CANELSON DRILLING INC. ANNOUNCES COMPLETION OF $40.5 MILLION FINANCING BY WAY OF BOUGHT DEAL

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

March 16, 2011 – CanElson Drilling Inc. (“CanElson” or the “Company”) (TSX VENTURE:CDI) is pleased to announce that it has closed its recently announced bought deal financing of 9,315,000 common shares (“Common Shares”), which includes the exercise in full of the over-allotment option of 1,215,000 Common Shares, at $4.35 per Common Share for aggregate gross proceeds of approximately $40.5 million (the “Financing”). The syndicate of underwriters was led by Peters & Co. Limited and included, Stifel Nicolus Canada Inc., HSBC Securities (Canada) Inc., Lightyear Capital Inc. and Wellington West Capital Markets Inc. (collectively the “Underwriters”).

The net proceeds from the Financing will be used initially to temporarily reduce bank debt (which had been incurred to fund the construction and acquisition of drilling rigs) and subsequently to fund the construction of five additional ultra-heavy small footprint telescopic drilling rigs with an estimated cost of $40 million and general corporate purposes.

With the addition of these 5 drilling rigs to CanElson’s fleet, 100% of CanElson’s owned drilling rig fleet will continue to be ultra-heavy, small footprint telescopic double drilling rigs rated greater than 3500 meters true vertical depth (4300 m horizontal) with an average age of less than 3 years which are designed for horizontal and resource play drilling. By the end of the construction program, CanElson expects to operate a combined rig fleet of 32 rigs (net owned 28).

CanElson is an Alberta, Canada corporation that is currently engaged in the manufacture, sale, acquisition and operation of drilling rigs for the oil and natural gas industry. The Corporation currently operates in the western Canadian Sedimentary Basin, the Permian Basin of west Texas and the Ebano-Panuco-Cacalilao fields of Mexico.

FOR FURTHER INFORMATION PLEASE CONTACT:

Randy Hawkings Robert Skilnick

President and Chief Executive Officer Chief Financial Officer

Phone: (403) 266-3922 Phone: (403) 266-3922

ADVISORY: This press release contains forward- looking information concerning the use of the net proceeds of the Offering; the cost of construction of five drilling rigs and the expected size of the rig fleet following completion of the construction of the five drilling rigs. Although CanElson believes that the expectations reflected in the forward-looking information is reasonable, undue reliance should not be placed on it because CanElson can give no assurance that it will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature it involves inherent risks and uncertainties. The intended use of the net proceeds of the Offering by CanElson might change if the board of directors of CanElson determines that it would be in the best interests of CanElson to deploy the proceeds for some other purpose and the cost, timing for construction and commencement of operations for the five additional drilling rigs might also change from original expectations. CanElson’s Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and events and which are incorporated herein by reference.

The forward-looking information contained in this press release is provided as of the date hereof and CanElson undertakes no obligations to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Corporation within the United States. The securities of the Corporation have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”) or any state securities laws. Accordingly, the Common Shares may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws or an exemption from such registration is available.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of the content of this release