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TSX SYMBOL:  TDG

CALGARY, Nov. 7, 2012 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or "the Company") reported solid third quarter and year-to-date 2012 results. Trinidad's adjusted EBITDA ⁽¹⁾ in the third quarter was in line with the same quarter last year and above the levels recorded in the second quarter of 2012. Year to date, adjusted EBITDA grew in the first nine months of 2012 when compared to the prior year. Trinidad's solid third quarter and year-to-date 2012 performance was a result of higher dayrates driven by strong demand present in the second half of 2011 and first half of 2012, partially offset by the impact of softening industry conditions in the third quarter.

"While we have seen a weakening in market conditions from the strength we saw in the first half of 2012, commodity prices still remain at levels that drive steady activity in the drilling industry," said Lyle Whitmarsh, Trinidad's Chief Executive Officer. "Our third quarter results demonstrate the strength of our business model and although we are not immune to the overall market conditions, our modern, high tech equipment, solid contract base and growing financial flexibility position us well to continue to outperform the industry as a whole."

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

FINANCIAL HIGHLIGHTS

		Three months ended September 30,			Nine months ended September 30,
($ thousands except share and per share data)		2012	2011	% Change	2012	2011	% Change
Revenue (3)		207,716	196,790	5.6	630,864	570,774	10.5
Revenue, net of third party costs		194,790	184,107	5.8	589,817	527,905	11.7
Gross margin (1)		79,895	81,486	(2.0)	249,872	218,853	14.2
Gross margin percentage (1, 3)		38.5%	41.4%	(7.0)	39.6%	38.3%	3.4
Gross margin - net percentage (1)		41.0%	44.3%	(7.4)	42.4%	41.5%	2.2
EBITDA (1)		64,714	76,017	(14.9)	209,035	180,994	15.5
	Per share (diluted) (2)	0.54	0.63	(14.3)	1.73	1.50	15.3
Adjusted EBITDA (1)		68,387	69,383	(1.4)	213,682	178,075	20.0
	Per share (diluted) (2)	0.57	0.57	-	1.77	1.47	20.4
Cash provided by operations		19,743	33,654	(41.3)	183,344	140,234	30.7
	Per share (basic / diluted) (2)	0.16	0.28	(42.9)	1.52	1.16	31.0
Funds provided by operations		51,659	44,936	15.0	174,324	144,155	20.9
	Per share (basic / diluted) (2)	0.43	0.37	16.2	1.44	1.19	21.0
Net earnings		19,950	30,169	(33.9)	67,284	51,163	31.5
	Per share (basic / diluted) (2)	0.17	0.25	(32.0)	0.56	0.42	33.3
Adjusted net earnings (1)		24,913	23,535	5.9	80,740	57,237	41.1
	Per share (basic / diluted) (2)	0.21	0.19	10.5	0.67	0.47	42.6
Capital expenditures net of dispositions		39,428	36,902	6.8	146,436	72,216	102.8
Dividends declared		6,043	6,043	-	18,129	18,129	-
Shares outstanding - basic / diluted
	(weighted average) (2)	120,859,476	120,859,109	-	120,859,476	120,853,781	-
As at					September 30,	December 31,
($ thousands except percentage data)					2012	2011	% Change
Total assets					1,611,220	1,608,126	0.2
Total long-term liabilities					634,568	666,717	(4.8)

(1)	Readers are cautioned that Gross margin, Gross margin percentage, Gross margin - net percentage, EBITDA, Adjusted EBITDA, Adjusted net earnings and the related per share information do not have standardized meanings prescribed by IFRS - see "Non-GAAP Measures".
(2)	Basic shares include the weighted average number of shares outstanding over the period.  Diluted shares include the weighted average number of shares outstanding over the period and the dilutive impact, if any, the number of shares issuable pursuant to the Incentive Option Plan.
(3)	Revenue has been recalculated in the prior year based on changes in presentation - see "Change in Presentation".

OPERATING HIGHLIGHTS

		Three months ended September 30,				Nine months ended September 30,
		2012	2011	% Change		2012	2011	% Change
Land Drilling Market
Operating days (1, 2)
	Canada	3,233	3,675	(12.0)		8,628	9,680	(10.9)
	United States and International	5,038	5,579	(9.7)		15,589	15,837	(1.6)
Rate per operating day (1, 3, 4)
	Canada (CDN$)	23,501	20,315	15.7		24,112	20,462	17.8
	United States and International (CDN$)	22,518	18,600	21.1		22,344	18,304	22.1
	United States and International (US$)	22,263	19,143	16.3		22,192	18,721	18.5
Utilization rate - operating day (1, 3, 5)
	Canada	62%	74%	(16.2)		57%	64%	(10.9)
	United States and International	81%	92%	(12.0)		85%	90%	(5.6)
Number of drilling rigs at quarter end
	Canada	57	54	5.6		57	54	5.6
	United States and International	68	66	3.0		68	66	3.0
	Utilization rate for service rigs (6)	-	-	-		-	51%	-
	Number of coring and surface casing rigs
	at quarter end	20	20	-		20	20	-
Barge Drilling Market
	Operating days (1, 2)	376	454	(17.2)		1,169	1,335	(12.4)
	Rate per operating day (CDN$) (1, 3, 4)	30,008	24,833	20.8		28,244	23,187	21.8
	Rate per operating day (US$) (1, 3, 4)	29,583	25,547	15.8		28,044	23,705	18.3
	Utilization rate - operating day (1, 5)	82%	99%	(17.2)		85%	98%	(13.3)
	Number of barge drilling rigs at quarter end	2	2	-		2	2	-
	Number of barge drilling rigs under Bareboat
	Charter Agreements at quarter end	3	3	-		3	3	-

(1)	Operating days, utilization rate - operating day and rate per operating day have been recalculated, see "Change in Presentation".
(2)	Operating days include drill days and move days.
(3)	Rate per operating day includes operating revenue divided by operating days.
(4)	Operating revenue is presented net of third party costs.
(5)	Utilization rate - operating day is based on operating days divided by total days available.
(6)	In the second quarter of 2011, Trinidad disposed of its 22 well servicing rigs and related equipment.

OVERVIEW

Trinidad recorded solid results in the third quarter of 2012; however, stronger revenue levels driven by higher dayrates were offset by lower operating days and higher repairs and maintenance expenses, leaving adjusted EBIDTA largely in line with the same quarter last year. Record performance in the first two quarters of 2012 drove higher revenue, gross margin and adjusted EBITDA in Trinidad's year-to-date results compared to the same period last year.

Net earnings in the quarter lowered from the same quarter last year largely as a result of higher share-based compensation, an impairment recorded on property and equipment and the absence of a foreign exchange gain, partially offset by lower income taxes. Year to date, net earnings increased due to higher adjusted EBITDA partially offset by the absence of gains on foreign exchange and the sale of assets and higher income taxes.

Third quarter revenue, adjusted EBIDTA and net earnings were higher than the second quarter of 2012 largely due to the end of spring break-up in Canada and added contributions from this segment as rigs went back to work.

During the third quarter of 2012, crude oil prices weakened as ongoing concerns around European debt levels and slow global economic recovery put downward pressure on oil prices. On average during the quarter, crude oil prices remained at healthy levels; however, a drop below US$80 per barrel in late June caused a pullback in oil and gas development across North America as oil and gas producers chose to delay capital spending and take a cautious approach to their drilling programs. The strong movement away from natural gas drilling over the past few years has begun to have an impact on supply levels and the level of natural gas in storage has begun to drop towards more normal levels. This improvement in pricing is positive; however, natural gas prices still remain below the level that drives strong development activity for natural gas plays.

INDUSTRY STATISTICS

	2012			2011				2010
	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4
Commodity Prices
WTI crude oil price (US$ per barrel)	92.15	93.30	102.99	94.02	89.49	102.02	94.07	85.16
Henry Hub natural gas price (US$ per mmBtu)	2.88	2.29	2.43	3.33	4.12	4.37	4.18	3.80
US Industry Activity
Average US industry active land rig count (1)	1,837	1,902	1,929	1,954	1,893	1,778	1,674	1,648
Average Trinidad active land rig count (2)	55	58	58	60	61	57	57	54
Canadian Industry Activity
Average Canadian industry utilization (3)	42%	18%	65%	54%	54%	23%	66%	49%
Average Trinidad utilization (4)	58%	24%	77%	69%	69%	31%	80%	65%

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.

During the third quarter, industry activity levels reflected the softening demand as the number of active rigs in the US dropped slightly and utilization levels in Canada were slower to ramp up after spring break-up. While Trinidad was impacted by these industry conditions, the Company's modern, high performance equipment and strong contract position allowed it to continue to outperform the industry average activity levels.

Trinidad's dayrates in the third quarter and year to date in 2012 increased from the levels recorded in the same periods last year driven by stronger demand across North America year over year. When compared to the second quarter of 2012, dayrates decreased as market conditions softened in the third quarter, combined with a shift in the Company's active rig mix after spring break-up.

Trinidad remains committed to its leverage reduction strategy and further reduced its Total Debt to EBITDA ratio in the third quarter to 1.96 times. In order to meet its debt reduction targets, Trinidad has carefully managed its cost structure and its capital spending program by selecting projects that allow the Company to grow its business and continue as an industry leader, while also reducing its debt balances. Trinidad is moving towards its long-term leverage goal of Total Debt to EBIDTA of 1.50 times.

Third quarter 2012 and year-to-date highlights

• Trinidad generated revenue of $207.7 million for the third quarter and $630.9 million year to date, an increase of 5.6% and 10.5% from the same periods of 2011. Revenue grew in the quarter and year to date as a result of higher dayrates in each of the Canadian and the US and international operations and an increased fleet size. These factors were partially offset by a reduction in operating days in 2012 due to softening market conditions in the third quarter.
  
  
• Gross margin - net percentage was 41.0% in the quarter and 42.4% year to date, compared to 44.3% and 41.5%, respectively, in 2011. Gross margin - net percentage decreased from the same quarter last year due to higher repairs and maintenance expenses incurred in the US and international division. Higher year-to-date gross margin - net percentage levels were largely driven by strong results in the first two quarters of 2012 compared to the first nine months of 2011.
  
  
• Adjusted EBITDA was $68.4 million in the third quarter and $213.7 million year to date, down 1.4% and up 20.0%, respectively, from the same periods of 2011. Adjusted EBITDA was largely in line with the same quarter last year as the impact of higher dayrates and an increased fleet size was offset by lower operating days and higher operating costs. Year to date, adjusted EBITDA increased as a result of higher gross margin in the first nine months of 2012 and lower general and administrative costs (excluding share-based payments) compared to the same period in the prior year.
  
  
• Net earnings were $20.0 million ($0.17 per share (diluted)) for the quarter and $67.3 million ($0.56 per share (diluted)) year to date, down 33.9% and up 31.5%, respectively from the comparative periods in 2011. Net earnings lowered quarter over quarter as a result of higher share-based compensation, the absence of a foreign exchange gain and an impairment of property and equipment recorded in the quarter, partially offset by lower income taxes. Year to date, net earnings increased due to higher adjusted EBITDA partially offset by the absence of gains relating to foreign exchange and asset sales and higher income taxes.
  
  
• In the third quarter of 2012, Trinidad maintained its lower leverage level and recorded Total Debt to EBITDA of 1.96 times, compared to 2.42 times at year-end 2011 and 2.56 times at the end of the third quarter of 2011. Trinidad remains committed to lowering its leverage with a long-term target of 1.50 times.
  
  
• During the quarter, Trinidad added two newly built rigs to its Canadian operations, both under five-year, take-or-pay contracts.

RESULTS FROM OPERATIONS

Canadian Operations

	Three months ended September 30,				Nine months ended September 30,
($ thousands except percentage and operating data)	2012	2011	% Change		2012	2011	% Change
Operating revenue (1, 2, 3, 4)	77,155	74,598	3.4		225,923	221,685	1.9
Other revenue	51	107	(52.3)		293	691	(57.6)
	77,206	74,705	3.3		226,216	222,376	1.7
Operating costs (1, 2, 3, 4)	43,276	42,992	0.7		129,802	134,236	(3.3)
Gross margin	33,930	31,713	7.0		96,414	88,140	9.4
Gross margin - net percentage	43.9%	42.5%	3.3		42.6%	39.6%	7.6
Drilling days	3,004	3,434	(12.5)		7,969	8,964	(11.1)
Operating days (1, 5)	3,233	3,675	(12.0)		8,628	9,680	(10.9)
Rate per operating day (CDN$) (1, 6)	23,501	20,315	15.7		24,112	20,462	17.8
Utilization rate - operating day (1, 7)	62%	74%	(16.2)		57%	64%	(10.9)
Utilization rate - drilling day (1, 8)	58%	69%	(15.9)		53%	59%	(10.2)
CAODC industry average (1, 9)	42%	54%	(22.2)		41%	47%	(12.8)
Number of drilling rigs at quarter end	57	54	5.6		57	54	5.6
Utilization rate for service rigs (1, 10)	-	-	-		-	51%	-
Number of coring and surface rigs
at quarter end	20	20	-		20	20	-

(1)	Operating revenue, operating costs, operating days, utilization rate - operating day and rate per operating day have been recalculated, see "Change in Presentation".
(2)	Inter-segment revenue and operating costs of $4.6 million and $16.7 million has been excluded for the three months ended September 30, 2012 and 2011, respectively.  Inter-segment revenue and operating costs of $9.5 million and $42.9 million has been excluded for the nine months ended September 30, 2012 and 2011, respectively. Each of these inter-segment revenue and operating costs relates to rig construction for the US operations.
(3)	External construction revenue and operating costs of less than $0.1 million and $0.2 million for the three and nine months ended September 30, 2012, respectively, are included in the above table. External construction revenue and operating costs of less than $0.1 million and $1.1 million for the three and nine months ended September 30, 2011, are included in the above table.
(4)	Operating revenue and operating costs exclude third party recovery and third party costs of $8.7 million and $9.4 million for the three month period ended September 30, 2012 and 2011, respectively. Operating revenue and operating costs exclude third party recovery and third party costs of $27.7 million and $30.9 million have been excluded for the nine month period ended September 30, 2012 and 2011, respectively.
(5)	Operating days include drill days and move days.
(6)	Rate per operating day includes operating revenue divided by operating days.
(7)	Utilization rate - operating day is based on operating days divided by total days available.
(8)	Utilization rate - drilling day is based on drilling days divided by total days available.
(9)	CAODC industry average is based on drilling days divided by total days available.
(10)	In the second quarter of 2011, Trinidad disposed of all of its 22 well servicing rigs and related equipment.

Trinidad's Canadian operations performed strongly in the third quarter and year-to-date 2012, which was reflected in higher revenues and improved gross margins compared to the same periods of the prior year. The strong performance was driven by higher dayrates carried over from the first half of 2012, which more than offset the lower activity levels in the current period. In addition, the increased rig count more than compensated for the impact of the sale of the Company's well service rigs in the second quarter of 2011.

When compared to the second quarter of 2012, Canadian operations generated higher revenue and gross margin - net percentage as a result of the seasonality present in the Canadian drilling industry.

The third quarter is typically representative of higher activity levels as spring break up is complete and road bans are lifted, allowing drilling to resume. Trinidad's high performance, modern fleet has consistently outperformed industry activity levels, with this trend continuing into the third quarter of 2012. During the quarter, Trinidad recorded average utilization that was 16 percentage points higher than the industry, strongly demonstrating the ongoing demand for the Company's equipment.

A slower than expected increase in activity following spring break-up led to lower industry activity levels versus the same period of the prior year. Low natural gas prices and weakening crude oil prices caused a number of oil and gas producers to take a cautious approach to their remaining 2012 drilling programs. For Trinidad, the effect of this shift in the industry had a muted impact due to continued strong demand for Trinidad's higher specification rigs, as well as the Company's focus toward long-term, take-or-pay contracts.

Dayrates increased in the third quarter of 2012 compared to the same period of 2011. Improved pricing was largely the result of high customer demand carried over from the first half of 2012, reflecting stronger market conditions year over year. The full impact of the higher dayrates was not reflected in the gross margin - net percentage as a portion of the increase was the result of higher crew wages from the fourth quarter of 2011; these costs are passed on to the operator at cost. In addition, in the current quarter and year to date, dayrates were higher by $432 per operating day and $483 per operating day, respectively, related to standby revenues. Standby revenues generate income but are not considered as operating days; therefore, increasing dayrates.

When compared to the second quarter of 2012, dayrates decreased as a result of the change in the active rig mix as rigs returned to work following spring break-up.

Gross margins in the current period and year-to-date 2012 were higher than the same periods of the prior year due to a higher rig count, increased dayrates carried over from the first half of 2012, as well as the Company's continued focus on cost containment. The positive margin impacts were slightly offset by the absence of the well servicing assets in the current periods, and the impact of lower operating days. These factors also drove higher gross margin - net percentages in both the current quarter and year-to-date 2012, compared to the same periods in 2011. Gross margin and gross margin - net percentage have increased when compared to the second quarter of 2012 due to the end of spring break-up and the return to normalized activity levels.

Trinidad's active rig fleet increased by three rigs in the current period versus the same period of 2011, as one new build was delivered from the Company's manufacturing division in the second quarter of 2012, and two new builds were added to the fleet during the third quarter of 2012.

By comparison, in the first three quarters of 2011, the construction operations delivered one rig per quarter into the US operations.  In addition, they continued construction on the two new builds that were added in early 2012.

In the third quarter of 2012, the construction operations continued work on Trinidad's four remaining new builds. The Company expects two rigs to be delivered in the fourth quarter of 2012, with the remaining two rigs delivered in the first half of 2013.

United States and International Operations

	Three months ended September 30,				Nine months ended September 30,
($ thousands except percentage and operating data)	2012	2011	% Change		2012	2011	% Change
Operating revenue (1, 2)	117,825	109,364	7.7		363,828	305,188	19.2
Other revenue	(241)	38	(734.2)		(227)	341	(166.6)
	117,584	109,402	7.5		363,601	305,529	19.0
Operating costs (1, 2)	71,619	59,629	20.1		210,143	174,816	20.2
Gross margin	45,965	49,773	(7.7)		153,458	130,713	17.4
Gross margin - net percentage	39.1%	45.5%			42.2%	42.8%
Land Drilling Rigs
Drilling days	4,355	4,957	(12.1)		13,495	14,237	(5.2)
Operating days (1 ,3)	5,038	5,579	(9.7)		15,589	15,837	(1.6)
Rate per operating day (CDN$) (1, 4)	22,518	18,600	21.1		22,344	18,304	22.1
Rate per operating day (US$) (1, 4)	22,263	19,143	16.3		22,192	18,721	18.5
Utilization rate - operating day (1, 5)	81%	92%	(12.0)		85%	90%	(5.6)
Utilization rate - drilling day (1, 6)	70%	82%	(14.6)		74%	81%	(8.6)
Number of drilling rigs at quarter end	68	66	3.0		68	66	3.0
Barge Drilling Rigs
Operating days (3)	376	454	(17.2)		1,169	1,335	(12.4)
Rate per operating day (CDN$) (1, 4)	30,008	24,833	20.8		28,244	23,187	21.8
Rate per operating day (US$) (1, 4)	29,583	25,547	15.8		28,044	23,705	18.3
Utilization rate - operating day (1, 5)	82%	99%	(17.2)		85%	98%	(13.3)
Number of barge drilling rigs at quarter end	2	2	-		2	2	-
Number of barge drilling rigs under
Bareboat Charter Agreements at quarter end	3	3	-		3	3	-

(1)	Operating revenue, operating costs, operating days, utilization rate - operating day and rate per operating day have been recalculated, see "Change in Presentation".
(2)	Operating revenue and operating costs exclude third party recovery and third party costs of $4.2 million and $3.3 million for the three months ended September 30, 2012 and 2011, respectively; and $13.3 million and $12.0 million for the nine months ended September 30, 2012 and 2011, respectively.
(3)	Operating days include drill days and move days.
(4)	Rate per operating day includes operating revenue divided by operating days.
(5)	Utilization rate - operating day is based on operating days divided by total days available.
(6)	Utilization rate - drilling day is based on drilling days divided by total days available.

Market conditions remained strong in the first half of 2012 in Trinidad's US and international operations when compared to the same period of the prior year; however, softening market conditions led to reduced industry activity levels in the current quarter. While the shift in industry demand reduced Trinidad's activity in the third quarter, it had a muted impact on the Company's operations due to Trinidad's continued focus towards in-demand, higher specification equipment, combined with the its high concentration of long-term, take-or-pay contracts.

Strong industry demand for Trinidad's modern, high performance equipment led to upward momentum on dayrates in the first half of the current year with dayrates in the third quarter and year-to-date of 2012 showing improvement over the same periods of the prior year. The full impact of these dayrate increases was not reflected in the gross margin - net percentage as a portion of the increase was related to higher crew wages, which are passed onto the operator at cost. In addition, in the current quarter and year to date, the Company recorded higher standby revenue versus the same periods of the prior year, which increased dayrates as revenue is incurred with no associated operating days. Overall, dayrates on a per-rig basis did not change versus the second quarter, while the average fleet dayrate was marginally impacted by lower standby revenue in the current period, partially offset by a shift in rig mix towards higher specification equipment. In the current quarter and year to date in 2012, dayrates were higher by US$778 per operating day and US$1,030 per operating day, respectively, related to standby revenues.

Although revenues remained strong, the gross margin and gross margin - net percentage levels showed a decline in the third quarter when compared to the prior year and prior quarter. Gross margins decreased largely due to higher operating costs in the current period as the Company took the opportunity to complete maintenance work on equipment during this period of lower activity, which had not been possible in prior periods. In addition, Trinidad is adapting to a shift in customer activity among plays, which has had a slightly negative impact on margins due to shorter well drilling times and more move days. Lastly, in the first half of 2011, Trinidad received one-time demobilization revenue that positively impacted the gross margin. Trinidad does not count standby and demobilization in the operating day statistics, which increases dayrates.

Utilization levels in the third quarter and year-to-date 2012 lowered from the levels experienced in 2011, as well as the first and second quarters of 2012. During the third quarter, Trinidad experienced a decrease in operating days for its spot market equipment as a result of the current uncertainty in relation to commodity prices. In addition, in the current periods there was an increase of rigs under standby versus the same periods of the prior year which reduced utilization levels in the current period.

Trinidad's land drilling rig count increased by two rigs on a net basis as at September 30, 2012, when compared to the same period of 2011. Four rigs were delivered into the US operations in the first half of 2012; each of these rigs were purchased externally and retrofitted to meet the Company's specifications. Additionally, two rigs were removed from the Company's marketable fleet at year-end 2011.  These two rigs are being assessed for sale or possible retrofit to meet current customer demands and Trinidad's target fleet mix. All four rigs delivered into service in 2012 were delivered into the Niobrara shale area in Wyoming.

The Company's barge drilling operations continued to perform well, with quarter-over-quarter as well as year-over-year dayrate increases.  Higher dayrates for these operations are a reflection of the solid demand and limited supply of high quality equipment in this sector.  However, operating days and utilization levels were negatively impacted during the current quarter due to logistical delays as a result of hurricane Isaac.

QUARTERLY ANALYSIS

FINANCIAL HIGHLIGHTS - QUARTERLY ANALYSIS

	2012			2011				2010
($ millions except per share data and operating data)	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4
Revenue	207.7	167.6	255.6	226.5	196.8	149.7	224.3	194.4
Gross margin (1)	79.9	65.8	104.2	88.8	81.5	52.6	84.7	76.7
Gross margin percentage (1)	38.5%	39.3%	40.8%	39.2%	41.4%	35.2%	37.8%	39.4%
Gross margin - net percentage (1)	41.0%	41.2%	44.3%	42.4%	44.3%	37.8%	41.4%	43.0%
Net earnings (loss) for the year	20.0	12.9	34.5	25.3	30.2	5.0	16.0	(84.8)
Adjustments for:
Depreciation and amortization	30.4	25.8	28.1	29.1	28.6	25.4	29.6	27.7
Foreign exchange	0.8	(0.7)	0.5	2.4	(6.1)	(1.2)	1.8	0.5
Loss (gain) on sale of property and equipment	-	(0.5)	0.2	(0.6)	(0.1)	(5.3)	-	0.4
Impairment of property and equipment	1.3	-	7.5	-	-	9.0	-	24.9
Impairment of intangible assets and goodwill	-	-	-	-	-	-	-	59.1
Finance costs	10.3	10.5	10.8	10.9	10.9	10.5	12.4	36.2
Income taxes	2.7	4.4	10.2	4.8	6.4	(3.4)	5.9	(2.2)
Other	2.9	1.0	0.1	2.5	(0.5)	(0.9)	4.0	1.7
Income taxes paid	(1.1)	(0.7)	(0.7)	-	(4.5)	(0.9)	(2.4)	(0.4)
Income taxes recovered	3.9	-	-	0.8	1.5	-	0.2	-
Interest paid	(19.5)	(1.5)	(19.8)	(1.6)	(21.4)	(3.3)	(3.1)	(25.7)
Interest received	-	-	-	-	-	-	-	-
Funds provided by operations	51.7	51.2	71.4	73.6	45.0	34.9	64.4	37.4
Net earnings (loss) per share (diluted)	0.17	0.11	0.29	0.21	0.25	0.04	0.13	(0.70)
Funds provided by operations per share (diluted)	0.43	0.42	0.59	0.61	0.37	0.29	0.53	0.31

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

NON-GAAP MEASURES HIGHLIGHTS - QUARTERLY ANALYSIS

		2012			2011				2010
($ millions except per share data and operating data)		Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4
EBITDA (1)		64.7	53.1	91.2	69.5	76.0	41.2	63.8	61.5
	Per share (diluted) (2)	0.54	0.44	0.75	0.58	0.63	0.34	0.53	0.51
Adjusted EBITDA (1)		68.4	53.3	92.0	74.4	69.4	39.1	69.6	63.7
	Per share (diluted) (2)	0.57	0.44	0.76	0.62	0.57	0.32	0.58	0.53
Adjusted net earnings (1)		24.9	13.1	42.7	30.2	23.5	11.9	21.8	1.5
	Per share (diluted) (2)	0.21	0.11	0.35	0.25	0.19	0.10	0.18	0.01

(1)	See the Non-GAAP Measures Definitions section of this document for further details.
(2)	Diluted shares include the weighted average number of shares outstanding over the period and the dilutive impact, if any, the number of shares issuable pursuant to the Incentive Option Plan.

OPERATING HIGHLIGHTS - QUARTERLY ANALYSIS

		2012			2011				2010
		Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4
Land Drilling Market
Operating days (1, 2)
	Canada	3,233	1,288	4,107	3,665	3,675	1,646	4,359	3,522
	United States and International	5,038	5,289	5,262	5,547	5,579	5,170	5,088	4,958
Rate per operating day (1, 3, 4)
	Canada (CDN$)	23,501	25,343	24,206	23,652	20,315	20,796	20,459	20,163
	United States and International (CDN$)	22,518	22,586	21,935	20,710	18,600	18,470	17,815	18,172
	United States and International (US$)	22,263	22,616	21,698	20,387	19,143	19,095	17,878	17,789
Utilization rate - operating day (1, 5)
	Canada	62%	26%	84%	74%	74%	34%	87%	70%
	United States and International	81%	86%	90%	92%	92%	89%	90%	82%
Number of drilling rigs at quarter end
	Canada	57	55	54	54	54	54	55	55
	United States and International	68	68	66	64	66	65	63	62
	Utilization rate for service rigs (6)	-	-	-	-	-	34%	66%	57%
	Number of service rigs at quarter end (6)	-	-	-	-	-	-	22	22
	Number of coring and surface casing
	rigs at quarter end	20	20	20	20	20	20	20	20
Barge Drilling Market
	Operating days (1, 2)	376	429	364	373	454	436	445	456
	Rate per operating day (CDN$) (1, 3, 4)	30,008	29,072	25,448	25,835	24,833	22,680	22,004	24,368
	Rate per operating day (US$) (1, 3, 4)	29,583	29,106	25,204	25,455	25,547	23,441	22,083	23,844
	Utilization rate - operating day (1, 5)	82%	94%	80%	81%	99%	96%	99%	99%
	Number of barge drilling rigs at quarter end	2	2	2	2	2	2	2	2
	Number of barge drilling rigs under
	Bareboat Charter at quarter end	3	3	3	3	3	3	3	3

(1)	Operating revenue, operating costs, operating days, utilization rate - operating day and rate per operating day have been recalculated, see "Change in Presentation".
(2)	Operating days include drill days and move days.
(3)	Rate per operating day includes operating revenue divided by operating days.
(4)	Operating revenue is presented net of third party costs.
(5)	Utilization rate - operating day is based on operating days divided by total days available.
(6)	In the second quarter of 2011, Trinidad disposed of its 22 well servicing rigs and related equipment.

FINANCIAL SUMMARY

As at		September 30,	December 31,
($ thousands except percentage data)		2012	2011	$ Change
Working capital (1)		121,234	139,829	(18,595)
Current portion of long-term debt		611	580	31
Long-term debt (2)		537,375	580,167	(42,792)
Total debt		537,986	580,747	(42,761)
Total debt as a percentage of assets		33.4%	36.1%
Total assets		1,611,220	1,608,126	3,094
Total long-term liabilities		634,568	666,717	(32,149)
Total long-term liabilities as a percentage of assets		39.4%	41.5%
Shareholders' equity		879,211	841,226	37,985
Total debt to shareholders' equity		61.2%	69.0%

 

(1)     See Non-GAAP Measures Definition section of this document for further details.
(2)     Long-term debt is net of associated transaction costs.

At September 30, 2012, working capital decreased by $18.6 million from December 31, 2011. The lower level of working capital was driven by a collection of receivables, lower inventory reflecting materials utilized for rig construction during the period, and an increase in deferred revenue related to delay and early termination penalty revenues received to be amortized over the remaining periods of the relevant contracts. These factors were partially offset by higher prepaid expenses, an increase in assets held for sale due to the classification of a building in the US operations, as well as a decrease in accounts payable and accruals due to timing of payables in the third quarter of 2012 compared to the fourth quarter of 2011.

Trinidad's total debt balance declined by $42.8 million during the current quarter when compared to the year ended December 31, 2011. During this period, Trinidad reduced its revolving credit facility balances by $28.6 million, combined with a decrease in the Senior Notes of $13.8 million as a result of the change in the US dollar foreign exchange rate at September 30, 2012, and a decrease in building and equipment loans of $0.4 million. 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.

At September 30, 2012, Trinidad had CDN$104.0 million outstanding on its Canadian revolving credit facility and nil on its US revolving credit facility, leaving CDN$96.0 million and US$100.0 million unutilized in the facility, respectively.  The Canadian and US revolving facility requires quarterly interest payments that are based on Bankers Acceptance and LIBOR rates and incorporate a tiered interest rate, which varies depending on the results of the Consolidated Total Debt to Consolidated EBITDA ratio (see table below). The facility matures on December 16, 2015, and is subject to annual extensions of an additional year on each anniversary.

A total of $149.1 million of capital expenditures were spent during the nine months ended September 30, 2012, compared to $116.0 million for the same period in the prior year.  Capital expenditures were substantially related to the Company's rig build program as well as upgrading the Company's fleet to meet customer demands.

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:

RATIO		September 30,	December 31,		THRESHOLD
		2012	2011
Consolidated Senior Debt to Consolidated EBITDA (1)		0.41:1	0.59:1		3.00:1 maximum
Consolidated Total Debt to Consolidated EBITDA (1)		1.96:1	2.42:1		4.00:1 maximum
Consolidated EBITDA to Consolidated Cash Interest Expense (1)		6.91:1	5.74:1		2.75:1 minimum

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

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

OUTLOOK

The first nine months of 2012 have shown improved performance for Trinidad over the same time period in 2011. The strength in the first two quarters of the year began to tail off in the third quarter of 2012 and market conditions have remained soft to date in the fourth quarter of 2012. Activity levels in both Canada and the US, while still strong, are at lower levels than this time last year. Trinidad anticipates that softer market conditions will continue through the fourth quarter of 2012 and potentially into 2013.

Trinidad's business model is well formulated to perform strongly in the cyclical drilling industry.  More than three quarters of the Company's fleet is considered high performance with high mobility and advanced drilling controls. Oil and gas producers are increasingly becoming aware of the importance of efficient, modern equipment and Trinidad's established reputation as a high performance driller gives it an advantage in this environment.

In addition, Trinidad's high proportion of long term contracts provides a meaningful level of revenue protection. Trinidad currently has approximately 60.0% of its fleet under long-term, take-or-pay contracts with an average term remaining of 1.5 to 2.0 years. The Company has expanded its customer base over the past year, reducing customer concentration while also adding new customers with broad development opportunities.  The combination of relevant, adaptable equipment and a solid, largely contracted customer base allows Trinidad's equipment to maintain more stable activity levels despite softening market conditions.

To date in 2012, Trinidad has completed six rigs from its 2011 capital program and two of the five new builds planned for construction in 2012. In addition, the Company has been focusing on upgrading existing equipment to ensure it remains marketable in an increasingly competitive industry. Trinidad has shown a disciplined approach to capital spending and a commitment to reaching its leverage goals for a number of years. In the third quarter, Trinidad maintained its Total Debt to EBITDA level below 2.00 times and remains committed to its leverage reduction strategy. The Company sees a clear path to meeting its long-term goal of Total Debt to EBITDA of 1.50 times. Trinidad will continue to carefully balance its growth program with its debt reduction strategy while also reviewing alternative ways of adding value for shareholders.

In the near term, Trinidad expects to see ongoing weakness for older style, mechanical rigs and increasing competition for work in high demand areas, such as the Bakken and the Eagle Ford. While there has been some pull back in utilization over the past few months, current commodity prices drive healthy levels of activity. Trinidad expects that as producers have new capital budgets to put to work in 2013, the industry will show some improvement in activity levels.

Trinidad is positioned to perform well in 2013 despite slightly weaker industry conditions. The Company's high contract base, in-demand equipment and expanded customer base allow it to have more steady activity and EBITDA levels than the industry as a whole. Looking further out, Trinidad's growing free cash flow position and lower leverage will allow the Company to take advantage of expansion opportunities both within North America and internationally.

CONFERENCE CALL

A conference call and webcast to discuss the results will be held for the investment community on Thursday Nov 8^th, 2012 beginning at 9:00 a.m. MT (11:00 a.m. ET).  To participate, please dial (888) 231-8191 (toll-free in North America) or (647) 427-7450 approximately 10 minutes prior to the conference call. An archived recording of the call will be available from approximately 2:00 p.m. ET on Nov 8^th, 2012 until midnight Nov 15^th, 2012 by dialing (855) 859 2056 or (416) 849-0833 and entering replay access code 37904524.

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

A full copy of Trinidad's third quarter 2012 report including Management's Discussion and Analysis, Consolidated Financial Statements and Notes to the Consolidated Financial Statements can be found on the Investor Relations page of Trinidad's website or at www.sedar.com

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	September 30,	December 31,
($ thousands) - unaudited	2012	2011
Assets
Current Assets
Accounts receivable	190,843	207,143
Inventory	10,938	17,523
Prepaid expenses	6,479	6,298
Assets held for sale	10,415	9,048
	218,675	240,012
Property and equipment	1,307,330	1,279,826
Intangible assets and goodwill	85,215	88,288
	1,611,220	1,608,126
Liabilities
Current Liabilities
Bank indebtedness	4,727	4,600
Accounts payable and accrued liabilities	80,587	88,960
Dividends payable	6,043	6,043
Deferred revenue	5,473	-
Current portion of long-term debt	611	580
	97,441	100,183
Long-term debt	537,375	580,167
Deferred income taxes	97,193	86,550
	732,009	766,900
Shareholders' Equity
Common shares	952,043	952,043
Contributed surplus	50,032	49,462
Accumulated other comprehensive income (loss)	(37,117)	(25,377)
Retained earnings (deficit)	(85,747)	(134,902)
	879,211	841,226
	1,611,220	1,608,126

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
		Three months ended		Nine months ended
		September 30,		September 30,
($ thousands except per share data) - unaudited		2012	2011	2012	2011
Revenue
Oilfield service revenue		207,906	196,645	630,798	569,742
Other revenue		(190)	145	66	1,032
		207,716	196,790	630,864	570,774
Expenses
Operating expense		127,821	115,304	380,992	351,921
General and administrative		14,371	11,614	40,122	43,464
Depreciation and amortization		30,436	28,602	84,383	83,595
Foreign exchange		810	(6,145)	715	(5,605)
Loss (gain) on sale of property and equipment		26	(63)	(295)	(5,416)
Impairment of property and equipment		1,290	-	8,809	8,993
		174,754	149,312	514,726	476,952
Finance costs		10,288	10,933	31,586	33,766
Earnings before income taxes		22,674	36,545	84,552	60,056
Income taxes
Current		102	(454)	66	2,712
Deferred		2,622	6,830	17,202	6,181
		2,724	6,376	17,268	8,893
Net earnings		19,950	30,169	67,284	51,163
Other comprehensive income (loss)
Foreign currency translation adjustment, net of income tax		(12,247)	27,176	(11,740)	12,328
		(12,247)	27,176	(11,740)	12,328
Total comprehensive income		7,703	57,345	55,544	63,491
Earnings per share
Net earnings
	Basic / Diluted	0.17	0.25	0.56	0.42

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For nine months ended September 30, 2012 and 2011
				Accumulated
				other	Retained
		Common	Contributed	comprehensive	earnings	Total
($ thousands) - unaudited		shares	surplus	income (loss) (1)	(deficit)	equity
Balance at December 31, 2011		952,043	49,462	(25,377)	(134,902)	841,226
Share-based payments		-	570	-	-	570
Total comprehensive income (loss)		-	-	(11,740)	67,284	55,544
Dividends		-	-	-	(18,129)	(18,129)
Balance at September 30, 2012		952,043	50,032	(37,117)	(85,747)	879,211
Balance at January 1, 2011		951,863	49,016	(30,030)	(187,211)	783,638
Exercise of stock options		180	(48)	-	-	132
Share-based payments		-	436	-	-	436
Total comprehensive income (loss)		-	-	12,328	51,163	63,491
Dividends		-	-	-	(18,129)	(18,129)
Balance at September 30, 2011		952,043	49,404	(17,702)	(154,177)	829,568

(1)	Accumulated other comprehensive income consisted of foreign currency translation adjustment.

CONSOLIDATED STATEMENTS OF CASH FLOWS
For nine months ended September 30,
($ thousands) - unaudited		2012	2011
Cash provided by (used in)
Operating activities
Net earnings		67,284	51,163
Adjustments for:
	Depreciation and amortization	84,383	83,595
	Foreign exchange	715	(5,605)
	(Gain) on sale of property and equipment	(295)	(5,416)
	Impairment of property and equipment	8,809	8,993
	Finance costs	31,586	33,766
	Income taxes	17,268	8,893
	Other	3,924	2,640
	Income taxes paid	(2,542)	(7,899)
	Income taxes recovered	3,953	1,785
	Interest paid	(40,769)	(27,806)
	Interest received	8	46
Funds provided by operations		174,324	144,155
Change in non-cash operating working capital		9,020	(3,921)
Cash provided by operations		183,344	140,234
Investing activities
Purchase of property and equipment		(149,114)	(116,008)
Proceeds from disposition of property and equipment		2,678	43,792
Change in non-cash working capital		9,704	(7,924)
Cash used by investing		(136,732)	(80,140)
Financing activities
Proceeds from long-term debt		77,239	69,738
Repayments of long-term debt		(105,729)	(100,160)
Proceeds from exercise of options		-	130
Dividends paid		(18,129)	(18,128)
Financing costs		-	(1,180)
Cash used by financing		(46,619)	(49,600)
Cash flow from operating, investing and financing activities		(7)	10,494
Effect of translation of foreign currency cash		(120)	(1,715)
(Decrease) increase in cash for the period		(127)	8,779
(Bank indebtedness) cash and cash equivalents - beginning of period		(4,600)	7,905
(Bank indebtedness) cash and cash equivalents - end of period		(4,727)	16,684

 

SEGMENTED INFORMATION

The following presents the result of Trinidad's operating segments:

Three months ended		United States /	Inter-
September 30, 2012	Canadian	International	segment
($ thousands)	Operations	Operations	Eliminations	Corporate	Total
Operating revenue	77,155	117,825	-	-	194,980
Other revenue	51	(241)	-	-	(190)
Third party recovery	8,705	4,221	-	-	12,926
Inter-segment revenue	4,584	-	(4,584)	-	-
	90,495	121,805	(4,584)	-	207,716
Operating costs	43,276	71,619	-	-	114,895
Third party costs	8,705	4,221	-	-	12,926
Inter-segment operating	4,584	-	(4,584)	-	-
Operating income	33,930	45,965	-	-	79,895
Depreciation and amortization	10,004	20,432	-	-	30,436
(Gain) loss on sale of property and equipment	177	(151)	-	-	26
Impairment of property and equipment	1,290	-	-	-	1,290
Impairment of intangible assets and goodwill	-	-	-	-	-
	11,471	20,281	-	-	31,752
Segmented income	22,459	25,684	-	-	48,143
General and administrative	-	-	-	14,371	14,371
Foreign exchange	-	-	-	810	810
Finance costs	-	-	-	10,288	10,288
Income taxes	-	-	-	2,724	2,724
Net earnings (loss)	22,459	25,684	-	(28,193)	19,950
Purchase of property and equipment	27,145	13,092	-	-	40,237
Three months ended		United States /	Inter-
September 30, 2011	Canadian	International	segment
($ thousands)	Operations	Operations	Eliminations	Corporate	Total
Operating revenue	74,598	109,364	-	-	183,962
Other revenue	107	38	-	-	145
Third party recovery	9,396	3,287	-	-	12,683
Inter-segment revenue	16,661	-	(16,661)	-	-
	100,762	112,689	(16,661)	-	196,790
Operating	42,992	59,629	-	-	102,621
Third party costs	9,396	3,287	-	-	12,683
Inter-segment operating	16,661	-	(16,661)	-	-
Operating income	31,713	49,773	-	-	81,486
Depreciation and amortization	9,042	19,560	-	-	28,602
(Gain) loss on sale of property and equipment	8	(71)	-	-	(63)
Impairment of property and equipment	-	-	-	-	-
Impairment of intangible assets and goodwill	-	-	-	-	-
	9,050	19,489	-	-	28,539
Segmented (loss) income	22,663	30,284	-	-	52,947
General and administrative	-	-	-	11,614	11,614
Foreign exchange	-	-	-	(6,145)	(6,145)
Finance costs	-	-	-	10,933	10,933
Income taxes	-	-	-	6,376	6,376
Net earnings (loss)	22,663	30,284	-	(22,778)	30,169
Purchase of property and equipment	14,300	29,632	-	-	43,932
Nine months ended		United States /	Inter-
September 30, 2012	Canadian	International	segment
($ thousands)	Operations	Operations	Eliminations	Corporate	Total
Operating revenue	225,923	363,828	-	-	589,751
Other revenue	293	(227)	-	-	66
Third party recovery	27,699	13,348	-	-	41,047
Inter-segment revenue	9,499	-	(9,499)	-	-
	263,414	376,949	(9,499)	-	630,864
Operating costs	129,802	210,143	-	-	339,945
Third party costs	27,699	13,348	-	-	41,047
Inter-segment operating	9,499	-	(9,499)	-	-
Operating income	96,414	153,458	-	-	249,872
Depreciation and amortization	25,371	59,012	-	-	84,383
(Gain) loss on sale of property and equipment	224	(519)	-	-	(295)
Impairment of property and equipment	7,247	1,562	-	-	8,809
	32,842	60,055	-	-	92,897
Segmented income	63,572	93,403	-	-	156,975
General and administrative	-	-	-	40,122	40,122
Foreign exchange	-	-	-	715	715
Finance costs	-	-	-	31,586	31,586
Income taxes	-	-	-	17,268	17,268
Net earnings (loss)	63,572	93,403	-	(89,691)	67,284
Purchase of property and equipment	88,383	60,731	-	-	149,114
Nine months ended		United States /	Inter-
September 30, 2011	Canadian	International	segment
($ thousands)	Operations	Operations	Eliminations	Corporate	Total
Operating revenue	221,685	305,188	-	-	526,873
Other revenue	691	341	-	-	1,032
Third party recovery	30,857	12,012	-	-	42,869
Inter-segment revenue	42,850	-	(42,850)	-	-
	296,083	317,541	(42,850)	-	570,774
Operating costs	134,236	174,816	-	-	309,052
Third party costs	30,857	12,012	-	-	42,869
Inter-segment operating	42,850	-	(42,850)	-	-
Operating income	88,140	130,713	-	-	218,853
Depreciation and amortization	26,523	57,072	-	-	83,595
(Gain) loss on sale of property and equipment	(4,163)	(1,253)	-	-	(5,416)
	23,895	63,277	-	-	87,172
Segmented income	64,245	67,436	-	-	131,681
General and administrative	-	-	-	43,464	43,464
Foreign exchange	-	-	-	(5,605)	(5,605)
Finance costs	-	-	-	33,766	33,766
Income taxes	-	-	-	8,893	8,893
Net earnings (loss)	64,245	67,436	-	(80,518)	51,163
Purchase of property and equipment	32,128	83,880	-	-	116,008

 

ADVISORY

CHANGE IN PRESENTATION

Effective December 31, 2011, Trinidad changed the presentation of third party costs and recovery to be accounted for on a gross basis versus a net basis.  This presentation change provides the users of the consolidated interim financial statements and MD&A improved disclosure on the Company's operating segments; in addition, the presentation more accurately reflects the legal form of the contracts.  The change resulted in a reclassification of third party rental equipment costs, which were previously netted against revenue, to be presented on a gross basis as third party recovery and third party costs.  In addition, third party fuel costs, which were previously reported on a gross basis, have been reclassified to be included in third party recovery and third party costs.

Additionally in the first quarter of 2012, the calculation of dayrates was changed to be based on operating revenue divided by operating days (drilling days plus move days), and now excludes third party recovery revenue as well as other income. Previously, only drilling days were included in the dayrate calculation. Furthermore, the Company began including additional disclosure in regards to utilization, adding utilization rate - operating day which is based on operating days instead of just the previously disclosed drilling day based utilization. The change in presentation of dayrates and utilization better aligns the Company's disclosure with its peers, and its management measurement tools.  Furthermore, the change allows the users of the financial statements a higher degree of disclosure.  See "Non-GAAP Measures Definitions" for calculations.  The changes in presentation have been applied retrospectively.

NON-GAAP MEASURES 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 gross margin, gross margin percentage, gross margin - net percentage, 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 under IFRS:

"Gross margin" is used by management and investors to analyze overall and segmented operating performance.  Gross margin is not intended to represent operating income nor should it be viewed as an alternative to net earnings or other measures of financial performance calculated in accordance with IFRS.  Gross margin is calculated from the consolidated statements of operations and comprehensive income (loss) and from the segmented information contained in the notes to the consolidated interim financial statements and is defined as revenue less operating expenses.

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

"Gross margin - net percentage" is used by management and investors to analyze overall and segmented operating performance.  Gross margin - net percentage is calculated from the consolidated statements of operations and comprehensive income (loss) and from the segmented information in the notes to the consolidated interim financial statements and is defined as gross margin divided by revenue net of third party costs.

"EBITDA" is a measure of the Company's operating profitability.  EBITDA provides an indication of the results generated by the Company's principal business activities prior to how these activities are financed, assets are depreciated, amortized and impaired, or how the results are taxed in various jurisdictions.

"Adjusted EBITDA" is used by management and investors to analyze EBITDA (as defined above) prior to the effect of foreign exchange and share-based payment expense, and is not intended to represent net earnings as calculated in accordance with IFRS.

"Adjusted net earnings" is used by management and the investment community to analyze net earnings prior to the effect of foreign exchange, share-based payments and impairment charges and is not intended to represent net earnings as calculated in accordance with IFRS.

"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 payments and unrealized foreign exchange.

"Total Debt to EBITDA" is defined as the consolidated balance of long-term debt, which includes the Senior Debt, Senior Notes Payable and dividends payable at quarter end, to consolidated EBITDA for the TTM.  Consolidated EBITDA used in this financial ratio is calculated as EBITDA plus share-based payments and unrealized foreign exchange.

"EBITDA to Cash Interest Expense" is defined as the consolidated EBITDA for TTM to the cash interest expense on all debt balances for TTM.  Consolidated EBITDA used in this financial ratio is calculated as EBITDA plus share-based payments and unrealized foreign exchange.

"Drilling days" is defined as rig days between spud to rig release.

"Operating days" is defined as moving days (move in, rig up and tear out) plus drilling days (spud to rig release).

"Utilization rate - drilling day" is defined as drilling days divided by total available rig days.

"Utilization rate - operating day" is defined as operating days (drilling days plus moving days) divided by total available rig days.

"Rate per operating day" is defined as operating revenue (net of third party costs) divided by operating days (drilling days plus moving days).

References to gross margin, gross margin percentage, gross margin - net percentage, EBITDA, Adjusted EBITDA, Adjusted net earnings, working capital, Senior Debt to EBITDA, Total Debt to EBITDA, EBITDA to Cash Interest Expense, drilling days, operating days, utilization rate - drilling day, utilization rate - operating day, and rate per operating day throughout this document have the meanings set out above.

FORWARD-LOOKING 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.