CANELSON DRILLING INC. INCREASES SIZE OF BOUGHT DEAL FINANCING

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

CALGARY, Feb. 23 /CNW/ - CanElson Drilling Inc. ("CanElson" or the "Company") (TSX VENTURE:CDI) is pleased to announce that it has increased the size of its previously disclosed bought deal short form prospectus offering entered into with a syndicate of underwriters led by Peters & Co. Limited and including Stifel Nicolaus Canada Inc., HSBC Securities, Lightyear Capital Inc. and Wellington West Capital Markets Inc. (the "Underwriters").  CanElson will now issue 8,100,000 common shares ("Common Shares") at a price of $4.35 per Common Share (the "Issue Price") for aggregate gross proceeds of approximately $35.2 million (the "Offering")  CanElson has also granted the Underwriters an option (the "Over-Allotment Option") to purchase up to an additional 1.22 million Common Shares at the Issue Price to cover over-allotments, if any, for additional gross proceeds of approximately $5.3 million.  The Over-Allotment Option is exercisable in whole or in part at any time until 30 days after the closing of the Offering.  Proceeds of the Offering will be used to fund the Corporation's rig construction program, described in the press release issued earlier today, to temporarily reduce bank indebtedness and for general corporate purposes.

Pursuant to the Offering, the Common Shares will be offered in all provinces of Canada, except Quebec, by way of a short form prospectus and by way of private placement in the United States pursuant to exemptions from the registration requirements pursuant to Rule 144A and/or Regulation D of the United States Securities Act of 1933.

Closing of the Offering is expected to occur on or about March 16, 2011 and is subject to certain customary conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.

CanElson is an Alberta, Canada corporation that is currently engaged in the manufacture, sale, acquisition and operation of drilling and service rigs for the oil and 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.

Forward Looking Information
This press release contains certain statements or disclosures relating to CanElson that are based on the expectations of CanElson as well as assumptions made by and information currently available to CanElson which may constitute forward-looking information under applicable securities laws.  All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that CanElson anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information.  In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro-forma", or other comparable terminology.

In particular, this press release makes reference to the closing date of the Offering and the anticipated use of net proceeds of which statements are forward looking information. CanElson's actual achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking information will transpire or occur, or occur on such dates, or if any of them do so, what benefits CanElson will derive therefrom. Such forward looking information involves material assumptions and known and unknown risks and uncertainties, certain of which are beyond CanElson's control.  Such assumptions, risks and uncertainties include, without limitation, those associated with, loss of markets and or that the closing of the Offering could be delayed if CanElson is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The Offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied.  Accordingly, there is a risk that the Offering will not be completed within the anticipated time or at all.  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.

The forward-looking information is made as at the date of this press release and CanElson does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.  This news release is not an offer for sale within the United States of any Common Shares or other securities of CanElson.  Any offering of securities of CanElson will not be registered under the U.S. Securities Act and may not be offered or sold in the United States absent registration under U.S. securities laws or an applicable exemption from registration under such laws.  These securities may not be sold in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.

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

SOURCE CanElson Drilling Inc.

For further information:

Randy Hawkings
President and Chief Executive Officer
CanElson Drilling Inc.
700, 808 - 4th Avenue SW
Calgary, Alberta  T2P 3E8
Tel:   403-266-3922
        Robert Skilnick
Chief Financial Officer
CanElson Drilling Inc.
700, 808 - 4th Avenue SW
Calgary, Alberta  T2P 3E8
Tel:   403-266-3922


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