Trinidad Drilling Ltd. has agreed to resume the construction of six new contracted drilling rigs that were delayed earlier in 2009 due to weak industry conditions.
"The addition of six new built-for-purpose style rigs continues our strategic deep-drilling focus and strengthens Trinidad's position as one of the leading unconventional shale drillers in North America," said Lyle Whitmarsh, Trinidad's President and Chief Executive Officer. "Our customer's ongoing commitment shows their satisfaction with our performance to date and their belief in our ability moving forward."
Trinidad and its customer have agreed to resume the construction of six new drilling rigs that were put on hold earlier in 2009. The rigs remain under five-year, take-or-pay contracts with the original customer and the terms of the contract are unchanged. The drilling rigs are 18,000 feet triple rigs with 1,500 horsepower AC drawworks and are equipped with Trinidad's in-house, state-of-the-art technology and automation. The rigs will be built at Trinidad's rig manufacturing facility, Victory Rig Equipment, and are expected to be completed by the end of 2010; the first rig's delivery is scheduled for the first quarter of 2010.
Trinidad estimates that it will take an additional $60 million to complete the construction on these rigs. The customer has compensated Trinidad for the interest on the initial capital spent on the construction of these rigs while they were on hold.
The new rigs are destined for operations in the Haynesville shale in Louisiana, bringing Trinidad's total rig count in the area to 31 and growing the Company's already industry-leading market share in this key shale play. Trinidad's modern, deep-capacity fleet is well suited to unconventional shale drilling and the Company's strong performance in these areas has created a solid reputation as a driller of choice with some of the key shale operators. Including these new rigs, Trinidad will have approximately 45 percent of its fleet operating in the unconventional shale plays.
Following the completion of these rigs, Trinidad will have 53 rigs in Canada, 64 rigs in the US, 7 rigs in Mexico and 1 rig in Chile. As in the past, Trinidad's growth continues to be backed by long-term, take-or-pay contracts; including the rigs under construction, the Company has 50 percent of its fleet under long-term, take-or-pay contract with an average term remaining of more than two years.
Trinidad is a growth-oriented corporation that trades on the Toronto Stock Exchange (TSX) under the symbol TDG and TDG.DB. Trinidad's divisions operate in the drilling, well-servicing, coring and barge-drilling sectors of the North American oil and natural gas industry. With the completion of the rigs under construction, Trinidad will have 125 land drilling rigs ranging in depths from 1,000 - 6,500 meters and operations in Canada, the United States, Mexico and Chile. In addition to its land drilling rigs, Trinidad has 22 service rigs, 20 pre-set and coring rigs and four barge rigs operating in the Gulf of 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.
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