News Releases

CALGARY, March 7, 2012 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or "the Company") reported year-end and fourth quarter 2011 results which reflected the strong industry conditions that have been present throughout 2011. Fourth quarter 2011 operating and financial results continued the trends of high activity, growing dayrates and improving profitability established earlier in the year. For the full year, record operating days and increasing dayrates allowed Trinidad to achieve its highest ever revenue level.  Gross margin ⁽¹⁾, Adjusted EBITDA ⁽¹⁾ and net earnings for 2011 all increased significantly over the prior year.

"The past year has been a very successful year for Trinidad for a number of reasons. Our results in 2011 exceeded our expectations both operationally and financially. We achieved the goals we set for the year by expanding into several new operating areas, growing our modern, technically advanced fleet while maintaining a focus on cost control and also lowering our overall leverage," said Lyle Whitmarsh, Trinidad's Chief Executive Officer. "In addition, we have demonstrated the flexibility of our equipment and the ongoing commitment of our customers by re-deploying a significant portion of our fleet towards oil and natural-gas-liquids rich plays during the year. To date in 2012, the high level of performance we achieved in 2011 has continued and we expect this coming year to be another strong year for Trinidad."

⁽¹⁾ Please see the Non-GAAP Measures Definitions section of this document for further details.

FINANCIAL HIGHLIGHTS

OPERATING HIGHLIGHTS

CHANGE IN PRESENTATION

Trinidad has changed the presentation of third party costs and recovery to be accounted for on a gross basis versus a net basis. The presentation change will provide the users of the consolidated financial statements and Management's Discussion and Analysis improved disclosure on the Company's operating segments, in addition, the presentation will more accurately reflect the legal form of the contracts.  The change has 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.

In addition, the calculation of dayrates has been changed to be based on operating revenue divided by operating days, and now excludes third party recovery revenue as well as other income.  The changes in presentation have been applied retroactively. Restated quarterly information for 2011 and 2010 is available on the investor relations section of Trinidad's website at www.trinidaddrilling.com

OVERVIEW

This past year has been among Trinidad's strongest since its inception with record operating days and record revenue generation. In addition, the Company achieved activity levels well in excess of industry averages and a very strong safety performance. In 2011, Trinidad's profitability grew significantly, particularly in the second half of 2011, as dayrates rebounded and gross margins expanded reflecting higher revenue generation and the Company's ongoing cost control measures. Net earnings also increased from the levels achieved in the past few years.

As industry conditions continued to improve throughout 2011, activity levels grew in both Canada and the US. On both sides of the border, drilling was increasingly focused on oil or natural-gas-liquids (NGL) rich plays. The increased activity for these commodities was largely driven by stronger pricing compared to natural gas, where pricing remained weak as a result of high storage levels. During 2011, crude oil prices averaged $95.13 per barrel up 19.7% from the previous year and up 16.7% from the five year average. In contrast natural gas prices weakened in 2011, averaging $4.00 per mmBtu, down 8.5% from the average in 2010, and 28.9% from the five year average. By the end of fourth quarter, 57.0% of wells drilled in the US and 72.0% in Canada were targeting oil, compared to approximately 20.0% to 30.0% at the end of 2007. Trinidad participated in this trend and at the end of the year had approximately 65.0% of its fleet drilling for oil or NGLs, up from a similar 20.0% to 30.0% a few years ago. To date in 2012, Trinidad's rigs have continued this migration and the Company currently has 85.0% of its fleet drilling oil or NGL rich targets. Of the rigs drilling dry natural gas, only three rigs are not under long-term, take-or-pay contracts.

Utilization levels across North America increased with industry utilization averaging 49.0% in Canada, up from 40.0% in 2010. In the US, the average active rig count increased to 2,027 in 2011, compared to 1,672 in the previous year.  Trinidad continued its trend of industry outperformance with utilization in its Canadian operations of 62.0% in 2011 and an average of 59 out of 65 available rigs active during the year in its US and international division. The strong demand for quality drilling equipment in 2011 flowed through to improved dayrates across the Company's business. Gross margins expanded as the year progressed; reflecting increased activity, higher dayrates and the absence of rig re-activation costs. Adjusted EBITDA grew to $252.5 million in 2011, up 25.2% from last year, while net earnings reached $76.5 million, up 202.0% from 2010.  The Company continued to capitalize on emerging plays in 2011, as it expanded its operations into new regions, including the Eagle Ford shale in Texas and the Niobrara in Wyoming.  Trinidad has a positive outlook for further growth and expansion in 2012, as the industry continues to discover and develop new emerging plays.

As industry conditions strengthened in 2011, Trinidad took the opportunity to increase dayrates and extend terms as existing contracts expired. During 2011, a significant number of rigs working on short-term contracts or on the spot market were transitioned into long-term, take-or-pay contracts, providing an increased level of revenue protection and debt coverage. Currently approximately 65.0% of the fleet is under long-term, take-or-pay contracts with an average remaining term of approximately two years.  This is an increase from the prior year-end of approximately 50.0% of the fleet under long-term, take-or-pay contracts, with an average remaining term of 1.7 years. The majority of the increase in contracted rigs has been associated with the Canadian operations, where almost 60.0% of the fleet is currently under this long-term, take-or-pay contract arrangement, up from approximately 30.0% at the end of 2010.

Over the past few years, Trinidad has been focused on maintaining sustainable growth levels in a cyclical industry, while also lowering overall total debt levels. During 2011, the Company succeeded in both these areas, as Trinidad constructed three new rigs for its fleet, while also managing to lower its Total Debt to EBITDA ratio significantly to 2.42 times in 2011, from 3.18 times in 2010.  While Trinidad had numerous requests for new equipment in 2011, the Company continued its commitment to managed growth as part of its debt reduction strategy and as a result of global economic conditions.  The 2011 rig builds were strategically deployed to areas identified as significant growth opportunities that allowed geographical diversification into new operating areas, and also diversified the Company's customer base.

Overall, 2011 was a very successful year for Trinidad with strong operational and financial results. The Company's ability to move its rigs within plays and grow its operations, while also reducing leverage and increasing the percentage of rig fleet under contract, position it well for future success in 2012 and beyond.

FULL YEAR 2011 HIGHLIGHTS

• In 2011, Trinidad generated its highest revenue since inception, reaching $797.3 million, up 19.0% from 2010. Record revenue levels were driven by a combination of increased operating days and higher dayrates reflecting the strong operating environment present throughout 2011 North America. These positive factors were partly offset by the impact of foreign exchange with a strengthening of the Canadian dollar versus the US dollar during 2011, which led to a reduction in revenue after translation to Canadian dollars.
  
  
• Gross margin grew to $307.7 million in 2011, up 20.3% from the previous year largely due to higher revenue generation in the year. Gross margin - net percentage averaged 41.7% in 2011, up slightly from 40.8% in 2010.  The impact of higher dayrates in 2011 was somewhat muted when viewed as a percentage of revenue due to a higher contribution from lower margin generating equipment and an increase in labour costs which are passed through to the customer. In addition, lower coring revenue and lower external construction revenue as a result of the 2011 reorganization had a negative impact on gross margin.
  
  
• Adjusted EBITDA grew to $252.5 million in 2011, up 25.2% from 2010 as a result of higher gross margin levels, slightly offset by increased general and administrative expenses compared to the prior year.
  
  
• Net earnings for 2011 totalled $76.5 million or $0.63 per share (diluted) compared to a net loss of $75.0 million or $0.62 per share (diluted) in 2010. In addition to higher Adjusted EBITDA, net earnings were positively impacted by increased gains on foreign exchange and the sale of property and equipment, lower impairment charges and lower finance costs reflecting the Company's lower leverage levels and the absence of refinancing costs. Higher depreciation and amortization expense as a result of increased equipment utilization in the year, and higher income tax charges partly offset these increases in 2011.
  
  
• At year-end 2011, Total Debt to EBITDA decreased to 2.42 times, compared to 3.18 times at year-end 2010, a direct result of Trinidad's ongoing commitment to continue reducing total debt levels moving forward.

RESULTS FROM OPERATIONS

Canadian Operations

Activity levels and demand continued to grow in 2011 for the Company's Canadian operations. Utilization increased in 2011 to 62.0% compared to 55.0% in the previous year, with 2011 utilization above the industry average of 49.0% by 13 percentage points. Strong demand led to increased dayrates in the current year, particularly in the last half of 2011 as customers prepared for a busy winter drilling program.

Increased operating days and higher dayrates resulted in a 15.5% increase in revenue over the prior year, to $311.8 million in revenue for 2011.  The higher revenue contributed to $123.1 million in gross margin, a 15.6% increase compared to the prior year. While the higher activity levels and revenue drove 2011 gross margin higher, this increase was moderated by the lower gross margin contribution from the service rig operations due to its sale in the middle of 2011.

Gross margin - net percentage increased slightly in 2011 to 39.5%, compared to 39.4% in the previous year.  The positive margin impact of higher utilization and dayrates in 2011 was moderated by changes in active rig mix, as well as labour increases that pass through to the operator at cost.  The labour increases have the result of increasing revenue and operating expense without any mark up, leading to an overall reduction in the gross margin when shown as a percent of revenue.

During 2011, Trinidad's Canadian rig count dropped by one rig reflecting the transfer of a Canadian rig to the US operations and into the Company's growing Niobrara shale operations in Wyoming.  By moving this rig to a high demand, less seasonal location, Trinidad was able to improve the rig's profitability and grow its presence in the area.

For the first half of 2011, the results from Trinidad's coring division were relatively consistent with the previous year.  For the last half of 2011 activity levels increased considerably in the Canadian drilling industry, resulting in a tight labour market.  The coring division made a strategic decision to recruit crews earlier than in previous years in order to have well-trained crews available for the winter drilling program.  Labour and recruiting costs were incurred in the third and fourth quarters of 2011 with the associated revenue occurring in the winter drilling months of the first quarter of 2012. These expenses lowered profitability in this division in the latter half of 2011, but prepared the division well for the first quarter of 2012.

In the second quarter of 2011, Trinidad sold its service rig operations for proceeds of $38.0 million, excluding positive working capital. The decision to sell these assets reflected the Company's strategy to focus on the deep, modern contract drilling market where returns are generally stronger and where the Company sees opportunities for future growth.

Following the reorganization of the construction operations in 2011, the components of that segment were combined with the Canadian operations.  As a result, the Canadian operations include external construction revenue and operating expense of $2.4 million and $2.7 million for 2011, and $5.1 million and $2.7 million for 2010, respectively.   While the reorganization resulted in a focus on internal rig builds only, there was operating profit associated with legacy external projects that occurred in 2010 and the early part of 2011 impacting margins. In addition to allowing Trinidad to focus solely on its internal constuction needs, the Company anticipates that the reorganization of this segment will also provide it with cost savings going forward.

United States and International Operations

Industry conditions strengthened for Trinidad's US and international operations in 2011 as demand continued to grow for Trinidad's high performance equipment, contributing to increased dayrates and higher activity levels compared to the previous year.

Increased operating days and higher dayrates led to record revenue generation of $425.6 million, a 19.3% increase over the prior year.  Throughout 2011 Trinidad's activity levels consistently achieved above 80.0% utilization, compared to a 2010 average utilization of 69.0%.  Dayrates have increased over the past two years as demand intensified, resulting in Trinidad re-signing contracts with customers at higher dayrates.

Gross margin and gross margin - net percentage increased in 2011 largely due to higher revenue levels and lower operating expenses in 2011 as rig re-activation costs were not incurred to the same extent as experienced in 2010, particularly in the second half of 2011.

During 2011, Trinidad's US and international rig count grew by a net two rigs. The Company transferred one rig from its Canadian operations into the Niobrara shale in Wyoming and delivered three new builds into its growing Eagle Ford shale operations.  This four rig increase was offset by the removal of two rigs from Trinidad's marketed fleet in the US at the end of 2011.  These rigs are being assessed for sale or possible retrofit, to meet current customer demands and Trinidad's target fleet mix. Trinidad continues to assess market conditions, and capitalize on relocating rigs to high demand locations, which is evident in the Company's 2011 acquisition, and refurbishment of four rigs that are designated for the Wyoming market in the first half of 2012.

Conditions in the barge drilling operations also improved throughout 2011, with average utilization levels increasing in 2011 and US dollar dayrates remaining consistent with the prior year.  Demand for well-maintained equipment remains high in this industry and given the limited supply of good quality barge drilling rigs, Trinidad expects that performance in this division will remain strong into 2012.

QUARTERLY ANALYSIS

FINANCIAL HIGHLIGHTS - QUARTERLY ANALYSIS

NON-GAAP MEASURES HIGHLIGHTS - QUARTERLY ANALYSIS

OPERATING HIGHLIGHTS - QUARTERLY ANALYSIS

FOURTH QUARTER 2011 HIGHLIGHTS

• Higher activity levels and dayrates across the Company's operations drove fourth quarter revenue to $226.5 million, up 16.5% compared to the same quarter last year.
  
  
• Gross margin also increased in the fourth quarter to $88.8 million, up 15.8% from the previous year largely due to higher revenue, but was partly offset by a lower gross margin contribution from the service rig operations due to its sale in the middle of 2011.
  
  
• Gross margin - net percentage decreased by 0.6% over the prior year to 42.4% in the fourth quarter of 2011.  Higher activity levels and dayrates drove an increase; however, the full impact was muted by higher labour costs passed through to the operator, in addition to higher coring costs.
  
  
• Adjusted EBITDA was $74.4 million in the fourth quarter, up 16.8% from the same quarter last year as a result of higher gross margin levels, slightly offset by increased general and administrative expenses compared to the prior year.
  
  
• Net earnings for the quarter totalled $25.3 million or $0.21 per share (diluted) compared to a net loss of $84.7 million or $0.70 per share (diluted) in 2010. In addition to higher Adjusted EBITDA, net earnings were positively impacted by an increased gain on foreign exchange, lower impairment charges and lower finance costs reflecting the Company's reduced debt levels and the absence of refinancing costs. Higher depreciation and amortization expense due to an increased level of equipment utilization in the quarter, and higher income taxes partly offset these increases.

Canadian Operations

Conditions remained strong in the Canadian operations during the fourth quarter of 2011. High activity levels and growing dayrates led to increased revenue in the quarter. Despite the typical slowdown over the December holiday period, average fourth quarter utilization levels remained in line with the third quarter at 69.0%. The Canadian operation's strong level of activity was 15 percentage points higher than the industry average of 54.0% and above the 65.0% recorded in same quarter last year.

Average dayrates grew substantially in the quarter as demand for high quality drilling equipment intensified. Dayrates also increased as a result of higher winter rental equipment revenue, in addition to labour cost increases which were passed through to the operator. Higher revenues led to increased gross margin in the quarter compared to the third quarter. However, when compared to the fourth quarter in 2010, gross margin levels were relatively unchanged reflecting the absence of the Company's service rig operations that was sold in the second quarter of 2011. In addition, timing issues in the fourth quarter of 2011 led to disproportionately higher labour and benefit costs.

In addition to the factors impacting gross margin, gross margin - net percentage in the fourth quarter was negatively impacted versus the previous quarter due to higher labour costs which were passed through to the operator.

During the fourth quarter of 2011, Trinidad's coring division began preparing for a more active winter program than experienced in the past few years. Activity typically commences towards the end of the year and continues through into the first quarter.  However, costs associated with crew training and recruitment and equipment maintenance generally occur in the fourth quarter and this timing difference lowered profitability in the fourth quarter but prepares the division for the busy winter months in the first quarter.

US and International Operations

Trinidad's US and international operations continued to perform strongly in the fourth quarter of 2011. Industry conditions have strengthened continually in this division for the past 18 months and while utilization has stabilized in the low 80.0% range for the past year, dayrates have consistently increased over the past six quarters. Higher dayrates in the fourth quarter of 2011 compared to the previous quarter and the fourth quarter last year were largely a result of increased demand for Trinidad's equipment and the movement of rigs into higher revenue generating areas. Gross margin was higher in the fourth quarter of 2011 than the third quarter, and the same quarter last year as a result of increased revenue levels and lower operating expenses. Gross margin - net percentage increased from the fourth quarter last year, reflecting the improved operating environment and was largely in line with the previous quarter in 2011.

As part of the Company's ongoing review of its fleet, Trinidad removed two rigs from its marketed fleet at the end of 2011. These rigs are being assessed for possible retrofit or sale, as the Company continually reviews its fleet to ensure it is in line with market demands, in addition to Trinidad's target fleet composition.

Similar to the land drilling market, the Company's barge rigs also saw strong operating conditions in the fourth quarter of 2011. Dayrates were relatively consistent with the previous quarter and showed improvement from the fourth quarter of 2010. Activity levels dipped from the almost full utilization experienced over the past few quarters, due largely to customer-related logistical delays, which allowed the Company to complete scheduled repairs; overall the Company expects to recover to previous levels in the coming quarters.

FINANCIAL SUMMARY

At December 31, 2011, working capital increased by $13.0 million compared to the same date in 2010.  Higher activity levels resulted in an increase in accounts receivable and accounts payable year over year, which resulted in an increase in working capital in the current year.  In addition, working capital increased by $9.0 million due to the addition of assets held for sale in the current year.  These increases were partially offset by a reduction in net cash of $12.5 million in the current year, as the Company utilized its bank overdraft versus carrying cash in the prior year, combined with a $16.5 million increase in interest payable on the Senior Notes due to the refinancing in the fourth quarter of 2010.

Trinidad's total debt declined by $26.0 million in 2011, due to the repayment on the Canadian and US revolving credit facility of $36.5 million, however this reduction in debt was partially offset by an increase in the fair value of the Senior Notes of US$450.0 million, as a result of the higher US to Canadian dollar ending foreign exchange rate at December 31, 2011. 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.  The first payment was made on July 15, 2011.

Trinidad's net debt declined by $39.0 million in 2011, due to a slightly lower debt balance combined with a significantly higher working capital, versus December 31, 2010.  The higher working capital was due to the reclassification of property and equipment to assets held for sale, offset by a decrease in the cash balance in the current year.

During 2011, and pursuant to the Company's strategy to reduce overall indebtedness combined with strong operating conditions, Trinidad reduced the balances on its revolving credit facility by $36.5 million. At December 31, 2011, Trinidad had CDN$75.0 million outstanding on its Canadian revolving credit facility and US$57.0 million on its US revolving credit facility, leaving CDN$125.0 million and US$43.0 million unutilized in the facility, respectively.

The new 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 $182.2 million of capital expenditures were invested during the year-ended December 31, 2011, compared to $143.2 million last year.  Capital expenditures were substantially related to the Company's rig build program, the purchase of four land rigs from a third party and a number of capital upgrades made to Trinidad's rig fleet to improve the equipment's marketability.  Net of proceeds received from dispositions, Trinidad's capital expenditures in 2011 totalled $135.7 million compared to $119.1 million in 2010.

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:

Readers are cautioned that the ratios noted above do not have standardized meanings prescribed in IFRS or Canadian GAAP.

OUTLOOK

Despite the ongoing weakness in natural gas prices, drilling industry fundamentals have remained strong to date in 2012. Trinidad, and the industry as a whole, has demonstrated an ability to switch its focus away from dry natural gas development towards oil and NGL rich plays. This migration has been happening for the past 12 to 18 months but has accelerated and gained more exposure in the past few months as natural gas prices dipped below $3.00 per mcf. To date, high oil prices and the resulting strong economics in these oil and NGL rich plays have led to demand levels that have absorbed any available high performance equipment.

Trinidad's outlook for 2012 remains positive. The fundamentals behind oil prices are significantly stronger than natural gas and most industry experts are forecasting crude oil prices at or above current levels for the next few years. These commodity price levels allow oil and gas companies to develop resources at acceptable levels of return and the Company expects that these factors will continue to drive healthy activity levels in 2012. Trinidad expects that modern, high performance equipment will continue to be the equipment of choice by operators and that demand and pricing will remain strong in this sector of the market. With three quarters of its fleet fitting into this category, and a customer base with a broad array of drilling opportunities, Trinidad anticipates 2012 will be another strong year.

Moving forward in 2012 and beyond Trinidad will continue to work towards its goals of lower leverage and sustainable growth. In the short-term Trinidad expects to lower its Total Debt to EBITDA levels below 2.0 times, with a long-term goal of maintaining its leverage either side of 1.5 times, depending on market conditions. To date, Trinidad has agreed to build five new rigs in 2012; all with five-year, take-or-pay contracts and delivery throughout the year. In addition, the Company will deliver six rigs into operations early in 2012 with the completion of last year's construction and upgrade program, adding four rigs to its US operations and two to its Canadian operations. 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 expects that the current positive momentum in the industry will continue through 2012. The Company's high contract base, modern fleet and increasing financial flexibility positions it well to capture the opportunities available in today's strong industry environment and to continue to build its business for the future.

CONFERENCE CALL

A conference call and webcast to discuss the results will be held for the investment community on Thursday March 8^th, 2011 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 March 8^th, 2011 until midnight March 15^th, 2011 by dialing (855) 859 2056 or (416) 849-0833 and entering replay access code 51920188.

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

A full copy of Trinidad's fourth quarter and year-end 2011 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.com

TRINIDAD DRILLING LTD.

Trinidad is a growth oriented corporation 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 CHANGES IN EQUITY
For the years ended December 31, 2011 and 2010

⁽¹⁾ Accumulated other comprehensive income as at December 31, 2011 consisted of $25.4 million in total foreign currency translation adjustment.  Accumulated other comprehensive income as at December 31, 2010 consisted of $30.0 million in total foreign currency translation adjustment and $(3.4) million in total change in fair value of derivatives designed as cash flow hedges, net of income taxes.

ADVISORY
NON-GAAP MEASURES DEFINITIONS

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 previous GAAP 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, Adjusted net earnings before refinancing costs, net debt, working capital, Senior Debt to EBITDA, Total Debt to EBITDA, and EBITDA to Cash Interest Expense.  These non-GAAP measures are identified and defined as follows under IFRS:

Additional information on the calculation of the above-mentioned, non-GAAP measures can be found in the Management's Discussion and Analysis section of Trinidad's full year and fourth quarter 2011 report which is available on Trinidad's website at www.trinidaddrilling.com or from SEDAR at www.sedar.com

"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 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 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 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.

"Adjusted net earnings before refinancing costs" is used by management to analyze Adjusted net earnings prior to the effects of refinancing costs 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, and dividends payable at quarter end, plus the current portion of long-term debt, 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.

References to gross margin, gross margin percentage, gross margin - net percentage, EBITDA, Adjusted EBITDA, Adjusted net earnings, Adjusted net earnings before refinancing costs, net debt, working capital, Senior Debt to EBITDA, Total Debt to EBITDA, and EBITDA to Cash Interest Expense throughout this document have the meanings set out above.

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.