Cabo Announces 2nd Quarter Results

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Source: Marketwire

VANCOUVER, BC -- (Marketwire) -- 03/02/11 --

Cabo Drilling Corp. / Cabo Announces 2nd Quarter Results Processed and transmitted by Thomson Reuters. The issuer is solely responsible for the content of this announcement.

Cabo Announces 2nd Quarter Results

North Vancouver, BC - Cabo Drilling Corp. ('Cabo' or the 'Company') (TSX- V:CBE) today reported results for its fiscal year 2011 second quarter ended December 31, 2010.

2nd  QUARTER HIGHLIGHTS

+---------------------+--------------+------------+-----------+-----------+
|(CDN   $000s,  except|   3 months   | 3 months   | 6 months  | 6 months  |
|earnings per share)  |    ending    |  ending    |  ending   |  ending   |
|                     |  Dec 31/10   | Dec 31/09  | Dec 31/10 | Dec 31/09 |
+---------------------+--------------+------------+-----------+-----------+
|Revenue              |        10,583|       7,983|     20,856|     14,324|
+---------------------+--------------+------------+-----------+-----------+
|Earnings       (Loss)|              |            |           |           |
|Before      Interest,|              |            |           |           |
|Taxes,  Amortization,|         1,242|         839|      2,253|      1,318|
|Stock           Based|              |            |           |           |
|Compensation      and|              |            |           |           |
|Other Items  (EBITDA)|              |            |           |           |
+---------------------+--------------+------------+-----------+-----------+
|Net  Earnings  (Loss)|           486|       (147)|        794|      (611)|
|Before Taxes         |              |            |           |           |
+---------------------+--------------+------------+-----------+-----------+
|Net  Earnings  (Loss)|           393|       (150)|        591|      (614)|
|After Taxes          |              |            |           |           |
+---------------------+--------------+------------+-----------+-----------+
|Earnings  (Loss)  per|              |            |           |           |
|Share  ($) (Basic and|              |            |           |           |
|Diluted)       Before|          0.02|        0.02|       0.04|       0.02|
|Interest,      Taxes,|              |            |           |           |
|Amortization,  Stock-|              |            |           |           |
|based    Compensation|              |            |           |           |
|and    Other    Items|              |            |           |           |
|(EBITDA)             |              |            |           |           |
+---------------------+--------------+------------+-----------+-----------+
|Earnings  (Loss)  per|          0.01|      (0.01)|       0.01|     (0.01)|
|Share  ($) (Basic and|              |            |           |           |
|Diluted)             |              |            |           |           |
+---------------------+--------------+------------+-----------+-----------+
|Cash from Operations*|           985|         729|      1,853|      1,117|
+---------------------+--------------+------------+-----------+-----------+
|Gross Margin %       |         26.1%|       28.5%|      25.1%|      28.8%|
+---------------------+--------------+------------+-----------+-----------+
|Working Capital      |         6,271|       6,076|      6,271|      6,076|
+---------------------+--------------+------------+-----------+-----------+

*before changes in non-cash working capital items

The Company reports:

* Increased quarterly revenue for the 2nd quarter fiscal 2011 of $10.58 million, a 24.6% improvement compared to $7.98 million in the 2nd quarter fiscal 2010.

* 2nd quarter fiscal 2011 earnings before interest, taxes, amortization, stock-based compensation and other items (EBITDA) of $1.24 million compared to 2nd quarter fiscal 2010 earnings before interest, tax, amortization, stock based compensation and other items (EBITDA) of $839,383, resulting in 2nd quarter fiscal 2011 earnings before interest, taxes, amortization, stock-based compensation and other items of $0.02 per share and $0.02 per share in the 2nd quarter of fiscal 2010.

* Net before tax income for the 2nd quarter of fiscal 2011 of $486,772 compared to a 2nd quarter fiscal 2010 before tax loss of $147,386.

* Net after tax earnings for the 2nd quarter of fiscal 2011 of $393,132 compared to a net after tax loss for the 2nd quarter of fiscal 2010 of $150,093, resulting in 2nd quarter fiscal 2011 net after tax earnings of $0.01 per share compared to a net after tax loss for 2nd quarter fiscal 2010 of $0.01 per share.

* Gross margin percentage for the 2nd quarter fiscal 2011 was 26.1% compared with a gross margin of 28.5% in 2nd quarter fiscal 2010 and 24.0% in the 1st quarter of fiscal 2011.

* Cash from operations, before changes in non-cash working capital items, was $985,199 for the 2nd quarter fiscal 2011 compared to 2nd quarter fiscal 2010 cash from operations of $728,657.

* A current asset balance of $20.41 million and working capital of $6.3 million.

* Total assets of $35.64 million and total liabilities of $15.87 million.

'Cabo has now recorded three consecutive quarters of increased revenues,' stated Mr. Versfelt, Cabo's President & CEO. 'Revenue for the quarter ending December 31, 2010 increased $2.60 million or 33% to $10.58 million, compared to $7.98 million in the comparable period in fiscal 2010. Revenues for the first six months of fiscal 2011 were $20.86 million, a 46% improvement compared to the first six months of fiscal 2010.'

'Gross margin improved from 24.0% in the first quarter of fiscal 2011 to 26.1% in the second quarter of fiscal 2011,' added Mr. Versfelt. 'Management expects gross margins in the 25-27% range for the balance of fiscal 2011.'

'Drilling activity and revenues in all regions where Cabo Drilling is working has been steady with average utilization at approximately 44% for the quarter,' said Mr. Versfelt. 'Management expects utilization to increase to around 60% in the fourth quarter of fiscal 2011.

'EBITDA improved quarter over quarter to $1.24 million for the second quarter ending December 31, 2010 from $839,383 in the second quarter of fiscal 2010 and from $1.01 million in the first quarter of fiscal 2011,' noted Mr. Versfelt. 'Both before and after tax earnings of $476,097 and $393,132 respectively for the second quarter of fiscal 2011 were the highest earnings that the Company experienced since the December 31, 2008 quarter.'

Second quarter ended December 31, 2010

Revenue for the quarter ending December 31, 2010 increased $2.60 million or 33% to $10.58 million, compared to $7.98 million in the comparable period in fiscal 2010. The primary reason for the increase is the increased activity in Canada and the international activity in Colombia, Panama and Albania. All Canadian divisions recorded increases in the second quarter of fiscal 2011 as compared to the second quarter of fiscal 2010.

The Company recorded a 3% increase in revenues comparing the $10.27 million recorded in the first quarter of fiscal 2011 to the $10.58 million in the second quarter of fiscal 2011.

Cash flow from operations (before changes in non-cash operating working capital items) was $985,199 during the 2nd quarter of fiscal 2011, compared $728,657 in the 2nd quarter of fiscal 2010.

EBITDA increased to $1.24 million in the second quarter of 2011, compared to $839,383 in the same period of the prior year, an increase of $402,211, or 48%, a result of a increased revenues. EBITDA in the second quarter of fiscal 2011 represents 12% of sales, compared to 11% in the previous comparable period in fiscal 2010.

Net income for the second quarter of fiscal 2011 was $393,132 compared to a net loss of $150,093 in the second quarter of fiscal 2010 and a net income of $197,544 during the first quarter of fiscal 2011.

For the full version of this news release please go to the Company's website www.cabo.ca or SEDAR www.sedar.ca.

About Cabo Drilling Corp. (TSX-V: CBE)

Cabo Drilling Corp. is a drilling services company headquartered in North Vancouver, British Columbia, Canada. The Company provides mining related and specialty drilling services through its Canadian divisions in Surrey, British Columbia; Montréal, Quebec; Kirkland Lake, Ontario; and Springdale, Newfoundland; as well as Cabo Drilling (Panama) Corp. of Panama, Republic of Panama; 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'

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) or by contacting Sheri Barton, Corporate Communications at 403-217-5830 or Mr. John A. Versfelt, Chairman, President & CEO of the Company at 604-984-8894. For general investor relation inquiries you may also contact Renmark Financial Communications Inc. Barbara Komorowski: bkomorowski@renmarkfinancial.com or Arash Shahi: ashahi@renmarkfinancial.com at Tel: 514-939-3989 or 416-644-2020.

* * * * 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 comments regarding the timing and content of upcoming work programs, geological interpretations, potential mineral recovery processes and other business transactions timing. 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.

--- End of Message ---

Cabo Drilling Corp. 3rd Floor, 120 Lonsdale Avenue North Vancouver BC Canada


Listed: Open Market (Freiverkehr) in Frankfurter Wertpapierbörse;

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Source: Cabo Drilling Corp. via Thomson Reuters ONE

[HUG#1493672]

CONTACT:
John A. Versfelt
Chairman, President and CEO
web site:www.cabo.ca
Telephone: (604) 984-8894
Facsimile: (604) 983-8056
e-mail: Email Contact

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