Cabo Drilling Announces 2013 Fourth Quarter and Annual Results

Cabo Drilling Corp. ("Cabo" or the "Company") (TSX VENTURE:CBE) reports results
for its fourth quarter and fiscal year ended June 30, 2013.


SELECTED ANNUAL HIGHLIGHTS 



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Years Ended June 30                                                         
$ (000's)                                           2013      2012      2011
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Revenue                                           42,534    58,951    43,420
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Earnings Before Interest, Taxes, Amortization,                              
 Stock Based Compensation and Other Items                                   
 (EBITDA)                                          3,956     6,383     2,646
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Net Income (loss) Before Taxes                        29     1,524     (271)
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Net Income (loss) After Taxes                      (565)     1,655     (840)
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Income per Share ($) (Basic and Diluted)                                    
 Before Interest, Taxes, Amortization, Stock-                               
 based Compensation and Other Items (EBITDA)        0.05      0.08      0.04
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Income (loss) Per Share (Weighted Average)        (0.01)      0.02    (0.01)
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Cash Flow from Operations(i)                       2,606     3,348     1,402
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Gross Margin (IFRS) %                              19.3%     18.2%     16.7%
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Gross Margin adjusted %                            25.1%     22.7%     22.1%
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Total Assets                                      37,552    42,428    41,356
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Total Liabilities                                 13,833    18,582    19,843
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Working Capital                                   13,454    12,723     8,140
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(i)before changes in non-cash working capital items                         



The Company reports:



--  Fiscal revenue for the year ended June 30, 2013, of $42.53 million, a
    28% decrease compared to $58.95 million in fiscal 2012, and quarterly
    revenue for the 4th quarter of fiscal 2013 of $8.91 million, a 35%
    decrease compared to $13.61 million in the 4th quarter fiscal 2012. 
--  Fiscal 2013 income before interest, taxes, amortization, stock-based
    compensation and other items ("EBITDA") of $3.96 million compared to
    fiscal 2012 EBITDA of $6.38 million, resulting in fiscal 2013 EBITDA of
    $0.05 per share compared to $0.08 per share in fiscal 2012, and 4th
    quarter fiscal 2013 EBITDA of $429,299 compared to 4th quarter fiscal
    2012 EBITDA of $293,734, resulting in 4th quarter fiscal 2013 EBITDA of
    $0.01 per share and $0.00 per share in the 4th quarter of fiscal 2012. 
--  Net loss after taxes for fiscal 2013 of $565,110 compared to net income
    after taxes of $1.66 million in fiscal 2012, resulting in a fiscal 2013
    net after tax loss of $0.01 per share compared to net after tax income
    for fiscal 2012 of $0.02 per share and an after tax loss for the 4th
    quarter of fiscal 2013 of $709,901 compared to a net after tax loss for
    the 4th quarter of fiscal 2012 of $734,090, resulting in 4th quarter
    fiscal 2013 net after tax loss of $0.01 per share and a net after tax
    loss for 4th quarter fiscal 2012 of $0.01 per share. 
--  Cash from operations, before changes in non-cash working capital items,
    was $2.62 million for fiscal 2013 compared to fiscal 2012 cash from
    operations of $3.35 million. 
--  A current asset balance of $22.62 million and working capital of $13.45
    million. 



"Cabo Drilling generated revenues for fiscal 2013 of $42.53 million," stated Mr.
Versfelt, Cabo's President & CEO. "This represents a 28% decrease compared to
the $58.95 million recorded in the comparable period in fiscal 2012. The
Company's quarterly gross revenue for the three months ended June 30, 2013 also
decreased by 35% to $8.91 million compared to $13.61 million in the comparable
three month period in fiscal 2012."


"Gross margin, adjusted to include amortization, was 19.3% or $8.21 million in
fiscal 2013, as compared to 18.2% or $10.75 million in fiscal 2012," commented
Mr. Versfelt. "In accordance with IFRS, depreciation expenses of $2.47 million
are included in direct costs as compared to $2.62 million in fiscal 2012.
Adjusted gross margin, when depreciation expense is excluded from direct costs
is 25.1% in fiscal 2013, as compared to 22.7% in fiscal 2012."


"The Company reported $3.96 million in EBITDA or $0.05 per share, for the year
ending June 30, 2013 compared to $6.38 million, or $0.08 per share, in fiscal
2012," stated Mr. Versfelt. 


"Approximately 59% of Cabo's revenues were generated from gold related projects,
18% from copper, 18% from iron and the balance from other base metals,"
commented Mr. Versfelt. 


"Working capital increased to $13.45 million during fiscal 2013, from $12.72
million at June 30, 2012," stated Mr. Versfelt. "Total liabilities decreased by
$4.75 million during fiscal 2013 to $13.83 million at June 30, 2013. During the
fiscal 2013 year the Company paid, in full, the debentures totalling $1.997
million that were due and payable on February 14, 2013."


"Cabo Drilling has reduced costs over the past two years and has improved its
balance sheet. Productivity has improved, our safety record is one of the best
in the industry and our client relationships are very good," commented John
Versfelt. "With a continued focus on excellent safety, high environmental
stewardship and improved productivity, plus the improved availability of good to
excellent drilling personnel, we believe we will experience better projects and
better margins, with high safety standards and high quality clients."


Consolidated Annual Financial Results

Revenue for the year ending June 30, 2013, decreased $16.42 million, or 28%, to
$42.53 million, compared to $58.95 million in fiscal 2012. The primary reason
for the decrease is due to reduced demand for drilling, as a result of projects
being scaled back, delayed or terminated. Latin America division revenues
decreased by 16% with slightly higher drill utilization in Panama, offset by the
decreased activity in Colombia during the second half of fiscal 2013. The
Canadian and USA divisions recorded a significant decrease in revenues of 34% to
$26.81 million in fiscal 2013, as compared to $40.72 million in fiscal 2012. 


Surface drilling revenues decreased 33%, from $45.02 million in fiscal 2012 to
$29.93 million in fiscal 2013, largely due to the early completion or
termination of drilling projects with major mining clients in Canada and
Colombia. Revenues from reverse circulation programs decreased by 13% to $4.49
million; however, activity in iron ore formations showed little change.
Underground drilling decreased by 4% in 2013 to $7.35 million, as compared to
$7.68 million in fiscal 2012. 


Direct costs for the year ended June 30, 2013, were $34.32 million compared to
$48.20 million in the year ending June 30, 2012, as adjusted to include
depreciation in accordance with IFRS. The decrease is a direct result of the
decreased activity in fiscal 2013. Gross margins, under IFRS reporting, for the
year ended June 30, 2013, were 19.3% compared to 18.2% during the year ending
June 30, 2012. While the Company experienced higher fixed costs in the Canadian
operations, these costs were offset mostly by higher margins in the Panama and
Colombia operations, resulting in a small improvement in overall gross margin,
compared to 2012. Management restructured two of its Canadian operations, which
is beginning to result in improved margins and profitability. 


In accordance with IFRS, $2.47 million of depreciation expense of property,
plant and equipment is included in direct costs for the year ending June 30,
2013, as compared to $2.62 million in fiscal 2012. 


General and administrative expenses decreased by $706,352 from $7.61 million in
fiscal 2012 to $6.90 million in fiscal 2013. The decrease is a result of lower
salaries and travel costs. During the year, the company reduced the general and
administration payroll by 21%, but the entire effect will not be noticed until
fiscal 2014. 


General and administration costs represent 16% of revenues of fiscal 2013, as
compared to 13% reported in the second year of fiscal 2012. Management expects
general and administration costs to range between $5.4 and $5.8 million for
2014. 


The Company incurred a $1.29 million finance and accretion interest expense
during fiscal 2013, compared to $1.43 million incurred during fiscal 2012. The
decrease can be directly attributed to the payment in full in February 2013 of
the $1.997 million debenture. Cabo continues to accrue and pay semi-annual
interest on the $2.70 million debentures. 


Net loss after taxes for fiscal 2013 is $565,110 compared to a net income of
$1.66 million in fiscal 2012. This is a direct result of the decreased activity
in the global drilling market. 


The Company's cash (cash and cash equivalents) position at June 30, 2013 is
$134,248 compared to $1.24 million at June 30, 2012. The reduction in cash is
largely due to the payment of the debentures in February, 2013 and the reduced
drilling activities.


Cash flow from operations (before changes in non-cash operating working capital
items) was $2.61 million during fiscal 2013, compared to $3.35 million during
fiscal 2012. 


Consolidated Fourth Quarter Financial Results

Revenue for the three months ending June 30, 2013 decreased approximately 35% to
$8.91 million, compared to $13.61 million in fiscal 2012. Revenues from our
international divisions continue to represent a significant portion of Cabo
Drilling's operations with 41% of revenues for the three month period ending
June 30, 2013, compared to 36% during the same period in fiscal 2012. Management
expects the international revenues to continue to represent a significant
portion of overall revenues looking forward to fiscal 2014.


Surface drilling decreased by 40% during the three month period ending June 30,
2013 to $6.14 million, due to decreased utilization in the Atlantic, Colombia,
and Pacific divisions. Underground drilling decreased 49% during the three month
period ending June 30, 2013 to $1.35 million. This compares to $2.65 million
during the same period in fiscal 2012. The decrease is due to an underground
contract not being renewed in the Atlantic division.


Direct costs for the three months ended June 30, 2013 were $7.49 million
compared to $11.75 million in the comparable period in fiscal 2012. Gross
margins for the three months ended June 30, 2013 were 16.0% compared to 13.7%
during the three months ended June 30, 2012, when direct costs include
depreciation expenses (or 21.7% compared to 18.4% for the respective periods,
when direct costs are adjusted to exclude depreciation expense). The Company's
margins should continue to improve due to restructuring in the Ontario and
Pacific divisions that took place in the fourth quarter fiscal 2013. 


General and administrative expenses decreased by approximately 18% from $2.10
million in the three months ended June 30, 2012 to $1.72 million in the three
months ending June 30, 2013. The decrease is primarily a result of decreased
salary costs from restructuring the Canadian operations, lower travel
expenditures and lower bad debt allowance.


Net loss for the last quarter of fiscal 2013 was $709,901 compared to a net loss
of $734,090 in the comparable period in fiscal 2012. 


As has been stated in the past, the drilling services business is always
challenging. In times of high demand for drilling services, like 2011 and the
first half of 2012, revenues were high, but good drill crews were difficult to
recruit and retain at cost effective prices, plus productivity was compromised
and safety and environmental concerns escalated, resulting in higher costs. In
slower times, like today, revenues decrease, but drilling crews are better and
more experienced, and costs per meter are reduced as well. There is no easy
formula for managing a drilling company, but good old fashioned business
practices, like quality customer relations, high respect for employees and
quality human relations, superb safety procedures and practises, careful
attention to the protection of the environment and community relations, continue
to be critical for Cabo Drilling's management team. These practices, plus
effective cost controls and management of equipment and drilling practices, and
services invoiced to the customer at a fair price and in an honest manner, will
enhance a drilling company's ability to grow profitably at all times.


About Cabo Drilling Corp. (TSX VENTURE:CBE) 

Cabo Drilling Corp. is a drilling services company headquartered in New
Westminster, British Columbia, Canada. The Company provides mining specialty
drilling services through its Canadian divisions in Surrey, British Columbia;
Kirkland Lake, Ontario; and Springdale, Newfoundland; as well as Cabo Drilling
(America) Inc. of the United States; Cabo Drilling (Panama) Corp. of Panama,
Republic of Panama; Cabo Drilling Panama-Pacifico Corp. of Panama, Republic of
Panama doing business as Cabo Drilling Colombia Corp.; Balkan States Drilling
SH.P.K. of Tirana, Albania; and Cabo Drilling (International) Inc. The Company's
common shares trade on the Frankfurt Exchange under the symbol: DHL and on the
TSX Venture Exchange under the symbol: CBE.


ON BEHALF OF THE BOARD

John A. Versfelt, Chairman, President and CEO

Further information about the Company can be found on the Cabo website
(http://www.cabo.ca) and SEDAR (www.sedar.com).


The TSX Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release. This news release may contain forward-looking
statements including but not limited to, those relating to worldwide demand for
gold and base metals and overall commodity prices, the level of activity in the
minerals and metals industry and the demand for the Company's services, the
Canadian and international economic environments, the impact of operational
changes, changes in jurisdictions in which the Company operates (including
changes in regulation), failure by counterparties to fulfill contractual
obligations, and other factors as may be set forth, as well as objectives or
goals. Forward-looking statements address future events and conditions and
therefore, involve inherent risks and uncertainties. Actual results may differ
materially from those currently anticipated in such statements.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Cabo Drilling Corp.
John A. Versfelt
Chairman, President and CEO
604-527-4201
[phone] (FAX)
[e-mail]
www.cabo.ca


Sheri Barton
Corporate Communications
403-217-5830