Trinidad Drilling Transfers 5 Canadian Rigs to U.S., Mexico
Trinidad Drilling Ltd. has agreed to move five existing rigs into higher dayrate and utilization areas in the United States and Mexico.
Trinidad recently agreed to move two rigs from Canada into the United States under long-term, take-or-pay contracts for periods of three and five years, with guaranteed utilization rates of 100% during their respective
contract terms. These rigs are expected to operate in the Haynesville Shale, Louisiana and the Bakken Shale, North Dakota. Trinidad has a growing presence in the emerging Haynesville Shale play and following the completion of its rig building program, the Corporation expects to have 21 rigs operating in the area.
The Bakken Shale is a relatively new area for Trinidad and this move will deploy the Corporation's initial rig into the U.S. side of the play, creating a first toehold in an area of expected growth moving forward. Both rigs are expected to be operating in their new areas in September 2008.
In addition, Trinidad has agreed to move three existing rigs from Canada into the southern edge of the Chicontepec field in central eastern Mexico. These rigs represent Trinidad's initial entry into Mexico and are expected to be in place and operational by the end of the third quarter of this year. The rigs are contracted to work at a utilization rate of 100% for an initial term of six months, with a further six month extension option. The operator has agreed to pay the costs associated with relocating the rigs into Mexico and returning the rigs to Canada at the end of the contracted period, if required. It is anticipated that these rigs will remain in Mexico for the foreseeable future.
"Trinidad's business model is based on growing our fleet in the areas where there is strong demand for our high-quality equipment and where we can generate the best returns for our shareholders. By moving these five rigs into an area of high utilization with strong dayrates, we will improve their contribution to Trinidad's performance," said Lyle Whitmarsh, Trinidad's President and Chief Executive Officer.
This move into Mexico follows Trinidad's overall strategy of initially moving a small number of rigs into new areas of opportunity, developing a strong reputation locally through high performance and a customer-focused
approach, and then expanding its operations. Trinidad's expansion into Mexico is in response to the strong demand for quality drilling equipment and growing drilling programs planned for the area.