Trinidad Drilling has reported strong operating and financial results for the third quarter and first nine months of
2008. The Company maintained its record breaking trend with 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 reaching record levels in the third quarter, following record results recorded in the first two quarters of 2008. The combination of Trinidad's growing inventory of drilling rigs, geographically diversified operations and high-tech, deeper-capacity fleet provided the foundation for these strong operational and financial results.
"We built Trinidad with a long-term vision in mind. We understand the cyclical nature of our environment and have built a company that is agile enough to identify and capture opportunities when they arise, but that can also withstand the inevitable downturns in the market," said Lyle Whitmarsh, Trinidad's President and Chief Executive Officer.
"The key to our strategy is providing the right equipment and exceptional performance for our customers. We have assembled an outstanding fleet of high-quality, modern rigs that are perfectly suited to unconventional drilling where activity levels remain strong. Our customers are eager to have access to this equipment and have contracted a significant portion of our fleet with long-term, take-or-pay contracts. These strengths show through in our results and have allowed Trinidad to continually post industryleading utilization levels and record financial results to date in 2008. Despite the current uncertainty in the financial and commodity markets, we believe that Trinidad is well positioned to perform strongly and activity levels in both Canada and the US continue to look encouraging."
THIRD 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 $191.7 million for the third quarter of 2008 and $552.5 million year-to-date, up 18.2% and 14.2%, respectively, largely due to growth through acquisitions, internal rig construction programs, higher utilization rates and our successful expansion into the US.
- Trinidad’s third quarter 2008 drilling utilization rate of 63% in Canada substantially exceeded the industry average of 48%. The US drilling operations continued to report strong activity levels with utilization of 85%. Year-to-date, Trinidad’s Canadian drilling utilization rate was 55% compared to the industry average of 41%, while the US operation’s utilization averaged 86%.
- Cash flow from operations before changes in non-cash working capital was $51.5 million ($0.53 per share (diluted)), in the third quarter of 2008 and $149.3 million ($1.67 per share (diluted)) year-to-date, up 10.9% and 4.6%, respectively. These record levels were achieved primarily through the increased rig fleet, the expanded US operations and a continued focus on cost control.
- Net earnings in the third quarter of 2008 were $20.4 million ($0.21 per share (diluted)) and $60.4 million ($0.68 per share (diluted)) year-to-date, up 35.4% for the quarter and down 1.9% on a year-to-date basis, largely due to higher recertification costs incurred in the period, interest expense and depreciation costs.
- During the third quarter, Trinidad laid the foundation for the redeployment of five existing Canadian rigs into higher dayrate and utilization areas. A new operating area was established into the Chicontepec field in central eastern Mexico, where three rigs will be moved in the fourth quarter of 2008. In addition, two rigs were moved into the US, one to the Bakken play in North Dakota and one to add to the Company's growing fleet in the Haynesville Shale in Louisiana. All rigs are under contract to work at 100% utilization during the period of their respective contracts.