Precision Drilling Wins Contract Extension from PEMEX

Precision Drilling Corporation through its subsidiary PD Mexicana, S. de R.L. de C.V. (a jointly owned company between Precision and BJ Services Company "BJ") has been awarded an extension of its multi-well integrated services contract by Pemex for work in the Burgos basin in northern Mexico. The extension, worth approximately US $339 million, involves the drilling of at least 285 additional gas wells in the basin.

Drilling activity, under this extension, will be a seamless continuation of the initial integrated contract which commenced in May 2001. For the extension, Precision will mobilize an additional three rigs to add to the existing seven Precision rigs in-country. The additional rigs will commence operations beginning in the third quarter of 2003 with continuous drilling for the ten rig fleet expected until January 2005. Precision will continue as lead contractor and project manager. As the lead contractor, Precision will supply services from several of its business units including drilling rigs, directional drilling, open hole logging, cased hole logging, slickline wireline services, production testing, PDC drill bits and completion products. Other services will be provided by BJ and subcontractors.

The Burgos basin, covering more than 50,000 sq km in the northern states of Tamaulipas and Nuevo Leon along the Texas border, is Mexico's largest non-associated natural gas basin. The Gas Technology Institute in Arlington, VA recently estimated that undiscovered natural gas potential in the basin could reach as high as 75 tcf. Successful development of the Burgos basin plays a key role in the future natural gas production for Mexico.