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TSX SYMBOL: TDG, TDG.DB
CALGARY, March 19 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or the "Company") provided an update on its operations in Mexico following a change in the contracted status of three of its drilling rigs. With 119 drilling rigs in its fleet, the Company does not view this as a material change and is providing this update for clarity and informational purposes only.
Trinidad's Mexican operations include seven rigs working under term contract with a US-based multi-services provider. The rigs have been operating in the ATG I, II and IV projects in the Chicontepec region of Mexico. Petroleos Mexicanos, the Mexican national oil company, recently announced budget reductions for the ATG I and II projects and drilling activity in these projects has been significantly impacted.
Trinidad has three rigs working in ATG I and II with contracts that, following one previous 12-month extension, were due to expire in April 2010. Trinidad was recently notified that the contracts on these three rigs would not be extended. As part of Trinidad's contract terms, the current customer is responsible to pay the costs associated with moving the rigs back to Canada, if necessary. Trinidad expects that the non-renewal of these three rigs will not have a material impact on its operations or financial position nor do they make up a material portion of the Company's assets, revenue or cash flow. In 2009, Trinidad estimates that these rigs would have generated less than three percent of the Company's Adjusted EBITDA(1) over the full year.
With the contracts due to expire on these three rigs, the Company had been exploring alternative for the rigs prior to receiving formal notification and has identified several opportunities for the rigs throughout North America. In addition to opportunities with the current customer and new customers within Mexico, the rigs are of a size and style that is well suited to several other plays where activity levels remain relatively strong, such as the Cardium in Canada and the Barnett shale in the US.
Trinidad's remaining four rigs are currently working on the ATG IV project and the Company expects that they will continue working in that area.
Trinidad is a growth-oriented corporation that trades on the Toronto Stock Exchange (TSX) under the symbol TDG and TDG.DB. Trinidad's divisions operate in the drilling, well-servicing, coring and barge-drilling sectors of the North American oil and natural gas industry. Following its current rig construction program, Trinidad will have 125 land drilling rigs ranging in depths from 1,000 - 6,500 metres and operations in Canada, the United States, Mexico and Chile. In addition to its land drilling rigs, Trinidad has 22 service rigs, 20 pre-set and coring rigs and 4 barge rigs currently operating in the Gulf of Mexico. Trinidad is focused on providing modern, reliable, expertly designed equipment operated by well-trained and experienced personnel. Trinidad's drilling fleet is one of the most adaptable, technologically advanced and competitive in the industry.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy the shares in any jurisdiction. The shares offered will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States or to a United States person, absent registration, or an applicable exemption therefrom.
(1) Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation, amortization, impairment of intangible assets, (gain) loss on sale of assets, (gain) loss on foreign exchange and stock based compensation.
SOURCE Trinidad Drilling Ltd.
For further information: For further information: Lyle Whitmarsh, President and Chief Executive Officer, (403) 265-6525; Brent Conway, Executive Vice President and Chief Financial Officer, (403) 265-6525; Lisa Ciulka, Director of Investor Relations, (403) 294-4401, email: email@example.com