Precision Drilling Trust (“Precision”) (TSX:PD.UN) (NYSE:PDS) and Grey Wolf, Inc. (“Grey Wolf”) (AMEX:GW) today announced that their Board of Trustees and Board of Directors, respectively, unanimously approved a definitive merger agreement pursuant to which Precision will acquire Grey Wolf.

The combination of Precision and Grey Wolf will have land drilling operations in virtually every conventional and unconventional oil and gas basin in the lower 48 United States and Canada with an emerging presence in Mexico. The combination of Grey Wolf’s deep drilling capabilities and Precision’s high performance systems and technology provides a foundation for immediate international expansion to pursue global oil drilling opportunities.

• Under the terms of the agreement, Grey Wolf shareholders will receive US$5.00 in cash and 0.1883 newly-issued Precision trust units (“Units”) for each Grey Wolf common share on a fully-diluted basis, for aggregate consideration of US$1.12 billion in cash and 42.0 million Units. Grey Wolf shareholders will be able to elect to receive cash or Units, subject to pro-ration.
• The consideration represents approximately a 4.5% increase in the aggregate number of Units offered to Grey Wolf shareholders since Precision’s last public announcement of its intention to acquire Grey Wolf.
• Grey Wolf’s Board of Directors believes this consideration represents a substantial premium over an ‘unaffected’ Grey Wolf stock price without the influence of Precision’s previous public announcements regarding its desire to acquire Grey Wolf.
• The transaction is expected to be highly accretive to Precision’s cash flow per Unit.
• Existing Grey Wolf shareholders will own approximately 25% of the combined entity and three of the current Grey Wolf directors will be added to the Board of Directors of Precision Drilling Corporation, the administrator of Precision Drilling Trust, at closing.
• Financing is not a condition to closing of the merger. Precision has committed financing for the cash portion of the consideration and sufficient funding to continue its strategic organic growth plan.

The combination is expected to increase value for Grey Wolf’s shareholders by enabling the combined entity to capitalize more effectively on strong industry fundamentals in North America. Grey Wolf’s highly experienced people, turnkey drilling capability and its technologically advanced rigs will enhance Precision’s ability to execute its strategy to expand its high performance, high value drilling business in the United States and creates a solid platform for international expansion. In addition to drilling, Precision’s Production and Completion segment in Canada provides Grey Wolf shareholders an investment in new business lines associated with the full life cycle of oil and natural gas wells including service rigs, rental equipment and well snubbing.

The transaction will enhance Precision’s leadership position in the North American oil field services sector and represents an important milestone in Precision’s long-term strategy for expansion beyond Canada. The combined company will continue to focus on providing a safe work environment for all its employees and will benefit through the sharing of best practices. The combination also provides synergies to secure greater cost advantage through the adoption of common operational support systems including procurement, maintenance, rig manufacturing and enterprise wide information systems.

The transaction will establish scale for Precision as one of the largest land drillers in North America with a combined fleet of 371 drilling rigs. The combined company will also provide 229 service rigs, camp and catering, procurement, rig manufacturing and repair, snubbing, rentals, wastewater treatment and a turnkey drilling business. On a pro-forma basis for the 12 months ended June 30, 2008, combined revenue was US$1.8 billion.

Grey Wolf reached agreement with Precision following its previously announced review of strategic alternatives for enhancing shareholder value. This review included an update to Grey Wolf’s existing strategic plan and, ultimately, active solicitation of interest among a broad range of potential strategic and financial buyers for Grey Wolf, with the assistance of its independent financial advisors, UBS Investment Bank.

Commenting on the transaction, Kevin Neveu, CEO of Precision Drilling Corporation, stated, “The merger with Grey Wolf is a perfect strategic fit for both companies. Grey Wolf’s customer base, experienced employees and rig fleet will be enhanced by Precision’s high performance systems and Super Series rig technology. Together we can deliver high value services that will provide significant value to our customers, employees and securityholders. We are well positioned to be the premier provider of drilling services to the emerging unconventional gas and oil plays throughout North America, from the Haynesville shale in Louisiana to the Horn River development in north-eastern British Columbia. Further, the combination will immediately strengthen the platform for Precision’s global drilling strategy with increased scale, deep drilling rigs and great people.” Mr. Neveu stated, “We will look forward to welcoming all Grey Wolf employees to the Precision family.”

Thomas P. Richards, Chairman, President and CEO of Grey Wolf said, “Grey Wolf’s Board of Directors believes this improved offer from Precision is in the best interests of Grey Wolf shareholders, customers, and employees and we are pleased we have been able to reach this agreement.