PEMEX Awards Drilling Contract to Northland Energy

PEMEX has awarded Northland Energy Corporation, a wholly owned subsidiary of Precision Drilling Corporation, integrated multi-well contracts for underbalanced drilling and separation services in the southern region of Mexico. The agreements mark Precision Drilling's second project awarded by PEMEX.

"We've been working with PEMEX in the Burgos Basin since May of this year with great success," said Larry Comeau, President of Precision Drilling's Technology Services Group. "These additional contracts enhance Precision Drilling's presence in Mexico, and reinforce our strategy of revenue diversification by further increasing our global presence."

Northland Energy will supply controlled pressure drilling (CPD(TM) ) services using its RBOP(R) equipment, as well as both vertical and horizontal separation systems to safely measure and separate well returns during drilling operations. Drilling activity commenced in August 2001 and is scheduled to run through August 2002. The contracts not only establish Northland Energy's presence in Mexico, but also provide an opportunity for Precision Drilling to introduce additional services that address specific challenges associated with wells drilled in the region.

Well characteristics in the region include depressurized oil reservoirs requiring foam and nitrogen gas, high permeability gas wells, and over-pressured and normally pressured wells prone to fluid losses. As the wells in the southern region grow in complexity, Northland Energy's RBOP(R) and separation services will play an important role in the successful development of this area.