Strategy

Cabo’s Growth Strategy 

Through its subsidiaries Cabo plans to continue to acquire a larger portion of the drilling services market share, reduce costs through economies of scale and improved performance and increase revenues by offering a broader range of quality international service than has been traditionally offered by global drilling companies. By consolidating within the drilling industry, Cabo plans to achieve a competitive edge in efficiency, productivity and scale.

As a growing drilling services company, Cabo is able to offer its customers a competitive alternative in the highly specialized mineral drilling sectors.

The Big Picture

Cabo Drilling Corp. currently operates in seven geographical areas – Albania, Canada, Liberia, Mexico, Panama, Spain and the United States, with plans to expand into North Africa, Eastern Europe and Central and South America.

In Canada, Cabo’s focus is on conventional underground and surface drilling. No specific commodity group dominates revenue in this region as Cabo drills for clients that are exploring and mining a variety of metals, minerals and precious stones. Approximately, 80% of Cabo’s operating drill rigs are in Canada.

Cabo Drilling has a growing international presence, with the international operations contributing revenues of $4.54 million or 28% of quarterly revenues in the third quarter of 2008 as compared to $199,919 or 2% in the third quarter of fiscal 2007. Cabo currently employs 20% of its operating drill rigs internationally. With strong demand for drilling services in international markets, Cabo is able to obtain favorable pricing for its services in these locations. Growth in these markets will continue to improve the Company’s overall margins.

Enhancing our customer service and expanding our markets has improved both our margins and customer satisfaction. Cabo is focusing its attention in these areas, while improving its operating capability, inventory management and working capital utilization.

Cabo is growing organically, while selectively pursuing strategic acquisitions to grow the Company’s revenue stream. Each acquisition or market expansion will be analyzed with respect to its human resources, customer base, growth potential, location and challenges. Top priority will be given to expansion into value-added market areas.

Cabo Drilling anticipates that the predicted supply shortfall of key industrial and precious metals in the coming years will be an on-going catalyst for growth. This shortfall is expected to drive the demand for mineral drilling services, producing an environment of stable unit prices, a growing workforce of experienced drillers and supervisors, and opportunities to focus on increased drill capacity and improved cost controls, resulting in better margins. Cabo is well positioned to respond to the demand for mineral exploration, development and geotechnical and mineral reserve drilling.

With a focus on growth through the expansion of our existing long-term customer base, attracting new customers and achieving new levels of operating and administrative efficiencies, Cabo Drilling Corp. is poised to become one of the global leaders in the drilling services industry.