6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Section 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

For the month of, July 2022

Commission File Number: 001-14534

Precision Drilling Corporation

(Exact name of registrant as specified in its charter)

800, 525 - 8 Avenue S.W.Calgary, AlbertaCanada T2P 1G1

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F __        Form 40-F X

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1). __

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __

SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: July 29, 2022	PRECISION DRILLING CORPORATION
	By:	/s/ Carey T Ford
	Name:	Carey T Ford
	Title:	Senior Vice President & Chief Financial Officer
Exhibit	DESCRIPTION
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31.1	Certification of Chief Executive Officer, Kevin Neveu, regarding the “Certification of Interim Filings” pursuant to Form 52-109F2.
31.2	Certification of Chief Financial Officer, Carey Ford, regarding the “Certification of Interim Filings” pursuant to Form 52-109F2.
99.1	Management’s Discussion and Analysis for the period ended June 30, 2022.
99.2	Consolidated Financial Statements for the period ended June 30, 2022.

Exhibit 31.1

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

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I, Kevin A. Neveu, President and Chief Executive Officer of Precision Drilling Corporation, certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the<br>"interim filings") of Precision Drilling Corporation (the "issuer"), for the interim period ended June 30, 2022.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the<br>interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that<br>is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered<br>by the interim filings.
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3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim<br>financial report together with the other financial information included in the interim filings fairly present in all material respects<br>the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim<br>filings.
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4.	Responsibility: The issuer’s other certifying officer and I are responsible for establishing<br>and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are<br>defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
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5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's<br>other certifying officer and I have, as at the end of the period covered by the interim filings
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(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance<br>that
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(i)	material information relating to the issuer is made known to us by others, particularly during the period<br>in which the interim filings are being prepared; and
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(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports<br>filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified<br>in securities legislation; and
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(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding<br>the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s<br>GAAP.
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5.1	Control framework: The control framework the issuer's other certifying officer and I used<br>to design the issuer's ICFR is the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (1992) and the Control Objectives<br>for Information and Related Technologies (COBIT).
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5.2	ICFR – material weakness relating to design: N/A.
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5.3	Limitation on scope of design: N/A.
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6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in<br>the issuer’s ICFR that occurred during the period beginning on April 01, 2022 and ended on June 30, 2022 that has<br>materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
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Date: July 29, 2022

By:	/s/Kevin A Neveu
	Name: Kevin A. Neveu<br><br> <br>Title:   President and Chief Executive Officer

Exhibit 31.2

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

I, Carey T. Ford, Senior Vice President and Chief Financial Officer of Precision Drilling Corporation, certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the<br>"interim filings") of Precision Drilling Corporation (the "issuer"), for the interim period ended June 30, 2022.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the<br>interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that<br>is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered<br>by the interim filings.
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3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim<br>financial report together with the other financial information included in the interim filings fairly present in all material respects<br>the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim<br>filings.
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4.	Responsibility: The issuer’s other certifying officer and I are responsible for establishing<br>and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are<br>defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
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5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's<br>other certifying officer and I have, as at the end of the period covered by the interim filings
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(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance<br>that
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(i)	material information relating to the issuer is made known to us by others, particularly during the period<br>in which the interim filings are being prepared; and
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(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports<br>filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified<br>in securities legislation; and
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(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding<br>the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s<br>GAAP.
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5.1	Control framework: The control framework the issuer's other certifying officer and I used<br>to design the issuer's ICFR is the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (1992) and the Control Objectives<br>for Information and Related Technologies (COBIT).
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5.2	ICFR – material weakness relating to design: N/A.
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5.3	Limitation on scope of design: N/A.
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6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in<br>the issuer’s ICFR that occurred during the period beginning on April 1, 2022 and ended on June 30, 2022 that has materially<br>affected, or is reasonably likely to materially affect, the issuer’s ICFR.
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Date: July 29, 2022

By:	/s/Carey T. Ford
	Name: Carey T. Ford<br><br> <br>Title:   Senior Vice President and Chief Financial Officer

Exhibit 99.1

PRECISION DRILLING CORPORATION

Second Quarter Report for the three and six months ended June 30, 2022 and 2021

MANAGEMENT’S DISCUSSION AND ANALYSIS

This report contains “forward-looking information and statements”within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risksto which they are subject, see the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in thisreport. This report contains references to certain Financial Measures and Ratios, including Adjusted EBITDA (earnings before income taxes,gain (loss) on investments and other assets, loss on repurchase of unsecured senior notes, finance charges, foreign exchange, gain onasset disposals and depreciation and amortization), Funds Provided by (Used in) Operations, Net Capital Spending and Working Capital.These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) and may not becomparable to similar measures used by other companies, see “Financial Measures and Ratios” later in this report.

Precision Drilling announces 2022 second quarter financial results:

·	Revenue for the quarter was $326 million, an increase of 62% as compared with 2021 as our North American<br>drilling activity increased by 38% and drilling day rates increased in the U.S. and Canada by 25% and 30%, respectively.
·	Strengthened our contract book with year-to-date additions of 39 term contracts.
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·	Adjusted EBITDA (see “FINANCIAL MEASURES AND RATIOS”) of $64 million increased 122% from $29<br>million the prior year quarter, reflective of our success in maximizing operating leverage in a growing activity environment. Current<br>quarter Adjusted EBITDA was negatively impacted by a $6.5 million (US$5 million) well control event, share-based compensation charges<br>of $5 million and $9 million less of CEWS program assistance.
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·	Net loss of $25 million or $1.81 per share compared with a net loss of $76 million or $5.71 per share<br>in 2021.
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·	Generated cash from operations and funds from operations (see “FINANCIAL MEASURES AND RATIOS”) of $135 million and $60<br>million, respectively, as compared with $42 million and $13 million in 2021. Our increased activity, operational leverage and day rates<br>and lower share-based compensation charges contributed to higher cash generation in the current quarter.
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·	Reduced our Senior Credit Facility balance by approximately $70 million during the quarter, ending with<br>$52 million of cash and more than $540 million of available liquidity.
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·	Increased our capital spending plan to $149 million in response to higher demand and expected customer contracted upgrades on over<br>20 drilling rigs for 2022.
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·	Repurchased and cancelled 60,796 common shares for $5 million under our Normal Course Issuer Bid (NCIB).
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·	Completion and Production Services segment generated revenue of $33 million and Adjusted EBITDA of $5<br>million, increases of 60% and 14%, respectively, from the prior year second quarter.
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·	Agreed to acquire the well servicing business and associated rental assets of High Arctic Energy Services<br>Inc. (High Arctic) for $38 million subsequent to the end of the quarter.
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SELECT FINANCIAL AND OPERATING INFORMATION

Financial Highlights

	For the three months ended June 30,							For the six months ended June 30,
(Stated in thousands of Canadian dollars, except per share amounts)		2022		2021		% Change			2022		2021		% Change
Revenue		326,016		201,359		61.9			677,355		437,832		54.7
Adjusted EBITDA^(1)^		64,099		28,944		121.5			100,954		83,483		20.9
Net loss		(24,611	)	(75,912	)	(67.6	)		(68,455	)	(112,018	)	(38.9	)
Cash provided by (used in) operations		135,174		42,219		220.2			69,880		57,641		21.2
Funds provided by operations^(1)^		60,373		12,607		378.9			90,328		56,037		61.2
Cash used in investing activities		36,782		10,150		262.4			67,125		20,064		234.6
Capital spending by spend category^(1)^
Expansion and upgrade		15,530		6,446		140.9			25,145		9,883		154.4
Maintenance and infrastructure		23,906		13,809		73.1			50,693		18,808		169.5
Proceeds on sale		(6,849	)	(2,590	)	164.4			(9,696	)	(5,914	)	63.9
Net capital spending^(1)^		32,587		17,665		84.5			66,142		22,777		190.4
Net loss per share:
Basic		(1.81	)	(5.71	)	(68.3	)		(5.06	)	(8.41	)	(39.8	)
Diluted		(1.81	)	(5.71	)	(68.3	)		(5.06	)	(8.41	)	(39.8	)
(1)	See “FINANCIAL MEASURES AND RATIOS.”
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Operating Highlights

					For the six months ended June 30,
	2022	2021	% Change			2022	2021	% Change
Contract drilling rig fleet	226	227	(0.4	)		226	227	(0.4	)
Drilling rig utilization days:
U.S.	5,037	3,579	40.7			9,627	6,530	47.4
Canada	3,376	2,497	35.2			9,029	6,315	43.0
International	546	546	-			1,086	1,086	-
Revenue per utilization day:
U.S. (US)	25,547	20,497	24.6			24,951	21,236	17.5
Canada (Cdn)	26,746	20,634	29.6			25,192	20,935	20.3
International (US)	54,612	54,269	0.6			52,436	53,512	(2.0	)
Operating cost per utilization day:
U.S. (US)	18,864	13,745	37.2			18,628	14,360	29.7
Canada (Cdn)	19,010	13,510	40.7			16,749	13,216	26.7
Service rig fleet	93	123	(24.4	)		93	123	(24.4	)
Service rig operating hours	30,389	26,630	14.1			68,654	61,533	11.6

All values are in US Dollars.

Financial Position

(Stated in thousands of Canadian dollars, except ratios)	June 30, 2022	December 31, 2021
Working capital^(1)^	111,492	81,637
Cash	51,641	40,588
Long-term debt	1,139,720	1,106,794
Total long-term financial liabilities	1,226,744	1,185,858
Total assets	2,704,686	2,661,752
Long-term debt to long-term debt plus equity ratio ^(1)^	0.49	0.47
(1)	See “FINANCIAL MEASURES AND RATIOS.”
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Summary for the three months ended June 30, 2022:

·	Revenue for the second quarter was $326 million, 62% higher than in 2021 and was the result of increased<br>North American drilling and service activity and day rates. Drilling rig utilization days increased by 41% in the U.S. and 35% in Canada<br>and well service activity increased 14% as compared with the second quarter of 2021.
·	Adjusted EBITDA for the quarter was $64 million, $35 million higher than 2021 mainly due to lower share-based<br>compensation charges, partially offset by a $6.5 million (US$5 million) charge related to a well control event and $9 million less CEWS<br>program assistance. Share-based compensation charges for the quarter were $5 million, $21 million lower than in 2021 with the decrease<br>primarily due to our lower share price during the current year quarter. Please refer to “Other Items” later in this report<br>for additional information on the well control event and share-based compensation charges.
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·	Adjusted EBITDA as a percentage of revenue (see “FINANCIAL MEASURES AND RATIOS”) was 20% as<br>compared with 14% in 2021, demonstrating our ability to maximize the operating leverage within the business in a growing activity environment.
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·	General and administrative expenses this quarter were $21 million, $10 million lower than in 2021 due<br>to lower share-based compensation charges, partially offset by lower CEWS program assistance.
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·	Net finance charges for the quarter were $21 million, a decrease of $7 million from 2021 due to lower<br>debt issue costs. Our higher debt issue costs in 2021 related to accelerated amortization of issue costs associated with the unsecured<br>senior notes that were fully redeemed in the quarter.
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·	In the U.S., revenue per utilization day was US$25,547 compared with US$20,497 in 2021. The increase was<br>primarily the result of improved pricing and turnkey activity. During the second quarter, we recognized revenue from turnkey projects<br>of US$9 million compared with US$3 million in 2021. Revenue per utilization day in the quarter, excluding the impact of turnkey, was US$23,689,<br>compared to US$19,666 in the prior year, an increase of $4,023. On a sequential basis, revenue per utilization day, excluding turnkey<br>revenue, increased approximately US$1,925.
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·	Our U.S. operating costs on a per day basis increased to US$18,864, compared with US$13,745 in 2021 due<br>to higher rig operating expenses, repairs and maintenance and turnkey activity, partially offset by the impact of fixed costs being spread<br>over higher activity. During the second quarter of 2022, we experienced a well control event resulting in a US$5 million charge, causing<br>our daily operating costs to increase by approximately US$1,015. U.S. operating cost per day during the quarter, excluding turnkey, was<br>US$16,517 compared with US$13,160 in the prior year. Sequentially, excluding the impact of turnkey activity, our operating costs per day<br>increased approximately US$420.
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·	In Canada, average revenue per utilization day for contract drilling for the quarter was $26,746 compared<br>with $20,634 in 2021, an increase of 30% and the result of higher day rates and increased labor and cost recoveries.
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·	Our Canadian operating costs on a per day basis increased to $19,010, compared with $13,510 in 2021 due<br>to industry-wide wage increases, higher repairs and maintenance expense and lower CEWS program assistance. During the second quarter of<br>2021, we recognized $5 million of CEWS program assistance which decreased our comparative daily operating costs by $1,877. Canadian operating<br>cost per day for the prior year quarter, excluding the impact of CEWS program assistance, were $15,387.
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·	Completion and Production Services second quarter revenue and Adjusted EBITDA was $33 million and $5 million, respectively, compared<br>with $21 million and $4 million in 2021. Our improved results were supported by higher service rates and operating hours, partially offset<br>by lower CEWS program assistance as we recognized $3 million of assistance in 2021.
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·	During the quarter, we did not recognize any CEWS program assistance as compared with $9 million in 2021.<br>In 2021, CEWS program assistance was presented as offsets to operating and general and administrative costs of $8 million and $1 million,<br>respectively.
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·	We realized second quarter revenue from international contract drilling of US$30 million, consistent with<br>2021, as activity and day rates remained constant.
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·	Second quarter cash provided by operations was $135 million as compared with $42 million in 2021. We generated<br>$60 million of funds from operations as compared with $13 million in 2021. Our increased activity, operational leverage, day rates and<br>lower share-based compensation charges contributed to higher cash generation in the current quarter.
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·	Capital expenditures were $39 million as compared with $20 million in 2021. Capital spending by spend<br>category (see “FINANCIAL MEASURES AND RATIOS”) included $16 million for expansion and upgrades and $24 million for the maintenance<br>of existing assets and infrastructure.
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| --- | | · | We reduced our Senior Credit Facility balance by approximately $70 million during the quarter, ending<br>the quarter with $52 million of cash and more than $540 million of available liquidity. Year-to-date, we have borrowed $12 million on<br>our Senior Credit Facility. | | --- | --- | | · | We repurchased and cancelled 60,796 common shares for $5 million under our NCIB. | | --- | --- | | · | Subsequent to the quarter, we agreed to acquire the well servicing business and associated rental assets<br>of High Arctic for $38 million, adding 80 service rigs (51 marketed and 29 inactive) to our fleet along with related rental assets, ancillary<br>support equipment, inventories and spares and six additional operating facilities in key operating basins. | | --- | --- |

Summary for the six months ended June 30, 2022:

·	Revenue for the first six months of 2022 was $677 million, an increase of 55% from 2021.
·	Adjusted EBITDA for the period was $101 million as compared with $83 million in 2021. Our higher Adjusted<br>EBITDA was attributable to higher activity and day rates, partially offset by higher share-based compensation charges, the impact of the<br>well control event and lower CEWS program assistance. Our 2021 Adjusted EBITDA was positively impact by $17 million of CEWS program assistance.
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·	General and administrative costs were $77 million, an increase of $24 million from 2021 primarily due<br>to higher share-based compensation charges of $17 million and lower CEWS program assistance of $2 million.
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·	Net finance charges were $42 million, a decrease of $8 million from 2021 due to lower debt issue costs.<br>In 2021, we accelerated the amortization of issue costs associated with fully redeemed unsecured senior notes.
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·	Cash provided by operations was $70 million as compared with $58 million in 2021. Funds provided by operations<br>in 2022 were $90 million, an increase of $34 million from the comparative period.
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·	Capital expenditures were $76 million in 2022, an increase of $47 million from 2021. Capital spending<br>by spend category included $25 million for expansion and upgrades and $51 million for the maintenance of existing assets and infrastructure.
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·	Year-to-date, we have borrowed $12 million on our Senior Credit Facility and repurchased and cancelled<br>60,697 common shares for $5 million under our NCIB.
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STRATEGY

Precision’s strategic priorities for 2022 are as follows:

1.	Grow revenue through scaling Alpha^TM^ technologies and EverGreen^TM^ suite of environmentalsolutions across Precision's Super Series rig fleet and further competitive differentiation through ESG initiatives –<br>We exited the quarter with 53 AC Super Triple Alpha^TM^ rigs equipped with our AlphaAutomation^TM^ platform and<br>20 commercialized AlphaApps^TM^. As compared with the second quarter of 2021, our total paid days for AlphaAutomation^TM^,<br>AlphaApps^TM^ and AlphaAnalytics^TM^ increased by 4%. As at July 26, 2022, we had three commercial, field-deployed,<br>EverGreen^TM^ Battery Energy Storage Systems with six additional systems scheduled for installation by year end. In addition,<br>we had 10 EverGreen^TM^ Integrated Power & Emissions Monitoring Systems deployed and anticipate ending the year with 15 systems<br>installed. In July, we released our annual Corporate Responsibility Report which highlighted several key ESG accomplishments aligned with<br>our High Performance, High Value strategy. We expanded our reporting to include additional elements from the Sustainability Accounting<br>Standards Board and Task Force on Climate-Related Financial Disclosures guidelines.
2.	Grow free cash flow by maximizing operating leverage as demand for our High Performance, High Valueservices continues to rebound – During the second quarter of 2022, we generated cash from operations of $135 million. In the<br>U.S., our second quarter average active rig count was 55, 41% higher than in 2021. In Canada, we averaged 37 active rigs for the quarter,<br>a 37% increase from 2021. Despite industry-wide inflationary pressures, our second quarter daily operating margins (average revenue less<br>operating costs per utilization day) in our North American contract drilling business remained strong. Our daily operating margins were<br>secured by our strengthening day rates, growing contract book and disciplined spending. Year-to-date in<br>2022, we have entered into 39 term contracts and as at July 26, 2022 had 57 active rigs in the U.S. and 61 in Canada. With the<br>tightening of available Super Series rigs, we expect to realize further pricing increases in the U.S. and Canada in the back half<br>of 2022. Our acquisition of High Arctic’s well servicing business and associated rental assets maximizes our existing operating<br>leverage and supports future cash flow generation.
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3.	Utilize free cash flow to continue strengthening our balance sheet while investing in our people, equipmentand returning capital to shareholders – During the quarter, our reinvestment into our drilling fleet included $39 million of<br>capital expenditures and we generated $7 million of cash proceeds from the divestiture of non-core assets. We repaid approximately $70<br>million on our Senior Credit Facility and continue to target $75 million of debt reduction for 2022 and longer-term goals of $400 million<br>of debt reduction between 2022 and 2025 and Net Debt to Adjusted EBITDA (see “FINANCIAL MEASURES AND RATIOS”) less than 1.5<br>times by 2025. Through share repurchases under our NCIB, we returned $5 million of capital to shareholders. We ended the quarter with<br>a cash balance of $52 million and more than $540 million of available liquidity.
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OUTLOOK

The return of global energy demand and the reality of a multi-year period of upstream oil and natural gas underinvestment has resulted in a shortage of oil and natural gas and higher commodity prices, providing a promising outlook for the oilfield services industry. The war in Ukraine and sanctions on Russian hydrocarbons have exacerbated the challenged supply situation and many importing countries are looking toward North America and the Middle East to fill the supply gap, both from exports of crude oil and natural gas through the global Liquified Natural Gas (LNG) market. Constrained natural gas production levels and low natural gas storage volumes have resulted in North American natural gas prices more than doubling in the last year. With U.S. LNG exports growing as countries look to displace Russian natural gas and various Canadian LNG projects to come online in 2025, we anticipate a sustained period of elevated natural gas drilling activity.

At current commodity price levels, we anticipate higher demand for our services and improved fleet utilization as customers seek to maintain production levels and replenish inventories, as drilled but uncompleted wells have been depleted over the past several years. However, broad economic concerns exist with respect to inflation, rising interest rates and geopolitical instability. These concerns may negatively impact customer spending plans.

With North American industry activity expected to further increase in 2022, we anticipate tightness in the high specification rig market with customers seeking term contracts to secure rigs and ensure fulfilment of their development programs. Accordingly, the tightening of available high specification rigs is expected to drive higher day rates and necessitate customer funded rig upgrades.

Interest in our EverGreen^TM^ suite of environmental solutions continues to gain momentum as customers seek meaningful solutions to achieve their emission reduction targets and improve their well economics. We expect our growing suite of Alpha^TM^ technologies paired with our EverGreen^TM^ suite of environmental solutions to be key competitive differentiators as our predictable and repeatable drilling results deliver exceptional value to our customers by reducing risks, well construction costs and carbon footprint.

The outlook for our Precision Well Servicing business remains positive with strong commodity prices supporting maintenance and completion activity as well as both federal and provincial support for increased well abandonment and rehabilitation projects. In addition, we are focusing on the successful integration of the recent purchase of High Arctic’s well service and associated rental operations. By leveraging our existing platform and continuing our strict focus on cost control, we expect to realize $5 million in annualized savings, realizable within one year of completing the acquisition.

Commodity Prices

During the second quarter of 2022, average West Texas Intermediate and Western Canadian Select oil prices were higher by 64% and 76%, respectively, from the comparative quarter. While average Henry Hub and AECO natural gas prices improved by 152% and 136%, respectively from 2021.

			Year ended <br><br>December 31,
	2022	2021		2021
Average oil and natural gas prices
Oil
West Texas Intermediate (per barrel) (US)	108.34	65.99		67.91
Western Canadian Select (per barrel) (US)	95.62	54.39		54.84
Natural gas
United States
Henry Hub (per MMBtu) (US)	7.47	2.97		3.72
Canada
AECO (per MMBtu) (CDN)	7.25	3.07		3.64

All values are in US Dollars.

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Contracts

Year-to-date in 2022, we have entered into 39 term contracts and 18 new contracts since the end of the first quarter of 2022. The following chart outlines the average number of drilling rigs under contract by quarter as of July 26, 2022. For those quarters ending after June 30, 2022, this chart represents the minimum number of long-term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional contracts.

	Average for the quarter ended 2021					Average for the quarter ended 2022
		Mar. 31	June 30	Sept. 30	Dec. 31		Mar. 31	June 30	Sept. 30	Dec. 31
Average rigs under term contract as of July 26, 2022:
U.S.		21	24	22	24		27	29	31	27
Canada		6	6	7	7		6	8	10	11
International		6	6	6	6		6	6	4	4
Total		33	36	35	37		39	43	45	42

The following chart outlines the average number of drilling rigs that we had under contract for 2021 and the average number of rigs we have under contract as of July 26, 2022.

	Average for the year ended
		2021	2022
Average rigs under term contract as of July 26, 2022:
U.S.		23	29
Canada		7	9
International		6	5
Total		36	43

In Canada, term contracted rigs normally generate 250 utilization days per year because of the seasonal nature of well site access. In most regions in the U.S. and internationally, term contracts normally generate 365 utilization days per year.

Drilling Activity

The following chart outlines the average number of drilling rigs that we had working or moving by quarter for the periods noted.

	Average for the quarter ended 2021					Average for the quarter<br><br> ended 2022
		Mar. 31	June 30	Sept. 30	Dec. 31		Mar. 31	June 30
Average Precision active rig count:
U.S.		33	39	41	45		51	55
Canada		42	27	51	52		63	37
International		6	6	6	6		6	6
Total		81	72	98	103		120	98

According to industry sources, as of July 26, 2022, the U.S. active land drilling rig count has increased 57% from the same point last year while the Canadian active land drilling rig count has increased by 31%. To date in 2022, approximately 79% of the U.S. industry’s active rigs and 60% of the Canadian industry’s active rigs were drilling for oil targets, compared with 82% for the U.S. and 58% for Canada at the same time last year.

Capital Spending and Free Cash Flow Allocation

During the quarter, we increased our capital spending plan to reflect higher maintenance capital from our increasing activity, strategic purchase of drill pipe and customer funded rig upgrades. Capital spending in 2022 is expected to be $149 million and by spend category includes $73 million for sustaining, infrastructure and intangibles and $76 million for expansion and upgrades. We expect that the $149 million will be split $141 million in the Contract Drilling Services segment, $6 million in the Completion and Production Services segment and $2 million to the Corporate segment. At June 30, 2022, Precision had capital commitments of $159 million with payments expected through 2024.

Our debt reduction plans continue with the goal of repaying over $400 million of debt over the next four years and reaching a sustained Net Debt to Adjusted EBITDA ratio of below 1.5 times. At the end of 2025, we expect to have reduced debt by well over $1 billion since 2018. In addition to our debt reduction target through 2025, we plan to allocate 10% to 20% of free cash flow before debt principal repayments toward the return of capital to shareholders.

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SEGMENTED FINANCIAL RESULTS

Precision’s operations are reported in two segments: Contract Drilling Services, which includes our drilling rig, oilfield supply and manufacturing divisions; and Completion and Production Services, which includes our service rig, rental and camp and catering divisions.

	For the three months ended June 30,							For the six months ended June 30,
(Stated in thousands of Canadian dollars)		2022		2021		% Change			2022		2021		% Change
Revenue:
Contract Drilling Services		294,299		181,256		62.4			608,444		386,075		57.6
Completion and Production Services		33,041		20,667		59.9			71,279		53,211		34.0
Inter-segment eliminations		(1,324	)	(564	)	134.8			(2,368	)	(1,454	)	62.9
		326,016		201,359		61.9			677,355		437,832		54.7
Adjusted EBITDA:^(1)^
Contract Drilling Services		70,429		47,703		47.6			141,603		107,734		31.4
Completion and Production Services		4,839		4,252		13.8			11,378		12,054		(5.6	)
Corporate and Other		(11,169	)	(23,011	)	(51.5	)		(52,027	)	(36,305	)	43.3
		64,099		28,944		121.5			100,954		83,483		20.9
(1)	See “FINANCIAL MEASURES AND RATIOS.”
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SEGMENT REVIEW OF CONTRACT DRILLING SERVICES

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	For the three months ended June 30,						For the six months ended June 30,
(Stated in thousands of Canadian dollars, except where noted)		2022		2021		% Change		2022		2021		% Change
Revenue		294,299		181,256		62.4		608,444		386,075		57.6
Expenses:
Operating		215,676		126,394		70.6		445,727		264,515		68.5
General and administrative		8,194		7,159		14.5		21,114		13,826		52.7
Adjusted EBITDA^(1)^		70,429		47,703		47.6		141,603		107,734		31.4
Adjusted EBITDA as a percentage of revenue^(1)^		23.9	%	26.3	%			23.3	%	27.9	%
(1)	See “FINANCIAL MEASURES AND RATIOS.”
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United States onshore drilling statistics:^(1)^	2022			2021
---	---	---	---	---	---	---
		Precision	Industry^(2)^		Precision	Industry^(2)^
Average number of active land rigs for quarters ended:
March 31		51	603		33	378
June 30		55	687		39	437
Year to date average		53	645		36	408
(1)	United States lower 48 operations only.
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(2)	Baker Hughes rig counts.
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Canadian onshore drilling statistics:^(1)^	2022			2021
---	---	---	---	---	---	---
		Precision	Industry^(2)^		Precision	Industry^(2)^
Average number of active land rigs for quarters ended:
March 31		63	205		42	145
June 30		37	113		27	72
Year to date average		50	159		35	109
(1)	Canadian operations only.
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(2)	Baker Hughes rig counts.
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Revenue from Contract Drilling Services was $294 million this quarter, 62% higher than 2021, while Adjusted EBITDA increased by 48% to $70 million. The increase in revenue and Adjusted EBITDA was primarily due to higher North American activity and day rates.

Drilling rig utilization days (drilling days plus move days) in the U.S. were 5,037, 41% higher than 2021. Drilling rig utilization days in Canada were 3,376, 35% higher than 2021. The increase in utilization days in both the U.S. and Canada was consistent with higher industry activity. Drilling rig utilization days in our international business were 546, consistent with 2021.

Our second quarter revenue per utilization day in the U.S. increased 25% from the comparable quarter. The increase was primarily the result of improved pricing and higher turnkey activity. During the second quarter, we recognized revenue from turnkey projects of US$9 million compared with US$3 million in 2021. Compared with the same quarter in 2021, drilling rig revenue per utilization day in Canada increased 30%. The increase was the result of higher day rates and increased labor and cost recoveries. Our international revenue per utilization day for the quarter was consistent with 2021.

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In the U.S., 49% of utilization days were generated from rigs under term contract as compared with 52% in 2021. In Canada, 19% of our utilization days were generated from rigs under term contract, compared with 16% in 2021.

In the U.S., operating costs for the quarter on a per day basis were higher by 37% compared with 2021 primarily due to higher rig operating expenses, repairs and maintenance and turnkey activity, partially offset by the impact of fixed costs being spread over higher activity. Our higher rig operating expenses in 2022 related to higher field wages and larger crew sizes. During the second and fourth quarters of 2021, we implemented field wage increases. In anticipation of increased activity, we strategically staffed active rigs with larger crews to ensure we have a sufficient number of trained and available crew personnel to meet growing customer demand. During the second quarter of 2022, we experienced a well control event resulting in a US$5 million charge, causing our daily operating costs to increase by approximately US$1,015. U.S. operating cost per day during the quarter, excluding turnkey, was US$16,517 compared with US$13,160 the prior year.

Our Canadian operating costs on a per day basis increased to $19,010, compared with $13,510 in 2021 due to industry-wide wage increases, higher repairs and maintenance expense and lower CEWS program assistance. During the second quarter of 2021, we recognized $5 million of CEWS program assistance which decreased our comparative daily operating costs by $1,877. Canadian operating cost per day for the prior year quarter, excluding the impact of CEWS program assistance, were $15,387.

Our general and administrative expense increased by 15% as compared with the second quarter of 2021. The higher expense for the quarter pertains to higher fixed overhead charges and lower CEWS program assistance, partially offset by lower share-based compensation charges.

SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES

	For the three months ended June 30,							For the six months ended June 30,
(Stated in thousands of Canadian dollars, except where noted)		2022		2021		% Change			2022		2021		% Change
Revenue		33,041		20,667		59.9			71,279		53,211		34.0
Expenses:
Operating		26,200		15,125		73.2			56,167		38,515		45.8
General and administrative		2,002		1,290		55.2			3,734		2,642		41.3
Adjusted EBITDA^(1)^		4,839		4,252		13.8			11,378		12,054		(5.6	)
Adjusted EBITDA as a percentage of revenue^(1)^		14.6	%	20.6	%				16.0	%	22.7	%
Well servicing statistics:
Number of service rigs (end of period)		93		123		(24.4	)		93		123		(24.4	)
Service rig operating hours		30,389		26,630		14.1			68,654		61,533		11.6
Service rig operating hour utilization		36	%	24	%				41	%	27	%
(1)	See “FINANCIAL MEASURES AND RATIOS.”
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Completion and Production Services revenue for the second quarter of 2022 increased to $33 million as compared with $21 million in 2021. The higher revenue was primarily due to increased average service rates and activity. Our second quarter service rig operating hours increased by 14% from 2021.

During the quarter, Completion and Production Services generated 13% of its revenue from U.S. operations compared with 12% in the comparative period.

Operating costs as a percentage of revenue increased to 79%, as compared with 73% in 2021 and was primarily due to the impact of CEWS program assistance. In the second quarter of 2022, we received CEWS program assistance of nil as compared with $2 million in 2021.

As compared to 2021, our second quarter general and administrative expense increased by 55%. The higher expense for the quarter pertains to higher fixed overhead charges and lower CEWS program assistance, partially offset by lower share-based compensation charges.

Our second quarter Adjusted EBITDA increased by $1 million as compared with 2021 primarily due to increased average service rates and activity, partially offset by lower CEWS program assistance of $3 million.

Subsequent to June 30, 2022, we acquired the well servicing business and associated rental assets of High Arctic for an aggregate purchase price of $38 million.

During the quarter, we did not renew the registration of 30 Canadian service rigs with the industry association, reducing our marketed fleet to 93 as at June 30, 2022.

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SEGMENT REVIEW OF CORPORATE AND OTHER

Our Corporate and Other segment provides support functions to our operating segments. The Corporate and Other segment had negative Adjusted EBITDA of $11 million as compared with $23 million in the second quarter of 2021. Our Adjusted EBITDA was positively impacted by decreased share-based compensation costs from our lower share price, partially offset by lower CEWS program assistance. During the quarter, we did not recognize any CEWS program assistance as compared with $1 million in 2021.

OTHER ITEMS

Share-based Incentive Compensation Plans

We have several cash and equity-settled share-based incentive plans for non-management directors, officers, and other eligible employees. Our accounting policies for each share-based incentive plan can be found in our 2021 Annual Report.

A summary of amounts expensed under these plans during the reporting periods are as follows:

	For the three months ended June 30,			For the six months ended June 30,
(Stated in thousands of Canadian dollars)		2022	2021		2022	2021
Cash settled share-based incentive plans		5,048	24,830		52,259	34,698
Equity settled share-based incentive plans:
Executive PSU		—	1,398		407	2,171
Share option plan		—	34		20	165
Total share-based incentive compensation plan expense		5,048	26,262		52,686	37,034
Allocated:
Operating		1,852	5,901		12,772	8,165
General and Administrative		3,196	20,361		39,914	28,869
		5,048	26,262		52,686	37,034

Cash settled share-based compensation expense for the quarter was $5 million as compared with $26 million in 2021. The decreased expense in 2022 was primarily due to our lower share price. Our equity settled share-based compensation expense for the second quarter of 2022 was nil as our Executive PSUs and share options fully vested in the first quarter of 2022.

As at June 30, 2022, the majority of our share-based compensation plans were classified as cash-settled and will be impacted by changes in our share price. Although accounted for as cash-settled, Precision retains the ability to settle certain vested units in common shares at its discretion.

Finance Charges

Second quarter net finance charges were $21 million as compared with $28 million in 2021. The decreased finance charges were primarily due to lower debt issue costs. In 2021, we accelerated the amortization of issue costs associated with the unsecured senior notes that were fully redeemed in the quarter. Interest charges on our U.S. denominated long-term debt in the second quarter were US$15 million ($19 million) as compared with US$16 million ($19 million) in 2021.

Income Tax

Income tax expense for the quarter was $4 million as compared with $1 million recovery in 2021. During the second quarter, we did not recognize deferred tax assets on certain Canadian and international operating losses.

Well Control Event

Late in the second quarter of 2022, we experienced a well control event during a turnkey drilling project. We recognized revenue of nil and US$5 million of drilling-related operating costs. Additionally, the net book value of our damaged drilling rig was derecognized resulting in a US$1 million charge to depreciation and amortization expense. We accrued US$12 million of associated well site clean-up and remediation costs and accrued estimated insurance recoveries of US$16 million for the drilling rig and associated costs. The provisions for the associated costs and insurance recoveries are based on our best estimates at June 30, 2022. As the assessment of damage is ongoing, the provisions may be subject to change.

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LIQUIDITY AND CAPITAL RESOURCES

The oilfield services business is inherently cyclical in nature. To manage this, we focus on maintaining a strong balance sheet, so we have the financial flexibility to manage our growth and cash flow regardless of where we are in the business cycle. We maintain a variable operating cost structure so we can be responsive to changes in demand.

Our maintenance capital expenditures are tightly governed and highly responsive to activity levels with additional cost savings leverage provided through our internal manufacturing and supply divisions. Term contracts on expansion capital for new-build and upgrade rig programs provide more certainty of future revenues and return on our capital investments.

Liquidity

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Amount	Availability	Used for	Maturity
Senior credit facility (secured)
US$500 million^(1)^ (extendible, revolving<br><br> <br>term credit facility with US$300 million accordion feature)	US$128 million drawn and US$32 million in outstanding letters of credit	General corporate purposes	June 18, 2025^(1)^
Real estate credit facilities (secured)
US$9 million	Fully drawn	General corporate purposes	November 19, 2025
$18 million	Fully drawn	General corporate purposes	March 16, 2026
Operating facilities (secured)
$40 million	Undrawn, except $7 million in<br><br> <br>outstanding letters of credit	Letters of credit and general<br><br> <br>corporate purposes
US$15 million	Undrawn	Short-term working capital<br><br> <br>requirements
Demand letter of credit facility (secured)
US$30 million	Undrawn, except US$12 million in<br><br> <br>outstanding letters of credit	Letters of credit
Unsecured senior notes (unsecured)
US$348 million – 7.125%	Fully drawn	Debt redemption and repurchases	January 15, 2026
US$400 million – 6.875%	Fully drawn	Debt redemption and repurchases	January 15, 2029
(1)	US$53 million expires on November 21, 2023.
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At June 30, 2022, we had $1,158 million outstanding under our Senior Credit Facility, Real Estate Credit Facilities and unsecured senior notes as compared with $1,126 million at December 31, 2021.

The current blended cash interest cost of our debt is approximately 6.6%.

Senior Credit Facility

The Senior Credit Facility requires we comply with certain covenants including a leverage ratio of consolidated senior debt to consolidated Covenant EBITDA of less than 2.5:1. For purposes of calculating the leverage ratio consolidated senior debt only includes secured indebtedness.

On June 18, 2021, we agreed with the lenders of our Senior Credit Facility to extend the facility’s maturity date and extend and amend certain financial covenants during the Covenant Relief Period. The maturity date of the Senior Credit Facility was extended to June 18, 2025; however, US$53 million of the US$500 million will expire on November 21, 2023.

The lenders agreed to extend the Covenant Relief Period to September 30, 2022 and amend the consolidated Covenant EBITDA to consolidated interest coverage ratio for the most recent four consecutive quarters to be greater than or equal to 2.25:1 for the periods ending June 30, 2022 and September 30, 2022 and 2.5:1 for periods ending thereafter. During the Covenant Relief Period, our distributions in the form of dividends, distributions and share repurchases are restricted to a maximum of US$25 million in 2022, subject to a pro forma senior net leverage ratio (as defined in the credit agreement) of less than or equal to 1.75:1. We also have the option to voluntarily terminate the Covenant Relief Period prior September 30, 2022.

The Senior Credit Facility limits the redemption and repurchase of junior debt subject to a pro forma senior net leverage covenant test of less than or equal to 1.75:1.

Unsecured Senior Notes

The unsecured senior notes require that we comply with certain restrictive and financial covenants including an incurrence based consolidated interest coverage ratio test of consolidated cash flow, as defined in the senior note agreements, to consolidated interest expense of greater than 2.0:1 for the most recent four consecutive fiscal quarters. In the event our consolidated interest coverage ratio is less than 2.0:1 for the most recent four consecutive fiscal quarters, the unsecured senior notes restrict our ability to incur additional indebtedness.

For further information, please see the unsecured senior note indentures which are available on SEDAR and EDGAR.

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Covenants

At June 30, 2022, we were in compliance with the covenants of our Senior Credit Facility and Real Estate Credit Facilities.

	Covenant	At June 30, 2022
Senior Credit Facility
Consolidated senior debt to consolidated covenant EBITDA^(1)^	<2.50	0.79
Consolidated covenant EBITDA to consolidated interest expense	>2.25	3.88
Real Estate Credit Facilities
Consolidated covenant EBITDA to consolidated interest expense	>2.25	3.88

(1) For purposes of calculating the leverage ratio consolidated senior debt only includes secured indebtedness.

Impact of foreign exchange rates

The following table summarizes the average and closing Canada-U.S. foreign exchanges rates.

	For the three months ended June 30,		For the six months ended June 30,		At December 31,
	2022	2021	2022	2021	2021
Canada-U.S. foreign exchange rates
Average	1.28	1.23	1.27	1.25	—
Closing	1.29	1.24	1.29	1.24	1.26

Hedge of investments in foreign operations

We utilize foreign currency long-term debt to hedge our exposure to changes in the carrying values of our net investment in certain foreign operations as a result of changes in foreign exchange rates.

We have designated our U.S. dollar denominated long-term debt as a net investment hedge in our U.S. operations and other foreign operations that have a U.S. dollar functional currency. To be accounted for as a hedge, the foreign currency denominated long-term debt must be designated and documented as such and must be effective at inception and on an ongoing basis. We recognize the effective amount of this hedge (net of tax) in other comprehensive income. We recognize ineffective amounts (if any) in net earnings (loss).

QUARTERLY FINANCIAL SUMMARY

(Stated in thousands of Canadian dollars, except per share amounts)	2021					2022
Quarters ended		September 30		December 31			March 31		June 30
Revenue		253,813		295,202			351,339		326,016
Adjusted EBITDA^(1)^		45,408		63,881			36,855		64,099
Net loss		(38,032	)	(27,336	)		(43,844	)	(24,611	)
Net loss per basic and diluted share		(2.86	)	(2.05	)		(3.25	)	(1.81	)
Funds provided by operations^(1)^		33,525		62,681			29,955		60,373
Cash provided by (used in) operations		21,871		59,713			(65,294	)	135,174
(Stated in thousands of Canadian dollars, except per share amounts)	2020					2021
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Quarters ended		September 30		December 31			March 31		June 30
Revenue		164,822		201,688			236,473		201,359
Adjusted EBITDA^(1)^		47,771		55,263			54,539		28,944
Net loss		(28,476	)	(37,518	)		(36,106	)	(75,912	)
Net loss per basic and diluted share		(2.08	)	(2.74	)		(2.70	)	(5.71	)
Funds provided by operations^(1)^		27,489		35,282			43,430		12,607
Cash provided by operations		41,950		4,737			15,422		42,219
(1)	See “FINANCIAL MEASURES AND RATIOS.”
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CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

Because of the nature of our business, we are required to make judgements and estimates in preparing our Condensed Consolidated Interim Financial Statements that could materially affect the amounts recognized. Our judgements and estimates are based on our past experiences and assumptions we believe are reasonable in the circumstances. The critical judgements and estimates used in preparing the Condensed Consolidated Interim Financial Statements are described in our 2021 Annual Report.

EVALUATION OF CONTROLS AND PROCEDURES

Based on their evaluation as at June 30, 2022, Precision’s Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the United States Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to ensure that information required to be disclosed by the Corporation in reports that are filed or submitted to Canadian and U.S. securities authorities is recorded, processed, summarized and reported within the time periods specified in Canadian and U.S. securities laws. In addition, as at June 30, 2022, there were no changes in the internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the three months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting. Management will continue to periodically evaluate the Corporation’s disclosure controls and procedures and internal control over financial reporting and will make any modifications from time to time as deemed necessary.

Based on their inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect misstatements, and even those controls determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

FINANCIAL MEASURES AND RATIOS

Non-GAAP Financial Measures
We reference certain additional Non-Generally Accepted Accounting Principles (Non-GAAP) measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
Adjusted EBITDA	We believe Adjusted EBITDA (earnings before income taxes, gain (loss)<br> on investments and other assets, loss on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals<br> and depreciation and amortization), as reported in our Condensed Interim Consolidated Statements of Net Loss and our reportable operating<br> segment disclosures, is a useful measure, because it gives an indication of the results from our principal business activities prior to<br> consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.<br><br> <br>The most directly comparable financial measure is net earnings (loss).
Funds Provided by (Used in) Operations	We believe funds provided by (used in) operations, as reported in our<br> Condensed Interim Consolidated Statements of Cash Flows, is a useful measure because it provides an indication of the funds our principal<br> business activities generate prior to consideration of working capital changes, which is primarily made up of highly liquid balances.<br><br> <br>The most directly comparable financial measure is cash provided by (used<br> in) operations.

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| --- | | Net Capital Spending | We believe net capital spending is a useful measure as it provides an<br> indication of our primary investment activities.<br><br> <br>The most directly comparable financial measure is cash provided by (used<br> in) investing activities.<br><br> <br>Net capital spending is calculated as follows: | | --- | --- |

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	For the three months ended<br><br> June 30,					For the six months ended <br><br>June 30,
(Stated in thousands of Canadian dollars)		2022		2021			2022		2021
Capital spending by spend category
Expansion and upgrade		15,530		6,446			25,145		9,883
Maintenance and infrastructure		23,906		13,809			50,693		18,808
		39,436		20,255			75,838		28,691
Proceeds on sale of property, plant and equipment		(6,849	)	(2,590	)		(9,696	)	(5,914	)
Net capital spending		32,587		17,665			66,142		22,777
Purchase of investments and other assets		536		—			536		—
Changes in non-cash working capital balances		3,659		(7,515	)		447		(2,713	)
Cash used in investing activities		36,782		10,150			67,125		20,064

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Working Capital	We define working capital as current assets less current liabilities,<br> as reported in our Condensed Interim Consolidated Statements of Financial Position.<br><br> <br>Working capital is calculated as follows:

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	At June 30,	At December 31,
(Stated in thousands of Canadian dollars)	2022	2021
Current assets	394,717	319,757
Current liabilities	283,225	238,120
Working capital	111,492	81,637

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Non-GAAP Ratios
We reference certain additional Non-GAAP ratios that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
Adjusted EBITDA % of Revenue	We believe Adjusted EBITDA as a percentage of consolidated revenue, as reported in our Condensed Interim Consolidated Statements of Net Loss, provides an indication of our profitability from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.
Long-term debt to long-term debt plus equity	We believe that long-term debt (as reported in our Condensed Interim Consolidated Statements of Financial Position) to long-term debt plus equity (total shareholders’ equity as reported in our Condensed Interim Consolidated Statements of Financial Position) provides an indication to our debt leverage.
Net Debt to Adjusted EBITDA	We believe that the Net Debt (long-term debt less cash, as reported in our Condensed Interim Consolidated Statements of Financial Position) to Adjusted EBITDA ratio provides an indication to the number of years it would take for us to repay our debt obligations.
Supplementary Financial Measures<br><br> <br>****
We reference certain supplementary financial measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
Capital Spending by Spend Category	We provide additional disclosure to better depict the nature of our capital spending. Our capital spending is categorized as expansion and upgrade, maintenance and infrastructure, or intangibles.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements contained in this release, including statements that contain words such as "could", "should", "can", "anticipate", "estimate", "intend", "plan", "expect", "believe", "will", "may", "continue", "project", "potential" and similar expressions and statements relating to matters that are not historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking information and statements").

In particular, forward looking information and statements include, but are not limited to, the following:

·	our strategic priorities for 2022;
·	our capital expenditures, free cash flow allocation and debt reduction plan for 2022;
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·	anticipated activity levels, demand for our drilling rigs, day rates and margins in 2022;
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·	the average number of term contracts in place for 2022;
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·	customer adoption of Alpha^TM^ technologies and EverGreen^TM^ suite of environmental<br>solutions;
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·	anticipated timing and amount of costs savings from acquired well servicing and rental assets;
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·	potential commercial opportunities and rig contract renewals;
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·	our future debt reduction plans; and
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·	anticipated timing and amounts of insurance recoveries.
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These forward-looking information and statements are based on certain assumptions and analysis made by Precision in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. These include, among other things:

·	the fluctuation in oil prices may pressure customers into reducing or limiting their drilling budgets;
·	the success of our response to the COVID-19 global pandemic;
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·	the status of current negotiations with our customers and vendors;
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·	customer focus on safety performance;
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·	existing term contracts are neither renewed nor terminated prematurely;
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·	our ability to deliver rigs to customers on a timely basis; and
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·	the general stability of the economic and political environments in the jurisdictions where we operate.
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Undue reliance should not be placed on forward-looking information and statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from our expectations. Such risks and uncertainties include, but are not limited to:

·	volatility in the price and demand for oil and natural gas;
·	fluctuations in the level of oil and natural gas exploration and development activities;
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·	fluctuations in the demand for contract drilling, well servicing and ancillary oilfield services;
---	---
·	our customers’ inability to obtain adequate credit or financing to support their drilling and production<br>activity;
---	---
·	the success of vaccinations for COVID-19 worldwide;
---	---
·	changes in drilling and well servicing technology, which could reduce demand for certain rigs or put us<br>at a competitive advantage;
---	---
·	shortages, delays and interruptions in the delivery of equipment supplies and other key inputs;
---	---
·	liquidity of the capital markets to fund customer drilling programs;
---	---
·	availability of cash flow, debt and equity sources to fund our capital and operating requirements, as<br>needed;
---	---
·	the impact of weather and seasonal conditions on operations and facilities;
---	---
·	competitive operating risks inherent in contract drilling, well servicing and ancillary oilfield services;
---	---
·	ability to improve our rig technology to improve drilling efficiency;
---	---
·	general economic, market or business conditions;
---	---
·	the availability of qualified personnel and management;
---	---
·	a decline in our safety performance which could result in lower demand for our services;
---	---
·	changes in laws or regulations, including changes in environmental laws and regulations such as increased<br>regulation of hydraulic fracturing or restrictions on the burning of fossil fuels and greenhouse gas emissions, which could have an adverse<br>impact on the demand for oil and natural gas;
---	---
·	terrorism, social, civil and political unrest in the foreign jurisdictions where we operate;
---	---
·	fluctuations in foreign exchange, interest rates and tax rates; and
---	---
·	other unforeseen conditions which could impact the use of services supplied by Precision and Precision’s<br>ability to respond to such conditions.
---	---

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2021, which may be accessed on Precision’s SEDAR profile at www.sedar.com or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

14

Exhibit 99.2

CONDENSED INTERIM CONSOLIDATED STATEMENTS OFFINANCIAL POSITION (UNAUDITED)

(Stated in thousands of Canadian dollars)	June 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash	$	51,641		$	40,588
Accounts receivable		316,529			255,740
Inventory		26,547			23,429
Total current assets		394,717			319,757
Non-current assets:
Income tax recoverable		1,521			—
Deferred tax assets		840			867
Right-of-use assets		51,553			51,440
Property, plant and equipment		2,225,236			2,258,391
Intangibles		21,678			23,915
Investments and other assets		9,141			7,382
Total non-current assets		2,309,969			2,341,995
Total assets	$	2,704,686		$	2,661,752
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	268,688		$	224,123
Income taxes payable		695			839
Current portion of lease obligations		11,602			10,935
Current portion of long-term debt (Note 5)		2,240			2,223
Total current liabilities		283,225			238,120
Non-current liabilities:
Share-based compensation (Note 7)		34,475			26,728
Provisions and other		6,907			6,513
Lease obligations		45,642			45,823
Long-term debt (Note 5)		1,139,720			1,106,794
Deferred tax liabilities		15,341			12,219
Total non-current liabilities		1,242,085			1,198,077
Shareholders’ equity:
Shareholders’ capital (Note 8)		2,299,370			2,281,444
Contributed surplus		74,057			76,311
Deficit		(1,335,435	)		(1,266,980	)
Accumulated other comprehensive income		141,384			134,780
Total shareholders’ equity		1,179,376			1,225,555
Total liabilities and shareholders’ equity	$	2,704,686		$	2,661,752

See accompanying notes to condensed interimconsolidated financial statements.

| 1 |

| --- |

CONDENSED INTERIM CONSOLIDATED STATEMENTS OFNET LOSS (UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
(Stated in thousands of Canadian dollars, except per share amounts)	2022			2021			2022			2021
Revenue (Note 3)	$	326,016		$	201,359		$	677,355		$	437,832
Expenses:
Operating		240,552			140,955			499,526			301,576
General and administrative		21,365			31,460			76,875			52,773
Earnings before income taxes, loss (gain) on investments and other assets, loss on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization		64,099			28,944			100,954			83,483
Depreciation and amortization		69,757			69,704			138,214			141,717
Gain on asset disposals		(10,800	)		(904	)		(13,914	)		(2,963	)
Foreign exchange		536			(296	)		18			(360	)
Finance charges (Note 6)		21,043			27,698			41,773			50,144
Loss on repurchase of unsecured senior notes		—			9,520			—			9,520
Loss (gain) on investments and other assets		4,346			—			(1,223	)		—
Loss before income taxes		(20,783	)		(76,778	)		(63,914	)		(114,575	)
Income taxes:
Current		635			788			1,605			1,572
Deferred		3,193			(1,654	)		2,936			(4,129	)
		3,828			(866	)		4,541			(2,557	)
Net loss	$	(24,611	)	$	(75,912	)	$	(68,455	)	$	(112,018	)
Net loss per share: (Note 9)
Basic	$	(1.81	)	$	(5.71	)	$	(5.06	)	$	(8.41	)
Diluted	$	(1.81	)	$	(5.71	)	$	(5.06	)	$	(8.41	)

See accompanying notes to condensed interimconsolidated financial statements.

---

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
(Stated in thousands of Canadian dollars)	2022			2021			2022			2021
Net loss	$	(24,611	)	$	(75,912	)	$	(68,455	)	$	(112,018	)
Unrealized gain (loss) on translation of assets and liabilities of operations denominated in foreign currency		44,638			(21,548	)		27,667			(42,546	)
Foreign exchange gain (loss) on net investment hedge with U.S. denominated debt		(33,831	)		15,630			(21,063	)		31,539
Tax expense related to net investment hedge of long-term debt		—			(285	)		—			—
Comprehensive loss	$	(13,804	)	$	(82,115	)	$	(61,851	)	$	(123,025	)

See accompanying notes to condensed interim consolidated financialstatements.

| 2 |

| --- |

CONDENSED INTERIM CONSOLIDATED STATEMENTS OFCASH FLOWS (UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
(Stated in thousands of Canadian dollars)	2022			2021			2022			2021
Cash provided by (used in):
Operations:
Net loss	$	(24,611	)	$	(75,912	)	$	(68,455	)	$	(112,018	)
Adjustments for:
Long-term compensation plans		3,224			13,653			34,436			20,801
Depreciation and amortization		69,757			69,704			138,214			141,717
Gain on asset disposals		(10,800	)		(904	)		(13,914	)		(2,963	)
Foreign exchange		422			464			151			1,022
Finance charges		21,043			27,698			41,773			50,144
Income taxes		3,828			(866	)		4,541			(2,557	)
Other		275			(567	)		275			(564	)
Loss (gain) on investments and other assets		4,346			—			(1,223	)		—
Loss on repurchase of unsecured senior notes		—			9,520			—			9,520
Income taxes paid		(2,576	)		(3,905	)		(2,803	)		(4,066	)
Income taxes recovered		—			3			—			3
Interest paid		(4,540	)		(26,412	)		(42,701	)		(45,178	)
Interest received		5			131			34			176
Funds provided by operations		60,373			12,607			90,328			56,037
Changes in non-cash working capital balances		74,801			29,612			(20,448	)		1,604
		135,174			42,219			69,880			57,641
Investments:
Purchase of property, plant and equipment		(39,436	)		(20,255	)		(75,838	)		(28,691	)
Proceeds on sale of property, plant and equipment		6,849			2,590			9,696			5,914
Purchase of investments and other assets		(536	)		—			(536	)		—
Changes in non-cash working capital balances		(3,659	)		7,515			(447	)		2,713
		(36,782	)		(10,150	)		(67,125	)		(20,064	)
Financing:
Issuance of long-term debt		6,405			676,341			94,529			696,341
Repayments of long-term debt		(75,921	)		(712,034	)		(84,111	)		(761,459	)
Repurchase of share capital		(5,000	)		—			(5,000	)		(4,294	)
Issuance of common shares on the exercise of options		4,766			—			6,162			—
Debt issuance costs		—			(9,550	)		—			(9,794	)
Debt amendment fees		—			(910	)		—			(910	)
Lease payments		(1,842	)		(1,709	)		(3,409	)		(3,330	)
Changes in non-cash working capital balances		—			1,829			—			1,829
		(71,592	)		(46,033	)		8,171			(81,617	)
Effect of exchange rate changes on cash		739			(430	)		127			(1,295	)
Increase (decrease) in cash		27,539			(14,394	)		11,053			(45,335	)
Cash, beginning of period		24,102			77,831			40,588			108,772
Cash, end of period	$	51,641		$	63,437		$	51,641		$	63,437

See accompanying notes to condensed interimconsolidated financial statements.

| 3 |

| --- |

CONDENSED INTERIMCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

(Stated in thousands of Canadian dollars)	Shareholders’ <br>Capital			Contributed <br>Surplus			Accumulated <br>Other <br>Comprehensive <br>Income		Deficit			Total <br>Equity
Balance at January 1, 2022	$	2,281,444		$	76,311		$	134,780	$	(1,266,980	)	$	1,225,555
Net loss for the period		—			—			—		(68,455	)		(68,455	)
Other comprehensive income for the period		—			—			6,604		—			6,604
Share options exercised		8,843			(2,681	)		—		—			6,162
Share repurchases		(5,000	)		—			—		—			(5,000	)
Share-based compensation reclassification		14,083			(219	)		—		—			13,864
Share-based compensation expense		—			646			—		—			646
Balance at June 30, 2022	$	2,299,370		$	74,057		$	141,384	$	(1,335,435	)	$	1,179,376
(Stated in thousands of Canadian dollars)	Shareholders’ <br>Capital			Contributed <br>Surplus			Accumulated <br>Other <br>Comprehensive <br>Income			Deficit			Total <br>Equity
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance at January 1, 2021	$	2,285,738		$	72,915		$	137,581		$	(1,089,594	)	$	1,406,640
Net loss for the period		—			—			—			(112,018	)		(112,018	)
Other comprehensive loss for the period		—			—			(11,007	)		—			(11,007	)
Share repurchases		(4,294	)		—			—			—			(4,294	)
Share-based compensation reclassification		—			(1,958	)		—			—			(1,958	)
Share-based compensation expense		—			4,293			—			—			4,293
Balance at June 30, 2021	$	2,281,444		$	75,250		$	126,574		$	(1,201,612	)	$	1,281,656

See accompanying notes to condensed interimconsolidated financial statements.

| 4 |

| --- |

NOTES TO CONDENSEDINTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Tabular amountsare stated in thousands of Canadian dollars except share numbers and per share amounts)

NOTE 1. DESCRIPTION OF BUSINESS

Precision Drilling Corporation (Precision or the Corporation) is incorporated under the laws of the Province of Alberta, Canada and is a provider of contract drilling and completion and production services primarily to oil and natural gas and geothermal exploration and production companies in Canada, the United States and certain international locations.

NOTE 2. BASIS OF PRESENTATION

(a) Statement of Compliance

These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, using accounting policies consistent with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretations Committee.

The condensed interim consolidated financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Corporation as at and for the year ended December 31, 2021.

These condensed interim consolidated financial statements were prepared using accounting policies and methods of their application consistent with those used in the preparation of the Corporation’s consolidated audited annual financial statements for the year ended December 31, 2021.

These condensed interim consolidated financial statements were approved by the Board of Directors on July 26, 2022.

(b) Use of Estimates and Judgements

The preparation of the condensed interim consolidated financial statements requires management to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingencies. These estimates and judgements are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The estimation of anticipated future events involves uncertainty and, consequently, the estimates used in preparation of the condensed interim consolidated financial statements may change as future events unfold, more experience is acquired, or the Corporation’s operating environment changes.

Significant estimates and judgements used in the preparation of these condensed interim consolidated financial statements remained unchanged from those disclosed in the Corporation’s consolidated audited annual financial statements for the year ended December 31, 2021.

NOTE 3. Revenue

(a)	Disaggregation of revenue

The following table includes a reconciliation of disaggregated revenue by reportable segment. Revenue has been disaggregated by primary geographical market and type of service provided.

| 5 |

| --- | | Three Months Ended June 30, 2022 | Contract<br> <br>Drilling<br> <br>Services | | Completion<br> <br>and<br> <br>Production<br> <br>Services | | Corporate<br> <br>and Other | | Inter-<br> <br>Segment<br> <br>Eliminations | | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | United States | $ | 164,174 | $ | 4,299 | $ | — | $ | (27 | ) | $ | 168,446 | | Canada | | 92,073 | | 28,742 | | — | | (1,297 | ) | | 119,518 | | International | | 38,052 | | — | | — | | — | | | 38,052 | | | $ | 294,299 | $ | 33,041 | $ | — | $ | (1,324 | ) | $ | 326,016 | | Day rate/hourly services | $ | 280,010 | $ | 33,041 | $ | — | $ | (233 | ) | $ | 312,818 | | Shortfall payments/idle but contracted | | 630 | | — | | — | | — | | | 630 | | Turnkey drilling services | | 11,842 | | — | | — | | — | | | 11,842 | | Other | | 1,817 | | — | | — | | (1,091 | ) | | 726 | | | $ | 294,299 | $ | 33,041 | $ | — | $ | (1,324 | ) | $ | 326,016 |

---

Three Months Ended June 30, 2021	Contract <br>Drilling <br>Services		Completion <br>and <br>Production <br>Services		Corporate <br>and Other		Inter- <br>Segment <br>Eliminations			Total
United States	$	90,128	$	2,540	$	—	$	(1	)	$	92,667
Canada		54,707		18,127		—		(563	)		72,271
International		36,421		—		—		—			36,421
	$	181,256	$	20,667	$	—	$	(564	)	$	201,359
Day rate/hourly services	$	174,266	$	20,667	$	—	$	(52	)	$	194,881
Shortfall payments/idle but contracted		119		—		—		—			119
Turnkey drilling services		3,684		—		—		—			3,684
Directional services		2,064		—		—		—			2,064
Other		1,123		—		—		(512	)		611
	$	181,256	$	20,667	$	—	$	(564	)	$	201,359

---

Six Months Ended June 30, 2022	Contract<br> <br>Drilling<br> <br>Services		Completion<br> <br>and<br> <br>Production<br> <br>Services		Corporate<br> <br>and Other		Inter-<br> <br>Segment<br> <br>Eliminations			Total
United States	$	305,439	$	8,337	$	—	$	(28	)	$	313,748
Canada		230,590		62,942		—		(2,340	)		291,192
International		72,415		—		—		—			72,415
	$	608,444	$	71,279	$	—	$	(2,368	)	$	677,355
Day rate/hourly services	$	578,060	$	71,279	$	—	$	(426	)	$	648,913
Shortfall payments/idle but contracted		630		—		—		—			630
Turnkey drilling services		26,580		—		—		—			26,580
Other		3,174		—		—		(1,942	)		1,232
	$	608,444	$	71,279	$	—	$	(2,368	)	$	677,355

---

| 6 |

| --- | | Six Months Ended June 30, 2021 | Contract <br>Drilling <br>Services | | Completion <br>and <br>Production <br>Services | | Corporate <br>and Other | | Inter- <br>Segment <br>Eliminations | | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | United States | $ | 172,802 | $ | 5,848 | $ | — | $ | (1 | ) | $ | 178,649 | | Canada | | 140,790 | | 47,363 | | — | | (1,453 | ) | | 186,700 | | International | | 72,483 | | — | | — | | — | | | 72,483 | | | $ | 386,075 | $ | 53,211 | $ | — | $ | (1,454 | ) | $ | 437,832 | | Day rate/hourly services | $ | 367,615 | $ | 53,211 | $ | — | $ | (160 | ) | $ | 420,666 | | Shortfall payments/idle but contracted | | 235 | | — | | — | | — | | | 235 | | Turnkey drilling services | | 9,630 | | — | | — | | — | | | 9,630 | | Directional services | | 5,843 | | — | | — | | — | | | 5,843 | | Other | | 2,752 | | — | | — | | (1,294 | ) | | 1,458 | | | $ | 386,075 | $ | 53,211 | $ | — | $ | (1,454 | ) | $ | 437,832 | | (b) | Seasonality | | --- | --- |

Precision has operations that are carried on in Canada which represent approximately 43% (2021 - 43%) of consolidated revenue for the six months ended June 30, 2022 and 35% (2021 - 36%) of consolidated total assets as at June 30, 2022. The ability to move heavy equipment in Canadian oil and natural gas fields is dependent on weather conditions. As warm weather returns in the spring, the winter's frost comes out of the ground rendering many secondary roads incapable of supporting the weight of heavy equipment until they have thoroughly dried out. The duration of this “spring break-up” has a direct impact on Precision’s activity levels. In addition, many exploration and production areas in northern Canada are accessible only in winter months when the ground is frozen hard enough to support equipment. The timing of freeze up and spring break-up affects the ability to move equipment in and out of these areas. As a result, late March through May is traditionally Precision’s slowest time in this region.

NOTE 4. SEGMENTED INFORMATION

The Corporation has two reportable operating segments; Contract Drilling Services and Completion and Production Services. Contract Drilling Services includes drilling rigs, procurement and distribution of oilfield supplies, and manufacture, sale and repair of drilling equipment. Completion and Production Services includes service rigs, oilfield equipment rental and camp and catering services. The Corporation provides services primarily in Canada, the United States and certain international locations.

Three Months Ended June 30, 2022	Contract<br> <br>Drilling<br> <br>Services			Completion<br> <br>and<br> <br>Production<br> <br>Services			Corporate<br> <br>and Other			Inter-<br> <br>Segment<br> <br>Eliminations			Total
Revenue	$	294,299		$	33,041		$	—		$	(1,324	)	$	326,016
Earnings before income taxes, loss (gain) on investments and other assets, loss on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization		70,429			4,839			(11,169	)		—			64,099
Depreciation and amortization		64,140			3,254			2,363			—			69,757
Gain on asset disposals		(10,581	)		(219	)		—			—			(10,800	)
Total assets		2,446,080			124,838			133,768			—			2,704,686
Capital expenditures		37,821			1,558			57			—			39,436

| 7 |

| --- | | Three Months Ended June 30, 2021 | Contract <br>Drilling <br>Services | | | Completion <br>and <br>Production <br>Services | | | Corporate <br>and Other | | | Inter- <br>Segment <br>Eliminations | | | Total | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | $ | 181,256 | | $ | 20,667 | | $ | — | | $ | (564 | ) | $ | 201,359 | | | Earnings before income taxes, loss (gain) on investments and other assets, loss on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization | | 47,703 | | | 4,252 | | | (23,011 | ) | | — | | | 28,944 | | | Depreciation and amortization | | 63,101 | | | 3,854 | | | 2,749 | | | — | | | 69,704 | | | Gain on asset disposals | | (595 | ) | | (213 | ) | | (96 | ) | | — | | | (904 | ) | | Total assets | | 2,420,314 | | | 123,403 | | | 152,592 | | | — | | | 2,696,309 | | | Capital expenditures | | 19,685 | | | 506 | | | 64 | | | — | | | 20,255 | | | Six Months Ended June 30, 2022 | Contract<br> <br>Drilling<br> <br>Services | | | Completion<br> <br>and<br> <br>Production<br> <br>Services | | | Corporate<br> <br>and Other | | | Inter-<br> <br>Segment<br> <br>Eliminations | | | Total | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | $ | 608,444 | | $ | 71,279 | | $ | — | | $ | (2,368 | ) | $ | 677,355 | | | Earnings before income taxes, loss (gain) on investments and other assets, loss on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization | | 141,603 | | | 11,378 | | | (52,027 | ) | | — | | | 100,954 | | | Depreciation and amortization | | 126,793 | | | 6,604 | | | 4,817 | | | — | | | 138,214 | | | Gain on asset disposals | | (12,463 | ) | | (1,389 | ) | | (62 | ) | | — | | | (13,914 | ) | | Total assets | | 2,446,080 | | | 124,838 | | | 133,768 | | | — | | | 2,704,686 | | | Capital expenditures | | 73,049 | | | 2,558 | | | 231 | | | — | | | 75,838 | | | Six Months Ended June 30, 2021 | Contract <br>Drilling <br>Services | | | Completion <br>and <br>Production <br>Services | | | Corporate <br>and Other | | | Inter- <br>Segment <br>Eliminations | | | Total | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | $ | 386,075 | | $ | 53,211 | | $ | — | | $ | (1,454 | ) | $ | 437,832 | | | Earnings before income taxes, loss (gain) on investments and other assets, loss on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization | | 107,734 | | | 12,054 | | | (36,305 | ) | | — | | | 83,483 | | | Depreciation and amortization | | 128,333 | | | 7,855 | | | 5,529 | | | — | | | 141,717 | | | Gain on asset disposals | | (2,320 | ) | | (456 | ) | | (187 | ) | | — | | | (2,963 | ) | | Total assets | | 2,420,314 | | | 123,403 | | | 152,592 | | | — | | | 2,696,309 | | | Capital expenditures | | 27,123 | | | 1,410 | | | 158 | | | — | | | 28,691 | |

| 8 |

| --- |

A reconciliation of total segment earnings before income taxes, loss (gain) on investments and other assets, loss on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization to net loss is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Total segment earnings before income taxes, loss (gain) on investments and other assets, loss on repurchase of unsecured senior notes, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization	$	64,099		$	28,944		$	100,954		$	83,483
Deduct:
Depreciation and amortization		69,757			69,704			138,214			141,717
Gain on asset disposals		(10,800	)		(904	)		(13,914	)		(2,963	)
Foreign exchange		536			(296	)		18			(360	)
Finance charges		21,043			27,698			41,773			50,144
Loss on repurchase of unsecured senior notes		—			9,520			—			9,520
Loss (gain) on investments and other assets		4,346			—			(1,223	)		—
Income taxes		3,828			(866	)		4,541			(2,557	)
Net loss	$	(24,611	)	$	(75,912	)	$	(68,455	)	$	(112,018	)

NOTE 5. LONG-TERM DEBT

		U.S. Denominated Facilities				Canadian Facilities and Translated U.S. Facilities
		June 30,		December 31,		June 30,			December 31,
		2022		2021		2022			2021
Current Portion of Long-Term Debt
Canadian Real Estate Credit Facility	US$	—	US$	—	$	1,333		$	1,333
U.S. Real Estate Credit Facility		704		704		907			890
	US$	704	US$	704	$	2,240		$	2,223
Long-Term Debt
Senior Credit Facility	US$	128,000	US$	118,000	$	164,767		$	149,206
Canadian Real Estate Credit Facility		—		—		17,000			17,667
U.S. Real Estate Credit Facility		8,741		9,093		11,251			11,498
Unsecured Senior Notes:
7.125% senior notes due 2026		347,765		347,765		447,657			439,735
6.875% senior notes due 2029		400,000		400,000		514,896			505,784
	US$	884,506	US$	874,858		1,155,571			1,123,890
Less net unamortized debt issue costs and original issue discount						(15,851	)		(17,096	)
					$	1,139,720		$	1,106,794

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| --- | | | Senior <br><br>Credit <br><br>Facility | | | Unsecured <br><br>Senior <br><br>Notes | | Canadian <br><br>Real Estate <br><br>Credit <br><br>Facility | | | U.S. <br><br>Real Estate <br><br>Credit <br><br>Facility | | | Debt Issue <br><br>Costs and <br><br>Original Issue <br><br>Discount | | | Total | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Current | $ | — | | $ | — | $ | 1,333 | | $ | 890 | | $ | — | | $ | 2,223 | | | Long-term | | 149,206 | | | 945,519 | | 17,667 | | | 11,498 | | | (17,096 | ) | | 1,106,794 | | | December 31, 2021 | | 149,206 | | | 945,519 | | 19,000 | | | 12,388 | | | (17,096 | ) | | 1,109,017 | | | Changes from financing cash flows: | | | | | | | | | | | | | | | | | | | Proceeds from Senior Credit Facility | | 94,529 | | | — | | — | | | — | | | — | | | 94,529 | | | Repayment of Senior Credit Facility | | (82,997 | ) | | — | | — | | | — | | | — | | | (82,997 | ) | | Repayment of Real Estate Credit Facility | | — | | | — | | (667 | ) | | (447 | ) | | — | | | (1,114 | ) | | | | 160,738 | | | 945,519 | | 18,333 | | | 11,941 | | | (17,096 | ) | | 1,119,435 | | | Amortization of debt issue costs | | — | | | — | | — | | | — | | | 1,248 | | | 1,248 | | | Foreign exchange adjustment | | 4,029 | | | 17,034 | | — | | | 217 | | | (3 | ) | | 21,277 | | | June 30, 2022 | $ | 164,767 | | $ | 962,553 | $ | 18,333 | | $ | 12,158 | | $ | (15,851 | ) | $ | 1,141,960 | | | Current | $ | — | | $ | — | $ | 1,333 | | $ | 907 | | $ | — | | $ | 2,240 | | | Long-term | | 164,767 | | | 962,553 | | 17,000 | | | 11,251 | | | (15,851 | ) | | 1,139,720 | | | | $ | 164,767 | | $ | 962,553 | $ | 18,333 | | $ | 12,158 | | $ | (15,851 | ) | $ | 1,141,960 | |

At June 30, 2022, Precision was in compliance with the covenants of the Senior Credit Facility and Real Estate Credit Facilities.

NOTE 6. FINANCE CHARGES

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Interest:
Long-term debt	$	19,516		$	19,893		$	38,677		$	40,755
Lease obligations		666			678			1,325			1,379
Other		101			—			186			5
Income		(11	)		(60	)		(45	)		(156	)
Amortization of debt issue costs, loan commitment fees and original issue discount		771			7,187			1,630			8,161
Finance charges	$	21,043		$	27,698		$	41,773		$	50,144

NOTE 7. SHARE-BASED COMPENSATION PLANS

Liability Classified Plans

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	Restricted<br> <br>Share <br><br>Units ^(a)^			Performance<br> <br>Share<br> <br>Units ^(a)^			Executive <br><br>Performance <br><br>Share Units^(b)^			Non-<br><br>Management<br> <br>Directors’<br><br> <br>DSUs ^(c)^		Total
December 31, 2021	$	18,050		$	21,524		$	16,507		$	4,674	$	60,755
Expensed during period		16,990			27,001			4,172			4,504		52,667
Settlement in shares		—			—			(14,083	)		—		(14,083	)
Reclassification from equity-settled plans		—			—			(406	)		—		(406	)
Payments and redemptions		(14,182	)		(7,496	)		(6,190	)		—		(27,868	)
Foreign exchange		(54	)		(51	)		—			—		(105	)
June 30, 2022	$	20,804		$	40,978		$	—		$	9,178	$	70,960
Current	$	14,897		$	21,588		$	—		$	—	$	36,485
Long-term		5,907			19,390			—			9,178		34,475
	$	20,804		$	40,978		$	—		$	9,178	$	70,960

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| --- |

(a) Restricted Share Units and PerformanceShare Units

A summary of the activity under the Restricted Share Unit (RSU) and the Performance Share Unit (PSU) plans are presented below:

	RSUs <br>Outstanding			PSUs <br>Outstanding
December 31, 2021		598,156			983,734
Granted		173,580			237,160
Redeemed		(265,757	)		(73,295	)
Forfeited		(13,484	)		(13,514	)
June 30, 2022		492,495			1,134,085

(b) Executive Performance Share Units

A summary of the activity under Executive Performance Share Unit (Executive PSU) share-based incentive plan is presented below:

	Executive PSUs <br>Outstanding
December 31, 2021		189,964
Redeemed		(189,964	)
June 30, 2022		—

Pursuant to the Omnibus Plan, Precision elected to settle 131,950 vesting Executive PSUs in 263,900 common shares.

(c) Non-Management Directors – DeferredShare Unit Plan

A summary of the activity under the non-management director Deferred Share Unit (DSU) plan is presented below:

	DSUs <br>Outstanding
December 31, 2021		104,591
Granted		6,378
June 30, 2022		110,969

Equity Settled Plans

(d) Option Plan

A summary of the activity under the option plan is presented below:

Canadian share options	Outstanding			Range of<br><br> <br>Exercise Price				Weighted<br><br> <br>Average<br><br> <br>Exercise Price		Exercisable
December 31, 2021		115,605		$	87.00	—	146.40	$	123.35		115,605
Exercised		(19,210	)		87.00	—	89.20		88.50
Forfeited		(52,980	)		146.40	—	146.40		146.40
June 30, 2022	****	43,415	****	$	87.00	—	145.97	$	110.64	****	43,415
U.S. share options	Outstanding			Range of<br> Exercise Price<br> (US)			Weighted<br> Average<br> Exercise Price<br> (US)	Exercisable
---	---	---	---	---	---	---	---	---	---
December 31, 2021		267,843			—	115.80			257,854
Exercised		(58,690	)		—	68.80
Forfeited		(32,205	)		—	115.80
June 30, 2022	****	176,948	****		—	111.47		****	176,948

All values are in US Dollars.

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| --- |

(e) Non-Management Directors – DeferredShare Unit Plan

A summary of the activity under this share-based incentive plan is presented below:

	DSUs <br>Outstanding
December 31, 2021 and June 30, 2022		1,470

NOTE 8. SHAREHOLDERS’ CAPITAL

Common shares	Number			Amount
December 31, 2021		13,304,425			2,281,444
Settlement of Executive PSUs		263,900			14,083
Share options exercised		77,900			8,843
Share repurchases		(60,796	)		(5,000	)
June 30, 2022		13,585,429			2,299,370

NOTE 9. PER SHARE AMOUNTS

The following tables reconcile the net loss and weighted average shares outstanding used in computing basic and diluted net loss per share:

---

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net loss - basic and diluted	$	(24,611	)	$	(75,912	)	$	(68,455	)	$	(112,018	)

---

	Three Months Ended June 30,				Six Months Ended June 30,
(Stated in thousands)	2022		2021		2022		2021
Weighted average shares outstanding – basic		13,588		13,304		13,533		13,327
Effect of share options and other equity compensation plans		—		—		—		—
Weighted average shares outstanding – diluted		13,588		13,304		13,533		13,327

NOTE 10. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying values of cash, accounts receivable, and accounts payable and accrued liabilities approximates their fair value due to the relatively short period to maturity of the instruments. At the end of each reporting period, investments and other assets are measured at their estimated fair value, with changes in fair value recognized in profit or loss. Amounts drawn on the Senior Credit Facility and the Canadian and U.S. Real Estate Credit Facilities are measured at amortized cost and approximate fair value as this indebtedness is subject to floating rates of interest. The fair value of the unsecured senior notes at June 30, 2022 was approximately $881 million (December 31, 2021 – $969 million).

Financial assets and liabilities recorded or disclosed at fair value in the consolidated statement of financial position are categorized based upon the level of judgement associated with the inputs used to measure their fair value. Hierarchical levels are based on the amount of subjectivity associated with the inputs in the fair value determination and are as follows:

Level I—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level II—Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level III—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

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| --- |

The estimated fair value of unsecured senior notes is based on level II inputs. The fair value is estimated considering the risk-free interest rates on government debt instruments of similar maturities, adjusted for estimated credit risk, industry risk and market risk premiums.

NOTE 11. OTHER MATTERS

Late in the second quarter of 2022, Precision experienced a well control event on one of its turnkey drilling jobs. Precision recognized revenue of nil and US$5 million of drilling-related operating costs, resulting in a US$5 million project loss.

The net book value of the damaged drilling rig was derecognized resulting in a US$1 million charge to depreciation and amortization expense. Precision accrued US$12 million of associated well site clean-up and remediation costs and accrued estimated insurance recoveries of US$16 million for the drilling rig and associated costs.

The provisions for the associated costs and insurance recoveries are based on management’s best estimates at June 30, 2022. As the assessment of damage is ongoing, the provisions may be subject to change.

NOTE 12. SUBSEQUENT EVENT

Subsequent to June 30, 2022, Precision agreed to acquire the well servicing business and associated rental assets of High Arctic Energy Services Inc. for an aggregate purchase price of $38 million, payable in cash. Precision adds to its Canadian well servicing operation a fleet of 80 service rigs (51 marketed and 29 inactive), rental assets, ancillary support equipment, inventories and spares and real estate.

| 13 |

| --- |

SHAREHOLDER INFORMATION

STOCK EXCHANGE LISTINGS

Shares of Precision Drilling Corporation are listed on the Toronto Stock Exchange under the trading symbol PD and on the New York Stock Exchange under the trading symbol PDS.

TRANSFER AGENT AND REGISTRAR

Computershare Trust Company of Canada

Calgary, Alberta

TRANSFER POINT

Computershare Trust Company NA

Canton, Massachusetts

Q2 2022 TRADING PROFILE

Toronto (TSX: PD)

High: $109.29

Low: $74.32

Close: $82.71

Volume Traded: 8,663,509

New York (NYSE: PDS)

High: US$87.19

Low: US$57.08

Close: US$64.02

Volume Traded: 5,077,530

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ACCOUNT QUESTIONS

Precision’s Transfer Agent can help you with a variety of shareholder related services, including:

•  change of address

•  lost unit certificates

•  transfer of shares to another person

•  estate settlement

Computershare Trust Company of Canada

100 University Avenue

9th Floor, North Tower

Toronto, Ontario M5J 2Y1

Canada

1-800-564-6253 (toll free in Canada and the United States)

1-514-982-7555 (international direct dialing)

Email: service@computershare.com

ONLINE INFORMATION

To receive news releases by email, or to view this interim report online, please visit Precision’s website at www.precisiondrilling.com and refer to the Investor Relations section. Additional information relating to Precision, including the Annual Information Form, Annual Report and Management Information Circular has been filed with SEDAR and is available at www.sedar.com and on the EDGAR website www.sec.gov

CORPORATE INFORMATION

DIRECTORS

Michael R. Culbert

William T. Donovan

Brian J. Gibson

Steven W. Krablin

Susan M. MacKenzie

Kevin O. Meyers

Kevin A. Neveu

David W. Williams

OFFICERS

Kevin A. Neveu

President and Chief Executive Officer

Veronica H. Foley

Chief Legal and Compliance Officer

Carey T. Ford

Senior Vice President and Chief Financial Officer

Shuja U. Goraya

Chief Technology Officer

Darren J. Ruhr

Chief Administrative Officer

Gene C. Stahl

Chief Marketing Officer

AUDITORS

KPMG LLP

Calgary, Alberta

HEAD OFFICE

Suite 800, 525 8th Avenue SW

Calgary, Alberta, Canada T2P 1G1

Telephone: 403-716-4500

Facsimile: 403-264-0251

Email: info@precisiondrilling.com

www.precisiondrilling.com

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