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Liquidity and Capital Resources

The Corporation had $17.6 million in cash at September 30, 2005 compared to debt of $10.9

million, resulting in cash, net of debt, of $6.7 million. At September 30, 2004, the Corporation

had debt of $65.2 million and cash of $56.0 million resulting in net debt of $9.2 million. In

October 2004, the Corporation repaid in full its US$46.5 million Senior Notes. Management believes

that existing cash and available credit facilities, together with expected operating cash flows,

will be sufficient to fund the Corporations planned operating cash requirements and capital

expenditures for 2005. The Corporation has a capital expenditure forecast for full year 2005 of

approximately $21 million, of which the largest component is targeted for casing running equipment.

Financial Instruments and Contractual Commitments

In August 2005, the Corporation agreed to the sale of its four CASING DRILLING®

rigs and related assets to Turnkey E&P Inc., a privately held Canadian company for gross proceeds

of approximately US$35 million and warrants to purchase

approximately 5% of Turnkey E&P Inc.. Completion of the sale, which is conditional on the purchaser

obtaining financing, will be on or before December 22, 2005.

In November 2005, TESCO Corporation agreed to sell its investment in Drillers Technology Corp.

(DTC) to Saxon Energy Services, Inc. (Saxon) for the tender offer price of $1.85 per share. If

Saxons offer is successful, the Corporations 5,400,000 DTC shares will result in proceeds to the

Corporation of approximately $10 million. The acquisition by Saxon of DTC is subject to certain

conditions which must be fulfilled by both parties pursuant to the terms of the acquisition

agreement.

On November 2, 2005, the Corporation purchased the assets of Tong Specialty and

Cheyenne Services for approximately US$50 million. Tong Specialty is based in Lafayette, Louisiana

and Cheyenne Services is based in Houston, Texas. Both companies provide a broad offering of

tubular running and related services offshore in the US Gulf of Mexico and onshore in Texas and

Louisiana. These companies supply equipment and personnel for the installation of tubing and

casing, including power tongs, pick-up/lay-down units, torque monitoring services, connection

testing services and power swivels for new well construction in work-over and re-entry operations.

Additionally, Cheyenne Services is a leader in the installation service of deep water smart well

completion equipment using its proprietary technology.

These businesses will be combined with the Corporations existing tubular services operations in

the US and will provide immediate expansion opportunities for the Corporations proprietary casing

running service delivered with its Casing Drive System (CDS) technology. Tong Specialtys and

Cheyenne Services base locations, corresponding service delivery capacity and client portfolios

will provide the Corporation with significant additional market access, and generate CDS

deployment opportunities, allowing mainstream accessibility to the safety and efficiency of the

CDS tool.

The combined purchase price of these two all-cash acquisitions totals approximately US$50 million.

In connection with these transactions and subsequent to September 30, 2005, the Corporation has

retired all outstanding debt, cancelled its existing credit facilities and has entered into a new

US$100 million credit facility with JPMorgan Chase, N.A. to fund these acquisitions, finance

potential future acquisitions, and provide working capital support.

Outlook

The Corporation remains focused on its strategy to grow the company through the expansion of

Casing Services and continued commitment to its core Top Drive business. TESCO continues to

evaluate potential acquisitions that would help leverage its proprietary technology.

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TESCO CORPORATION

2005 THIRD QUARTER REPORT