Grey Wolf Announces Response to Unsolicited Proposal

Grey Wolf, Inc. announced today that it received a letter from the board of trustees of Precision Drilling Trust making a second unsolicited proposal to acquire Grey Wolf. The Trust's second proposal is to acquire all of the common stock of Grey Wolf for total consideration of $9.30 per share on a fully diluted basis, consisting of cash and Trust units at the election of Grey Wolf's shareholders, subject to proration so that the cash portion does not exceed 40% of the equity purchase price.

Other terms and conditions of the Trust's proposal letter include the final agreement on a transaction, which would be conditioned on a negotiation of acceptable legal documentation, completion of customary due diligence, Grey Wolf shareholder approval, which would not be conditioned on Trust unitholder approval and regulatory approval under the Hart-Scott-Rodino Act.

Also possible completion of evaluation, due diligence, negotiation and signing of definitive documents within two weeks, the Trust's statement that it has C$600 million of committed borrowing capacity to assist it in funding the proposed business combination and attached letters from two financial institutions indicating that they were highly confident that they could arrange for or provide to the Trust financing required to complete the proposed business combination, subject in each case to numerous conditions, some of which were unspecified or were to be met to the satisfaction of the lender; however, each institution indicated that their letter should not be considered a binding commitment to provide such financing.