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TSX SYMBOL: TDG.UN
CALGARY, Jan. 16 /CNW/ - Trinidad Energy Services Income Trust
("Trinidad" or the "Trust") is pleased to announce the following:
Customer Backed 5 Rig Construction Program
Trinidad continues work on additional long term contracts with three
major North American oil and gas exploration and development companies whereby
it will provide 5 new drilling rigs ranging in depth capacity from
5,000 metres to 5,500 metres. All five rigs will be operating in the United
States each backed by take-or-pay contracts.
The total construction costs for the 5 rigs will be approximately
$80 million (Cdn) and is being funded through Trinidad's recently expanded
credit facility and internal cashflow.
Trinidad's most recent rig construction program consists of two
5,000 metre 1,200 horsepower triple rigs, and three 5,500 metre 1,500
horsepower triple rigs. Four of the triple rigs are contracted for a minimum
of 365 days per year for each of the next three years. The fifth rig has been
contracted for two years plus an option for an additional year at market rates
for a minimum of 365 days per year. The rigs being commissioned in the United
States are expected to be delivered in February through June of 2007 and are
currently planning to operate in Texas and Oklahoma.
These five rigs being constructed will increase Trinidad's United States
drilling fleet to 42 rigs. The US fleet combined with the completed Canadian
drilling fleet of 64 rigs will give Trinidad a total of 106 drilling rigs once
all existing construction programs are completed.
Of the previously announced rigs under construction for Canada, seven of
the total eleven rigs have been completed and put in service as at year end
with the remaining four to be finished and drilling by April of 2007. In the
United States market, of the original 17 rigs which were being built, 11 have
been delivered and are drilling at year end. The remaining six rigs are
currently schedule to be completed by the second quarter of 2007.
The rig construction program will result in:
- An increase in operating cash flow per unit and cash available for
distribution per unit as the rigs commence operations;
- Provide unitholders with downside risk protection as a result of the
take or pay contracts;
- An increased presence within the United States market at fixed
current market day rates at a guaranteed minimum rig utilization of
- Further customer validation of Trinidad's deep drilling market focus.
Trinidad Energy Services Income Trust is a growth oriented income trust
that trades on the TSX under the symbol TDG.UN. Trinidad's divisions operate
in the drilling and well servicing sectors of the Canadian oil and gas
industry. With the completion of the acquisition of the Cheyenne rigs and with
new rig construction, the Trust will have 106 drilling rigs ranging in depths
from 1,000 - 6,500 metres. In addition to its drilling rigs, Trinidad has
18 service rigs that have been completely retrofitted or are new within the
past five years and 2 more service rig currently under construction. Trinidad
also operates 17 pre-set and coring rigs. 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
and competitive in the industry.
This news release may contain forward-looking statements concerning the
anticipated performance of the Trust. Forward-looking statements are based on
the estimates and opinions of management at the date the statements are made,
and the Trust undertakes no obligation to update forward-looking statements if
conditions or opinions should change.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy the trust units in any jurisdiction. The trust
units offered will not be and have not been registered under the United States
Securities Act of 1933 and may not be offered or sold in the United States or
to a U.S. person, absent registration, or an applicable exemption therefrom.
The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.