Press release from CNW Group
Trinidad Drilling Ltd. announces the sale of its coring and pre-set rigs
Wednesday, June 19, 2013
Trinidad Drilling Ltd. announces the sale of its coring and pre-set rigs16:30 EDT Wednesday, June 19, 2013
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./
TSX SYMBOL: TDG
CALGARY, June 19, 2013 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or "the Company") is pleased to announce that it has entered in to an agreement to sell its coring and pre-set rigs to Alken Basin Drilling Ltd. (Alken) for $12 million in cash, excluding working capital and land and buildings.
Trinidad has operated coring and pre-set rigs since 2005 in the oilsands of northern Canada in the winter and in southern Alberta in the summer. The reduction in pre-set work over the summer months and the growth in the Company's land drilling fleet since 2005 has reduced the impact of the coring operations on the overall Company's results. Trinidad has a track record of selling assets that do not fit its future core strategy and the Company's decision to sell its coring assets fits with this rationale.
"As coring and pre-set work has become a less significant part of our overall business, we needed to invest capital to grow this division or to narrow our focus more tightly towards contract drilling," said Lyle Whitmarsh, Trinidad's Chief Executive Officer. "Our growth over the past few years has largely been through adding deep, technically advanced drilling rigs and we have developed a reputation as an industry leader in this area. Our decision to sell our coring and pre-set rigs reflects our strategy to focus on the deep, modern contract drilling market where returns are generally stronger and where we see opportunities for future growth."
Trinidad's coring and pre-set division includes the following assets:
- 13 range III rigs with top drives and ranging in depth capacity from 400 metres to 1,100 metres
- 2 range I rigs with top drives and a depth capacity of 400 metres
- Inventory associated with the coring operations
Alken (President, Kevin Baumann) has agreed to purchase all 15 of Trinidad's coring and pre-set rigs and anticipates that they will retain the majority of employees currently working in this division. The sale is expected to close on June 28, 2013.
Demand for modern, technically advanced drilling equipment remains strong and Trinidad has a number of expansion opportunities that it is currently pursuing. The Company expects to use the proceeds from the sale of its coring and pre-set rigs to help fund this growth or alternatively, to reduce overall corporate indebtedness.
Trinidad is a corporation focused on sustainable growth that trades on the Toronto Stock Exchange (TSX) under the symbol TDG. Trinidad's divisions operate in the drilling 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.
The 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 proposed sale of Trinidad's coring and pre-set rigs to Alken, including timing thereof; the expected retention of the majority of employees currently working in the coring division of Trinidad; and the expected use of proceeds from the proposed sale; fluctuations in the demand for Trinidad's services; 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. 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.
SOURCE: Trinidad Drilling Ltd.
For further information:
Chief Executive Officer
Vice President, Investor Relations