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TSX SYMBOL:  TDG

CALGARY, Nov. 6, 2013 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or "the Company") today reported results from its third quarter and first nine months of 2013. "This quarter marked a key point in Trinidad's strategic development; we were able to crystalize on several important opportunities that we had been working on for many months," said Lyle Whitmarsh, Trinidad's Chief Executive Officer.  "The most important of these opportunities were our new rig build contract for LNG-related drilling in Canada and our international joint venture agreement with Halliburton. These important milestones demonstrate our strong future growth opportunities and will help to define the future for Trinidad. While we were focused on finalizing these deals, we also continued to monitor our existing operations closely in the quarter. Our operations have performed well throughout 2013, despite weaker industry conditions. Our third quarter results reflect our ongoing focus on maximizing our activity levels and maintaining strong dayrates across our operations."

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

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

FINANCIAL HIGHLIGHTS

OPERATING HIGHLIGHTS

OVERVIEW

In the third quarter and year-to-date 2013, Trinidad recorded stable dayrates across its land drilling operations despite a strongly competitive market and weaker industry demand when compared to the same period last year. Adjusted EBITDA lowered from the prior periods largely due to lower activity in both the Canadian and US and international operations.

In Canada, operating days were lower in the third quarter due largely to weaker customer demand. The addition of four new, high specification rigs over the past year provided additional operating days year to date in 2013; however, this impact was largely offset by slower activity in the third quarter. Operating days remained relatively unchanged compared to the first nine months of 2012. Trinidad continued to outperform the industry with utilization thirteen percentage points higher than the Canadian industry average for the quarter and eleven percentage points higher, year to date. In the US, the industry active rig count stabilized at just under 1,700 rigs over the first nine months of 2013, 202 rigs lower than the same period last year. Activity levels for Trinidad's US and international operations were lower in the current quarter and year to date in 2013 when compared to 2012. Despite the lower activity levels year over year, the Company's US fleet began to show signs of improvement in the third quarter, as rigs were reactivated and utilization levels increased from the second quarter of 2013.

Operating income - net percentage in the quarter lowered from the same quarter last year largely due to less contribution from the Canadian operations. Profitability in the Canadian operations lowered as a result of reduced revenue generation from less operating days and higher repairs and maintenance costs incurred in the third quarter. US and international operations operating income - net percentage in the third quarter was largely unchanged from the same quarter in 2012. Year to date, operating income - net percentage was lower than for the same period last year due to lower operating days in the US and international division and higher repairs and maintenance costs in the Canadian operations.

Trinidad's reputation in the industry for designing, building and operating high-performance equipment was further recognized when the Company was awarded a five-year contract for a new rig to work in the Liard Basin, drilling liquefied natural gas (LNG) - related wells. The rig will be one of Canada's largest and most technically advanced rigs and is expected to be completed in the second half of 2014. Trinidad currently works for a number of the key LNG players in the industry and is well positioned to take advantage of future growth opportunities that the LNG development is expected to provide over the coming years.

During the third quarter, Trinidad signed a joint venture agreement with a wholly-owned subsidiary of Halliburton Company (Halliburton) to provide and operate drilling rigs for Halliburton's international integrated projects. The joint venture is expected to concentrate initially on Saudi Arabia and Mexico, with future growth opportunities in other international markets. The joint venture will have a right of first look to provide drilling rigs for all of Halliburton's managed onshore projects outside of Canada and the US. This joint venture opens new doors in international growth for Trinidad, while also lowering risk for its shareholders by partnering with a company with extensive international experience and infrastructure. Initially, the joint venture has agreed to move four rigs into Saudi Arabia, where they are expected to be operational by mid-2014. Of the four rigs added to the joint venture, three will be taken from Trinidad's existing US fleet and upgraded to meet the specifications required and one will be built by Trinidad's manufacturing division.

After strengthening earlier in 2013 natural gas prices lowered in the third quarter of the year. The change in natural gas prices had a limited impact on Trinidad and the industry in North America as a whole, as approximately 80% to 90% of rigs are currently drilling oil or natural gas liquids-rich targets. While the lower natural gas price does not change the targets being drilled, it does lower cash flow from associated natural gas production for oil and gas companies, and a persistently low natural gas price could negatively impact future capital programs. Crude oil prices strengthened during the quarter largely as a result of unrest in the Middle East causing oil and gas companies to continue to favor oil drilling over dry gas.

INDUSTRY STATISTICS

THIRD QUARTER 2013 AND YEAR-TO-DATE HIGHLIGHTS

• Trinidad generated revenue of $208.7 million in the third quarter and $621.3 million year to date in 2013, a decrease of 3.0% and 4.4% from the same periods of 2012, respectively. Revenue lowered year over year due to lower activity levels across the Company's operations. When compared to the second quarter of 2013, revenue increased from $165.4 million largely as a result of seasonality in Canada which restricts drilling activity during the second quarter.
  
  
• Operating income - net percentage was 38.5% in the current quarter and 39.6% year to date in 2013, compared to 40.0% and 41.4%, respectively, in 2012. Lower profitability in the current quarter and year to date was largely driven by lower activity levels, as dayrates remained relatively stable. Additional repairs and maintenance costs were also incurred in the quarter and negatively impacted operating profitability as Trinidad took advantage of the downtime to upgrade rigs. Operating income - net percentage increased from 35.6% in the second quarter of 2013 largely as a result of the timing of repairs and maintenance expenses and seasonality of the Canadian operations.
  
  
• Adjusted EBITDA was $61.8 million in the third quarter and $186.6 million year to date in 2013, down 9.6% and 12.7%, respectively, from the same periods of the prior year. Adjusted EBITDA decreased year over year largely as a result of lower operating income and higher general and administrative (G&A) expenses. Adjusted EBITDA increased from $39.9 million in the second quarter of 2013 as a result of seasonality in the Canadian operations.
  
  
• Net earnings were $9.2 million ($0.08 per share (diluted)) in the third quarter and $42.3 million ($0.35 per share (diluted)) year to date in 2013, down 54.1% and 37.2%, respectively, from the same periods last year. Net earnings in the quarter decreased largely due to lower adjusted EBITDA, higher stock-based payment expenses and higher deferred income taxes.
  
  
• During the current quarter and first nine months of 2013, Trinidad remained focused on maintaining lower leverage. At September 30, 2013, Trinidad's revolving credit facility was virtually unutilized and the Total Debt to EBITDA ratio was 1.92 times, bringing the Company well within reach of its long-term leverage goal of Total Debt to EBITDA of approximately 1.50 times.
  
  

RESULTS FROM OPERATIONS

Canadian Operations

A slower than expected start to summer drilling caused by softening customer demand resulted in lower activity levels in the current quarter when compared to the prior year. This slower start resulted in 215 fewer operating days which reduced utilization by eight percentage points in the current quarter when compared to 2012. On a year-to-date basis, operating days were up marginally, driven by strong performance in the first half of 2013 as a result of a higher rig count but slightly offset by reduced third quarter activity levels.

For each of the three and nine month periods ended September 30, 2013, dayrates improved from the same periods last year by $185 per day and $709 per day, respectively. Dayrates increased due to a change in rig mix in 2013 caused by the addition of four new, high specification rigs and reduced activity levels on the Company's less modern equipment. Higher dayrates on the Company's more modern equipment more than offset weaker dayrates on the Company's older style equipment in the current period.

Although utilization decreased by eight percentage points quarter over quarter and four percentage points year over year, Trinidad's high performance, modern fleet continued to outperform industry activity levels, recording utilization levels that exceeded the industry average for each of the three and nine months ended September 30, 2013, by thirteen and eleven percentage points, respectively. This is a reflection of the Company's strategic focus towards in-demand, high performance equipment backed by a strong customer base.

Revenue decreased in the third quarter by 6.5%, compared to the same quarter last year driven by lower operating days. Year to date in 2013, revenue was consistent with 2012 revenue generation as activity levels and dayrates remained largely in line with those recorded in the same period last year.

Operating income - net percentage decreased quarter over quarter and year over year by 3.4 percentage points and 1.2 percentage points, respectively. Lower revenue in the third quarter, combined with higher repairs and maintenance costs and increased wage expenses caused overall operating income - net percentage to decline. Wage expenses increased versus the same periods of the prior year due to the annual crew wage increase that occurred in the fourth quarter of 2012.

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

During the first half of 2013, Trinidad's manufacturing division completed construction on the remaining two rigs carried over from its 2012 construction program, with one delivered in each of the first and third quarters of the current year. Trinidad signed a contract to build a new rig to drill wells for a northern Canada LNG project. The rig will be constructed to drill natural gas in the Liard Basin, and is expected to be one of Canada's largest and most technically-advanced land rigs. The rig is expected to be completed in the second half of 2014 and will be operating under a five-year, take-or-pay contract. Additionally, Trinidad has signed a contract to build a new rig to operate in Saudi Arabia through a joint venture arrangement. This rig is expected to be completed and delivered by the manufacturing division towards the middle of 2014. Lastly, the manufacturing division will continue to work on upgrading the Company's existing fleet with the addition of moving systems, top drives and upgraded mud systems to ensure that these assets remain competitive in the current market.

By comparison, in the first three quarters of 2012, Trinidad's manufacturing division had completed work on three new builds, including a natural-gas powered rig for the Horn River, a steam-assisted gravity drainage (SAGD) rig and a rig destined for the Cardium. In addition, the division continued to work on four more new build rigs, one destined for the Cardium and three for the Duvernay.

At the end of the second quarter of 2013, Trinidad announced the sale of its coring and pre-set rigs, including all related inventory, for $12 million in cash. The decision to sell these assets was in line with the Company's strategy to divest assets that no longer fit Trinidad's future core strategy. The sale officially closed July 31, 2013, and as of September 30, 2013, Trinidad no longer has these rigs included in the Canadian fleet.

Third quarter 2013 versus second quarter 2013

Revenue and operating income increased by $35.1 million and $21.2 million, respectively, in the third quarter of 2013 when compared to the second quarter, largely driven by seasonality in the Canadian industry. Operating days increased by 1,584 days in the third quarter with utilization of 54% versus 26% in the previous quarter. The second quarter is typically affected by spring break-up, as weather conditions and road bans restrict the movement of heavy equipment which results in lower drilling activity. The third quarter is generally a more active period in the Canadian drilling market due to better weather conditions.

Dayrates decreased in the third quarter by $1,825 per operating day compared to the second quarter. Dayrates lowered in the current quarter as a result of a change in rig mix. As activity levels increased, the Company re-activated its smaller and older style rigs, which tend to generate lower dayrates.

United States and International Operations

For the three and nine months ended September 30, 2013, total operating days and utilization for the US and international operations' land drilling rigs lowered compared to the same periods last year. Strong competition and growing demand for more efficient equipment impacted activity levels in the quarter. Lower activity was slightly offset by an increase in dayrates quarter over quarter and year over year of US$197 per day and US$269 per day. This increase is due to Trinidad's continued focus on high grading equipment, resulting in a shift in the active rig mix towards the Company's higher specification equipment. Trinidad's fleet is largely composed of higher specification rigs, which has mitigated the impact of the decline in the US drilling market. Additionally, as Trinidad has a significant proportion of its fleet operating under long-term contracts, the Company has been able to limit its exposure to this weaker market.

US and international operations generated revenue of $125.5 million in the third quarter, up 0.6% from the same quarter last year. Revenue increased as a result of slightly higher dayrates and stronger performance from the barge operations, partly offset by lower operating days. Year to date in 2013, revenue was $356.6 million, down 6.5% from the first nine months of 2012. Revenue declined year to date largely due to lower activity levels in the current year.

The three rigs Trinidad has located in Mexico completed their contracts at the end of the second quarter and were idle during most of the third quarter, negatively impacting utilization levels in the current quarter. Trinidad is currently pursuing future opportunities for these rigs and anticipates that these assets may return to work in 2014.

Operating income - net percentage stayed relatively stable for the three months ended September 30, 2013, and declined for the nine months ended September 30, 2013. This decline in profitability was mainly due to lower revenue generation combined with a smaller reduction in repairs and maintenance costs. During 2013, Trinidad has taken advantage of the slowdown to complete necessary upgrades and repairs on rigs that have been working consistently since their initial construction. Trinidad has focused these repairs and upgrade initiatives on rigs that will be redeployed in the near term.

The Company's barge drilling operations performed well with quarter-over-quarter and year-over-year dayrate increases of US$3,157 per day and US$2,993 per day, respectively. As well, operating days and utilization showed improvement increasing in each of the three and nine month periods respectively. Strong operations reflect the solid demand and limited supply of high quality equipment in this sector, which Trinidad is able to supply.

Third quarter 2013 versus second quarter 2013

In the third quarter of 2013, revenue increased by $6.5 million when compared to the second quarter of 2013 largely as a result of higher operating days in the current period. Improving customer demand allowed Trinidad to reactivate a number of rigs during the third quarter allowing the segment to record an additional 155 operating days. Dayrates remained relatively stable quarter over quarter, showing an increase of US$24 per operating day in the current quarter.

Operating income - net percentage decreased to 37.4% from 40.0% in the prior quarter, due to a lower contribution from the Company's Mexican operations combined with costs incurred to reactivate idle rigs.

Activity levels in the Barge market stayed relatively consistent quarter over quarter at 97% in the third quarter of 2013. However, dayrates continued to increase into the third quarter as demand for Trinidad's high quality equipment remained strong. Dayrates increased to US$32,740 per day in the third quarter from US$31,077 in the second quarter, improving revenue generation in this segment.

QUARTERLY ANALYSIS
FINANCIAL HIGHLIGHTS - QUARTERLY ANALYSIS

NON-GAAP MEASURES HIGHLIGHTS - QUARTERLY ANALYSIS

OPERATING HIGHLIGHTS - QUARTERLY ANALYSIS

FINANCIAL SUMMARY

For the nine months ended September 30, 2013, working capital increased by $25.0 million when compared to December 31, 2012, due to an increase in current assets of $57.0 million offset by an increase in current liabilities of $32.1 million. The increase in current assets was mainly a result of an increase in cash in the current period as a result of lower capital additions in 2013, an increase in prepaid expenses due to insurance renewals in the quarter and an increase in assets held for sale due to the re-classification of property assets held in the Canadian operations. This is offset by lower receivables in the current period due to timing of collections as well as a slight decrease in inventory levels in Trinidad's manufacturing division.

Current liabilities increased during the period mainly as a result of an increase in accounts payable and accrued liabilities related to an increase in capital upgrade initiatives mainly in the US operations. This was in addition to an increase in deferred revenue in the current period due to amounts received for future commitments, as well as the increase in the current portion of long-term debt due to a building mortgage becoming current.

Trinidad's total long-term debt balance declined by $48.7 million during the current period when compared to the year ended December 31, 2012. The reduction in debt was due to a decrease in the revolving debt balances in the current period which was partially offset by an increase in the foreign exchange impact on Senior Notes at quarter end. The decline in debt is in line with the Company's core objective of sustainable growth, in conjunction with leverage reduction.

Trinidad's revolving debt facilities decreased by $65.9 million as a result of payments made during the year. As of September 30, 2013, Trinidad had $4.0 million outstanding on its Canadian revolving credit facility and no amounts outstanding on the US revolving credit facility, leaving $196.0 million and US$100.0 million unutilized in the facilities, respectively.

Although Trinidad had paid off the US revolving debt facility and the majority of the Canadian facility, the Company is still considering future capital commitments, and as such, it is expected that these facilities will be utilized in the future in the general course of business. The Canadian and US revolving facilities require quarterly interest payments that are based on Bankers Acceptance and LIBOR rates and incorporate a tiered interest rate, which varies depending on the results of the Consolidated Total Debt to Consolidated EBITDA ratio (see table below). The facility matures on December 16, 2016, and is subject to annual extensions of an additional year on each anniversary.

The value of the Senior Notes increased by $16.1 million as a result of the change in the US dollar foreign exchange rate at September 30, 2013 versus December 31, 2012. The Senior Notes are translated at each quarter end, as such their value will fluctuate quarterly with variations in exchange rates.  The Senior Notes are due January 2019 and interest is payable semi-annually in arrears on January 15 and July 15.

A total of $50.3 million of capital expenditures were spent during the nine months ended September 30, 2013, compared to $149.1 million for the same period in the prior year. Capital expenditures were substantially related to the Company's rig build program as the Company delivered two new rigs into service in the Canadian operations, one in each of the first and third quarters of 2013. In addition, the Company continued to work on upgrading existing equipment including moving systems, top drives and mud systems, to ensure these rigs remain competitive in the current market.

Trinidad expects cash provided by operations and the Company's various sources of financing to be sufficient to meet its debt repayments, future obligations and to fund planned capital expenditures. Earlier in 2013, Trinidad forecasted a capital program of approximately $175 million for the year. Trinidad has chosen to delay certain rig upgrades and other capital projects included in the 2013 forecast due to weaker-than-anticipated industry conditions. In addition, capital costs associated with the LNG-related rig have been incurred at a slower rate than expected. The delay in rig construction is a timing issue only and the Company does not expect it to impact the delivery date of the completed rig. Trinidad now expects that $40 to $50 million of capital projects included in the 2013 forecast may be carried over to 2014 and included in next year's capital program. The current 2013 capital program includes the following:

• Beginning construction on one rig to be delivered to Trinidad's Canadian operations for LNG-related drilling;
• Beginning construction on one rig and the upgrading of three existing rigs to be delivered to Saudi Arabia for the joint venture arrangement;
• The completion of two contracted rigs for the Canadian operations carried over from the 2012 capital program, one rig was delivered in each of the first and third quarters of 2013;
• Maintenance capital and select upgrade capital to improve the efficiency and marketability of existing equipment.

Current financial performance is well in excess of the financial ratio covenants under the revolving credit facility as reflected in the table below under IFRS:

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

OUTLOOK

The winter drilling season in Canada is shaping up well with firm demand, in particular for deeper, high performance equipment. In the US, activity levels have been increasing over the past few months and Trinidad expects to see stable conditions for the remainder of 2013 and into 2014.

As the Company finalizes its capital spending plans for 2014, it is carefully evaluating new growth opportunities and upgrades to existing equipment. Competition remains high in North America and customers are increasingly looking for high performance equipment to improve the efficiency of their drilling programs. Trinidad expects that its 2014 capital budget will reflect a focus on upgrading existing equipment to ensure it remains competitive and new growth initiatives backed by customer contracts.

Looking forward into 2014, conditions in North America are expected to remain stable. Trinidad's deeper, high-performance rigs are the style of equipment that its customers need, and the Company's experience in drilling technically-challenging wells continues to position it as an industry leader.

Interest in plays such as the Montney, Duvernay, Horn River and Liard Basin in western Canada is increasing as customers understand the drilling requirements needed to supply natural gas to their proposed LNG plants in British Columbia. Trinidad believes that this interest will turn into increased rig demand as these projects become more certain, with higher drilling activity and requests for new equipment over the coming years. Trinidad's reputation as an experienced rig manufacturer and deep technical driller was clearly acknowledged in a recent award to build one of the few LNG-related new builds awarded in Canada.

In addition to LNG-related growth in Canada, Trinidad's newly signed joint venture with Halliburton offers the Company a strong growth initiative going forward. Currently, the Company has agreed to move three existing upgraded rigs and one new build into the joint venture, with all four rigs expected to begin operations in Saudi Arabia in the second half of 2014.  Trinidad anticipates that additional opportunities to add either existing or new equipment into the joint venture will occur as the joint venture progresses. The initial areas of focus will be in Saudi Arabia and Mexico, with additional countries being considered for expansion at a later date.

Trinidad's focus over the past few years on lowering its leverage has positioned the company well to take advantage of the growth opportunities it is now seeing. The Company expects to grow its international operations at a measured pace, while also maintaining close attention to its existing North American operations. Trinidad's improved financial flexibility, strong growth initiatives and available cash flow, provide the Company with a variety of ways to grow the Company and to add value for its shareholders.

CONFERENCE CALL

A conference call and webcast to discuss the results will be held for the investment community on Thursday November 7^th, 2013 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 2:30 p.m. ET on November 7^th, 2013 until midnight November 14^th, 2013 by dialing (855) 859 2056 or (416) 849-0833 and entering replay access code 77203749.

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

TRINIDAD DRILLING LTD.

Trinidad is a corporation focused on sustainable growth that trades on the Toronto Stock Exchange under the symbol TDG. Trinidad's divisions operate in the drilling and barge-drilling sectors of the North American oil and natural gas industry with operations in Canada, the United States and Mexico. In addition, through a joint venture, Trinidad has the opportunity to operate drilling rigs in other international markets such as Saudi Arabia.  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.

SEGMENTED INFORMATION

ADVISORY

NON-GAAP MEASURES DEFINITIONS

This document contains references to certain financial measures and associated per share data that do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.  These financial measures are computed on a consistent basis for each reporting period and include EBITDA, Adjusted EBITDA, Adjusted net earnings, working capital, Senior Debt to EBITDA, Total Debt to EBITDA, EBITDA to Cash Interest Expense, drilling days, operating days, utilization rate - drilling day, utilization rate - operating day, and rate per operating day.  These non-GAAP measures are identified and defined as follows:

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

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

"Adjusted net earnings" is used by management and the investment community to analyze net earnings prior to the effect of foreign exchange, share-based payment expense and impairment charges and is not intended to represent net earnings as calculated in accordance with IFRS.  Adjusted net earnings is a useful measure because it provides an indication of results of the Company's principal business activities before consideration of fluctuations in foreign exchange gains and losses, impairment and share-based payment expenses, which are not consistently incurred period over period.

"Working capital" is used by management and the investment community to analyze the operating liquidity available to the Company.

"Senior Debt to EBITDA" is defined as the consolidated balance of the revolving facility and other debt secured by a lien at quarter end to consolidated EBITDA for the trailing 12 months (TTM).  Consolidated EBITDA used in this financial ratio is calculated as EBITDA plus share-based payment expense and unrealized foreign exchange.

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

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

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

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

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

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

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

ADDITIONAL GAAP MEASURES DEFINITIONS

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

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

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

"Operating income percentage" is used by management and investors to analyze overall and segmented operating performance, including third party recovery and third party costs, as well as inter-segment revenue and inter-segment operating costs. Operating income percentage is calculated from the consolidated statements of operations and comprehensive income (loss) and from the segmented information in the notes to the consolidated financial statements. Operating income percentage is defined as operating income divided by revenue.

"Operating income - net percentage" is used by management and investors to analyze overall and segmented operating performance excluding third party recovery and third party costs, as well as inter-segment revenue and inter-segment operating costs, as these revenues and expenses do not have an effect on consolidated net earnings. Operating income - net percentage is calculated from the consolidated statements of operations and comprehensive income (loss) and from the segmented information in the notes to the consolidated financial statements. Operating income - net percentage is defined as operating income divided by revenue net of third party costs.

FORWARD-LOOKING STATEMENTS

The document contains certain forward-looking statements relating to Trinidad's plans, strategies, objectives, expectations and intentions.  The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "confident", "might" and similar expressions are intended to identify forward-looking information or statements. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this document. The forward-looking information and statements included in this document are not guarantees of future performance and should not be unduly relied upon.  Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements. In particular, but without limiting the foregoing, this document may contain forward-looking information and statements pertaining to the completion of announced rig construction programs on a timely basis and economical terms; the assumption that Trinidad's customers will honour their take-or-pay contracts; fluctuations in the demand for Trinidad's services; the ability for Trinidad to attract and retain qualified personnel, in particular field staff to crew the Company's rigs; the existence of competitors, technological changes and developments in the oilfield services industry; the existence of operating risks inherent in the oilfield services industry; assumptions respecting capital expenditure programs and other expenditures by oil and gas exploration and production companies; assumptions regarding commodity prices, in particular oil and natural gas; assumptions respecting supply and demand for commodities, in particular oil and natural gas; assumptions regarding foreign currency exchange rates and interest rates; the existence of regulatory and legislative uncertainties; the possibility of changes in tax laws; and general economic conditions including the capital and credit markets; assumptions made about future performance and operations of the joint venture arrangement. 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.