Cabo Announces Record Quarterly Results

For Immediate Release: December 1, 2008
                                        Telephone: (604) 984-8894
 
Facsimile: (604) 983-8056
 
                                        e-mail: ir@cabo.ca
CONTACT:  John A. Versfelt, Chairman, President and CEO
                                    web site: www.cabo.ca
 
Cabo Announces Record Quarterly Results
 
North Vancouver, BC  - Cabo Drilling Corp. ("Cabo" or the  "Company")
(TSX-V:CBE) today reported  results for  its fiscal  year 2009  first
quarter ended September 30, 2008.
 
1st QUARTER HIGHLIGHTS
 
+-------------------------------------------------------------------+
| (CDN $000s,  except earnings  per | Q1 - 09  | Q1  - 08 | FY 2008 |
| share)                            | Sept. 30 | Sept. 30 | June 30 |
|-----------------------------------+----------+----------+---------|
| Revenue                           |   16,617 |   14,339 |  58,645 |
|-----------------------------------+----------+----------+---------|
| Earnings (Loss) Before  Interest, |          |          |         |
| Taxes, Amortization, Stock  Based |    2,504 |    2,349 |   6,764 |
| Compensation  and  Other   Items  |          |          |         |
| (EBITDA)                          |          |          |         |
|-----------------------------------+----------+----------+---------|
| Net Earnings (Loss) Before Taxes  |    1,695 |    1,759 |   3,951 |
|-----------------------------------+----------+----------+---------|
| Net Earnings (Loss) After Taxes   |    1,090 |    1,084 |   3,203 |
|-----------------------------------+----------+----------+---------|
| Earnings  (Loss)  per  Share  ($) |          |          |         |
| (Basic   and   Diluted)    Before |          |          |         |
| Interest,  Taxes,   Amortization, |     0.05 |     0.05 |    0.15 |
| Stock-based   Compensation    and |          |          |         |
| Other Items (EBITDA)              |          |          |         |
|-----------------------------------+----------+----------+---------|
| Earnings  (Loss)  per  Share  ($) |     0.02 |     0.03 |    0.07 |
| (Basic and Diluted)               |          |          |         |
|-----------------------------------+----------+----------+---------|
| Cash from Operations*             |    1,821 |    1,572 |   2,665 |
|-----------------------------------+----------+----------+---------|
| Gross Margin %                    |    26.0% |    26.1% |   24.6% |
|-----------------------------------+----------+----------+---------|
| Working Capital (deficiency)      |    7,716 |    6,225 |   3,272 |
+-------------------------------------------------------------------+
 
*before changes in non-cash working capital items
 
"Cabo recorded  its highest  ever quarterly  revenues for  the  first
quarter fiscal 2009 of $16.62  million compared to our previous  high
of $16.04 million  recorded in  the second quarter  of fiscal  2008,"
said John  A. Versfelt,  President and  CEO of  Cabo Drilling  Corp.
"This also represents a 16% increase from the $14.34 million recorded
during the first quarter of fiscal 2008.  Our international  division
recorded 27% of the revenues compared  to 5% in the first quarter  of
fiscal 2008 and 19% recorded during fiscal 2008."
 
"The Company recorded a net income  of  $1.09 million during the  1st
quarter of fiscal  2009 or  $0.02 earnings per  share compared  $1.08
million or $0.03  earnings per  share in  the 1st  quarter of  fiscal
2008," noted  John  A. Versfelt.   "EBITDA  increased 6.4%  to  $2.50
million during the first  quarter of fiscal  2009, compared to  $2.35
million in the previous corresponding  period.  While these are  good
results, we are evaluating all  cost areas, particularly general  and
administrative costs, to  improve the bottom  line even though  gross
revenues in the coming quarters are expected to be lower."
 
"We were able  to react  quickly to the  dramatic economic  downturn,
requiring all of the Cabo divisions to re-evaluate and revise  fiscal
budgets, as well  as implement cost  reductions. Salaries, wages  and
consulting fees have been frozen  until further notice.  In  addition
senior  management  volunteered  to  take  salary  cuts,"  said   Mr.
Versfelt.  "Administration,  warehouse and  maintenance staff  levels
were reduced  by  25% and  a  number of  general  administrative  and
operating cost  reduction measures  were taken.  As a  result of  the
Company's cost reduction measures, the Company negotiated the  return
of inventories for credit against accounts payable that should  total
approximately  $1,000,000.  We   are  focused   on  maintaining   and
increasing cash flow, tightly managing our inventories and continuing
to add to our base of mid-tier and larger capitalized exploration and
mining customers with good working capital."
 
First quarter ended September 30, 2008
Revenue for the quarter  ending September 30,  2008 increased 16%  to
$16.62 million, compared to  $14.34 million in  the first quarter  of
fiscal 2008 and 14%  compared to the $14.63  million recorded in  the
fourth quarter  of  fiscal  2008.  The  increase  can  be  attributed
primarily to  significant growth  from our  international  divisions.
Revenues from  our international  divisions  represent 27%  of  first
quarter fiscal 2009 revenues as compared to 5 % in the first  quarter
of fiscal  2008  and  20%  in the  fourth  quarter  of  fiscal  2008.
Management expects international operations  to contribute a  growing
percentage of  the Company's  total revenue  stream as  the  Albanian
division, Balkan States  Drilling SH.P.K., begins  operations in  the
second quarter of fiscal 2009.
 
Direct costs for  the quarter  ended September 30,  2008 were  $12.29
million compared to  $10.60 million  in the first  quarter of  fiscal
2008 and $11.72  million in the  fourth quarter of  fiscal 2008.  The
increase is a  direct result  of higher activity,  which resulted  in
higher revenue in fiscal  2008. Gross margins  for the quarter  ended
September 30,  2008 were  26.0% compared  to 26.1%  during the  first
quarter of fiscal 2008 and 20.0% in the fourth quarter of the  fiscal
year  2008.  The  Company  recorded  higher  gross  margins  in  most
divisions during the  first quarter of  fiscal 2009, but  experienced
higher costs in the Pacific, United States and Mexico divisions.  The
lower margins experienced by our Mexico division are a direct  result
of decreased drill utilization in Mexico during the first quarter  of
fiscal 2009, as compared to the first quarter of fiscal 2008.
 
General and administrative expenses decreased by approximately  28.0%
or $709 thousand from $2.50 million in the fourth quarter fiscal 2008
to $1.79 million  in the first  quarter of fiscal  2009. Compared  to
$1.36 million recorded in the first quarter of fiscal 2008 there  was
an increase  of $160  thousand (10%)  in general  and  administrative
expenses. At  10.9%,  as a  percentage  of revenue  in  fiscal  2008,
general and  administration  costs  have increased  marginally  on  a
pro-rata quarter  to  quarter comparison  but  lower than  the  12.4%
recorded on an annual basis in fiscal 2008.
 
To view  the Company's  complete news  release, MD&A,  and  financial
statements please visit the company's website at www.cabo.ca or SEDAR
(www.sedar.com).
 
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
de Mexico S.A. de C.V. of Hermosillo, Mexico; Cabo Drilling  (Panama)
Corp. of  Panama, Republic  of Panama;  Cabo Drilling  Spain S.L.  of
Sevilla, Spain; 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 Investor Relations, Sheri  Barton, at 403-217-5830 or  Mr.
John A.  Versfelt,  Chairman,  President  & CEO  of  the  Company  at
604-984-8894.
                          *    *    *    *
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.
 
Cabo Drilling Corp. was recognized as a TSX Venture 50(TM) company in
2008. TSX Venture 50 is a trade-mark of TSX Inc. and is used under
license.
 
This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.