North Vancouver, BC – Cabo Drilling Corp. (“Cabo” or the “Company”) (TSX-V:CBE) today reports results for its fiscal year 2007 third quarter ended March 31.

3rd QUARTER HIGHLIGHTS

*before changes in non-cash working capital items

The Company reports:

- Third quarter revenue of $8.9 million in the 3rd quarter of FY2007, a 48.3% increase over revenue of $6.0 million in the 3rd quarter of FY2006.

- Net 3rd quarter FY2007 earnings before interest, taxes, amortization, stock based compensation and other items of $643,845 compared to a 3rd quarter FY2006 loss before interest, tax, amortization, stock based compensation and other items of $408,854.

- Net earnings after taxes for the 3rd quarter, FY2007 of $130,793 compared to a 3rd quarter, FY2006 loss after taxes of $2,206,866, resulting in 3rd quarter, FY2007 net earnings after taxes of $0.00 per share compared to 3rd quarter, FY2006 loss of $0.07 per share.

- Gross margin percentage for the 3rd quarter, FY2007 was 22.4% compared with a gross margin of 19.1% in the 3rd quarter, FY2006.

- Cash from operations, before changes in non-cash working capital items, was $504,883 for the 3rd quarter FY2007 compared to 3rd quarter FY2006 cash deficit from operations of $424,286.

- A current asset balance of $ 13.06 million and working capital of $3.66 million.

- Total assets of $24.51 million and total liabilities of $11.42 million including deposits of $1.83 million, reported as unearned revenue.

“Cabo’s record revenue growth continued with a 48% increase in revenues, from $5.99 million in the third quarter of fiscal 2006 to $8.89 million in the third quarter of fiscal 2007, and a 26.1% increase from $21.23 million for the nine months ending March 31, 2006 to $26.77 million for the nine months ending March 31, 2007,” said Mr. John A. Versfelt, Chairman, President & CEO of Cabo Drilling Corp. “Revenue from surface drilling increased to $16.76 million in the first nine months of fiscal 2007 from $13.03 million in the first nine months of fiscal 2006, a 28% increase, most of which was experienced in the Advanced Drilling and Petro Drilling Company divisions due to increased business in the BC/Yukon and Newfoundland sectors. Additionally, the Company has expanded operations into Mexico where it recorded revenues of $902,441 during the first nine months of fiscal 2007.”

“The gross margin for the third quarter of fiscal 2007 was 22.4%, compared to 19.1% in the third quarter of fiscal 2006 and 25.8% in the second quarter of fiscal 2007,” stated Mr. Versfelt. “Gross margins have improved year over year primarily due to better revenues per contract and improved cost control. The gross margin decreased marginally during the third quarter of fiscal 2007 compared to the second quarter of fiscal 2007, as a result of expected third quarter higher than normal maintenance and after-the-holiday season start up costs.”

“General and administrative expenses increased to $3.87 million compared to $3.84 million for the comparable period last year. Higher travel and investor relations costs, as well as costs incurred in establishing the subsidiaries in Spain and Panama prevented the Company from reducing its G&A expenses,” said Mr. Versfelt. “However, considering that the Company’s gross revenue for the nine-months in fiscal 2007 improved by approximately $5.54 million compared to fiscal 2006, maintaining G&A expenses at levels comparable to the same period in fiscal 2006 demonstrates that our people are achieving cost central results. As a percentage of gross revenue, G&A expenses have decreased to 14.5% from 18.1% for the nine months fiscal 2006.”

“The Company reported a pre-tax income of $1.27 million for the nine months ending March 31, 2007, compared to a pre-tax loss of $1.98 million for the same period in fiscal 2006. In 2006, we experienced write-downs of the resource properties and non-recurring charges whereas in 2007 there were no write-downs. In addition, all of our divisions are experiencing improved performance in operations during fiscal 2007,” said Mr. Versfelt. “The net income after tax for the nine months ending March 31, 2007 increased from a $1.98 million loss in fiscal 2006 to $764,293 in fiscal 2007.”

“The third quarter is typically weaker due to Company shut downs and start-ups and weather related issues. This year, mostly due to increased demand, the effect of these factors were reduced,” said Mr. Versfelt. “While our 3rd quarter revenues remain lower than our revenues from our 1st and 4th quarters, strategies put into place have assisted in improving our overall revenues and bottom line. We will continue to work to maximize our potential during our 2nd and 3rd quarters in the years ahead.”

“It is worthwhile to note that over the past nine months, after selling the mineral resource properties to IMMC and redistributing (or placing in trust) the 10,000,000 IMMC units, the Company’s assets have increased by approximately $5.79 million compared to the year ended June 30, 2006, while the Company’s liabilities, adjusted for unearned revenue (deposits received), have only increased $0.867 million in the same period,” stated Mr. Versfelt. “Cabo is building its asset base without mortgaging its future.”

“The drilling service industry continued to see a strong demand for its services. This demand should remain positive as the supply-demand fundamentals continue to drive the price higher for precious, base, industrialand strategic metals. Given the favourable market conditions the Company continues to expand its market areas,” said Mr. Versfelt. “During the 3rd quarter of 2007 the Company expended capital on the purchase of three new drills; one for its expansion into Panama and two for its recently announced expansion into Spain. With the addition of these rigs, and our continued market expansion, the Company’s positive growth is expected to continue into the fourth quarter, traditionally our busiest quarter.”

Results of Operations - Three months ended March 31, 2007

In the third quarter of fiscal 2007, contract core drilling services represented 97% of revenues and geotechnical drilling services represented 3%. Third quarter revenues increased 48% from $6.00 million in fiscal 2006 to $8.90 million in fiscal 2007. Surface drilling revenue increased $2.21 million to $5.45 million in the third quarter of fiscal 2007 from $ 3.24 million in the second quarter of fiscal 2006 and underground drilling revenue increased 26% or $656,091 to $3.15 million in the second quarter of fiscal 2007 compared to $2.50 million in the same period in fiscal 2006. Geotechnical drilling increased marginally in the third quarter of fiscal 2007 to $289,370 or 12% compared to $258,378 in the second quarter of fiscal 2007. Included in the surface revenue is $199,919 of revenues earned from the Company’s Mexico operations.

The gross margin for the third quarter of fiscal 2007 was 22.4%, compared to 19.1% in the third quarter of fiscal 2006 and 25.8% in the second quarter of fiscal 2007. Gross margins improved year over year primarily due to better revenues per contract and improved cost control. The gross margin decreased marginally during the third quarter of fiscal 2007 compared to the second quarter of fiscal 2007, as a result of expected third quarter higher than normal maintenance and after-the-holiday season start up costs.

The Company recorded EBITDA (earnings before interest, tax, amortization, stock-based compensation and other items) of $643,845 in the third quarter of fiscal 2007, a substantial increase from a loss of $408,854 EBITDA for the third quarter of fiscal of 2006.

General and administrative (“G&A”) costs were $1.36 million in the third quarter of fiscal 2007 compared to $1.24 million in the second quarter of fiscal 2007 and to $1.61 million in the third quarter of fiscal 2006. During the third quarter of fiscal 2007, the Company incurred higher administration, legal and travel costs to establish new subsidiaries in Spain and Panama. G&A costs decreased $249,717 in the third quarter of fiscal 2007 compared to $1.61 million in the third quarter of fiscal 2006, largely due to non-recurring charges incurred in the third quarter of fiscal 2006 and improved cost controls.

Amortization expense increased $115,367 from $273,833 in the third quarter of fiscal 2006 to $389,200 in the third quarter fiscal 2007. As the Company increases its property, plant and equipment, amortization expenses will increase as well.

The Company recorded an after tax income of $130,793 in the third quarter of fiscal 2007 compared to $210,947 earned in the second quarter of fiscal and a loss of $2.21 million in the third quarter of fiscal 2006.

The Company’s current cash (marketable securities and cash equivalents) position at March 31, 2007, is $1.03 million compared to $1.92 million at December 31, 2006. The decrease in cash is primarily due to acquisition of capital assets in preparation for the summer drilling season. The Company closed brokered and non-brokered private placements in January 2007 for net proceeds of $416,850.

Cash flow from operations (before changes in non-cash operating working capital items) was $504,883 in the third quarter of fiscal 2007 compared to an operating deficit of $424,286 in the third quarter of 2006, largely due to improved operations during fiscal 2007.

Working capital increased by $334,670 from $3.33 million at June 30, 2006 to $3.66 million at March 31, 2007. Funds received from the private placements were offset by capital assets purchased with cash.

Interest expense on short and long-term debt increased to $42,924 in the third quarter of fiscal 2007 from $32,888 in the third quarter of fiscal 2006, and decreased from $53,606 in the second quarter of fiscal 2007. Interest costs during the quarter were reduced through improved usage of the operating line and cash flow. The third quarter of fiscal 2006 interest costs resulted from the demand and operating loans from HSBC and capital leases for new drilling equipment.

In January 2007, the Company closed on brokered private placements for 1,195,000 units and non-brokered placements of 220,000 units at $0.375 per unit for the gross proceeds of $530,625. Each unit consisted of one common share of the Company and one warrant, each warrant entitles the holder thereof to acquire one additional share of the Company at a price of $0.50 for a period of two years from the date of issuance of the units, provided that if the closing price of Cabo’s shares is $0.60 per share or greater for twenty consecutive trading days following the four month hold period, Cabo may, upon notice to the warrant holders, reduce the exercise period to twenty days from the date of the notice. The Company paid broker fees totaling $31,275 and 76,000 in shares of the Company at a deemed value of $22,406.

Results of Operations - Nine Months Ended March 31, 2007

Revenues for the nine-month period ending March 31, 2007 increased 22% to $26.77 million from $21.23 million for the corresponding period last year. Advanced Drilling and Petro Drilling recorded significant growth in revenues while Heath & Sherwood revenues remained constant during the nine-month period ending March 31, 2007, compared to the nine-month period ending March 31, 2006.

Gross margins for the nine-month period ended March 31, 2007 were 23.8% compared to 20.1% during the same period last year. Gross margin improvements were maintained throughout the third quarter for a nine-month total ending March 31, 2007 to $6.37 million compared to $4.26 million earned in the first nine months of fiscal 2006. This represents a 49.6% improvement in the gross margin dollars and an 18.4% improvement in gross margin percentage.

The Company recorded EBITDA (earnings before interest, tax, amortization, stock-based compensation and other items such as write-downs of the resource properties, software costs and goodwill) of $2.53 million in the first nine months of fiscal 2007, a substantial increase from $523,019 EBITDA for the first nine months of fiscal 2006.

General and administrative expenses increased to $3.87 million compared to $3.84 million the same period last year. Higher travel and investor relations costs, as well as costs incurred in establishing the subsidiaries in Spain and Panama prevented the Company from reducing its G&A expenses.

Amortization expense increased to $1.04 million for the nine months ending March 31, 2007 compared to $819,894 for the same period last year. As the Company adds to its property, plant and equipment base, amortization expenses increase as well.

Net earnings for the nine-month period were up substantially to $764,293 compared to a net loss of $1,980,255 in the same period last year. Increased earnings are a direct result of increased drilling service activity and better cost controls during fiscal 2007. In addition, the Company wrote down the mineral properties assets in the comparable period fiscal 2006.

Cabo continues to position itself regionally, nationally and internationally to capture an increase in revenues and improve its gross margin as the demand for exploration drilling services increases. The Company’s strategy is to focus on growth by expanding its existing long-term customer base revenues, attracting new customers and by identifying favourable geographical locations in which to expand its drilling services business.

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 de Mexico S.A. de C.V. of Hermosillo, Sonora, Mexico; Cabo Drilling (Panama) Corp. of Panama, Republic of Panama; and Cabo Drilling Spain S.L. of Sevilla, Spain. The Company’s common shares trade 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 Ms. Sheri Barton, Investor Relations at 403-217-5830 or Mr. John A. Versfelt, Chairman, President & CEO of the Company at 604-984-8894.

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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.