C:\AA\NEWSLETTER\Newsletter Vol - TESCO Corporation

BUSINESS OUTLOOKHere it is springtime again, and we arestill very busy. We have not seen thetraditional drop off in activity in Canadaso prevalent the last couple of years.The result of this is that we are strugglingto find top drives to place in otherareas of our Company where businessis still improving. This is a nice problemto have!We continue to increase our internationalpresence and employee make up.Alain Keller and Vicente Rojas have recentlyjoined Tesco as the General Managersof Europe/Africa and Mexico, respectively.Alain is going to be locatedin Pau, France, focusing on our Algerianbusiness, while Vicente will be locatedin Carmen, Mexico working on thePemex contract.I hope everyone has had a chance toreview the Q1, 2001 results for TescoCorporation; they are available on ourwebsite. Thanks to you, Tesco had itsbest quarter ever. We had a record levelSTOCK TALKFrom January 1, 2001 to May 17, 2001,the Tesco share price rose from $15.60at the beginning of the year to $20.75.For the first four months of 2001 on theToronto Stock Exchange 9,279,216shares traded at an average price of$17.18 while on Nasdaq 2,255,850shares traded at an average price ofUS$11.32. In total the value of sharestraded was close to $200 million. That’sa lot of money!The performance of the share price hasbeen driven by three factors:1.The continuing favourable industryclimate,2.The very good results reported inQ1 2001,3.The results being achieved onCasing Drilling jobs in Wyoming andthe expectation of further commercialsuccess with Casing Drilling.Martin Hall, C.A.Senior Vice President Finance;Chief Financial Officer & SecretaryTesco Corporation - CalgaryEDITOR’S MESSAGEWishing each of you and your familiesa happy and safe summer season.Carol Rosdobutko,Editorof revenue and earnings, as well as anadded gain due to the profitable sale ofour UBD assets to Weatherford.In addition to excellent activity with topdrive rentals and sales, we also generatedapproximately $3 million in CasingDrilling activity. Two rigs were workingaround the clock in the first quarter;one in Canada for Anadarko and one inthe USA for BP. This is the first start ofcommercial revenue activity for CasingDrilling and it looks like it is going togrow substantially. We have already extendedthe contract to drill with casingfor BP in Wyoming, but have also secureda contract with Conoco to drill inSouth Texas.The At-Floor-Snubbing System, or PushPull Machine, had a great winter seasonand generated around $3 million insales. The Canadian Services grouphas done a great job in developing aunique application pushing drill pipe inhorizontal wells, and it looks like thisIn March “Town Hall” meetings wereconducted in Calgary and Houston. Itwas recommended that we give theemployees an overview of what washappening with Tesco as the employeeshad heard rumours that we were sellingthe Underbalanced assets.Bob Tessari, President & Chief ExecutiveOfficer presented his Investor Relationspromotional slide show to giveemployees an idea of what he does topromote Tesco. The employees werealso invited to ask questions either submittedprior to the meeting or at themeeting.The attendance at both the Calgary andHouston “Town Hall” meetings was excellentand the feedback that we receivedwas extremely positive. Followingare some questions asked by employees:1. With Casing Drilling cominginto play, what kind ofemployment will it create?A lot of work in manufacturing, productsand operations. We will be recruitingwireline experts, downhole tool expertsand people who know how to run andrepair the equipment - operational typepeople. It’s a little early to tell yet but aswe get more into the drilling businesscould be another piece of Tesco technologythat adds earnings to the bottomline. We already have additional unitsworking in Australia and South Americasupporting traditional snubbing applications.Tesco is enjoying the overall increasein activity that is being experienced bythe oilpatch in general. However, Tescois seeing increased participation due toour international operations, whichtranslates into more growth for the Companyand its employees. In addition, theadded value that Tesco technology isdelivering makes our services and productseven more desirable as oilfield servicespricing increases and operatorcosts go up. This all bodes very well forTesco and should result in significantgrowth over the next several years.Mark FischerChief Operating OfficerTesco Corporation, HoustonTOWN HALL MEETINGSwe will need the standard type rig handswho understand more about computersand hydraulics.2. What % of our shares doinstitutional buyers hold?About 85%. The other 15% are whatwe call retail. People like you and I buyour 10-20 shares but really it’s the institutionalpeople that drive the businessand buy in big blocks. 45% of shareholdersare American. The New Yorkand Boston investors seem to be morelong-term investors who believe in whatwe’re doing, unlike the Toronto investors.3. Rumor on the street is thatPrecision or Weatherford arebuying Tesco. Is that true?There has been no approach by Precisionor Weatherford. For the last 5 yearsWeatherford has been extremely interestedin what we have been doing inUBD and Casing Drilling. We arelooking at working with them but we arenot shopping the company. We’ve got atremendous future!If you would like to view the video of theCalgary “Town Hall” meeting please contactMarion Lee at the Corporate Officein Calgary.Tesco Connections Page 2