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Press release from CNW Group

Trinidad Drilling Ltd. Reports Strong Second Quarter 2012 Results; Dayrates, Profitability and Financial Flexibility All Continue to Improve

Wednesday, August 08, 2012

Trinidad Drilling Ltd. Reports Strong Second Quarter 2012 Results; Dayrates, Profitability and Financial Flexibility All Continue to Improve21:00 EDT Wednesday, August 08, 2012/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/ TSX SYMBOL:  TDG CALGARY, Aug. 8, 2012 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or "the Company") reported strong second quarter and year-to-date 2012 results that demonstrate the ongoing demand for the Company's modern, technically advanced equipment. During the quarter and the first half of 2012, Trinidad recorded increased dayrates which drove higher revenue, improved margins and higher adjusted EBITDA(1) and net earnings than in the same periods last year, despite lower activity levels. In addition, the Company continued to lower its debt levels and made important strides towards reaching its leverage reduction targets."Trinidad's business model is about performance. Our high quality equipment and well trained crews provide consistent top performance for our customers. Trinidad's commitment to high performance not only keeps our existing customers satisfied but allows us to increase market share, maintain industry leading activity and deliver more stable margins even in today's ever-changing oil and gas industry," said Lyle Whitmarsh, Trinidad's Chief Executive Officer. "This ability has been evident in the first half of 2012, where we were able to redeploy assets into higher demand areas, maintain strong activity levels and deliver solid financial results with increased profitability and improved financial flexibility. In addition, we have remained committed to the safety of our people and continued to improve our already strong safety performance. These impressive results have been achieved during a time of global economic uncertainty and weakening commodity prices. We have built Trinidad with a long-term vision that can withstand the cycles in the industry and capture opportunities for success as conditions change. Our adaptable, top performing equipment, high proportion of long-term contracts and growing financial flexibility position us well for continued success in the future."(1) Please see the Non-GAAP Measures Definitions section of this document for further details.FINANCIAL HIGHLIGHTS        Three months ended June 30,Six months ended June 30,($ thousands except share and per share data)20122011% Change20122011% ChangeRevenue (3)167,568149,66612.0423,148373,98413.1Revenue, net of third party costs159,835139,10014.9395,027343,79814.9Gross margin (1)65,78452,63825.0169,977137,36723.7Gross margin percentage (1, 3)39.3%35.2%11.640.2%36.7%9.5Gross margin - net percentage (1)41.2%37.8%9.043.0%40.0%7.5EBITDA (1)53,08141,16429.0144,321104,97737.5 Per share (diluted) (2)0.440.3429.41.190.8736.8Adjusted EBITDA (1)53,34439,06936.5145,295108,69233.7 Per share (diluted) (2)0.440.3237.51.200.9033.3Cash provided by operations96,13482,32016.8163,601106,58053.5 Per share (basic / diluted) (2)0.800.6817.61.350.8853.4Funds provided by operations51,20934,86046.9122,66599,21923.6 Per share (basic / diluted) (2)0.420.2944.81.010.8223.2Net earnings12,8665,005157.147,33420,994125.5 Per share (basic / diluted) (2)0.110.04175.00.390.17129.4Adjusted net earnings (1)13,12911,90310.355,82733,70265.6 Per share (basic / diluted) (2)0.110.1010.00.460.2864.3Capital expenditures net of dispositions46,35711,044319.7107,00835,314203.0Dividends declared6,0436,043-12,08612,086-Shares outstanding - basic       (weighted average) (2)120,859,476120,858,226-120,859,476120,851,072-Shares outstanding - diluted       (weighted average) (2)120,859,476120,906,245-120,859,476120,899,091-As at    June 30,December 31, ($ thousands except percentage data)   20122011 % Change Total assets   1,615,348 1,608,1260.4Total long-term liabilities   648,616 666,717(2.7)Net debt (1)   439,322 440,338(0.2) (1) Readers are cautioned that gross margin, gross margin percentage, gross margin - net percentage, EBITDA, Adjusted EBITDA, Adjusted net earnings and net debt and the related per share information do not have standardized meanings prescribed by IFRS - see "Non-GAAP Measures".(2) Basic shares include the weighted average number of shares outstanding over the period.  Diluted shares include the weighted average number of shares outstanding over the period and the dilutive impact, if any, the number of shares issuable pursuant to the Incentive Option Plan.(3) Revenue and gross margin percentage have been recalculated in the prior year based on changes in presentation - see "Change in Presentation". OPERATING HIGHLIGHTS   Three months ended June 30, Six months ended June 30,  20122011% Change 20122011% ChangeLand Drilling Market        Operating days (1, 2)        Canada 1,288 1,646(21.7) 5,395 6,006(10.2) United States and International5,289 5,1702.3 10,551 10,2582.9Rate per operating day (1, 3, 4)        Canada (CDN$)25,34320,79621.9 24,47820,55119.1 United States and International (CDN$)22,58618,47022.3 22,26118,14522.7 United States and International (US$)22,61619,09518.4 22,15818,49119.8Utilization rate - operating day (1, 3, 5)        Canada 26%34%(23.5) 54%60%(10.0) United States and International86%89%(3.4) 88%90%(2.2)Number of drilling rigs at quarter end        Canada 55541.9 55541.9 United States and International68654.6 68654.6 Utilization rate for service rigs (6)-34%- -51%- Number of coring and surface casing rigs at quarter end2020- 2020-Barge Drilling Market         Operating days (1, 2)429436(1.6) 793881(10.0) Rate per operating day (CDN$) (1, 3, 4)29,07222,68028.2 27,40822,33922.7 Rate per operating day (US$) (1, 3, 4)29,10623,44124.2 27,31422,75520.0 Utilization rate - operating day (1, 5)94%96%(2.1) 87%97%(10.3) Number of barge drilling rigs at quarter end22- 22- Number of barge drilling rigs under Bareboat Charter Agreements at quarter end33- 33-(1) Operating days, utilization rate - operating day and rate per operating day have been recalculated, see "Change in Presentation".(2) Operating days include drill days and move days.(3) Rate per operating day includes operating revenue divided by operating days.(4) Operating revenue is presented net of third party costs(5) Utilization rate - operating day is based on operating days divided by total days available.(6) In the second quarter of 2011, Trinidad disposed of its 22 well servicing rigs and related equipment. OVERVIEWThe record results achieved in the first quarter of 2012 continued into the second quarter, with Trinidad achieving increased dayrates and improved profitability over the same periods last year. Ongoing demand for high performance equipment and increased revenue generation combined with a continued focus on cost control drove record levels of gross margins, adjusted EBITDA and net earnings in the quarter and year-to-date 2012.During the second quarter of 2012, commodity prices weakened from the previous quarter and from the same quarter last year. The gap between current natural gas storage levels and the five-year average narrowed during the second quarter; however, levels still remain high and have kept downward pressure on natural gas prices. In the second quarter of 2012, Henry Hub natural gas prices averaged US$2.21 per mmBtu, down from US$2.44 per mmBtu in the previous quarter and US$4.37 per mmBtu in the second quarter of last year. Year to date, natural gas prices declined from US$4.27 per mmBtu in the first half of 2011 to US$2.34 per mmBtu in the same period this year. Crude oil prices also weakened in the second quarter of 2012, reflecting increased concerns for delayed economic recovery in North America and globally. West Texas Intermediate crude oil prices averaged US$93.29 per barrel in the second quarter, down from US$102.98 per barrel in the previous quarter and US$102.02 per barrel in the same quarter last year. Year-to-date crude oil prices remained relatively unchanged in 2012 compared to 2011. Weaker natural gas prices have driven a strong move away from natural gas drilling towards oil and liquids-rich drilling in the past few years. Trinidad has participated in this trend and has moved a large number of rigs for its customers into oil or liquids-rich plays. The Company currently has approximately 90.0% of its fleet drilling in these higher activity plays.During the second quarter of 2012, the industry active rig count in the US lowered slightly reflecting the weaker commodity price environment and the growing supply of equipment that has moved away from natural gas drilling and is now competing for work in oil or liquids-rich plays. The US active rig count in the second quarter averaged 1,970 rigs, compared to 1,989 rigs in the previous quarter. Despite a slight decrease in the active rig count in the current quarter, US drilling activity still remains above the level in the same quarter last year, when it averaged 1,834 active rigs. Trinidad's US and international utilization levels were down slightly compared to the previous year as a result of customer logistical delays.Industry utilization levels in Canada were lower in the second quarter due to wet weather conditions which delayed the start-up of drilling equipment. Industry utilization averaged 18.0% for the quarter compared to 23.0% for the same quarter last year. Trinidad was also impacted by these conditions but exceeded industry utilization levels by six percentage points, averaging 24.0% in the quarter compared to 31.0% for the same quarter last year.Increased dayrates in both the Canadian and US and international segments drove higher revenue generation in the current quarter and year-to-date 2012, compared to the same periods last year. This strong performance combined with a continued focus on cost control led to higher gross margin, adjusted EBITDA and net earnings in the quarter and year-to-date.Trinidad understands the cyclicality of the drilling industry and typically keeps a significant proportion of its fleet under long-term, take-or-pay contracts in order to minimize the impact of industry cycles on its revenue stream. Currently, Trinidad has more than 60.0% of its fleet under this style of contract with an average term remaining of approximately two years.The company continues to be focused on maintaining a sustainable growth program. The 2012 rig build program remains unchanged with five new rigs expected to be delivered into operations during the year or early in 2013. In addition, the Company completed two new rigs and four upgraded rigs from its 2011 program in the first half of 2012.Trinidad remains committed to its leverage reduction strategy and reached a significant milestone during the second quarter. At June 30, 2012, Trinidad reached its near-term goal of lowering Total Debt to EBITDA to below 2.0 times, closing the quarter at 1.97 times. By comparison, the Company's Total Debt to EBITDA at the end of 2011 was 2.42 times, at June 30, 2011 it was 2.53 times and at its peak at December 31, 2007 it was 3.53 times. Trinidad's ability to make consistent progress on its leverage reduction strategy is due to the Company's ongoing capital discipline, commitment to living within free cash flow and adapting its business to maintain profitable and high performing operations during a time of significant change in the industry. Trinidad is moving towards its long-term leverage goal of Total Debt to EBITDA at either side of 1.5 times.Second quarter 2012 and year-to-date highlightsTrinidad generated revenue of $167.6 million for the second quarter and $423.1 million year to date, an increase of 12.0% and 13.1% from the same periods of 2011. Revenue grew in the quarter and year to date as a result of increased dayrates in each of the Canadian and the US and international operations. The impact of the improved market conditions was partially offset by a reduction in operating days due to wet weather conditions experienced in Canada during the second quarter of 2012.Gross margin grew to $65.8 million in the second quarter and $170.0 million year to date, an increase of 25.0% and 23.7%, respectively, from the prior comparative periods. Gross margin increased due to higher revenue generation which was partially offset by higher operating costs. Gross margin net percentage was 41.2% in the quarter and 43.0% year to date, which increased from 37.8% and 40.0%, respectively, in 2011. Increase in gross margin and gross margin net-percentage were a result of increased dayrates reflecting the improved market conditions and a continued focus on cost containment.Adjusted EBITDA was $53.3 million in the second quarter and $145.3 million year to date, up 36.5% and 33.7%, respectively, from the same periods of 2011. Adjusted EBITDA improvements were driven by higher dayrates, increased gross margin and lower general and administrative expenses (before share-based payments).Net earnings were $12.9 million ($0.11 per share (diluted)) for the quarter and $47.3 million ($0.39 per share (diluted)) year to date, up 157.1% and 125.5%, respectively, from 2011. Net earnings grew as a result of improved EBITDA, partially offset by an increase in income taxes in the current three and six month period when compared to the prior year.In the second quarter of 2012, Total Debt to EBITDA decreased to 1.97 times, compared to 2.42 times at year-end 2011 and 2.53 times at the end of the second quarter of 2011, a direct result of Trinidad's ongoing commitment to reducing indebtedness.RESULTS FROM OPERATIONSCanadian Operations        Three months ended June 30, Six months ended June 30,($ thousands except percentage and operating data)20122011% Change 20122011% ChangeOperating revenue (1, 2, 3, 4)33,80238,225(11.6) 148,767147,0871.1Other revenue116379(69.4) 242584(58.6) 33,91838,604(12.1) 149,009147,6710.9Operating costs (1, 2, 3, 4)23,14029,885(22.6) 86,52791,244(5.2)Gross margin10,7788,71923.6 62,48256,42710.7Gross margin - net percentage31.8%22.6%40.7 41.9%38.2%9.7        Drilling days1,1821,522(22.3) 4,9665,530(10.2)Operating days (1, 5)1,2881,646(21.7) 5,3956,006(10.2)Rate per operating day (CDN$) (1, 6)25,34320,79621.9 24,47820,55119.1Utilization rate - operating day (1, 7)26%34%(23.5) 54%60%(10.0)Utilization rate - drilling day (1, 8)24%31%(22.6) 50%55%(9.1)CAODC industry average (1, 9)18%23%(21.7) 42%44%(4.5)Number of drilling rigs at quarter end55541.9 55541.9        Utilization rate for service rigs (1, 10)-34%- -51%- Number of coring and surface rigs at quarter end 2020- 2020-(1) Operating revenue, operating costs, operating days, utilization rate - operating day and rate per operating day have been recalculated, see "Change in Presentation".(2) Inter-segment revenue and operating costs of ($2.4) million and $13.1 million has been excluded for the three months ended June 30, 2012 and 2011, respectively.  Inter-segment revenue and operating costs of $4.9 million and $26.2 million has been excluded for the six months ended June 30, 2012 and 2011, respectively. Each of these inter-segment revenue and operating costs relates to rig construction for the US operations.(3) External construction revenue and operating costs of $0.1 million and $0.2 million for the three and six months ended June 30, 2012, respectively, are included in the above table. External construction revenue and operating costs of $0.3 million and $1.1 million for the three and six months ended June 30, 2011, are included in the above table.(4) Operating revenue and operating costs exclude third party recovery and third party costs of $3.8 million and $6.0 million for the three month period ended June 30, 2012 and 2011, respectively. Operating revenue and operating costs exclude third party recovery and third party costs of $19.0 million and $21.5 million have been excluded for the six month period ended June 30, 2012 and 2011, respectively.(5) Operating days include drill days and move days.(6) Rate per operating day includes operating revenue divided by operating days.(7) Utilization rate - operating day is based on operating days divided by total days available.(8) Utilization rate - drilling day is based on drilling days divided by total days available.(9) CAODC industry average is based on drilling days divided by total days available.(10) In the second quarter of 2011, Trinidad disposed of all of its 22 well servicing rigs and related equipment. Trinidad's Canadian operations performed strongly in the second quarter and year to date 2012. Higher dayrates in the current period drove improved profitability and more than offset slightly lower activity levels and the impact of the sale of the Company's well service rigs in the second quarter of 2011.The second quarter is typically influenced by spring breakup, as activity levels drop due to the road bans which restrict the movement of heavy equipment during this period. In 2012, wetter than normal conditions in the second quarter led to an extended spring break up and resulted in lower operating days than the same quarter last year. Trinidad's high performance, modern fleet has a long track record of consistently outperforming industry activity levels and despite the impact of wet weather this quarter, the fleet continued this trend with industry-leading utilization levels. Changes in customer demand also impacted activity levels during the second quarter of 2012. A weaker commodity price environment resulted in customers re-evaluating their current drilling plans, causing them to switch activity between plays and also led to an increase in exploratory drilling versus development drilling.  These changes in customer focus resulted in increased move days and lower pad drilling during the quarter.Dayrates increased in the second quarter of 2012 compared to the same period of 2011.  Improved pricing was largely the result of high customer demand reflecting stronger market conditions year over year. Dayrates also increased due to crew wage increases that occurred in the third quarter of 2011, these additional costs were passed through to the operator.  Additionally, in the current quarter and year to date 2012, dayrates were $1,050 per operating day and $320 per operating day, respectively, higher than the prior year due to standby revenue received as a result of operator logistical delays.  Standby revenue increases average dayrates as it generates revenue, but does not count as an operating day. Compared to the first quarter of 2012, dayrates increased by $1,137 per operating day as a higher proportion of contracted, high performance rigs operated, driving up the overall average dayrate.Gross margin in the current period and year to date 2012 was higher than the same periods of 2011 due to the ongoing demand for modern, technically advanced equipment and subsequently higher dayrates.  Improved pricing more than offset the absence of the well servicing assets, and the impact of lower operating days. These factors also drove higher gross margin net percentages in both the current quarter and year-to-date 2012, compared to the same periods in 2011.Trinidad's rig fleet increased by one rig in the current period, versus the same period of 2011, as one new build was delivered from the Company's manufacturing division in the second quarter of 2012.In the first and second quarters of 2011, the construction operations delivered one rig per quarter into the US operations.  In addition, they continued construction of the two new builds added in early 2012.In the second quarter of 2012, the construction operations continued work on Trinidad's five rig new build program.  The company expects two rigs to be delivered in the second half of 2012, two rigs in the later part of 2012 or early 2013, and the final rig in the first quarter of 2013.United States and International Operations Three months ended June 30, Six months ended June 30,($ thousands except percentage and operating data)20122011% Change 20122011% ChangeOperating revenue (1, 2)125,907100,32925.5 246,004195,82425.6Other revenue10167(94.0) 14303(95.4) 125,917100,49625.3 246,018196,12725.4Operating costs (1, 2)70,91156,57725.3 138,523115,18720.3Gross margin55,00643,91925.2 107,49580,94032.8Gross margin - net percentage43.7%43.7%  43.7%41.3%          Land Drilling Rigs        Drilling days4,5604,741(3.8) 9,1409,280(1.5)Operating days (1 ,3)5,2895,1702.3 10,55110,2582.9Rate per operating day (CDN$) (1, 4)22,58618,47022.3 22,26118,14522.7Rate per operating day (US$) (1, 4)22,61619,09518.4 22,15818,49119.8Utilization rate - operating day (1, 5)86%89%(3.4) 88%90%(2.2)Utilization rate - drilling day (1, 6)74%82%(9.8) 76%81%(6.2)Number of drilling rigs at quarter end68654.6 68654.6         Barge Drilling Rigs        Operating days (3)429436(1.6) 793881(10.0) Rate per operating day (CDN$) (1, 4)29,07222,68028.2 27,40822,33922.7 Rate per operating day (US$) (1, 4)29,10623,44124.2 27,31422,75520.0Utilization rate - operating day (1, 5)94%96%(2.1) 87%97%(10.3) Number of barge drilling rigs at quarter end 22- 22- Number of barge drilling rigs underBareboat Charter Agreements at quarter end 33- 33-(1) Operating revenue, operating costs, operating days, utilization rate - operating day and rate per operating day have been recalculated, see "Change in Presentation".(2) Operating revenue and operating costs exclude third party recovery and third party costs of $4.0 million and $4.6 million for the three months ended June 30, 2012 and 2011, respectively; and $9.1 million and $8.7 million for the six months ended June 30, 2012 and 2011, respectively.(3) Operating days include drill days and move days.(4) Rate per operating day includes operating revenue divided by operating days.(5) Utilization rate - operating day is based on operating days divided by total days available.(6) Utilization rate - drilling day is based on drilling days divided by total days available. Industry conditions remained strong in Trinidad's US and international operations for the second quarter and first half of 2012.  Revenue and gross margins increased versus the same periods of 2011 as a result of an expanded rig fleet and growing dayrates.Strong demand for Trinidad's modern, high performance equipment led to upward momentum on dayrates in the quarter, versus the same period of 2011 and the first quarter of 2012. Higher dayrates also reflected increases in crew wages, flat sum trucking, and standby revenue generated in the quarter. While gross margin net percentage levels remained strong and consistent in both the second quarter of last year and the first quarter of the current year, they did not fully reflect the increased dayrates. Wage increases incurred in the past year have been passed on to the operator at cost, and therefore have no gross margin impact, but do negatively impact gross margin net percentage.  Standby revenue received in the current period and year to date increased dayrates per operating day versus the same periods of 2011 by approximately US$1,100 and US$1,050 per operating day, respectively. In addition, in 2011, Trinidad received one-time demobilization revenue that positively impacted the gross margin. Trinidad does not count standby and demobilization in the operating day statistics, which increases dayrates.Utilization levels in the second quarter and year-to-date 2012 lowered from the levels experienced in 2011 and the first quarter of 2012. During the second quarter, Trinidad had an increased number of rigs receiving standby revenue as customers re-evaluated their development opportunities in light of weaker commodity prices. While standby revenue does not add operating days and utilization, it does contribute to revenue and the profitability of operations.The land drilling rig count increased by net three rigs in the current period versus the same period of 2011; five new builds were delivered into service in the US, one rig in the third quarter of 2011 and four rigs in the first half of 2012. Of the new builds delivered, four were rigs purchased externally and retrofitted to meet the company's specifications, with one rig built internally. The additional rigs were partially offset by two rigs being removed from the company's marketable fleet at year-end 2011.  These two rigs are being assessed for sale or possible retrofit to meet current customer demands and Trinidad's target fleet mix. The four rigs delivered into service in 2012 were delivered into the Niobrara shale in Wyoming.The Company's barge drilling operations continued its positive momentum, with quarter-over-quarter and sequential dayrate increases.  Higher dayrates for these operations are a reflection of the increased level of demand and the limited supply of high quality equipment in this sector.  Activity levels increased from the first quarter of 2012, but were lower compared to the second quarter and year to date in 2011, as a result of short-term customer logistical delays. The increased activity in the current quarter demonstrates that the customer delays are largely complete and barge drilling operations are expected to remain at stable activity levels going forward.QUARTERLY ANALYSIS FINANCIAL HIGHLIGHTS - QUARTERLY ANALYSIS 201220112010($ millions except per share data and operating data) Q2  Q1  Q4  Q3  Q2  Q1  Q4  Q3 Revenue167.6 255.6226.5196.8149.7224.3194.4167.4Gross margin65.8 104.288.881.552.684.776.762.5Gross margin percentage39.3%40.8%39.2%41.4%35.2%37.8%39.4%37.3%Gross margin - net percentage41.2%44.3%42.4%44.3%37.8%41.4%43.0%39.7%         Net earnings (loss) for the year12.9 34.525.330.25.016.0(84.8)0.8Adjustments for:         Depreciation and amortization 25.8 28.129.128.625.429.627.728.6 Foreign exchange (0.7)0.52.4(6.1)(1.2)1.80.55.1 Loss (gain) on sale of property and equipment (0.5)0.2(0.6)(0.1)(5.3)-0.4- Impairment of property and equipment - 7.5--9.0-24.9- Impairment of intangible assets and goodwill - -----59.10.3 Finance costs 10.5 10.810.910.910.512.436.214.0 Income taxes 4.4 10.24.86.4(3.4)5.9(2.2)0.4 Other 1.0 0.12.5(0.5)(0.9)4.01.70.7 Income taxes paid (0.7)(0.7)-(4.5)(0.9)(2.4)(0.4)(1.9) Income taxes recovered - -0.81.5-0.2-- Interest paid (1.5)(19.8)(1.6)(21.4)(3.3)(3.1)(25.7)(2.6)Funds provided by operations51.2 71.473.645.034.964.437.445.4Net earnings (loss) per share (diluted)0.11 0.290.210.250.040.13(0.70)0.01Funds provided by operations per share (diluted)0.42 0.590.610.370.290.530.310.38 NON-GAAP MEASURES HIGHLIGHTS - QUARTERLY ANALYSIS 2012 2011 2010 ($ millions except per share data and operating data) Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3EBITDA (1)53.1 91.2 69.5   76.0   41.2   63.8 61.5 44.1 Per share (diluted) (2)0.44 0.75 0.58   0.63   0.34   0.53 0.51 0.37Adjusted EBITDA (1)53.3 92.0   74.4   69.4   39.1   69.6 63.7 49.9 Per share (diluted) (2)0.44 0.76   0.62   0.57 0.32   0.58 0.53   0.41Adjusted net earnings (1)13.1 42.7 30.2   23.5 11.9   21.8 1.5 6.9 Per share (diluted) (2)0.11 0.35 0.25 0.19 0.10 0.18 0.01 0.06               (1) See the Non-GAAP Measures Definitions section of this document for further details.(2) Diluted shares include the weighted average number of shares outstanding over the period and the dilutive impact, if any, the number of shares issuable pursuant to the Incentive Option Plan.  OPERATING HIGHLIGHTS - QUARTERLY ANALYSIS  201220112010   Q2 Q1  Q4  Q3  Q2  Q1  Q4  Q3 Land Drilling Market         Operating days(1, 2)         Canada 1,2884,1073,6653,6751,6464,3593,5222,971 United States and International5,2895,2625,5475,5795,1705,0884,9584,769Rate per operating day(1, 3, 4)         Canada (CDN$)25,34324,20623,65220,31520,79620,45920,16318,751 United States and International (CDN$)22,58621,93520,71018,60018,47017,81518,17218,414 United States and International (US$)22,61621,69820,38719,14319,09517,87817,78917,681Utilization rate - operating day(1, 5)         Canada 26%84%74%74%34%87%70%60% United States and International86%90%92%92%89%90%82%78%          Number of drilling rigs at quarter end         Canada 5554545454555555 United States and International6866646665636266 Utilization rate for service rigs (6)----34%66%57%41% Number of service rigs at quarter end (6)-----222222 Number of coring and surface casing rigs at quarter end2020202020202020          Barge Drilling Market          Operating days (1, 2)429364373454436445456368 Rate per operating day (CDN$) (1, 3, 4)29,07225,44825,83524,83322,68022,00424,36824,556 Rate per operating day (US$) (1, 3, 4)29,10625,20425,45525,54723,44122,08323,84423,581 Utilization rate - operating day (1, 5)94%80%81%99%96%99%99%88% Number of barge drilling rigs at quarter end 22222222 Number of barge drilling rigs under Bareboat Charter at quarter end 33333333(1) Operating revenue, operating costs, operating days, utilization rate - operating day and rate per operating day have been recalculated, see "Change in Presentation".(2) Operating days include drill days and move days.(3) Rate per operating day includes operating revenue divided by operating days.(4) Operating revenue is presented net of third party costs(5) Utilization rate - operating day is based on operating days divided by total days available.(6) In the second quarter of 2011, Trinidad disposed of its 22 well servicing rigs and related equipment.  FINANCIAL SUMMARY      As atJune 30, December 31,  ($ thousands except percentage data)2012 2011  $ ChangeWorking capital (1)107,726 139,829 (32,103)      Current portion of long-term debt605 580 25Long-term debt (2)547,048 580,167 (33,119)Total debt547,653 580,747 (33,094)Total debt as a percentage of assets33.9% 36.1%        Net debt (1)439,322 440,338 (1,016)Net debt as a percentage of assets27.2% 27.4%        Total assets1,615,348 1,608,126 7,222Total long-term liabilities648,616 666,717 (18,101)Total long-term liabilities as a percentage of assets40.2% 41.5%        Shareholders' equity877,313 841,226 36,087Total debt to shareholders' equity62.4% 69.0%  Net debt to shareholders' equity50.1% 52.3%             (1) See Non-GAAP Measures Definition section of this document for further details.(2) Long-term debt is net of associated transaction costs. At June 30, 2012, working capital decreased by $32.1 million from December 31, 2011. The lower level of working capital was driven by a collection of receivables, lower inventory reflecting materials utilized for rig construction during the period, a reduction in prepaid expenses, and an increase in deferred revenue related to a delay penalty received from a customer to be amortized over the remaining periods of 2012. These factors were partially offset by higher cash balances, an increase in assets held for sale due to the classification of a building in the US operations, as well as a decrease in accounts payable and accruals due to lower activity levels in the second quarter of 2012 compared to the fourth quarter of 2011.Trinidad's total debt balance declined by $33.1 million during the current quarter when compared to the year ended December 31, 2011. During this period, Trinidad reduced its revolving credit facility balances by $34.2 million, offset slightly by a small increase in the Senior Notes as a result of the change in the US dollar foreign exchange rate at June 30, 2012. The Senior Notes are translated at each quarter end, as such their value will fluctuate quarterly with variations in exchange rates.  The Senior Notes are due January 2019 and interest is payable semi-annually in arrears on January 15 and July 15.Trinidad's net debt declined by $1.0 million during the current quarter, due to a lower debt balance offset by a lower working capital for reasons as mentioned above.At June 30, 2012, Trinidad had CDN$68.0 million outstanding on its Canadian revolving credit facility and US$30.0 million on its US revolving credit facility, leaving CDN$132.0 million and US$70.0 million unutilized in the facility, respectively.  The Canadian and US revolving facility requires quarterly interest payments that are based on Bankers Acceptance and LIBOR rates and incorporate a tiered interest rate, which varies depending on the results of the Consolidated Total Debt to Consolidated EBITDA ratio (see table below). In 2011 Trinidad's lenders agreed to an extension of the facility, which now matures on December 16, 2015, and is subject to annual extensions of an additional year on each anniversary.A total of $108.9 million of capital expenditures were spent during the six months ended June 30, 2012, compared to $72.1 million for the same period in the prior year.  Capital expenditures were substantially related to the Company's rig build program.Trinidad expects cash provided by operations and the Company's various sources of financing to be sufficient to meet its debt repayments, future obligations and to fund planned capital expenditures.Current financial performance is well in excess of the financial ratio covenants under the revolving credit facility as reflected in the table below under IFRS:      RATIOJune 30, December 31, THRESHOLD 2012 2011        Consolidated Senior Debt to Consolidated EBITDA (1) 0.37:1  0.59:1 3.00:1 maximum Consolidated Total Debt to Consolidated EBITDA (1) 1.97:1  2.42:1 4.00:1 maximum Consolidated EBITDA to Consolidated Cash Interest Expense (1) 6.88:1 5.74:1 2.75:1 minimum                   (1) Please see the Non-GAAP Measures Definition section of this document for further details.Readers are cautioned that the ratios noted above do not have standardized meanings prescribed in IFRS.OUTLOOKTrinidad's operations have continued to operate smoothly and profitably over the first half of 2012. The company relocated a large number of rigs into oil and liquids-rich plays following the weakness in natural gas prices in the later part of 2011 and into 2012. During this time, Trinidad demonstrated the adaptability and the ongoing customer demand for its high performance equipment and the Company's ability to perform well during periods of industry change.Moving into the second half of 2012, commodity prices have continued to fluctuate. Trinidad closely monitors these changes, the economic indicators that drive them, as well as the impact on its customers' capital spending programs. To date, Trinidad has seen customers re-evaluate drilling programs and move activity between plays in order to maintain their economic returns; however, the Company has not seen an overall pull back in spending. Several of Trinidad's customers are owned by, or have agreements with, foreign national oil companies which tend to have long-term development plans and less sensitivity to fluctuations in commodity prices. Other customers tend to be bigger exploration and development companies with a large number of development opportunities to select from.While current commodity price levels drive solid activity and good dayrates, Trinidad is aware that additional weakness in crude oil prices, in particular, could cause softening in the market. Trinidad expects that there may be some reduction in activity levels and dayrates in select areas and for select styles of equipment, depending on the commodity being developed and the efficiency of the equipment, but overall the Company does not expect activity and pricing to drop to levels seen in the 2009 downturn. The extent of these changes, if any, will largely depend on commodity prices going forward. As economics become tighter for exploration and development companies, the importance of using efficient, high performance equipment grows. With more than three quarters of its fleet fitting into this category, Trinidad expects that its equipment will continue to achieve industry leading activity levels and solid dayrates. In addition, Trinidad has more than 60.0% of its fleet under long-term, take-or-pay contracts that provide the Company with a high level of revenue protection.Moving forward into 2012 and beyond, Trinidad will continue to work towards its goals of lower leverage and sustainable growth. In the second quarter, Trinidad achieved the next milestone in its leverage reduction strategy by lowering its Total Debt to EBITDA level to below 2.0 times. The Company remains committed to this strategy and is moving closer to its long-term goal of maintaining its leverage at either side of 1.5 times.During the first half of the year, Trinidad completed six rigs from its 2011 capital program and continues to have five new builds for construction in 2012. In addition, the Company has been focusing on upgrading existing equipment to ensure it remains marketable in an increasingly competitive industry. Trinidad has shown a disciplined approach to capital spending and a commitment to reaching its leverage goals for a number of years and a clear path to achieving its targets in the near future is now visible. Trinidad has also shown its commitment to providing a yield as part of its shareholders' total return. The Company has kept its dividend in place for the past ten years throughout industry cycles and the challenging economic times experienced during the past few years. Trinidad will continue to carefully balance its growth program with its debt reduction strategy while also reviewing alternative ways of adding value for shareholders.Notwithstanding recent media reports regarding producers' future spending plans, our customers continue to perform as expected under their contracts. Trinidad anticipates that while there may be some softness in specific areas of the industry in the next few months, current industry conditions will remain solid and that Trinidad, with its high performing fleet, significant contract base and improved financial flexibility, will continue to perform well for the remainder of 2012 and into the future.CONFERENCE CALLA conference call and webcast to discuss the results will be held for the investment community on Thursday Aug 9th, 2012 beginning at 9:00 a.m. MT (11:00 a.m. ET).  To participate, please dial (888) 231-8191 (toll-free in North America) or (647) 427-7450 approximately 10 minutes prior to the conference call. An archived recording of the call will be available from approximately 2:00 p.m. ET on Aug 9th, 2012 until midnight Aug 16th, 2012 by dialing (855) 859 2056 or (416) 849-0833 and entering replay access code 98511193.A live audio webcast of the conference call will also be available via the Investor Relations page of Trinidad's website.A full copy of Trinidad's second quarter 2012 report including Management's Discussion and Analysis, Consolidated Financial Statements and Notes to the Consolidated Financial Statements can be found on the Investor Relations page of Trinidad's website or at www.sedar.comTRINIDAD DRILLING LTD.Trinidad is a corporation focused on sustainable growth that trades on the Toronto Stock Exchange under the symbol TDG. Trinidad's divisions operate in the drilling, 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.     CONSOLIDATED STATEMENTS OF FINANCIAL POSITION    As at June 30,  December 31,($ thousands) - unaudited2012  2011     Assets    Current Assets    Cash and cash equivalents14,596  -Accounts receivable 155,008  207,143Inventory13,236  17,523Prepaid expenses2,250  6,298Assets held for sale12,055  9,048 197,145  240,012     Property and equipment1,329,953  1,279,826Intangible assets and goodwill88,250  88,288 1,615,348  1,608,126     Liabilities    Current Liabilities    Bank indebtedness-  4,600Accounts payable and accrued liabilities 80,349  88,960Dividends payable6,043  6,043Deferred revenue2,422  -Current portion of long-term debt605  580 89,419  100,183     Long-term debt547,048  580,167Deferred income taxes101,568  86,550 738,035  766,900     Shareholders' Equity    Common shares952,043  952,043Contributed surplus49,794  49,462Accumulated other comprehensive income (loss)(24,870)  (25,377)Retained earnings (deficit)(99,654)  (134,902) 877,313  841,226 1,615,348  1,608,126Commitments and contingencies          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)   Three months endedSix months ended June 30,June 30,($ thousands except per share data) - unaudited2012201120122011     Revenue    Oilfield service revenue167,442149,120422,892373,097Other revenue126546256887 167,568149,666423,148373,984Expenses     Operating expense101,78497,028253,171236,617General and administrative13,41412,69125,75131,850Depreciation and amortization25,81725,41853,94754,993Foreign exchange(711)(1,217)(95)540(Gain) loss on sale of property and equipment(491)(5,342)(321)(5,353)Impairment of property and equipment-8,9937,5198,993 139,813137,571339,972327,640Finance costs10,49610,45221,29822,833Earnings before income taxes17,2591,64361,87823,511Income taxes     Current192,441(36)3,166Deferred 4,374(5,803)14,580(649) 4,393(3,362)14,5442,517Net earnings12,8665,00547,33420,994     Other comprehensive income (loss)    Foreign currency translation adjustment, net of income tax7,288(6,053)507(14,848) 7,288(6,053)507(14,848)Total comprehensive income (loss)20,154(1,048)47,8416,146     Earnings per share    Net earnings     Basic0.110.040.390.17 Diluted0.110.040.390.17        CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFor six months ended June 30, 2012 and 2011                Accumulated          other Retained    Common Contributed comprehensive earnings Total($ thousands) - unauditedshares surplus income (loss) (1) (deficit) equity           Balance at December 31, 2011952,043  49,462  (25,377) (134,902) 841,226 Share-based payments-  332  -  -  332 Total comprehensive income (loss)-  -  507  47,334  47,841 Dividends-  -  -  (12,086) (12,086)Balance at June 30, 2012952,043  49,794  (24,870) (99,654) 877,313            Balance at January 1, 2011951,863 49,016 (30,030) (187,211) 783,638Exercise of stock options163 (44) - - 119Share-based payments- 382 - - 382Total comprehensive income (loss)- - (14,848) 20,994 6,146Dividends- - - (12,086) (12,086)Balance at June 30, 2011952,026 49,354 (44,878) (178,303) 778,199(1) Accumulated other comprehensive income consisted of foreign currency translation adjustment.      CONSOLIDATED STATEMENTS OF CASH FLOWS  For six months ended June 30, ($ thousands) - unaudited2012 2011    Cash provided by (used in)   Operating activities   Net earnings47,334 20,994Adjustments for:    Depreciation and amortization 53,947 54,993 Foreign exchange (95) 540 (Gain) on sale of property and equipment (321) (5,353) Impairment of property and equipment 7,519 8,993 Finance costs 21,298 22,833 Income taxes 14,544 2,517 Other 1,064 3,132 Income taxes paid (1,353) (3,352) Income taxes recovered 30 247 Interest paid (21,307) (6,368) Interest received 5 43Funds provided by operations122,665 99,219Change in non-cash operating working capital40,936 7,361Cash provided by operations163,601 106,580    Investing activities   Purchase of property and equipment(108,877) (72,076)Proceeds from disposition of property and equipment1,869 36,762Change in non-cash working capital8,882 (3,773)Cash used by investing(98,126) (39,087)    Financing activities   Proceeds from long-term debt30,964 35,156Repayments of long-term debt(65,560) (88,224)Proceeds from exercise of options- 119Dividends paid(12,086) (12,085)Financing costs- (1,180)Cash used by financing(46,682) (66,214)    Cash flow from operating, investing and financing activities18,793 1,279Effect of translation of foreign currency cash403 245Increase in cash for the period19,196 1,524    (Bank indebtedness) cash and cash equivalents - beginning of period(4,600) 7,905Cash and cash equivalents - end of period14,596 9,429  SEGMENTED INFORMATION The following presents the result of Trinidad's operating segments:           Three months ended   United States / Inter-    June 30, 2012Canadian International segment    ($ thousands) Operations Operations Eliminations Corporate Total  Operating revenue 33,802 125,907 - - 159,709  Other revenue 116 10 - - 126  Third party recovery 3,757 3,976 - - 7,733  Inter-segment revenue (2,382) - 2,382 - -  35,293 129,893 2,382 - 167,568  Operating costs 23,140 70,911 - - 94,051  Third party costs 3,757 3,976 - - 7,733  Inter-segment operating (2,382) - 2,382 - -  Operating income 10,778 55,006 - - 65,784  Depreciation and amortization 6,005 19,812 - - 25,817  (Gain) loss on sale of property and equipment 17 (508) - - (491)  Impairment of property and equipment - - - - -  Impairment of intangible assets and goodwill - - - - -  6,022 19,304 - - 25,326  Segmented income 4,756 35,702 - - 40,458  General and administrative - - - 13,414 13,414  Foreign exchange - - - (711) (711)  Finance costs - - - 10,496 10,496  Income taxes - - - 4,393 4,393  Net earnings (loss)4,756 35,702 - (27,592) 12,866             Purchase of property and equipment 36,006 11,066 - - 47,072                       Three months ended   United States / Inter-    June 30, 2011Canadian International segment    ($ thousands) Operations  Operations Eliminations Corporate Total  Operating revenue 38,225 100,329 - - 138,554  Other revenue 379 167 - - 546  Third party recovery 5,961 4,605 - - 10,566  Inter-segment revenue 13,097 - (13,097) - -  57,662 105,101 (13,097) - 149,666  Operating 29,885 56,577 - - 86,462  Third party costs 5,961 4,605 - - 10,566  Inter-segment operating 13,097 - (13,097) - -  Operating income 8,719 43,919 - - 52,638  Depreciation and amortization 6,250 19,168 - - 25,418  (Gain) loss on sale of property and equipment (4,219) (1,123) - - (5,342)  Impairment of property and equipment 1,535 7,458 - - 8,993  Impairment of intangible assets and goodwill - - - - -  3,566 25,503 - - 29,069  Segmented (loss) income 5,153 18,416 - - 23,569  General and administrative - - - 12,691 12,691  Foreign exchange - - - (1,217) (1,217)  Finance costs - - - 10,452 10,452  Income taxes - - - (3,362) (3,362)  Net earnings (loss)5,153 18,416 - (18,564) 5,005             Purchase of property and equipment 13,599 33,925 - - 47,524                                            Six months ended   United States / Inter-    June 30, 2012Canadian International segment    ($ thousands) Operations Operations Eliminations Corporate Total  Operating revenue 148,767 246,004 - - 394,771  Other revenue 242 14 - - 256  Third party recovery 18,994 9,127 - - 28,121  Inter-segment revenue 4,914 - (4,914) - -  172,917 255,145 (4,914) - 423,148  Operating costs 86,527 138,523 - - 225,050  Third party costs 18,994 9,127 - - 28,121  Inter-segment operating 4,914 - (4,914) - -  Operating income 62,482 107,495 - - 169,977  Depreciation and amortization 15,367 38,580 - - 53,947  (Gain) loss on sale of property and equipment 47 (368) - - (321)  Impairment of property and equipment 5,957 1,562 - - 7,519  Impairment of intangible assets and goodwill - - - - -  21,371 39,774 - - 61,145  Segmented income 41,111 67,721 - - 108,832  General and administrative - - - 25,751 25,751  Foreign exchange - - - (95) (95)  Finance costs - - - 21,298 21,298  Income taxes - - - 14,544 14,544  Net earnings (loss) 41,111 67,721 - (61,498) 47,334             Purchase of property and equipment 61,238 47,639 - - 108,877                      Six months ended   United States / Inter-     June 30, 2011Canadian International segment    ($ thousands) Operations Operations Eliminations Corporate Total  Operating revenue 147,087 195,824 - - 342,911  Other revenue 584 303 - - 887  Third party recovery 21,461 8,725 - - 30,186  Inter-segment revenue 26,189 - (26,189) - -  195,321 204,852 (26,189) - 373,984  Operating costs 91,244 115,187 - - 206,431  Third party costs 21,461 8,725 - - 30,186  Inter-segment operating 26,189 - (26,189) - -  Operating income 56,427 80,940 - - 137,367  Depreciation and amortization 17,481 37,512 - - 54,993  (Gain) loss on sale of property and equipment (4,171) (1,182) - - (5,353)  Impairment of property and equipment 1,535 7,458 - - 8,993  Impairment of intangible assets and goodwill - - - - -  14,845 43,788 - - 58,633  Segmented income 41,582 37,152 - - 78,734  General and administrative - - - 31,850 31,850  Foreign exchange - - - 540 540  Finance costs - - - 22,833 22,833  Income taxes - - - 2,517 2,517  Net earnings (loss) 41,582 37,152 - (57,740) 20,994             Purchase of property and equipment 17,828 54,248 - - 72,076 ADVISORYCHANGE IN PRESENTATIONEffective December 31, 2011, Trinidad changed the presentation of third party costs and recovery to be accounted for on a gross basis versus a net basis.  This presentation change provides improved disclosure on the Company's operating segments; in addition, the presentation more accurately reflects the legal form of the contracts.  The change resulted in a reclassification of third party rental equipment costs, which were previously netted against revenue, to be presented on a gross basis as third party recovery and third party costs.  In addition, third party fuel costs, which were previously reported on a gross basis, have been reclassified to be included in third party recovery and third party costs.Additionally in the first quarter of 2012, the calculation of dayrates was changed to be based on operating revenue divided by operating days (drilling plus move days), and now excludes third party recovery revenue as well as other income.  Previously, only drilling days were included in the dayrate calculation.  Furthermore, the Company began including additional disclosure in regards to utilization, adding utilization rate - operating day which is based on operating days instead of just the previously disclosed drilling day based utilization. The change in presentation of dayrates and utilization better aligns our disclosure with our peers, and our management measurement tools.  Furthermore, the changes allow the users of the financial statements a higher degree of disclosure.  See "Non-GAAP Measures Definitions" for calculations.  The changes in presentation have been applied retrospectively.NON-GAAP MEASURES DEFINITIONSThis document contains references to certain financial measures and associated per share data that do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.  These financial measures are computed on a consistent basis for each reporting period and include gross margin, gross margin percentage, gross margin - net percentage, EBITDA, Adjusted EBITDA, Adjusted net earnings, net debt, working capital, Senior Debt to EBITDA, Total Debt to EBITDA, EBITDA to Cash Interest Expense, drilling days, operating days, utilization rate - drilling day, utilization rate - operating day, and rate per operating day.  These non-GAAP measures are identified and defined as follows under IFRS:"Gross margin" is used by management and investors to analyze overall and segmented operating performance.  Gross margin is not intended to represent operating income nor should it be viewed as an alternative to net earnings or other measures of financial performance calculated in accordance with IFRS.  Gross margin is calculated from the consolidated statements of operations and comprehensive income (loss) and from the segmented information contained in the notes to the consolidated interim financial statements and is defined as revenue less operating expenses."Gross margin percentage" is used by management and investors to analyze overall and segmented operating performance.  Gross margin percentage is calculated from the consolidated statements of operations and comprehensive income (loss) and from the segmented information in the notes to the consolidated interim financial statements and is defined as gross margin divided by revenue."Gross margin - net percentage" is used by management and investors to analyze overall and segmented operating performance.  Gross margin - net percentage is calculated from the consolidated statements of operations and comprehensive income (loss) and from the segmented information in the notes to the consolidated interim financial statements and is defined as gross margin divided by revenue net of third party costs."EBITDA" is a measure of the Company's operating profitability.  EBITDA provides an indication of the results generated by the Company's principal business activities prior to how these activities are financed, assets are depreciated, amortized and impaired, or how the results are taxed in various jurisdictions."Adjusted EBITDA" is used by management and investors to analyze EBITDA (as defined above) prior to the effect of foreign exchange and share-based payment expense, and is not intended to represent net earnings as calculated in accordance with IFRS."Adjusted net earnings" is used by management and the investment community to analyze net earnings prior to the effect of foreign exchange, share-based payments and impairment charges and is not intended to represent net earnings as calculated in accordance with IFRS."Net debt" is used by management and the investment community to analyze the amount of debt less the working capital of the Company."Working capital" is used by management and the investment community to analyze the operating liquidity available to the Company."Senior Debt to EBITDA" is defined as the consolidated balance of the revolving facility and other debt secured by a lien at quarter end to consolidated EBITDA for the trailing twelve months (TTM).  Consolidated EBITDA used in this financial ratio is calculated as EBITDA plus share-based payments and unrealized foreign exchange."Total Debt to EBITDA" is defined as the consolidated balance of long-term debt, which includes the Senior Debt, Senior Notes Payable and dividends payable at quarter end, to consolidated EBITDA for the TTM.  Consolidated EBITDA used in this financial ratio is calculated as EBITDA plus share-based payments and unrealized foreign exchange."EBITDA to Cash Interest Expense" is defined as the consolidated EBITDA for TTM to the cash interest expense on all debt balances for TTM.  Consolidated EBITDA used in this financial ratio is calculated as EBITDA plus share-based payments and unrealized foreign exchange."Drilling days" is defined as rig days between spud to rig release."Operating days" is defined as moving days (move in, rig up and tear out) plus drilling days (spud to rig release)."Utilization rate - drilling day" is defined as drilling days divided by total available rig days."Utilization rate - operating day" is defined as operating days (drilling days plus moving days) divided by total available rig days."Rate per operating day" is defined as operating revenue (net of third party costs) divided by operating days (drilling days plus moving days).References to gross margin, gross margin percentage, gross margin - net percentage, EBITDA, Adjusted EBITDA, Adjusted net earnings, net debt, working capital, Senior Debt to EBITDA, Total Debt to EBITDA, EBITDA to Cash Interest Expense, drilling days, operating days, utilization rate - drilling day, utilization rate - operating day, and rate per operating day throughout this document have the meanings set out above.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 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.     SOURCE: Trinidad Drilling Ltd.For further information: Lyle Whitmarsh, Chief Executive Officer Brent Conway President Lisa Ciulka Vice President, Investor Relations Phone: (403) 294-4401 Fax: (403) 265-4168 Email: lciulka@trinidaddrilling.com