Cabo Drilling Corp. Announces Second Quarter 2015 Results

2^nd QUARTER HIGHLIGHTS

The Company reports:

• Revenue for the second quarter fiscal 2015 ("Q2 FY2015") of $3.78 million compared to $6.82 million in the second quarter fiscal 2014 ("Q2 FY2014").
• Gross margin percentage for the quarter was 11.3% (with depreciation included in direct costs), compared with 11.7% in for the corresponding period last year.
• EBITDA of $54,932 for the quarter compared to a negative EBITDA of $53,567, in Q2 FY2014, resulting in EBITDA per share of $0.00 for the quarter compared to $0.00 in Q2 FY2014.
• Net after tax loss for Q2 FY2015 was $656,576 or a loss of $0.01 per share (loss of $0.01 per share diluted), compared to net after tax loss of $991,003 or a loss of $0.01 per share (loss of $0.01 per share diluted) for the corresponding period last year.
• Cash from operations, before changes in non-cash working capital items, was negative $65,413 for Q2 FY2015, compared to negative $209,015 for Q2 FY2014.

"Cabo Drilling generated revenues of $3.78 million during the second quarter of fiscal 2015 and $7.67 million for the six months ending December 31, 2014," stated Mr. Versfelt, Cabo's President & CEO. "This represents a 45% decrease compared to the $6.82 million recorded in the second quarter of fiscal 2014 and 43% decrease for the six month period ended December 31, 2014."

"Gross margin, adjusted to include depreciation, was 11.0% or $840,406 in the first six months of fiscal 2015, as compared to 12.4% in the first six months of fiscal 2014," stated Mr. Versfelt. "In accordance with IFRS, depreciation expenses of $1.11 million are included in direct costs as compared to $1.27 million in fiscal 2014. Adjusted gross margin, when depreciation expense is excluded from direct costs, is 25.5% in the first six months of fiscal 2015, as compared to 21.9% in the comparable period in fiscal 2014."

"General and administration costs decreased by 39% when compared to the first six months of fiscal 2014. The decrease is a direct result of restructuring activities that began in fiscal 2014 and continued in the first six months of fiscal 2015," commented Mr. Versfelt. "Total liabilities decreased by $1.92 million during the first six months of fiscal 2015 to $11.18 million at December 31, 2014," Mr. Versfelt noted. "At December 31, 2014, the Company has $22,813,000 in tax losses expiring primarily between 2025-2035."

"The Company reports positive EBITDA of $98,880 during the first six months of fiscal 2015, compared to $1,407 in the comparable period in fiscal 2014" stated Mr. Versfelt.

Mr. Versfelt observed that "73% of fiscal 2015 revenues came from gold related projects, 25% from copper, and the remaining 2% from other base metals."

"Our safety record is one of the best in the industry and our relationships with existing clients 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, should result in better projects and better margins, with high safety standards and high quality clients."

Consolidated Quarterly Financial Results

Revenue for the quarter ending December 31, 2014, decreased $3.04 million, or 45%, to $3.78 million, compared to $6.82 million in the second quarter of fiscal 2014. The primary reason for the decrease is due to reduced global demand for drilling, as a result of projects being scaled back, delayed or terminated.

Revenues from surface drilling services decreased 57%, from $4.50 million in the second quarter of fiscal 2014 to $1.95 million in the second quarter of fiscal 2015, largely due to the early completion or termination of drilling projects with major mining clients in Canada and reduced drill utilization in Panama. Revenues from reverse circulation programs decreased to nil in the second quarter of fiscal 2015 from $1.26 million in the comparable period in fiscal 2014 due to no demand in the Labrador iron ore formations, resulting from the collapse of global iron ore prices. Underground drilling increased by 83% in the second quarter of fiscal 2015 to $1.78 million as compared to $976,214 in the comparable period in fiscal 2014, primarily as a result of a new contract in Europe.

Direct costs for the quarter ended December 31, 2014, were $3.36 million compared to $6.03 million in the quarter ending December 31, 2013, as adjusted to include depreciation, in accordance with IFRS. The decrease is a direct result of the decreased activity in fiscal 2014. Gross margins, under IFRS reporting, for the quarter ended December 31, 2014, were 11.3% compared to 11.7% during the quarter ending December 31, 2013.

General and administrative expenses decreased by $608,360 from $1.52 million for the second quarter of fiscal 2014 to $912,543 in the second quarter of fiscal 2015. The decrease is a direct result of reduced administration staff, lower investor relations costs, lower insurance and professional fees and lower office administration costs in all divisions. Further staffing reductions were made subsequent to the quarter end in the restructuring of the Canadian operations. These reductions will result in a continued improvement to the bottom line in the following 2015 quarters and will enhance the cash flow and EBITDA numbers.

The Company incurred an $183,945 finance and accretion interest expense during the second quarter of fiscal 2015, compared to $270,061 incurred during the second quarter of fiscal 2014. The decrease can be directly attributed to the reduction of debt. Cabo continues to accrue interest on the $2.70 million debentures.

The Company has engaged financial advisors to assist in replacing the $2.70 million debentures and the $1.4 million equipment loan that are due in May, 2015, with new facilities. The Company is in arrears on the debenture and the equipment loan interest payments. The Company expects these loan facilities to be refinanced with another lender in 2015.

Cabo is currently in the second stage of positioning itself to refinance its existing debt. Existing market conditions industry wide have created additional challenges in undertaking the refinancing of the Company's debt, and have resulted in delays, based on the timeline management originally expected. In the interim, Cabo has initiated action to provide working capital by financing its unencumbered equipment in Colombia. Cabo management expects to report on the success of its financing efforts in the third quarter.

Net loss for the second quarter of fiscal 2015 is $656,576 compared to a net loss of $991,003 in the second quarter of fiscal 2014. Although we reported lower revenues the cost reductions allowed us to report a smaller loss and positive cash flow for the quarter.

We believe we are at the bottom of the worst mining market that anyone in the business today can remember; however, we do not believe there will be any dramatic turnaround in the industry in 2015. We are trusting that our demonstrated business values and a continued focus on strong marketing, will encourage growth with new clients as the mining markets improve. In the meantime, the Company has announced that it is expanding its services in the mining sector to the infrastructure sector. This will, over time, include offering geotechnical services, tree cutting & clearing services and other services in the road building and general contracting sector, the pipeline sector, the hydropower sector and the oil & gas sector.

The Company announces its first transaction into the infrastructure sector, whereby it has entered into an agreement to acquire 100% of WorldWide EnviroChem Corporation ("WWEC"), for total consideration of $870,000. The Company will assume an existing debt owing in the amount of $125,000 and, on the Closing Date, will deliver 8,800,000 Cabo voting common shares from its treasury, at an issue price of $0.05 per voting common share, to Northstar Capital Corporation and issue 6,100,000 Cabo voting common shares from its treasury, at an issue price of $0.05 per voting common share, to Maaz Construction Ltd. at a deemed value of $0.05 per share, subject to TSX Venture Exchange approval.

Financial Statements and Management's Discussion and Analysis are available on the Company's website (www.cabo.ca) and on SEDAR (www.sedar.com).

About Cabo Drilling Corp. (TSX VENTURE:CBE)

Cabo provides services to the mining industry and is expanding its operations to offer its services to the utilities, pipeline, forest products, road building, and concrete construction industries. Cabo will be providing a comprehensive range of infrastructure products and services, as well as engineered construction solutions globally for customers in a diverse cross-section of industries that are located in selected world markets. Cabo currently has operations in six countries. Further information about Cabo can be found in the disclosure documents filed by Cabo with the securities regulatory authorities, available at www.sedar.com and on the Company website at www.cabo.ca. 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 Drilling 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 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.