gas
production. Their wireline, UBD, coiled tubing drilling rigs,

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workover rigs and well testing product lines expand or attractive short radius and rotary steerable technology. As small
enhance most of the current product lines in our Contract private companies, both lacked the financial and operational
Drilling and Oilfield Specialty Services business segments. depth to take full advantage of global markets. By combining
Their coiled tubing drilling rigs, combined with our own our engineering and financial strength with their international
existing design, propel Precision into a leading edge position presence we are creating the foundation for global expansion
in this technology. The exceptional timing of this acquisition with a delivery system for new technologies.
coincided with the strong recovery in Canada and now affords

Following each acquisition, integration teams, systems and
us the opportunity to harvest free cash flow to invest in our
infrastructure are put in place to ensure a smooth transition into
technological and strategic international expansion.
the Precision fold. One of the groups I am proud of is our
The takeover of CenAlta Energy Services, with its 163 Information Technology department. In past years Precision has
service rigs and 10 drilling rigs catapulted Precision to the invested wisely in the development of our enterprise resource
position of owning the largest workover rig fleet in Canada. planning software. This specialized software efficiently
With service rig fleet ownership now consolidated (three accommodates our fast growth rate and our track record of
public companies own 65% of the industry fleet), we envision acquisitions. For example our payroll system, one of the most
a new era of pricing discipline and stable margins. The highly complex in Canada, seamlessly accepted 1,700 former CenAlta
fragmented, low return characteristics of the traditional employees with their multitude of pay scales, tax withholding
service rig market are beginning to disappear. When we requirements and multi-provincial tax rates. Timely
consolidated our drilling rig fleet, we were able to utilize management information is paramount to operate our
economies of scale, improve operating efficiency and leverage businesses profitably and efficiently and Precision will continue
technology to lower our daily operating costs. These same to invest in such essential support services.
disciplines and proven business models are now being applied

TECHNOLOGY
to our service rig business. The CenAlta acquisition, with its

Precision’s traditional focus on technology is attracting
diverse range of rigs, also expands our capability to capitalize
increasing opportunities from our international customers.
on future international well servicing opportunities.
Advantage Engineering Services (AES), our new research and
In recent years, Geoservices S.A., has developed leading development facility in Houston boasts a team of engineers,
edge electromagnetic (EM) directional and horizontal scientists and programmers that are equal to any in the world.
technology. BecField Drilling Services was a niche player with

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This group has a proven track record and 500 years of UBD technology advances included the completion of a
combined experience in developing high-tech downhole tools. 5,000 psi rotating blowout preventer for higher pressure UBD
AES’s mandate is to develop next generation Logging While well control as well as the commercialization of a new small
Drilling (LWD) and Measurement While Drilling (MWD) footprint high pressure gas separator utilized in the
tools whose performance and durability will create a higher demanding environment of the North Sea.
standard of excellence in the industry. The prize is a share of

As I write, the next generation coiled tubing drilling rig,
the lucrative US $2.3 billion directional, MWD/LWD market
the Cisco 2000 is in field trials. As a leader in coiled tubing
in which there are only a few players. This market is expected
drilling we have taken our experiences and translated them into
to grow significantly as producers continue to explore and
a new style of rig with major improvements in coiled tubing
produce the deep-water offshore plays. Our first tools are
handling and injection. The Cisco 2000 rig will be able to drill
scheduled to be in field trials in early 2001 and the remaining
to 2,000 metres with 3½” coiled tubing to qualify as the
suite of tools will roll out regularly through 2002. While the
deepest and largest diameter rated coil land rig for grass roots
costs of research and engineering are charged to current
drilling in the world. Developments such as these maintain
periods, this technology will construct a new platform on
Precision’s leadership in shallow and medium depth drilling.
which to generate future earnings.
The ability to produce free cash flow in our segments
Our wireline product group has introduced a number of
such as contract drilling has afforded us the ability to invest in
new wireline innovations to the market in the past year. A
technology. As we continue in this positive up cycle, all
high speed Wireline Communication System now enables our
segments will continue to generate the capital required to
trucks to record more data at faster rates during logging
support all planned technology development.
operations and provide better quality data for our clients. New
SAFETY
logging tools such as our ShortStak production logging tools,
Before closing, I believe it is important to highlight
Hi-Res Borehole Compensated Sonic tools, and Multi Array
Precision’s exceptional commitment to safety. Safety is key – it
Neutron tools were released to complete and enhance our
is fundamental – a priority. Our lower than industry Workers’
product offerings to our clients. All these tools now can
Compensation Board assessments are clear evidence that the
connect to our satellite COMSTAR system so clients can view,
efforts of our safety professionals and management are paying
manipulate and assess their logs in near real time over a secure
off. Safety at Precision however is not about cost reduction. In
Internet connection anywhere in the world.

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fact we continue to invest more and more each year into our
safety staff, employee programs, and safety equipment. Safety
is not about regulatory compliance. Our safety standards are
consistent, company wide and often exceed governmental
requirements. Regardless of whether we are operating in the
regulated winter access locations of north eastern British
Columbia or in the emerging unregulated offshore fields of
Bangladesh, the safety standards and practices of both
operations mirror the other. Safety at Precision is an everyday
concern. Safety means that worker protection is one of the
prime parameters in the design of our new technology. From
pre-employment orientations and safety reporting to standard

HANK B. SWARTOUT
operating procedures and continuous training of our field Chairman, President and Chief Executive Officer
staff, Precision is dedicated to ensuring that our workers have

and for striving to create a safer work place for all of us. But as
the necessary knowledge, skills and equipment to perform
we look towards the future, I challenge each and every one of
their jobs safely.
them to continue to improve the safety of our workplace while
Safety does not stop at our yard gate nor at the edge of a
carrying on our momentum of growth and profitability.
drilling lease. Our safety culture means we must look beyond
To our shareholders, I am proud of our legacy of value
our boundaries. Precision continues to work cooperatively
and growth over the last decade and a half. I thank you for
with customers, vendors and trade associations in enhancing
your continued support of the Board and management. The
safety throughout the industry. Many of these groups have
future burns brightly for Precision as I look forward to
similar strong safety commitments and share our goals of a
another outstanding year.
safer industry.
In closing, I make no apologies for restating the old adage,
our people are Precision’s most vital asset. Their hard work and
Hank B. Swartout
efforts have made 2000 the record year it was. I wish to take
March 26, 2001
this moment to congratulate and thank them for their efforts

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Diverse...
2
– enough to deliver top notch

service – everywhere!
PRECISION DRILLING CORPORATION DIVERSE 13
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Nature of Business Units of Production Location Employees

CONTRACT DRILLING SERVICES
Columbia Oilfield Supply Ltd. Procurement and distribution Warehouse and Canada 40
of oilfield supplies distribution facility
Fleet Coil Technologies (U.S.) Corp. Contract drilling 2 drilling rigs US 45
Live Well Service Hydraulic well assist 19 snubbing units, Canada 65
snubbing 32% of industry
LRG Catering Ltd. Camp and catering 74 oilfield camps Canada 212
Precision Drilling International Contract drilling 12 drilling rigs International 350
Precision Drilling Limited Partnership Contract drilling 230 drilling rigs, Canada 4,114
38% of industry
Precision Well Servicing Contract service rigs 257 service rigs, Canada 1,765
28% of the industry
Rostel Industries Ltd. Manufacture, repair and Yard and shop facility, Canada 87
sale of drilling equipment 38,000 square feet
OILFIELD SPECIALTY SERVICES
Advantage Engineering Services, Inc. MWD/LWD tool and 30,000 square feet US 39
equipment research research and
and engineering test facility
Computalog Ltd. Open and cased hole 34 open hole units, Canada, 1,531
wireline services, 133 cased hole units, US,
directional drilling services 23 slickline units, International
2 barges with cased hole skids,
90 drilling systems
Fleet Cementers, Inc. Oil and gas well pumping 16 cement units, US 92
service, cementing, acidizing, 7 acid units, 2 frac units,
fracturing, nitrogen, 2 nitrogen units,
coiled tubing well servicing 6 coiled tubing units
Northland Energy Corporation Well testing and control 108 testing systems, Canada, 555
Northland-Norward Energy Services pressure drilling services 41 RBOP™, US,
Entest 34 UBD systems International
Plains Perforating Ltd. Cased hole logging and 32 cased hole units, Canada 189
Challenger/Silverline perforating, H2S logging 10 slickline units,
and mechanical services 7 combination units
Polar Completions Engineering Inc. Design, manufacture Yard and manufacturing Canada 81
and servicing of downhole facility, 55,000
completion and production square feet
equipment
United Diamond Ltd. Design, manufacture, Manufacturing and Canada 16
sales and rental of PDC operations support of
drill bits 200 jobs/month
RENTAL AND PRODUCTION SERVICES
CEDA International Corporation Industrial maintenance 135 vacuum trucks, Canada, 1,000
and turnaround services 55 high pressure units, US
9 bundle blasters
Energy Industries Inc. Packaging, sales, lease, 90,000 square feet of Canada 250
rental and servicing of production capacity
natural gas compression
Montero Oilfield Services Ltd. Wellsite trailers, downhole 286 trailers, 9,500 joints Canada 144
drilling equipment, surface of specialty drill stem, 4,000
oilfield equipment tools, 3,600 surface units
December 31, 2000 10,575
14 PRECISION DRILLING CORPORATION DIVERSE

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PRECISION — A SUM OF ITS PARTS
INTRODUCTION
The oil and gas industry is a constantly changing scene. At Precision Drilling Corporation we stress cutting edge technology,
broad expertise and absolute service as the vehicles taking us into the global oil patch. We are headquartered in Calgary, Alberta
and from this vibrant Canadian city we serve the world.
The extensive experience in the dynamic proving ground of the Western Canadian Sedimentary Basin enables Precision to
deliver top-to-bottom operational excellence to international corporations around the globe.
Our range of state-of-the-art services – from underbalanced drilling and high-tech rigs to real time data transmission from
well site to our clients’ offices – today are at work on five continents.
Precision operates in three business segments: Contract Drilling Services, Oilfield Specialty Services and Rental and
Production Services. These segments embrace a diverse wealth of innovative product and service lines. Wireline, MWD/LWD,
drilling services, well testing and underbalanced drilling, the latest in international drilling rig design are just a few. We also offer
rental equipment, compression packages, industrial maintenance services and more.
From its headquarters in Calgary, Alberta at the foot of the Canadian Rockies and the home of the Calgary Stampede, Precision serves the world.
We have taken the pioneering tradition of the Canadian west and our 15 years of oil and gas industry know-how and exported it around the world.

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Super Single™ Rigs
Beauty is in the eye of the beholder. And we think our latest drilling hardware is a beauty.
The sixth generation Super Single™ rig is our own design that replaces more traditional jack-knife and shallow telescopic
doubles in shallow to medium depth drilling.
It is Precision’s home-grown concept from engineering and design through manufacturing and operation. Its extreme
flexibility allows custom fitting for clients in environments as diverse as the hot tropical climate of Venezuela or the frigid winters
of Kazakhstan and Canada. Its small footprint makes it an environmental winner.
On our Super Single™ rigs, the top drive travels along a track system built into a one piece mast which can
be set to varying degrees, from vertical to a 45 degree slant position.
Our Super Single™ rigs boast an automated pipe handling system that eliminates much of the manual and hazardous pipe
work on the drill floor. The rig is safe, more compact and highly transportable, with a view to minimizing downtime between
jobs. Its unique mast design allows it to move in one degree increments to drill from vertical to 45 degrees.
Such features help our customers drive down their development costs and turn marginal projects into economic successes
through faster pipe tripping, speedier drilling, and ease of moving the rig – anywhere in the world.
Already the Super Single™ rig is a record holder – 5,235 feet of 8.5-inch horizontal hole in 22.5 hours!
Now that’s a prime example of Precision’s commitment to back its vision of being a major player in the international oilfield
industry with Canadian technology.

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The Super Single™ rig’s pipe arm eliminates drillpipe handling by roughnecks with a view to improve safety. This patented arm is part of the
overall automation of this rig that enables the rig to drill faster.

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Coiled Tubing Rigs
It looks like a king-sized roll of flexible steel garden hose.

Only it’s thousands of feet long and it goes into the ground
like a plumber’s snake.
No tool joint connections mean hazardous pipehandling

is eliminated both during drilling operations and on rig moves.
This built-in safety reduces the potential for accidents.
Drilling power comes from a downhole mud motor that
produces continuous rotary action at the end of the coil.
Penetration rates of over 400 metres per hour are routinely
achieved.
Coiled tubing technology also means less drilling fluids

spilled during operations – the coil is reeled in or played out
in a single connection. This type of coil rig has a small
footprint, requires minimal ground disturbance and is self
levelling. This is a big environmental plus.
Our patented injector head technology, pioneered in the

abandonment of shallow wells, is now used to drill these types
of wells. Operators save money on bulk cement since the hole
drilled with coiled tubing is closer to the desired gauge. Fewer
cavities to fill up with cement! Drilling controls are in the
doghouse so workers’ exposure to the elements is reduced.
It’s a revolutionary technology whose time has come and it

is very much part of Precision’s diverse world of oilfield
technology. Continuous coiled tubing, our newest drilling technology.
Anchorless Service Rigs
Guy wires are on their way out on Precision workover rigs.
Today’s modern rig fleet is increasingly anchorless and customers are welcoming the added flexibility and reduction in
environmental stress.
That familiar signpost rig mast – about 69 feet high on a single or 112 feet high on a double – needed six strong guy wires
to be safely anchored.

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But today, Precision’s batwing rig assembly – in which the rig’s two arms swing out to anchor the rig through its own weight
distribution – eliminates a rigging expense. As well, it cuts down on ground disturbance – no 10 to 20 feet deep auger-type
anchors for attaching the guy wires to the ground are necessary.
Some clients are so impressed they have paid the capital upgrade to alter specific rigs under contract.
The batwing design, as illustrated on rigs 607 and 609, eliminates the need for guy wires to anchor
the rigs’ masts prior to the start of operations.

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Flow Rate Tester (FRT)
Developed and proven in the Canadian oilfields, Precision’s high-tech well testing system is ready for use this year in the US
and overseas markets.
It combines the best from earlier generations of conventional testing with the time saving and flexibility of wireline
operation. Simply put, it’s a better method to open hole test oil or gas reservoirs. It saves the Precision client money while
providing superior well information and protecting the environment.
The client receives real time data and with precise depth control provided by gamma ray correlation, all potential formations
can be tested in just one trip.
The FRT tool records critical reservoir pressure and potential production data. Sensors identify fluids before multiple,
uncontaminated reservoir fluid samples are taken. No gas or fluids are flowed to surface as in conventional testing, eliminating
storage and environmentally unfriendly flaring. Safety is improved especially in poisonous hydrogen sulphide formations. Fast
reservoir completion or abandonment decisions can now be made.
From open hole to cased hole applications, the FRT delivers effective reservoir knowledge from the people whose best runs
have always been below the surface.
Within a protective housing, lies a downhole laboratory consisting of a complex network of electronic components, sensors, chambers and
pumps able to analyze oil and gas formations at predetermined depths, which can be isolated for more zone specific readings by the FRT.

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COMSTAR
The client focuses on his computer monitor in his home office whilst he analyzes a log from a well just drilled several
thousand miles away.
At the wellsite, Precision’s logging truck is still on location. Its data is transmitted to the Galaxy XR satellite that is
geostationed above earth at the Equator. From here the data is sent back to earth to computer centres in Precision’s Wide Area
Network.
It is all in near to real time. A secure Internet system delivers the data to where the client wants to view it. Our SEELOG
software allows the client to manipulate the data to his required format. This means logs are viewed and decisions made faster
than having to wait for couriers to deliver the data package.
Satellites, secure Internet connections and sophisticated communications software linking wellbores to computers virtually
anywhere in the world are all part of Precision’s diversity in a demanding, technological age.
In near real time, data is transmitted via satellite to the client, for immediate well analysis.

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Electromagnetic Measurement While Drilling (EM-MWD) Tool
A series of mud pulses from sensors positioned just above the drill bit is the traditional method of communicating real time
drilling information to engineers on the surface.
Today EM technology is winning industry-wide acceptance because of its superior performance.
Precision, via its acquisition of EM-MWD technology and equipment license, uses electromagnetic waves through the
formation outside the wellbore to allow the driller to monitor and control well trajectory.
The key advantage of this EM tool, part of the bottom hole assembly, is that the solid state electronics do not rely on a fluid
filled wellbore in order to transmit data. This is especially useful in underbalanced drilling where aerated fluids distort mud pulses
resulting in lost data. As well it is more reliable, provides considerably more data and is cost effective with no moving parts and
hydraulic issues to prolong survey times.
After application in over 1,500 wells, this proven technology is becoming the communication method of choice. Another
stake on Precision’s claim to being a leading innovator in the quest for faster, more cost effective drilling.
EM-MWD broadcasts radio waves of downhole information to enable technicians to monitor and
control well trajectory.

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Underbalanced Drilling (UBD)
Pioneering hasn’t stopped in western Canada.
Precision lead the development of UBD in western Canada then took its innovative approach to the North Sea. Originally
developed as a way to reduce formation damage during drilling operations, UBD provides a host of other positive benefits: an
increase in recoverable reserves from the reservoir; basic real time reservoir evaluation; greater penetration rates while drilling; less
downtime associated with lost circulation; and an overall reduction in drilling time.
The Corporation has completed its second offshore North Sea system – a state of the art, closed loop UBD surface separation
package for a multinational client. This integrated package allows our client to produce gas for the first time from this reservoir
from an offshore platform and halves the usual time for projects of this magnitude in the southern North Sea gas field
development.
This technology, coupled with our newly engineered separation design that occupies only half the deck space of earlier
packages, can be employed by a wider range of offshore rigs than previously possible. With a patented technique which allows
separation of gas from wellbore returns at high pressure, gas can be sent straight to production or re-injection thus reducing
environmentally unfriendly flaring.
This type of integrated technology enlarges Precision’s overseas clout. It allows us a modest claim to be returning some of
that pioneer spirit that built the Canadian West to its European roots.
With safety as the paramount objective, Precision was

challenged to engineer and build a UBD system capable of
operating offshore in the harsh conditions of the North Sea.
The second generation [shown above] has a smaller footprint,
yet is capable of handling even greater rates of flow.

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Venezuelan Wireline
Canadian technology is in full bloom in the development of Venezuela’s vast oil reserves.
From the country’s El Tigre eastern field – a flat, dry terrain, rich in shallow heavy oils and deeper light crude deposits – to
the Ojeda field in the west on Lake Maracaibo, Precision is a competitive supplier of high-tech services to PDVSA, Venezuela’s
national petroleum company.
A new US $1.4 million barge, measuring 40 feet by 110 feet, is part of our response to increased demand in this challenging
offshore oil field. It is a complete high end logging unit with living quarters and anchor winch systems. This is Precision’s
second barge to operate on Lake Maracaibo.
The Corporation’s growing profile in Venezuela, with continued investment, has led to increased contracts in the area.
Our Cutting Edge
Forty-one polycrystalline diamond compact (PDC) wafers embedded in the fist of an 8¾ inch steel body. That is the
business end of a drilling rig. Built in Nisku, Alberta by Canada’s sole PDC bit company, the new-age technology bits are
designed for increased penetration and harder formations with greater stability – all to produce a constant torque, virtually no
slipstick and much less wear and tear on drill collars and pipe.
A PDC bit in production.

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The distinction is in the placement of the PDC cutters, highly pressured wafers of black diamond layered in tungsten
carbide slugs. These cutters use a more efficient shearing action than the crushing mode of traditional roller bits.
After all, diamonds aren’t just about glitter.
Precision’s Advantage
The mandate of Advantage Engineering Services’ team of scientists, engineers and software programmers is to to develop
the next generation of directional drilling MWD/LWD tools and gain a commanding share of the estimated US $2.3 billion
market. The team operates out of a new 30,000 square foot state-of-the-art research and engineering facility complete with
extensive testing and downhole simulation capabilities.
The Advantage team, assembled just over a year ago, will begin to field test its first set of new tools starting in the second
quarter of 2001.
These tools are initially aimed at the deep-water segment of the market where current technology is at its limits. The
objective – to provide a superior line of tools that log faster and more reliably in zones where extreme temperatures, flow rates
and pressures are commonplace.
Our commitment to this technology is evident – Precision is planning to spend approximately $55 million researching,
developing and proving this new generation of tools. The result: an innovative technology platform from which to grow new
earnings in a market where lost time is measured in seconds and lost dollars in millions.
There has to be an Advantage in all that!
On Advantage’s vibration table, tools or components of tools are tested to evaluate their durability.

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Completion Tools
The tender mandated the design, manufacture and delivery of hydroseals – all within 30 days.
Precision’s completion tool division met its deadline for the high quality order from a multinational producer in Australia
and won repeat business.
Expertise, honed on successful projects such as designing and manufacturing a complete recovery system for a major
Saskatchewan heavy oil plant, backstop the Corporation’s move into the global scene.
Other contracts which led to the repeat business, include hydroseal orders for a Middle East client in Oman and completion
strings for horizontal re-entries in Kazakhstan. Further international contracts with oil majors were landed in Indonesia, Egypt,
Yemen and Hungary.
This willingness to move the bar, coupled with the ability to deliver Precision-style excellence, on time, is how we will vault
to the next level of market penetration.
A specialized laser measurement instrument ensures exact tolerances in the manufacture of

completion tools.

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A wireline technician inspects circuitry on one of our newly assembled open hole wireline trucks.

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Industrial Maintenance
Precision is cleaning up in the world of industrial plant maintenance.
The Corporation, through its CEDA arm, specializes in industrial maintenance from chemical cleaning operations and plant
turnarounds to highly specialized, state-of-the-art hydraulic bolt tensioning and the speedy removal of large heat exchangers.
Last year we renewed long-term contracts with clients involving a broad range of industrial maintenance and cleaning
services in the oil sands projects at Fort McMurray, Alberta.
We also promoted the Unidense method of loading industrial reformers as the preferred technology around the world. Our
skilled technicians, through an alliance, completed loading projects throughout North America, Chile, Sicily, Trinidad, Germany,
South Korea, Norway and France. Our crews performed turn key turnarounds around the globe.
The world is getting to be a cleaner place because of our efforts.
With the billions of dollars of investment in plant expansions, oil sands players have begun the
construction that should triple production to 900,000 barrels per day, adding more
infrastructure to be maintained by our established industrial maintenance arm.

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Rentals
Polycrystalline diamonds are not always a driller’s best friends.
Increasingly popular at the cutting edge of the drill, the diamond bits with their aggressive cutters create far more torque
and torsional stresses on the drill string than traditional roller cone drill bits.
Precision’s downhole rental tool division has a project underway: a torsional shock tool designed to reduce or eliminate
random torsional stress cycles. These are what cause many drill string failures delaying drilling while the crew fishes for the
detached drill pipe and tools. In some cases the hole must be abandoned and a new one drilled.
The 4½ foot long tool, in the initial stages of field introduction, sits above the drill bit. Its function is to dampen the stress
cycle and thus prevent a costly twist off.
Yet another example of Precision’s constant effort to design excellence into its field operations.
After each rental, the torsional shock tool is inspected and redressed.

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Packaging
A portable compression unit looks like a big Meccano

set on skids with its compressor, engine, process cooler,
piping and pressure vessels.
Precision sets the industry standard for excellence in

packaging these tailor-made units, using 27 years of field
experience to produce deftly engineered and easily serviced
compression packages.
The market for compression is expanding. Aging wells,

declining reservoir pressures and production rates have
almost doubled the demand for compression over the past
decade. Drilling takes place further and further away from
pipelines increasing the need for a greater network of
A skid mounted portable natural gas compressor.
gathering systems requiring more compressor units.
The Corporation has an aggressive stocking program that ensures quick response to orders.
Skilled teams, with decades of fieldwork behind them, understand the customers’ need regardless how remote the package.
SUMMARY
So as you can see, we have a broad base of services already being provided on a global basis. This, however, is just the
beginning.
We think “Best in Class”, and bolster that claim with more than 20 acquisitions over the past decade. Technologies such as
Super Single™ rigs, UBD, and FRT are just three of our many calling cards.
The expertise, encompassed within our organization of over ten thousand employees, backed by the information technology
we deploy, enables us to successfully integrate all Precision services, wherever our clients want us to be.
The mantra of “Operational Excellence” infuses all segments. We tailor our services to individual client needs while using
our knowledge to reduce costs and improve margins.
As we broaden our footprint on the world, we take the best of our homegrown skills and attitudes wherever we operate.
These include standards of safety, environmental awareness and community involvement in a world that increasingly expects and
receives the best from us – whether that be offshore in Venezuela’s Lake Maracaibo, in the always-challenging North Sea or back
home in the Western Canadian Sedimentary Basin. From our Canadian backyard to the international oilfields:
We commit; We deliver; No excuses.

PDar01DR10 3/28/01 3:01 PM Page 31
Involved...
– striving to make a difference

in our work and where we live
– thoughtfully!
PRECISION DRILLING CORPORATION INVOLVED 31
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Precision invested in this rig floor simulator as a key component of its training program for entry level floorhands.
32 PRECISION DRILLING CORPORATION INVOLVED

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WE ARE INVOLVED
SAFETY At Precision, safety professionals make no apologies for

Safety Is Everyone’s Business their presence on a rig floor or checking out crews handling
Safety pays. People, profits, and the Corporation all toxic industrial cleaning materials. Their on-site style is to
benefit when employees are part of a team committed to a safe bring safety training to the job, not just the employee to the
working environment. Our safety record, backed by classroom.
workplace experience and external audits, makes its own case. On the job, the safety crews audit every procedure. They
Precision has more than 34 safety professionals on staff. investigate incidents. They are trained to recognize hazards;
Last year they logged more than 1,000 field visits. situations that are accidents waiting to happen.
Safety at Precision begins at the top. We not only preach They know government regulations in depth. Their focus
safety – we practise it. Senior executives and managers reaches outside Precision through membership in industry
continually go into the field to inspect working conditions associations. Information systems designed especially for
and to ensure compliance with company policy. safety management are part of Precision’s Information
Technology arsenal for producing a safe and healthy work
After Precision acquires a company, it immediately
environment.
reviews the target’s safety procedures to ensure they match the
high standards that apply throughout the Corporation, at On the Job
home and abroad. A moment of distraction is all it takes to send a derrick

man plunging 100 feet from the monkey board to the ground
The Corporation supports its large investment in safety
to suffer permanent injuries or worse.
by tracking trends from a global database. Customer alliances
with multinationals also link Precision’s safety committees to That’s reason enough for Precision to invest $350,000 in
companies with world-class safety performance. For example, equipping derrick men with hook-on fall arresters, in addition
this year, following a major audit of our safety programs and to their traditional pullback lines.
practices by a large multinational producer, Precision was The arresters are on a slope line and already have paid off
invited to take part in a round table on best safety practices, in four cases.
to take place in Houston. Precision along with other key
“I didn’t want to use it but I did,” says Precision
suppliers will expound their safety management practices in
derrickman Keith Northcott, 29 of Port Aux Basque,
efforts to bring safety to a higher level.
Newfoundland, who had unhooked his pullback line. “I was
Safety Checks green. I fell handling pipe. I slid and the fall arrester saved me
Safety is no longer secondary to the petroleum industry’s from falling.” Keith said “It works. Without it, I’d be crippled
focus of drilling holes in the ground. or worse. I came down, no injuries at all. Certainly I’m one of the
lucky ones.’’
He’s still scrambling around the monkey board, thanks to

that fall arrester and the safety program that put it there.

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WE ARE INVOLVED
Roughneck U
So you want to be a worker in the oilfields.
The three-day course is free. There is no pay and there is

no guarantee of a job on graduation.
But you do get an insider’s look at what it’s like to work

on a rig along with an early introduction into the role safety
plays in the petroleum industry.
Some quotes from a recent Precision orientation course

evaluation:
“This is a very helpful course to get me started. I wouldn’t

want to go on a rig without a clue.”
Another wrote: “It’s nice to see a company take the time and
expense to give a new hand a good start.”
“Hands on experience was necessary to get me the confidence

to work efficiently. I hope I can produce quality workmanship,
equal to the quality Precision has displayed to me.”
And another: “The instructors did an excellent job. They

never candy coat anything. They told me straight out what it
would be like. I appreciate everything they said and showed me of
their past experiences.”
Fall arresters save lives. A derrickman attaches his safety harness to
Graduate Programs the fall arrester prior to his ascent up the rig mast to the monkey
board.
They arrive in groups of eight or more at our Edmonton
wireline technology boot-camp with degrees in engineering, The first task is to unload the trucks, get to know the
geology or geophysics. Their first subject in this intensive six- equipment and what fellow oilfield workers do to service
month long training program is safety — or how to survive in client wells in an era of high-tech.
the modern oil patch.
The Edmonton Wireline Shops reclaim them for two
Safety covers basic first aid, professional driving, weeks – their world expands with the theory of logging tools,
Precision’s company-wide safety policy and the dangers of operating processes, software and hardware. Six weeks in the
working with hydrogen sulphide. field follow under the careful eye of a veteran wireline engineer.
Then the new hires change into coveralls. It’s reality time Trouble shooting becomes part of their working lives as
for the next five weeks at one of the 15 wireline and cased hole they learn the complexities of keeping an oilfield customer
field operations in western Canada. happy.

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Another two review weeks back at Edmonton and week- never stops. Intermediate and Senior Engineer ratings follow.
long log interpretation school in Calgary are next before their And there is spring school for upgrading with new tools and
final field assignments. Practise what we have taught you, their cutting edge technologies along with staying abreast of
instructors tell them – you have six to eight weeks before you Precision’s constantly evolving computer systems.
get to do the job all on your own.
No one ever said operational excellence would come easy.
And one final program event – the gruelling eight-hour Offshore Safety Basics
breakout exam day back at Calgary headquarters. The
Most things are different on an offshore rig or production
examiners ask trouble shooting questions, probe for practical
platform.
solutions to scenarios they know are possible in the field.
Expectations are high: the passing grade is 80 percent. A slip- “We come and go via helicopter, work long shifts in a
up means a make-up exam with a 90 percent pass challenge. confined space where there isn’t much room to move around, to
store fuel and supplies.” explains an offshore veteran. “With
underbalanced drilling, things are very different from
conventional drilling. The pressure is at the surface. That means
a potential fire hazard with hydrocarbons. Energized mixtures of
gas, sand and liquids under pressure must be safely controlled.
Being offshore just heightens this risk”.
Precision’s UBD arm has major contracts in the North

Sea. It has built three UBD packages for offshore platforms
and along with our clients we have become aware of the need
for intensive training courses for all of our technicians who
work offshore.
The Corporation joined several North Sea contractors

and a major North Sea operator last year to set up a three-day
course at Lowestoft, UK.
Personnel learned how to deal with a lot of equipment in

To ensure our wireline employees continually stay abreast of the a confined space, with safety as a crucial theme. The service
latest in tool design and computer technology, Precision administers companies provided a basic course in safety from their
in-house training programs directed at all engineers as part of their
particular perspectives. Directional drillers, snubbers, operators
continuing qualifications.
and well testers presented insights into how they work and
what they do to prevent mishaps. Everybody’s knowledge was
If all goes well the graduate has one last task – pick up a broadened.
truck and get back to his assigned field district where, after six
months on the job, he becomes what he set out to be – a
Junior Field Engineer. Learning doesn’t stop there. In fact, it

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Precision’s offshore operations in the UK carry an Nature First

impressive credential – ISO 9002 accreditation. This is an Anyone watching the caribou in their migrations across
industry standard, based on strict six month audits, that assures northern Canada marvels at the spectacular sight of thousands
clients that the services we provide are supported by top quality of animals moving to their feeding and calving grounds.
procedures and safety tracking systems. Precision is aware of how important these great herds are to all
The North Sea sector is highly regulated for safety by the Canadians and their special cultural value to northern people.
UK Health and Safety Executive (HSE). We also won HSE The Corporation tailors its contracts working in harmony
approval for safety procedures in our pioneering package using with customers, suspending operations or moving rigs so as to
jointed pipe for the first time in a UBD operation offshore UK. intrude as little as possible during these vital periods.
Safety is deeply ingrained throughout Precision’s Prevention is Better
expanding world. Spills are preventable. Precision’s well testing operations

combine training, procedures and purpose built equipment to
ENVIRONMENT
ensure no such an occurrence. The nature of the task requires
Leaving a Smaller Footprint
us to flow and meter oil and gas to surface often at high rates
Working with Mother Nature is a priority at all levels of and high pressures to assist our clients in evaluating the
Precision. Our commitment is to high standards of potential of their reservoirs. Trained supervisors hold pre-job
environmental care in all our operations, each and every day. meetings. An exhaustive pre-flow checklist with more than
While most of our operations are carried out on leases which 230 items is reviewed. Nothing is left to chance – valves,
are under the control of our clients, we ensure that we are flowlines, cables, anchors, oil and water lines, relief and supply
familiar with their environmental polices and practices and lines, propane supply, and pressure vessels are all checked.
those of the regulatory authorities as we work co-operatively Well flow does not begin until the crew all sign off.
to minimize the impact to the environment.
Many of our clients require our rigs to go sumpless. This
Some of our clients are now practising zero percent replaces the traditional method of simply digging a pit or
disturbance drilling. Among other things, drilling cuttings are sump in which to dispose cuttings during a drilling or service
returned to the ground free of all contaminants. This requires operation. Today’s rigs are modified so that wastes are
that Precision modifies and services its equipment to meet collected in transportable tanks and then hauled to hazardous
these higher standards. For example, our rig mud systems are waste landfill sites or treatment centres.
designed to eliminate the possibility of unwanted fluids and
Environmental protection is a team responsibility – from
solids entering into them. Zero percent drilling disturbance
management through to field personnel. All are aware of laws
specifications are so tight that even an introduction of
and regulations that protect the environment. Potential
hydrocarbon laced water into the mud system will require that
hazards are identified before a job is undertaken. Emergency
the cuttings be hauled away and treated offsite in a proper
response plans are in place to minimize potential
facility instead of being land farmed in the immediate area.
environmental incidents.

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The industry itself has given environmental protection a Although the major responsibility for environmental
new status throughout the oil patch. spills remains with the well operator, Precision also
incorporates environmental protection in its equipment
Within Precision, the environment is not a static issue but
design and operation practices whenever possible. Many rigs
a dynamic one – we encourage training courses on updated
have switched over to electronic fuel injected motors which
protection issues at both field and management levels.
reduce fuel consumption 15-20% and run cleaner. New catch
We scrutinize all proposed acquisitions to ensure any systems collect drilling mud, from breaking joints of drill
necessary environmental clean up is complete before we take pipe, and route it back to the mud tanks instead of it
over a property or facility. The deal is not done until it gets an collecting in the cellar. The use of our anchorless workover rigs
environmental clean bill of health. is spreading as the industry recognizes their smaller footprint
Precision management regularly provides a report to the along with that of our Super Single™ drilling rig.
Board of Directors on environmental practices including any Environmental planning thus makes for sound business
serious incidents. This policy applies to what occurs at home practices.
or abroad.
As old fashioned as it sounds, a key element in any
When a Spill Occurs environmental safety program remains good housekeeping
The surface stain spread over the ground near a Precision rig habits such as:
and other equipment in a racking area in the Wildcat Hills west
❚ simple checks to see that oil is not leaking out of
of Cochrane, Alberta. equipment
A Precision supervisor called in an environmental ❚ the placing of absorbent pads around engines
consultant to inspect the site. The crew found hydrocarbons had ❚ the provision of segregated bins for waste plastics and
leaked from the rig and from a diesel tank on skids. There was wire rope at rig sites
another surface stain from a pile of stacked pipes. Waste is managed so that it is reduced.
Contractors were hired to excavate 11 tons of topsoil to a Recycling plays its part – from office paper to used oil.
depth of 25 cm and transport the material to a landfill. The The all-purpose burning waste barrel is no more.
grassland site then was backfilled and contoured to grade with
After all, we all live and work in the same world.
fresh topsoil.
The Corporation’s spill procedures stress quick response, full

disclosure to government and senior staff at levels depending on
size of spill, and a speedy clean-up.
Each area has its own spill containment package with a list
of emergency contacts if the spill is a large one.

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PRECISION IN THE COMMUNITY In education, Precision has begun a five-year

The Corporation’s donation committee focuses on 12 commitment to the Southern Alberta Institute of
major categories: community, both rural and urban; Technology’s (SAIT) new environmental technology centre.
international aid; women’s groups; youth; aboriginal peoples; Our own world of technology education is strongly linked
medical; the disabled; the homeless; education; the through many employees to SAIT.
environment; the arts; and political organizations. Mount Royal College received its third payment in a
The Corporation sets a budget, based on a percentage of four-year commitment to its capital program.
net income, for the committee to distribute. The committee The Corporation also supports overseas projects as it
then accepts requests from various organizations. Funds are increases its own global presence. The Aga Khan Foundation
donated on a regular basis to each of the categories subject to of Canada receives annual donations towards its efforts to
internal category limits. improve living conditions in the developing world. We also
Traditionally we have kept a flexible view towards contributed to the Venezuelan Relief fund of the Canadian
donations whereby we would exceed our set budget for Red Cross after devastating floods ravaged parts of that
donations in years where we outperform. country.
This year we supported STARS air ambulance in Last year we backed the Partners in Health program at
recognition of its role in airlifting injured workers from the Foothills Hospital in Calgary. This initiative seeks to create
remote sites. Its service covers much of the oil patch – a vital centres of excellence in health care research and medical
reassuring presence for workers in isolated areas. Medical education. Precision also continues to donate to the Alberta
evacuation to urban centres by air not only saves lives but it Cancer Foundation’s Tom Baker Centre.
gets the injured worker quickly to skilled treatment. This year we have pledged a major contribution to the
It also spares the injured worker from having to be driven over Alberta Children’s Hospital which will make us a significant
often rough, near impassable back-country roads. patron of the institution over the next few years.
Both Calgary and Edmonton United Way campaigns We are out there in the community and for the
received grants for the many social agencies they fund. Our community.
aim is to reach as many different and deserving groups as
possible.

PDar01DR10 3/28/01 3:01 PM Page 39
Solid...
– the financial strength

to sustain long term growth
– consistently!
PRECISION DRILLING CORPORATION SOLID 39
tabs 4/5/01 11:46 AM Page 40
Crude Oil Prices Natural Gas Prices
WTI Calendar year average – US$/Bbl AECO Calendar year average Cdn. $/MMbtu
35 6
30 5
25
4
20
3
15
2
10
5 1
0 0
92 93 94 95 96 97 98 99 00 92 93 94 95 96 97 98 99 00
2000 Revenue 1999 Revenue 2000 Sources of Funds 2000 Uses of Funds
Total: $ 1,355.5 Million Total: $ 734.7 Million Total: $ 734.4 Million Total: $ 766.1 Million
Proceeds on sale of equipment 3% Acquisitions 48%

Increase in long-term debt 44% Repayment of long-term debt 15%
Oilfield Specialty 27% Oilfield Specialty 23% Increase in bank indebtedness 10% Non-cash working capital 8%
Rental & Production 18% Rental & Production 24% Issue of common shares 3% Redemption of warrants 3%
Contract Drilling 55% Contract Drilling 53% Funds from operations 40% Purchase of equipment 26%
Net Fixed Assets Cash Flow
$ Millions $ Millions
1500 300
250
1200
200
900
150
600
100
300
50
0 0
93 94 95 96 97 98 99 99 00 93 94 95 96 97 98 99 99 00
April 30 Dec. 31 April 30 Dec. 31
40 PRECISION DRILLING CORPORATION SOLID

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M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LY S I S
The Management’s Discussion and Analysis focuses on key statistics from the Consolidated Financial Statements, and pertains to
known risks and uncertainties relating to the oilfield and industrial service sectors. This discussion should not be considered all-inclusive,
as it excludes changes that may occur in general economic, political and environmental conditions. Additionally, other elements may or
may not occur which could affect the Corporation in the future. In order to obtain the best overall perspective, this discussion should be
read in conjunction with the material contained in other parts of this annual report including the audited Consolidated Financial
Statements and the related notes. The effects on the Consolidated Financial Statements arising from differences in generally accepted
accounting principles between Canada and the United States are described in Note 13 to the Consolidated Financial Statements.
HIGHLIGHTS
% of % of
Years ended December 31, 2000 Revenue 1999 Revenue
Revenue $1,355,453 $ 734,740
Increase (decrease) 84% (10%)
Operating earnings 260,845 19% 117,494 16%
Earnings before goodwill amortization 154,321 11% 50,081 7%
Earnings before goodwill amortization per share 2.98 1.09
Net earnings 131,560 10% 34,250 5%
Net earnings per share 2.55 0.76
Funds provided by operations 297,873 22% 100,036 14%
Funds provided by operations per share 5.69 2.13

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SUMMARY INCOME STATEMENT
(Stated in thousands of dollars)

Years ended December 31, 2000 1999
Operating earnings
Contract drilling services $ 212,633 $ 97,864
Oilfield specialty services 30,620 6,796
Rental and production services 43,289 19,705
Corporate and other expenses (25,697) (6,871)
260,845 117,494
Interest 28,713 16,544
Gain on disposal of subsidiary and investments (40) (26,318)
Reduction of carrying amount of investments – 13,101
Reduction of carrying amount of property, plant and equipment – 10,200
Earnings before income taxes and goodwill amortization 232,172 103,967
Income taxes 77,851 53,886
Earnings before goodwill amortization 154,321 50,081
Goodwill amortization, net of tax 22,761 15,831
Net earnings $ 131,560 $ 34,250
The record results posted by the Corporation in 2000 which is produced by natural gas fueled generators, increased
are indicative of the improved business fundamentals in the oil with the prolific rise in Internet and e-business utilization.
and natural gas exploration and production industry in Natural gas production, however, has remained stagnant due
Canada and internationally. The price of West Texas to the maturity of producing reservoirs and, until this year,
Intermediate crude oil averaged US $30.31 per barrel in 2000 declining investment in exploration and production activity as
compared to US $19.24 in 1999. Production discipline by low commodity prices did not provide acceptable returns on
OPEC members and increased demand from strong world investment. As the year progressed our clients became more
economies contributed to the improvement in world crude oil comfortable with the sustainability of oil and gas prices and
prices. Similarly, North American natural gas prices rose with their improving financial positions. This in turn lead to
dramatically in 2000 due to tightening supply and demand. increases in exploration and development spending and higher
Natural gas on the New York Mercantile Exchange averaged activity levels across all our businesses.
US $4.38 per mcf in 2000 compared to US $2.32 per mcf in
1999. Demand for electricity, a large and growing portion of

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In the increasingly favourable business environment, Growth through acquisition is complemented by

the Corporation continued to execute its strategy to internal development of new and existing services. The
strengthen its Canadian base of operations and lever off this cornerstone of the Corporation’s strategy to become a full
solid foundation to become a worldwide integrated oilfield service provider on the world oil and gas industry stage is our
service provider. Acquisitions have remained a key element in research staff and facilities at Advantage Engineering Services,
carrying out this plan. During the second quarter, the Inc. (AES) in Houston, Texas. The mandate of this group, is
industrial maintenance group strengthened its presence in the to build the industry’s most reliable Logging While Drilling
growing Fort McMurray oilsands operations with the (LWD) system with an emphasis on the global deepwater
acquisition of the assets of JJay Exchanger Industries Ltd., an drilling market. Field testing of the tools is scheduled for the
established business in plant maintenance and shutdown second quarter and the first commercial application will take
work. The acquisition of Plains Energy Services Ltd. (Plains) place this summer. The evolution of our Super Single™
in July enhanced the Corporation’s capabilities in coiled drilling rig technology is also continuing with the
tubing drilling, a technology especially suited to shallow gas construction of additional rigs for both domestic and
drilling, and added experienced personnel and well international customers.
maintained equipment to our well servicing, production
The maintenance of Precision’s strong balance sheet
testing, underbalanced drilling, and wireline operations. In
remained of paramount importance throughout this year of
October, Precision acquired CenAlta Energy Services Inc.
rapid growth. The Corporation ended the year with a debt to
(CenAlta), creating the largest and most diversified fleet of
debt plus equity ratio of just over 0.3 and debt to trailing cash
service rigs in the Western Canadian Sedimentary Basin
flow of 1.84. With the strong demand for our services
(WCSB). Also in October, the Corporation acquired the
expected in 2001, our financial position and flexibility should
global directional drilling and electromagnetic (EM)
continue to improve.
Measurement While Drilling (MWD) assets of Geoservices
A development, the importance of which must not be
S.A. (Geoservices) of Paris, France and an exclusive worldwide
overlooked, was the announcement of planned corporate tax
license to its EM-MWD technology. This acquisition will
rate reductions by the federal government of Canada and the
allow for increased utilization of MWD technologies for
provincial government of Alberta. The federal government
directional and horizontal well applications on a global basis
introduced tax rate reductions in its February 28 and October
and enable Precision to more effectively integrate its
18, 2000 budgets that will reduce corporate tax rates by 7%
underbalanced drilling capabilities.
over the next 4 years. The Alberta provincial government has
The expansion has continued. In January 2001, the
also planned to reduce corporate tax rates by 7.5% over the
Corporation acquired BecField Drilling Services Ltd.
next four years. These changes combine to reduce the
(BecField). BecField, with established operations in Europe
Corporation’s tax rate on ordinary income earned in Alberta
and the Middle East, provides directional drilling and MWD
from 45% in 2000 to 30.5% in 2004. Our Canadian
services through its technical, field and support personnel to
operations are the solid foundation upon which Precision is
both onshore and offshore oil and gas companies.
building its international presence and they will always be a
critical contributor to the Corporation’s profitability.

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These significant tax rate reductions represent the biggest international markets. The Rental and Production Services
fundamental change in the Canadian economy in recent segment includes the design, packaging, sales and service of
history and create an environment of increased profitability. natural gas compression equipment; the manufacture and
rental of oilfield wellsite trailers; the rental of equipment to the
Precision’s operations are managed in three industry
oil and gas industry for drilling, completion and production
segments. Contract Drilling Services provides land drilling
activities; and the provision of industrial process services,
services in Canada and internationally, and provides well
including specialized equipment and labour services to
workover services in Canada. The Oilfield Specialty Services
downstream oil and gas, petro-chemical and other process
segment provides both open and cased hole wireline,
industry customers.
directional drilling, MWD/LWD services, production testing
and underbalanced drilling services, in domestic and
(Stated in thousands of dollars, except per day/hour amounts)

% of % of
Revenue $ 743,544 $ 429,848
Expenses:
Operating 440,300 59% 272,589 63%
General and administrative 32,417 4% 19,359 5%
Depreciation 58,194 8% 40,036 9%
Operating earnings $ 212,633 29% $ 97,864 23%
Number of drilling rigs (end of year) 244 220
Drilling operating days 43,376 30,172
Revenue per operating day $ 13,961 $ 12,266
Number of service rigs (end of year) 257 76
Service rig operating hours 222,539 106,846
Revenue per operating hour $ 380 $ 340
Contract Drilling Services revenue increased by Revenue per operating day in Canada increased by 14% in
$313.7 million or 73% over 1999 as a result of the combined 2000 over 1999. This pricing momentum continues in 2001,
impact of increased utilization, pricing increases and when for the first time in the Corporation’s history, drilling
expansion of the equipment fleet. Of the 43,376 drilling day rates for certain rigs are expected to increase as we come
operating days in 2000, 5% or 2,373 were from rigs working out of the winter drilling season.
internationally. This compares to 1,088 or 4% in 1999.

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The following table illustrates the change in the size, its own design innovations to establish a world leading
makeup and deployment of the drilling fleet in 2000. The position in this technology. The acquisition of CenAlta added
acquisition of Plains added 8 coiled tubing rigs to the fleet. 10 drilling rigs to the fleet and an additional 6 rigs were built
This provided the equipment base to which Precision applied at our in-house machining and fabrication facilities.
2000 1999
Type of Drilling Rig Depth Canada International Total Canada International Total
Single to 1,200 m 18 1 19 15 – 15
Super Single™ to 2,500 m 14 3 17 13 2 15
Double to 3,000 m 102 3 105 96 3 99
Light triple to 3,600 m 49 4 53 49 2 51
Heavy triple to 7,600 m 38 2 40 38 2 40
Coiled tubing 9 1 10 – – –
Total fleet 230 14 244 211 9 220
The size and breadth of the service rig fleet increased rig fleet was the one area across the Corporation that was
dramatically with the acquisition of CenAlta and Plains. hampered by shortages of skilled labour.
Utilization and hourly rates also increased. Service rig The characteristics of the fleet, which currently
operating hours increased 108% to 222,539 in 2000 from operates only in the Western Canadian Sedimentary Basin, is
106,846 in 1999 and revenue per operating hour increased illustrated in the following table:
12% from $340 to $380. However, utilization of the service
Type of Service Rig 2000 1999
Single 4 –
Freestanding mobile single 8 4
Mobile single 105 42
Double 59 24
Freestanding mobile double 4 –
Mobile double 50 –
Heavy double 9 2
Slant 16 4
Swab 2 –
Total fleet 257 76

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With 257 workover rigs, Precision now services the efficiencies were gained from our in-house operating supply
entire breadth of the market and has approximately 28% of procurement and distribution capabilities and our in-house
the Canadian workover rig industry. The ownership of the rig repair and construction service. There is still room for
Canadian service rig industry has been significantly improvement in operating cost structures as recent
consolidated with three companies now owning 65% of the acquisitions become fully ensconced in our vertically
fleet. As the history of the drilling business has shown, integrated service delivery system. Depreciation remained
consolidation of an oilfield service brings pricing discipline relatively consistent on a per unit of production basis (per
and improved margin stability. The much larger fleet allows us operating day or operating hour), further contributing to the
to reap the benefit of economies of scale and will be managed operating earnings percentage increase.
using the same integrated processes and operating philosophy An important component of the success of the
that have proven successful in our drilling operation. Contract Drilling Services segment is the degree to which cost
Operating earnings for the Contract Drilling Services structures have been developed to be as variable as possible
segment increased to 29% of revenue from 23%. Expense with activity levels. This allows the Corporation to respond
increases, primarily in employee compensation and fuel costs quickly to sudden changes in our extremely cyclical industry
were more than offset by rate increases. In addition, further and produces superior returns in periods of high activity.

% of % of
Revenue $ 372,425 $ 125,954
Expenses:
Operating 254,628 68% 85,695 68%
Depreciation 27,969 8% 12,305 10%
Research and engineering 20,288 5% 3,629 3%
Wireline jobs performed 29,431 9,179
MWD/directional drilling man days 34,404 10,171
Well testing/CPD man days 41,777 24,493
Oilfield Specialty Services revenue increased by $246.5 from a competitor in May. In addition, Computalog Ltd.
million or 196% in 2000 over 1999. This increase is the result (Computalog), which was acquired in July 1999, contributed
of two factors. First, business acquisitions account for revenue for the full year in 2000.
approximately $130.0 million of the change. The purchase of Second, activity levels increased significantly across all
Plains in July expanded the depth of many services provided services offered by the segment. On a full year over year basis,
in this segment, as did the acquisition of well testing assets adjusting out the effect of acquisitions, the number of wireline

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jobs performed, MWD man days, well testing/controlled 2001. More significant, however, were the expenditures made
pressure drilling man days and directional drilling man days across all the segment’s service lines to improve the
increased by 40%, 68%, 38%, and 73% respectively. Pricing maintenance levels and reliability of the equipment fleet and
for all of these services improved during the year. enhance the training programs provided to the workforce.
Operating earnings amounted to $30.6 million or 8% of These upgrades were necessary to prepare the operations to
revenue in 2000. This segment will be the engine of Precision’s move into the diverse international market place and to
future growth and its results are characteristic of a global increase the number of qualified crews available.
business in early stages of development. Costs are being Much of the impetus for the segment’s international
incurred, and charged against income, which are preparing the growth initiatives is to reduce the Corporation’s exposure to
platform for revenue and profitability expansion. The the cyclical North American market. The Canadian market is
acquisitions noted above along with the purchase of assets from subject to large seasonal swings in activity levels. The North
Geoservices in October, added critical mass, technology and American market responds quickly to commodity price
international distribution channels. This strategy continued to fluctuations. Exploration and production projects in many
unfold in 2001 with the acquisition of BecField. Consistent other areas of the world are less susceptible to these factors.
with Precision’s experience throughout its acquisitive history, the This strategy will increase the utilization of the segment’s
integration period carries cost redundancies and the resulting relatively mobile equipment fleets. Employee costs in this
inefficiencies that take time to eliminate. segment are more fixed in nature making higher utilization
The pursuit of Oilfield Specialty Services international key to improved profitability.
growth objectives also contributed to higher expenses in 2000 Expansion of product lines is an important element of
with no commensurate revenue contribution. Expansion of this plan. To move into new markets and compete in a
the cased hole and open hole wireline operation in the US meaningful way, the Corporation will have to be a full service
required expenditures in the latter half of the year to set up provider. The following charts illustrate the expansion of
new operations centres. These operations will begin product lines within the Oilfield Specialty Services segment
contributing noticeable revenue growth in the first quarter of and the geographic diversification of its revenue.
Revenue by Service Line

2000: Total: $ 372.4 Million 1999: Total: $ 126.0 Million
Well testing/controlled pressure drilling 15%

Pumping services 4%
Directional drilling 23% Directional drilling 18%
Downhole tools and completions 5% Well testing/controlled pressure drilling 30%
Drill bits 1% Downhole tools and completions 3%
Wireline 52% Wireline 49%

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Revenue by Geographic Distribution

2000: Total: $ 372.4 Million 1999: Total: $ 126.0 Million
Canada 58% Canada 62%

US 30% US 24%
Rest of world 12% Rest of world 14%
As a new player in international markets, Precision will length in the industry. These tools are currently being field
use its unique mix of skills and equipment to secure its initial tested and initial commercial applications are planned for the
service contracts. Leading edge technologies being developed second half of 2001.
by AES will play an increasing role in accomplishing this The operational and administrative infrastructures
objective. While the cost of this world class research and necessary to deliver the segment’s services internationally are
engineering team and facility is being borne by current now being put in place. A Regional Director of Operations
operations, the benefits will not be translated into meaningful has been appointed in each of five strategic areas: US,
revenue and margin increases until 2002. The advancements Europe/Africa, Middle East, Asia Pacific and Latin America.
in MWD and LWD technology being developed at AES are These people are experienced oilfield professionals with
projected to produce tools with the highest flow rating, business knowledge specific to these regions.
highest pressure rating, fastest logging speed, and shortest tool

% of % of
Revenue $ 239,220 $ 178,938
Expenses:
Operating 170,729 71% 133,809 75%
Depreciation 13,995 6% 14,575 8%
Equipment rental days 671,000 478,000
Number of compressor packages sold 68 59

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Revenue in the Rental and Production Services level of information systems spending as operations with
segment increased by $60.3 million or 34% with all product different hardware and software configurations are integrated
lines increasing by relatively the same percentage. The into Precision’s systems.
industrial maintenance and plant turnaround operation
In total, general and administrative expense declined
received a strong return from its expansion in Fort McMurray
slightly as a percentage of revenue to 7.6% in 2000 from 8.0%
and has seen revenue climb as clients increase the scope and
in 1999.
duration of their plant maintenance shutdowns. The oilfield
Interest Expense
equipment rental and natural gas compression packaging
businesses saw activity levels rise in step with increased oilfield Net interest expense increased by $12.2 million or 74%
activity in western Canada. in 2000 over 1999, in conjunction with the increase in net
borrowings from $236.4 million to $675.4 million. The cash
With the exception of natural gas compression
component of business acquisition costs in 2000 amounted to
packaging, operating margins increased across the segment in
$365.0 million while debt assumed in these transactions
conjunction with the increased demand for their products and
totalled $93.3 million. As a percentage of revenue, net interest
services. The gas compression business is experiencing strong
expense remained consistent at 2.1% in 2000 compared to
competitive pressures as a result of over capacity in the
2.3% in 1999. Management is comfortable with this level of
Canadian market.
debt servicing cost.
CORPORATE AND OTHER EXPENSES
Income Taxes
Corporate and other expenses of $25.7 million have
Tax expense in 2000 is equal to 34% of earnings before
increased due to the increase in personnel required to manage
income taxes and goodwill amortization, compared to 52% in
the expanded business including the establishment of a
1999. Half of this difference is due to the impact of the
corporate office in Houston, Texas. A significant portion of
Canadian federal government’s plan to reduce corporate tax
corporate employee compensation is comprised of incentive
rates by 7% over the next four years. Canadian generally
pay that is tied to corporate performance. The improved
accepted accounting principles (GAAP) require that the effect
financial performance of the Corporation relative to 1999
of this rate reduction on the Corporation’s future tax balances
resulted in increased employee compensation expense. In
be reflected as a decrease of future tax expense in 2000, since
addition, the Corporation’s active acquisition program
the rate reductions have been substantively enacted into law.
contributed to the increase in costs in 2000. There tends to be
The resultant reduction of tax expense in the fourth quarter of
an increase in costs for a period after each acquisition until
2000 amounted to $19.9 million. This treatment differs from
corporate functions can be rationalized.
US GAAP in that this adjustment would not be recognized
A significant component of corporate expenditures is until reduced rates have been formally passed into law, which
dedicated to the maintenance of our management information will occur in 2001. In addition, a similar adjustment will
systems. This department has expanded to meet the ever occur in 2001, under Canadian and US GAAP, should the
increasing needs of our fast growing domestic and international Alberta provincial government proceed with its plan to reduce
operations. Again, acquisition activity has an impact on the corporate tax rates by 7.5% over the next four years.

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The other primary reason for the reduced effective tax At December 31, 2000 the Corporation had working
rate in 2000 relates to the Corporation’s change in method of capital of $157.7 million. This amount is net of $100.0
accounting for income taxes. Effective January 1, 2000, the million borrowed under the Corporation’s extendable
Corporation retroactively adopted the liability method of revolving unsecured facility to finance the increase in accounts
accounting for income taxes without restating prior periods in receivable resulting from the increase in activity.
accordance with revised Canadian accounting standards. The Maintaining a strong balance sheet has remained a
new standards move Canadian practice in line with US
focus of management throughout this past year of rapid
income tax accounting methods. The most significant impact
growth. At year-end the Corporation had long-term debt of
of this change is that the Corporation’s provision for income
$548.1 million and its debt to debt plus equity ratio was
taxes is no longer increased by the effect of non-deductible
conservative at 0.31. The longer-term component of the
depreciation.
Corporation’s capital structure was increased with the addition
Goodwill Amortization of $150 million Series 2 unsecured debentures maturing in
Goodwill amortization increased by $6.9 million as a 2010. The $200 million Series 1 unsecured debentures mature
result of adding $268.9 million to goodwill during 2000, in 2007.
primarily from the Plains and CenAlta acquisitions. In Strong adherence to conservative financial philosophies
addition, a full year of amortization was taken on the $55.5 has put the Corporation in good stead with current lenders
million of goodwill associated with the Computalog and the public debt markets. This is very important for an
acquisition in July 1999. organization that has and will continue to grow through
Recently, accounting standards bodies in both Canada acquisition and therefore requires ready access to funding
and the US have proposed changes that would eliminate the sources. The Corporation believes that its strong balance sheet
amortization of goodwill as an ongoing expense item and and unutilized borrowing capacity, combined with funds
would also eliminate pooling of interests as an acceptable generated from operations, will provide sufficient capital to
method of accounting for business combination transactions. fund its on-going operations and future expansion.
These changes will facilitate a closer comparison of our results BUSINESS RISKS
with those of our US peers, most of whom have used pooling
Crude Oil and Natural Gas Prices
of interests accounting in the past.
The price received by our customers for the crude oil
LIQUIDITY AND CAPITAL RESOURCES and natural gas they produce has a direct impact on cash flow
In 2000 the Corporation adhered closely to its policy available to them to finance the acquisition of services
of correlating capital expenditure levels to cash flow as a key provided by the Corporation.
element of its business risk management strategy. Funds from Prices for crude oil are established in a worldwide
operations amounted to $297.9 million for the year ended market in which supply and demand are subject to a vast array
December 31, 2000 while capital expenditures totaled $201.0 of economic and political influences. This results in very
million. volatile pricing; a prime example of which is West Texas
Intermediate crude oil trading at US $12 per barrel in late

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1998 and in excess of US $40 per barrel at one point in 2000. comes out of the ground rendering many secondary roads
Natural gas prices are established in a more “local” North incapable of supporting the weight of heavy equipment until
American market due to the requirement to transport this they have thoroughly dried out. The duration of this “spring
gaseous product in pressurized pipelines. Demand for natural breakup” has a direct impact on the Corporation’s activity
gas is seasonal and is correlated to heating and electricity levels. In addition, many exploration and production areas in
generation requirements. northern Canada are accessible only in winter months when
The Corporation manages the risk of volatile the ground is frozen hard enough to support equipment. The
commodity prices, and thus volatile demand for its services, timing of freeze up and spring breakup affects the ability to
by striving to maintain efficient cost structures that are move equipment in and out of these areas.
scalable to activity levels. In addition, our strong balance sheet Working with our customers, we strive to position
and adherence to conservative financing practices provide the equipment where possible such that it can be working on
resilience to withstand and benefit from downturns and location during spring breakup, limiting the need to move
upturns in the business cycle. equipment during this period as much as possible. However,
Workforce Availability
many uncontrollable factors affect our ability to plan in this
fashion and the spring season, which can occur any time from
The Corporation’s ability to provide reliable services is
late March through May, is traditionally our slowest time.
dependent upon the availability of well trained, experienced
This seasonal cyclicality is evidenced by the number of drilling
crews to operate our field equipment. The strong Canadian
operating days in Canada in the first quarter of 2000 versus
and US economies combined with the seasonality of
the second quarter. In the period of January to March 2000,
employment offered by many of our business units in Canada
our Canadian drilling operating days totaled 13,937 while in
has increased the challenge of attracting qualified personnel.
the period of April to June, 2000 operating days amounted to
We must also balance the requirement to maintain a skilled
6,013.
workforce with the need to establish cost structures that vary
with activity levels. Technology
Technological innovation by oilfield service companies

Our most experienced people are retained during
has improved the profitability of the entire exploration and
periods of low utilization by having them fill lower level
production sector over the industry’s 140-year history.
positions on our field crews. The Corporation has established
Recently, development of directional and horizontal drilling,
training programs for employees new to the oilfield service
underbalanced drilling, coiled tubing drilling, and methods of
sector and we work closely with industry associations to
providing real time data during drilling and production
ensure competitive compensation levels and to attract new
operations have increased production volumes and the
workers to the industry as required.
recoverable amount of discovered reserves. Innovations such
Weather
as 3-D and 4-D seismic have maintained the success rate of
The ability to move heavy equipment in the Canadian exploration wells as the quantity of drillable prospects
oil and natural gas fields is dependent on weather conditions. declines.
As warm weather returns in the spring, the winter’s frost

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Our ability to deliver more efficient services is critical Foreign Operations

to our continued success. The Corporation has continuously The Corporation is working hard to export its expertise
built upon its experience and teamed with customers to and technologies to oil and gas producing regions around the
provide solutions to their unique problems. Our ability to world. With this comes the risk of dealing with business and
design and build specialized equipment has kept us on the political systems that are much different than we are
leading edge of technology. The success of our in-house accustomed to in North America. The Corporation has hired
designed and built Super Single™ drilling rig, both in Canada employees who have experience working in the international
and abroad, is testimony of our dedication to these efforts. arena and it is committed to recruiting resident nationals on
The continued development of our Oilfield Specialty the staffs of all its international operations.
Services segment, and in particular the research and Foreign Currency Exchange Rates
development work of AES, puts the Corporation at another
The Corporation has two sources of foreign currency
level where high-end technological innovation is paramount
exchange risk. On international contracts, attempts are made
to success. The team of highly qualified experienced
to structure revenue streams such that a portion sufficient to
professionals, that has been assembled and working together
match local expenditures is denominated in the local currency,
for almost a year in a state of the art testing facility, is equal to
with the remainder being denominated in US dollars. In
any in the industry.
addition, many of our business units buy a portion of their
Natural Gas Supply parts and supplies from suppliers in the United States. As a
North American natural gas demand is strong and result, the Corporation is a net payer of US dollars but at
growing. The industry has focused on the Western Canadian present this exposure is not significant.
Sedimentary Basin as the source of supply to satisfy a Merger and Acquisition Activity
significant portion of this increased demand. The
Recent merger and acquisition activity in the oil and
Corporation’s substantial operations in western Canada are
gas exploration and production sector has impacted demand
poised to benefit from the increased natural gas activity created
for our services as customers focus on reorganization activities
by this supply and demand imbalance. Recent natural gas
prior to committing funds to significant drilling and
discoveries in offshore fields in eastern Canada could, in the
maintenance projects. Continued merger and acquisition
long-term, provide competition to western Canadian supplies.
activity could have a short-term impact on our business, but
Acquisition Integration in the long-term should result in stronger, more active
The Corporation has worked towards its strategic customers.
objective of becoming an integrated service provider of OUTLOOK
sufficient size to benefit from economies of scale and to
Management holds an optimistic outlook for the future
provide the foundation from which to pursue international
based upon the strong fundamentals of the oil and natural gas
opportunities. Business acquisitions have been an important
exploration and production industry and upon its internal
tool in this pursuit and will continue to be so in the future.
initiatives to capitalize on them.
Continued successful integration of new businesses, people
and systems is key to our future success.

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❚ The North American natural gas story is key to resource and will benefit from increased activity in this
management’s optimistic outlook. Analysts estimate area. In addition, the Corporation has successfully
that over 60% of Canadian drilling activity in 2001 exported this home grown expertise, particularly in
will be targeting natural gas. The shortage of electricity Venezuela and Kazakhstan.
in California is well documented and has resulted in a ❚ The Corporation is confident that its significant
large number of electrical generating facilities being research and engineering efforts, centered around
proposed. Analysts predict that natural gas will be the AES’s staff and facilities, will produce the next
fuel of choice for 95% of these plants. Canada will generation of LWD systems and sensors. Field tests of
remain an important source of supply for this this equipment are underway and the first commercial
expanding market and transportation capacity is no applications are scheduled for the second half of 2001.
longer an issue. Meeting the demand will require
❚ The Corporation’s success and critical mass in Canada
increased drilling in existing reservoirs and exploration now form the strong foundation upon which to grow
of new areas including the Mackenzie Delta and other internationally. Precision’s presence in the US is
northern regions. Precision is well positioned to take growing and experienced people have been put in place
advantage of this increased activity. and infrastructure is currently being developed in
❚ Crude oil prices have remained high due to the tight Europe/Africa, Asia Pacific, the Middle East and Latin
supply and demand balance. This situation will likely America to facilitate the export of our skills and
continue for some time, as the impact of years of technologies, both old and new.
declining investment in the oil industry due to
❚ In March 2001, Precision, as part of a joint venture was
uneconomic pricing levels can not be reversed in a awarded a US $270 million, 240 well project in the
short time frame. Higher commodity prices will Burgos Basin in northern Mexico. As project manager
provide the necessary financing but time is also and lead contractor, the Corporation will supply
required to attract and train technically skilled drilling rigs, wireline, directional drilling, and well
personnel, develop drilling prospects, and bring new testing services, drill bits and downhole completion
reserves into production. The continued production tools. This high profile project gives the Corporation a
discipline of OPEC is a factor in the supply and foothold in a new expanding market eager for all the
demand equation, but to a diminishing extent. services and products we can deliver.
OPEC’s surplus production capacity has declined
Based upon these longer-term fundamentals and the
substantially and many member states are now looking
demand for the Corporation’s services currently being
to attract western technology and capital to reverse this
experienced, management expects 2001 to be another record
trend.
year.
❚ Canada’s heavy oil reserves are plentiful and improving
technology is rapidly increasing the productive capacity
of this known resource. Precision has long been a leader
in developing drilling techniques to exploit this

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MANAGEMENT’S REPORT TO THE SHAREHOLDERS
The accompanying consolidated financial statements and all information in the Annual Report are the responsibility of
management. The consolidated financial statements have been prepared by management in accordance with the accounting
policies in the notes to financial statements. When necessary, management has made informed judgments and estimates in
accounting for transactions which were not complete at the balance sheet date. In the opinion of management, the financial
statements have been prepared within acceptable limits of materiality, and are in accordance with Canadian generally accepted
accounting principles appropriate in the circumstances. The financial information elsewhere in the Annual Report has been
reviewed to ensure consistency with that in the consolidated financial statements.
Management has prepared Management’s Discussion and Analysis (MD&A). The MD&A is based upon the Corporation’s
financial results prepared in accordance with Canadian GAAP. The MD&A compares the audited financial results for the twelve
months ended December 31, 2000 to the audited results for the twelve months ended December 31, 1999. Note 13 to the
consolidated financial statements describes the impact on the consolidated financial statements of significant differences between
Canadian and United States GAAP.
Management maintains appropriate systems of internal control. Policies and procedures are designed to give reasonable
assurance that transactions are properly authorized, assets are safeguarded and financial records properly maintained to provide
reliable information for the preparation of financial statements.
KPMG LLP, an independent firm of Chartered Accountants, was engaged, as approved by a vote of shareholders at the
Corporation’s most recent annual general meeting, to audit the consolidated financial statements in accordance with generally
accepted auditing standards in Canada and provide an independent professional opinion.
The Audit Committee of the Board of Directors, which is comprised of three directors who are not employees of the
Corporation, has discussed the consolidated financial statements, including the notes thereto, with management and external
auditors. The consolidated financial statements have been approved by the Board of Directors on the recommendation of the
Audit Committee.
HANK B. SWARTOUT DALE E. TREMBLAY
Chairman of the Board, Senior Vice President Finance

President and Chief Executive Officer and Chief Financial Officer
February 14, 2001

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AUDITORS’ REPORT TO THE SHAREHOLDERS
We have audited the consolidated balance sheets of Precision Drilling Corporation as at December 31, 2000 and 1999 and
the consolidated statements of earnings and retained earnings and cash flow for the years then ended. These financial statements
are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that
we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the
Corporation as at December 31, 2000 and 1999 and the results of its operations and its cash flow for the years then ended in
accordance with Canadian generally accepted accounting principles.
Accounting principles generally accepted in Canada vary in certain significant respects from accounting principles generally
accepted in the United States. Application of accounting principles generally accepted in the United States would have affected
results of operations for years ended December 31, 2000 and 1999 and shareholders’ equity as of December 31, 2000 and 1999,
to the extent summarized in Note 13 to the consolidated financial statements.
KPMG LLP
Chartered Accountants
Calgary, Canada
February 14, 2001

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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS

As at December 31, 2000 1999

ASSETS
Current assets:
Cash $ 20,702 $ 5,550
Investment in short-term commercial paper – 46,775
Accounts receivable 424,817 239,088
Income taxes recoverable 2,050 3,531
Inventory (Note 2) 85,688 59,566
533,257 354,510
Property, plant and equipment, at cost less accumulated depreciation (Note 3) 1,287,932 761,589
Goodwill, net of accumulated amortization of $60,838 (1999 - $38,077) 550,502 304,400
Other assets (Note 4) 16,445 13,367
$ 2,388,136 $ 1,433,866
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Bank indebtedness $ 112,620 $ 3,353
Accounts payable and accrued liabilities 227,548 129,766
Current portion of long-term debt (Note 5) 35,353 58,524
375,521 191,643
Long-term debt (Note 5) 548,096 226,815
Future income taxes (Note 9) 257,624 –
Deferred income taxes (Note 9) – 106,613
Shareholders’ equity:
Share capital (Note 6) 864,495 627,923
Retained earnings 342,400 280,872
1,206,895 908,795
Contingencies and commitments (Notes 8 and 17)
$ 2,388,136 $ 1,433,866
See accompanying notes to consolidated financial statements.
Approved by the Board:
HANK B. SWARTOUT H. GARTH WIGGINS
Director Director

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CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

(Stated in thousands of dollars, except per share amounts)

Revenue $ 1,355,453 $ 734,740
Expenses:
Operating 870,172 487,960
General and administrative 102,848 58,429
Depreciation 101,300 67,228
Research and engineering 20,288 3,629
1,094,608 617,246
Operating earnings 260,845 117,494
Interest:
Long-term debt 31,166 19,634
Other 473 481
Income (2,926) (3,571)
Earnings before income taxes and goodwill amortization 232,172 103,967
Income taxes: (Note 9)
Current 36,252 69,299
Future 41,599 –
Deferred (reduction) – (15,413)
77,851 53,886
Earnings before goodwill amortization 154,321 50,081
Goodwill amortization, net of tax 22,761 15,831
Net earnings 131,560 34,250
Retained earnings, beginning of year 280,872 246,622
Adjustment on adoption of liability method of accounting for income taxes (70,032) –
Retained earnings, end of year $ 342,400 $ 280,872
Earnings per share before goodwill amortization: (Note 10)
Basic $ 3.17 $ 1.13
Fully diluted $ 2.98 $ 1.09
Earnings per share: (Note 10)
Basic $ 2.70 $ 0.77

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CONSOLIDATED STATEMENTS OF CASH FLOW

(Stated in thousands of dollars, except per share amounts)
Cash provided by (used in):

Operations:
Net earnings $ 131,560 $ 34,250
Items not affecting cash:
Depreciation 101,300 67,228
Goodwill amortization 22,761 15,831
Future income taxes 41,599 –
Deferred income taxes – (15,413)
Amortization of deferred financing costs 1,435 1,157
Amortization and realization of deferred foreign exchange gain (742) –
Funds provided by operations 297,873 100,036
Changes in non-cash working capital balances (Note 16) (60,988) (62,219)
236,885 37,817
Investments:
Acquisitions (Note 12) (364,959) 2,250
Purchase of property, plant and equipment (201,004) (56,117)
Proceeds on sale of property, plant and equipment 20,520 14,969
Investments 95 (3,125)
Proceeds on disposal of investment and subsidiary 64 122,929
(545,284) 80,906
Financing:
Increase in long-term debt 321,543 109,688
Repayment of long-term debt (118,219) (187,860)
Deferred financing costs (1,973) –
Issuance of common shares 21,009 11,558
Redemption of warrants (18,924) –
Change in bank indebtedness 73,340 (260)
276,776 (66,874)
Increase (decrease) in cash (31,623) 51,849
Cash, beginning of year 52,325 476
Cash, end of year $ 20,702 $ 52,325
Funds provided by operations per share: (Note 10)
Basic $ 6.11 $ 2.25
Cash is defined as cash and investment in short-term commercial paper.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Field technical equipment is depreciated on the straight-
(Tabular amounts stated in thousands of dollars, line method over periods ranging from two to five years.
except per share amounts)
Rental equipment is depreciated on the straight-line
method over periods ranging from five to 15 years. Other
Precision Drilling Corporation (the Corporation) is a
equipment is depreciated on a straight-line basis over
vertically integrated oilfield service company, providing
periods ranging from three to 10 years.
oilfield and industrial services to customers worldwide.
Light duty vehicles are depreciated on the straight-line
The financial statements are prepared in accordance with
method over four years. Heavy-duty vehicles are
generally accepted accounting principles in Canada.
depreciated on the straight-line basis over 10 years.
Management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and Buildings are depreciated on the straight-line method
disclosure of contingent assets and liabilities at the date of the over periods ranging from 10 to 30 years.
financial statements and the reported amounts of revenues and (d) Revenue recognition:
expenses during the reported period. Actual results could Revenue is primarily recognized as services are rendered
differ from these estimates. based upon agreed daily, hourly, or job rates. The
1. SIGNIFICANT ACCOUNTING POLICIES: Corporation’s manufacturing operations recognize
revenue on work in progress on a percentage of
(a) Principles of consolidation:
completion basis.
The consolidated financial statements include the
(e) Investments:
accounts of the Corporation, its subsidiaries, all of which
are wholly-owned, and its proportionate share of joint Investments in shares of associated companies, over
ventures. which the Corporation has significant influence, are
accounted for by the equity method. Other investments
(b) Inventory:
are carried at cost. If there are other than temporary
Inventory is valued at the lower of average cost and
declines in value, these investments would be written
replacement value.
down to their net realizable value.
(c) Property, plant and equipment:
(f) Deferred financing costs:
Drilling rig equipment is depreciated by the unit-of-
Costs associated with the issuance of long-term debt are
production method based on 3,650 drilling days, except
deferred and amortized on the straight-line basis over the
for drill pipe and drill collars, which are depreciated over
term of the debt. The amortization is included in interest
1,100 drilling days. Service rig equipment is depreciated
expense.
on a unit-of-production method based on 1,500 days for
(g) Goodwill:
single and double rigs and 2,000 days for heavy double
rigs. Goodwill is recorded at cost and amortized on the
straight-line method over 20 years. The recoverability of
goodwill is assessed, if indications of impairment are
present, based on estimated undiscounted future cash
flows.

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(h) Income taxes: exchange rate and non-monetary assets and liabilities are
Effective January 1, 2000, the Corporation adopted the translated using historical rates of exchange. Gains or
liability method of accounting for future income taxes. losses resulting from these translation adjustments are
Under the liability method, future income tax assets and included in net earnings. Gains and losses related to
liabilities are determined based on “temporary foreign currency denominated long-term debt are
differences” (differences between the accounting basis deferred and amortized over the term of the debt.
and the tax basis of the assets and liabilities), and are (k) Stock-based compensation plans:
measured using the currently enacted, or substantively The Corporation has equity incentive plans, which are
enacted, tax rates and laws expected to apply when these described in Note 6. No compensation expense is
differences reverse. Income tax expense is the sum of the recognized for these plans when stock options are issued.
Corporation’s provision for current income taxes and the Any consideration received on exercise of the stock
difference between opening and ending balances of the options is credited to share capital.
future income tax assets and liabilities.
(l) Research and engineering:
Prior to adoption of this new accounting standard,
Research and engineering costs are charged to income as
income tax expense was determined using the deferral
incurred. Costs associated with the development of new
method. Under this method, deferred income tax expense
operating tools and systems are expensed during the
was determined based on “timing differences” (differences
period unless the recovery of these costs can be reasonably
between the accounting and tax treatment of expense or
assured given the existing and anticipated future industry
income items), and were measured using the tax rates in
conditions. Upon successful completion and field testing
effect in the year the differences originated.
of the tools any deferred costs are transferred to the
The Corporation has adopted the new income tax related capital asset accounts.
accounting standard retroactively, without restating the
(m) Earnings and funds provided by operations per share:
financial statements of any prior period. As a result, the
Basic earnings and funds provided by operations per share
Corporation has recorded an adjustment to retained
are calculated using the weighted average number of
earnings and future tax liability, formerly the deferred tax
shares outstanding during the year. Fully diluted earnings
liability, in the amount of $70.0 million as at January 1,
and funds provided by operations per share are calculated
2000.
by adjusting earnings and funds from operations by the
(i) Post employment benefits:
imputed earnings on funds which would have been
The Corporation has entered into an employment received on exercise of options and by adjusting the
agreement with a senior officer, which provides for certain weighted average number of shares outstanding by the
post employment benefits. Costs of these benefits are number of options outstanding.
charged to earnings on a straight-line basis over ten years.
(n) Comparative figures:
(j) Foreign currency translation:
Certain comparative figures have been reclassified to
Accounts of foreign operations, all of which are conform with the current financial statement
considered financially and operationally integrated, are presentation.
translated to Canadian dollars using average exchange
rates for the year for revenue and expenses. Monetary
assets and liabilities are translated at the year end current

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2. INVENTORY:
2000 1999
Finished goods and work in progress $ 52,600 $ 23,930
Operating supplies 16,123 18,406
Manufacturing parts and materials 16,965 17,230
$ 85,688 $ 59,566
3. PROPERTY, PLANT AND EQUIPMENT:
Accumulated Net Book

Cost Depreciation Value
2000
Rig equipment $ 848,476 $ 163,244 $ 685,232
Field technical equipment 306,552 20,384 286,168
Rental equipment 86,656 23,321 63,335
Other equipment 176,945 36,219 140,726
Vehicles 67,968 13,608 54,360
Buildings 44,935 7,766 37,169
Other 13,489 6,973 6,516
Land 14,426 – 14,426
$ 1,559,447 $ 271,515 $ 1,287,932
1999
Rig equipment $ 632,015 $ 126,935 $ 505,080
Field technical equipment 106,563 11,962 94,601
Rental equipment 80,815 22,877 57,938
Other equipment 76,259 29,289 46,970
Vehicles 27,174 9,592 17,582
Buildings 26,093 5,186 20,907
Other 13,062 5,569 7,493
Land 11,018 – 11,018
$ 972,999 $ 211,410 $ 761,589
4. OTHER ASSETS:
2000 1999
Investments, at cost less provision for impairment $ 4,125 $ 4,494
Investments, at equity 3,183 2,905
Deferred financing costs, net of accumulated amortization 8,927 8,389
Deferred foreign exchange loss (gain) 210 (2,421)
$ 16,445 $ 13,367

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5. LONG-TERM DEBT:
2000 1999
Unsecured debentures – Series 1 $ 200,000 $ 200,000
Unsecured debentures – Series 2 150,000 –
Unsecured notes (US $35,000) – 50,516
EDC facility (US $18,472) 27,712 34,278
EDC facility (US $50,000) 75,010 –
Extendable revolving unsecured facility 94,468 –
Equipment loans 30,760 –
Capital lease obligations 5,499 545
583,449 285,339
Less amounts due within one year 35,353 58,524
$ 548,096 $ 226,815
The $200.0 million 6.85% Series 1 unsecured The $75.0 million unsecured term financing facility with
debentures mature June 26, 2007 and have an effective the EDC is repayable over five years in semi-annual
interest rate of 7.44% after taking into account deferred installments, matures September 15, 2005 and bears
financing costs. The debentures are redeemable at any interest at six-month US Libor plus applicable margin.
time at the option of the Corporation upon payment of The margin is dependent upon the Corporation’s credit
a redemption price equal to the greater of an amount rating, which at December 31, 2000 resulted in a margin
calculated with reference to the yield on a Government of of 0.9%.
Canada bond with the same maturity, and par. The Corporation has an extendable revolving unsecured
The $150.0 million 7.65% Series 2 unsecured facility of $300.0 million (or US equivalent) with a
debentures mature October 27, 2010 and have an syndicate led by a Canadian chartered bank. Advances
effective interest rate of 7.71% after taking into account under the facility bear interest at the bank’s prime lending
deferred financing costs. The debentures are redeemable rate, US base rate, US Libor plus applicable margin or
at any time at the option of the Corporation upon Bankers’ Acceptance plus applicable margin. The
payment of a redemption price equal to the greater of an applicable margin is dependent on the Corporation’s
amount calculated with reference to the yield on a credit rating, which at December 31, 2000 resulted in a
Government of Canada bond with the same maturity, margin of 0.75%. The facility is extendable annually at
and par. the option of the lenders. Should this facility not be
The $27.7 million unsecured term financing facility with extended, outstanding amounts will be transferred to a
the Export Development Corporation (EDC) is two-year term facility repayable in equal quarterly
repayable in semi-annual installments, matures on installments. As at December 31, 2000 the Corporation
January 20, 2004 and bears interest at six-month US had drawn $194.5 million under this facility, $100.0
Libor plus applicable margin. The margin is dependent million of which has been included in bank indebtedness
upon the Corporation’s credit rating, which at December as the funds were used to finance working capital.
31, 2000 resulted in a margin of 0.8%.

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Equipment loans of $30.8 million bear interest at rates between 8.26% and 8.75% and are repayable in monthly installments.
These loans are secured by specific well servicing equipment.
Principal repayments over the next five years are as follows:
2001 $ 35,353
2002 32,866
2003 35,537
2004 19,673
2005 15,041
6. SHARE CAPITAL:
Authorized:
❚ unlimited number of non-voting cumulative convertible redeemable preferred shares without nominal or par value
❚ unlimited number of common shares without nominal or par value
The following is a summary of the changes in share capital:
Issued:
Common Shares: Number Amount

Balance, December 31, 1998 42,078,518 $ 504,541
Issued on acquisition of Computalog 4,031,441 106,107
Issued on acquisition of Underbalanced 217,158 5,716
Options exercised 835,902 11,559
Balance, December 31, 1999 47,163,019 $ 627,923
Issued on acquisition of Plains 113,882 6,555
Issued on acquisition of CenAlta 4,025,743 202,535
Issued on acquisition of AQRIT assets 48,000 2,500
Options exercised 932,409 21,009
52,283,053 $ 860,522
Warrants issued on acquisition of Plains 22,897
Warrants repurchased by the Corporation (18,924)
Balance, December 31, 2000 $ 864,495
Each of the 351,604 warrants outstanding entitle the holder thereof to acquire one common share at an exercise price of
$64.00 at any time prior to 4:00 p.m. on December 31, 2001. The warrant holders were entitled to put the warrants to
Precision at any time prior to September 29, 2000 in return for $11.30 cash for each full warrant and holders of 1,674,671
warrants exercised their option to do so.

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The Corporation has equity incentive plans under which a combined total of 5,208,823 options to purchase common shares
can be granted to employees and directors. Under these plans, the exercise price of each option equals the fair market value
of the Corporation’s stock on the date of the grant and an option’s maximum term is five years. Options generally vest over
a period of four years from the date of grant as employees or directors render continuous service to the Corporation.
A summary of the status of the equity incentive plans as at December 31, 1999 and 2000, and changes during the periods
then ended is presented below:
Options Range of Weighted Average Options
Outstanding Exercise Price Exercise Price Exercisable
Outstanding at December 31, 1998 3,370,600 $ 6.50 – 44.38 $ 15.89 772,000
Granted 1,718,540 13.50 – 33.60 28.12
Exercised (835,902) 6.50 – 34.50 13.87
Cancelled or expired (313,400) 7.00 – 34.50 24.21
Granted 1,615,474 25.50 – 54.20 39.51
Exercised (932,409) 13.50 – 34.50 22.53
Cancelled or expired (148,800) 16.30 – 40.25 28.55
The range of exercise prices for options outstanding at December 31, 2000 are as follows:
Total Options Outstanding Exercisable Options
Weighted
Weighted Average Weighted
Average Remaining Average
Exercise Contractual Exercise
Range of Exercise Prices: Number Price Life (Years) Number Price
$ 13.50 – 19.99 712,854 $ 14.49 2.2 301,904 $ 14.52
20.00 – 29.99 772,985 25.05 2.0 282,658 24.12
30.00 – 39.99 2,126,590 34.58 3.6 346,525 33.58
40.00 – 49.99 805,274 41.11 4.6 15,000 44.38
50.00 – 54.20 56,400 52.24 4.5 – –
$ 13.50 – 54.20 4,474,103 $ 31.18 3.3 946,087 $ 24.84
7. EMPLOYEE BENEFIT PLANS:
The Corporation has a defined contribution employee benefit plan covering a significant number of its employees. The
Corporation matches individual employee contributions up to 5% of the employee’s compensation. Employer matching
contributions under the plan totalled $4.3 million for the year ended December 31, 2000 (year ended December 31, 1999
- $3.0 million).

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8. COMMITMENTS:
The Corporation has commitments for operating lease agreements in the aggregate amount of $120.6 million. Payments
over the next five years are as follows:
2001 $ 22,279
2002 19,030
2003 14,715
2004 9,258
2005 8,314
Rent expense included in the statements of earnings is as follows:

Year ended December 31, 2000 $ 12,064
Year ended December 31, 1999 5,322
9. INCOME TAXES:
The provision for income taxes differs from that which would be expected by applying statutory rates. A reconciliation of
the difference is as follows:
2000 1999
Earnings before income taxes $ 209,411 $ 88,136
Income tax rate 45% 45%
Expected income tax provision $ 94,235 $ 39,661
Add (deduct):
Non-deductible expenses 1,458 1,313
Utilization of prior period losses (1,828) (1,657)
Non-deductible depreciation and amortization 10,106 10,146
Income taxed in jurisdictions with lower tax rates (5,869) –
Other (317) (503)
$ 97,785 $ 53,886
Reduction of future tax balances due to substantively enacted tax rate reductions (19,934) –
$ 77,851 $ 53,886
The Federal Government of Canada introduced tax rate reductions to be implemented over the next four years in its
February 28 and October 18, 2000 budgets. The effect of the combined 7% tax rate reduction, from 29% to 22%, on the
Corporation’s future tax balances has been reflected as a reduction of future tax expense in 2000.
The Corporation’s operations are complex and the computation of the provision for income taxes involves tax
interpretations, regulations and legislation that are continually changing. There are tax matters that have not yet been
confirmed by taxation authorities, however, management believes that the provision for income taxes is adequate.

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The net future tax liability (1999 – deferred tax liability) is comprised of the tax effect of the following temporary
differences:
2000 1999
Liabilities:
Property, plant and equipment $ 220,364 $ 87,371
Assets held in partnership with different tax year 67,332 19,522
Deferred financing costs 3,358 3,859
$ 291,054 $ 110,752
Assets:
Losses carried forward $ 30,528 $ –
Reserves 2,902 2,946
Share issue costs – 1,193
$ 33,430 $ 4,139
$ 257,624 $ 106,613
10. EARNINGS AND FUNDS PROVIDED BY OPERATIONS PER SHARE:
Per share amounts have been calculated on the weighted average number of common shares outstanding. The weighted
average shares outstanding for the year ended December 31, 2000 was 48,722,141 (year ended December 31, 1999 –
44,499,837).
Fully diluted per share amounts reflect the dilutive effect of the exercise of the options and warrants outstanding. The fully
diluted shares outstanding for the year ended December 31, 2000 was 52,886,723 (year ended December 31, 1999 –
47,851,960). Earnings on the funds which would have been received on exercise of the options have been imputed at 5%
per annum.
11. SIGNIFICANT CUSTOMERS:
During the years ended December 31, 2000 and 1999, no one customer accounted for more than 5% of the Corporation’s
revenue.
12. ACQUISITIONS:
During the year ended December 31, 2000, the Corporation completed business acquisitions, the most significant of which
were:
(a) Acquisition of all the issued and outstanding shares of Plains Energy Services Ltd. (Plains) in July 2000. Plains provides
wireline, surface control systems, well servicing and contract drilling services to the oil and gas industry and engineers,
manufactures, sells and operates specialty products, tools and equipment.
(b) Acquisition of all the issued and outstanding shares of CenAlta Energy Services Inc. (CenAlta) in October 2000.
CenAlta provides equipment and crews for the servicing and drilling of oil and natural gas wells in western Canada.
(c) Acquisition of the global directional drilling and electromagnetic measurement while drilling business and associated
assets from Geoservices S.A. (Geoservices) in October 2000.

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The acquisitions have been accounted for by the purchase method with results of operations of the acquired businesses
included in the financial statements from the effective dates of acquisition. The details of the acquisitions are as follows:
Plains CenAlta Geoservices Other Total
Net assets acquired at assigned values:
Working capital $ 11,178 $ (2,240) $ 6,717 $ 18 $ 15,673
Property, plant and equipment 124,847 219,411 85,500 17,401 447,159
Goodwill 188,540 72,351 – 7,972 268,863
Other assets 28 – – – 28
Long-term debt (42,535) (50,725) – – (93,260)
Future income taxes (4,755) (34,262) – – (39,017)
$ 277,303 $ 204,535 $ 92,217 $ 25,391 $ 599,446
Consideration:
Common shares $ 6,555 $ 202,535 $ – $ 2,500 $ 211,590
Warrants 22,897 – – – 22,897
Cash 247,851 2,000 92,217 22,891 364,959
$ 277,303 $ 204,535 $ 92,217 $ 25,391 $ 599,446
The following proforma information provides an indication of what the Corporation’s results of operations would have
been had Plains and CenAlta been acquired effective January 1, 2000:
2000
Revenues $1,546,431
Earnings before goodwill amortization 129,692
Net earnings 99,304
Earnings per share before goodwill amortization:
Basic $ 2.50
Fully diluted 2.37
Earnings per share:
Basic $ 1.91
Fully diluted 1.83
During the year ended December 31, 1999 the Corporation completed several acquisitions, the most significant of which
were:
(a) Acquisition of all the issued and outstanding shares of Computalog Ltd. (Computalog) in July 1999. Computalog
provides electric wireline logging services and directional drilling services to the oil and gas industry and manufactures
and sells specialty products, tools and equipment.
(b) Acquisition of all the issued and outstanding shares of Underbalanced Drilling Systems Ltd. (Underbalanced) in July
1999. Underbalanced provides a service gas for use in underbalanced drilling applications.

text 4/5/01 11:25 AM Page 68
The acquisitions have been accounted for by the purchase method with results of operations of the acquired entities
included in the financial statements from the effective dates of acquisition. The details of the acquisitions are as follows:
Computalog Underbalanced Other Total
Net assets acquired at assigned values:
Working capital $ 49,798(a) $ (303)(b) $ (3) $ 49,492
Property, plant and equipment 82,628 7,149 10,716 100,493
Investments 3,204 – – 3,204
Deferred financing costs 321 – – 321
Goodwill 55,518 – 655 56,173
Long-term debt (52,165) (911) (7,279) (60,355)
Deferred income taxes (5,663) – (2) (5,665)
$ 133,641 $ 5,935 $ 4,087 $ 143,663
Consideration:
Common Shares $ 106,107 $ 5,716 $ – $ 111,823
Carrying amount of Computalog shares
acquired prior to April 30, 1999 23,070 – – 23,070
Carrying amount of investment
prior to January 1, 1999 – – 1,528 1,528
Cash 4,464 219 2,559 7,242
$ 133,641 $ 5,935 $ 4,087 $ 143,663
(a) Includes cash of $9,392
(b) Includes cash of $100
13. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES:
These financial statements have been prepared in accordance with Canadian generally accepted accounting principles
(Canadian GAAP) which, in the case of the Corporation conform with United States generally accepted accounting
principles (US GAAP) in all material respects, except as follows:
(a) Income taxes:
In 1999 the Corporation followed the deferral method of accounting for income taxes. In 2000 the Corporation
adopted the liability method as described in Note 1(h) without restatement of prior years. For 1999 and 2000 US
GAAP required the use of the liability method prescribed in the Statement of Financial Accounting Standards No. 109,
which substantially conforms with the Canadian GAAP accounting standard adopted in 2000. In 1999, adoption of
US GAAP would have increased both goodwill and future tax liability by $70.0 million. In 2000 the US GAAP
financial statements would reflect an increase of goodwill of $66.5 million and a corresponding increase in retained
earnings. An additional charge to earnings of $3.5 million would be required related to this goodwill.
Under Canadian GAAP, future tax liabilities and assets are calculated by reference to current tax legislation and
proposed legislation that is considered to be substantively enacted but not yet enacted into law. US GAAP requires that
only enacted income tax legislation be used for calculation of future tax amounts.

text 4/5/01 11:25 AM Page 69
(b) Translation of foreign currency denominated debt:
Under Canadian GAAP, gains and losses on translation of foreign currency denominated debt are deferred and
amortized over the debt term. US GAAP requires that such gains and losses be included in the determination of
income.
(c) Per share amounts:
The Corporation calculates its fully diluted earnings per share following the policy outlined in Note 10. US GAAP
requires the use of the treasury stock method for diluted per share amounts.
The application of the US accounting principles would have the following impact on the consolidated financial statements:
Consolidated Statements of Earnings

Net earnings under Canadian GAAP $ 131,560 $ 34,250
Adjustments under US GAAP:
Goodwill amortization (3,502) –
Income tax rate (19,934) –
Foreign currency translation (210) 2,421
Net income and comprehensive income under US GAAP $ 107,914 $ 36,671
Earnings per share under US GAAP:
Basic $ 2.22 $ 0.80
Balance Sheet
As at December 31, 2000 1999

As reported US GAAP As reported US GAAP
Current assets $ 533,257 $ 533,257 $ 354,510 $ 354,510
Property, plant and equipment 1,287,932 1,287,932 761,589 761,589
Goodwill 550,502 617,032 304,400 374,432
Other assets 16,445 16,235 13,367 15,788
$ 2,388,136 $ 2,454,456 $ 1,433,866 $ 1,506,319
Current liabilities $ 375,521 $ 375,521 $ 191,643 $ 191,643
Long-term debt 548,096 548,096 226,815 226,815
Future income taxes 257,624 277,558 – 176,645
Deferred income taxes – – 106,613 –
Shareholders’ equity 1,206,895 1,253,281 908,795 911,216
$ 2,388,136 $ 2,454,456 $ 1,433,866 $ 1,506,319

text 4/5/01 11:25 AM Page 70
Stock Compensation
Under Canadian GAAP, no compensation cost has been recognized for stock options in the financial statements. Under US
GAAP, the Corporation applied APB Opinion No. 25 in accounting for stock options and, accordingly, no compensation
cost is recognized in earnings. The per share weighted-average fair value of stock options granted during the year ended
December 31, 2000 was $18.21 (year ended December 31, 1999 - $8.66) on the date of grant using the Black Scholes
option-pricing model with the following assumptions: risk free interest rate of 6.0%, expected life of five years and expected
volatility of 61% (year ended December 31, 1999 – risk-free interest rate of 5%, expected life of five years and expected
volatility of 46%).
Had the Corporation determined compensation cost based on the fair value at the date of grant for its stock options under
SFAS 123, net earnings in accordance with US GAAP would have decreased by $16.8 million to $91.2 million (basic EPS -
$1.87) for the year ended December 31, 2000 and decreased by $6.3 million to $27.9 million (basic EPS - $0.63) for the year
ended December 31, 1999. These pro forma earnings reflect compensation cost amortized over the options’ vesting period.
Comprehensive Income
Comprehensive income is equal to net earnings.
14. SEGMENTED INFORMATION:
The Corporation operates in three industry segments. Contract Drilling Services, which provides drilling services and well
servicing rigs, Oilfield Specialty Services, which includes well testing, underbalanced drilling, wireline and directional
drilling services and the manufacture and sale of wireline tools and equipment, and Rental and Production Services, which
includes compression equipment design, packaging, sales and service, oilfield equipment rental services, industrial
equipment rentals (to February 18, 1999) and other industrial process services.
Contract Oilfield Rental and
Drilling Specialty Production Corporate
Services Services Services and Other Total
2000
Revenue $ 743,544 $ 372,425 $ 239,220 $ 264 $ 1,355,453
Operating earnings 212,633 30,620 43,289 (25,697) 260,845
Research and engineering – 20,288 – – 20,288
Depreciation 58,194 27,969 13,995 1,142 101,300
Assets 1,376,007 718,680 203,113 90,336 2,388,136
Capital expenditures* 97,498 78,468 21,828 3,210 201,004
1999
Revenue $ 429,848 $ 125,954 $ 178,938 $ – $ 734,740
Operating earnings 97,864 6,796 19,705 (6,871) 117,494
Research and engineering – 3,629 – – 3,629
Depreciation 40,036 12,305 14,575 312 67,228
Assets 827,412 345,492 188,524 72,438 1,433,866
Capital expenditures* 27,670 9,138 15,800 3,509 56,117
* excludes acquisitions

text 4/5/01 11:25 AM Page 71
The Corporation’s operations are carried on in the following geographic locations:

Domestic International Total
2000
Revenue $ 1,105,183 $ 250,270 $ 1,355,453
Assets 2,048,219 339,917 2,388,136
1999
Revenue $ 615,222 $ 119,518 $ 734,740
Assets 1,271,228 162,638 1,433,866
15. FINANCIAL INSTRUMENTS:
The carrying value of cash, investments in short-term commercial paper, accounts receivable, accounts payable and accrued
liabilities approximate their fair value due to the relatively short period to maturity of the instruments. The fair value of
long-term debt, exclusive of the unsecured debentures, approximates its carrying value as it bears interest at floating rates.
The $200 million Series 1 debentures have a fair value of approximately $199.5 million as at December 31, 2000
(December 31, 1999 - $191.8 million) and the $150 million Series 2 unsecured debentures have a fair value of
approximately $152.6 million at December 31, 2000. Investments have a carrying value of $7.3 million (December 31,
1999 - $7.4 million) and a fair value of approximately $12.0 million (December 31, 1999 - $7.4 million) as at December
31, 2000.
Accounts receivable includes balances from a large number of customers. The Corporation assesses the credit worthiness of
its customers on an ongoing basis as well as monitoring the amount and age of balances outstanding. Accordingly, the
Corporation views the credit risks on these amounts as normal for the industry. At December 31, 2000 the Corporation’s
allowance for doubtful accounts was $8.2 million (December 31, 1999 - $6.6 million).
The Corporation manages its exposure to interest rate risks through a combination of fixed and floating rate borrowings.
As at December 31, 2000, 34% of its total long-term debt was in floating rate borrowings.
The Corporation is exposed to foreign currency fluctuations in relation to its international operations, however,
management believes this exposure is not material to its overall operations.
16. SUPPLEMENTAL CASH FLOW INFORMATION:
2000 1999
Cash interest paid $ 29,504 $ 16,663
Cash income taxes paid 34,771 120,238
Components of change in non-cash working capital balances:
Accounts receivable $ (120,686) $ (48,414)
Inventory (6,391) (4,927)
Accounts payable and accrued liabilities 64,479 16,072
Income taxes payable 1,610 (24,950)
$ (60,988) $ (62,219)

text 4/5/01 11:25 AM Page 72
The components of accounts payable and accrued liabilities are as follows:

2000 1999
Accounts payable $ 68,903 $ 40,494
Accrued liabilities:
Payroll 50,522 25,959
Other 108,123 63,313
$ 227,548 $ 129,766
17. CONTINGENCIES:
The Corporation, through the performance of its services and product sales obligations, is sometimes named as a defendant
in litigation. The nature of these claims is usually related to personal injury, completed operations or product liability. The
Corporation maintains a level of insurance coverage deemed appropriate by management and for matters for which
insurance coverage can be maintained. The Corporation has no outstanding claims having a potentially material adverse
effect on the Corporation as a whole.
18. SUBSEQUENT EVENT:
In January 2001, the Corporation acquired BecField Drilling Services Ltd. (BecField) for cash consideration of $30.0
million. BecField provides directional drilling and measurement while drilling services through its technical field and
support personnel to the onshore and offshore oil and gas industry. It has established operations in Europe and the Middle
East.

PDar01DR10 3/28/01 3:02 PM Page 73
Canadian...
– you bet! – and proud of 5
our global presence!

PRECISION DRILLING CORPORATION CANADIAN 73
tabs 4/5/01 11:46 AM Page 74
HOW WE’VE PERFORMED
SHARE TRADING SUMMARY — THE TORONTO STOCK EXCHANGE
High Low Close Volume Value

Canadian ($) ($) ($) of Shares ($)
2000
March 31 48.95 33.90 48.55 15,684,504 643,952,179
June 30 59.50 43.80 57.20 15,846,874 851,428,913
September 30 59.00 47.90 53.85 13,604,034 731,986,873
December 31 57.15 39.30 56.25 15,461,804 747,323,156
59.50 33.90 56.25 60,597,216 2,974,691,121
1999
March 31 21.50 13.25 19.50 13,718,204 234,035,097
June 30 30.75 18.45 28.00 14,673,427 384,072,934
September 30 40.60 27.05 34.00 14,029,216 487,923,911
December 31 39.45 28.25 37.00 8,875,591 294,174,872
40.60 13.25 37.00 51,296,438 1,400,206,814
SHARE TRADING SUMMARY — THE NEW YORK STOCK EXCHANGE
High Low Close Volume Value

US ($) ($) ($) of Shares ($)
2000
March 31 33.75 23.31 33.38 14,504,500 416,080,112
June 30 40.38 29.38 38.63 14,323,200 512,362,421
September 30 39.56 32.38 35.63 12,586,000 455,927,521
December 31 37.94 25.56 37.53 15,878,300 491,100,502
40.38 23.31 37.53 57,292,000 1,875,470,556
1999
March 31 14.00 8.81 13.00 4,453,900 50,536,487
June 30 21.13 12.31 19.06 7,252,400 126,663,654
September 30 27.75 18.38 23.19 9,008,500 212,591,281
December 31 26.94 19.13 25.69 9,422,900 212,297,850
27.75 8.81 25.69 30,137,700 602,089,272
74 PRECISION DRILLING CORPORATION CANADIAN

text 4/5/01 11:25 AM Page 75
STATEMENTS OF EARNINGS AND RETAINED EARNINGS

8 months
Years ended Years ended ending
December 31 April 30 Dec. 31
($ millions except per share amounts) 2000 1999 1999 1995 1990 1985
Revenue 1,355.5 734.7 693.9 178.6 31.7 4.0
Expenses:
Operating 870.2 488.0 450.1 122.4 24.7 3.3
General and administrative 102.9 58.4 51.1 12.1 3.9 0.3
Depreciation 101.3 67.2 61.1 9.8 1.1 0.2
Research and engineering 20.3 3.6 – – – –
Operating earnings 260.8 117.5 131.6 34.3 2.0 0.2
Interest, net 28.6 16.5 18.9 1.5 1.2 –
Gain on disposal of subsidiary and investments – (26.3) (34.8) – – –
Reduction of carrying amount of investments – 13.1 11.0 – – –
Reduction of carrying amount of property,
plant and equipment – 10.2 10.2 – 5.1 –
Forgiveness of long-term debt – – – – (5.2) –
Dividend income – – – 0.7 – –
Earnings before taxes, goodwill amortization
and minority interest 232.2 104.0 126.3 33.5 0.9 0.2
Income taxes 77.9 53.9 58.0 16.4 – 0.1
Earnings before goodwill amortization
and minority interest 154.3 50.1 68.3 17.1 0.9 0.1
Goodwill amortization 22.7 15.8 14.9 – – –
Earnings before minority interest 131.6 34.3 53.4 17.1 0.9 0.1
Minority interest – – – 0.2 – –
Net earnings 131.6 34.3 53.4 16.9 0.9 0.1
Retained earnings, beginning of period 280.9 246.6 206.9 20.7 5.7 –
Adjustment on adoption of liability method of
accounting for income taxes (70.1) – – – – –
Adjustment on purchase and cancellation of share capital – – – (0.2) – –
Retained earnings, end of period 324.4 280.9 260.3 37.4 6.6 0.1
Earnings before goodwill amortization
and minority interest per share:
Basic ($) 3.17 1.13 1.62 1.04 0.08 0.01
Fully diluted ($) 2.98 1.09 1.56 0.95 n/a n/a
Earnings per share:
Basic ($) 2.70 0.77 1.27 1.03 0.08 0.01
Fully diluted ($) 2.55 0.76 1.22 0.94 n/a n/a

text 4/5/01 11:25 AM Page 76
ADDITIONAL SELECTED FINANCIAL DATA
8 months
Years ended Years ended ending
December 31 April 30 Dec. 31
($ millions except per share amounts) 2000 1999 1999 1995 1990 1985
Returns
Return on sales (1) 9.7% 4.7% 7.7% 9.5% 2.8% 3.0%
Return on assets (2) 7.5% 2.6% 9.3% 14.7% 3.2% 3.7%
Return on equity (3) 13.5% 4.2% 15.9% 29.1% 7.0% 8.7%
Financial position
Working capital 157.7 162.9 91.2 8.4 3.8 0.1
Current ratio 1.42 1.85 1.54 1.21 1.53 1.05
Net fixed assets 1,287.9 761.6 683.5 66.8 15.7 2.9
Total assets 2,388.1 1,436.3 1,247.7 119.1 27.4 4.8
Long–term debt 548.1 226.8 215.0 1.4 5.6 0.8
Shareholders’ equity 1,206.9 908.8 768.3 67.0 12.7 2.1
Long–term debt to shareholders’ equity 0.45 0.25 0.28 0.02 0.44 0.37
Net capital expenditures excluding acquisitions 180.5 41.1 88.3 11.8 1.1 1.4
EBITDA (4) 362.1 184.9 192.7 44.1 3.1 0.4
EBITDA – % of sales 26.7% 25.2% 27.8% 24.7% 9.8% 10.8%
Operating earnings 260.8 117.5 131.6 34.3 2.0 0.2
Operating earnings – % of sales 19.2% 16.0% 19.0% 19.2% 6.2% 5.7%
Cash flow (5) 297.9 100.0 78.0 28.3 2.0 0.4
Cash flow per share ($) 6.11 2.25 1.85 1.73 0.18 0.04
Depreciation 101.3 67.2 61.1 9.8 1.1 0.2
Common share data
Book value per share ($) (6) 24.75 20.42 18.26 4.09 1.14 0.23
Earnings per share ($) (7) 2.70 0.77 1.27 1.03 0.08 0.01
Price earnings ratio (8) 20.8 48.1 19.8 6.7 17.4 –
Weighted average common shares outstanding (000’s) 48,772 44,500 42,086 16,398 11,218 9,006
(1) Return on sales was calculated by dividing net earning by total revenues
(2) Return on assets was calculated by dividing net earnings by average total assets
(3) Return on equity was calculated by dividing net earnings by average total shareholders’ equity
(4) Earnings before interest, taxes, depreciation and amortization
(5) Funds provided from operations excluding forgiveness of debt for 1990 and funds provided from operations combined with dividend income
(6) Book value per share was calculated by dividing shareholders’ equity by total weighted average number of common shares outstanding
(7) Earning per share was calculated by dividing net earnings by the total weighted average number of common shares outstanding
(8) Year end closing price divided by basic earnings per share

text 4/5/01 11:25 AM Page 77
WHO WE ARE AND HOW TO FIND US
HEAD OFFICE
Precision Drilling Corporation Oilfield Specialty Services – Latin America P.D. Technical Services Ltd.
4200, Petro-Canada Centre Av. la Estancia 2nd Floor Trident House,
150-6th Avenue SW Centro Ciudad Comercial Tamanaca Broad Street, Bridgetown,
Calgary, Alberta T2P 3Y7 Torre B, Piso 1, Oficina B105 Barbados, West Indies
Telephone: (403) 716-4500 Chuao, Caracas, Venezuela Telephone: (246) 228-4293
Facsimile: (403) 264-0251 Codigo Postal 1064 Facsimile: (246) 426-5992
Website: www.precisiondrilling.com Telephone: 58-212-959-9906
Precision Drilling de Venezuela, C.A.
INTERNATIONAL OFFICES Oilfield Specialty Services – Middle East Avenida Intercomunal El Tigre-El Tigrito
P.O. Box 2146 Al Lado de American Diesel,
Oilfield Specialty Services – Asia Pacific
Abu Dhabi, United Arab Emirates El Tigre, Estado Anzoategui, Venezuela
Jakarta Stock Exchange Building
Telephone: 00971-2-6449966 Telephone: 58-2832-412701
Tower 2, 23rd Floor, Suite 2303A
Facsimile: 00971-2-6442765 Facsimile: 58-2832-412822
JL. Jend. Suidirman Kav 52-53
Jakarta, 12910 Indonesia PD Holdings (USA) Inc. Precision Drilling International
Telephone: 62-21-7883-5381 Suite 1700 4400, 150-6th Avenue SW
Facsimile: 62-21-7883-5383 363 N. Sam Houston Parkway East Calgary, Alberta T2P 3Y7
Houston, Texas 77060, US Telephone: (403) 716-4500
Oilfield Specialty Services – Europe/Africa
Telephone: (281) 260-5600 Facsimile: (403) 716-4867
Eddesser Strabe 1
Facsimile: (281) 260-5670
31234 Edemissen, Germany
Telephone: 49-5176-9896-11
Facsimile: 49-5176-9896-12
MAJOR SUBSIDIARIES, DIVISIONS AND OPERATIONS MANAGEMENT
Advantage Engineering Services, Inc. Ducharme Oilfield Rentals Fleet Coil Technologies (U.S.) Corp.
Mike Larronde Big D Rentals Kyle Swingle
President Gordon Skulmoski President
Vice President, General Manager
CEDA International Corporation Live Well Service
Roger Hearn Energy Industries Inc. Larry MacPherson
Senior Vice President Ivan Heidecker General Manager
General Manager
Columbia Oilfield Supply Ltd. LRG Catering Ltd.
Martin Byar Fleet Cementers, Inc. Doug White
General Manager Tim Dame General Manager
President
Computalog Ltd.
Neil Brown
President

text 4/5/01 11:25 AM Page 78
MAJOR SUBSIDIARIES, DIVISIONS AND OPERATIONS MANAGEMENT (Continued)
Northland-Norward Energy Services Plains Perforating Ltd. Precision Drilling Limited Partnership
Entest Challenger/Silverline Dwayne Peters
Carel Hoyer Chris Oddy Senior Vice President
President President
Ron Berg
Oilfield Specialty Services Polar Completions Engineering Inc. Vice President
Kurt Beilner John Nash
Doug Evasiuk
Regional Director of Operations President, Sales and Operations
Vice President
Europe/Africa Vitold Serafin
John Jacobsen
Marwan Bitar President, Engineering and
Vice President
Regional Director of Operations Manufacturing
Middle East Precision Drilling International Precision Well Servicing
Mark Helmer Marv Clifton

Jerry Dugas
Vice President Senior Vice President
Regional Director of Operations
Latin America Precision Drilling de Venezuela, C.A. Rostel Industries Ltd.
David Hobbs Yook Tong

John Mahar
President General Manager
US Smoky Oilfield Rentals
Tom Facette
Dan Robson
Vice President, General Manager
Asia Pacific United Diamond Ltd.
Ian Gillis
President
BANKER LEGAL COUNSEL AUDITORS
Royal Bank of Canada Borden Ladner Gervais llp KPMG LLP

Calgary, Alberta Calgary, Alberta Calgary, Alberta

text 4/5/01 11:25 AM Page 79
DIRECTORS
W.C. (Mickey) Dunn (1) Murray K. Mullen (3) H. Garth Wiggins (1)
Edmonton, Alberta Calgary, Alberta Calgary, Alberta
Robert J. S. Gibson (1) (2) Brian E. Roberts (3) (1) Audit Committee Member
(2) Compensation Committee Member
Calgary, Alberta Calgary, Alberta
(3) Corporate Governance
Steven C. Grant (2) Hank B. Swartout Committee Member
Houston, Texas Calgary, Alberta
OFFICERS
Hank B. Swartout Larry J. Comeau M.J. (Mick) McNulty

Chairman of the Board, Senior Vice President Vice President Finance
President and Chief Executive Officer Oilfield Specialty Services
Jan M. Campbell
Dale E. Tremblay W. Bruce Herron Corporate Secretary
Senior Vice President Finance Senior Vice President
and Chief Financial Officer Rental and Production Services
STOCK EXCHANGE LISTINGS SHARE SPLIT TRADING PROFILE
Common shares of Precision In 1997, Precision’s Board of Directors Toronto

Drilling Corporation are listed on authorized a two for one split of the January 1, 2000 to December 31, 2000
The Toronto Stock Exchange under Corporation’s common shares. High: $59.50
the trading symbol PD and on the The record date for the split was Low: $33.90
New York Stock Exchange under the September 30, 1997. Volume traded – 60.6 million
trading symbol PDS. New York

January 1, 2000 to December 31, 2000
Warrants of Precision Drilling
High: US$40.38
Corporation are listed on The
Low: US$23.31
Toronto Stock Exchange under
Volume traded – 57.3 million
the trading symbol PD.WT.

text 4/5/01 11:25 AM Page 80
SHAREHOLDER INFORMATION
As a Precision Drilling Corporation shareholder, you are invited to take advantage of shareholder services or to request more
information about the Corporation.
TRANSFER AGENT AND REGISTRAR Shareholders of record who receive ESTIMATED INTERIM RELEASE DATES
Computershare Trust Company of Canada more than one copy of this annual 2001 First Quarter
Calgary, Alberta report can contact our Transfer Agent May 9, 2001
and arrange to have their accounts
TRANSFER POINT 2001 Second Quarter
consolidated. Shareholders who own
Computershare Trust Company, Inc. August 8, 2001
Precision shares through a brokerage
New York, New York
firm can contact their broker to request 2001 Third Quarter
ACCOUNT QUESTIONS consolidation of their accounts. November 8, 2001
Our Transfer Agent can help you with QUARTERLY UPDATES ANNUAL MEETING
a variety of shareholder related services, If you would like to receive quarterly The Annual General and Special Meeting
including: reports but are not a registered of the Shareholders of Precision Drilling
shareholder, please write or call us with Corporation will be held in the
❚ Change of address
your name and address. To receive our McMurray Room of the Calgary
❚ Lost share certificates
news releases by fax, please forward your Petroleum Club, 319-5th Avenue SW,
❚ Transfer of stock to another person
fax number to us. To receive our news Calgary, Alberta at 3:30 p.m. (Calgary
❚ Estate Settlement releases by e-mail, please visit our website time) on Tuesday, May 15, 2001.
You can call our Transfer Agent at www.precisiondrilling.com and refer to Shareholders are encouraged to attend
toll free at: 1-800 558 0046 the Investor Relations section. and those unable to do so, are requested
to complete the Form of Proxy at their
You can write them at: ONLINE INFORMATION
Anyone with access to the Internet can earliest convenience.

Computershare Trust Company of Canada
600, 530-8th Ave. SW view this annual report electronically at
Calgary, Alberta T2P 3S8 www.precisiondrilling.com
PUBLISHED INFORMATION
Or you can email them at:
If you wish to receive copies of the 2000
caregistryinfo@computershare.com
Renewal Annual Information Form, or
additional copies of this annual report,
please contact:
Corporate Secretary
Precision Drilling Corporation
4200, 150-6th Avenue SW
Calgary, Alberta T2P 3Y7
Telephone: 403-716-4500
Printed in Canada
Fax: 403-264-0251

Cover 4/5/01 11:10 AM Page 2
OUR GUIDANCE AND SUPPORT
This year’s annual report celebrates 15 years of robust growth for

Precision. It focuses on the critical goals we have set and met over the
last year and the factors crucial to the continued growth of our
company.
It is no accident that today, Precision is at the forefront of the

drilling and service industry in Canada and making inroads globally.
Our achievement is the result of a decade of hard work, careful
planning, bold strategic moves and, as in any business, some good
fortune.
Precision Drilling Corporation is an international oilfield services Our Officers: from left to right Michael J. McNulty, Vice President Finance; Hank B. Swartout, Chairman,
President and Chief Executive Officer; W. Bruce Herron, Senior Vice President Rental and Production
company. In a 15 year span, Precision has grown from a three rig Services; Dale E. Tremblay, Senior Vice President Finance and Chief Financial Officer; Jan M. Campbell,
Corporate Secretary; Larry J. Comeau, Senior Vice President Oilfield Speciality Services.
drilling contractor in western Canada, with $4 million in revenue to
a multi-service international oil and gas service company with
revenues exceeding $1.3 billion. Through a series of targeted
acquisitions, the Corporation has expanded its suite of services and
now provides them on five continents.
In its steadfast pursuit of operational excellence in every endeavour,

Precision has emerged in this, a new millennium, as a strong and
tenacious competitor. We are well positioned to provide innovative
technology, unparalleled service and dedicated support to our
customers worldwide. We are committed to sustained strength and
profitability – enterprise wide – for the benefit of all shareholders. Our Board of Directors: from left to right back row W. C. (Mickey) Dunn; Murray K. Mullen; Brian E.
Roberts; H. Garth Wiggins; Robert J. S. Gibson. Seated front row Hank B. Swartout; Steven C. Grant.
PRECISION DRILLING CORPORATION 2000 ANNUAL REPORT PRECISION DRILLING CORPORATION CANADIAN
PDar01DR10 3/28/01 3:02 PM Page 82
PRECISION DRILLING CORPORATION

2000 ANNUAL REPORT
P
D
C
4200, PETRO-CANADA CENTRE, 150-6TH AVENUE S.W., CALGARY, ALBERTA T2P 3Y7
TELEPHONE: (403) 716-4500 FACSIMILE: (403) 264-0251
Website: www.precisiondrilling.com

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PDar01DR10 3/28/01 3:02 PM Page 83

OUR GUIDANCE AND SUPPORT

This year’s annual report celebrates 15 years of robust growth for

It is no accident that today, Precision is at the forefront of the

In its steadfast pursuit of operational excellence in every endeavour,

...with a global presence

Argentina Nigeria Syria Oman

IN THIS ANNUAL REPORT

PRECISION DRILLING CORPORATION GLOBAL PRESENCE 1

HOW WE’VE DONE THIS YEAR

FINANCIAL PERFORMANCE SUMMARY

THE TRACK RECORD

Share Performance TSE Share Performance NYSE Value of Shares Outstanding

2 PRECISION DRILLING CORPORATION SUMMARIES

HOW WE’VE DONE THIS YEAR

QUARTERLY RESULTS SUMMARY

Year ended December 31, 1999 Q1 Q2 Q3 Q4 Total

THE TRACK RECORD

Gross Revenue Cash Flow Net Earnings

PRECISION DRILLING CORPORATION SUMMARIES 3

DISCLOSURE REGARDING FORWARD–LOOKING STATEMENTS

4 PRECISION DRILLING CORPORATION DISCLOSURE

– big enough to meet

REPORT OF THE CHIEF EXECUTIVE OFFICER

Our multinational client required a fast moving, fast drilling

that will address clients’ needs around the world.

6 PRECISION DRILLING CORPORATION GROWING

REPORT OF THE CHIEF EXECUTIVE OFFICER

expenditures (internal growth), $599.4 million on

segment has developed an international structure. The significant upside potential.

reform represents the biggest incentive given to business by

our governments in recent history and creates an environment

on internal organic growth, external growth through

PRECISION DRILLING CORPORATION GROWING 7

REPORT OF THE CHIEF EXECUTIVE OFFICER

has sparked a flurry of announced additions to the US

demand, producers must develop their current reservoirs. This

Mackenzie Delta Integrated Oilfield Services, an Inuvialuit

company, qualifies Precision as one of the only two drilling

8 PRECISION DRILLING CORPORATION GROWING

REPORT OF THE CHIEF EXECUTIVE OFFICER

can deliver. expansions of their plant facilities, plan to increase their

activity. Analysts predict that overall exploration and ACQUISITIONS

production. Their wireline, UBD, coiled tubing drilling rigs,

PRECISION DRILLING CORPORATION GROWING 9

REPORT OF THE CHIEF EXECUTIVE OFFICER

coincided with the strong recovery in Canada and now affords

disciplines and proven business models are now being applied

to our service rig business. The CenAlta acquisition, with its

10 PRECISION DRILLING CORPORATION GROWING

REPORT OF THE CHIEF EXECUTIVE OFFICER

standard of excellence in the industry. The prize is a share of

PRECISION DRILLING CORPORATION GROWING 11

REPORT OF THE CHIEF EXECUTIVE OFFICER

safety staff, employee programs, and safety equipment. Safety

is not about regulatory compliance. Our safety standards are

consistent, company wide and often exceed governmental

requirements. Regardless of whether we are operating in the

regulated winter access locations of north eastern British