Trinidad Drilling Ltd. reported solid operating and financial results for the second quarter and first six months of
2008 today. Revenue, net earnings before interest, taxes, depreciation and gain or loss on sale of long-term assets (EBITDA) and cash flow from operations before changes in non-cash working capital all reached record levels in both the second quarter and year-to-date, reflecting the Company's accretive growth per share and continued focus on adding value for its shareholders.
"Trinidad has continued to perform strongly to date in 2008. We have consistently recorded utilization rates in excess of the Canadian industry average and by growing our US operations we have added a stable revenue stream to our business," said Lyle Whitmarsh, Trinidad’s President and Chief Executive Officer.
"We have strategically grown our business in areas where demand for our deeper, more technologically advanced fleet is strong. This value-adding strategy is paying off for Trinidad and is demonstrated in our strong performance and record results. We are pleased with our results in the first half of 2008 and with building momentum in the drilling industry, we are cautiously optimistic for the remainder of 2008 and beyond," Whitmarsh said.
SECOND QUARTER AND YEAR-TO-DATE HIGHLIGHTS
(Quarter-over-quarter and year-to-date comparatives all relate to the comparable period in 2007)
- Revenue reached record levels of $141.2 million for the second quarter of 2008 and $360.8 million year-to-date, up 22.2% and 12.2% respectively, largely due to growth through acquisitions, internal rig construction programs, higher utilization rates and our successful expansion into the US.
- Trinidad’s second quarter 2008 drilling utilization rate of 31% in Canada exceeded the industry average of 20%. The US drilling operations continued to report strong activity levels with utilization of 87%. Year-to-date, Trinidad’s Canadian drilling utilization rate has been 52% compared to the industry average of 38% while the US operation’s utilization has averaged 87%.
- Cash flow from operations before changes in non-cash working capital was $27.2 million ($0.31 per share (diluted)), in the second quarter of 2008 and $97.7 million ($1.14 per share (diluted)) year-to-date, up 16.5% and 1.6%, respectively. These record levels were achieved primarily through the increased rig fleet, the expanded US operations and a continued focus on maintaining gross margins.
- Net earnings in the second quarter of 2008 were $1.1 million ($0.01 per share (diluted)) and $40.1 million ($0.47 per share (diluted)) year-to-date, down 75.4% and 14.0% respectively, largely due to higher interest and depreciation costs.
- On June 10, 2008, Trinidad closed an equity financing deal where a total of 12,132,353 shares were issued, including a 10% overallotment, for gross proceeds of $165.0 million.
- During the second quarter of 2008, Trinidad continued its growth into the US drilling market with the announcement of a construction program for nine new drilling rigs. In July 2008, the Company announced an additional seven new drilling rigs also bound for the US. All 16 of these rigs are backed by long-term, take-or-pay contracts and are expected to be completed by the end of 2009. In addition, Trinidad plans to build six new service rigs to meet the growing demand in the Canadian market. In total, the rig construction programs are anticipated to cost $258.0 million, which is expected to be financed with the net proceeds from the recent equity offering ($158.4 million), proceeds from the sale of its newly constructed barge rig (US$53.5 million), cash flow from operations and funds available under the Company’s existing credit facility.