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|                   |
|-------------------|
|                   |
| FORM 10-Q/A       |
| (Amendment No. 1) |

|   |
|---|
|   |  |
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

|        |
|--------|
|        |  |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

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|-------------------------------------------------------------------------------------|
|                                                                                     |
| PARKER DRILLING COMPANY(Exact name of registrant as specified in its charter)  |

|                                                               |
|---------------------------------------------------------------|
|                                                               |  |  |
| Delaware                                                      |   | 73-0618660 |
| (State or other jurisdiction ofincorporation or organization) |   | (I.R.S. EmployerIdentification No.) |
|                                                          |   |   |
| 5 Greenway Plaza, Suite 100,Houston, Texas               |   | 77046 |
| (Address of principal executive offices)                      |   | (Zip code) |

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |
| (281) 406-2000(Registrant’s telephone number, including area code)  |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |
| Large accelerated filer |   | ¨ |    | Accelerated filer |   | x |
|                              |   |   |   |
| Non-accelerated filer             |   | ¨ (Do not check if a smaller reporting company) |    | Smaller reporting company |   | ¨ |

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|----------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                            |  |
|                                                                                                                       | Page |
| Part I. Financial Information                                                                                              | 3 |
| Item 1. Financial Statements                                                                                          | 3 |
| Consolidated Condensed Balance Sheets as at June 30, 2013 (Unaudited) and December 31, 2012                           | 3 |
| Consolidated Condensed Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2013 and 2012      | 4 |
| Consolidated Condensed Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2013 and 2012 | 5 |
| Consolidated Condensed Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2013 and 2012                | 6 |
| Notes to the Unaudited Consolidated Condensed Financial Statements                                                         | 7 |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations                   | 32 |
| Item 3. Quantitative and Qualitative Disclosures about Market Risk                                                    | 43 |
| Item 4. Controls and Procedures                                                                                       | 43 |
|                                                                                                                       |   |
| Part II. Other Information                                                                                                 | 45 |
| Item 1. Legal Proceedings                                                                                             | 45 |
| Item 1A. Risk Factors                                                                                                 | 45 |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                   | 45 |
| Item 5. Other Information                                                                                                  | 46 |
| Item 6. Exhibits                                                                                                      | 47 |
| Signatures                                                                                                                 | 48 |

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|                                                                                                                                                       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                       |  |  |  |  |  |  |  |
|                                                                                                                                                  | June 30, 2013 |   | December 31, 2012 |
|                                                                                                                                                  | (Unaudited) |   |   |
| ASSETS                                                                                                                                                |   |   |   |
| Current assets:                                                                                                                                       |   |   |   |
| Cash and cash equivalents                                                                                                                             | $ | 69,608 |  |   | $ | 87,886 |  |
| Accounts and notes receivable, net of allowance for bad debts of $12,642 and $8,117 at June 30, 2013 and December 31, 2012                       | 251,440 |  |   | 168,562 |  |
| Rig materials and supplies                                                                                                                            | 39,229 |  |   | 28,860 |  |
| Deferred costs                                                                                                                                        | 10,822 |  |   | 1,089 |  |
| Deferred income taxes                                                                                                                                 | 16,411 |  |   | 8,742 |  |
| Other tax assets                                                                                                                                      | 13,722 |  |   | 33,524 |  |
| Assets held for sale                                                                                                                                  | 8,656 |  |   | 6,800 |  |
| Other current assets                                                                                                                                  | 19,818 |  |   | 12,821 |  |
| Total current assets                                                                                                                                  | 429,706 |  |   | 348,284 |  |
| Property, plant and equipment less accumulated depreciation and amortization of $1,061,845 and $1,029,712 at June 30, 2013 and December 31, 2012 | 852,813 |  |   | 789,123 |  |
| Deferred income taxes                                                                                                                                 | 107,957 |  |   | 95,295 |  |
| Other noncurrent assets                                                                                                                               | 46,061 |  |   | 23,031 |  |
| Total assets                                                                                                                                          | $ | 1,436,537 |  |   | $ | 1,255,733 |  |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                            |   |   |   |
| Current liabilities:                                                                                                                                  |   |   |   |
| Current portion of long-term debt                                                                                                                     | $ | 10,000 |  |   | $ | 10,000 |  |
| Accounts payable and accrued liabilities                                                                                                              | 169,130 |  |   | 137,746 |  |
| Accrued income taxes                                                                                                                                  | 6,975 |  |   | 4,120 |  |
| Total current liabilities                                                                                                                             | 186,105 |  |   | 151,866 |  |
| Long-term debt                                                                                                                                        | 589,147 |  |   | 469,205 |  |
| Other long-term liabilities                                                                                                                           | 22,743 |  |   | 23,182 |  |
| Long-term deferred tax liability                                                                                                                      | 31,306 |  |   | 20,847 |  |
| Contingencies (Note 11)                                                                                                                               | — |  |   | — |  |
| Stockholders’ equity:                                                                                                                           |   |   |   |
| Common stock                                                                                                                                          | 19,995 |  |   | 19,818 |  |
| Capital in excess of par value                                                                                                                        | 651,535 |  |   | 646,217 |  |
| Accumulated other comprehensive income                                                                                                                | (564 | ) |   | — |  |
| Accumulated deficit                                                                                                                                   | (65,740 | ) |   | (74,631 | ) |
| Total controlling interest stockholders’ equity                                                                                                 | 605,226 |  |   | 591,404 |  |
| Noncontrolling interest                                                                                                                               | 2,010 |  |   | (771 | ) |
| Total equity                                                                                                                                          | 607,236 |  |   | 590,633 |  |
| Total liabilities and stockholders’ equity                                                                                                      | $ | 1,436,537 |  |   | $ | 1,255,733 |  |

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|                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                            | Three Months Ended June 30, |   | Six Months Ended June 30, |
|                                                            | 2013 |   | 2012 |   | 2013 |   | 2012 |
| Revenues                                                        | $ | 226,001 |  |   | $ | 178,925 |  |   | $ | 393,156 |  |   | $ | 355,494 |  |
| Expenses:                                                       |   |   |   |   |   |   |   |
| Operating expenses                                              | 143,549 |  |   | 104,526 |  |   | 260,595 |  |   | 199,458 |  |
| Depreciation and amortization                                   | 32,280 |  |   | 27,959 |  |   | 61,792 |  |   | 55,578 |  |
|                                                            | 175,829 |  |   | 132,485 |  |   | 322,387 |  |   | 255,036 |  |
| Total operating gross margin                                    | 50,172 |  |   | 46,440 |  |   | 70,769 |  |   | 100,458 |  |
| General and administration expense                              | (22,378 | ) |   | (7,420 | ) |   | (35,261 | ) |   | (12,917 | ) |
| Gain on disposition of assets, net                              | 517 |  |   | 1,368 |  |   | 1,665 |  |   | 1,860 |  |
| Total operating income                                          | 28,311 |  |   | 40,388 |  |   | 37,173 |  |   | 89,401 |  |
| Other income and (expense):                                     |   |   |   |   |   |   |   |
| Interest expense                                                | (10,741 | ) |   | (8,925 | ) |   | (20,747 | ) |   | (16,962 | ) |
| Change in fair value of derivative positions                    | 17 |  |   | 38 |  |   | 54 |  |   | (11 | ) |
| Interest income                                                 | 2,203 |  |   | 53 |  |   | 2,251 |  |   | 79 |  |
| Loss on extinguishment of debt                                  | — |  |   | (1,649 | ) |   | — |  |   | (1,649 | ) |
| Other                                                           | (183 | ) |   | 20 |  |   | (56 | ) |   | 36 |  |
| Total other expense                                             | (8,704 | ) |   | (10,463 | ) |   | (18,498 | ) |   | (18,507 | ) |
| Income before income taxes                                      | 19,607 |  |   | 29,925 |  |   | 18,675 |  |   | 70,894 |  |
| Income tax expense                                              | 11,233 |  |   | 9,817 |  |   | 9,729 |  |   | 24,460 |  |
| Net income                                                      | 8,374 |  |   | 20,108 |  |   | 8,946 |  |   | 46,434 |  |
| Less: Net income (loss) attributable to noncontrolling interest | 93 |  |   | 25 |  |   | 73 |  |   | (41 | ) |
| Net income attributable to controlling interest                 | $ | 8,281 |  |   | $ | 20,083 |  |   | $ | 8,873 |  |   | $ | 46,475 |  |
| Basic earnings per share                                        | $ | 0.07 |  |   | $ | 0.17 |  |   | $ | 0.07 |  |   | $ | 0.40 |  |
| Diluted earnings per share                                      | $ | 0.07 |  |   | $ | 0.17 |  |   | $ | 0.07 |  |   | $ | 0.39 |  |
|                                                            |   |   |   |   |   |   |   |
| Number of common shares used in computing earnings per share:   |   |   |   |   |   |   |   |
| Basic                                                           | 119,483,780 |  |   | 117,410,212 |  |   | 119,177,431 |  |   | 117,129,364 |  |
| Diluted                                                         | 121,860,011 |  |   | 118,526,879 |  |   | 121,498,223 |  |   | 118,623,037 |  |

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|                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                | Three Months Ended June 30, |   | Six Months Ended June 30, |
|                                                                | 2013 |   | 2012 |   | 2013 |   | 2012 |
|                                                                |   |   |   |   |   |   |   |
| Comprehensive income (loss):                                        |   |   |   |   |   |   |   |
| Net income                                                          | $ | 8,281 |  |   | $ | 20,083 |  |   | $ | 8,873 |  |   | $ | 46,475 |  |
| Other comprehensive loss, net of tax:                               |   |   |   |   |   |   |   |
| Foreign exchange translation losses and other                       | (564 | ) |   | — |  |   | (564 | ) |   | — |  |
| Total other comprehensive loss, net of tax:                         | (564 | ) |   | — |  |   | (564 | ) |   | — |  |
| Comprehensive income                                                | 7,717 |  |   | 20,083 |  |   | 8,309 |  |   | 46,475 |  |
| Comprehensive (income)/loss attributable to noncontrolling interest | (30 | ) |   | — |  |   | (30 | ) |   | — |  |
| Comprehensive income attributable to controlling interest           | $ | 7,687 |  |   | $ | 20,083 |  |   | $ | 8,279 |  |   | $ | 46,475 |  |

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|                                                                                  |
|----------------------------------------------------------------------------------|
|                                                                                  |  |  |  |  |  |  |  |
|                                                                             | Six Months Ended June 30, |
|                                                                             | 2013 |   | 2012 |
| Cash flows from operating activities:                                            |   |   |   |
| Net income                                                                       | $ | 8,946 |  |   | $ | 46,434 |  |
| Adjustments to reconcile net income to net cash flows from operating activities: |   |   |   |
| Depreciation and amortization                                                    | 61,792 |  |   | 55,578 |  |
| Loss on extinguishment of debt                                                   | — |  |   | 1,649 |  |
| Gain on disposition of assets                                                    | (1,665 | ) |   | (1,860 | ) |
| Deferred income tax expense                                                      | 1,800 |  |   | 10,432 |  |
| Expenses not requiring cash                                                      | 7,989 |  |   | 11,789 |  |
| Changes in current assets and liabilities                                        |   |   |   |
| Change in accounts receivable                                                    | (32,285 | ) |   | 9,161 |  |
| Change in other assets                                                           | 6,711 |  |   | (7,138 | ) |
| Change in accrued income taxes                                                   | 2,179 |  |   | 923 |  |
| Change in liabilities                                                            | (9,543 | ) |   | (31,437 | ) |
| Net cash provided by operating activities                                        | 45,924 |  |   | 95,531 |  |
|                                                                             |   |   |   |
| Cash flows from investing activities:                                            |   |   |   |
| Capital expenditures                                                             | (63,537 | ) |   | (109,531 | ) |
| Proceeds from the sale of assets                                                 | 2,901 |  |   | 2,340 |  |
| Acquisition of ITS, net of cash acquired                                         | (117,991 | ) |   | — |  |
| Net cash used in investing activities                                            | (178,627 | ) |   | (107,191 | ) |
|                                                                             |   |   |   |
| Cash flows from financing activities:                                            |   |   |   |
| Proceeds from issuance of debt                                                   | 125,000 |  |   | 130,000 |  |
| Repayments of senior notes                                                       | — |  |   | (122,852 | ) |
| Repayments of term loan                                                          | (5,000 | ) |   | (12,000 | ) |
| Payments of debt issuance costs                                                  | (5,386 | ) |   | (3,537 | ) |
| Payments of debt extinguishment costs                                            | — |  |   | (402 | ) |
| Excess tax benefit from stock based compensation                                 | (189 | ) |   | 49 |  |
| Net cash provided by (used in) financing activities                              | 114,425 |  |   | (8,742 | ) |
|                                                                             |   |   |   |
| Net decrease in cash and cash equivalents                                        | (18,278 | ) |   | (20,402 | ) |
| Cash and cash equivalents, beginning of year                                     | 87,886 |  |   | 97,869 |  |
| Cash and cash equivalents, end of period                                         | $ | 69,608 |  |   | $ | 77,467 |  |
|                                                                             |   |   |   |
| Supplemental cash flow information:                                              |   |   |   |
| Interest paid                                                                    | $ | 21,823 |  |   | $ | 16,989 |  |
| Income taxes paid                                                                | $ | 8,585 |  |   | $ | 28,307 |  |

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|----|---------|
| 1. | General |

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|    |                                            |
|----|--------------------------------------------|
| 2. | Acquisition of ITS     |

|                                                                                        |
|----------------------------------------------------------------------------------------|
|                                                                                        |  |  |  |
| Cash paid to, or on behalf of, ITS and its equity holders                              | $ | 101,000 |  |
| Cash deposited in escrow                                                               | 19,000 |  |
| Fair value of contingent consideration deposited in escrow for assets not acquired (1) | 5,000 |  |
| Total fair value of the consideration transferred                                      | $ | 125,000 |  |

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|                                                             |
|-------------------------------------------------------------|
|                                                             |  |  |  |
|                                                        | April 22, 2013 |
|                                                        | (In thousands) |
|                                                        |   |
| Cash and cash equivalents                                   | $ | 7,009 |  |
| Accounts and notes receivable, net (1)                 | 48,795 |  |
| Other current assets                                        | 1,803 |  |
| Accounts payable and accrued liabilities                    | (39,156 | ) |
| Accrued income taxes                                        | (1,251 | ) |
| Working capital excluding Rig materials and supplies        | 17,200 |  |
| Rig materials and supplies                                  | 11,514 |  |
| Property, plant and equipment, net (2)                 | 70,339 |  |
| Investment in joint venture                                 | 4,134 |  |
| Other noncurrent assets                                     | 2,818 |  |
| Total tangible assets                                       | 106,005 |  |
| Deferred income tax assets - current                        | 222 |  |
| Deferred income tax assets - noncurrent (3)            | 14,153 |  |
| Intangible Assets (4)                                       |   |
| Trade name, developed technology, and customer relationship | 10,000 |  |
| Indefinite-lived intangible assets                          | 200 |  |
| Total assets acquired                                       | 130,580 |  |
| Other long-term liabilities                                 | (211 | ) |
| Long-term deferred tax liability                            | (2,661 | ) |
| Net assets acquired                                         | 127,708 |  |
| Less: Noncontrolling interest (5)                           | (2,708 | ) |
| Total consideration transferred                             | $ | 125,000 |  |

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|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |
|                                       | Six Months Ended June 30, |
|                                       | 2013 |   | 2012 |
|                                       | (Dollars in thousands, except per share data) |
|                                       |   |   |   |
| Revenue                                    | $ | 433,976 |  |   | $ | 418,362 |  |
| Net income                                 | $ | 20,558 |  |   | $ | 45,905 |  |
| Net income attributable to Parker Drilling | $ | 20,255 |  |   | $ | 45,946 |  |
| Earnings per share - basic                 | $ | 0.17 |  |   | $ | 0.39 |  |
| Earnings per share - diluted               | $ | 0.17 |  |   | $ | 0.39 |  |
|                                       |   |   |   |
| Basic number of shares                     | 119,177,431 |  |   | 117,129,364 |  |
| Diluted number of shares                   | 121,498,223 |  |   | 118,623,037 |  |

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|    |                          |
|----|--------------------------|
| 3. | Earnings per share (EPS) |

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |
|                               | Three Months Ended June 30, 2013 |
|                               | Income(Numerator) |   | Shares(Denominator) |   | Per-ShareAmount |
| Basic EPS                          | $ | 8,281,000 |  |   | 119,483,780 |  |   | $ | 0.07 |  |
| Effect of dilutive securities:     |   |   |   |   |   |
| Restricted stock                   | — |  |   | 2,376,231 |  |   | — |  |
| Diluted EPS                        | $ | 8,281,000 |  |   | 121,860,011 |  |   | $ | 0.07 |  |
|                               |   |   |   |   |   |
|                               | Six Months Ended June 30, 2013 |
|                               | Income(Numerator) |   | Shares(Denominator) |   | Per-ShareAmount |
|                                    |   |   |   |   |   |
| Basic EPS                          | $ | 8,873,000 |  |   | 119,177,431 |  |   | $ | 0.07 |  |
| Effect of dilutive securities:     |   |   |   |   |   |
| Restricted stock                   | — |  |   | 2,320,792 |  |   | — |  |
| Diluted EPS                        | $ | 8,873,000 |  |   | 121,498,223 |  |   | $ | 0.07 |  |
|                               |   |   |   |   |   |
|                               | Three Months Ended June 30, 2012 |
|                               | Income(Numerator) |   | Shares(Denominator) |   | Per-ShareAmount |
| Basic EPS                          | $ | 20,083,000 |  |   | 117,410,212 |  |   | $ | 0.17 |  |
| Effect of dilutive securities:     |   |   |   |   |   |
| Stock options and restricted stock | — |  |   | 1,116,667 |  |   | — |  |
| Diluted EPS                        | $ | 20,083,000 |  |   | 118,526,879 |  |   | $ | 0.17 |  |
|                               |   |   |   |   |   |
|                               | Six Months Ended June 30, 2012 |
|                               | Income(Numerator) |   | Shares(Denominator) |   | Per-ShareAmount |
| Basic EPS                          | $ | 46,475,000 |  |   | 117,129,364 |  |   | $ | 0.40 |  |
| Effect of dilutive securities:     |   |   |   |   |   |
| Stock options and restricted stock | — |  |   | 1,493,673 |  |   | (0.01 | ) |
| Diluted EPS                        | $ | 46,475,000 |  |   | 118,623,037 |  |   | $ | 0.39 |  |

|    |                     |
|----|---------------------|
| 4. | Reportable Segments |

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|                                               |
|-----------------------------------------------|
|                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                          | Three Months Ended June 30, |   | Six Months Ended June 30, |
| Operations by Reportable Industry Segment     | 2013 |   | 2012 |   | 2013 |   | 2012 |
|                                          | (Dollars in Thousands) |   | (Dollars in Thousands) |
| Revenues:                                     |   |   |   |   |   |
| Rental Tools                                  | $ | 82,022 |  |   | $ | 65,002 |  |   | $ | 139,105 |  |   | $ | 131,286 |  |
| U.S. Barge Drilling                           | 38,301 |  |   | 33,292 |  |   | 68,165 |  |   | 61,127 |  |
| U.S. Drilling                                 | 17,910 |  |   | — |  |   | 29,545 |  |   | — |  |
| International Drilling(1)                     | 83,182 |  |   | 76,923 |  |   | 147,832 |  |   | 155,673 |  |
| Technical Services                            | 4,586 |  |   | 3,708 |  |   | 8,509 |  |   | 7,408 |  |
| Total revenues                                | 226,001 |  |   | 178,925 |  |   | 393,156 |  |   | 355,494 |  |
| Operating gross margin:                       |   |   |   |   |   |   |   |
| Rental Tools(2)                               | 25,149 |  |   | 31,251 |  |   | 46,656 |  |   | 64,853 |  |
| U.S. Barge Drilling(2)                        | 16,660 |  |   | 11,014 |  |   | 25,417 |  |   | 18,171 |  |
| U.S. Drilling(2)                              | (666 | ) |   | (1,623 | ) |   | (4,719 | ) |   | (3,170 | ) |
| International Drilling(2)                     | 8,925 |  |   | 6,056 |  |   | 2,983 |  |   | 20,615 |  |
| Technical Services(2)                         | 104 |  |   | (258 | ) |   | 432 |  |   | (11 | ) |
| Total operating gross margin                  | 50,172 |  |   | 46,440 |  |   | 70,769 |  |   | 100,458 |  |
| General and administrative expense            | (22,378 | ) |   | (7,420 | ) |   | (35,261 | ) |   | (12,917 | ) |
| Gain on disposition of assets, net            | 517 |  |   | 1,368 |  |   | 1,665 |  |   | 1,860 |  |
| Total operating income                        | 28,311 |  |   | 40,388 |  |   | 37,173 |  |   | 89,401 |  |
| Interest expense                              | (10,741 | ) |   | (8,925 | ) |   | (20,747 | ) |   | (16,962 | ) |
| Changes in fair value of derivative positions | 17 |  |   | 38 |  |   | 54 |  |   | (11 | ) |
| Interest income                               | 2,203 |  |   | 53 |  |   | 2,251 |  |   | 79 |  |
| Loss on extinguishment of debt                | — |  |   | (1,649 | ) |   | — |  |   | (1,649 | ) |
| Other                                         | (183 | ) |   | 20 |  |   | (56 | ) |   | 36 |  |
| Income before income taxes                    | $ | 19,607 |  |   | $ | 29,925 |  |   | $ | 18,675 |  |   | $ | 70,894 |  |
|                                          |   |   |   |   |   |   |   |
| Operations by Reportable Industry Segment     |   |   |   |   |   |   |   |
|                                          | June 30, 2013 |   | December 31, 2012 |   |   |   |   |
| Identifiable assets:                          |   |   |   |   |   |   |   |
| Rental Tools                                  | $ | 368,371 |  |   | $ | 194,600 |  |   |   |   |   |
| U.S. Barge Drilling                           | 111,711 |  |   | 99,409 |  |   |   |   |   |
| U.S. Drilling                                 | 340,773 |  |   | 374,794 |  |   |   |   |   |
| International Drilling                        | 487,005 |  |   | 414,546 |  |   |   |   |   |
| Total identifiable assets                     | 1,307,860 |  |   | 1,083,349 |  |   |   |   |   |
| Corporate assets (3)                     | 128,677 |  |   | 172,384 |  |   |   |   |   |
| Total assets                                  | $ | 1,436,537 |  |   | $ | 1,255,733 |  |   |   |   |   |

|     |                                                                                                                                                                                                                                                                                                                                         |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | In the second quarter of 2013, our largest customer, Exxon Neftegas Limited (ENL), constituted 13.9% of our total consolidated revenues and approximately 37.7% of our International Drilling segment. In the second quarter of 2012, no single customer contributed 10% or more of our year-to-date consolidated revenues. |

|     |                                                                                                                                   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|
| (2) | Operating gross margin is calculated as revenues less direct operating expenses, including depreciation and amortization expense. |

|     |                                                                                                                                                          |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | This category includes corporate assets as well as minimal assets for our Technical Services segment primarily related to office furniture and fixtures. |

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|----|----------------------|
| 5. | Assets Held for Sale |

|    |                                            |
|----|--------------------------------------------|
| 6. | Accounting for Uncertainty in Income Taxes |

|    |                            |
|----|----------------------------|
| 7. | Income Tax Benefit/Expense |

|    |                |
|----|----------------|
| 8. | Long-Term Debt |

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |
|                                | June 30, 2013 |   | December 31, 2012 |
|                                | (Dollars in Thousands) |
| 9.125% Senior Notes, due April 2018 | $ | 429,147 |  |   | $ | 429,205 |  |
| Goldman Term Loan, due April 2018   | 125,000 |  |   | — |  |
| Term Note, due December 2017        | 45,000 |  |   | 50,000 |  |
| Total debt                          | 599,147 |  |   | 479,205 |  |
| Less current portion                | 10,000 |  |   | 10,000 |  |
| Total long-term debt                | $ | 589,147 |  |   | $ | 469,205 |  |

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|    |                                  |
|----|----------------------------------|
| 9. | Derivative Financial Instruments |

|     |                                     |
|-----|-------------------------------------|
| 10. | Fair Value of Financial Instruments |

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|         |                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------|
| • | Level 1 — Unadjusted quoted prices for identical assets or liabilities in active markets; |

|         |                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------|
| • | Level 2 — Direct or indirect observable inputs, including quoted prices or other market data, for similar |

|         |                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------|
| • | Level 3 — Unobservable inputs that require significant judgment for which there is little or no market data. |

|                |
|----------------|
|                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|      | June 30, 2013 |   | December 31, 2012 |
|           | Carrying  Amount |   | Fair Value |   | Carrying  Amount |   | Fair Value |
|           | (in thousands) |
| Long-term Debt |   |   |   |   |   |   |   |
| 9.125% Notes   | $ | 425,000 |  |   | $ | 449,438 |  |   | $ | 425,000 |  |   | $ | 453,688 |  |
| Total          | $ | 425,000 |  |   | $ | 449,438 |  |   | $ | 425,000 |  |   | $ | 453,688 |  |

|                    |
|--------------------|
|                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Liabilities:       | Level 1 |  | Level 2 |  | Level 3 |  | Total |
| Deposits in escrow | $ | — |  |  | $ | — |  |  | $ | 5,000 |  |  | $ | 5,000 |  |
| Total Liabilities  | $ | — |  |  | $ | — |  |  | $ | 5,000 |  |  | $ | 5,000 |  |

|     |               |
|-----|---------------|
| 11. | Contingencies |

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|     |                                  |
|-----|----------------------------------|
| 12. | Recent Accounting Pronouncements |

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|     |                                                                                         |
|-----|-----------------------------------------------------------------------------------------|
| 13. | Parent, Guarantor, Non-Guarantor Unaudited Consolidating Condensed Financial Statements |

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|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                  | June 30, 2013 |
|                                                  | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
| ASSETS                                                |   |   |   |   |   |   |   |   |   |
| Current assets:                                       |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                             | $ | 14,706 |  |   | $ | 5,043 |  |   | $ | 49,859 |  |   | $ | — |  |   | $ | 69,608 |  |
| Accounts and notes receivable, net                    | 415,294 |  |   | 127,661 |  |   | 368,236 |  |   | (659,751 | ) |   | 251,440 |  |
| Rig materials and supplies                            | — |  |   | 2,514 |  |   | 36,715 |  |   | — |  |   | 39,229 |  |
| Deferred costs                                        | — |  |   | 65 |  |   | 10,757 |  |   | — |  |   | 10,822 |  |
| Deferred income taxes                                 | — |  |   | 11,950 |  |   | 4,461 |  |   | — |  |   | 16,411 |  |
| Other tax assets                                      | 1,152 |  |   | (783 | ) |   | 13,353 |  |   | — |  |   | 13,722 |  |
| Assets held for sale                                  | — |  |   | 1,771 |  |   | 6,885 |  |   | — |  |   | 8,656 |  |
| Other current assets                                  | — |  |   | 11,343 |  |   | 8,475 |  |   | — |  |   | 19,818 |  |
| Total current assets                                  | 431,152 |  |   | 159,564 |  |   | 498,741 |  |   | (659,751 | ) |   | 429,706 |  |
| Property, plant and equipment, net                    | 60 |  |   | 557,331 |  |   | 295,422 |  |   | — |  |   | 852,813 |  |
| Investment in subsidiaries and intercompany advances  | 818,597 |  |   | (241,693 | ) |   | 1,705,099 |  |   | (2,282,003 | ) |   | — |  |
| Other noncurrent assets                               | 53,989 |  |   | 54,771 |  |   | 45,258 |  |   | — |  |   | 154,018 |  |
| Total assets                                          | $ | 1,303,798 |  |   | $ | 529,973 |  |   | $ | 2,544,520 |  |   | $ | (2,941,754 | ) |   | $ | 1,436,537 |  |
|                                                  |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY            |   |   |   |   |   |   |   |   |   |
| Current liabilities:                                  |   |   |   |   |   |   |   |   |   |
| Current portion of long-term debt                     | $ | 10,000 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 10,000 |  |
| Accounts payable and accrued liabilities              | 68,206 |  |   | 90,012 |  |   | 373,142 |  |   | (362,230 | ) |   | 169,130 |  |
| Accrued income taxes                                  | (35,299 | ) |   | 41,885 |  |   | 389 |  |   | — |  |   | 6,975 |  |
| Total current liabilities                             | 42,907 |  |   | 131,897 |  |   | 373,531 |  |   | (362,230 | ) |   | 186,105 |  |
| Long-term debt                                        | 589,147 |  |   | — |  |   | — |  |   | — |  |   | 589,147 |  |
| Other long-term liabilities                           | 3,933 |  |   | 5,075 |  |   | 13,735 |  |   | — |  |   | 22,743 |  |
| Long-term deferred tax liability                      |  |  |   | 40,892 |  |   | (9,586 | ) |   | — |  |   | 31,306 |  |
| Intercompany payables                                 | 62,584 |  |   | 43,657 |  |   | 356,331 |  |   | (462,572 | ) |   | — |  |
| Contingencies                                         | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Stockholders’ equity:                           |   |   |   |   |   |   |   |   |   |
| Common stock                                          | 19,995 |  |   | 18,049 |  |   | 43,003 |  |   | (61,052 | ) |   | 19,995 |  |
| Capital in excess of par value                        | 651,535 |  |   | 733,899 |  |   | 1,579,458 |  |   | (2,313,357 | ) |   | 651,535 |  |
| Accumulated other comprehensive income                | — |  |   | — |  |   | (564 | ) |   | — |  |   | (564 | ) |
| Retained earnings (accumulated deficit)               | (66,303 | ) |   | (443,496 | ) |   | 186,602 |  |   | 257,457 |  |   | (65,740 | ) |
| Total controlling interest stockholders’ equity | 605,227 |  |   | 308,452 |  |   | 1,808,499 |  |   | (2,116,952 | ) |   | 605,226 |  |
| Noncontrolling interest                               | — |  |   | — |  |   | 2,010 |  |   | — |  |   | 2,010 |  |
| Total equity                                          | 605,227 |  |   | 308,452 |  |   | 1,810,509 |  |   | (2,116,952 | ) |   | 607,236 |  |
| Total liabilities and stockholders’ equity      | $ | 1,303,798 |  |   | $ | 529,973 |  |   | $ | 2,544,520 |  |   | $ | (2,941,754 | ) |   | $ | 1,436,537 |  |

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|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                  | December 31, 2012 |
|                                                  | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
| ASSETS                                                |   |   |   |   |   |   |   |   |   |
| Current assets:                                       |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                             | $ | 42,251 |  |   | $ | 11,023 |  |   | $ | 34,612 |  |   | $ | — |  |   | $ | 87,886 |  |
| Accounts and notes receivable, net                    | 289,957 |  |   | 98,747 |  |   | 292,644 |  |   | (512,786 | ) |   | 168,562 |  |
| Rig materials and supplies                            | — |  |   | 2,834 |  |   | 26,026 |  |   | — |  |   | 28,860 |  |
| Deferred costs                                        | — |  |   | — |  |   | 1,089 |  |   | — |  |   | 1,089 |  |
| Deferred income taxes                                 | — |  |   | 7,615 |  |   | 1,127 |  |   | — |  |   | 8,742 |  |
| Other tax assets                                      | 46,249 |  |   | (31,136 | ) |   | 18,411 |  |   | — |  |   | 33,524 |  |
| Assets held for sale                                  | — |  |   | — |  |   | 6,800 |  |   | — |  |   | 6,800 |  |
| Other current assets                                  | — |  |   | 8,675 |  |   | 4,146 |  |   | — |  |   | 12,821 |  |
| Total current assets                                  | 378,457 |  |   | 97,758 |  |   | 384,855 |  |   | (512,786 | ) |   | 348,284 |  |
| Property, plant and equipment, net                    | 60 |  |   | 548,794 |  |   | 240,269 |  |   | — |  |   | 789,123 |  |
| Investment in subsidiaries and intercompany advances  | 780,878 |  |   | (233,388 | ) |   | 1,467,429 |  |   | (2,014,919 | ) |   | — |  |
| Other noncurrent assets                               | 43,569 |  |   | 59,541 |  |   | 15,216 |  |   | — |  |   | 118,326 |  |
| Total assets                                          | $ | 1,202,964 |  |   | $ | 472,705 |  |   | $ | 2,107,769 |  |   | $ | (2,527,705 | ) |   | $ | 1,255,733 |  |
| LIABILITIES AND STOCKHOLDERS’ EQUITY            |   |   |   |   |   |   |   |   |   |
| Current liabilities:                                  |   |   |   |   |   |   |   |   |   |
| Current portion of long-term debt                     | $ | 10,000 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 10,000 |  |
| Accounts payable and accrued liabilities              | 65,839 |  |   | 93,243 |  |   | 205,864 |  |   | (227,200 | ) |   | 137,746 |  |
| Accrued income taxes                                  | — |  |   | 612 |  |   | 3,508 |  |   | — |  |   | 4,120 |  |
| Total current liabilities                             | 75,839 |  |   | 93,855 |  |   | 209,372 |  |   | (227,200 | ) |   | 151,866 |  |
| Long-term debt                                        | 469,205 |  |   | — |  |   | — |  |   | — |  |   | 469,205 |  |
| Other long-term liabilities                           | 3,933 |  |   | 6,129 |  |   | 13,120 |  |   | — |  |   | 23,182 |  |
| Long-term deferred tax liability                      | — |  |   | 36,894 |  |   | (16,047 | ) |   | — |  |   | 20,847 |  |
| Intercompany payables                                 | 62,583 |  |   | 43,657 |  |   | 216,320 |  |   | (322,560 | ) |   | — |  |
| Contingencies                                         | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Stockholders’ equity:                           |   |   |   |   |   |   |   |   |   |
| Common stock                                          | 19,818 |  |   | 18,049 |  |   | 43,003 |  |   | (61,052 | ) |   | 19,818 |  |
| Capital in excess of par value                        | 646,217 |  |   | 733,112 |  |   | 1,455,246 |  |   | (2,188,358 | ) |   | 646,217 |  |
| Accumulated other comprehensive income                | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Retained earnings (accumulated deficit)               | (74,631 | ) |   | (458,991 | ) |   | 187,526 |  |   | 271,465 |  |   | (74,631 | ) |
| Total controlling interest stockholders’ equity | 591,404 |  |   | 292,170 |  |   | 1,685,775 |  |   | (1,977,945 | ) |   | 591,404 |  |
| Noncontrolling interest                               | — |  |   | — |  |   | (771 | ) |   | — |  |   | (771 | ) |
| Total Equity                                          | 591,404 |  |   | 292,170 |  |   | 1,685,004 |  |   | (1,977,945 | ) |   | 590,633 |  |
| Total liabilities and stockholders’ equity      | $ | 1,202,964 |  |   | $ | 472,705 |  |   | $ | 2,107,769 |  |   | $ | (2,527,705 | ) |   | $ | 1,255,733 |  |

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|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                            | Three months ended June 30, 2013 |
|                                                            | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
|                                                            |   |   |   |   |   |   |   |   |   |
| Total revenues                                                  | $ | — |  |   | $ | 121,848 |  |   | $ | 133,057 |  |   | $ | (28,904 | ) |   | $ | 226,001 |  |
| Operating expenses                                              | — |  |   | 63,833 |  |   | 108,620 |  |   | (28,904 | ) |   | 143,549 |  |
| Depreciation and amortization                                   | — |  |   | 18,721 |  |   | 13,559 |  |   | — |  |   | 32,280 |  |
| Total operating gross margin                                    | — |  |   | 39,294 |  |   | 10,878 |  |   | — |  |   | 50,172 |  |
| General and administration expense (1)                          | (46 | ) |   | (22,160 | ) |   | (172 | ) |   | — |  |   | (22,378 | ) |
| Gain on disposition of assets, net                              | — |  |   | 843 |  |   | (326 | ) |   | — |  |   | 517 |  |
| Total operating income (loss)                                   | (46 | ) |   | 17,977 |  |   | 10,380 |  |   | — |  |   | 28,311 |  |
| Other income and (expense):                                     |   |   |   |   |   |   |   |   |   |
| Interest expense                                                | (11,719 | ) |   | (35 | ) |   | (2,765 | ) |   | 3,778 |  |   | (10,741 | ) |
| Changes in fair value of derivative positions                   | 17 |  |   | — |  |   | — |  |   | — |  |   | 17 |  |
| Interest income                                                 | 1,437 |  |   | 1,144 |  |   | 3,400 |  |   | (3,778 | ) |   | 2,203 |  |
| Other                                                           | — |  |   | (269 | ) |   | 86 |  |   | — |  |   | (183 | ) |
| Equity in net earnings of subsidiaries                          | 13,828 |  |   | — |  |   | — |  |   | (13,828 | ) |   | — |  |
| Total other income (expense)                                    | 3,563 |  |   | 840 |  |   | 721 |  |   | (13,828 | ) |   | (8,704 | ) |
| Income (benefit) before income taxes                            | 3,517 |  |   | 18,817 |  |   | 11,101 |  |   | (13,828 | ) |   | 19,607 |  |
| Total income tax expense (benefit)                              | (4,764 | ) |   | 12,182 |  |   | 3,815 |  |   | — |  |   | 11,233 |  |
| Net income (loss)                                               | 8,281 |  |   | 6,635 |  |   | 7,286 |  |   | (13,828 | ) |   | 8,374 |  |
| Less: Net income (loss) attributable to noncontrolling interest | — |  |   | — |  |   | 93 |  |   | — |  |   | 93 |  |
| Net income (loss) attributable to controlling interest          | $ | 8,281 |  |   | $ | 6,635 |  |   | $ | 7,193 |  |   | $ | (13,828 | ) |   | $ | 8,281 |  |

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|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                            | Three Months Ended June 30, 2012 |
|                                                            | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
|                                                            |   |   |   |   |   |   |   |   |   |
| Total revenues                                                  | $ | — |  |   | $ | 104,767 |  |   | $ | 98,036 |  |   | $ | (23,878 | ) |   | $ | 178,925 |  |
| Operating expenses                                              | — |  |   | 47,632 |  |   | 80,772 |  |   | (23,878 | ) |   | 104,526 |  |
| Depreciation and amortization                                   | — |  |   | 15,665 |  |   | 12,294 |  |   | — |  |   | 27,959 |  |
| Total operating gross margin                                    | — |  |   | 41,470 |  |   | 4,970 |  |   | — |  |   | 46,440 |  |
| General and administration expense  (1)                         | (44 | ) |   | (7,078 | ) |   | (298 | ) |   | — |  |   | (7,420 | ) |
| Gain on disposition of assets, net                              | — |  |   | 197 |  |   | 1,171 |  |   | — |  |   | 1,368 |  |
| Total operating income (loss)                                   | (44 | ) |   | 34,589 |  |   | 5,843 |  |   | — |  |   | 40,388 |  |
| Other income and (expense):                                     |   |   |   |   |   |   |   |   |   |
| Interest expense                                                | (9,817 | ) |   | (35 | ) |   | (2,023 | ) |   | 2,950 |  |   | (8,925 | ) |
| Changes in fair value of derivative positions                   | 38 |  |   | — |  |   | — |  |   | — |  |   | 38 |  |
| Interest income                                                 | 8,504 |  |   | 4,537 |  |   | 34,070 |  |   | (47,058 | ) |   | 53 |  |
| Loss on extinguishment of debt                                  | (1,649 | ) |   | — |  |   | — |  |   | — |  |   | (1,649 | ) |
| Other                                                           | — |  |   | 23 |  |   | (3 | ) |   | — |  |   | 20 |  |
| Equity in net earnings of subsidiaries                          | 19,057 |  |   | — |  |   | — |  |   | (19,057 | ) |   | — |  |
| Total other income (expense)                                    | 16,133 |  |   | 4,525 |  |   | 32,044 |  |   | (63,165 | ) |   | (10,463 | ) |
| Income (loss) before income taxes                               | 16,089 |  |   | 39,114 |  |   | 37,887 |  |   | (63,165 | ) |   | 29,925 |  |
| Income tax expense (benefit)                                    | (3,994 | ) |   | 13,668 |  |   | 143 |  |   | — |  |   | 9,817 |  |
| Net income (loss)                                               | 20,083 |  |   | 25,446 |  |   | 37,744 |  |   | (63,165 | ) |   | 20,108 |  |
| Less: Net income (loss) attributable to noncontrolling interest | — |  |   | — |  |   | 25 |  |   | — |  |   | 25 |  |
| Net income (loss) attributable to controlling interest          | $ | 20,083 |  |   | $ | 25,446 |  |   | $ | 37,719 |  |   | $ | (63,165 | ) |   | $ | 20,083 |  |

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|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                            | Six Months Ended June 30, 2013 |
|                                                            | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
|                                                            |   |   |   |   |   |   |   |   |   |
| Total revenues                                                  | $ | — |  |   | $ | 226,210 |  |   | $ | 219,357 |  |   | $ | (52,411 | ) |   | $ | 393,156 |  |
| Operating expenses                                              | — |  |   | 122,411 |  |   | 190,595 |  |   | (52,411 | ) |   | 260,595 |  |
| Depreciation and amortization                                   | — |  |   | 37,380 |  |   | 24,412 |  |   | — |  |   | 61,792 |  |
| Total operating gross margin                                    | — |  |   | 66,419 |  |   | 4,350 |  |   | — |  |   | 70,769 |  |
| General and administration expense (1)                          | (91 | ) |   | (34,914 | ) |   | (256 | ) |   | — |  |   | (35,261 | ) |
| Gain on disposition of assets, net                              | — |  |   | 1,952 |  |   | (287 | ) |   | — |  |   | 1,665 |  |
| Total operating income (loss)                                   | (91 | ) |   | 33,457 |  |   | 3,807 |  |   | — |  |   | 37,173 |  |
| Other income and (expense):                                     |   |   |   |   |   |   |   |   |   |
| Interest expense                                                | (22,699 | ) |   | (59 | ) |   | (6,182 | ) |   | 8,193 |  |   | (20,747 | ) |
| Changes in fair value of derivative positions                   | 54 |  |   | — |  |   | — |  |   | — |  |   | 54 |  |
| Interest income                                                 | 3,006 |  |   | 1,334 |  |   | 6,104 |  |   | (8,193 | ) |   | 2,251 |  |
| Other                                                           | — |  |   | (167 | ) |   | 111 |  |   | — |  |   | (56 | ) |
| Equity in net earnings of subsidiaries                          | 14,007 |  |   | — |  |   | — |  |   | (14,007 | ) |   | — |  |
| Total other income (expense)                                    | (5,632 | ) |   | 1,108 |  |   | 33 |  |   | (14,007 | ) |   | (18,498 | ) |
| Income (loss) before income taxes                               | (5,723 | ) |   | 34,565 |  |   | 3,840 |  |   | (14,007 | ) |   | 18,675 |  |
| Total Income tax expense (benefit)                              | (14,596 | ) |   | 17,771 |  |   | 6,554 |  |   | — |  |   | 9,729 |  |
| Net income (loss)                                               | 8,873 |  |   | 16,794 |  |   | (2,714 | ) |   | (14,007 | ) |   | 8,946 |  |
| Less: Net income (loss) attributable to noncontrolling interest | — |  |   | — |  |   | 73 |  |   | — |  |   | 73 |  |
| Net income (loss) attributable to controlling interest          | $ | 8,873 |  |   | $ | 16,794 |  |   | $ | (2,787 | ) |   | $ | (14,007 | ) |   | $ | 8,873 |  |

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|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                            | Six Months Ended June 30, 2012 |
|                                                            | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
|                                                            |   |   |   |   |   |   |   |   |   |
| Total revenues                                                  | $ | — |  |   | $ | 203,924 |  |   | $ | 201,061 |  |   | $ | (49,491 | ) |   | $ | 355,494 |  |
| Operating expenses                                              | — |  |   | 90,999 |  |   | 157,950 |  |   | (49,491 | ) |   | 199,458 |  |
| Depreciation and amortization                                   | — |  |   | 31,261 |  |   | 24,317 |  |   | — |  |   | 55,578 |  |
| Total operating gross margin                                    | — |  |   | 81,664 |  |   | 18,794 |  |   | — |  |   | 100,458 |  |
| General and administration expense (1)                          | (90 | ) |   | (12,450 | ) |   | (377 | ) |   | — |  |   | (12,917 | ) |
| Gain on disposition of assets, net                              | — |  |   | 615 |  |   | 1,245 |  |   | — |  |   | 1,860 |  |
| Total operating income (loss)                                   | (90 | ) |   | 69,829 |  |   | 19,662 |  |   | — |  |   | 89,401 |  |
| Other income and (expense):                                     |   |   |   |   |   |   |   |   |   |
| Interest expense                                                | (18,818 | ) |   | (71 | ) |   | (3,972 | ) |   | 5,899 |  |   | (16,962 | ) |
| Changes in fair value of derivative positions                   | (11 | ) |   | — |  |   | — |  |   | — |  |   | (11 | ) |
| Interest income                                                 | 8,600 |  |   | 4,715 |  |   | 36,771 |  |   | (50,007 | ) |   | 79 |  |
| Loss on extinguishment of debt                                  | (1,649 | ) |   | — |  |   | — |  |   | — |  |   | (1,649 | ) |
| Other                                                           | — |  |   | 36 |  |   | — |  |   | — |  |   | 36 |  |
| Equity in net earnings of subsidiaries                          | 50,957 |  |   | — |  |   | — |  |   | (50,957 | ) |   | — |  |
| Total other income (expense)                                    | 39,079 |  |   | 4,680 |  |   | 32,799 |  |   | (95,065 | ) |   | (18,507 | ) |
| Income (loss) before income taxes                               | 38,989 |  |   | 74,509 |  |   | 52,461 |  |   | (95,065 | ) |   | 70,894 |  |
| Income tax expense (benefit)                                    | (7,486 | ) |   | 27,698 |  |   | 4,248 |  |   | — |  |   | 24,460 |  |
| Net income (loss)                                               | 46,475 |  |   | 46,811 |  |   | 48,213 |  |   | (95,065 | ) |   | 46,434 |  |
| Less: Net income (loss) attributable to noncontrolling interest | — |  |   | — |  |   | (41 | ) |   | — |  |   | (41 | ) |
| Net income (loss) attributable to controlling interest          | $ | 46,475 |  |   | $ | 46,811 |  |   | $ | 48,254 |  |   | $ | (95,065 | ) |   | $ | 46,475 |  |

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|                                                                     |
|---------------------------------------------------------------------|
|                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                | Three Months Ended June 30, 2013 |
|                                                                | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
| Comprehensive income (loss):                                        |  |   |  |   |  |   |  |   |  |
| Net income                                                          | $ | 8,281 |  |   | $ | 6,635 |  |   | $ | 7,193 |  |   | $ | (13,828 | ) |   | $ | 8,281 |  |
| Other comprehensive loss, net of tax:                               |  |   |  |   |  |   |  |   |  |
| Foreign exchange translation losses and other                       | — |  |   | — |  |   | (564 | ) |   | — |  |   | (564 | ) |
| Total other comprehensive loss, net of tax:                         | — |  |   | — |  |   | (564 | ) |   | — |  |   | (564 | ) |
| Comprehensive income                                                | 8,281 |  |   | 6,635 |  |   | 6,629 |  |   | (13,828 | ) |   | 7,717 |  |
| Comprehensive (income)/loss attributable to noncontrolling interest | — |  |   | — |  |   | (30 | ) |   | — |  |   | (30 | ) |
| Comprehensive income attributable to controlling interest           | $ | 8,281 |  |   | $ | 6,635 |  |   | $ | 6,599 |  |   | $ | (13,828 | ) |   | $ | 7,687 |  |

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|                                                                     |
|---------------------------------------------------------------------|
|                                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                | Six Months Ended June 30, 2013 |
|                                                                | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
| Comprehensive income (loss):                                        |  |   |  |   |  |   |  |   |  |
| Net income                                                          | $ | 8,873 |  |   | $ | 16,794 |  |   | $ | (2,787 | ) |   | $ | (14,007 | ) |   | $ | 8,873 |  |
| Other comprehensive loss, net of tax:                               |  |   |  |   |  |   |  |   |  |
| Foreign exchange translation losses and other                       | — |  |   | — |  |   | (564 | ) |   | — |  |   | (564 | ) |
| Total other comprehensive loss, net of tax:                         | — |  |   | — |  |   | (564 | ) |   | — |  |   | (564 | ) |
| Comprehensive income                                                | 8,873 |  |   | 16,794 |  |   | (3,351 | ) |   | (14,007 | ) |   | 8,309 |  |
| Comprehensive (income)/loss attributable to noncontrolling interest | — |  |   | — |  |   | (30 | ) |   | — |  |   | (30 | ) |
| Comprehensive income attributable to controlling interest           | $ | 8,873 |  |   | $ | 16,794 |  |   | $ | (3,381 | ) |   | $ | (14,007 | ) |   | $ | 8,279 |  |

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|                                                     |
|-----------------------------------------------------|
|                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                | Six Months Ended June 30, 2013 |
|                                                | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
| Cash flows from operating activities:               |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                   | $ | 8,873 |  |   | $ | 16,794 |  |   | $ | (2,714 | ) |   | $ | (14,007 | ) |   | $ | 8,946 |  |
| Adjustments to reconcile net income (loss):         |  |   |  |   |  |   |  |   |  |
| Depreciation and amortization                       | — |  |   | 37,380 |  |   | 24,412 |  |   | — |  |   | 61,792 |  |
| Gain on disposition of assets                       | — |  |   | (1,952 | ) |   | 287 |  |   | — |  |   | (1,665 | ) |
| Deferred income tax expense                         | (4,560 | ) |   | 6,261 |  |   | 99 |  |   | — |  |   | 1,800 |  |
| Expenses not requiring cash                         | 5,218 |  |   | 1,563 |  |   | 1,208 |  |   | — |  |   | 7,989 |  |
| Equity in net earnings of subsidiaries              | (14,007 | ) |   | — |  |   | — |  |   | 14,007 |  |   | — |  |
| Change in accounts receivable                       | (125,337 | ) |   | (22,895 | ) |   | 115,947 |  |   | — |  |   | (32,285 | ) |
| Change in accrued income taxes                      | (35,297 | ) |   | 41,272 |  |   | (3,796 | ) |   | — |  |   | 2,179 |  |
| Change in other assets                              | 45,072 |  |   | (42,264 | ) |   | 3,903 |  |   | — |  |   | 6,711 |  |
| Change in liabilities                               | 1,780 |  |   | (14,043 | ) |   | 2,720 |  |   | — |  |   | (9,543 | ) |
| Net cash provided by (used in) operating activities | (118,258 | ) |   | 22,116 |  |   | 142,066 |  |   | — |  |   | 45,924 |  |
|                                                |  |   |  |   |  |   |  |   |  |
| Cash flows from investing activities:               |  |   |  |   |  |   |  |   |  |
| Capital expenditures                                | — |  |   | (38,430 | ) |   | (25,107 | ) |   | — |  |   | (63,537 | ) |
| Proceeds from the sale of assets                    | — |  |   | 2,834 |  |   | 67 |  |   | — |  |   | 2,901 |  |
| Acquisition of ITS, net of cash acquired            | — |  |   | (292 | ) |   | (117,699 | ) |   | — |  |   | (117,991 | ) |
| Net cash (used in) investing activities             | — |  |   | (35,888 | ) |   | (142,739 | ) |   | — |  |   | (178,627 | ) |
|                                                |  |   |  |   |  |   |  |   |  |
| Cash flows from financing activities:               |  |   |  |   |  |   |  |   |  |
| Proceeds from debt issuance                         | 125,000 |  |   | — |  |   | — |  |   | — |  |   | 125,000 |  |
| Paydown on term note                                | (5,000 | ) |   | — |  |   | — |  |   | — |  |   | (5,000 | ) |
| Payment of debt issuance costs                      | (5,386 | ) |   | — |  |   | — |  |   | — |  |   | (5,386 | ) |
| Excess tax benefit from stock-based compensation    | (189 | ) |   | — |  |   | — |  |   | — |  |   | (189 | ) |
| Intercompany advances, net                          | (23,712 | ) |   | 7,792 |  |   | 15,920 |  |   | — |  |   | — |  |
| Net cash provided by (used in) financing activities | 90,713 |  |   | 7,792 |  |   | 15,920 |  |   | — |  |   | 114,425 |  |
|                                                |  |   |  |   |  |   |  |   |  |
| Net change in cash and cash equivalents             | (27,545 | ) |   | (5,980 | ) |   | 15,247 |  |   | — |  |   | (18,278 | ) |
| Cash and cash equivalents at beginning of year      | 42,251 |  |   | 11,023 |  |   | 34,612 |  |   | — |  |   | 87,886 |  |
| Cash and cash equivalents at end of year            | $ | 14,706 |  |   | $ | 5,043 |  |   | $ | 49,859 |  |   | $ | — |  |   | $ | 69,608 |  |

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|                                                     |
|-----------------------------------------------------|
|                                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                | Six Months Ended June 30, 2012 |
|                                                | Parent |   | Guarantor |   | Non-Guarantor |   | Eliminations |   | Consolidated |
| Cash flows from operating activities:               |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                   | $ | 46,475 |  |   | $ | 46,811 |  |   | $ | 48,213 |  |   | $ | (95,065 | ) |   | $ | 46,434 |  |
| Adjustments to reconcile net income (loss)          |  |  |   |  |  |   |  |  |   |  |  |   |  |  |
| to net cash provided by operating activities:       |  |  |   |  |  |   |  |  |   |  |  |   |  |  |
| Depreciation and amortization                       | — |  |   | 31,261 |  |   | 24,317 |  |   | — |  |   | 55,578 |  |
| Loss on extinguishment of debt                      | 1,649 |  |   | — |  |   | — |  |   | — |  |   | 1,649 |  |
| Gain on disposition of assets                       | — |  |   | (615 | ) |   | (1,245 | ) |   | — |  |   | (1,860 | ) |
| Deferred income tax expense                         | 7,025 |  |   | 3,832 |  |   | (425 | ) |   | — |  |   | 10,432 |  |
| Expenses not requiring cash                         | 10,737 |  |   | 716 |  |   | 336 |  |   | — |  |   | 11,789 |  |
| Equity in net earnings of subsidiaries              | (50,957 | ) |   | — |  |   | — |  |   | 50,957 |  |   | — |  |
| Change in accounts receivable                       | (208 | ) |   | (11,248 | ) |   | 20,617 |  |   | — |  |   | 9,161 |  |
| Change in other assets                              | (29,586 | ) |   | 22,490 |  |   | (42 | ) |   | — |  |   | (7,138 | ) |
| Change in accrued income taxes                      | (766 | ) |   | 1,042 |  |   | 647 |  |   | — |  |   | 923 |  |
| Change in liabilities                               | 2,402 |  |   | (25,239 | ) |   | (8,600 | ) |   | — |  |   | (31,437 | ) |
| Net cash provided by (used in) operating activities | (13,229 | ) |   | 69,050 |  |   | 83,818 |  |   | (44,108 | ) |   | 95,531 |  |
|                                                |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:               |   |   |   |   |   |   |   |   |   |
| Capital expenditures                                | — |  |   | (103,855 | ) |   | (5,676 | ) |   | — |  |   | (109,531 | ) |
| Proceeds from the sale of assets                    | — |  |   | 906 |  |   | 1,434 |  |   | — |  |   | 2,340 |  |
| Intercompany dividend payment                       | (8,387 | ) |   | (4,357 | ) |   | (31,364 | ) |   | 44,108 |  |   | — |  |
| Net cash (used in) investing activities             | (8,387 | ) |   | (107,306 | ) |   | (35,606 | ) |   | 44,108 |  |   | (107,191 | ) |
|                                                |   |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:               |   |   |   |   |   |   |   |   |   |
| Proceeds from debt issuance                         | 130,000 |  |   | — |  |   | — |  |   | — |  |   | 130,000 |  |
| Paydown on senior notes                             | (122,852 | ) |   | — |  |   | — |  |   | — |  |   | (122,852 | ) |
| Paydown on term note                                | (12,000 | ) |   | — |  |   | — |  |   | — |  |   | (12,000 | ) |
| Payment of debt issuance costs                      | (3,537 | ) |   | — |  |   | — |  |   | — |  |   | (3,537 | ) |
| Payment of debt extinguishment costs                | (402 | ) |   | — |  |   | — |  |   | — |  |   | (402 | ) |
| Excess tax benefit from stock-based compensation    | 49 |  |   | — |  |   | — |  |   | — |  |   | 49 |  |
| Intercompany advances, net                          | 2,919 |  |   | 44,310 |  |   | (47,229 | ) |   | — |  |   | — |  |
| Net cash provided by (used in) financing activities | (5,823 | ) |   | 44,310 |  |   | (47,229 | ) |   | — |  |   | (8,742 | ) |
|                                                |   |   |   |   |   |   |   |   |   |
| Net change in cash and cash equivalents             | (27,439 | ) |   | 6,054 |  |   | 983 |  |   | — |  |   | (20,402 | ) |
| Cash and cash equivalents at beginning of year      | 55,670 |  |   | 4,212 |  |   | 37,987 |  |   | — |  |   | 97,869 |  |
| Cash and cash equivalents at end of year            | $ | 28,231 |  |   | $ | 10,266 |  |   | $ | 38,970 |  |   | $ | — |  |   | $ | 77,467 |  |

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|     |                   |
|-----|-------------------|
| 14. | Subsequent Events |

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|              |                                                                                             |
|--------------|---------------------------------------------------------------------------------------------|
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |

|         |                                                         |
|---------|---------------------------------------------------------|
| • | stability of prices and demand for oil and natural gas; |

|         |                                                                      |
|---------|----------------------------------------------------------------------|
| • | levels of oil and natural gas exploration and production activities; |

|         |                                                                                         |
|---------|-----------------------------------------------------------------------------------------|
| • | demand for contract drilling and drilling-related services and demand for rental tools; |

|         |                                                 |
|---------|-------------------------------------------------|
| • | our future operating results and profitability; |

|         |                                                                 |
|---------|-----------------------------------------------------------------|
| • | our future rig utilization, dayrates and rental tools activity; |

|         |                                                                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | entering into new, or extending existing, drilling contracts and our expectations concerning when our rigs will commence operations under such contracts; |

|         |                                                                                    |
|---------|------------------------------------------------------------------------------------|
| • | growth through acquisitions of companies or assets, including the ITS Acquisition; |

|         |                                   |
|---------|-----------------------------------|
| • | organic growth of our operations; |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| • | construction or upgrades of rigs and expectations regarding when these rigs will commence operations; |

|         |                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------|
| • | capital expenditures for acquisition of rigs, construction of new rigs or major upgrades to existing rigs; |

|         |                                         |
|---------|-----------------------------------------|
| • | entering into joint venture agreements; |

|         |                       |
|---------|-----------------------|
| • | our future liquidity; |

|         |                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------|
| • | availability and sources of funds to refinance our debt and expectations of when debt will be reduced; |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| • | the outcome of pending or future legal proceedings, investigations, tax assessments and other claims; |

|         |                                                                      |
|---------|----------------------------------------------------------------------|
| • | the availability of insurance coverage for pending or future claims; |

|         |                                                                                                |
|---------|------------------------------------------------------------------------------------------------|
| • | the enforceability of contractual indemnification in relation to pending or future claims; and |

|         |                                                      |
|---------|------------------------------------------------------|
| • | compliance with covenants under our debt agreements. |

|         |                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | worldwide economic and business conditions that adversely affect market conditions and/or the cost of doing business including potential country failures and downgrades; |

|         |                                                     |
|---------|-----------------------------------------------------|
| • | our inability to access the credit or bond markets; |

|         |                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------|
| • | U.S. credit market volatility resulting from the U.S. national debt and potential further downgrades of the U.S. credit rating; |

|         |                                                  |
|---------|--------------------------------------------------|
| • | the U.S. economy and the demand for natural gas; |

|         |                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------|
| • | low U.S. natural gas prices that could adversely affect U.S. drilling and our barge rig and rental tools businesses; |

|         |                           |
|---------|---------------------------|
| • | worldwide demand for oil; |

|         |                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | fluctuations in the market prices of oil and natural gas, including the inability or unwillingness of our customers to fund drilling programs in low price cycles; |

|         |                                                 |
|---------|-------------------------------------------------|
| • | imposition of unanticipated trade restrictions; |

|         |                                                      |
|---------|------------------------------------------------------|
| • | unanticipated operating hazards and uninsured risks; |

|         |                                          |
|---------|------------------------------------------|
| • | political instability, terrorism or war; |

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|         |                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | governmental regulations, including changes in accounting rules or tax laws that may impact our ability to remit funds to the U.S., that adversely affect the cost of doing business; |

|         |                                                                                     |
|---------|-------------------------------------------------------------------------------------|
| • | changes in the tax laws that would allow double taxation on foreign sourced income; |

|         |                                                                |
|---------|----------------------------------------------------------------|
| • | the outcome of investigations into possible violations of law; |

|         |                               |
|---------|-------------------------------|
| • | adverse environmental events; |

|         |                             |
|---------|-----------------------------|
| • | adverse weather conditions; |

|         |                         |
|---------|-------------------------|
| • | global health concerns; |

|         |                                                                      |
|---------|----------------------------------------------------------------------|
| • | changes in the concentration of customer and supplier relationships; |

|         |                                                                                  |
|---------|----------------------------------------------------------------------------------|
| • | ability of our customers and suppliers to obtain financing for their operations; |

|         |                                                                            |
|---------|----------------------------------------------------------------------------|
| • | ability of our customers to fund drilling plans with low commodity prices; |

|         |                                                                                        |
|---------|----------------------------------------------------------------------------------------|
| • | unexpected cost increases for new construction and upgrade and refurbishment projects; |

|         |                                                                                                                          |
|---------|--------------------------------------------------------------------------------------------------------------------------|
| • | delays in obtaining components for capital projects and in ongoing operational maintenance and equipment certifications; |

|         |                             |
|---------|-----------------------------|
| • | shortages of skilled labor; |

|         |                                                                    |
|---------|--------------------------------------------------------------------|
| • | unanticipated cancellation of contracts by customers or operators; |

|         |                         |
|---------|-------------------------|
| • | breakdown of equipment; |

|         |                                                                                   |
|---------|-----------------------------------------------------------------------------------|
| • | other operational problems including delays in start-up or commissioning of rigs; |

|         |                         |
|---------|-------------------------|
| • | changes in competition; |

|         |                                                 |
|---------|-------------------------------------------------|
| • | the effect of litigation and contingencies; and |

|         |                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | other similar factors, some of which are discussed in our Annual Report on Form 10-K, elsewhere in this Form 10-Q and in our other reports and filings with the SEC. |

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|                                                                             |
|-----------------------------------------------------------------------------|
|                                                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                        | Three Months Ended June 30, |
|                                                                        | 2013 |   | 2012 |
|                                                                        | (Dollars in Thousands) |
| Revenues:                                                                   |   |
| Rental Tools                                                                | $ | 82,022 |  |   | 36 | % |   | $ | 65,002 |  |   | 36 |  % |
| U.S. Barge Drilling                                                         | 38,301 |  |   | 17 | % |   | 33,292 |  |   | 19 |  % |
| U.S. Drilling                                                               | 17,910 |  |   | 8 | % |   | — |  |   | — |  % |
| International Drilling                                                      | 83,182 |  |   | 37 | % |   | 76,923 |  |   | 43 |  % |
| Technical Services                                                          | 4,586 |  |   | 2 | % |   | 3,708 |  |   | 2 |  % |
| Total revenues                                                              | 226,001 |  |   | 100 | % |   | 178,925 |  |   | 100 |  % |
| Operating gross margin:                                                     |   |   |   |   |   |   |   |
| Rental Tools gross margin excluding depreciation and amortization           | 38,347 |  |   | 47 | % |   | 42,450 |  |   | 65 |  % |
| U.S Barge Drilling gross margin excluding depreciation and amortization     | 20,011 |  |   | 52 | % |   | 14,500 |  |   | 44 |  % |
| U.S. Drilling gross margin excluding depreciation and amortization          | 3,640 |  |   | 20 | % |   | (533 | ) |   | n/a |  |
| International Drilling gross margin excluding depreciation and amortization | 20,327 |  |   | 24 | % |   | 18,240 |  |   | 24 |  % |
| Technical Services gross margin excluding depreciation and amortization     | 127 |  |   | 3 | % |   | (258 | ) |   | (7 | )% |
| Total operating gross margin excluding depreciation and amortization        | 82,452 |  |   | 36 | % |   | 74,399 |  |   | 42 |  % |
| Depreciation and amortization                                               | (32,280 | ) |   |   |   | (27,959 | ) |   |   |
| Total operating gross margin                                                | 50,172 |  |   |   |   | 46,440 |  |   |   |
| General and administrative expense                                          | (22,378 | ) |   |   |   | (7,420 | ) |   |   |
| Gain on disposition of assets, net                                          | 517 |  |   |   |   | 1,368 |  |   |   |
| Total operating income                                                      | $ | 28,311 |  |   |   |   | $ | 40,388 |  |   |   |

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|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                           | RentalTools |   | U.S.BargeDrilling |   | U.S.Drilling |   | InternationalDrilling |   | TechnicalServices |
| Three Months Ended June 30, 2013                               | (Dollars in Thousands) |
| Operating gross margin (1)                                     | $ | 25,149 |  |   | $ | 16,660 |  |   | $ | (666 | ) |   | $ | 8,925 |  |   | $ | 104 |  |
| Depreciation and amortization                                  | 13,198 |  |   | 3,351 |  |   | 4,306 |  |   | 11,402 |  |   | 23 |  |
| Operating gross margin excluding depreciation and amortization | $ | 38,347 |  |   | $ | 20,011 |  |   | $ | 3,640 |  |   | $ | 20,327 |  |   | $ | 127 |  |
| Three Months Ended June 30, 2012                               |   |   |   |   |   |   |   |   |   |
| Operating gross margin (1)                                     | $ | 31,251 |  |   | $ | 11,014 |  |   | $ | (1,623 | ) |   | $ | 6,056 |  |   | $ | (258 | ) |
| Depreciation and amortization                                  | 11,199 |  |   | 3,486 |  |   | 1,090 |  |   | 12,184 |  |   | — |  |
| Operating gross margin excluding depreciation and amortization | $ | 42,450 |  |   | $ | 14,500 |  |   | $ | (533 | ) |   | $ | 18,240 |  |   | $ | (258 | ) |

|     |                                                                                                                                   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|
| (1) | Operating gross margin is calculated as revenues less direct operating expenses, including depreciation and amortization expense. |

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|                                                                             |
|-----------------------------------------------------------------------------|
|                                                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                        | Six Months Ended June 30, |
|                                                                        | 2013 |   | 2012 |
|                                                                        | (Dollars in Thousands) |
| Revenues:                                                                   |   |
| Rental Tools                                                                | $ | 139,105 |  |   | 35 | % |   | $ | 131,286 |  |   | 37 |  % |
| U.S. Barge Drilling                                                         | 68,165 |  |   | 17 | % |   | 61,127 |  |   | 17 |  % |
| U.S. Drilling                                                               | 29,545 |  |   | 8 | % |   | — |  |   | — |  % |
| International Drilling                                                      | 147,832 |  |   | 38 | % |   | 155,673 |  |   | 44 |  % |
| Technical Services                                                          | 8,509 |  |   | 2 | % |   | 7,408 |  |   | 2 |  % |
| Total revenues                                                              | 393,156 |  |   | 100 | % |   | 355,494 |  |   | 100 |  % |
| Operating gross margin:                                                     |   |   |   |   |   |   |   |
| Rental Tools gross margin excluding depreciation and amortization           | 70,555 |  |   | 51 | % |   | 87,104 |  |   | 66 |  % |
| U.S Barge Drilling gross margin excluding depreciation and amortization     | 32,433 |  |   | 48 | % |   | 25,195 |  |   | 41 |  % |
| U.S. Drilling gross margin excluding depreciation and amortization          | 3,967 |  |   | 13 | % |   | (999 | ) |   | n/a |  |
| International Drilling gross margin excluding depreciation and amortization | 25,123 |  |   | 17 | % |   | 44,747 |  |   | 29 |  % |
| Technical Services gross margin excluding depreciation and amortization     | 483 |  |   | 6 | % |   | (11 | ) |   | — |  % |
| Total operating gross margin excluding depreciation and amortization        | 132,561 |  |   | 34 | % |   | 156,036 |  |   | 44 |  % |
| Depreciation and amortization                                               | (61,792 | ) |   |   |   | (55,578 | ) |   |   |
| Total operating gross margin                                                | 70,769 |  |   |   |   | 100,458 |  |   |   |
| General and administrative expense                                          | (35,261 | ) |   |   |   | (12,917 | ) |   |   |
| Gain on disposition of assets, net                                          | 1,665 |  |   |   |   | 1,860 |  |   |   |
| Total operating income                                                      | $ | 37,173 |  |   |   |   | $ | 89,401 |  |   |   |

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                           | RentalTools |   | U.S.BargeDrilling |   | U.S.Drilling |   | InternationalDrilling |   | TechnicalServices |
| Six Months Ended June 30, 2013                                 | (Dollars in Thousands) |
| Operating gross margin (1)                                     | $ | 46,656 |  |   | $ | 25,417 |  |   | $ | (4,719 | ) |   | $ | 2,983 |  |   | $ | 432 |  |
| Depreciation and amortization                                  | 23,899 |  |   | 7,016 |  |   | 8,686 |  |   | 22,140 |  |   | 51 |  |
| Operating gross margin excluding depreciation and amortization | $ | 70,555 |  |   | $ | 32,433 |  |   | $ | 3,967 |  |   | $ | 25,123 |  |   | $ | 483 |  |
| Six Months Ended June 30, 2012                                 |   |   |   |   |   |   |   |   |   |
| Operating gross margin (1)                                     | $ | 64,853 |  |   | $ | 18,171 |  |   | $ | (3,170 | ) |   | $ | 20,615 |  |   | $ | (11 | ) |
| Depreciation and amortization                                  | 22,251 |  |   | 7,024 |  |   | 2,171 |  |   | 24,132 |  |   | — |  |
| Operating gross margin excluding depreciation and amortization | $ | 87,104 |  |   | $ | 25,195 |  |   | $ | (999 | ) |   | $ | 44,747 |  |   | $ | (11 | ) |

|     |                                                                                                                                   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|
| (1) | Operating gross margin is calculated as revenues less direct operating expenses, including depreciation and amortization expense. |

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|       |                                                                                                                              |
|-------|------------------------------------------------------------------------------------------------------------------------------|
|   | $425.0 million aggregate principal amount of 9.125% Notes, plus an associated $4.1 million in unamortized debt premium; |

|       |                                                            |
|-------|------------------------------------------------------------|
|   | $125.0 million Term Loan for the purchase of ITS; and |

|       |                                                                                      |
|-------|--------------------------------------------------------------------------------------|
|   | $ 45.0 million under our Term Loan, $10.0 million of which is classified as current. |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    | Total |   | Less than1 Year |   | Years1 - 3 |   | Years3 - 5 |   | More than5 Years |
|                                    | (Dollars in Thousands) |
| Contractual cash obligations:           |   |   |   |   |   |   |   |   |   |
| Long-term debt — principal (1)    | $ | 595,000 |  |   | $ | 10,000 |  |   | $ | 20,000 |  |   | $ | 565,000 |  |   | $ | — |  |
| Long-term debt — interest (1)     | 247,287 |  |   | 49,753 |  |   | 100,513 |  |   | 97,021 |  |   | — |  |
| Operating leases and capital leases (2) | 55,976 |  |   | 16,376 |  |   | 16,190 |  |   | 10,665 |  |   | 12,745 |  |
| Purchase commitments (3)                | 14,815 |  |   | 14,815 |  |   | — |  |   | — |  |   | — |  |
| Total contractual obligations           | $ | 913,078 |  |   | $ | 90,944 |  |   | $ | 136,703 |  |   | $ | 672,686 |  |   | $ | 12,745 |  |
| Commercial commitments:                 |   |   |   |   |   |   |   |   |   |
| Standby letters of credit (4)           | 2,055 |  |   | 2,055 |  |   | — |  |   | — |  |   | — |  |
| Total commercial commitments            | $ | 2,055 |  |   | $ | 2,055 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |

|     |                                                                                                                                                                                                                                                                       |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Long-term debt includes the principal and interest cash obligations of the 9.125% Notes, the Goldman Term Loan and the Term Loan. The remaining unamortized premium of $4.1 million on the 9.125% Notes is not included in the contractual cash obligations schedule. |

|     |                                                                                                                           |
|-----|---------------------------------------------------------------------------------------------------------------------------|
| (2) | Operating leases consist of agreements in excess of one year for office space, equipment, vehicles and personal property. |

|     |                                                                                                     |
|-----|-----------------------------------------------------------------------------------------------------|
| (3) | Purchase commitments outstanding as of June 30, 2013 are primarily related to rig upgrade projects. |

|     |                                                                                                                                                                                                                                                                                |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | We have an $80.0 million revolving credit facility. As of June 30, 2013, we had no borrowings under the Revolver and $2.1 million of availability has been used to support letters of credit that have been issued, resulting in $77.9 million of availability. |

|              |                                                            |
|--------------|------------------------------------------------------------|
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |

|              |                         |
|--------------|-------------------------|
| ITEM 4. | CONTROLS AND PROCEDURES |

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|              |                   |
|--------------|-------------------|
| ITEM 1. | LEGAL PROCEEDINGS |

|               |              |
|---------------|--------------|
| ITEM 1A. | RISK FACTORS |

|              |                                                             |
|--------------|-------------------------------------------------------------|
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |

|                       |
|-----------------------|
|                       |  |  |  |  |  |
| Period                | Total Numberof SharesPurchased |   | Average PricePaid Per Share (1) |
| April 1-30, 2013 | 24,481 |  |   | 4.12 |  |
| May 1-31, 2013   | 327 |  |   | 4.81 |  |
| June 1-30, 2013  | 867 |  |   | 4.47 |  |
| Total                 | 25,675 |  |   | 4.14 |  |

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|              |                   |
|--------------|-------------------|
| ITEM 5. | OTHER INFORMATION |

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|                |
|----------------|
|                |  |  |
| ExhibitNumber  |   | DESCRIPTION |
|           |   |   |
| 10.1           | — | Sale and Purchase Agreement, dated April 22, 2013, among ITS Tubular Services (Holdings) Limited, as Seller, Ian David Green, John Bruce Cartwright and Graham Douglas Frost, as joint administrators of the Seller, ITS Holdings, Inc. and PD International Holdings C.V., Parker Drilling Offshore Corporation and Parker Drilling Company (Incorporated by reference to Exhibit 10.1 to Parker Drilling Company's Current Report on Form 8-K filed on April 23, 2013). |
|           |   |   |
| 10.2‡    | — | First Supplemental Indenture, dated June 21, 2013, among Parker Drilling Company, as Guarantor and The Bank of New York Mellon Trust Company, N.A., as Trustee. |
|           |   |   |
| 10.3           | — | Term Loan Agreement, dated April 18, 2013, among Parker Drilling Company, as Borrower, and Goldman Sachs Bank USA, as Administrative Agent, Syndication Agent, Sole Lead Arranger and Sole Lead Bookrunner and the several banks and other financial institutions or entities from time to time parties thereto (Incorporated by reference to Exhibit 10.2 to Parker Drilling Company's Current Report on Form 8-K filed on April 23, 2013). |
|           |   |   |
| 10.4           | — | First Amendment to Term Loan Agreement dated July 19, 2013, among Parker Drilling Company, the lenders party thereto, Goldman Sachs Bank USA and certain other parties thereto (Incorporated by reference to Exhibit 10.1 to Parker Drilling Company's Current Report on Form 8-K filed on July 22, 2013). |
|           |   |   |
| 10.5           | — | First Amendment to Amended and Restated Credit Agreement, dated as of July 19, 2013, among Parker Drilling Company, as Borrower, certain Subsidiaries of the Borrower, as Guarantors, the Lenders party thereto, and Bank of America N.A., as administrative agent (Incorporated by reference to Exhibit 10.2 to Parker Drilling Company's Current Report on Form 8-K filed on July 22, 2013). |
|           |   |   |
| 10.6           | — | Employment Agreement dated May 3, 2013 between Parker Drilling Company and Christopher Weber (Incorporated by reference to Exhibit 10.1 to Parker Drilling Company's Current Report on Form 8-K filed on May 14, 2013). |
|           |   |   |
| 10.7           | — | Form of Restricted Stock Unit Incentive Agreement between Parker Drilling Company and Christopher Weber (Incorporated by reference to Exhibit 10.2 to Parker Drilling Company's Current Report on Form 8-K filed on May 14, 2013). |
|           |   |   |
| 31.1*          | — | Gary G. Rich, President, Chief Executive Officer, and Director, Rule 13a-14(a)/15d-14(a) Certification. |
|           |   |   |
| 31.2*          | — | Christopher T. Weber, Senior Vice President and Chief Financial Officer, Rule 13a-14(a)/15d- 14(a) Certification. |
|           |   |   |
| 32.1*          | — | Gary G. Rich, President, Chief Executive Officer, and Director, Section 1350 Certification. |
|           |   |   |
| 32.2*          | — | Christopher T. Weber, Senior Vice President and Chief Financial Officer, Section 1350 Certification. |
|           |   |   |
| 101.INS‡ | — | XBRL Instance Document. |
|           |   |   |
| 101.SCH‡ | — | XBRL Taxonomy Schema Document. |
|           |   |   |
| 101.CAL‡ | — | XBRL Calculation Linkbase Document |
|           |   |   |
| 101.LAB‡ | — | XBRL Label Linkbase Document |
|           |   |   |
| 101.PRE‡ | — | XBRL Presentation Linkbase Document. |
|           |   |   |
| 101.DEF‡ | — | XBRL Definition Linkbase Document. |

----

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|        |
|--------|
|        |  |  |  |  |
|   |   |   |   |   |
|   |   | PARKER DRILLING COMPANY |
|   |   |   |   |   |
| Date:  | August 13, 2013 | By: |   | /s/ Gary G. Rich |
|   |   |   |   | Gary G. RichPresident, Chief Executive Officer, and Director |
|   |   |   |   |   |
|   |   | By: |   | /s/ Christopher T. Weber |
|   |   |   |   | Christopher T. WeberSenior Vice President and Chief Financial Officer |

----

Table of Contents

|                |
|----------------|
|                |  |  |  |
| ExhibitNumber  |   |    | DESCRIPTION |
|           |   |   |   |
| 10.1           | — |   | Sale and Purchase Agreement, dated April 22, 2013, among ITS Tubular Services (Holdings) Limited, as Seller, Ian David Green, John Bruce Cartwright and Graham Douglas Frost, as joint administrators of the Seller, ITS Holdings, Inc. and PD International Holdings C.V., Parker Drilling Offshore Corporation and Parker Drilling Company (Incorporated by reference to Exhibit 10.1 to Parker Drilling Company's Current Report on Form 8-K filed on April 23, 2013). |
|           |   |   |   |
| 10.2‡    | — |   | First Supplemental Indenture, dated June 21, 2013, among Parker Drilling Company, as Guarantor and The Bank of New York Mellon Trust Company, N.A., as Trustee. |
|           |   |   |   |
| 10.3           | — |   | Term Loan Agreement, dated April 18, 2013, among Parker Drilling Company, as Borrower, and Goldman Sachs Bank USA, as Administrative Agent, Syndication Agent, Sole Lead Arranger and Sole Lead Bookrunner and the several banks and other financial institutions or entities from time to time parties thereto (Incorporated by reference to Exhibit 10.2 to Parker Drilling Company's Current Report on Form 8-K filed on April 23, 2013). |
|           |   |   |   |
| 10.4           | — |   | First Amendment to Term Loan Agreement dated July 19, 2013, among Parker Drilling Company, the lenders party thereto, Goldman Sachs Bank USA and certain other parties thereto (Incorporated by reference to Exhibit 10.1 to Parker Drilling Company's Current Report on Form 8-K filed on July 22, 2013). |
|           |   |   |   |
| 10.5           | — |   | First Amendment to Amended and Restated Credit Agreement, dated as of July 19, 2013, among Parker Drilling Company, as Borrower, certain Subsidiaries of the Borrower, as Guarantors, the Lenders party thereto, and Bank of America N.A., as administrative agent (Incorporated by reference to Exhibit 10.2 to Parker Drilling Company's Current Report on Form 8-K filed on July 22, 2013). |
|           |   |   |   |
| 10.6           | — |   | Employment Agreement dated May 3, 2013 between Parker Drilling Company and Christopher Weber (Incorporated by reference to Exhibit 10.1 to Parker Drilling Company's Current Report on Form 8-K filed on May 14, 2013). |
|           |   |   |   |
| 10.7           | — |   | Form of Restricted Stock Unit Incentive Agreement between Parker Drilling Company and Christopher Weber (Incorporated by reference to Exhibit 10.2 to Parker Drilling Company's Current Report on Form 8-K filed on May 14, 2013). |
|           |   |   |   |
| 31.1*          | — |    | Gary G. Rich, President, Chief Executive Officer, and Director, Rule 13a-14(a)/15d-14(a) Certification. |
|           |   |   |   |
| 31.2*          | — |    | Christopher T. Weber, Senior Vice President and Chief Financial Officer, Rule 13a-14(a)/15d-14(a) Certification. |
|           |   |   |   |
| 32.1*          | — |    | Gary G. Rich, President, Chief Executive Officer, and Director, Section 1350 Certification. |
|           |   |   |   |
| 32.2*          | — |    | Christopher T. Weber, Senior Vice President and Chief Financial Officer, Section 1350 Certification. |
|           |   |   |   |
| 101.INS‡ | — |    | XBRL Instance Document. |
|           |   |   |   |
| 101.SCH‡ | — |    | XBRL Taxonomy Schema Document. |
|           |   |   |   |
| 101.CAL‡ | — |    | XBRL Calculation Linkbase Document |
|           |   |   |   |
| 101.LAB‡ | — |    | XBRL Label Linkbase Document |
|           |   |   |   |
| 101.PRE‡ | — |    | XBRL Presentation Linkbase Document. |
|           |   |   |   |
| 101.DEF‡ | — |    | XBRL Definition Linkbase Document. |