Cabo Drilling Corp CBEEF

From Sedar MD&A

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Highlights and Overall Performance

In what is historically one of the Company’s worst quarter, Cabo recorded its highest ever
quarterly revenue in its history with revenues of $16.04 million compared to $14.34 million
recorded in the first quarter of fiscal 2008. This represents an 80% increase from $8.90 million
recorded in the third quarter of fiscal 2007 and a 17% increase in revenues from the $13.64
million recorded in the second quarter of fiscal 2008. The growth in revenues can be attributed to
record revenues from our international operations and strong growth from in Ontario and Atlantic
divisions. The international operations recorded revenues of $4.54 million or 28% of quarterly
revenues as compared to $199,919 or 2% in the third quarter of fiscal 2007.

Cabo’s Pacific Division expansion into the United States is continuing with a second project in
Colorado.

Cabo continues to record improved gross margins compared to quarters in fiscal 2007. The
Company recorded a gross margin of 22.9% during the third quarter of fiscal 2008 compared to
22.4% during the third quarter in fiscal 2007. However, because of significant downtime due to
the Holiday season factor and increased costs in the same period, the third quarter costs are
higher than normal compared to the balance of the year resulting in less than satisfactory gross
margins.

The Company recorded a net income of $731,277 during the third quarter fiscal 2008 or $0.02
earnings per share and EBITDA of $1.86 million

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