CANELSON ANNOUNCES THAT ITS MEXICAN JOINT VENTURE HAS ACQUIRED TWO DRILLING RIGS DATE: January 15, 2013 NEWS RELEASE CALGARY, ALBERTA - CanElson Drilling Inc. ("CanElson" or the "Company") (TSX: CDI) announces that its Mexican Joint Venture, Diavaz CanElson de Mexico, S.A. de C.V. ("DCM") has acquired two existing telescoping double drilling rigs ("tele-doubles") for US$5.6 million.

"The acquisition of these two rigs is a significant step forward for our Mexican joint venture," said Randy Hawkings, President and CEO of CanElson. "We expect this will increase profitability and improve payouts compared with DCM's current practice of using a sub-contracted drilling rig in Mexico."
The two tele-doubles are already in southern Mexico and will be moved to Tampico, a city in the eastern part of the country. In Tampico the rigs will undergo refurbishment to fit-for-purpose small-footprint plug-n-play configuration, complete with built-in managed pressure drilling and snubbing capability. When the refurbishment is completed, the rigs will be similar to the other highly standardized rigs in CanElson's North American fleet.

Cost, with refurbishing, compares favourably with new tele-doubles

The refurbishment of each tele-double is expected to cost about US$2.5 million resulting in a total expected cost per rig of US$5.3 million. This compares favourably with the cost of approximately $8 million to assemble new tele-doubles.
DCM intends to finance these capital investment activities using a combination of existing working capital and external funding as needed. DCM's Mexican engineering team, which has been training with CanElson, will supervise the upgrades.

Rigs to commence drilling in Q2 2013

During the second quarter of 2013, upon completion of the re-configuration, CanElson expects that the tele-doubles will commence drilling in the Ebano Panuco fields, located near the Central Gulf of Mexico. While the tele-doubles are being refurbished, DCM's drilling operations will continue through use of one sub-contracted drilling rig.
DCM expects to finalize a 5-year contract for one of the tele-doubles with its customer DS Servicios Petroleros, S.A. de C.V. ("DS") imminently. Discussions regarding the contract terms for the second tele- double are ongoing.

DS recently signed a 30-year production-sharing contract with PEMEX, Mexico's state-owned petroleum company, to operate the Ebano heavy oil block near Tampico, Mexico. CanElson anticipates increased profitability and excellent payouts for DCM-owned tele-doubles drilling on a performance basis with Mexican crews, as compared with sub-contracting third-party drilling rigs.

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Established Operations at DCM

DCM has established a profitable operation and has substantially improved its drilling operations since the joint venture was formed in 2009. Among other things, DCM has: