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Press release from CNW Group

TRINIDAD DRILLING LTD. ANNOUNCES EXTENDED CONTRACT TERMS

Monday, May 16, 2011

TRINIDAD DRILLING LTD. ANNOUNCES EXTENDED CONTRACT TERMS08:00 EDT Monday, May 16, 2011/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/TSX SYMBOL: TDGCALGARY, May 16 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or "the Company") is pleased to announce that it has re-signed long-term, take-or-pay contracts with expanding gross margins on 24 existing rigs."Trinidad is known in the industry for its modern, technically advanced equipment that performs well in today's challenging drilling environment," said Lyle Whitmarsh, Trinidad's President and Chief Executive Officer. "Our ability to re-sign our equipment to multi-year, take-or-pay contracts and lock in improving market conditions reflects the ongoing demand for our equipment and our track record of high performance."As a part of its strategy to manage cyclicality in the drilling industry, Trinidad maintains a blend of long-term and spot market exposure over its fleet. This blend provides revenue stability during weak industry conditions, while also allowing the Company to participate in the upside as conditions improve. In line with this strategy, Trinidad recently completed contract negotiations on 17 rigs which were due to expire at the end of 2011. These rigs have now been re-signed with the same customer for an additional three year term at 100% utilization at increased dayrates. The successful re-contracting of these rigs reflects the increasing demand for high quality drilling equipment such as Trinidad's. In addition, Trinidad has re-signed another seven rigs, including four rigs that will be moved to the Powder River basin in Wyoming, creating a new operating area for Trinidad. These seven rigs have also been contracted for three years at 100% utilization.The re-contracted rigs were largely built over the past five years and backed by long-term, take-or-pay contracts associated with their construction. Trinidad's ability to extend its initial contracts reflects the high quality of its equipment and the top performance it has been able to provide its customers. It also demonstrates the ongoing adaptability of the equipment to existing and emerging development areas.Including the rigs being constructed in 2011 and the re-signed contracts, Trinidad has 52% of its fleet under contract with an average term remaining of approximately 2.3 years. Following the completion of the rig build program, Trinidad will have a total of 122 drilling rigs with 56 rigs in Canada, 63 rigs in the US and 3 rigs in Mexico.Trinidad is a growth-oriented corporation that trades on the Toronto Stock Exchange under the symbol TDG. Trinidad's divisions operate in the drilling, well-servicing, coring and barge-drilling sectors of the North American oil and natural gas industry with operations in Canada, the United States and 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.FORWARD-LOOKING STATEMENTSThe document contains certain forward-looking statements relating to Trinidad's plans, strategies, objectives, expectations and intentions. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "confident", "might" and similar expressions are intended to identify forward-looking information or statements. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this document. The forward-looking information and statements included in this document are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements. In particular, but without limiting the foregoing, this document may contain forward-looking information and statements pertaining to the completion of announced rig construction programs on a timely basis and on economical terms; the assumption that Trinidad's customers will honour their take-or-pay contracts; fluctuations in the demand for Trinidad's services; the ability for Trinidad to attract and retain qualified personnel, in particular field staff to crew the Company's rigs; the existence of competitors, technological changes and developments in the oilfield services industry; the existence of operating risks inherent in the oilfield services industry; assumptions respecting capital expenditure programs and other expenditures by oil and gas exploration and production companies; assumptions regarding commodity prices, in particular oil and natural gas; assumptions respecting supply and demand for commodities, in particular oil and natural gas; assumptions regarding foreign currency exchange rates and interest rates; the existence of regulatory and legislative uncertainties; the possibility of changes in tax laws; and general economic conditions including the capital and credit markets. Trinidad cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information and statements contained in this document speak only as of the date of this document and Trinidad assumes no obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.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.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: lciulka@trinidaddrilling.com