Exhibit 99.1

WELCOME TO OUR 2023 MANAGEMENT INFORMATION CIRCULAR

This document includes important information about Precision Drilling Corporation (Precision or the Company) and the business of our 2023 Annual Meeting of Shareholders.

The summary starting on page 5 gives you an update on our performance for the year, our governance practices and the key elements affecting executive pay for 2022.

Please take time to read the Management lnformation Circular (the Circular) and remember to vote.

We look forward to seeing you on May 11, 2023.

TABLE OF CONTENTS

LETTER TO SHAREHOLDERS

Dear Fellow Shareholders,

We are pleased to invite you to attend this year’s Annual Meeting of Shareholders of Precision Drilling Corporation to be held virtually via a live webcast May 11, 2023 at 10:00 a.m. MDT. At the meeting, you will have the opportunity to ask questions and vote on several important matters. Attending the virtual meeting provides you with the opportunity to receive an update on our 2022 performance and our strategic priorities going forward. Inside this Circular, you will find important information and instructions about how to participate at our virtual meeting.

The strategic decisions we made since the industry temporarily collapsed in 2020 as a result of the COVID-19 pandemic not only addressed severe near-term challenges due to the pandemic, but also ensured the Company was well positioned to capture opportunities emerging from an industry recovery. We are proud to report that in the second half of 2022, Precision returned to profitability, generating positive quarterly net earnings for the first time since 2019. During the year, we strengthened our balance sheet, exceeded our debt reduction target, and returned $10 million to shareholders through share repurchases. We also continued to improve our competitive position with our Alpha^TM technologies and EverGreen^TM suite of environmental solutions.

The Precision team successfully delivered on these priorities. We advanced our Alpha^TM digital strategy and increased our Alpha^TM technologies revenue by over 60% compared to the prior year. We ended the year with 70 Alpha^TM enabled Super Triple drilling rigs, representing a 49% increase over the prior year. Precision’s EverGreen^TM suite of environmental solutions was launched in 2021, offering multiple technologies aimed at reducing and quantifying greenhouse gas emissions at the wellsite. In 2022, we began generating meaningful revenue from this product line and exited the year with seven field-deployed EverGreen^TM Battery Energy Storage Systems, 15 EverGreen^TM Integrated Power and Emissions Monitoring Systems and 21 high mast LED lighting systems.

During the year, we generated cash provided by operations of $237 million, representing a 70% increase over the prior year due to higher activity, day rates and operating margins. In 2022, our active rig count increased 40% in the U.S. and 30% in Canada and we expanded our daily operating margins by 41% in the U.S. and 36% in Canada, as compared with 2021. Other notable accomplishments in 2022 included the acquisition of High Arctic’s well servicing business and rental assets, and the award of four five-year drilling contracts in Kuwait following the renewal of three five-year drilling contracts in the Kingdom of Saudi Arabia. These accomplishments were well aligned with our strategic priorities as they provided scale and improved the free cash flow profile of the Company.

We leveraged our high-quality, digitally-enabled Super Series fleet and lean cost structure to generate free cash flow and reduce debt by $106 million, achieving approximately $770 million in debt reduction since the beginning of 2018. Precision is on track to meet its recently updated long-term debt repayment goal of reducing total debt by $500 million between 2022 and 2025 and reaching a sustained Net Debt to Adjusted EBITDA leverage ratio of below 1.0 times by the end of 2025 (Net Debt to Adjusted EBITDA is a non-GAAP ratio – see Financial Measures and Ratios on page 81).

Our people remain our most valuable asset and we are dedicated to the training and development of our employees. In 2022, over 1,300 employees were trained on Precision’s culture, rig roles and responsibilities, well control, tools and equipment, HSE standards, leadership and communication. We also continue to foster a culture that is inclusive and encourage our people to contribute their differing perspectives, ideas and experiences to advance the way we live and work.

Despite the recent market volatility, Precision is well-positioned to capitalize on opportunities in the oilfield services sector and the broader energy industry in 2023. Our strategic focus on Super Series equipment, developing our people, and commercially deploying digital and emissions-reducing technologies will continue to serve as competitive differentiators.

2023 Management Information Circular1

Please Read this Circular

This Circular includes important information that will help you decide how to vote your shares.

This year we are asking you to elect eight directors to the Board for a term of one year. All of our nominees are qualified and experienced and have agreed to stand for election. You can read about each nominee beginning on page 21.

You will also have an opportunity to participate in our ‘say-on-pay’ advisory vote. We have held this advisory vote every year since 2011 as we believe it is an important way to engage our shareholders and to receive direct and regular feedback on our approach to executive compensation. Historically, we have received consistently high shareholder voter turnout and strong support. In 2022, our advisory vote received 88% shareholder support, with 64% of the shares outstanding voting. Our Board and Human Resources and Compensation Committee (HRCC) are continually engaging with shareholders and considering their feedback when reviewing our compensation plans. You can read more about our executive compensation plans in the message from the Chair of the HRCC beginning on page 49, and the compensation discussion and analysis section beginning on page 52.

Your Vote Is Important

Your vote is very important to us. This is your opportunity to voice your opinion and vote on matters of key importance to our Company.

No matter how many shares you own, you can vote your shares by following the procedures described in the Circular and attending the virtual meeting, or by using the enclosed proxy form, or voting instruction form to vote by proxy. If you have any questions about voting, please contact our proxy solicitor, TMX Investor Solutions Inc. (toll-free in North America) 1.800.549.6746 or 1.201.654.4898 (to call collect from outside North America). You may also send an email to info_tmxis@tmx.com.

In Closing

As we conclude a very successful 2022 for Precision, we would like to acknowledge the hard work and dedication of our passionate people across the Precision organization. We have complete confidence in the value created by our adherence to Precision’s Core Values, the deployment of our Super Series rig fleet, Alpha^TM Technologies, EverGreen^TM suite of environmental solutions, and our operational support systems.

Our focus on environmental, social and governance (ESG) leadership within our communities and the industry continues to be paramount, and we are pleased to have transitioned our ESG reporting to a new, interactive page on our website. We will continue to share performance metrics on this page, and the new format will allow us to provide accurate, timely, and reoccurring updates on our efforts and successes more frequently than was previously possible through an annual corporate responsibility report.

We are extremely proud of our standing as a leading North American drilling company with global diversification, a strong liquidity position, commitment to safety and an excellent customer base. We have an experienced management team committed to our stakeholders and dedicated to growing equity value for our shareholders.

Mr. Brian Gibson has decided to retire and not stand for re-election after serving on the Board since 2011. We would like to thank Mr. Gibson for his long-standing service and many contributions as a director throughout the years.

We are currently in the process of recruiting a female director to complement the background and experience of our current board membership and achieve at least 30% representation of women on our Board by the end of 2023.

The Board is confident in Precision’s ability to successfully navigate through any challenges and opportunities in 2023, while continuing to strengthen our position as a leading provider of services to the oil and natural gas industry.

Please remember to vote. We thank you for your continued confidence and look forward to the virtual meeting on May 11, 2023, which will be available at https://web.lumiagm.com/220635712.

Sincerely,

N

2023 Management Information Circular2

NOTICE OF OUR 2023 ANNUAL MEETING OF SHAREHOLDERS

2023 Management Information Circular3

ABOUT PRECISION

Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs operated by highly-skilled and well-trained personnel. Precision has commercialized an industry-leading digital technology portfolio known as Alpha^TM technologies that utilize advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel. Our drilling services are enhanced by our EverGreen^TM suite of environmental solutions, which bolsters our commitment to reducing the environmental impact on our operations.

From our founding as a private drilling contractor in 1951, Precision has grown to become one of the most active drillers in North America. Our High Performance, High Value competitive advantage is underpinned by four distinguishing features:

The summary below gives a snapshot of Precision – what we do and what we do not do.

We established the following strategic priorities for 2023:

(1) Adjusted EBITDA is a non-GAAP measure – see Financial Measures and Ratios on page 81.

2023 Management Information Circular4

SUMMARY OF 2022

In 2022, the world economy continued to recover from the COVID-19 pandemic and demand for global energy increased. High commodity prices and low inventory levels, following a multi-year period of upstream underinvestment, provided a strong backdrop for the oilfield services industry with drilling activity increasing 52% in the U.S. and 33% in Canada over the prior year.

With strong supply-demand fundamentals for energy, oil and natural gas prices were generally high in 2022 with price volatility caused by geopolitical issues, supply chain disruptions, inflation, climbing interest rates and increased economic uncertainty. In the U.S., WTI averaged US$94.23 per barrel, an increase of 39% from the prior year, and Henry Hub natural gas prices increased 75% to average US$6.51 per MMBtu.

Precision remains the most active onshore driller in Canada with approximately 32% market share and approximately 8% market share in the U.S.

Our vision is to be globally recognized as the High Performance, High Value provider of digitally optimized and environmentally responsible land drilling services. Our mission is to deliver High Performance through passionate people supported by quality business systems, superior equipment and technologies designed to optimize results and reduce environmental, human and operational risks. We create High Value by operating sustainably, lowering our customers’ risks and costs while improving efficiency, developing our people, and generating superior financial returns for our investors.

We work toward this vision and support it by defining and measuring our results against strategic priorities. Precision has a multi-year track record of clearly defining and delivering on our strategic initiatives.

Our 2022 strategic priorities and the effectiveness of our strategic initiatives are summarized below.

(1) Adjusted EBITDA is a non-GAAP measure – see Financial Measures and Ratios on page 81.

2023 Management Information Circular5

In this Circular, we use certain non-GAAP financial measures and ratios to assess our performance and provide important supplemental information to investors. Adjusted EBITDA, Funds Provided by (Used in) Operations, Net Debt to Adjusted EBITDA and Return on Capital Employed do not have standardized meanings as prescribed by International Financial Reporting Standards (IFRS), and therefore may not be comparable with similar measures presented by other issuers. For more information about these measures, see page 81 of this Circular or page 40 of our 2022 Annual Report on our website (www.precisiondrilling.com) and available on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).

2023 Management Information Circular6

FIVE YEAR OVERVIEW

Accomplishments and Highlights

In the previous five years, management and the Board have set strategic priorities that are aligned with current market conditions, which have had a direct impact on our short and long-term goals. Management has consistently achieved the targets set out in these annual strategic priorities.

2022 Accomplishments

(1) Adjusted EBITDA is a non-GAAP measure – see Financial Measures and Ratios on page 81.

2022 Highlights

In 2022, Precision returned to profitability during the second half of the year, generating positive net earnings for the first time since 2019. During the year, we strengthened our balance sheet, exceeding on debt reduction target and returned $10 million to shareholders through share repurchases.

On January 6, 2022, Precision introduced its capital allocation framework through 2025; announced the 2021 debt reduction and year-end liquidity updates; and gave an operations update for drilling activity, Alpha™ technologies and EverGreen™ suite of environmental solutions.

On July 27, 2022, we acquired the well servicing business and associated rental assets of High Arctic Energy Services for an aggregate purchase price of $38 million. The transaction provided Precision with rental assets, ancillary support equipment, inventories and spares, and six additional operating facilities in key basins, four of which are owned.

On July 8, 2022, we published our third annual Corporate Responsibility Report that highlights the Company’s progress in ESG efforts and provides an outline of Precision’s ESG strategies, focus areas, and performance. We expanded our reporting to include additional elements from the Sustainability Accounting Standards Board and Task Force on Climate-Related Financial Disclosures guidelines. Our Corporate Responsibility Report also incorporated a significantly broader base of ESG related metrics – including emissions and energy use – where relevant and reliable information is available.

On August 29, 2022, we renewed our normal course issuer bid (NCIB) through the facilities of the TSX and NYSE. Pursuant to the renewed NCIB, we were authorized by the TSX to acquire up to a maximum of 1,148,771 Common Shares, representing 10% of the public float, for cancellation. During the year, we repurchased and cancelled 130,395 shares for approximately $10 million. These repurchases were funded from cash flow and accounted for approximately 1.1% of our available public float.

On October 19, 2022, Precision announced that it was awarded four drilling contracts in Kuwait, each with a five-year term and an optional one-year renewal. The contract awards are for our AC Super Triple 3000 HP rigs and will increase our active rig count in Kuwait from three rigs to five rigs by the middle of 2023. We also announced that we signed our third drilling rig in the Kingdom of Saudi Arabia to a five-year contract extension, following two earlier five-year contract signings in the second quarter of 2022. With the three contract extensions in the Kingdom of Saudi Arabia and the Kuwait contract awards, Precision will have eight rigs under long-term contracts in the Middle East stretching into 2028 and representing approximately US$600 million (approximately C$820 million) in backlog revenue.

We ended 2022 with a total debt reduction of $106 million, exceeding our goal of $75 million.

2023 Management Information Circular7

2021 Accomplishments

2021 Highlights

In 2021, Precision continued to proactively respond to the COVID-19 pandemic by implementing our comprehensive safety protocols to protect the health and welfare of our people and other stakeholders. Once again, we did not suffer any material shutdowns, interruption of services or capability reductions due to the pandemic.

In June 2021, we completed a US$400 million offering of 6.875% unsecured senior notes due in 2029 (2029 Notes) in a private placement. Net proceeds (and unutilized capacity under our syndicated senior credit facility (the Senior Credit Facility)) were used to redeem all outstanding 7.75% senior notes due 2023 (2023 Notes) and 5.25% senior notes due 2024 (2024 Notes).

On June 18, 2021, we amended our Senior Credit Facility to extend the maturity to June 2025, in addition to an extension and amendment of certain covenant relief provisions from our lenders.

On July 14, 2021, we published our second annual Corporate Responsibility Report that documents our progress in ESG efforts and outlined our ESG strategies, focus areas and performance. We also announced the creation of our Environmental (E) and Social (S) Teams, comprised of well-qualified and diverse leaders from across the organization who focus on coordinating and developing strategies, plans and technologies to reduce environmental impacts and enhance our social programs and outreach.

On July 14, 2021, we announced the brand launch of our EverGreen^TM suite of environmental solutions, bolstering our commitment to reducing the environmental impact of oilfield operations. Our EverGreen^TM suite of environment solutions is comprised of EverGreenMonitoring^TM, EverGreenEnergy^TM and EverGreen^TM Fuel Cell.

On July 23, 2021, we divested our directional drilling business to Cathedral Energy Services, Ltd. (Cathedral) for approximately $6 million. The transaction included the sale of operating assets and personnel transfer from our directional drilling business (including our operations facility in Nisku, Alberta) and Precision’s investment of $3 million in Cathedral. In addition, Precision and Cathedral entered into a strategic marketing alliance to support mutual business and technology initiatives. The purchase price was satisfied through the issuance by Cathedral to Precision of 13,400,000 common shares along with warrants for an additional 2,000,000 common shares. Precision was also granted the right to nominate a member of Cathedral’s board of directors pursuant to an investor rights agreement, resulting in the appointment of Shuja Goraya, our Chief Technology Officer.

On August 27, 2021, we renewed our NCIB through the facilities of the TSX and NYSE. The NCIB allows us to buy back up to 1,317,158 shares, representing 10% of our public float, by August 26, 2022. During the year, we repurchased and cancelled 155,168 shares for approximately $4 million. These repurchases were funded from cash flow and accounted for approximately 1.2% of our available public float.

Our 2021 targeted debt reduction range was $100 million to $125 million. We ended 2021 with a total of $115 million of debt reduction, exceeding the low end of our targeted range by $15 million. During 2021, we redeemed and retired the outstanding amounts of our 2023 Notes and 2024 Notes using net proceeds of our 2029 Notes issuance and drawings on our Senior Credit Facility.

2023 Management Information Circular8

2020 Accomplishments

(1) Adjusted EBITDA is a non-GAAP measure – see Financial Measures and Ratios on page 81.

2020 Highlights

Precision responded to the pandemic throughout 2020 by implementing comprehensive safety protocols to protect the health and welfare of our people and stakeholders from the risks of COVID-19. As a result of acting quickly and aggressively, Precision did not suffer any shutdowns, interruption of services, or any capability reductions due to the pandemic.

On April 9, 2020, we amended our Senior Credit Facility to obtain certain covenant relief from our lenders to March 2022.

On August 27, 2020, we renewed our NCIB through the facilities of the TSX and NYSE. The NCIB allowed us to buy back up to 1,199,883 million shares, representing 10% of our public float, by August 26, 2021. During 2020, we repurchased and cancelled 420,588 shares (on a post-consolidation basis) for approximately $11 million. These repurchases were funded from cash flow and accounted for approximately 3.5% of our available public float.

In October 2020, we published our first Corporate Responsibility Report and conducted a materiality assessment to identify material areas of focus.

On November 12, 2020, we implemented a 20:1 share consolidation that resulted in 13,459,593 shares outstanding as of December 31, 2020.

Our 2020 targeted debt reduction range was $100 million to $150 million. During 2020, we retired the remainder of our 6.5% unsecured senior notes due 2021 (2021 Notes) with total redemptions of US$88 million. We also repurchased and cancelled US$3 million of the 2021 Notes, US$59 million of the 2023 Notes, US$44 million of 2024 Notes, and US$22 million of the 7.125% unsecured senior notes due in 2026 (2026 Notes). We ended 2020 with a total of $171 million of debt reduction, exceeding the high end of our targeted range by approximately $21 million.

2019 Accomplishments

(1) Adjusted EBITDA is a non-GAAP measure – see Financial Measures and Ratios on page 81.

2023 Management Information Circular9

2019 Highlights

During the year, we divested several non-core assets, including five idle rigs in Mexico, snubbing assets and our Terra Water Treatment Systems business.

In July, our sixth rig in Kuwait commenced drilling operations.

In August, we launched our NCIB authorizing us to repurchase up to 29.2 million common shares (pre-consolidation) by August 2020. We used the NCIB to repurchase and cancel 16.5 million common shares (pre-consolidation) for $26 million.

In November, we negotiated a one-year extension of our Senior Credit Facility to November 2023.

In November, we introduced our Alpha^TM technologies, including AlphaAutomation^TM, AlphaApps^TM, and AlphaAnalytics^TM. We also announced full commercialization of our 34 AlphaAutomation^TM systems deployed throughout North America.

In 2019, we redeemed US$75 million principal amount of the 2021 Notes, and repurchased and cancelled US$5 million of the 2023 Notes, US$43 million of the 2024 Notes, and US$30 million of the 2026 Notes.

We reduced our long-term debt by $205 million.

2018 Accomplishments

2018 Highlights

In July, we announced the award of a new build drilling rig in Kuwait under a five-year contract with an optional one-year extension.

In November, we negotiated a one-year extension of our Senior Credit Facility to November 2022.

During the year, we redeemed US$80 million and repurchased and cancelled US$3 million principal amount of our 2021 Notes and repurchased and cancelled US$49 million of our 2024 Notes.

We reduced our long-term debt by $174 million.

2023 Management Information Circular10

2022 CORPORATE GOVERNANCE HIGHLIGHTS

Notes:

(1) See definition of “Other Diverse Persons” under Diversity, Equity and Inclusion – Board Diversity on page 41.

2023 Management Information Circular11

MANAGEMENT INFORMATION CIRCULAR

You have received this Management Information Circular because you owned Precision shares on March 22, 2023, the record date for the meeting, and are entitled to vote your shares at our Annual Meeting on May 11, 2023 beginning at 10:00 a.m. MDT. This year’s meeting will be in a virtual-only format via live audio webcast. You can access the meeting at https://web.lumiagm.com/220635712. You will be able to attend via an online platform that will allow you to ask questions, vote and participate electronically in real time. As with a physical meeting, only registered shareholders and duly appointed proxyholders who have standing at the meeting will be able to address the meeting and ask questions during the formal conduct of business.

2023 Management Information Circular12

A - THE ANNUAL MEETING OF SHAREHOLDERS

The Annual Meeting of Shareholders is your opportunity to vote on the items of business, ask questions, and listen to an update on our 2022 performance and plans for the future.

This section discusses the items of business in detail and explains the voting process. It also tells you about the directors nominated for election to the Board this year.

2023 Management Information Circular13

SUMMARY OF BUSINESS ITEMS

Time and Date – 10:00 a.m. MDT on May 11, 2023Virtual Attendance – https://web.lumiagm.com/220635712

VOTING

Who Can Vote

As of March 22, 2023, we had 13,721,788 common shares and no preferred shares outstanding.

Principal Holders of Precision Shares

Our directors and executive officers are aware of one organization that owns or controls 10% or more of our outstanding shares.

How to Vote

You can vote by proxy, or vote at the meeting by completing a ballot online during the meeting, as further described under “Attending and Participating at the Meeting.” Note that the voting process is different for registered and beneficial (non-registered) shareholders.

You are a registered shareholder if you hold Precision shares in your own name and have an actual share certificate. Your package includes a proxy form.

2023 Management Information Circular14

If you want to appoint someone else to be your proxyholder, cross out the names of the Precision proxyholders on your proxy form and print the name of the person you are appointing. Send the completed form to Computershare.

Make sure the person is aware they must attend the meeting online and vote your shares for you. Your proxyholder must vote for or against, or withhold your vote, according to your instructions. See “Attending and Participating at the Meeting” for details on how to vote at the meeting.

Computershare must receive your instructions by 10:00 a.m. MDT on May 11, 2023. If the meeting is postponed or adjourned, they must receive the instructions by 10:00 a.m. MDT two business days before the adjourned or postponed meeting is reconvened. The Chair of the Board has sole discretion to waive or extend the proxy cut-off time without notice.

2023 Management Information Circular15

Changing Your Vote

If you have already voted by proxy, you can revoke your proxy or change your vote. You can do this at any time up, until the start of the meeting. If you have followed the process for attending and voting at the meeting online, voting at the meeting online will revoke your previous proxy. You can also change or revoke your vote in any other way the law allows. The notice can come from you, or from your legal representative if he or she has your written authorization. If a corporation owns the shares, the notice must be under the corporate seal or from an authorized officer or representative.

If you voted by phone or on the internet, you can submit a new vote. The new vote will revoke your earlier vote.

If you submitted your proxy form by mail, send a written notice by 10:00 a.m. MDT on May 11, 2023 to our registered office at:

Precision Drilling Corporation

Suite 800, 525 – 8th Avenue SW

Calgary, Alberta T2P 1G1

If the meeting is postponed or adjourned, we must receive your notice by 10:00 a.m. MDT two business days before the postponed or adjourned meeting is reconvened or you must vote at the postponed or adjourned meeting online. You may change your vote only in respect of items of business that have not yet been voted on.

Registering your Proxyholder to Participate at the Meeting

Shareholders who wish to appoint themselves or a third-party proxyholder to represent them at the online meeting must submit their proxy or voting instruction form (if applicable) prior to registering your proxyholder. Registering your proxyholder is an additional step once you have submitted your proxy or voting instruction form. Failure to register the proxyholder will result in the proxyholder not receiving a Username to participate in the meeting. To register a proxyholder, shareholders MUST visit www.computershare.com/PrecisionDrilling by 10:00 a.m. MDT on May 11, 2023 and provide Computershare with their proxyholder’s contact information, so that Computershare may provide the proxyholder with a Username via email.

For U.S. beneficial shareholders, to attend and vote at the virtual meeting, you must first obtain a valid legal proxy from your broker, bank or other agent and then register in advance to attend the meeting. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a legal proxy form. After first obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the meeting, you must submit a copy of your legal proxy to Computershare. Requests for registration should be directed to:

Computershare
100 University Avenue

8^th Floor

Toronto, Ontario M5J 2Y1  

OR

Email at uslegalproxy@computershare.com

Requests for registration must be labeled as “Legal Proxy” and be received no later than 10:00 a.m. MT on May 11, 2023. You will receive a confirmation of your registration by email after we receive your registration materials. If you are validly registered, you may attend the Annual Meeting and vote your shares at https://web.lumiagm.com/220635712 during the meeting. Please note that you are required to register your appointment at www.computershare.com/PrecisionDrilling.

Attending and Participating at the Meeting

The meeting will be hosted virtually by way of a live webcast. Shareholders will not be able to attend the meeting in person. A summary of the information shareholders will need to attend the online meeting is provided below. The meeting will begin at 10:00 a.m. MT on May 11, 2023.

Shareholders and duly appointed proxyholders and guests can attend the meeting online by going to https://web.lumiagm.com/220635712.

Registered shareholders and duly appointed proxyholders can participate in the meeting (vote and submit questions) by clicking “I have a login” and entering a Username and Password before the start of the meeting.

Voting at the meeting will only be available for registered shareholders and duly appointed proxyholders. Non-registered shareholders who have not appointed themselves may attend the meeting by clicking “I am a guest” and completing the online form.

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Beneficial shareholders who have not appointed themselves as proxyholder and who do not have a 15-digit control number or Username will only be able to attend as a guest which allows them to listen to the meeting; however, they will not be able to vote or submit questions.

You will be able to participate in the meeting using an internet-connected device such as a laptop, computer, tablet or mobile phone. In order to run the meeting platform, you will need the latest version of Chrome, Safari, Edge or Firefox, that are running the most updated version of the applicable software plugins and that meet the minimum system requirements.

If you are accessing the meeting, you must remain connected to the internet at all times during the meeting in order to vote when balloting commences. It is your responsibility to ensure internet connectivity for the duration of the meeting. Note that if you lose connectivity once the meeting has commenced, there may be insufficient time to resolve your issue before ballot voting is completed. Even if you plan to attend the meeting, you should consider voting your shares in advance so that your vote will be counted in case you later decide not to attend the meeting or in the event that you experience any technical difficulties and are unable to access the meeting and vote for any reason.

Registered shareholders and duly appointed proxyholders will have an opportunity to ask questions at the meeting using the online platform tool on matters of business at the Meeting. As at an in-person meeting, to ensure fairness for all attendees, the chair of the Meeting will decide on the amount of time allocated to each question and will have the right to limit or consolidate questions and to reject questions that are determined to be inappropriate or otherwise out of order.

Shareholders with questions regarding the virtual meeting portal or requiring assistance accessing the meeting website may visit the website https://web.lumiagm.com/220635712 for additional information.

It is important that you are connected to the internet at all times during the meeting in order to vote when balloting commences.

In order to participate online, shareholders must have a valid 15-digit control number and proxyholders must have received an email from Computershare containing a Username.

Voting at the Meeting

A registered shareholder or a beneficial shareholder who has appointed themselves or a third-party proxyholder to represent them at the meeting, will appear on a list of shareholders prepared by Computershare, the transfer agent and registrar for the meeting. To have their shares voted at the meeting, each registered shareholder or proxyholder will be required to enter their control number or Username provided by Computershare at https://web.lumiagm.com/220635712 prior to the start of the meeting. In order to vote, non-registered shareholders who appoint themselves as a proxyholder MUST register with Computershare at www.computershare.com/PrecisionDrilling after submitting their voting instruction form in order to receive a Username (please see the information under the headings “Registering your Proxyholder to participate at the Meeting” for details).

If you are using a 15-digit control number to login to the online meeting and you accept the terms and conditions, you will be revoking any and all previously submitted proxies. However, in such a case, you will be provided the opportunity to vote by ballot on the matters put forth at the meeting. If you DO NOT wish to revoke all previously submitted proxies, do not accept the terms and conditions, in which case you can only enter the meeting as a guest.

Without a Username, proxyholders will not be able to vote at the meeting.

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BUSINESS OF THE ANNUAL MEETING

Our audited consolidated financial statements for the year ended December 31, 2022 (2022 Consolidated Financial Statements) will be presented at the meeting. The Board has approved the 2022 Consolidated Financial Statements and no vote is required. However, you will have an opportunity to ask questions at the meeting.

We mailed our 2022 Consolidated Financial Statements to all registered shareholders and to beneficial shareholders who requested them. You can find them and the management’s discussion and analysis (MD&A) in our 2022 Annual Report on our website (www.precisiondrilling.com) and on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).

You can vote on electing eight directors to our Board for a one-year term:

Our articles of incorporation state that we must have between one and 15 directors on our Board. The Board has decided that there will be eight directors this year. The Corporate Governance, Nominating and Risk Committee (CGNRC) believes the eight nominated directors represent an appropriate mix of skills and experience and other qualities required for serving on our Board. All the nominees currently serve on the Board and you can read about each of them in the director profiles beginning on page 21.

You can vote for all the nominated directors, vote for some and withhold votes for others, or withhold votes for all of them. If you are voting by proxy and do not appoint someone to serve as your proxyholder, the Precision representatives named in the proxy form will vote your shares for electing each nominated director unless you provided different instructions.

All the nominees meet the Board’s independence criteria except for Mr. Neveu because of his role as our President and Chief Executive Officer.

Each director will serve until the end of the next annual general meeting, unless he or she resigns, and a successor is elected or appointed. If a nominee withdraws his or her name, you or your proxyholder can vote for another nominated director.

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You can vote on reappointing the auditors and authorizing the Board to set their fees.

The Board recommends that KPMG LLP, Chartered Professional Accountants (KPMG), be appointed as our auditors until the next annual general meeting. Representatives of KPMG will be at the meeting to answer any questions. KPMG has been our auditors for more than five years, and we believe their re-appointment is in the best interests of Precision and our shareholders.

Auditor Independence

The independence of the auditors is essential to maintaining the integrity of our financial statements. We comply with Canadian securities laws relating to the independence of external auditors, services they can perform, and fee disclosure. We also comply with the provisions of the United States (U.S.) Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) and the accounting and corporate governance rules adopted by the U.S. Securities and Exchange Commission (SEC) that set out services that cannot be provided by external auditors.

The table below shows the fees billed to us and our affiliates for professional services provided by KPMG in the last two fiscal years.

2023 Management Information Circular19

At the meeting, you will have the opportunity to vote for or against our approach to executive compensation through the following resolution:

“BE IT RESOLVED, on an advisory basis and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation disclosed in Precision’s Management Information Circular delivered in advance of the 2023 Annual Meeting of Shareholders.”

While this is an advisory vote and the results are not binding on the Board, the vote is an important part of our ongoing engagement with shareholders about executive compensation and governance matters. The Board will take the voting results and other feedback into account when considering its approach to executive compensation in the future.

We have typically received strong support from our shareholders. In 2022, we received 88% in favour of our approach to executive compensation. The Board and the Human Resources and Compensation Committee continue to monitor developments in executive compensation to ensure that our compensation practices and decisions and compensation risk oversight are appropriate.

If there are amendments or variations to the items of business or other matters that properly come before the meeting, you (or your proxyholder, if you are voting by proxy) can vote as you see fit.

As of the date of this Circular, we are not aware of any amendments or variations to the items of business or of any other matters that may properly come before the meeting.

2023 Management Information Circular20

ABOUT THE NOMINATED DIRECTORS

The Board has decided that eight directors will be elected to the Board this year. The CGNRC believes they represent an appropriate mix of skills and experience and other qualities required for serving on our Board.

Precision’s articles of incorporation allow the Board to appoint one or more additional directors to the Board between annual meetings, but the number of additional directors cannot exceed one-third of the number of directors elected at our most recent annual meeting. Our diversity policy sets a target of achieving 30% representation of females on our Board, a target we are committed to achieving by the end of 2023.

Mr. Neveu is the only non-independent director because of his role as our President and Chief Executive Officer.

(1) See definition of “Other Diverse Persons” under Diversity, Equity and Inclusion – Board Diversity on page 41.

2023 Management Information Circular21

2023 Management Information Circular22

2023 Management Information Circular23

2023 Management Information Circular24

2023 Management Information Circular25

EXPECTATIONS OF DIRECTORS

Integrity

We expect our directors to be highly engaged, fulfill their responsibilities to the Board and their committees, and always act in our best interests with the highest ethics and integrity.

This means: 

All of our nominated directors have consistently met or exceeded our expectations. All directors: 

Attendance and Responsibilities

We believe that an active and engaged Board governs more effectively. We expect directors to attend all Board meetings, their committee meetings and the annual meeting of shareholders. All of our directors had 100% attendance in 2022. The 2022 Annual and Special Meeting of Shareholders was also held virtually. Directors may attend regular meetings by phone or video conference if circumstances require it.

The table below shows the number of Board and committee meetings held in 2022 and the director attendance record.

Notes:

(1) Mr. Gibson has decided to retire and will not stand for re-election at our 2023 Annual Meeting.

(2) Ms. Lancaster joined the Precision Board in October 2022.

Serving on Other Boards

We do not limit the number of other public company boards our directors can serve on, but the CGNRC discusses our expectations with potential candidates, so they understand the time commitments and expectations before agreeing to be nominated as a director.

Members of the Audit Committee can serve on the audit committee of up to three other public companies as long as the Board determines that the other commitments will not limit the director’s ability to effectively serve on our Audit Committee. William Donovan, Michael Culbert and Lori Lancaster serve on the audit committees of other public companies and the Board has determined that those committee memberships do not interfere with their ability to serve effectively on our Audit Committee.

2023 Management Information Circular26

Many of our nominated directors are active corporate directors and hold positions on other boards. The Board and the CGNRC have reviewed the board memberships and determined that the directors have consistently demonstrated that they are able to, and do, devote the necessary time and attention to Precision to carry out their duties effectively and act in Precision’s best interests.

2023 Management Information Circular27

Board Interlocks

We do not have a policy on interconnecting directorships. Every year, our Board reviews directors’ independence. None of our directors currently serve together on any public company boards.

Skills and Experience

Our Board must have the appropriate mix of skills and experience in order to provide appropriate direction to management and to ensure that all major issues affecting our business and affairs are given proper consideration. The CGNRC uses a comprehensive skills matrix to assess Board composition and recruit new director candidates as part of Board succession. The skills matrix below is aligned with our vision, strategy and five-year plan.

2023 Management Information Circular28

Director Development and Continuing Education

Continuing education provides our directors with opportunities to strengthen their skills, deepen their understanding of our business and operations and stay current with emerging issues that affect our business, governance and compensation practices. Continuing education also comes in a variety of formats in addition to educational programs, such as independent reading and networking.

Every quarter, we facilitate continuing education programs that cover a wide range of diverse topics that directors are required to attend in order to help them accomplish these goals.

Management provides regular updates on relevant topics and quarterly updates on emerging governance and regulatory matters. We also encourage directors to attend external educational events as appropriate. We reimburse directors for memberships in organizations dedicated to corporate governance and ongoing director education.

See Appendix A for a list of the educational programs attended by our directors in 2022.

Director Orientation

Our orientation program familiarizes new directors with Precision, the drilling and well servicing industry and our expectations of its directors. New directors meet with our management teams and receive a comprehensive orientation manual with information about Precision, including our values and strategic plans, policies and governance guidelines, talent and performance management, succession planning and our annual operating and capital budgets. The CGNRC reviews the orientation manual periodically to make sure the content is current and appropriate.

New directors receive a copy of the charter of each committee on which they serve, along with access to our electronic board portal where they can review historical information presented and minutes of previous meetings. New directors also meet with each committee chair and with key management representatives for each committee to discuss recent activities and any issues or concerns relating to that aspect of our business or governance practices.

Director Share Ownership Guidelines

We believe that director share ownership is a good governance practice because it ensures directors have a stake in our future success and aligns their interests with those of our shareholders. Our directors are required to own at least two times the amount of their annual retainer in Precision shares within four years of joining the Board. Directors can count shares (held directly or beneficially through a nominee) and deferred share units (DSUs) towards meeting the guidelines. In addition, DSUs cannot be redeemed until a director retires from the Board (see more about DSUs in Appendix B on page 86).

We use the actual purchase cost or the current market price (whichever is higher) to calculate share ownership. All directors met or have time to meet our ownership guidelines in 2022.

Securities Held (as of March 22, 2023)

The table below shows the number of shares each director owns or exercises control or direction over and their compliance with our Share Ownership Guidelines. Each director has provided information about the Precision shares he or she owns, or exercises control or direction over, and we used $67.12, the closing price of Precision’s shares on the TSX on March 22, 2023 to determine the current market value of their share ownership. We use the actual purchase cost of the shares or the current market value (whichever is higher) to determine whether a director has met the share ownership guidelines.

Notes:

2023 Management Information Circular29

CORPORATE DIRECTOR COMPENSATION

Approach

The Board generally sets compensation at or slightly below the median (50th percentile) of a compensation peer group of public companies in the broader oilfield services industry. The Human Resources and Compensation Committee (HRCC) uses this same peer group to benchmark executive compensation (see page 55). 

The CGNRC is responsible for reviewing director compensation every year and recommending the appropriate level and mix to the Board for approval. It considers the responsibilities, time commitment, risks, complexity of decision-making, best practices and general market trends in director compensation. It also refers to published compensation surveys and receives independent advice from an external consultant (currently Meridian, the same consultant the HRCC uses for executive compensation).

2022 Director Compensation

Historically, we have paid directors a combination of cash and share-based compensation in the form of DSUs so they have a vested interest in Precision’s long-term success. A DSU is a phantom unit equal to the fair market value of a Precision share. Directors can choose to receive all or some of their annual cash retainer and other fees in DSUs.

The retainer covers all Board and committee memberships and meeting fees as well as other committee meetings directors attend as guests. The CGNRC conducted a comprehensive review of director compensation to determine an appropriate level of retainer that reflects the scope of the duties and time commitment of our non-management directors. The Chair of the Board receives a higher retainer to reflect the scope of the role and increased responsibilities. Directors who serve as committee chairs receive a higher amount to recognize their increased responsibilities and time commitment.

The table below shows the fees we paid to directors for the year ended December 31, 2022.

Notes:

2023 Management Information Circular30

Share-based awards are the portion of the annual retainer, meeting and other fees received as DSUs, and do not include any DSUs granted as dividend equivalents for dividends paid on Precision shares. In February 2016, we suspended our dividend as a result of a restricted payments basket limitation in our Senior note indentures.

Directors are also reimbursed for travel expenses relating to Precision business.

We pay the annual cash retainer in U.S. dollars to help us attract and retain strong global talent to the Board, which supports Precision’s long-term global operations strategy towards U.S. and international operations. The flat fee streamlines the compensation structure, caps director fees, and is a common corporate governance practice. They are not eligible to receive incentive awards.

The table below shows the 2022 director fee schedule.

Outstanding Share-Based Awards

The table below shows all outstanding share-based awards in Canadian dollars for each non-management director as of December 31, 2022. We calculated the market or payout values using US$76.70, the closing price of Precision shares on the NYSE on December 31, 2022, the final trading day of the fiscal year and an annual average exchange rate of 1.3018.

Non-management directors do not participate in our Omnibus Plan, as such they do not have any outstanding option-based or PSU and RSU awards.

Notes:

2023 Management Information Circular31

B – CORPORATE GOVERNANCE AND RESPONSIBILITY

Corporate Responsibility has been at the core of our business philosophy since Precision’s formation. We have always been driven by innovation, creativity and an entrepreneurial spirit combined with our commitment to the safety of our employees, customers, neighbours and the environment.

We manage Precision for the long-term by maintaining excellent governance policies and practices and taking a responsible approach that prioritizes building a durable business that yields long-term value for our stakeholders.

34High Standards

34Governance Guidelines

34Our Code of Business Conduct and Ethics

35Internal Policies

37Independence

37Avoiding Conflicts of Interest

38Board Priorities

40Board Effectiveness

41Board Succession

42Communicating with the Board

43Audit Committee Report

44Corporate Governance, Nominating and Risk Committee Report

45Human Resources and Compensation Committee Report

2023 Management Information Circular32

A MESSAGE FROM THE CHAIR OF THE CORPORATE GOVERNANCE, NOMINATING AND RISK COMMITTEE

In 2022, Precision’s Board of Directors remained committed to key governance areas including strengthening Board diversity and supporting the enhancement of Precision’s inclusive culture. We know that attracting, including, and retaining individuals with varying backgrounds, talents, ideas, and experiences propels collective innovation and drives Precision’s success. The Board is pleased to provide progress made and yet to come in several important governance areas.

Commitment to Diversity

In last year’s Circular, the Board highlighted our efforts to increase gender diversity, and in October 2022 achieved that goal by welcoming Lori Lancaster to the Board. Ms. Lancaster brings considerable experience within the energy sector, serving in both financial and strategic advisory roles and board-level leadership positions.

In 2023, we are committed to adding another diverse candidate to the Board. We have engaged a leading search firm and are currently in the process of recruiting a female director to complement the background and experience of our current Board. Our diversity policy sets a goal of achieving 30% representation of women on our Board, a target we are committed to achieving by the end of 2023.

Forward-Looking Corporate Culture

Strengthening Precision’s workforce diversity and inclusive culture is a continuous effort. This starts at the top. To continue to foster a corporate culture in which all of our employees feel valued and see themselves reflected in the upper echelon of our organization, this year, we have disclosed the make-up of our diverse Board and the executive team.

In 2022, new, robust Diversity, Equity, and Inclusion training was developed and required to be completed by all Precision employees and our Board of Directors. To encourage diverse thought and the sharing of ideas, a Leadership Exchange Program was launched to encourage and enhance collaboration within the Company. Continued open dialogue through employee and manager surveys and focus groups was aimed at gathering feedback to ensure the advancement of Precision’s culture of inclusivity. Progress on these and other key cultural initiatives are reviewed regularly by the Board.

This is a journey that will continue to evolve and grow in 2023.

ESG in All We Do

The Board and management review Precision’s Corporate Responsibility strategy annually at the Board Strategic Planning Session. The Company’s ESG material priorities are reviewed and finalized at that time. Each quarter the Board reviews sustainability efforts and results while the Human Resources and Compensation Committee oversees progress on select ESG metrics within the short-term incentive plan.

In 2022, Precision published its third annual Corporate Responsibility Report aligned with Sustainability Accounting Standards Board (SASB) and Task Force on Climate Related Financial Disclosures (TCFD). The report describes further refined internal emissions gathering and calculation processes to accurately capture greenhouse gas (GHG) emissions from the Company operations and equipment. In 2023 this information will be used to identify opportunities for emissions reductions through efficiency gains and the use of alternate forms of energy.

As an upgrade to Precision’s reporting, the ESG highlights previously shared in our Corporate Responsibility Report have been transitioned onto our website where the information will portray not just a single snapshot representation of the year but a frequently updated view of the Company’s continuing ESG efforts. For more detailed information on Precision’s ESG journey and results, please visit our website.

The Board is proud of the engagement, collective innovation, and hard work of Precision’s employees that have led to advancing these key governance areas and we look forward to sharing additional progress with you in 2023. As always, we welcome and appreciate your feedback.

Sincerely,

Susan M. MacKenzie

Chair of the Corporate Governance, Nominating and Risk Committee

2023 Management Information Circular33

OUR APPROACH TO GOVERNANCE

Precision is a public company and our shares are listed on the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE). We comply with corporate governance guidelines for Canadian companies listed on the TSX, and the NYSE corporate governance standards that apply to us as a foreign private issuer registered with the U.S. Securities and Exchange Commission (SEC).

Our corporate governance practices meet or exceed the guidelines adopted by the Canadian Securities Administrators (CSA) set out under National Policy 58-201 – Corporate Governance Guidelines and the SEC rules that apply to us. The only major differences between the governance practices set by the TSX and the NYSE standards for U.S. domestic companies listed on the NYSE relate to shareholder approval of equity compensation plans and the external auditor. You can find an explanation in the investor relations section of our website (www.precisiondrilling.com).

High Standards

Our transparent culture of governance and ethical behaviour is fundamental to the way we do business. We monitor regulatory developments and governance best practices and adopt regulatory changes that apply to us as a dual-listed issuer in Canada and the U.S., and governance practices that are appropriate for us. The Board reviews our governance charters, guidelines, policies and procedures regularly to ensure they are appropriate and that we maintain high governance standards.

Our following governance charters and policies are posted on our website: 

The governance disclosure in this Circular meets the requirements under National Instrument 58-101 – Disclosure of Corporate Governance Practices, specific rules adopted by the SEC and Sarbanes-Oxley Act, NYSE rules and Canadian rules relating to audit committees under National Instrument 52-110 – Audit Committees. The Board has approved this disclosure on the recommendation of the Corporate Governance, Nominating and Risk Committee.

Each director, executive officer and employee has an obligation to make sure we conduct ourselves according to our Disclosure Policy and its objectives. We review the policy regularly and update it as appropriate.

Governance Guidelines

Our Corporate Governance Guidelines outline the composition, structure, procedures, and policies that guide our Board. These guidelines are reviewed annually and serve as a guidepost for the Board. Topics pertaining to corporate citizenship, governance and sustainability are also routinely reviewed at meetings of the Board and its committees.

Our Code of Business Conduct and Ethics

We believe ethical behavior is fundamental to the way we do business. The Code of Business Conduct and Ethics (the Code) ensures every director, executive officer, manager, employee, and contractor is aware of Precision’s values. The full text of the Code is available on the Corporate Governance section of our website.

We have a robust, proven corporate governance system that is effective in ensuring a transparent culture. It allows for ethical issues to be reported, assessed, and resolved in a timely manner. This system employs a strong body of policies, enforcement mechanisms and a closed-loop resolution process of issues that are reported.

The Code addresses the following key areas, among others:

Every director, executive officer, manager, and employee must annually acknowledge that they have read, understood, and will abide by the Code. Each member of the senior management team must also certify quarterly whether they are aware of any breaches of the Code. In-person and online training is provided annually to all permanent employees and covers an array of topics related to business conduct and ethics.

2023 Management Information Circular34

Internal Policies

We work proactively to ensure our workforce and the Board understand their obligations to uphold our standards and the law when it comes to ethics and compliance. We have developed internal corporate policies, in addition to our Code, to guide our directors, officers, and employees in meeting our standards and fulfilling our responsibilities to our shareholders, governmental, and regulatory authorities, business partners and each other. The following are some of our internal policies that we have put in place to ensure compliance and to reflect our current business practices:

Clawbacks

Our senior leadership team is held accountable for their decisions. As such, we have designed our compensation plan so any consequences stemming from our policies, employment agreements and incentive plans align with Precision’s best interests.

Our Clawback Policy entitles us to recoup some, or all incentive compensation awarded or paid to our senior leadership team, including our CEO, both past and present, if:

The policy applies to all forms of incentive awards including bonuses, restricted share units, performance share units and stock options.

2023 Management Information Circular35

BOARD GOVERNANCE

The Board of Directors oversees the conduct of our business, provides direction to management and ensures that all major issues affecting our business and affairs are given proper consideration. It believes in respect, trust and candor and fosters a culture of open dialogue.

The Board has established three independent standing committees to help it carry out its responsibilities effectively. It may also create special ad hoc committees from time to time to deal with other important matters. It may also delegate certain responsibilities to management from time to time, as permitted by law.

Each committee has a charter and each committee chair has a position description that is approved by the Board. Led by the committee chair, each committee sets annual goals with its members and management, taking into account the committee charter, our strategic vision, the annual business plan and issues raised through our engagement with shareholders or governance organizations. Each committee assesses progress made towards annual goals quarterly.

You can read more about the committees beginning on page 43 and find the committee charters and position descriptions on our website (www.precisiondrilling.com).

2023 Management Information Circular36

Directors must provide the Corporate Governance Nominating and Risk Committee (the CGNRC) information about their business and other relationships with Precision (and our affiliates) and senior management (and their affiliates) when they join the Board and annually thereafter. They must advise the CGNRC if there is a material change to their circumstances or relationships that could affect the Board’s independence assessment. In 2022, the CGNRC determined that no material relations exist between Precision and the independent directors based on the completed questionnaires about employment history, affiliations, and family and other relationships.

Independent Chair

Steven Krablin has served as the Chair of our Board since May 2017 and is an independent non-executive director. Mr. Krablin has been a Precision director for approximately seven years – you can read more about Mr. Krablin in his profile on page 21.

The Chair provides leadership to the Board, is responsible for its effective functioning and is the primary liaison between the Board and management. Duties include: 

Meeting In Camera

The independent directors meet without management at every Board and committee meeting. The Board met seven times in 2022. Board and committee meetings do not run for a fixed length of time, so directors have sufficient time for open and frank discussions about the agenda items and any issues of concern.

Avoiding Conflicts of Interest

The Board strives to make all decisions in the best interests of Precision and considers the interests of our shareholders, customers, employees, suppliers, communities where we operate, the environment, governments, regulators and the general public.

Directors must also disclose if at any time they face potential conflicts of interest related to our business. Some directors may hold management or director positions with customers or other oilfield service providers that may be in direct competition with us. Some may also be involved with entities that periodically provide financing or make equity investments in companies that compete with us. Any conflicts are subject to the procedures and remedies set out under the Business Corporations Act (Alberta). If directors find themselves in a conflict of interest, they will advise the Chair and abstain from participating in any discussions and voting on the matter or excuse themselves from the meeting. Directors are required to complete the Code of Business Conduct and Ethics (the Code) training and confirm annually (or as needed) that no conflict of interest exists.

2023 Management Information Circular37

Board Priorities

Strategy and Budget

The Board is responsible for our strategic direction and approves our strategic plan annually.

Management develops the strategic plan and assesses strategic issues with the Board throughout the year. We hold an annual strategic planning session with the Board and management to review the strategic plan, discuss strategic issues, identify corporate opportunities and evaluate material risks facing our business. We also perform a look-back assessment of key strategic initiatives and recalibrate the strategic plan based on our progress, and establish annual corporate goals and objectives aligned with our strategic initiatives.

The Board also holds an annual budget planning meeting with management to review and approve the business plan. Annually, the Board also reviews and approves operating and capital budgets presented by management for the coming year.

The Board must approve all significant transactions, including key borrowing and financing decisions.

Risk Oversight

We face many risks as part of our business activities, including operating, financial, governance, health and safety, environmental, cybersecurity, compensation, strategic and reputational risks (you can read more about our risks in our Annual Information Form and a discussion of compensation risk on page 53).

The Board maintains a very active approach to overseeing the internal risk function. The Board performs timely review of all risk-related matters, including an assessment of Precision’s internal risk matrix and receiving quarterly updates from its delegated Internal Risk Committee. In addition, management provides regular comprehensive updates on risk to the Board and committees regularly (you can read more about our Enterprise Risk Management (ERM) program on page 46).

The Board has overall responsibility for risk oversight and assigns specific risks to its committees:

Cybersecurity is a critical component of our risk management program. The Board devotes significant time and attention to overseeing cyber and information security risks. The CGNRC is charged with oversight of risks related to cybersecurity and operational resiliency. The Chief Administrative Officer provides a comprehensive cybersecurity report to the CGNRC at each meeting.

Our Board oversees the Corporation’s commitment, approach, planning, performance, monitoring and disclosure related to sustainability and ESG matters, including an annual review of Board and committee charters and quarterly reports on ESG mapping, materiality assessments and ESG-related risks.

You can read about the specific activities of each committee beginning on page 43.

 Internal Controls

The Board is responsible for overseeing the integrity of our internal controls and management information systems, and delegates oversight responsibility for the controls over accounting and financial reporting systems to the Audit Committee.

The Board and Audit Committee ensure that public reporting of our financial information is reliable and accurate, our transactions are appropriately accounted for, and our assets are safeguarded. Every quarter: 

2023 Management Information Circular38

Management evaluated the effectiveness of our system of internal control over financial reporting and concluded that the system was effective in providing reasonable assurance as of December 31, 2022. KPMG audited our internal controls over financial reporting as of that date and provided an unqualified opinion. It also provided an unqualified opinion on our consolidated financial statements for the 2021 and 2022 fiscal years.

The Board has established clear limits of authority for the CEO. These mainly relate to his financial authority, approval of significant or material transactions and any departures from the strategic plan. The CEO is accountable to the Board, and the Board conducts a formal review of his performance every year.

Succession Planning

The HRCC oversees succession planning for the CEO and other key roles and has an emergency succession plan if something unexpected happens.

Management provides annual updates to the HRCC, and the CEO meets in camera with the HRCC every year to review the depth of the talent pool and succession capacity for critical roles.

Our succession strategy is a combination of promotion from within and external recruitment for key positions. This ensures a smooth and timely transition at senior levels, minimizes disruptions caused by changes in leadership and maintains consistency in business strategy, practices and culture.

The Board considers a range of skills, experience and diversity, including the proportion of female executives, when considering executive appointments. We have not, however, established gender targets for our executives because we believe the skills, qualifications and attributes of the candidate and the needs of the organization are the most critical factors in making leadership decisions. We believe the potential for strong leadership skills begins early in a person’s career, fostered by exposure to a wide variety of business opportunities, life experience, and leadership roles with increasing levels of scope and responsibility.

2023 Management Information Circular39

Board Effectiveness

The Corporate Governance, Nominating and Risk Committee implements a comprehensive process for assessing board, committee and director effectiveness annually. This is a key mechanism for board renewal because it involves evaluating the performance, skills and contribution of each director. Through action plans, feedback and monitoring of progress, the CGNRC and Board can ensure continuous improvement of the Board’s effectiveness.

2023 Management Information Circular40

Board Succession

The CGNRC is responsible for recruiting new directors and qualified candidates as identified by the Board, management and shareholders from time to time.

Tenure and Term Limits

The Board has decided not to establish term limits or a mandatory retirement policy at this time to avoid the possibility of prompting higher turnover and forcing experienced members to leave the Board prematurely, causing the Board to lose continuity and momentum.

The average tenure of our nominated directors is approximately eight years. Over the past eight years, five directors have retired, and five new directors have joined the Board. This successful and voluntary Board refreshment strategy continues to support our decision not to establish term or age limits.

The CGNRC reviews the Board’s position on term limits and a mandatory retirement age periodically.

Commitment to Board Diversity

When recruiting new directors, the CGNRC considers our vision and business strategy, the skills and competencies of the current directors, gaps in Board skills, and the attributes, knowledge and experience new directors should have to enhance our Board. The CGNRC also considers diversity as part of this process, including the level of female representation on the Board. When assessing Board composition, or identifying suitable candidates, the CGNRC will include a slate of minority candidates for all open Board seats. In 2022, the Board determined that it was important to increase gender diversity among the Board members and appointed Lori A. Lancaster to serve on the Board.

Currently, 22% (two out of nine) of our Board members are female and 44% (four out of nine) of our Board members self-identify as an Other Diverse Person, as detailed in the table below.

Nominating Directors

The Board nominates directors for election (or appoints them to the Board between annual meetings) if they have an appropriate mix of skills, knowledge and business experience.

A shareholder can nominate a candidate for election by submitting the person’s name, background, qualifications and experience to our Corporate Secretary. Our by-laws require shareholders to give us advance notice of any proposal to nominate a director for election to the Board, if the nomination is not made by requesting a meeting, or by making a shareholder proposal following the procedures set out in the Business Corporations Act (Alberta):

The notice must include information about the proposed nominee and the shareholder making the proposal.

This requirement ensures all Precision shareholders (including shareholders voting by proxy and those voting in person at the meeting) receive adequate notice and information about each nominated director so they can make an informed voting decision.

2023 Management Information Circular41

All nominations are forwarded to the Chair of the CGNRC to present to the CGNRC for consideration.

The CGNRC is also responsible for the orderly succession of the Board Chair position. The CGNRC, as appropriate, uses its director assessment, review of the skills matrix and results of the Board assessment process to identify suitable candidates for assuming the role of Board Chair. The new Board meets following the annual meeting to review the outcome of the meeting and to elect its new Chair.

2023 Management Information Circular42

COMMITTEE REPORTS

Audit Committee Report

Each member of the Audit Committee must be independent and financially literate to meet regulatory requirements in Canada and the U.S., and the NYSE corporate governance standards. The Board looks at the director’s ability to read and understand the financial statements of a business similar in complexity to Precision to determine whether a director is financially literate. The Board has determined that each member of the Audit Committee is independent and financially literate within the meaning of National Instrument 52-110 and the corporate governance standards of the NYSE.

Mr. Culbert, Mr. Donovan, Mr. Gibson, Mr. Krablin, Ms. Lancaster and Mr. Williams are considered audit committee financial experts under the SEC rules because of their training and experience.

The Audit Committee has three main areas of responsibility:

Financial Reporting

Oversees the quality and integrity of financial reporting and reviews the following to provide recommendations to the Board for approval: 

Internal Control Systems

Oversees the quality, integrity and performance of our internal control systems for finance and accounting, our internal audit function and our disclosure controls. The Audit Committee receives reports annually on the following: 

External Auditors

Responsible for critical audit matters and oversees the external auditors (currently KPMG LLP): 

The Audit Committee is also responsible for overseeing: 

The Audit Committee reviews the Audit Committee charter and position description for the Audit Committee Chair annually.

You can find more information about the Audit Committee in our Annual Information Form, filed on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).

The Audit Committee met five times in 2022 and met in camera without management present at every meeting. It also met separately with the Director of Audit Services and with KPMG at these meetings.

Notes:

(1) Mr. Gibson has decided to retire and not stand for re-election at our 2023 Annual Meeting.

2023 Management Information Circular43

Corporate Governance, Nominating and Risk Committee Report

The Corporate Governance, Nominating and Risk Committee (CGNRC) is responsible for overseeing compliance with current governance requirements and monitoring emerging issues, developing and implementing governance best practices, and overseeing our approach to enterprise risk management. It is also responsible for conducting director assessments and developing director compensation programs.

Board Operations

Oversees the Board operations from a governance perspective: 

Director Compensation

Develops a competitive director compensation package with advice from independent external consultants (currently Meridian Compensation Partners): 

Board and Director Assessment

Assesses the overall effectiveness of the Board and committees: 

Director Nominations

Recommends to the Board suitable director candidates for nomination for election: 

Corporate Governance Principles

Carries out corporate governance initiatives: 

Enterprise Risk Management (ERM)

Ensures Precision actively evaluates its business risks: 

The CGNRC met five times in 2022 and met in camera without management present at every meeting. The CGNRC also reviews and approves its charter and position description for the CGNRC Chair annually.

Notes

2023 Management Information Circular44

Human Resources and Compensation Committee Report

The Human Resources and Compensation Committee (HRCC) is responsible for human resources and compensation governance, talent management, succession planning, other employee-wide programs, and all matters relating to executive compensation.

Executive Compensation

Consults with management and seeks advice from an independent external consultant (currently Meridian Compensation Partners) to develop our compensation philosophy and reviews all compensation policies and programs for our executives and recommends them to the Board for approval.

The HRCC’s review and recommendations include: 

The HRCC is also responsible for assessing compensation risk and overseeing the development and implementation of compensation programs, including incentive and equity-based plans.

Talent Management and Succession Planning

Monitors succession planning for the CEO and other key roles: 

Other Major Human Resources Programs

The HRCC is responsible for overseeing the development and implementation of programs aimed at: 

The average HRCC member tenure is 7.6 years as of December 31, 2022.

The HRCC is responsible for reviewing and approving the executive compensation disclosure that management prepared for this Circular.

The HRCC met six times in 2022 and met in camera without management present at every meeting. The HRCC reviews the HRCC charter and position description for the HRCC Chair annually.

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ESG in All We Do

In 2022, we maintained our focus on those ESG areas that we determined to be material to Precision in our 2020 materiality assessment. We continued our efforts to adopt proactive and sustainable means to ensure ESG is accounted for in all that we do. Our “E” (Environmental) and “S” (Social) teams, comprised of high-performing employees from throughout the organization worked collaboratively to drive environmental and social efforts. We also published our third annual Corporate Responsibility Report, which can be found on the Sustainability section of our website, in alignment with the Sustainability Accounting Standards Board (SASB) and Task Force on Climate Related Financial Disclosures (TCFD) frameworks. A major evolution of our disclosure included in this report included our 2021 greenhouse gas (GHG) emissions data associated with our direct operations and those we conduct on behalf of our customers, which we will continue to share on an annual basis.

The expansion of our short-term incentive plan (STIP) goals in 2021 to include ESG goals beyond health, safety, and environmental (HSE) targets, highlighted our focus on accelerating the evaluation, testing, implementation, and commercialization of several lower-carbon energy sources, monitoring systems, and energy efficient equipment substitutions and modifications. This success led us to expand further on those goals in 2022, creating an even stronger incentive for all our salaried, non-exempt employees that are eligible for the STIP to contribute toward these efforts. We met or exceeded all of these goals in 2022, resulting in even greater environmental and associated financial gains both internally and for our customers.

In 2023, we are excited to transition the ESG highlights shared in our Corporate Responsibility Report onto our website, where the information will represent not just a single snapshot of the year, but will portray a frequently updated view of our ESG efforts. We have maintained our alignment with SASB and TCFD and will continue to publish ESG performance data for the preceding year.

In 2022, we maintained our focus on the following areas:

ESG Board Oversight

Our Board is engaged in overseeing our business strategies and related risks and opportunities, which includes all material ESG topics. Our committee structure facilitates oversight of issues that impact many areas of our business, including ESG. Annually, our Board reviews our Corporate Responsibility strategy, and every quarter management updates the HSE and Corporate Responsibility Council and the Board on our ESG initiatives.

Precision employs a comprehensive Enterprise Risk Management (ERM) program that proactively assesses material risks to the organization and manages several robust mitigation strategies, including those related to our ESG initiatives. Precision continuously monitors various risks related to our ESG performance, specifically identifying the following risks and mitigation opportunities:

We believe in building a feedback-rich culture and encouraging ongoing engagement with our employees, shareholders, and other stakeholders. Please contact us at investorrelations@precisiondrilling.com with your feedback.

More detailed information regarding our ESG efforts can be found on our website at www.precisiondrilling.com/esg.

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C – EXECUTIVE COMPENSATION

‘Pay-for-performance’ is a core principle of our executive compensation program. Our program is designed to support our short-term and long-term strategic objectives, drive High Performance, High Value services for our customers, and create shareholder value over the long term.

This Compensation Discussion and Analysis (CD&A) was prepared by management and reviewed and approved by the Board’s Human Resources and Compensation Committee. It includes information about compensation governance, our executive compensation program, and the decisions affecting executive pay for 2022 and 2023.

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A MESSAGE FROM THE CHAIR OF THE HUMAN RESOURCES AND COMPENSATION COMMITTEE

To our Fellow Shareholders,

We believe our ‘say on pay’ vote is essential to our approach to executive pay. The Board has held this advisory vote every year since 2011. We believe this is an important way to engage our shareholders and to receive direct and regular feedback on our approach to executive compensation and its alignment with shareholder interests. Historically, we have received consistent shareholder turnout and strong support. At our 2022 Annual General Meeting, our advisory vote on executive compensation received 88% shareholder support, with 64% of the shares outstanding voting. Our Board of Directors and Human Resources and Compensation Committee (HRCC) were pleased with this result yet continue to work towards approval above 90% and higher voter turnout.

Competing for Talent

Attracting, retaining, and engaging leaders to deliver our strategic objectives and provide shareholder returns is the primary focus of the HRCC and the Board. Competition for executive-level talent in the oilfield services industry has become more challenging post-pandemic. The landscape has changed. More companies are experiencing growth, and succession has been challenged by the increased ability for talent to transfer across industries. For Precision to remain competitive, we must provide executives with a targeted pay opportunity aligned with our direct industry peers with whom we compete for talent. Within the Compensation Discussion and Analysis of this Circular, we include details on our compensation philosophy, our processes in determining compensation levels, our peer groups and our incentive plan designs and metrics.

Pay for Performance

The Board of Directors and the HRCC believe that a significant portion of the total targeted direct compensation of our executives should be performance-based, tied to the achievement of short and long-term financial and operational performance, and aligned with shareholder returns. Over the past five years, the targeted at-risk pay of the CEO has averaged 78% of his targeted total compensation. The cyclicality of the oilfield services industry has provided challenges to managing this approach. Annually, the HRCC reviews our corporate strategy in order to achieve this alignment. We believe that the appropriate mix of pay, metrics, and plan governors have been put into place to drive the executive team to achieve these goals to the advantage of our shareholders’ interests. This has been demonstrated over time, as can be seen in the Compensation and Discussion Analysis section, along with the key decisions made based on shareholder feedback.

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Realized Compensation Driven by Performance

During 2022, our CEO “realized compensation” (actual base salary received and incentive plan payouts) was approximately 330% of his total “targeted direct compensation” (base salary and targeted incentive compensation). This result was a product of strong financial, operational, and share price performance. Our short-term incentive plan (STIP) result in 2022 was driven by strong Adjusted EBITDA performance above our stretch target. The CEO’s long-term incentive award granted in February 2020, prior to the unexpected market conditions caused by COVID-19, vested in 2023 and consisted of 70% performance share units (PSUs) and 30% restricted share units (RSUs). During the three-year performance period, we experienced a 233% total shareholder return, well above our peer average and over eight times (8x) the return of the S&P 500 over the same period.

Highlights of our performance include:

The HRCC and the Board conduct a rigorous metric and target setting process each year for the STIP and LTIP, with guidance from our independent compensation consultant, and thoroughly stress test any risks associated with potential performance and payout results. Targets are not adjusted during the performance period, and the HRCC reviews projected performance quarterly. Additionally, our compensation plan design is reviewed each year by our independent compensation consultant. More information regarding our compensation decisions can be found in the CD&A section of this Circular.

Shareholder Engagement Program

Shareholder engagement is a priority at Precision. In 2017, the Board approved the creation of a formal shareholder engagement program to create a dialogue forum on executive compensation matters, and we have continued to solicit and receive feedback throughout the past six years.

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2023 Shareholder Engagement

In addition to meeting with shareholders, our management team held calls with proxy advisors ISS and Glass Lewis to discuss their processes and methodology regarding peer group selection and their quantitative and qualitative analyses.

All feedback and recommendations provided by our shareholders and proxy advisors were shared with and discussed by the HRCC and Board.

Our Commitment to Shareholders

Our approach to executive compensation continues to balance market realities with the need to set solid financial and operational goals, motivate and retain management to achieve those goals, and generate positive short and long-term impacts on shareholder returns.

We remain firmly committed to evolving our approach to executive compensation. We will remain agile to respond to market changes and governance practices, and welcome direct shareholder feedback or any opportunity to discuss these issues in more detail with you. To set up a meeting with me, the Chair of the Human Resources and Compensation Committee, please contact: investorrelations@precisiondrilling.com

We thank you and look forward to your continued support.

Sincerely,

Dr. Kevin O. Meyers

Chair of the Human Resource and Compensation Committee

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COMPENSATION DISCUSSION AND ANALYSIS

Compensation Governance

We have designed our executive compensation program to align with our pay-for-performance philosophy, support our corporate strategy, and drive shareholder value over the long-term. The Board has final approval of all decisions about executive compensation.

The HRCC is tasked with ensuring that our compensation policies, plan designs and compensation decisions are consistent with our high governance standards and support our pay-for-performance philosophy.

The HRCC is 100% independent and is responsible for oversight of our human resources policies, employee programs, and every aspect of executive compensation. This includes assessing corporate and individual performance and making compensation recommendations for our senior executives to the Board for its review and approval. The HRCC also reviews and approves the compensation disclosure in this Circular.

Qualified and Experienced Committee

All five members (Kevin Meyers, the Committee Chair, Michael Culbert, Susan MacKenzie, David Williams and Steven Krablin, our Chair of the Board) are highly qualified and represent a diverse mix of skills to effectively carry out its duties and responsibilities on behalf of the Board and Precision’s shareholders.

Ms. MacKenzie holds the ICD.D designation of the Institute of Corporate Directors.

Our Compensation Practices

Role of the Independent Compensation Consultant

Since 2019, the HRCC has engaged Meridian Compensation Partners (Meridian) as its independent advisor for research and analysis on executive compensation matters for Precision. Meridian provides insights on general compensation issues, competitiveness of pay levels, risks relating to compensation design, insights into market trends, and advice about technical matters. The HRCC takes this information into account but ultimately makes its own recommendations and decisions.

The HRCC and management regularly assess the independence of the compensation consultant, and in 2022 confirmed that Meridian’s work has not raised any conflicts of interest.

The table below shows the total fees paid to our external consultant in the last two years:

Role of Management

In addition to the support of the independent compensation consultant, management regularly provides data, analysis and recommendations to the HRCC specific to our compensation programs and policies below the CEO and NEOs. Management administers the programs and policies as directed by the Committee and provides ongoing review of the effectiveness of our compensation programs, and the alignment with our strategic objectives.

The Committee holds regular sessions in camera without management present to discuss compensation decisions and any other matters relating to the design and governance of the executive compensation programs.

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Managing Compensation Risk

The HRCC monitors governance issues and industry developments and conducts an on-going internal risk assessment using a framework developed by our independent consultant. It also engages our independent consultant to conduct a formal compensation risk assessment every two years as part of its regular oversight and in response to changes to Canadian and U.S. regulatory requirements and the increasing scrutiny of governance practices generally.

In 2022, Meridian reviewed the following seven areas of compensation risk and did not identify any material risks that could reasonably have a material adverse effect on Precision:

The review confirmed our compensation policies, program structure and components are sound and did not identify any areas

of material risk.

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Compensation Design and Decision Making

Executive compensation at Precision is designed to support our corporate strategy and pay-for-performance philosophy. Decisions about executive pay are a direct result of our corporate, individual and share performance. With the increasing demands from our customers and shareholders in delivering our services faster and safer, and enhancing well economics through technology, attracting, retaining, and engaging leaders to deliver our strategic objectives and drive shareholder returns is the primary focus of the HRCC and the Board. Specifically, the Board deems the retention of the current leadership to be a high priority to position the Company for continued long-term success.

Our compensation program must be competitive to attract, engage and retain high-performing, global executives. Executive compensation must also be appropriate and defensible in the eyes of regulators, shareholders, and industry groups.

Our compensation program: 

Executives participate in the same compensation programs as our other salaried employees. However, a higher portion of executive pay is variable / at-risk and not guaranteed.

Compensation Highlights

The HRCC has developed a compensation framework that aligns the interests of our executives and shareholders. The HRCC values any feedback it receives from shareholders and other stakeholders to ensure that the framework continues to be appropriate and reflects good governance practices. The summary below sets out what we do and what we do not do.

Compensation Philosophy

Precision operates in a highly competitive market for talent. As such, we set forth a compensation philosophy that enables us to attract the highest quality executive level talent, retain them for the long-term, and engage and reward them for achieving strong performance against our strategic short-term and long-term objectives. We start with a targeted mix of pay that is heavily weighted toward variable or “at-risk” compensation, with the CEO being 19% fixed and 81% variable in 2022. In terms of our “fixed” compensation or base salary for our executives, we target alignment with the 50^th percentile of our Compensation Peer Group. Our executive pay is deemed variable or “at-risk” through our short-term and long-term incentive plans utilize targeted amounts aligned with the 50^th percentile of our Compensation Peer Group. Our executives “realized” compensation is determined through the achievement against stretch metrics which are share price relative to our PSU Peer Group and our strategic financial and operational objectives. Further details on our incentive plans can be found in the remainder of this section of the Circular.

Benchmarking

We benchmark executive compensation with the aim to attract, engage, and retain global talent and remain competitive in markets where we operate. The HRCC works with Meridian and our human resources group to review market data and establish a peer group of public companies that we compete with for executive talent. We also look at these companies to assess compensation trends and market practices.

Total compensation for each executive is based on several factors, including individual performance, leadership, global responsibilities, collaboration, experience, education, succession planning considerations, competitive pressures and internal equity.

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We set our targets for base salaries and total direct compensation at or slightly below the median (50th percentile) of our Compensation Peer Group.

Compensation Peer Group

Our Compensation Peer Group, which includes contract drilling, well servicing, and offshore drilling companies, have been carefully selected based on their comparability to Precision – comparable business lines and similarity in size, complexity, operating regions and style of operation. Our Compensation Peer Group also includes companies from the broader oilfield services sector that we compete with for global talent, market share and customers.

Our growth over the last several years, as well as our future growth plans, are primarily focused in the U.S. and our international regions. In fiscal 2022, 55% of our revenue was from our U.S. and International operations, and 45% was from our operations in Canada. In 2023, the majority of our capital expenditures are expected to be focused on U.S. and International operations. Our leadership team is centralized in Houston, Texas and we compensate them in U.S. dollars. With assistance from Meridian, we review the companies included in our Compensation Peer Group annually and include both Canadian and U.S. based companies. Establishing a peer group that consists of a mix of Canadian and U.S.-based companies reinforces our strategy of attracting and retaining the best talent in the drilling services market to drive value to shareholders over the long term.

The HRCC works with Meridian on the peer group analysis, examining eight metrics that provide a reasonable assessment of comparability to establish a peer group of companies that is relevant and appropriate.

For benchmarking purposes, a review is performed of the proxy materials of peer companies, third party compensation survey data, and relevant information from other companies in the energy services sector that have revenue of a similar size, as well as similar operational makeup, if compensation data for equivalent executive positions is not publicly available.

The HRCC reviews our Compensation Peer Group every year (more frequently if there are mergers, acquisitions or other industry developments) to ensure the group is appropriate for compensation planning purposes.

2022 Compensation Peer Group

We benchmarked compensation levels for 2022 against the following 15 companies.

With our operations spanning across Canada, the United States and the Middle East, the HRCC is confident that our Compensation Peer Group is appropriate. Aligned with our philosophy of targeting the median for setting compensation, we also aim to be positioned near the median for the relevant metrics of size and operational complexity we compare. Among the metrics used to determine comparability are revenue (42^nd percentile), EBITDA (64^th percentile), assets (52^nd percentile), market capitalization (45^th percentile), enterprise value (52^nd percentile), employee count (42^nd percentile), geographic footprint and complexity of service offerings. Of the financial factors listed, in 2022, Precision was on average at the 50^th percentile of our Compensation Peer Group.

2023 Compensation Peer Group

The HRCC reviewed our 2022 Compensation Peer Group with assistance from Meridian and feedback from management and concluded no changes would be made for 2023.

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Third-Party Advisory Service Firms

In previous years, a proxy advisory service firm has compared Precision’s pay and performance against a select group of Canadian-only companies, a limited number of which are direct peers mixed with a larger group of less relevant Canadian industrial companies resulting in different conclusions about competitive pay levels and relative performance. Our peer selection process is thorough and disciplined and involves input and analysis by the HRCC’s independent compensation consultant and consists of Canadian and U.S. companies with a similar international footprint. We believe that a group of Canadian-only companies is not appropriate, as we would not only target Canadian talent for our senior executive positions. Furthermore, many of the companies included do not compete within the drilling and oilfield services industries and are not subjected to the same business cycles and risks as Precision. Precision’s long-term growth strategy is focused on our U.S. and international operations, which in 2022 accounted for 55% of our revenue. Since 2014, over 78% of our rig additions have been in our U.S. or International markets. Based on these facts, and to support our long-term strategy, all of our leadership team is based in Houston, Texas and paid in U.S. dollars. Accordingly, our 2022 Compensation Peer Group of 15 publicly traded companies includes a majority of comparable U.S. companies that we compete with for talent, market share and customers.

Components of Executive Compensation

Total direct compensation for our executives includes a mix of fixed and variable /at-risk pay. In 2017, shareholders approved the existing Omnibus Plan, which allows the Board to settle the short- and long-term incentive awards in cash, shares (issued from treasury or purchased on the market) or a combination of both.

Notes:

Compensation Pays Out Over Time

Our compensation program emphasizes variable / at-risk pay. Incentive awards account for the majority of executive pay and payout over time, based on performance as noted in the table above.

Compensation decisions are based on both corporate and individual performance, demonstrating the strong linkage between pay and performance. Long-term incentives are equity-based, aligning with shareholder interests because the ultimate value of the award is based on share performance.

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Decision-making Process

We have a formal process for reviewing the compensation program, setting targets and objectives, assessing performance and making final decisions on executive pay each year.

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Share Ownership Guidelines

We encourage our executives to own Precision shares, so they have a vested interest in our long-term success.

Executives are expected to build their equity ownership to meet the share ownership guidelines within five years of assuming their position and can count RSUs and PSUs that are to be paid in shares toward meeting the guidelines. Stock options cannot be counted toward meeting the guidelines.

Our CEO is required to hold five times his annual base salary while the other NEOs aim for two times their base salary. We calculate share ownership based on the actual purchase cost or the current market value of our shares (whichever is higher).

See below for information about the share ownership of each NEO.

2022 EXECUTIVE COMPENSATION

Notes:

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Base Salary

Executives receive a base salary as fixed pay for performing their day-to-day responsibilities. The amount is based on each executive’s experience, education, time in the role, performance, internal equity and market competitiveness (see page 54 for information about benchmarking and page 55 for our Compensation Peer Group). The base salaries for the CEO and the NEOs for 2022 are included in the table below. In 2022, the CEO did not receive an increase in base salary, and the NEOs increases were market-based adjustments. For 2023, the CEO’s base salary will remain unchanged.