financial condition, cash flows and growth prospects may be adversely effected by any implementation problems associated with the business systems. R ecent Acquisitions The combination of Orbit and Garant on January 31, 2007, and the acquisition of Drift (and the assets of Phyl-Don) on April 16, 2007, are recent developments and the Company may be exposed to business risks or liabilities for which it may not be fully indemnified or insured. The ongoing integration of existing and new computer systems, equipment and personnel may impact the success of the acquisitions. Any issues arising from the integration of the acquired businesses, including the integration of the accounting software, may require significant management, financial or personnel resources that would otherwise be available for ongoing development and expansion of the Company’s existing operations. If this happens, it may have a material adverse effect on the financial performance, financial condition, cash flows and growth prospects of the Company. Access to Drills Due to the worldwide increased demand for drilling services, the industry is experiencing a tightness in the supply of drilling equipment, including drills, and this could impede the Company’s ability to grow its business. The Company is at Capacity The Company is operating at close to capacity based upon the number and types of drills that it currently owns. Equipment is often located at remote or isolated locations and may be hard to remove for the purpose of optimizing capacity. There has also been an increase in the delay time in the availability of consumables used by the Company in its drilling operations due to the worldwide demand for drilling services. There is no certainty that the Company will have a sufficient supply of consumables in a timely manner or at current cost levels to support its existing operations or growth. The Company’s ability to fulfill its contractual obligations with its customers and grow its business could be adversely affected, and its revenue and profitability reduced, if it is unable to acquire a secure supply of its consumables in a timely manner or at economically viable price. Supply of Consumables The Company’s strong growth has placed pressure on the ability of Soudure R oyale and X-Spec to manufacture and deliver to the Company, respectively, new drills and consumables. Any negative impact to the ability of Soudure R oyale and X-Spec to deliver their products may constrain the Company’s ability to increase its capacity and increase or maintain revenue and profitability. Demand for Drills Current commodity prices have led to an increase in the demand for drilling services and an increase in the supply of drills. In the event of a decrease in demand for drilling services, this market may be oversupplied with drills which may result in margin pressure and a loss of market share by the Company and could have a material adverse effect on the financial performance, financial condition, cash flows, and growth prospects of the Company. In addition, if demand for drills declines, the contribution of Soudure R oyale to the Company’s profitability and cash flows would be expected to decline. Competition The Company faces considerable competition from several large drilling services companies and many smaller, regional competitors. Some of the Company’s competitors have been in the drilling services industry for a longer period of time and have substantially greater financial and other resources than the Company. Increased competition in the drilling services market may adversely affect the Company’s current market share, profitability and growth opportunities. The capital cost to acquire drilling rigs is relatively low, enabling competitors to finance expansion and providing opportunity for new competitors to enter the market. This dynamic exposes the Company to the risk of reduced market share and scope for geographic growth as well as lower revenue and margin for its existing business. As well, there can be no guarantee that the scale advantage 72