NEW WESTMINSTER, BRITISH COLUMBIA--(Marketwire - Nov. 28, 2012) - Cabo Drilling Corp. ("Cabo" or the "Company") (News - Market indicators) today reported results for its fiscal year 2013 first quarter ended September 30, 2012.

1^st QUARTER HIGHLIGHTS

The Company reports:

• Quarterly revenue for the 1^st quarter fiscal 2013 of $13.84 million, an 18% decrease compared to $16.93 million in the 1^st quarter fiscal 2012.
• 1^st quarter fiscal 2013 earnings before interest, taxes, amortization, stock-based compensation and other items of $1.83 million compared to 1^st quarter fiscal 2012 earnings before interest, tax, amortization, stock based compensation and other items (EBITDA) of $3.05 million, resulting in 1^st quarter fiscal 2013 earnings before interest, taxes, amortization, stock-based compensation and other items of $0.02 per share, compared to $0.04 per share in the 1^st quarter of fiscal 2012.
• Net before tax income for the 1^st quarter of fiscal 2013 of $768,965 compared to before tax income for the 1^st quarter fiscal 2012 of $2.26 million.
• Net after tax earnings for the 1^st quarter of fiscal 2013 of $559,737 compared to net after tax earnings for the 1^st quarter of fiscal 2012 of $1.52 million, resulting in 1^st quarter fiscal 2013 net after tax earnings of $0.01 per share compared to net after tax earnings for 1^st quarter fiscal 2012 of $0.02 per share.
• Gross margin percentage for the 1^st quarter fiscal 2013 was 21.3%, with amortization included in direct costs, compared with a gross margin of 20.7% in 1^st quarter fiscal 2012 and 13.7% in the 4^th quarter of fiscal 2012.
• Cash from operations, before changes in non-cash working capital items, was $1.35 million for the 1^st quarter fiscal 2013 compared to 1^st quarter fiscal 2012 cash from operations of $1.47 million.
• A current asset balance of $25.0 million and working capital of $13.8 million.
• Total assets of $40.5 million and total liabilities of $16.4 million.

"Cabo Drilling generated gross revenues of $13.84 million during the 1^st quarter of fiscal 2013," stated Mr. Versfelt, Cabo Drilling's President and CEO. "This represents a decrease of 18% compared to the first quarter of fiscal 2012 and an increase of 2%, compared to the fourth quarter of fiscal 2012."

"Gross margin, adjusted to include amortization, was 21.3% or $2.94 million in first quarter of fiscal 2013, as compared to 20.7% in the first quarter of fiscal 2012," reported Mr. Versfelt. "In accordance with IFRS, amortization expenses of $655,113 are included in direct costs as compared to $651,969 in the first quarter of fiscal 2012. Adjusted gross margin, when amortization expense is excluded, is 26.0% in first quarter of fiscal 2013, as compared to 24.6% in the first quarter of fiscal 2012."

"The Company recorded earnings of $559,737 during the 1^st quarter of fiscal 2013, or $0.01 earnings per share compared to earnings of $1.52 million or $0.02 per share in the 1^st quarter of fiscal 2012," noted Mr. Versfelt. "EBITDA for the first quarter of fiscal 2013 (13.2%) was $1.83 million, compared to $3.05 million in the first quarter of fiscal 2012 (13.8% after adjustment for one time gain). The $3.05 million in fiscal 2012 includes a one time gain on the settlement of a debenture of $710,889."

"Cabo Drilling's working capital increased to $13.83 million during the first quarter of fiscal 2013, from $12.72 million at the fourth quarter of fiscal 2012," commented Mr Versfelt. "Total liabilities decreased by $2.22 million during the quarter to $16.36 million at September 30, 2012."

"Approximately 49% of revenues came from gold related projects, 17% from copper, 26% from iron and the remaining 8% from other base metals," stated Mr. Versfelt.

"Overall, Cabo Drilling Management expects average drill utilization in fiscal 2013 to remain near the 50%-55% level, with gross margins at 25-26%, prior to amortization expenses included in direct costs," stated Mr. Versfelt. "General and administration expenses should remain in the $7 million range and Cabo Drilling is budgeting gross revenues of approximately $50-56 million for fiscal 2013."

First quarter ended September 30, 2012

Revenue for the quarter ending September 30, 2012, decreased $3.09 million or 18% to $13.84 million, compared to $16.93 million in the first quarter of fiscal 2012, and increased slightly from the $13.61 million in the fourth quarter of fiscal 2012. The primary reason for the decrease is due to reduced demand for drilling in the second half of calendar 2012. The Latin America division decreased activity with lower drill utilization in Colombia, decreasing revenues by 32% to $2.64 million, as compared to $3.87 million in the comparable period in fiscal 2012. The Canadian and USA divisions also recorded a decrease in revenues of 12% to $11.16 million in the first quarter of fiscal 2013, as compared to $12.75 million in the first quarter of fiscal 2012. Management expects the second quarter results to be lower in fiscal 2013 (October through December 2012), as compared to fiscal 2012, but also expects a strong second half of fiscal 2013 (January through June, 2013).

Surface drilling revenues decreased 23%, from $11.34 million in the first quarter of fiscal 2012 to $8.73 million during the first quarter of fiscal 2013, largely due to the early completion of drilling projects with major mining clients, projects which should restart after 2013 budgets are approved and the new drilling season begins. Revenues from reverse circulation programs decreased by 34% to $2.15 million in the three months ending September 30, 2012, as compared to $3.26 million in the comparable period in fiscal 2012 for similar reasons. Underground drilling increased by 25% in the first quarter of fiscal 2013 to $2.68 million as compared to $2.15 million in the first quarter of fiscal 2012, as a result of increased underground drill utilization.

Direct costs for the quarter ended September 30, 2012, were $10.90 million compared to $13.42 million in the quarter ending September 30, 2011, as adjusted to include depreciation in accordance with IFRS. The decrease is a direct result of the decreased activity in the first quarter of fiscal 2013. Gross margins for the quarter ended September 30, 2012, were 21.3% compared to 20.7% during the quarter ending September 30, 2011. The increased gross margin is a direct result of improvements in the Canadian operations and increased revenue from the International divisions. Management restructured two of its Canadian operations, which is beginning to result in improved margins and profitability.

In accordance with IFRS, $655,113 of depreciation expense of property, plant and equipment is included in direct costs for the quarter ending September 30, 2012, as compared to $651,969 in the quarter ending September 30, 2012.

General and administrative expenses increased by $7,222 from $1.757 million in the first quarter of fiscal 2012 compared to $1.764 million in the first quarter of fiscal 2013. During the quarter, the Company incurred $42,200 in divisional restructuring charges, a bad debt allowance of $45,000 and an additional $62,400 of professional fees and consulting fees that did not occur in the first quarter of fiscal 2012.

General and administration costs represent 13% of revenues during the first quarter of fiscal 2013, as compared to 15% reported in the fourth quarter of fiscal 2012, and 10% in the first quarter of fiscal 2012. Management expects general and administration costs to remain around $1.70 million per quarter for the remainder of fiscal 2013.

Net income for the first quarter of fiscal 2013 is $559,737 compared to a net income of $ $1.52 million in the first quarter of fiscal 2012. The main difference is the gain recorded in the first quarter of fiscal 2012 of $710,889 and lower revenues reported in the first quarter of fiscal 2013, as compared to the first quarter of fiscal 2012.

The Company's cash (cash and cash equivalents) position at September 30, 2012, is $1.86 million compared to $1.24 million at June 30, 2012.

Marketable securities decreased $10,620, from $338,698 at June 30, 2012, to $328,078 at September 30, 2012. Marketable securities consist primarily of 1,500,000 shares in Standard Gold Inc. We have adjusted the value of our holdings at September 30, 2012, as recorded in the comprehensive income statement. At September 30, 2012, the balance of $328,078 consists of shares in public corporations.

Accounts receivable decreased by $1.21 million or 12% to $9.16 million at September 30, 2012, from $10.37 million at June 30, 2012. The decrease is primarily due to reduced activity during the first quarter of fiscal 2013.

Property, plant & equipment decreased to $12.82 million at September 30, 2012 from $13.47 million at June 30, 2012, a decrease of $651,512 during the first quarter of fiscal 2013. The Company purchased $130,764 of equipment during the first quarter of fiscal 2013. The Company has a capital expenditure budget of $1.80 million for fiscal 2013 with an emphasis on modernizing its drill fleet.

Cash flow from operations (before changes in non-cash operating working capital items) was $1.35 million during the 1^st quarter of fiscal 2013, compared $1.47 million in the 1^st quarter of fiscal 2012.

The drilling services business is always challenging. In times of high demand, like 2011 and the first half of 2012, good drill crews are difficult to recruit and to retain at cost effective prices because many drilling company owners and/or senior managers are prepared to pay unreasonable wages and bonuses. In slower times, like the second half of 2012, good drill crews are available at a more reasonable price; however, unless drilling companies have developed quality relationships with well financed mining and exploration companies and/or mining and exploration companies that are not prepared to compromise their ore reserve or deposit development programs, thereby creating potential balance sheet problems, they will begin to offer their services at less than healthy prices. There is no easy formula to manage 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, plus effective cost controls and management of equipment and drilling practices, 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. (News - Market indicators)

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; Montréal, Quebec; 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).

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.