Trinidad Drilling Ltd. reports second quarter and year-to-date 2013 results; records stable dayrates and industry-leading utilization

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TSX SYMBOL:  TDG

CALGARY, Aug. 7, 2013 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or "the Company") today reported results from its second quarter and first six months of 2013. "Trinidad has continued to perform well throughout 2013, despite weaker industry conditions," said Lyle Whitmarsh, Trinidad's Chief Executive Officer.  "The industry movement we saw in 2012 towards more efficient, high performance equipment has intensified to date in 2013 and while we have seen strong competition for work across North America, Trinidad's modern, technically advanced fleet has driven stable dayrates and industry-leading activity levels. During this time, Trinidad has remained focused on following its strategic plan. We have grown our fleet by adding selective new builds while also lowering our leverage significantly. We are now well positioned to add value for our shareholders with expansion opportunities and a growing level of free cash flow."

Additional information is available on Trinidad's website (www.trinidaddrilling.com) and all previous public filings, including a full copy of the second quarter 2013 report, the most recently filed Annual Report and Annual Information Form, are available through SEDAR (www.sedar.com).

All amounts are denominated in Canadian dollars (CDN$) unless otherwise identified.  All amounts are stated in thousands unless otherwise identified.

FINANCIAL HIGHLIGHTS

					Three months ended June 30,									Six months ended June 30,
($ thousands except share and per share data)					2013			2012			% Change			2013			2012			% Change
Revenue					165,447			174,273			(5.1)			412,633			434,667			(5.1)
Revenue, net of third party costs					156,171			165,871			(5.8)			383,548			405,741			(5.5)
Operating income (1)					55,651			66,372			(16.2)			154,010			170,794			(9.8)
Operating income percentage (1)					33.6%			38.1%			(11.8)			37.3%			39.3%			(5.1)
Operating income - net percentage (1)					35.6%			40.0%			(11.0)			40.2%			42.1%			(4.5)
EBITDA (1)					37,788			53,081			(28.8)			119,838			144,321			(17.0)
	Per share (diluted) (2)				0.31			0.44			(29.5)			0.99			1.19			(16.8)
Adjusted EBITDA (1)					39,941			53,344			(25.1)			124,777			145,295			(14.1)
	Per share (diluted) (2)				0.33			0.44			(25.0)			1.03			1.20			(14.2)
Cash provided by operations					89,852			96,134			(6.5)			130,347			163,601			(20.3)
	Per share (basic / diluted) (2)				0.74			0.80			(7.5)			1.08			1.35			(20.0)
Funds provided by operations (1)					39,124			51,209			(23.6)			104,067			122,665			(15.2)
	Per share (basic / diluted) (2)				0.32			0.42			(23.8)			0.86			1.01			(14.9)
Net earnings					347			12,866			(97.3)			33,095			47,334			(30.1)
	Per share (basic / diluted) (2)				0.00			0.11			-			0.27			0.39			(30.8)
Adjusted net earnings (1)					2,631			13,129			(80.0)			38,165			55,827			(31.6)
	Per share (basic / diluted) (2)				0.02			0.11			(81.8)			0.32			0.46			(30.4)
Capital expenditures - net of dispositions					15,089			46,357			(67.5)			31,965			107,008			(70.1)
Dividends declared					6,043			6,043			-			12,086			12,086			-
Shares outstanding - diluted
	(weighted average) (2)				120,859,476			120,859,476			-			120,859,476			120,859,476			-
As at														June 30,			December 31,
($ thousands except percentage data)														2013			2012			% Change
Total assets														1,551,206			1,541,294			0.6
Total long-term liabilities														554,335			585,629			(5.3)

(1)	Readers are cautioned that Operating income, Operating income percentage, Operating income - net percentage, EBITDA, Adjusted EBITDA, Funds provided by operations, Adjusted net earnings and the related per share information do not have standardized meanings prescribed by IFRS - see "Non-GAAP Measures" and "Additional 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, of the number of shares issuable pursuant to the Incentive Option Plan.

OPERATING HIGHLIGHTS 

					Three months ended June 30,										Six months ended June 30,
					2013				2012			% Change			2013				2012			% Change
Land Drilling Market
Operating days (1)
	Canada				1,434				1,288			11.3			5,632				5,395			4.4
	United States and International				4,578				5,289			(13.4)			9,031				10,551			(14.4)
Rate per operating day (2, 3)
	Canada (CDN$)				25,511				25,343			0.7			25,429				24,478			3.9
	United States and International (CDN$)				22,908				22,586			1.4			22,665				22,261			1.8
	United States and International (US$)				22,436				22,616			(0.8)			22,461				22,158			1.4
Utilization rate - operating day (1, 4)
	Canada				26%				26%			-			52%				54%			(3.7)
	United States and International				73%				86%			(15.1)			73%				88%			(17.0)
Number of drilling rigs at period end
	Canada				60				55			9.1			60				55			9.1
	United States and International				68				68			-			68				68			-
	Coring and surface casing rigs				15				20			(25.0)			15				20			(25.0)
Barge Drilling Market
	Operating days (1)				445				429			3.7			860				793			8.6
	Rate per operating day (CDN$) (2, 3)				31,731				29,072			9.1			30,460				27,408			11.1
	Rate per operating day (US$) (2, 3)				31,077				29,106			6.8			30,151				27,314			10.4
	Utilization rate - operating day (4)				98%				94%			4.3			95%				87%			9.2
	Number of barge drilling rigs at period end				2				2			-			2				2			-
	Number of barge drilling rigs under Bareboat
	Charter Agreements at period end				3				3			-			3				3			-

(1)	Operating days include drill days and move days.
(2)	Rate per operating day is based on operating revenue divided by operating days.
(3)	Operating revenue is presented net of third party costs.
(4)	Utilization rate - operating day is based on operating days divided by total days available.

OVERVIEW

In the second quarter and year-to-date 2013, Trinidad recorded stable dayrates across its land drilling operations despite a strongly competitive market and weaker industry demand when compared to the same period last year. Adjusted EBITDA lowered from the prior periods largely due to lower activity in the US and international operations over the past six months and timing of Canadian repairs and maintenance expenses in the current quarter.

In Canada, Trinidad recorded more operating days in both the second quarter and the first six months of the year compared to the same periods last year, despite prolonged wet weather in late spring. The addition of five new, high specification rigs over the past year drove additional operating days and also led to higher dayrates when compared to the first six months of 2012.  Trinidad continued to outperform the industry with utilization six percentage points higher than the Canadian industry average for the quarter and ten percentage points higher, year to date. In the US, the industry active rig count stabilized at just under 1,700 rigs over the first six months of 2013, 216 rigs lower than the same period last year. Trinidad's US and international operations showed a similar trend, remaining stable at 50 active rigs in the first six months compared to 58 active rigs in the same period last year.

Operating income lowered in the Canadian operations for the current quarter as a result of repairs and maintenance costs delayed from the first quarter of 2013 incurred during the second quarter. For the six months ended June 30, 2013, these expenses were completed, showing consistent profitability year over year. On a consolidated basis, lower activity in the US and international segment drove lower revenue and lower operating income when compared to the previous comparable periods.

Strengthening natural gas prices in the second quarter and first six months of the year positively impacted producers' cash flows but have not yet reached a level that drives a significant increase in drilling for natural gas. During the same period, relatively stable crude oil prices and narrower Canadian differentials have continued to favor oil drilling over dry gas.

INDUSTRY STATISTICS

				2013							Full Year				2012															Full Year				2011
				Q2				Q1			2012				Q4				Q3				Q2				Q1			2011				Q4				Q3
Commodity Prices
Aeco natural gas price (CDN$ per gigajoule)				3.36				3.03			2.26				3.03				2.18				1.81				2.01			3.45				3.03				3.48
Henry Hub natural gas price (US$ per mmBtu)				4.04				3.47			2.75				3.40				2.88				2.29				2.43			4.00				3.33				4.12
Western Canada Select crude oil price
(CDN$ per barrel)				79.25				67.64			71.70				60.73				76.29				74.10				75.91			77.53				83.38				73.52
WTI crude oil price (US$ per barrel)				94.14				94.30			94.09				88.17				92.15				93.30				102.99			94.88				94.02				89.49
US Industry Activity
Average US industry active land rig count (1)				1,686				1,687			1,852				1,741				1,837				1,902				1,929			1,825				1,954				1,893
Average Trinidad active land rig count (2)				50				49			57				56				55				58				58			59				60				61
Canadian Industry Activity
Average Canadian industry utilization (3)				18%				58%			39%				36%				42%				18%				65%			49%				54%				54%
Average Trinidad utilization (4)				24%				73%			52%				51%				58%				24%				77%			62%				69%				69%

(1)	Baker Hughes rig counts (information obtained from Tudor Pickering Holt & Company weekly rig roundup report).
(2)	Includes US and international rigs, excludes rigs that are idle but contracted.
(3)	Canadian Association of Oilwell Drilling Contractors (CAODC) utilization.
(4)	Based on drilling days (spud to rig release dates), excludes rigs that are idle but contracted.

Second quarter 2013 and year-to-date highlights

• Trinidad generated revenue of $165.4 million in the second quarter and $412.6 million year to date in 2013, a decrease of 5.1% from both the same quarter and first six months of 2012. Revenue lowered year over year due to lower activity levels in the US and international division. This impact was partially offset by an increase in operating days and higher dayrates in Canada as a result of new equipment added in the past year. When compared to the first quarter of 2013, revenue lowered from $247.2 million largely as a result of seasonality in Canada which restricts drilling activity during the second quarter.
  
  
• Operating income - net percentage was 35.6% in the current quarter and 40.2% year to date in 2013, compared to 40.0% and 42.1%, respectively, in 2012. Lower profitability in the current quarter and year to date was largely driven by lower activity levels in the US and international division which led to reduced revenue generation. In addition, in the current quarter, repairs and maintenance costs delayed from the first quarter in the Canadian division were incurred and negatively impacted operating profitability. Operating income - net percentage lowered from 43.3% in the first quarter of 2013 largely as a result of the timing of repairs and maintenance expenses and seasonality of the Canadian operations.
  
  
• Adjusted EBITDA was $39.9 million in the second quarter and $124.8 million year to date in 2013, down 25.1% and 14.1%, respectively, from the same periods of the prior year. Adjusted EBITDA decreased year over year largely as a result of lower operating income and higher general and administrative (G&A) expenses. Adjusted EBITDA lowered from $84.8 million in the first quarter of 2013 as a result of seasonality in the Canadian operations and higher G&A expenses. G&A expenses in the current quarter included a non-cash charge for bad debt expenses.
  
  
• Net earnings were $0.3 million ($0.00 per share (diluted)) in the second quarter and $33.1 million ($0.27 per share (diluted)) year to date in 2013, down 97.3% and 30.1%, respectively, from the same periods last year. Net earnings decreased largely due to lower adjusted EBITDA, higher depreciation and amortization costs, partially offset by a lower impairment charge than the charge recorded in the first quarter of 2012, decreased finance costs and lower income taxes.
  
  
• During the current quarter and first six months of 2013, Trinidad continued to lower its leverage ratio. At June 30, 2013, Trinidad had completely repaid its revolving credit facility and reduced its Total Debt to EBITDA ratio to 1.89 times, bringing the Company well within reach of its long-term leverage goal of Total Debt to EBIDTA of approximately 1.50 times.

RESULTS FROM OPERATIONS

Canadian Operations

			Three months ended June 30,									Six months ended June 30,
($ thousands except percentage and operating data)			2013			2012			% Change			2013			2012			% Change
Operating revenue (1, 2)			37,110			33,802			9.8			152,449			148,767			2.5
Other revenue			13			116			(88.8)			57			242			(76.4)
			37,123			33,918			9.4			152,506			149,009			2.3
Operating costs (1, 2)			29,096			23,140			25.7			88,645			86,527			2.4
Operating income (8)			8,027			10,778			(25.5)			63,861			62,482			2.2
Operating income - net percentage (8)			21.6%			31.8%						41.9%			41.9%
Operating days (3)			1,434			1,288			11.3			5,632			5,395			4.4
Drilling days			1,323			1,182			11.9			5,187			4,966			4.5
Rate per operating day (CDN$) (4)			25,511			25,343			0.7			25,429			24,478			3.9
Utilization rate - operating day (5)			26%			26%			-			52%			54%			(3.7)
Utilization rate - drilling day (6)			24%			24%			-			48%			50%			(4.0)
CAODC industry average (7)			18%			18%			-			38%			42%			(9.5)
Number of drilling rigs at period end			60			55			9.1			60			55			9.1
Number of coring and surface rigs
at period end			15			20			(25.0)			15			20			(25.0)

(1)	Inter-segment revenue and operating costs for the three months ended June 30, 2013 and 2012 have been excluded of $1.7 million and ($2.4) million, respectively. Inter-segment revenue and operating costs for the six months ended June 30, 2013 and 2012 have been excluded of $1.9 million and $4.9 million, respectively. Each of these inter-segment revenue and operating costs relates to expenses incurred in the manufacturing division related to the US operations.
(2)	Operating revenue and operating costs for the three months ended June 30, 2013 and 2012 exclude third party recovery and third party costs of $4.1 million and $3.8 million, respectively. Operating revenue and operating costs for the six months ended June 30, 2013 and 2012 exclude third party recovery and third party costs of $17.8 million and $19.0 million, respectively.
(3)	Operating days include drill days and move days.
(4)	Rate per operating day is based on 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.
(7)	CAODC industry average is based on drilling days divided by total days available.
(8)	See Non-GAAP Measures Definition and Additional GAAP Measures Definition section of this document for further details.

Canadian operations performed strongly in the current quarter and year to date, recording increased revenue levels and increased dayrates when compared to the prior year periods. However, increased operating costs in the current quarter lowered Canadian operating income - net percentage as repairs and maintenance expenses delayed from the first quarter of 2013 were incurred in the second quarter of the current year. For the six months ended June 30, 2013, these expenses were completed, showing consistent profitability year over year.

Typically, the second quarter is a less active period in Canada, as weather conditions and road bans restrict the movement of heavy equipment. Over the past year, Trinidad has added five new, high specification rigs to its Canadian fleet, allowing the Company to increase the number of operating days by 146 days quarter over quarter, and 237 days year over year. Trinidad's high performance, modern fleet continued to outperform industry activity levels, recording utilization levels that exceeded the industry average for the three and six months ended June 30, 2013, by six percentage points and ten percentage points, respectively. This is a reflection of the Company's strategic focus towards in-demand, high performance equipment backed by a strong contract base.

Dayrates improved for the three and six months ended June 30, 2013 by $168 per day and $951 per day, respectively. For each of these periods, Trinidad experienced a higher concentration of operating days related to the Company's more modern equipment. These rigs demand a higher dayrate and drove an increase in the overall average dayrate in the period. As well, a crew wage increase came into effect at the end of 2012, which is passed onto the operator causing the overall dayrate to increase in the current period.

Trinidad's operating income - net percentage within the Canadian division decreased quarter over quarter, but remained consistent year over year. In the first quarter of 2013, the Company elected to delay rig recertification and maintenance work until after spring break-up. This work was performed in the second quarter resulting in higher expenses and lower operating income - net percentage when compared to the same quarter of the prior year. On a year to date basis, operating income - net percentage has remained consistent at 41.9%.

In the current quarter, Trinidad's active rig fleet increased by five rigs when compared to the second quarter of 2012. All five rigs were constructed at the Company's in-house manufacturing division and were put into service under long-term, take-or-pay contracts.

During the first half of 2013, Trinidad's manufacturing division continued progress on the remaining two rigs in its construction program. In the first quarter of 2013, one of these rigs was completed and delivered into the Canadian operations. The second rig was delivered into service in the Canadian operations in the early part of the third quarter of 2013. By comparison, in the first half of 2012, Trinidad's manufacturing division had completed work on two new builds and continued work on the five rigs included in the 2012 new build program.

Subsequent to June 30, 2013, Trinidad signed a contract to build a new rig for a northern Canada liquefied natural gas (LNG) project. The rig will be constructed to drill natural gas in the Liard Basin, and is expected to be one of Canada's largest and most technically-advanced land rigs. The rig is expected to be completed in the second half of 2014 and will be operating under a five-year, take-or-pay contract. Additionally, the manufacturing division will continue to work on upgrading the Company's existing fleet with the addition of moving systems, top drives and upgraded mud systems to ensure that these assets remain competitive in the current market.

At the end of the second quarter of 2013, Trinidad announced the sale of its coring and pre-set rigs, including all related inventory, for $12 million in cash. The decision to sell these assets was in line with the Company's strategy to divest assets that no longer fit the Company's future core strategy. The sale officially closed subsequent to quarter end, and as of June 30, 2013, all of the related property and equipment included in the sale had been re-classified to assets held for sale.

Second quarter 2013 versus first quarter 2013

Revenue and operating income decreased by $78.3 million and $47.8 million, respectively, in the second quarter of 2013 when compared to the first quarter, largely driven by seasonality in the Canadian industry. Operating days declined by 2,764 days and utilization fell to 26%, from 79% in the previous quarter. The second quarter is typically affected by spring break-up, as weather conditions and road bans restrict the movement of heavy equipment which results in lower drilling activity. This impact was partially offset by an increase of $110 per day in dayrates over the first quarter.

United States and International Operations

			Three months ended June 30,									Six months ended June 30,
($ thousands except percentage and operating data)			2013			2012			% Change			2013			2012			% Change
Operating revenue (1)			119,024			131,943			(9.8)			230,996			256,718			(10.0)
Other revenue			24			10			140.0			46			14			228.6
			119,048			131,953			(9.8)			231,042			256,732			(10.0)
Operating costs (1)			71,424			76,359			(6.5)			140,893			148,420			(5.1)
Operating income (6)			47,624			55,594			(14.3)			90,149			108,312			(16.8)
Operating income - net percentage (6)			40.0%			42.1%						39.0%			42.2%
Land Drilling Rigs
Operating days (2)			4,578			5,289			(13.4)			9,031			10,551			(14.4)
Drilling days			4,050			4,560			(11.2)			7,873			9,140			(13.9)
Rate per operating day (CDN$) (3)			22,908			22,586			1.4			22,665			22,261			1.8
Rate per operating day (US$) (3)			22,436			22,616			(0.8)			22,461			22,158			1.4
Utilization rate - operating day (4)			73%			86%			(15.1)			73%			88%			(17.0)
Utilization rate - drilling day (5)			65%			74%			(12.2)			64%			76%			(15.8)
Number of drilling rigs at period end			68			68			-			68			68			-
Barge Drilling Rigs
Operating days (2)			445			429			3.7			860			793			8.4
Rate per operating day (CDN$) (3)			31,731			29,072			9.1			30,460			27,408			11.1
Rate per operating day (US$) (3)			31,077			29,106			6.8			30,151			27,314			10.4
Utilization rate - operating day (4)			98%			94%			4.3			95%			87%			9.2
Number of barge drilling rigs at period end			2			2			-			2			2			-
Number of barge drilling rigs under
Bareboat Charter Agreements at period end			3			3			-			3			3			-

(1)	Operating revenue and operating costs for the three months ended June 30, 2013 and 2012 exclude third party recovery and third party costs of $5.2 million and $4.6 million, respectively. Operating revenue and operating costs for the six months ended June 30, 2013 and 2012 exclude third party recovery and third party costs of $11.3 million and $9.9 million, respectively.
(2)	Operating days include drill days and move days.
(3)	Rate per operating day is based on operating revenue divided by operating days.
(4)	Utilization rate - operating day is based on operating days divided by total days available.
(5)	Utilization rate - drilling day is based on drilling days divided by total days available.
(6)	See Non-GAAP Measures Definition and Additional GAAP Measures Definition section of this document for further details.

The softening US market conditions that began in the second half of 2012 carried forward into 2013, resulting in reduced revenues and operating income year over year. The reduction in activity was largely driven by reduced customer demand for a portion of the Company's less modern equipment. While year over year there has been a reduction in activity levels, operations remained relatively consistent in the second quarter when compared to the first quarter, with slightly higher operating days and utilization recorded in the second quarter. Dayrates for the Company's less modern equipment have experienced downward pressure; however, the shift in the active rig mix towards more modern equipment has resulted in overall stable average dayrates over the past year.

A year over year decline in total operating days and utilization has caused an overall decrease in revenue in the current three and six month periods when compared to the prior year. Total operating days decreased by 711 days quarter over quarter, and 1,520 days year over year. US industry active rig counts in the first half of 2013 were approximately 12% lower than in the same period last year. This reduction in drilling activity has largely affected the Company's lower specification equipment, as operators high grade their equipment as newer rigs become available across the industry. Utilization of Trinidad's less modern equipment has lowered and the Company has experienced a shift in its active rig mix towards its higher specification equipment. Trinidad's fleet is largely composed of these higher specification rigs, which has mitigated the impact of this decline. Additionally, as Trinidad's fleet has a high percentage of long-term contracts, the Company has been able to limit the exposure to this weaker market.

Operating income - net percentage declined for each of the three month and six month periods of 2013 when compared to the prior year. The decline in profitability is mainly due to lower revenue generation combined with a smaller relative reduction in operating costs. During 2013, Trinidad has taken advantage of the slowdown to complete necessary upgrades and repairs on rigs that have been working consistently since their initial construction. Trinidad has focused these repairs and upgrade initiatives on rigs that will be redeployed in the near term.

The Company's barge drilling operations continued to perform well with quarter over quarter and year over year dayrate increases of US$1,971 per day and US$2,837 per day, respectively. As well, operating days showed improvement increasing in each period respectively. Strong operations reflect the solid demand and limited supply of high quality equipment in this sector.

Second quarter 2013 versus first quarter 2013

In the second quarter of 2013, revenue and operating income increased by $7.1 million and $5.1 million, respectively, when compared to the first quarter of 2013 largely as a result of an increase of 125 operating days and one percentage point in utilization.  Operating income - net percentage also increased to 40.0% from 38.0% in the prior quarter. In the first quarter, the Company took advantage of the slowdown to perform repairs and maintenance work on rigs that had been working consistently for a number of years. This work remained consistent into the second quarter; however, increased revenue generation in the quarter led to an increase in overall operating income - net percentage. Dayrates were relatively stable quarter over quarter, showing a reduction of US$51 per operating day in the current quarter.

Activity levels in the Barge market increased to 98%, up from 92% in the prior quarter as demand for Trinidad's high quality equipment remained strong. As well, dayrates increased by US$1,919 per operating day as a result of improved pricing on Trinidad's high quality equipment within this sector.

QUARTERLY ANALYSIS
FINANCIAL HIGHLIGHTS - QUARTERLY ANALYSIS

				2013						2012												2011
($ millions except per share data and operating data)				Q2			Q1			Q4			Q3			Q2			Q1			Q4			Q3
Revenue				165.4			247.2			209.6			215.1			174.3			260.4			231.1			202.8
Operating income (1)				55.7			98.4			77.8			80.6			66.4			104.4			89.0			81.7
Operating income percentage (1)				33.6%			39.8%			37.1%			37.5%			38.1%			40.1%			38.5%			40.3%
Operating income - net percentage (1)				35.6%			43.3%			39.7%			40.0%			40.0%			43.5%			41.6%			43.0%
Net earnings (loss) for the year				0.3			32.7			(12.4)			20.0			12.9			34.5			25.3			30.2
Adjustments for:
Depreciation and amortization				27.6			29.9			29.2			30.4			25.8			28.1			29.1			28.6
Foreign exchange				-			-			(1.4)			0.8			(0.7)			0.5			2.4			(6.1)
Gain (loss) on sale of property and equipment				1.3			-			(11.5)			-			(0.5)			0.2			(0.6)			(0.1)
Impairment of property and equipment				0.1			-			70.1			1.3			-			7.5			-			-
Finance costs				10.0			10.0			10.1			10.3			10.5			10.8			10.9			10.9
Income taxes				(1.6)			9.4			(22.2)			2.7			4.4			10.2			4.8			6.4
Other				2.2			2.8			1.4			2.9			1.0			0.1			2.5			(0.5)
Income taxes paid				(0.8)			(1.3)			(2.0)			(1.1)			(0.7)			(0.7)			-			(4.5)
Income taxes recovered				0.7			-			0.7			3.9			-			-			0.8			1.5
Interest paid				(0.7)			(18.6)			(1.1)			(19.5)			(1.5)			(19.8)			(1.6)			(21.4)
Funds provided by operations (1)				39.1			64.9			60.9			51.7			51.2			71.4			73.6			45.0
Net earnings (loss) per share (diluted)				0.00			0.27			(0.10)			0.17			0.11			0.29			0.21			0.25
Funds provided by operations per share (diluted)				0.32			0.54			0.50			0.43			0.42			0.59			0.61			0.37

(1)	See the Non-GAAP Measures Definitions and Additional GAAP Measures Definitions section of this document for further details.

NON-GAAP MEASURES HIGHLIGHTS - QUARTERLY ANALYSIS

				2013						2012												2011
($ millions except per share data and operating data)				Q2			Q1			Q4			Q3			Q2			Q1			Q4			Q3
EBITDA (1)				37,788			82,050			63,323			64,715			53,081			91,240			69,545			76,016
Per share (diluted) (2)				0.31			0.68			0.52			0.54			0.44			0.75			0.58			0.63
Adjusted EBITDA (1)				39,941			84,836			63,332			68,388			53,344			91,951			74,401			69,382
Per share (diluted) (2)				0.33			0.70			0.52			0.57			0.44			0.76			0.62			0.57
Adjusted net earnings (1)				2,631			35,534			57,807			24,913			13,129			42,698			30,174			23,535
Per share (diluted) (2)				0.02			0.29			0.48			0.21			0.11			0.35			0.25			0.19

(1)	See the Non-GAAP Measures Definitions and Additional 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, of the number of shares issuable pursuant to the Incentive Option Plan.

OPERATING HIGHLIGHTS - QUARTERLY ANALYSIS

					2013						2012												2011
					Q2			Q1			Q4			Q3			Q2			Q1			Q4			Q3
Land Drilling Market
Operating days (1)
	Canada				1,434			4,198			2,915			3,233			1,288			4,107			3,665			3,675
	United States and International				4,578			4,453			4,789			5,038			5,289			5,262			5,547			5,579
Rate per operating day (2,3)
	Canada (CDN$)				25,511			25,401			26,190			23,501			25,343			24,206			23,652			20,315
	United States and International (CDN$)				22,908			22,416			22,305			22,518			22,586			21,935			20,710			18,600
	United States and International (US$)				22,436			22,487			22,589			22,263			22,616			21,698			20,387			19,143
Utilization rate - operating day (4)
	Canada				26%			79%			56%			62%			26%			84%			74%			74%
	United States and International				73%			72%			77%			81%			86%			90%			92%			92%
Number of drilling rigs at period end
	Canada				60			60			59			57			55			54			54			54
	United States and International				68			68			68			68			68			66			64			66
	Coring and surface casing rigs				15			15			15			20			20			20			20			20
Barge Drilling Market
	Operating days (1)				445			415			386			376			429			364			373			454
	Rate per operating day (CDN$) (2,3)				31,731			29,097			29,954			30,008			29,072			25,448			25,835			24,833
	Rate per operating day (US$) (2,3)				31,077			29,158			30,330			29,583			29,106			25,204			25,455			25,547
	Utilization rate - operating day (4)				98%			92%			84%			82%			94%			80%			81%			99%
	Number of barge drilling rigs at period end				2			2			2			2			2			2			2			2
	Number of barge drilling rigs under
	Bareboat Charter at period end				3			3			3			3			3			3			3			3

(1)	Operating days include drill days and move days.
(2)	Rate per operating day is based on operating revenue divided by operating days.
(3)	Operating revenue is presented net of third party costs.
(4)	Utilization rate - operating day is based on operating days divided by total days available.

FINANCIAL SUMMARY

As at						June 30,				December 31,
($ thousands)						2013				2012					$ Change
Working capital (1)						105,563				109,412					(3,849)
Senior Notes						470,631				444,994					25,637
Credit facility						-				69,898					(69,898)
Building loans						5,448				5,754					(306)
						476,079				520,646					(44,567)
Less: unamortized debt issue costs						(9,826)				(10,814)					988
Total long-term debt						466,253				509,832					(43,579)
Total long-term debt as a percentage of assets						30.1%				33.1%
Total assets						1,551,206				1,541,294					9,912
Total long-term liabilities						554,335				585,629					(31,294)
Total long-term liabilities as a percentage of assets						35.7%				38.0%
						June 30,				June 30,
						2013				2012					$ Change
Cash provided by operations						130,347				163,601					(33,254)
Cash used by investing						(26,533)				(98,126)					71,593
Cash used by financing						(82,699)				(46,682)					(36,017)

(1)	See Non-GAAP Measures Definition section of this document for further details.

For the six months ended June 30, 2013, working capital lowered by $3.8 million when compared to December 31, 2012, due to a decrease in current assets of $0.6 million and an increase in current liabilities of $3.2 million. The decrease in current assets was mainly a result of lower receivables driven by a reduction in operations in the second quarter within the Canadian operations, typical within the drilling industry, as well as a slight decrease in prepaid expenses. This was slightly offset by an increase of cash in the current period as a result of lower capital additions and an increase in assets held for sale due to the pending sale of the coring and pre-set rigs.

Current liabilities increased during the period mainly as a result of an increase in deferred revenue in the current period due to amounts received for future commitments as well as the increase in the current portion of long-term debt due to a building mortgage becoming current. These increases were slightly offset by a decrease in accounts payable and accrued liabilities due to the general slow-down within Canadian drilling due to seasonal factors.

Trinidad's total long-term debt balance declined by $43.6 million during the current period when compared to the year ended December 31, 2012. The reduction in debt was due to a decrease in the revolving debt balances in the current period which were partially offset by an increase in the foreign exchange impact on Senior Notes at quarter end. The decline in debt is in line with the Company's core objective of sustainable growth, in conjunction with leverage reduction.

Trinidad's revolving debt facilities decreased by $69.9 million in the current period as a result of payments made during the period. As of June 30, 2013, Trinidad had no amounts outstanding on either of its Canadian revolving credit facility or the US revolving credit facility, leaving $200.0 million and US$100.0 million unutilized in the facilities, respectively.

Although Trinidad had paid off the revolving credit balances as of June 30, 2013, the Company is still considering future capital commitments, and as such, it is expected that these balances will be used into the future in the general course of business. 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). The facility matures on December 16, 2016, and is subject to annual extensions of an additional year on each anniversary.

The value of the Senior Notes increased by $25.6 million as a result of the change in the US dollar foreign exchange rate at June 30, 2013 versus December 31, 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.

A total of $32.8 million of capital expenditures were spent during the six months ended June 30, 2013, compared to $108.9 million for the same period in the prior year. Capital expenditures were substantially related to the Company's rig build program as the Company delivered one new rig into service in the Canadian operations in the first quarter of 2013, with the second rig completed and delivered into the Canadian operations in the early part of the third quarter of 2013. In addition, the Company continued to work on upgrading existing equipment including moving systems, top drives and mud systems, to ensure these rigs remain competitive in the current market.

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. Trinidad's 2013 capital program is expected to be approximately $140 million. The capital program includes the building of one new rig included in the 2013 capital program, this rig is expected to be one of Canada's largest and most technically-advanced land rigs; as well as the completion of two contracted rigs for the Canadian operations carried over from the 2012 capital program, maintenance capital and select upgrade capital to improve the efficiency and marketability of existing equipment.

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:

RATIO

June 30,

December 31,

THRESHOLD

2013

2012

Consolidated Senior Debt to Consolidated EBITDA (1)

0.02:1

0.27:1

3.00:1 maximum

Consolidated Total Debt to Consolidated EBITDA (1)

1.89:1

1.91:1

4.00:1 maximum

Consolidated EBITDA to Consolidated Cash Interest Expense (1)

6.46:1

6.76:1

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.

OUTLOOK

Activity levels in Canada have begun to increase as ground conditions improve and equipment goes back to work. To date in the third quarter, activity is in line with expectations and Trinidad anticipates the second half of the year to be steady for its Canadian operations. The Company's larger, deep drilling capacity equipment is in high demand as producers are focused on booking reserves for LNG related projects.  While this development is in early stages in Canada, the level of activity related to LNG development is expected to ramp up over the next 12 to 18 months. Trinidad has a deep, technically advanced fleet and currently works for the majority of the key LNG players, positioning the Company well to take advantage of this coming growth opportunity. In clear recognition of Trinidad's strong reputation as a deep, technical driller, the Company was recently awarded a contract to build a rig that will operate in the Liard Basin, in northern Canada, drilling natural gas for the proposed Kitimat LNG plant. This rig is expected to be delivered in the second half of 2014 and will be operating under a five-year, take-or-pay contract.

In the US, the market remains competitive with industry activity levels staying relatively unchanged and producers continuing to demand more modern and efficient equipment. Trinidad has maintained stable activity levels and dayrates throughout 2013 despite these conditions and expects that its operations will continue at this level for the remainder of the year, assuming no major commodity price or economic change.

The contracts on Trinidad's three rigs working in Mexico were not extended by the customer following a recent reduction in activity by Petróleos Mexicanos (Pemex). Initial discussions with Pemex and other interested parties indicate that activity should resume in Mexico in late 2013 or early 2014, with anticipation that additional equipment may also be required. Trinidad expects its rigs will remain in Mexico in the near term as these opportunities solidify and the Company may add to its Mexican fleet if suitable contracts can be negotiated.

At the end of the second quarter, Trinidad had fully paid off its revolving credit facility and brought its Total debt to EBITDA down to 1.89 times, its lowest level in several years and approaching the Company's long term target of around 1.5 times. As Trinidad nears the end of its debt reduction phase, it is entering into a renewed era of opportunity and growth at a time when the market is demanding more of the style of drilling that Trinidad has built its reputation on. Trinidad expects that it will be able to fund these expansion opportunities with cash flow from operations while also maintaining a conservative capital structure.

Trinidad expects that industry conditions will remain relatively stable in 2013 and is seeing early indications of increased activity levels in 2014. The Company expects that its modern, high performance equipment will continue to be in demand; however, unless commodity prices increase there will be limited demand for less modern equipment. Approximately three-quarters of Trinidad's fleet are considered high performance; these rigs have demonstrated their ability to continue to meet customers' needs by achieving high activity levels and stable dayrates. Trinidad currently has approximately 50% of its fleet under long-term, take-or-pay contracts with an average term remaining of approximately 1.5 years, providing the Company with significant revenue stability.

CONFERENCE CALL

A conference call and webcast to discuss the results will be held for the investment community on Thursday August 8^th, 2013 beginning at 9:00 a.m. MT (11:00 a.m. ET).  To participate, please dial [phone] (toll-free in North America) or [phone] 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 August 8^th, 2013 until midnight August 15^th, 2013 by dialing [phone] or [phone] and entering replay access code 17956741.

A live audio webcast of the conference call will also be available via the Investor Relations page of Trinidad's website.

TRINIDAD 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) - unaudited						2013				2012
Assets
Current Assets
Cash and cash equivalents						27,157				4,933
Accounts receivable						150,056				182,071
Inventory						8,385				8,600
Prepaid expenses						3,014				4,808
Assets held for sale						12,000				816
						200,612				201,228
Property and equipment						1,259,738				1,253,921
Intangible assets and goodwill						90,856				86,145
						1,551,206				1,541,294
Liabilities
Current Liabilities
Accounts payable and accrued liabilities						77,601				82,265
Dividends payable						6,043				6,043
Deferred revenue						5,957				2,891
Current portion of long-term debt						5,448				617
						95,049				91,816
Long-term debt						460,805				509,215
Deferred income taxes						93,530				76,414
						649,384				677,445
Shareholders' Equity
Common shares						952,043				952,043
Contributed surplus						50,504				50,245
Accumulated other comprehensive loss						(17,698)				(34,403)
Deficit						(83,027)				(104,036)
						901,822				863,849
						1,551,206				1,541,294

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
					Three months ended								Six months ended
					June 30,								June 30,
($ thousands except per share data) - unaudited					2013				2012				2013				2012
Revenue
Oilfield service revenue					165,410				174,147				412,530				434,411
Other revenue					37				126				103				256
					165,447				174,273				412,633				434,667
Expenses
Operating expense					109,796				107,901				258,623				263,873
General and administrative					17,884				14,002				34,198				26,568
Depreciation and amortization					27,602				25,817				57,461				53,947
Foreign exchange					(21)				(711)				(26)				(95)
Loss (gain) on sale of property and equipment					1,331				(491)				1,367				(321)
Impairment of property and equipment					131				-				131				7,519
					156,723				146,518				351,754				351,491
Finance costs					9,989				10,496				19,959				21,298
(Loss) earnings before income taxes					(1,265)				17,259				40,920				61,878
Income taxes
Current					192				19				1,263				(36)
Deferred					(1,804)				4,374				6,562				14,580
					(1,612)				4,393				7,825				14,544
Net earnings					347				12,866				33,095				47,334
Other comprehensive income
Foreign currency translation adjustment, net of income tax					10,022				7,288				16,705				507
					10,022				7,288				16,705				507
Total comprehensive income					10,369				20,154				49,800				47,841
Earnings per share
Net earnings
Basic / Diluted					0.00				0.11				0.27				0.39

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For six months ended June 30, 2013 and 2012
														Accumulated
														other
						Common				Contributed				comprehensive								Total
($ thousands) - unaudited						shares				surplus				(loss) (1)				(Deficit)				equity
Balance at December 31, 2012						952,043				50,245				(34,403)				(104,036)				863,849
Share-based payments						-				259				-				-				259
Total comprehensive income						-				-				16,705				33,095				49,800
Dividends						-				-				-				(12,086)				(12,086)
Balance at June 30, 2013						952,043				50,504				(17,698)				(83,027)				901,822
Balance at January 1, 2012						952,043				49,462				(25,377)				(134,902)				841,226
Share-based payments						-				332				-				-				332
Total comprehensive income						-				-				507				47,334				47,841
Dividends						-				-				-				(12,086)				(12,086)
Balance at June 30, 2012						952,043				49,794				(24,870)				(99,654)				877,313

(1)		Accumulated other comprehensive income (loss) includes the foreign currency translation adjustment.

CONSOLIDATED STATEMENTS OF CASH FLOWS
For six months ended June 30,
($ thousands) - unaudited						2013				2012
Cash provided by (used in)
Operating activities
Net earnings						33,095				47,334
Adjustments for:
Depreciation and amortization						57,461				53,947
Foreign exchange						(26)				(95)
Loss (gain) on sale of property and equipment						1,367				(321)
Impairment of property and equipment						131				7,519
Finance costs						19,959				21,298
Income taxes						7,825				14,544
Interest income						(19)				(5)
Other (1)						4,965				1,069
Income taxes paid						(2,121)				(1,353)
Income taxes recovered						663				30
Interest paid						(19,252)				(21,307)
Interest received						19				5
Funds provided by operations						104,067				122,665
Change in non-cash operating working capital						26,280				40,936
Cash provided by operations						130,347				163,601
Investing activities
Purchase of property and equipment						(32,828)				(108,877)
Proceeds from disposition of property and equipment						863				1,869
Change in non-cash working capital						5,432				8,882
Cash used by investing						(26,533)				(98,126)
Financing activities
Proceeds from long-term debt						26,257				30,964
Repayments of long-term debt						(96,870)				(65,560)
Dividends paid						(12,086)				(12,086)
Cash used by financing						(82,699)				(46,682)
Cash flow from operating, investing and financing activities						21,115				18,793
Effect of translation of foreign currency cash						1,109				403
Increase in cash for the period						22,224				19,196
Cash and cash equivalents (bank indebtedness) - beginning of period						4,933				(4,600)
Cash and cash equivalents (bank indebtedness) - end of period						27,157				14,596

(1)

Other includes share-based payment expense.

 

SEGMENTED INFORMATION

Three months ended							United States /			Inter-
June 30, 2013				Canadian			International			segment
($ thousands)				Operations			Operations			Eliminations			Corporate					Total
Operating revenue				37,110			119,024			-			-					156,134
Other revenue				13			24			-			-					37
Third party recovery				4,087			5,189			-			-					9,276
Inter-segment revenue				1,736			-			(1,736)			-					-
				42,946			124,237			(1,736)			-					165,447
Operating costs				29,096			71,424			-			-					100,520
Third party costs				4,087			5,189			-			-					9,276
Inter-segment operating				1,736			-			(1,736)			-					-
Operating income				8,027			47,624			-			-					55,651
Depreciation and amortization				8,133			19,469			-			-					27,602
Loss (gain) on sale of property and equipment				90			1,241			-			-					1,331
Impairment of property and equipment				131			-			-			-					131
				8,354			20,710			-			-					29,064
Segmented income				(327)			26,914			-			-					26,587
General and administrative				-			-			-			17,884					17,884
Foreign exchange				-			-			-			(21)					(21)
Finance costs				-			-			-			9,989					9,989
Income taxes				-			-			-			(1,612)					(1,612)
Net earnings (loss)				(327)			26,914			-			(26,240)					347
Purchase of property and equipment				10,348			5,143			-			-					15,491

Three months ended							United States /			Inter-
June 30, 2012				Canadian			International			segment
($ thousands)				Operations			Operations			Eliminations			Corporate					Total
Operating revenue				33,802			131,943			-			-					165,745
Other revenue				116			10			-			-					126
Third party recovery				3,757			4,645			-			-					8,402
Inter-segment revenue				(2,382)			-			2,382			-					-
				35,293			136,598			2,382			-					174,273
Operating				23,140			76,359			-			-					99,499
Third party costs				3,757			4,645			-			-					8,402
Inter-segment operating				(2,382)			-			2,382			-					-
Operating income				10,778			55,594			-			-					66,372
Depreciation and amortization				6,005			19,812			-			-					25,817
Loss (gain) on sale of property and equipment				17			(508)			-			-					(491)
Impairment of property and equipment				-			-			-			-					-
				6,022			19,304			-			-					25,326
Segmented income				4,756			36,290			-			-					41,046
General and administrative				-			-			-			14,002					14,002
Foreign exchange				-			-			-			(711)					(711)
Finance costs				-			-			-			10,496					10,496
Income taxes				-			-			-			4,393					4,393
Net earnings (loss)				4,756			36,290			-			(28,180)					12,866
Purchase of property and equipment				36,006			11,066			-			-					47,072

Six months ended							United States /			Inter-
June 30, 2013				Canadian			International			segment
($ thousands)				Operations			Operations			Eliminations			Corporate					Total
Operating revenue				152,449			230,996			-			-					383,445
Other revenue				57			46			-			-					103
Third party recovery				17,788			11,297			-			-					29,085
Inter-segment revenue				1,910			-			(1,910)			-					-
				172,204			242,339			(1,910)			-					412,633
Operating costs				88,645			140,893			-			-					229,538
Third party costs				17,788			11,297			-			-					29,085
Inter-segment operating				1,910			-			(1,910)			-					-
Operating income				63,861			90,149			-			-					154,010
Depreciation and amortization				20,015			37,446			-			-					57,461
Loss (gain) on sale of property and equipment				231			1,136			-			-					1,367
Impairment of property and equipment				131			-			-			-					131
				20,377			38,582			-			-					58,959
Segmented income				43,484			51,567			-			-					95,051
General and administrative				-			-			-			34,198					34,198
Foreign exchange				-			-			-			(26)					(26)
Finance costs				-			-			-			19,959					19,959
Income taxes				-			-			-			7,825					7,825
Net earnings (loss)				43,484			51,567			-			(61,956)					33,095
Purchase of property and equipment				27,258			5,570			-			-					32,828

Six months ended							United States /			Inter-
June 30, 2012				Canadian			International			segment
($ thousands)				Operations			Operations			Eliminations			Corporate					Total
Operating revenue				148,767			256,718			-			-					405,485
Other revenue				242			14			-			-					256
Third party recovery				18,994			9,932			-			-					28,926
Inter-segment revenue				4,914			-			(4,914)			-					-
				172,917			266,664			(4,914)			-					434,667
Operating costs				86,527			148,420			-			-					234,947
Third party costs				18,994			9,932			-			-					28,926
Inter-segment operating				4,914			-			(4,914)			-					-
Operating income				62,482			108,312			-			-					170,794
Depreciation and amortization				15,367			38,580			-			-					53,947
Loss (gain) on sale of property and equipment				47			(368)			-			-					(321)
Impairment of property and equipment				5,957			1,562			-			-					7,519
				21,371			39,774			-			-					61,145
Segmented income				41,111			68,538			-			-					109,649
General and administrative				-			-			-			26,568					26,568
Foreign exchange				-			-			-			(95)					(95)
Finance costs				-			-			-			21,298					21,298
Income taxes				-			-			-			14,544					14,544
Net earnings (loss)				41,111			68,538			-			(62,315)					47,334
Purchase of property and equipment				61,238			47,639			-			-					108,877

ADVISORY

NON-GAAP MEASURES DEFINITIONS

This 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 EBITDA, Adjusted EBITDA, Adjusted net earnings, 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:

"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 payment expense and impairment charges and is not intended to represent net earnings as calculated in accordance with IFRS.

"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 12 months (TTM).  Consolidated EBITDA used in this financial ratio is calculated as EBITDA plus share-based payment expense 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 payment expense 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 payment expense 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).

ADDITIONAL GAAP MEASURES DEFINITIONS

The Company uses certain additional GAAP financial measures within the financial statements and document that are not defined terms under IFRS to assess performance. Management believes that these measures provide useful supplemental information to investors. These financial measures are computed on a consistent basis for each reporting period and include Funds provided by operations, Operating income, Operating income percentage and Operating income - net percentage. These additional GAAP measures are identified and defined as follows:

"Funds provided by operations" is used by management and investors to analyze the funds generated by Trinidad's principal business activities prior to consideration of working capital. This balance is reported in the Consolidated Statements of Cash Flows included in the cash provided by operating activities section.

"Operating income" is used by management and investors to analyze overall and segmented operating performance.  Operating income is not intended to represent an alternative to net earnings or other measures of financial performance calculated in accordance with IFRS.  Operating income is calculated from the consolidated statements of operations and comprehensive income (loss) and from the segmented information contained in the notes to the consolidated financial statements. Operating income is defined as revenue less operating expenses.

"Operating income percentage" is used by management and investors to analyze overall and segmented operating performance.  Operating income percentage is calculated from the consolidated statements of operations and comprehensive income (loss) and from the segmented information in the notes to the consolidated financial statements. Operating income percentage is defined as operating income divided by revenue.

"Operating income - net percentage" is used by management and investors to analyze overall and segmented operating performance.  Operating income - 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 financial statements. Operating income - net percentage is defined as operating income divided by revenue net of third party costs.

FORWARD-LOOKING STATEMENTS

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 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.

Lyle Whitmarsh,
Chief Executive Officer

Brent Conway,
President

Lisa Ciulka,
Vice President, Investor Relations
[phone]
email: [email protected]