Trinidad Drilling Ltd. announces renewal of credit agreement



CALGARY, April 6 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or the "Company") is pleased to announce that it has amended its credit facilities, including extended terms and an additional US dollar denominated revolving facility.

"The extension and amendment to our existing credit agreement better aligns our credit facilities with the Company's growing US and international presence. In addition, the extended maturity dates give Trinidad additional flexibility to consider refinancing, redemption and other alternatives, prior to the maturity of our convertible debentures in July 2012," said Brent Conway, Trinidad's Executive Vice President and Chief Financial Officer.

Trinidad's amended credit facilities now include:

    -   A Canadian revolving facility of C$150 million and a US revolving
        facility of US$100 million;
    -   A Canadian term facility with an outstanding principal amount of
        approximately C$67.5 million; and
    -   A US term facility with an outstanding principal amount of
        approximately of US$84.3 million.

The maturity dates on all three credit facilities have been extended to April 2012, except for approximately US$4.7 million under the US term facility which remains due in May 2011. The interest rates associated with the credit agreement have been adjusted to reflect current market conditions; they continue to be based on LIBOR and BA rates and now incorporate a tiered interest rate, which varies depending on the results of the leverage ratio. The term facilities continue to have minimal repayment requirements of one percent per annum until April 2012, other than the portion of the US dollar term facility which was not extended as noted above.

The amended credit agreement is jointly led by The Toronto-Dominion Bank (TD) and Wells Fargo Bank, National Association (Wells Fargo), with TD acting as the agent for the Canadian credit facilities and Wells Fargo, the agent for the US credit facilities.

As part of the amendment of the credit facility, the financial ratio covenants included in the credit agreement have changed slightly. The new agreement has three financial ratio covenants that Trinidad is required to operate within, which are listed below. Trinidad's financial position at the end of 2009 was well within these covenants.

    Financial ratio covenant     Position at Dec 31, 2009       Threshold
    Leverage ratio                        1.34:1              2.5:1  maximum
    Fixed charge coverage ratio           2.16:1              1.25:1 minimum
    Maximum distribution payout            30.9%              maximum 50% of
                                                            excess cash flow

As in the past, Trinidad's convertible debentures are excluded from the calculation of the leverage ratio. A full description of the calculation of these covenants is available in the credit agreement which will be filed on SEDAR (

A summary of the changes to Trinidad's credit facilities is outlined below:

    Facility                    Amount                       Term
                         Current      Previous      Current        Previous
    Canadian Revolving   C$150        C$225         Due April 1,   Renewed
     facility            million      million           2012       annually

    US Revolving         US$100       nil           Due April 1,   nil
     facility            million                        2012
    Canadian term        C$67.5       C$67.8        Due April 1,   Due May
     facility            million      million           2012         2011
                                      drawn at
    US term              US$84.3      US$84.7       Due April 1,   Due May
     facility            million      million          2012(1)       2011
                                      drawn at

    (1) Other than approximately US$4.7 million due under the US term
        facility which remains due in May 2011.

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 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.

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:

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