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/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES /
TSX SYMBOL: TDG
CALGARY , Aug. 6, 2014 /CNW/ - Trinidad Drilling Ltd. ("Trinidad" or the
"Company") reported second quarter and year to date 2014 results. The
Company's results were impacted as rigs were re-activated to meet
increasing demand, incurring additional costs and leading to lower
adjusted EBITDA (1) in the current quarter.
"The second quarter was a transitional quarter for Trinidad ," said Lyle
Whitmarsh , Trinidad's Chief Executive Officer. "We are seeing growing
demand across all areas of our operations and incurred higher costs in
the quarter as we prepared the fleet for these improved industry
conditions. During the quarter, our US and international division moved
rigs to new customers and locations, and had higher than usual repairs
and maintenance costs as rigs were re-activated. Although these costs
negatively affected the second quarter, we are already seeing the
benefit as all of our US rigs are currently operating. We anticipate
that Trinidad will perform well in the second half of 2014 as customers
increasingly lock up existing rigs and demand for new equipment grows."
(1)
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See Non-GAAP Measures Definition and Additional GAAP Measures Definition
section of this document for further details.
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FINANCIAL HIGHLIGHTS
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Three months ended June 30,
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Six months ended June 30,
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($ thousands except share and per share data)
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2014
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2013
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% Change
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2014
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2013
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% Change
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Revenue
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168,945
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165,447
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2.1
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420,450
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412,633
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1.9
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Revenue, net of third party costs
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159,644
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156,171
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2.2
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390,662
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383,548
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1.9
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Operating income (1)
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45,605
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55,651
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(18.1)
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140,797
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154,010
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(8.6)
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Operating income percentage (1)
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27.0%
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33.6%
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(19.6)
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33.5%
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37.3%
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(10.2)
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Operating income - net percentage (1)
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28.3%
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35.6%
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(20.5)
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35.9%
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40.2%
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(10.7)
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EBITDA (1)
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5,445
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36,326
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(85.0)
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86,700
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118,340
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(26.7)
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Per share (diluted) (2)
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0.04
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0.30
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(86.7)
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0.62
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0.98
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(36.7)
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Adjusted EBITDA (1)
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30,644
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39,941
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(23.3)
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110,086
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124,777
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(11.8)
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Per share (diluted) (2)
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0.22
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0.33
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(33.3)
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0.79
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1.03
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(23.3)
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Cash provided by operations
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71,086
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89,852
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(20.9)
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90,519
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130,347
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(30.6)
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Per share (basic / diluted) (2)
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0.51
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0.74
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(31.1)
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0.65
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1.08
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(39.8)
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Funds provided by operations (1)
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30,285
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39,124
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(22.6)
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91,142
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104,067
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(12.4)
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Per share (basic / diluted) (2)
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0.22
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0.32
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(31.3)
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0.66
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0.86
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(23.3)
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Net (loss) earnings
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(24,815)
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347
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(7,251.3)
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947
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33,095
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(97.1)
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Per share (basic / diluted) (2)
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(0.18)
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0.00
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-
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0.01
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0.27
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(96.3)
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Adjusted net (loss) earnings (1)
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(5,557)
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3,460
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(260.6)
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22,189
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39,033
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(43.2)
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Per share (basic / diluted) (2)
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(0.04)
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0.03
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(233.3)
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0.16
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0.32
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(50.0)
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Capital expenditures
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71,587
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15,089
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374.4
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102,793
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32,828
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213.1
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Dividends declared
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6,910
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6,043
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14.3
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13,818
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12,086
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14.3
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Shares outstanding - diluted
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(weighted average) (2)
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138,873,120
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120,859,476
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14.9
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138,848,922
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120,859,476
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14.9
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As at
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June 30,
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December 31,
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($ thousands except percentage data)
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2014
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2013
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% Change
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Total assets
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1,876,403
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1,827,496
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2.7
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Total long-term liabilities
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570,449
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564,095
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1.1
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(1)
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Readers are cautioned that Operating income, Operating income
percentage, Operating income - net percentage, EBITDA, Adjusted
EBITDA, Funds provided by operations, Adjusted net (loss) earnings and
the related per share information do not have standardized
meanings prescribed by IFRS - see "Non-GAAP Measures" and "Additional
GAAP Measures".
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(2)
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Basic shares include the weighted average number of shares outstanding
over the period. Diluted shares include the weighted
average number of shares outstanding over the period and the dilutive
impact, if any, of the number of shares issuable pursuant
to the Incentive Option Plan.
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OPERATING HIGHLIGHTS
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Three months ended June 30,
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Six months ended June 30,
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2014
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2013
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% Change
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2014
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2013
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% Change
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Land Drilling Market
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Operating days (1)
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Canada
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1,430
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1,434
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(0.3)
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5,507
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5,632
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(2.2)
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United States and International
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4,441
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4,578
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(3.0)
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8,752
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9,031
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(3.1)
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Rate per operating day (1)
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Canada (CDN$)
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26,338
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25,511
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3.2
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25,655
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25,429
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0.9
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United States and International (CDN$)
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22,890
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22,908
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(0.1)
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23,747
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22,665
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4.8
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United States and International (US$)
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20,819
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22,436
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(7.2)
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21,716
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22,461
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(3.3)
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Utilization rate - operating day (1)
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Canada
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26%
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26%
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-
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50%
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52%
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(3.8)
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United States and International
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80%
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73%
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9.6
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78%
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73%
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6.8
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Number of drilling rigs at period end (4)
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Canada
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59
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60
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(1.7)
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59
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60
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(1.7)
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United States and International
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56
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68
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(17.6)
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56
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68
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(17.6)
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Coring and surface casing rigs (2)
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-
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15
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(100.0)
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-
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15
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(100.0)
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Joint Venture Operations (3)
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Number of drilling rigs at period end
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4
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-
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100.0
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4
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-
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100.0
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Barge Drilling Market
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Operating days (1)
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259
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445
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(41.8)
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503
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860
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(41.5)
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Rate per operating day (CDN$) (1)
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37,953
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31,731
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19.6
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37,886
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30,460
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24.4
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Rate per operating day (US$) (1)
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34,599
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31,077
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11.3
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34,680
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30,151
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15.0
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Utilization rate - operating day (1)
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57%
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98%
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(41.8)
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56%
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95%
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(41.1)
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Number of barge drilling rigs at period end
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2
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2
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-
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2
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2
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-
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Number of barge drilling rigs under Bareboat
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Charter Agreements at period end
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3
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3
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-
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3
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3
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-
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(1)
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See Non-GAAP Measures Definition and Additional GAAP Measures Definition
section of this document for further details.
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(2)
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In the third quarter of 2013, Trinidad disposed of its 15 remaining
coring rigs and all related equipment.
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(3)
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Trinidad is party to a joint venture with a wholly-owned subsidiary of
Halliburton. These rigs are owned by the joint venture.
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(4)
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Refer to the Results from Operations section for details on changes to
the rig count.
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OVERVIEW
The second quarter of 2014 was a transitional period for Trinidad . Each
of the following factors had a significant impact on the Company:
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Increased demand in the US operations caused the Company to re-activate
existing rigs, incurring increased costs, changing rig mix and lowering
overall margins in this segment;
-
The Company continued to gear up for international growth with the joint
venture. With this growth period, Trinidad incurred additional general
and administrative expenses;
-
Trinidad transitioned their three rigs out of Mexico and moved them to
Canada where their specifications are more in demand. The Company
expects to recommence operations in Mexico through the joint venture
with four rigs by the end of 2014 and early 2015.
As Trinidad transitioned to meet the growing demand in the US, the
Company incurred higher repairs and maintenance and rig moving expenses
as the Company readied equipment to go back to work. In addition, a
number of lower specification rigs were reactivated in the current
quarter due to improving customer demand for this type of equipment.
Trinidad typically times larger repairs and maintenance costs with
increasing market demand. This was combined with the temporary impact
of lower utilization on several high performance rigs that received
early termination revenue in previous quarters, causing a decline in
profitability in the US and international segment when compared to the
same quarter last year. As at June 30, 2014 , Trinidad also reviewed its
rig fleet based on the marketability of existing assets, resulting in a
number of rigs being decommissioned and an impairment expense of $20.6
million recorded in the period.
Trinidad is currently seeing improved industry conditions across all of
its operations. The Company anticipates that the factors negatively
impacting the results in the second quarter are due to reactivating
previously idle rigs, which will not persist into the second half of
2014. As Trinidad continues to review its rig fleet and ensure all
assets remain highly competitive, the retrofit and redeployment of
current higher specification rigs will continue into the second half of
2014.
During the second quarter and first six months of 2014, commodity prices
increased from the same periods in 2013. Crude oil prices improved for
both the US-based WTI benchmark and the Western Canadian Select
benchmark prices, driving an ongoing focus towards crude oil and
natural gas liquids targets. Oil prices continued to strengthen and
increased in the current quarter from the first quarter of 2014 mostly
due to increased geopolitical unrest in the Middle East and Eastern
Europe and lowering US storage levels. Natural gas prices were also
higher in the current periods compared to the same periods last year,
but lowered in the second quarter from the first quarter of 2014.
Growing storage levels in North America were the main driver behind
lowering natural gas prices in the current quarter.
In the second quarter and first six months of 2014, Canadian industry
activity levels averaged 28% and 42%, respectively, up from 18% and 38%
in the same periods last year, reflecting the improving industry
conditions in Canada . Trinidad's Canadian utilization rate - drilling
days remained stable at 24% quarter over quarter and at 46% year to
date in 2014 compared to 48% for the same period last year. Trinidad's
activity levels in the current quarter were impacted by the timing of
rig re-certifications and customer specific delays and year to date
from weaker demand in oil sands related drilling.
In the US, industry activity increased in the second quarter and first
six months of 2014, averaging 1,781 and 1,743 active rigs,
respectively, up from 1,686 active rigs for the same periods last year.
Trinidad's US and international division averaged approximately 47
active rigs in the second quarter and first six months of 2014 down
slightly from approximately 49 active rigs during the same periods in
2013. Trinidad's lower active rig count was driven by three Mexican
rigs that were idled after the second quarter of 2013, due to the
completion of their contracts.
During the second quarter and year-to-date 2014, the US dollar was
stronger against the Canadian dollar than during the same periods last
year. Trinidad has a significant portion of its business that operates
in US dollars and the change in foreign exchange rates in the quarter
had a noticeable, and largely positive impact on the Company's results.
USD/CDN dollar exchange rates averaged 1.0997 in the current quarter
compared to 1.0211 in the same quarter last year. On a year to date
basis, US dollar exchange rates averaged 1.0940 in 2014 compared to
1.0091 for the same period last year. The stronger US dollar positively
impacted EBITDA generated by Trinidad's US and international division
but also drove increased depreciation and interest expenses in the
quarter and year to date.
INDUSTRY STATISTICS
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2014
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Full Year
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2013
|
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Full Year
|
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2012
|
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Q2
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Q1
|
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2013
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Q4
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Q3
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Q2
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Q1
|
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2012
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Q4
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Q3
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Commodity Prices
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Aeco natural gas price (CDN$ per gigajoule)
|
|
|
|
4.45
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|
|
5.34
|
|
3.01
|
|
3.33
|
|
|
2.32
|
|
|
3.36
|
|
|
3.03
|
|
2.26
|
|
3.03
|
|
|
2.18
|
Henry Hub natural gas price (US$ per mmBtu)
|
|
|
|
4.59
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|
|
5.15
|
|
3.72
|
|
3.84
|
|
|
3.55
|
|
|
4.01
|
|
|
3.47
|
|
2.75
|
|
3.40
|
|
|
2.88
|
Western Canada Select crude oil price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(CDN$ per barrel)
|
|
|
|
91.34
|
|
|
85.81
|
|
75.84
|
|
69.62
|
|
|
86.31
|
|
|
79.25
|
|
|
67.64
|
|
71.70
|
|
60.73
|
|
|
76.29
|
WTI crude oil price (US$ per barrel)
|
|
|
|
103.06
|
|
|
98.72
|
|
98.01
|
|
97.56
|
|
|
105.82
|
|
|
94.14
|
|
|
94.30
|
|
94.09
|
|
88.17
|
|
|
92.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average industry active land rig count (1)
|
|
|
|
1,781
|
|
|
1,705
|
|
1,685
|
|
1,679
|
|
|
1,687
|
|
|
1,686
|
|
|
1,687
|
|
1,852
|
|
1,741
|
|
|
1,837
|
Average Trinidad active land rig count (2)
|
|
|
|
47
|
|
|
48
|
|
50
|
|
49
|
|
|
51
|
|
|
50
|
|
|
49
|
|
57
|
|
56
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average industry utilization (3)
|
|
|
|
28%
|
|
|
58%
|
|
40%
|
|
43%
|
|
|
37%
|
|
|
18%
|
|
|
58%
|
|
39%
|
|
36%
|
|
|
42%
|
Average Trinidad utilization (4)
|
|
|
|
24%
|
|
|
68%
|
|
48%
|
|
48%
|
|
|
50%
|
|
|
24%
|
|
|
73%
|
|
52%
|
|
51%
|
|
|
58%
|
(1)
|
Baker Hughes rig counts (information obtained from Tudor Pickering Holt
& Company weekly rig roundup report).
|
(2)
|
Includes US and international rigs.
|
(3)
|
Canadian Association of Oilwell Drilling Contractors (CAODC)
utilization.
|
(4)
|
Based on drilling days (spud to rig release dates).
|
SECOND QUARTER AND YEAR-TO-DATE 2014 HIGHLIGHTS
-
Trinidad generated revenue of $168.9 million in the second quarter and
$420.5 million year to date in 2014, up 2.1% and 1.9% from the same
periods last year. Revenue was positively impacted in 2014 by increased
dayrates in the Company's Canadian operations, as well as a positive
foreign currency translation on Trinidad's US division. Revenue was
negatively impacted in the current periods by the absence of the
Company's coring rigs, which were sold in 2013, lower activity from the
Mexican rigs and a weaker contribution from the barge operations.
Additionally, Trinidad's manufacturing division had increased revenues
due to external new build revenue in 2014.
-
Overall operating income - net percentage was 28.3% in the second
quarter and 35.9% year to date in 2014 compared to 35.6% and 40.2%
respectively, in 2013. Profitability lowered in the quarter and year to
date largely as a result of higher manufacturing activity in the
current year. The manufacturing division typically generates lower
margins than Trinidad's drilling operations as the external new builds
are constructed for Trinidad's joint venture company and joint venture
partner at cost plus a small margin. In addition in the second quarter
of 2014, increased operating costs and lower dayrates, mainly due to
rig re-activations of lower specification rigs, led to lower
profitability in the US and international division. This was partially
offset by a favorable foreign exchange translation on Trinidad's US and
international operations in 2014 as the US dollar exchange rate
averaged above the Canadian dollar in the current year.
-
Adjusted EBITDA was $30.6 million in the quarter and $110.1 million year
to date in 2014, down 23.3% and 11.8% from the same periods last year.
Adjusted EBITDA decreased in the quarter and year to date largely as a
result of a decrease in operating income due to the factors discussed
above.
-
Net (loss) earnings were a loss of $24.8 million or $0.18 per share
(diluted) in the quarter and earnings of $0.9 million or $0.01 per
share (diluted) year to date in 2014, down $25.2 million and $32.1
million , respectively from the same periods last year. Net (loss)
earnings decreased largely as a result of lower operating income,
higher share-based payment expenses, a foreign exchange loss and an
impairment of property and equipment recorded in the second quarter.
This was offset by lower income taxes in the current period and a gain
on the sale of property in both the second quarter and year to date
2014.
-
Adjusted net (loss) earnings decreased by $9.0 million in the quarter
compared to the same quarter last year, with adjusted net (loss)
earnings per share (diluted) decreasing $0.07 per share. Adjusted net
(loss) earnings decreased in the current year due to lower adjusted
EBITDA in the current period.
RESULTS FROM OPERATIONS
Canadian Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
|
|
Six months ended June 30,
|
($ thousands except percentage and operating data)
|
|
|
|
|
|
2014
|
|
|
|
2013 (4)
|
|
|
% Change
|
|
|
|
2014
|
|
|
|
2013 (4)
|
|
|
% Change
|
Operating revenue (1)
|
|
|
|
|
|
37,681
|
|
|
|
37,110
|
|
|
1.5
|
|
|
|
141,288
|
|
|
|
152,552
|
|
|
(7.4)
|
Other revenue
|
|
|
|
|
|
358
|
|
|
|
13
|
|
|
2,653.8
|
|
|
|
1,080
|
|
|
|
57
|
|
|
1,794.7
|
|
|
|
|
|
|
38,039
|
|
|
|
37,123
|
|
|
2.5
|
|
|
|
142,368
|
|
|
|
152,609
|
|
|
(6.7)
|
Operating costs (1)
|
|
|
|
|
|
28,724
|
|
|
|
28,783
|
|
|
(0.2)
|
|
|
|
83,024
|
|
|
|
88,374
|
|
|
(6.1)
|
Operating income (3)
|
|
|
|
|
|
9,315
|
|
|
|
8,340
|
|
|
11.7
|
|
|
|
59,344
|
|
|
|
64,235
|
|
|
(7.6)
|
Operating income - net percentage (3)
|
|
|
|
|
|
24.5%
|
|
|
|
22.5%
|
|
|
|
|
|
|
41.7%
|
|
|
|
42.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating days (3)
|
|
|
|
|
|
1,430
|
|
|
|
1,434
|
|
|
(0.3)
|
|
|
|
5,507
|
|
|
|
5,632
|
|
|
(2.2)
|
Drilling days (3)
|
|
|
|
|
|
1,318
|
|
|
|
1,323
|
|
|
(0.4)
|
|
|
|
5,031
|
|
|
|
5,187
|
|
|
(3.0)
|
Rate per operating day (CDN$) (3)
|
|
|
|
|
|
26,338
|
|
|
|
25,511
|
|
|
3.2
|
|
|
|
25,655
|
|
|
|
25,429
|
|
|
0.9
|
Utilization rate - operating day (3)
|
|
|
|
|
|
26%
|
|
|
|
26%
|
|
|
-
|
|
|
|
50%
|
|
|
|
52%
|
|
|
(3.8)
|
Utilization rate - drilling day (3)
|
|
|
|
|
|
24%
|
|
|
|
24%
|
|
|
-
|
|
|
|
46%
|
|
|
|
48%
|
|
|
(4.2)
|
CAODC industry average (2)
|
|
|
|
|
|
28%
|
|
|
|
18%
|
|
|
55.6
|
|
|
|
42%
|
|
|
|
38%
|
|
|
10.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of drilling rigs at period end
|
|
|
|
|
|
59
|
|
|
|
60
|
|
|
(1.7)
|
|
|
|
59
|
|
|
|
60
|
|
|
(1.7)
|
Number of coring and surface rigs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at period end
|
|
|
|
|
|
-
|
|
|
|
15
|
|
|
(100.0)
|
|
|
|
-
|
|
|
|
15
|
|
|
(100.0)
|
(1)
|
Operating revenue and operating costs for the three months ended June
30, 2014 and 2013 exclude third party recovery and
third party costs of $4.9 million and $4.1 million, respectively.
Operating revenue and operating costs for the six months ended
June 30, 2014 and 2013 exclude third party recovery and third party
costs of $19.5 million and $17.8 million, respectively.
|
(2)
|
CAODC industry average is based on drilling days divided by total days
available.
|
(3)
|
See Non-GAAP Measures Definition and Additional GAAP Measures Definition
section of this document for further details.
|
(4)
|
During the prior year, Trinidad's Canadian operations included the
Canadian manufacturing division. Effective January 1, 2014,
Trinidad has re-evaluated operating segments. Management has determined
that the Manufacturing operations is considered
a separate operating segment. All prior period segmented information has
been reclassified to conform to this new presentation.
|
Trinidad's Canadian operations performed well in the second quarter of
2014, recording higher levels of operating revenue and operating income
when compared to the same quarter of 2013. Higher dayrates were the
main driver behind the improved performance, reflecting strengthening
industry conditions in the Canadian market.
For the six months ended June 30, 2014 , operating revenue and operating
income lowered from the same period in the prior year due to the
absence of the preset and coring rigs, which were sold in the third
quarter of 2013. These rigs generated $9.3 million in operating revenue
in the first half of 2013 compared to nil in the current year.
Operating days were in line with the same quarter last year despite wet
weather and flooding towards the end of the second quarter that
impacted a number of Trinidad's rigs operating in Manitoba . For the six
months ended June 30, 2014 , operating days lowered slightly year over
year mainly driven by weaker customer demand in the oilsands sector in
the first quarter of 2014.
Operating income - net percentage increased in the quarter reflecting
improved dayrates in the Canadian drilling division. This was slightly
offset by an increase in repairs and maintenance costs in 2014 due to
re-certifications performed on rigs in the current year. However, the
increase in costs in the drilling operations was offset by a reduction
of costs due to the absence of the preset and coring rigs in 2014. On a
year-to-date basis, operating income - net percentage declined slightly
year over year mainly due to weaker customer demand in the oil sands
sector in the first quarter of 2014.
As part of the Company's ongoing review of its fleet, Trinidad
identified five rigs that it deemed were no longer competitive and were
not economical to upgrade. Therefore, these rigs were removed from
Trinidad's rig fleet at the end of the second quarter. In addition,
during the quarter Trinidad relocated three rigs from its Mexican
operations to Canada . These rigs are currently being upgraded with top
drives and other upgrades and are expected to begin drilling in the
second half of 2014.
As of June 30, 2014 , Trinidad's active rig fleet decreased by net one
rig when compared to June 30, 2013 . The change in the rig count
reflects the five rigs removed from the fleet in the current quarter,
offset by three rigs added from Mexico in the current quarter and one
new build delivered to the Canadian operations in the third quarter of
2013. The Mexico rigs were moved to Canada as the size and
specifications of these rigs no longer met requirements in the Mexican
market.
Second quarter 2014 versus first quarter 2014
The second quarter is typically affected by spring break-up, as weather
conditions and road bans restrict the movement of heavy equipment,
resulting in lower activity. This seasonality led to a reduction in
operating days and lower revenue and operating income in the second
quarter compared to the first quarter of 2014. The impact of lower
activity levels was partly offset by an increase of $923 per day in
dayrates over the first quarter. Dayrates increased largely as a result
of rig mix; in the second quarter, a higher percentage of the active
fleet is made up of high specification rigs, resulting in a higher
average dayrate.
United States and International Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
|
|
Six months ended June 30,
|
($ thousands except percentage and operating data)
|
|
|
|
|
|
2014
|
|
|
|
2013 (3)
|
|
|
% Change
|
|
|
|
2014
|
|
|
|
2013 (3)
|
|
|
% Change
|
Operating revenue (1)
|
|
|
|
|
|
110,414
|
|
|
|
118,834
|
|
|
(7.1)
|
|
|
|
225,195
|
|
|
|
230,409
|
|
|
(2.3)
|
Other revenue
|
|
|
|
|
|
67
|
|
|
|
24
|
|
|
179.2
|
|
|
|
113
|
|
|
|
46
|
|
|
145.7
|
|
|
|
|
|
|
110,481
|
|
|
|
118,858
|
|
|
(7.0)
|
|
|
|
225,308
|
|
|
|
230,455
|
|
|
(2.2)
|
Operating costs (1)
|
|
|
|
|
|
75,732
|
|
|
|
71,086
|
|
|
6.5
|
|
|
|
146,704
|
|
|
|
140,100
|
|
|
4.7
|
Operating income (1)
|
|
|
|
|
|
34,749
|
|
|
|
47,772
|
|
|
(27.3)
|
|
|
|
78,604
|
|
|
|
90,355
|
|
|
(13.0)
|
Operating income - net percentage (2)
|
|
|
|
|
|
31.5%
|
|
|
|
40.2%
|
|
|
|
|
|
|
34.9%
|
|
|
|
39.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land Drilling Rigs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating days (2)
|
|
|
|
|
|
4,441
|
|
|
|
4,578
|
|
|
(3.0)
|
|
|
|
8,752
|
|
|
|
9,031
|
|
|
(3.1)
|
Drilling days (2)
|
|
|
|
|
|
3,851
|
|
|
|
4,050
|
|
|
(4.9)
|
|
|
|
7,578
|
|
|
|
7,873
|
|
|
(3.7)
|
Rate per operating day (CDN$) (2)
|
|
|
|
|
|
22,890
|
|
|
|
22,908
|
|
|
(0.1)
|
|
|
|
23,747
|
|
|
|
22,665
|
|
|
4.8
|
Rate per operating day (US$) (2)
|
|
|
|
|
|
20,819
|
|
|
|
22,436
|
|
|
(7.2)
|
|
|
|
21,716
|
|
|
|
22,461
|
|
|
(3.3)
|
Utilization rate - operating day (2)
|
|
|
|
|
|
80%
|
|
|
|
73%
|
|
|
9.6
|
|
|
|
78%
|
|
|
|
73%
|
|
|
6.8
|
Utilization rate - drilling day (2)
|
|
|
|
|
|
70%
|
|
|
|
65%
|
|
|
7.7
|
|
|
|
68%
|
|
|
|
64%
|
|
|
6.3
|
Number of drilling rigs at period end
|
|
|
|
|
|
56
|
|
|
|
68
|
|
|
(17.6)
|
|
|
|
56
|
|
|
|
68
|
|
|
(17.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barge Drilling Rigs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating days (2)
|
|
|
|
|
|
259
|
|
|
|
445
|
|
|
(41.8)
|
|
|
|
503
|
|
|
|
860
|
|
|
(41.5)
|
Rate per operating day (CDN$) (2)
|
|
|
|
|
|
37,953
|
|
|
|
31,731
|
|
|
19.6
|
|
|
|
37,886
|
|
|
|
30,460
|
|
|
24.4
|
Rate per operating day (US$) (2)
|
|
|
|
|
|
34,599
|
|
|
|
31,077
|
|
|
11.3
|
|
|
|
34,680
|
|
|
|
30,151
|
|
|
15.0
|
Utilization rate - operating day (2)
|
|
|
|
|
|
57%
|
|
|
|
98%
|
|
|
(41.8)
|
|
|
|
56%
|
|
|
|
95%
|
|
|
(41.1)
|
Number of barge drilling rigs at period end
|
|
|
|
|
|
2
|
|
|
|
2
|
|
|
-
|
|
|
|
2
|
|
|
|
2
|
|
|
-
|
Number of barge drilling rigs under
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bareboat Charter Agreements at period end
|
|
|
|
|
|
3
|
|
|
|
3
|
|
|
-
|
|
|
|
3
|
|
|
|
3
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Operating revenue and operating costs for the three months ended June
30, 2014 and 2013 exclude third party recovery and third
party costs of $4.0 million and $5.2 million, respectively. Operating
revenue and operating costs for the six months ended June 30,
2014 and 2013 exclude third party recovery and third party costs of $9.7
million and $11.3 million, respectively.
|
(2)
|
See Non-GAAP Measures Definition and Additional GAAP Measures Definition
section of this document for further details.
|
(3)
|
During the prior year, Trinidad's US and international operations
included the US manufacturing division. Effective January 1, 2014,
Trinidad has re-evaluated operating segments. Management has determined
that the Manufacturing operations is considered a
separate operating segment. All prior period segmented information has
been reclassified to conform to this new presentation.
|
Demand for drilling equipment in the US land drilling market increased
in the quarter allowing Trinidad to re-activate a number of existing
rigs. While this reflected the improving industry conditions in the US,
the Company incurred higher repairs and maintenance costs and moving
costs as rigs were mobilized to new locations. In addition, several
lower specification rigs were re-activated during the quarter, lowering
the average dayrate when compared to the previous periods. As well,
this segment was negatively impacted by Trinidad's three Mexico rigs
which remained idle during the first six months of 2014, lowering
operating days and operating revenue for this segment on a total basis.
Effective June 30, 2014 , the three Mexico rigs were moved to the
Canadian drilling division.
Operating revenue decreased in the second quarter and year to date in
2014 by $8.4 million and $5.2 million , respectively when compared to
the same periods last year. Lower activity levels in the barge
operations, three idle rigs in Mexico and lower average dayrates all
contributed to lower revenue in the current periods. This impact was
partly offset by termination revenue received in the first quarter of
2014 and a favorable foreign currency exchange year over year.
Operating days decreased by 137 days quarter over quarter and 279 days
on a year-to-date basis in Trinidad's US and international land
drilling division. The decrease in operating days was entirely a result
of Trinidad's three Mexican rigs being idle for the first six months of
2014. Effective June 30, 2014 , these rigs have been moved to Canada .
Excluding the impact of these rigs, the US land drilling division
recorded an increase in operating days in each of the three and six
months ended June 30, 2014 , despite having fewer rigs.
For the three and six months ended June 30, 2014 , dayrates decreased by
US$1,617 per day and US$745 per day, respectively, compared to the same
periods of the prior year. Trinidad's US dollar dayrates lowered in
2014, mainly due to a change in the active rig mix as increasing demand
for Trinidad's lower specification rigs allowed the company to
re-activate this equipment. Additionally, several high dayrate rigs
that received termination revenue in late 2013 and early 2014 were not
fully utilized, lowering the overall average dayrate. On a year-to-date
basis, this was slightly offset by early termination revenues received
for two rigs in the first quarter of 2014.
Operating income and operating income - net percentage declined in each
of the three and six months ended June 30, 2014 . The decline in
revenue, discussed above, was further impacted by increased operating
expenses in each period. During 2014, Trinidad re-activated a number of
rigs in the US land drilling division, which had significant repairs
and maintenance costs for the Company. In addition, Trinidad incurred
costs related to the re-deployment of its Mexican rigs to Canada in the
current period. Trinidad expects that operating income - net percentage
will improve over the coming quarters as re-activation costs lower and
the impact of rig mix is offset by improving industry conditions and
increasing dayrates.
At June 30, 2014 Trinidad's US and international rig count totaled 56
rigs, twelve fewer than at the same time last year. The rig count
lowered in the second quarter as a result of three Mexican rigs moved
to the Company's Canadian drilling operations and two rigs that were no
longer considered competitive removed from the marketed fleet at June
30, 2014 . In addition, the rig count lowered year over year as three
rigs were sold to the joint venture in the first quarter of 2014, and
four lower specification rigs were decommissioned at the end of 2013.
Trinidad's barge drilling rigs continued to generate strong dayrates in
the current year, showing an increase of US$3,522 per day and US$4,529 ,
respectively, in each of the three and six months ended June 30, 2014 .
However, a decline in operating days in the current periods caused
overall revenue generation and profitability to decline. Drilling
projects that were expected to take place in the first half of 2014
were pushed back to later periods due to customer and permit delays,
causing downtime on these rigs in 2014. Utilization began to pick up
towards the end of the second quarter, and Trinidad anticipates that
activity levels will improve in the coming periods.
Second quarter 2014 versus first quarter 2014
Revenue and operating income decreased by $4.3 million and $9.1 million ,
respectively, in the second quarter of 2014 when compared to the first
quarter of 2014. Strengthening industry conditions in the current
quarter led to an increase in operating days; however, this was offset
by lower dayrates. Lower early termination revenues and a change in
the active rig mix in the current quarter were the main factors causing
lower dayrates quarter over quarter. In addition, higher operating
costs as a result of the re-activation and moving of rigs in the
current quarter led to higher operating expenses and lower operating
income - net percentage.
Joint Venture Operations
Amounts are presented at 100% of the value included in the statement of
operations and comprehensive income for Trinidad Drilling International
(TDI); Trinidad owns 60% of the shares of TDI:
|
|
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|
|
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|
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Three months ended June 30,
|
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|
Six months ended June 30,
|
($ thousands except percentage and operating data)
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
% Change
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
% Change
|
Operating revenue
|
|
|
|
|
|
10,137
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|
|
|
|
-
|
|
|
-
|
|
|
|
13,453
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|
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|
|
-
|
|
|
-
|
Other revenue
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
-
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|
|
|
-
|
|
|
|
|
-
|
|
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-
|
|
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10,137
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-
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|
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-
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|
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|
13,453
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|
-
|
|
|
-
|
Operating costs
|
|
|
|
|
|
5,248
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|
|
|
|
-
|
|
|
-
|
|
|
|
7,322
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|
|
|
|
-
|
|
|
-
|
Operating income (1)
|
|
|
|
|
|
4,889
|
|
|
|
|
-
|
|
|
-
|
|
|
|
6,131
|
|
|
|
|
-
|
|
|
-
|
Operating income - net percentage (1)
|
|
|
|
|
|
48.2%
|
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|
|
|
-
|
|
|
|
|
|
|
45.6%
|
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|
|
|
-
|
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|
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Number of drilling rigs at period end
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4
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-
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|
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-
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|
|
|
4
|
|
|
|
|
-
|
|
|
-
|
Number of active drilling rigs at period end
|
|
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|
2
|
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|
|
-
|
|
|
-
|
|
|
|
2
|
|
|
|
|
-
|
|
|
-
|
(1)
|
See Non-GAAP Measures Definition and Additional GAAP Measures Definition
section of this document for further details.
|
During 2013, Trinidad signed a joint venture agreement with Halliburton
with a right of first look at all drilling projects outside of Canada
and the United States . The joint venture currently has operations in
Saudi Arabia , with plans to expand to Mexico by the end of 2014.
Additionally, the joint venture continues to look into future growth
opportunities in other international markets. The joint venture
conducts business under the name Trinidad Drilling International (TDI)
through separately incorporated entities.
Trinidad owns 60% of the shares of TDI, and each of Trinidad and
Halliburton have equal voting rights with respect to the operations of
the company. TDI is accounted for using the equity method of
accounting, whereby Trinidad takes 60% of the net income recorded as
loss (income) from investment in joint venture.
During the six months ended June 30, 2014 , TDI took ownership of three
upgraded rigs purchased from Trinidad's US land drilling division and
one new build rig purchased from Trinidad's manufacturing division. Two
of these rigs were drilling by the end of the period, with the
remaining two rigs expected to begin working in the second half of
2014.
For the three months ended June 30, 2014 , TDI recorded operating income
and operating income - net percentage of $4.9 million and 48.2%,
respectively. Additionally, for the first six months of 2014, TDI
recorded operating income and operating income - net percentage of $6.1
million and 45.6%, respectively. In the second quarter of 2014, TDI
began drilling operations with two rigs recording operating days in the
quarter and also collected standby revenue.
Rig Purchase Commitments
During 2013, TDI agreed to purchase four rigs from Trinidad for
operations in Saudi Arabia , three upgraded rigs from Trinidad's US
drilling division and one new build rig constructed by Trinidad's
manufacturing division. As of June 30, 2014 , TDI has taken ownership of
all three upgraded rigs and the new build rig.
Additionally, early in 2014, TDI agreed to purchase four rigs from
Trinidad's manufacturing division for operations in Mexico . Each of
these rigs will be high performance, 3,600 horsepower, AC, walking
rigs, operating under three-year, take-or-pay contracts with an
optional one year extension. These rigs are expected to be delivered
towards the end of 2014 and early 2015.
Manufacturing Operations
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|
Three months ended June 30,
|
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|
Six months ended June 30,
|
($ thousands except percentage and operating data)
|
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2014
|
|
|
2013
|
|
|
% Change
|
|
|
|
2014
|
|
|
2013
|
|
|
% Change
|
Operating revenue (1)
|
|
|
|
|
|
11,119
|
|
|
190
|
|
|
5,752.1
|
|
|
|
22,973
|
|
|
484
|
|
|
4,646.5
|
Other revenue
|
|
|
|
|
|
5
|
|
|
-
|
|
|
-
|
|
|
|
13
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
11,124
|
|
|
190
|
|
|
5,754.7
|
|
|
|
22,986
|
|
|
484
|
|
|
4,649.2
|
Operating costs (1)
|
|
|
|
|
|
9,952
|
|
|
651
|
|
|
1,428.7
|
|
|
|
20,788
|
|
|
1,064
|
|
|
1,853.8
|
Operating income (2)
|
|
|
|
|
|
1,172
|
|
|
(461)
|
|
|
354.2
|
|
|
|
2,198
|
|
|
(580)
|
|
|
479.0
|
Operating income - net percentage (2)
|
|
|
|
|
|
10.5%
|
|
|
(242.6%)
|
|
|
|
|
|
|
9.6%
|
|
|
(119.8%)
|
|
|
|
|
|
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|
|
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|
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|
(1)
|
For the three months ended June 30, 2014, included in operating revenue
and operating costs are downstream elimination
entries of $9.1 million and $8.3 million, respectively (2013, nil and
nil, respectively). For the six months ended June 30, 2014,
included in operating revenue and operating costs are downstream
elimination entries of $16.8 million and $15.2 million,
respectively (2013, nil and nil, respectively). These entries remove
Trinidad's percentage of profits related to manufacturing
of rigs for the joint venture.
|
(2)
|
See Non-GAAP Measures Definition and Additional GAAP Measures Definition
section of this document for further details
|
Effective January 1, 2014 , Trinidad reviewed all existing operating
segments in order to better present the Company's operations based on
geographic location, services provided and any material changes to
operations. In the prior year, Trinidad's manufacturing operations
mainly performed work internally; therefore, the prior year operating
income includes a loss based on costs incurred by the manufacturing
division mainly related to raw materials consumed during construction
of rigs for internal use. Towards the end of 2013 and early 2014,
Trinidad's manufacturing division signed contracts to build rigs for
external parties, including the Company's joint venture partner and the
joint venture company.
As the manufacturing operations begins to record operating revenues and
costs, management believes that presenting this division as a separate
operating segment from the Company's drilling operations is more useful
to users of the financial statements, as it will provide a more
accurate representation of the margins recorded on Trinidad's drilling
operations. Prior period segmented information has been reclassified to
conform to the current period's presentation.
The purpose of the manufacturing operations is to support rig builds,
rig maintenance and re-certifications for all of Trinidad's divisions,
including all associates and joint ventures. Therefore, management does
not commit to building a rig with the intention to earn significant
profits from this business. All contracts are based on a cost plus
formula which is calculated in order for Trinidad to break even on rig
builds when all costs, including general and administrative expenses,
are factored in. Contracts are negotiated depending on the Company's
varying involvement, which can range from full scale design and
manufacturing to project management with a large degree of outsourcing.
Towards the end of 2013 and into 2014, Trinidad signed five new build
contracts; one rig for the joint venture to operate in Saudi Arabia and
four rigs for the joint venture to operate in Mexico . Additionally,
Trinidad has agreed to build a training rig for its joint venture
partner. For the period ended June 30, 2014 , Trinidad recognized
revenues and expenses related to the Saudi rig build and the training
rig, compared to no external new build revenues or expenses recognized
in 2013.
Additionally, as of June 30, 2014 , Trinidad is still early in the
construction phase of the four Mexico rigs. Long-lead items have been
ordered and some inventory has arrived, but assembly has not occurred
as yet. Therefore, there is no related revenue or expenses included in
Trinidad's operating income related to the construction of these rigs.
During the second quarter of 2014, Trinidad's manufacturing operations
delivered the new Saudi rig to the joint venture. The training rig is
expected to be delivered towards the end of 2014 and delivery of the
four Mexico rigs are expected towards the end of 2014 and early 2015.
FINANCIAL HIGHLIGHTS - QUARTERLY ANALYSIS
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2014
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2013
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|
2012
|
($ millions except per share data and operating data)
|
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Q2
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Q1
|
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Q4
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Q3
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Q2
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Q1
|
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Q4
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|
|
Q3
|
Revenue
|
|
|
|
|
168.9
|
|
|
251.5
|
|
|
224.6
|
|
|
208.7
|
|
|
165.4
|
|
|
247.2
|
|
|
209.6
|
|
|
215.1
|
Operating income (1)
|
|
|
|
|
45.6
|
|
|
95.2
|
|
|
99.6
|
|
|
76.2
|
|
|
55.7
|
|
|
98.4
|
|
|
77.8
|
|
|
80.6
|
Operating income percentage (1)
|
|
|
|
|
27.0%
|
|
|
37.8%
|
|
|
44.4%
|
|
|
36.5%
|
|
|
33.6%
|
|
|
39.8%
|
|
|
37.1%
|
|
|
37.5%
|
Operating income - net percentage (1)
|
|
|
|
|
28.3%
|
|
|
41.1%
|
|
|
47.0%
|
|
|
38.5%
|
|
|
35.6%
|
|
|
43.3%
|
|
|
39.7%
|
|
|
40.0%
|
Net (loss) earnings
|
|
|
|
|
(24.8)
|
|
|
25.8
|
|
|
28.8
|
|
|
9.2
|
|
|
0.3
|
|
|
32.7
|
|
|
(12.4)
|
|
|
20.0
|
Adjustments for:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
27.4
|
|
|
30.2
|
|
|
29.5
|
|
|
30.1
|
|
|
27.6
|
|
|
29.9
|
|
|
29.2
|
|
|
30.4
|
Foreign exchange
|
|
|
|
|
1.6
|
|
|
3.1
|
|
|
0.9
|
|
|
0.4
|
|
|
-
|
|
|
-
|
|
|
(1.4)
|
|
|
0.8
|
(Gain) loss on sale of property and equipment
|
|
|
|
|
(1.3)
|
|
|
(10.5)
|
|
|
0.1
|
|
|
(0.1)
|
|
|
1.3
|
|
|
-
|
|
|
(11.5)
|
|
|
-
|
Impairment of property and equipment
|
|
|
|
|
20.6
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.1
|
|
|
-
|
|
|
70.1
|
|
|
1.3
|
(Income) loss from investment in Joint Venture
|
|
|
|
|
(0.4)
|
|
|
0.1
|
|
|
0.8
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Finance costs
|
|
|
|
|
10.0
|
|
|
10.0
|
|
|
12.0
|
|
|
10.4
|
|
|
10.0
|
|
|
10.0
|
|
|
10.1
|
|
|
10.3
|
Income taxes
|
|
|
|
|
(7.2)
|
|
|
15.3
|
|
|
11.1
|
|
|
5.9
|
|
|
(1.6)
|
|
|
9.4
|
|
|
(22.2)
|
|
|
2.7
|
Interest Income
|
|
|
|
|
(0.1)
|
|
|
(0.2)
|
|
|
(0.1)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Other
|
|
|
|
|
5.3
|
|
|
5.6
|
|
|
1.5
|
|
|
5.9
|
|
|
2.2
|
|
|
2.8
|
|
|
1.4
|
|
|
2.9
|
Income taxes paid
|
|
|
|
|
(0.7)
|
|
|
(0.4)
|
|
|
(1.8)
|
|
|
-
|
|
|
(0.8)
|
|
|
(1.3)
|
|
|
(2.0)
|
|
|
(1.1)
|
Income taxes recovered
|
|
|
|
|
0.2
|
|
|
0.3
|
|
|
1.5
|
|
|
0.4
|
|
|
0.7
|
|
|
-
|
|
|
0.7
|
|
|
3.9
|
Interest paid
|
|
|
|
|
(0.5)
|
|
|
(18.6)
|
|
|
(1.1)
|
|
|
(18.4)
|
|
|
(0.7)
|
|
|
(18.6)
|
|
|
(1.1)
|
|
|
(19.5)
|
Interest received
|
|
|
|
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Funds provided by operations (1)
|
|
|
|
|
30.2
|
|
|
60.9
|
|
|
83.3
|
|
|
43.8
|
|
|
39.1
|
|
|
64.9
|
|
|
60.9
|
|
|
51.7
|
Net (loss) earnings per share (diluted)
|
|
|
|
|
(0.18)
|
|
|
0.19
|
|
|
0.23
|
|
|
0.08
|
|
|
0.00
|
|
|
0.27
|
|
|
(0.10)
|
|
|
0.17
|
Funds provided by operations per share (diluted)
|
|
|
|
|
0.22
|
|
|
0.44
|
|
|
0.67
|
|
|
0.36
|
|
|
0.32
|
|
|
0.54
|
|
|
0.50
|
|
|
0.43
|
(1)
|
See the Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section of this document for further details.
|
NON-GAAP MEASURES HIGHLIGHTS - QUARTERLY ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
($ thousands except per share data and operating data)
|
|
|
|
|
Q2
|
|
|
Q1
|
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
|
|
Q4
|
|
|
Q3
|
EBITDA (1)
|
|
|
|
|
5,445
|
|
|
81,255
|
|
|
81,246
|
|
|
55,635
|
|
|
36,326
|
|
|
82,014
|
|
|
4,825
|
|
|
63,398
|
Per share (diluted) (2)
|
|
|
|
|
0.04
|
|
|
0.58
|
|
|
0.65
|
|
|
0.46
|
|
|
0.30
|
|
|
0.68
|
|
|
0.04
|
|
|
0.52
|
Adjusted EBITDA (1)
|
|
|
|
|
30,644
|
|
|
79,441
|
|
|
83,830
|
|
|
61,838
|
|
|
39,941
|
|
|
84,836
|
|
|
63,332
|
|
|
68,387
|
Per share (diluted) (2)
|
|
|
|
|
0.22
|
|
|
0.57
|
|
|
0.68
|
|
|
0.51
|
|
|
0.33
|
|
|
0.70
|
|
|
0.52
|
|
|
0.57
|
Adjusted net (loss) earnings (1)
|
|
|
|
|
(5,557)
|
|
|
27,746
|
|
|
31,266
|
|
|
15,406
|
|
|
3,460
|
|
|
35,573
|
|
|
23,112
|
|
|
24,626
|
Per share (diluted) (2)
|
|
|
|
|
(0.04)
|
|
|
0.20
|
|
|
0.25
|
|
|
0.13
|
|
|
0.03
|
|
|
0.29
|
|
|
0.19
|
|
|
0.20
|
(1)
|
See the Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section of this document for further details.
|
(2)
|
Diluted shares include the weighted average number of shares outstanding
over the period and the dilutive impact, if any, of the number
of shares issuable pursuant to the Incentive Option Plan.
|
OPERATING HIGHLIGHTS - QUARTERLY ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Q2
|
|
|
Q1
|
|
|
Q4
|
|
|
Q3
|
|
|
Q2
|
|
|
Q1
|
|
|
Q4
|
|
|
Q3
|
Land Drilling Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating days (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
|
|
1,430
|
|
|
4,077
|
|
|
2,935
|
|
|
3,018
|
|
|
1,434
|
|
|
4,198
|
|
|
2,915
|
|
|
3,233
|
|
United States and International
|
|
|
|
4,441
|
|
|
4,311
|
|
|
4,470
|
|
|
4,733
|
|
|
4,578
|
|
|
4,453
|
|
|
4,789
|
|
|
5,038
|
Rate per operating day (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada (CDN$)
|
|
|
|
26,338
|
|
|
25,415
|
|
|
25,102
|
|
|
23,686
|
|
|
25,511
|
|
|
25,401
|
|
|
26,190
|
|
|
23,501
|
|
United States and International (CDN$)
|
|
|
|
22,890
|
|
|
24,630
|
|
|
27,243
|
|
|
23,297
|
|
|
22,908
|
|
|
22,416
|
|
|
22,305
|
|
|
22,518
|
|
United States and International (US$)
|
|
|
|
20,819
|
|
|
22,641
|
|
|
26,213
|
|
|
22,460
|
|
|
22,436
|
|
|
22,487
|
|
|
22,589
|
|
|
22,263
|
Utilization rate - operating day (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
|
|
26%
|
|
|
74%
|
|
|
52%
|
|
|
54%
|
|
|
26%
|
|
|
79%
|
|
|
56%
|
|
|
62%
|
|
United States and International
|
|
|
|
80%
|
|
|
76%
|
|
|
71%
|
|
|
76%
|
|
|
73%
|
|
|
72%
|
|
|
77%
|
|
|
81%
|
Number of drilling rigs at period end (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
|
|
59
|
|
|
61
|
|
|
61
|
|
|
61
|
|
|
60
|
|
|
60
|
|
|
59
|
|
|
57
|
|
United States and International
|
|
|
|
56
|
|
|
61
|
|
|
64
|
|
|
68
|
|
|
68
|
|
|
68
|
|
|
68
|
|
|
68
|
|
Coring and surface casing rigs
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
15
|
|
|
15
|
|
|
15
|
|
|
20
|
Joint Venture Operations (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of drilling rigs at period end
|
|
|
|
4
|
|
|
3
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Barge Drilling Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating days (1)
|
|
|
|
259
|
|
|
244
|
|
|
394
|
|
|
449
|
|
|
445
|
|
|
415
|
|
|
386
|
|
|
376
|
|
Rate per operating day (CDN$) (1)
|
|
|
|
37,953
|
|
|
37,815
|
|
|
34,810
|
|
|
33,962
|
|
|
31,731
|
|
|
29,097
|
|
|
29,954
|
|
|
30,008
|
|
Rate per operating day (US$) (1)
|
|
|
|
34,599
|
|
|
34,767
|
|
|
33,490
|
|
|
32,740
|
|
|
31,077
|
|
|
29,158
|
|
|
30,330
|
|
|
29,583
|
|
Utilization rate - operating day (1)
|
|
|
|
57%
|
|
|
54%
|
|
|
86%
|
|
|
97%
|
|
|
98%
|
|
|
92%
|
|
|
84%
|
|
|
82%
|
|
Number of barge drilling rigs at period end
|
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
Number of barge drilling rigs under
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bareboat Charter at period end
|
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
See Non-GAAP Measures Definition and Additional GAAP Measures Definition
section of this document for further details
|
(2)
|
Trinidad is party to a joint venture with a wholly-owned subsidiary of
Halliburton. During the first quarter of 2014, 3 rigs were
sold to the joint venture by Trinidad's US and international operations.
During the second quarter of 2014, 1 rig was sold to
the joint venture by Trinidad's manufacturing division. Effective June
30, 2014, these rigs are owned by the joint venture.
|
(3)
|
Refer to the Results from Operations section for details on changes to
the rig count.
|
FINANCIAL SUMMARY
Trinidad's total long-term debt balance increased by $2.5 million during
the current year when compared to December 31, 2013 . This slight
increase was due to the increase in the Senior Notes at June 30, 2014 ,
and is entirely a result of the increase in the US to Canadian dollar
exchange rate in 2014 versus the prior year as these notes are held in
US funds. The Senior Notes are translated at each period end, as such
their value will fluctuate with variations in exchange rates. The
Senior Notes are due January 2019 and interest is payable semi-annually
in arrears on January 15 and July 15 .
As at June 30, 2014 and December 31, 2013 , Trinidad's revolving debt
facilities were completely paid off, leaving $200.0 million and
US$100.0 million unutilized in these facilities, respectively. The
Company continues to consider future capital commitments, and as such,
the unutilized facilities are expected to be used in the future course
of business. The Canadian and US revolving facilities require quarterly
interest payments that are based on Bankers Acceptance and LIBOR rates
and incorporate a tiered interest rate, which varies depending on the
results of the Consolidated Total Debt to EBITDA ratio. The facility
matures on December 16, 2017 , and is subject to annual extensions of an
additional year on each anniversary.
Capital expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30,
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
New Builds
|
|
|
|
|
|
|
|
|
|
|
55,988
|
|
|
|
16,890
|
Capital Upgrades & Enhancements
|
|
|
|
|
|
|
|
|
|
|
24,397
|
|
|
|
8,569
|
Maintenance & Infrastructure
|
|
|
|
|
|
|
|
|
|
|
22,408
|
|
|
|
7,369
|
Total
|
|
|
|
|
|
|
|
|
|
|
102,793
|
|
|
|
32,828
|
During the six months ended June 30, 2014 , a total of $102.8 million was
spent on capital expenditures, compared to $32.8 million at June 30,
2013 . These capital expenditures were substantially related to work on
upgrading existing equipment including moving systems, top drives and
mud systems, to ensure the Company's rigs remain competitive in the
current market. Additionally, these costs would include work performed
to upgrade the three US land drilling rigs that were sold to Trinidad's
joint venture for operations in Saudi Arabia . Lastly, costs were
incurred as progress was made on the Company's internal rig build to be
delivered to the Canadian operations.
In 2014, Trinidad expects to spend a total of approximately $315.0
million on capital projects. This total includes Trinidad's internal
capital projects, Trinidad's portion of the joint venture capital
projects, and takes into account proceeds received for existing rigs
sold into the joint venture. Trinidad's capital budget is further
broken down as follows:
-
Completion of one new rig to be delivered to Trinidad's Canadian
operations for LNG-related drilling;
-
Completion of one new rig and the upgrading of three existing rigs to
be delivered to Saudi Arabia for the joint venture arrangement;
-
Construction of four new rigs to be delivered to Mexico for the joint
venture arrangement in late 2014 or early 2015;
-
Upgrades to improve the efficiency and marketability of more than 30
existing rigs; and
-
Maintenance and infrastructure capital.
Excluding proceeds received from the sale of rigs into the joint
venture, in the second quarter and year-to-date 2014, Trinidad spent
$79.9 million and $118.0 million , respectively, on internal capital
projects and its portion of the joint venture projects. Costs related
to the joint venture rig build projects are accounted for as operating
expenses in Trinidad's manufacturing operations.
As of June 30, 2014 , the three upgraded rigs and the new build rig were
delivered to the joint venture for operations in Saudi Arabia . Two of
the upgraded rigs began operations in the current quarter, with the
remaining upgraded rig and new build rig expected to begin in the
second half of 2014.
OUTLOOK
Conditions in the North American drilling industry have been steadily
improving throughout 2014. Stable commodity prices have led to strong
demand with activity continuing to be largely focused on oil or
liquids-rich targets. Increasing demand for high performance equipment,
such as Trinidad's , is driving higher activity levels and improved
dayrates for this style of rig.
Industry activity levels have increased over the previous year in both
the Canadian and US markets and Trinidad anticipates that these
conditions will continue through the remainder of 2014 and into 2015.
The number of rigs under long-term, take-or-pay contracts has increased
to represent approximately 45.0% of the Company's fleet with an average
term remaining of approximately 1.6 years.
Operations in the Company's international joint venture are progressing
as expected, with all eight rigs expected to be operational in late
2014 or early 2015. Halliburton continues to present opportunities to
the joint venture as they arise and Trinidad anticipates growing its
international presence in the coming quarters.
Trinidad's capital program for 2014 remains at $315.0 million , including
the Company's portion of capital for the joint venture. Increasing
demand for high performance equipment, particularly in the US and
international markets, is driving a growing number of requests for
additional equipment from Trinidad's customers. The Company is
reviewing these growth opportunities, carefully evaluating contract
terms, capital returns, cash flow requirements and areas of strategic
growth before selecting those, if any, to pursue.
The Company expects that re-activation costs are largely complete in the
US division. Although Trinidad will continue to review its active rig
fleet and upgrade rigs to remain competitive, strong industry
conditions across its operations should continue throughout 2014, and
Trinidad expects to perform well for the remainder of the year.
CONFERENCE CALL
A conference call and webcast to discuss the results will be held for
the investment community on Thursday August 7 th, 2014 beginning at 9:00 a.m. MT (11:00 a.m. ET). To participate,
please dial (888) 231-8191 (toll-free in North America ) or (647)
427-7450 approximately 10 minutes prior to the conference call. An
archived recording of the call will be available from approximately
12:30 p.m. MT on August 7 th, 2014 until 10:00 p.m. MT August 14 th, 2014 by dialing (855) 859-2056 or (416) 849-0833 and entering replay
access code 70477681.
A live audio webcast of the conference call will also be available via
the Investor Relations page of Trinidad's website.
TRINIDAD DRILLING LTD.
Trinidad is a corporation focused on sustainable growth that trades on
the Toronto Stock Exchange under the symbol TDG. Trinidad's divisions
operate in the drilling and barge-drilling sectors of the North
American oil and natural gas industry with operations in Canada and the
United States . In addition, through a joint venture agreement signed in
the previous year, Trinidad began operating drilling rigs in Saudi
Arabia , expects to begin operations in Mexico by the end of 2014, and
is currently looking into operations in other international markets.
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.
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
($ thousands) - unaudited
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
263,952
|
|
|
268,160
|
Accounts receivable
|
|
|
|
|
|
144,558
|
|
|
166,557
|
Inventory
|
|
|
|
|
|
37,251
|
|
|
8,474
|
Prepaid expenses
|
|
|
|
|
|
30,893
|
|
|
5,557
|
Assets held for sale
|
|
|
|
|
|
5,870
|
|
|
3,685
|
|
|
|
|
|
|
482,524
|
|
|
452,433
|
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
|
|
|
1,196,860
|
|
|
1,275,465
|
Intangible assets and goodwill
|
|
|
|
|
|
91,887
|
|
|
91,729
|
Investment in joint venture
|
|
|
|
|
|
105,132
|
|
|
7,869
|
|
|
|
|
|
|
1,876,403
|
|
|
1,827,496
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
121,424
|
|
|
110,455
|
Dividends payable
|
|
|
|
|
|
6,910
|
|
|
6,906
|
Deferred revenue and customer deposits
|
|
|
|
|
|
74,254
|
|
|
31,952
|
|
|
|
|
|
|
202,588
|
|
|
149,313
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
|
471,123
|
|
|
468,670
|
Deferred income taxes
|
|
|
|
|
|
99,326
|
|
|
95,425
|
|
|
|
|
|
|
773,037
|
|
|
713,408
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Common shares
|
|
|
|
|
|
1,118,004
|
|
|
1,117,197
|
Contributed surplus
|
|
|
|
|
|
50,693
|
|
|
50,607
|
Accumulated other comprehensive income
|
|
|
|
|
|
5,660
|
|
|
4,404
|
Deficit
|
|
|
|
|
|
(70,991)
|
|
|
(58,120)
|
|
|
|
|
|
|
1,103,366
|
|
|
1,114,088
|
|
|
|
|
|
|
1,876,403
|
|
|
1,827,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
|
|
|
|
|
|
Three months ended
|
|
|
|
Six months ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
June 30,
|
($ thousands) - unaudited
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oilfield service revenue
|
|
|
|
|
|
168,146
|
|
|
|
165,410
|
|
|
|
418,593
|
|
|
|
412,530
|
Other revenue
|
|
|
|
|
|
799
|
|
|
|
37
|
|
|
|
1,857
|
|
|
|
103
|
|
|
|
|
|
|
168,945
|
|
|
|
165,447
|
|
|
|
420,450
|
|
|
|
412,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense
|
|
|
|
|
|
123,340
|
|
|
|
109,796
|
|
|
|
279,653
|
|
|
|
258,623
|
General and administrative
|
|
|
|
|
|
19,584
|
|
|
|
17,884
|
|
|
|
40,775
|
|
|
|
34,198
|
Depreciation and amortization
|
|
|
|
|
|
27,430
|
|
|
|
27,602
|
|
|
|
57,685
|
|
|
|
57,461
|
Foreign exchange
|
|
|
|
|
|
1,635
|
|
|
|
(21)
|
|
|
|
4,789
|
|
|
|
(26)
|
(Gain) loss on sale of property and equipment
|
|
|
|
|
|
(1,270)
|
|
|
|
1,331
|
|
|
|
(11,809)
|
|
|
|
1,367
|
Impairment of property and equipment
|
|
|
|
|
|
20,630
|
|
|
|
131
|
|
|
|
20,630
|
|
|
|
131
|
|
|
|
|
|
|
191,349
|
|
|
|
156,723
|
|
|
|
391,723
|
|
|
|
351,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from investment in joint venture
|
|
|
|
|
|
(419)
|
|
|
|
-
|
|
|
|
(288)
|
|
|
|
-
|
Finance costs
|
|
|
|
|
|
10,049
|
|
|
|
9,989
|
|
|
|
20,008
|
|
|
|
19,959
|
Earnings before income taxes
|
|
|
|
|
|
(32,034)
|
|
|
|
(1,265)
|
|
|
|
9,007
|
|
|
|
40,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
3,605
|
|
|
|
192
|
|
|
|
3,895
|
|
|
|
1,263
|
Deferred
|
|
|
|
|
|
(10,824)
|
|
|
|
(1,804)
|
|
|
|
4,165
|
|
|
|
6,562
|
|
|
|
|
|
|
(7,219)
|
|
|
|
(1,612)
|
|
|
|
8,060
|
|
|
|
7,825
|
Net (loss) earnings
|
|
|
|
|
|
(24,815)
|
|
|
|
347
|
|
|
|
947
|
|
|
|
33,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of income tax
|
|
|
|
|
|
(23,587)
|
|
|
|
10,022
|
|
|
|
1,256
|
|
|
|
16,705
|
|
|
|
|
|
|
(23,587)
|
|
|
|
10,022
|
|
|
|
1,256
|
|
|
|
16,705
|
Total comprehensive (loss) income
|
|
|
|
|
|
(48,402)
|
|
|
|
10,369
|
|
|
|
2,203
|
|
|
|
49,800
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic / Diluted
|
|
|
|
|
|
(0.18)
|
|
|
|
0.00
|
|
|
|
0.01
|
|
|
|
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
For six months ended June 30, 2014 and 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
other
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Contributed
|
|
|
comprehensive
|
|
|
|
|
|
Total
|
($ thousands) - unaudited
|
|
|
shares
|
|
|
surplus
|
|
|
income (1)
|
|
|
(Deficit)
|
|
|
equity
|
Balance at December 31, 2013
|
|
|
1,117,197
|
|
|
50,607
|
|
|
4,404
|
|
|
(58,120)
|
|
|
1,114,088
|
Exercise of stock options
|
|
|
807
|
|
|
(215)
|
|
|
-
|
|
|
-
|
|
|
592
|
Share-based payment expense
|
|
|
-
|
|
|
301
|
|
|
-
|
|
|
-
|
|
|
301
|
Total comprehensive income
|
|
|
-
|
|
|
-
|
|
|
1,256
|
|
|
947
|
|
|
2,203
|
Dividends
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(13,818)
|
|
|
(13,818)
|
Balance at June 30, 2014
|
|
|
1,118,004
|
|
|
50,693
|
|
|
5,660
|
|
|
(70,991)
|
|
|
1,103,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012
|
|
|
952,043
|
|
|
50,245
|
|
|
(34,403)
|
|
|
(104,036)
|
|
|
863,849
|
Share-based payment expense
|
|
|
-
|
|
|
259
|
|
|
-
|
|
|
-
|
|
|
259
|
Total comprehensive income
|
|
|
-
|
|
|
-
|
|
|
16,705
|
|
|
33,095
|
|
|
49,800
|
Dividends
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(12,086)
|
|
|
(12,086)
|
Balance at June 30, 2013
|
|
|
952,043
|
|
|
50,504
|
|
|
(17,698)
|
|
|
(83,027)
|
|
|
901,822
|
(1)
|
Accumulated other comprehensive income (loss) consisted of the foreign
currency translation adjustment.
|
|
All amounts will be reclassified to profit or loss when specific
conditions are met.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For six months ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ thousands) - unaudited
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by (used in)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
|
|
|
|
|
947
|
|
|
|
33,095
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
57,685
|
|
|
|
57,461
|
|
Foreign exchange
|
|
|
|
|
|
|
|
|
4,789
|
|
|
|
(26)
|
|
(Gain) loss on sale of property and equipment
|
|
|
|
|
|
|
|
|
(11,809)
|
|
|
|
1,367
|
|
Impairment of property and equipment
|
|
|
|
|
|
|
|
|
20,630
|
|
|
|
131
|
|
Income from investment in joint venture
|
|
|
|
|
|
|
|
|
(288)
|
|
|
|
-
|
|
Finance costs
|
|
|
|
|
|
|
|
|
20,008
|
|
|
|
19,959
|
|
Income taxes
|
|
|
|
|
|
|
|
|
8,060
|
|
|
|
7,825
|
|
Interest income
|
|
|
|
|
|
|
|
|
(326)
|
|
|
|
(19)
|
|
Other (1)
|
|
|
|
|
|
|
|
|
10,854
|
|
|
|
4,965
|
|
Income taxes paid
|
|
|
|
|
|
|
|
|
(1,105)
|
|
|
|
(2,121)
|
|
Income taxes recovered
|
|
|
|
|
|
|
|
|
490
|
|
|
|
663
|
|
Interest paid
|
|
|
|
|
|
|
|
|
(19,119)
|
|
|
|
(19,252)
|
|
Interest received
|
|
|
|
|
|
|
|
|
326
|
|
|
|
19
|
Funds provided by operations
|
|
|
|
|
|
|
|
|
91,142
|
|
|
|
104,067
|
Change in non-cash operating working capital
|
|
|
|
|
|
|
|
|
(623)
|
|
|
|
26,280
|
Cash provided by operations
|
|
|
|
|
|
|
|
|
90,519
|
|
|
|
130,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
|
|
|
|
|
(102,793)
|
|
|
|
(32,828)
|
Proceeds from disposition of property and equipment
|
|
|
|
|
|
|
|
|
128,782
|
|
|
|
863
|
Investment in joint venture
|
|
|
|
|
|
|
|
|
(119,691)
|
|
|
|
-
|
Change in non-cash working capital
|
|
|
|
|
|
|
|
|
13,473
|
|
|
|
5,432
|
Cash used by investing
|
|
|
|
|
|
|
|
|
(80,229)
|
|
|
|
(26,533)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
|
|
|
|
|
-
|
|
|
|
26,257
|
Repayments of long-term debt
|
|
|
|
|
|
|
|
|
-
|
|
|
|
(96,870)
|
Proceeds from exercise of options
|
|
|
|
|
|
|
|
|
592
|
|
|
|
-
|
Dividends paid
|
|
|
|
|
|
|
|
|
(13,814)
|
|
|
|
(12,086)
|
Cash used by financing
|
|
|
|
|
|
|
|
|
(13,222)
|
|
|
|
(82,699)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operating, investing and financing activities
|
|
|
|
|
|
|
|
|
(2,932)
|
|
|
|
21,115
|
Effect of translation of foreign currency cash
|
|
|
|
|
|
|
|
|
(1,276)
|
|
|
|
1,109
|
(Decrease) increase in cash for the period
|
|
|
|
|
|
|
|
|
(4,208)
|
|
|
|
22,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - beginning of period
|
|
|
|
|
|
|
|
|
268,160
|
|
|
|
4,933
|
Cash and cash equivalents - end of period
|
|
|
|
|
|
|
|
|
263,952
|
|
|
|
27,157
|
(1)
|
Other includes share-based payment expense and the elimination of
downstream
transactions included in net earnings in the Manufacturing Operations.
|
SEGMENTED INFORMATION
The following presents the result of Trinidad's operating segments:
For three months ended
|
|
|
|
|
|
|
United States /
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2014
|
|
|
|
Canadian
|
|
|
International
|
|
|
Manufacturing
|
|
|
Joint Venture
|
|
|
Inter-segment
|
|
|
|
|
|
|
($ thousands)
|
|
|
|
Operations
|
|
|
Operations
|
|
|
Operations
|
|
|
Operations (1)
|
|
|
Eliminations
|
|
|
Corporate
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
|
|
37,681
|
|
|
110,414
|
|
|
20,248
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
168,343
|
Other revenue
|
|
|
|
358
|
|
|
67
|
|
|
5
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
430
|
Third party recovery
|
|
|
|
4,930
|
|
|
4,002
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
8,932
|
General and administrative - third party recovery
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
369
|
|
|
369
|
Inter-segment revenue
|
|
|
|
-
|
|
|
-
|
|
|
11,759
|
|
|
-
|
|
|
(11,759)
|
|
|
-
|
|
|
-
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
(9,129)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(9,129)
|
|
|
|
|
42,969
|
|
|
114,483
|
|
|
22,883
|
|
|
-
|
|
|
(11,759)
|
|
|
369
|
|
|
168,945
|
Operating costs
|
|
|
|
28,724
|
|
|
75,732
|
|
|
18,252
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
122,708
|
Third party costs
|
|
|
|
4,930
|
|
|
4,002
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
8,932
|
Inter-segment operating
|
|
|
|
-
|
|
|
-
|
|
|
11,759
|
|
|
-
|
|
|
(11,759)
|
|
|
-
|
|
|
-
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
(8,300)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(8,300)
|
Operating income
|
|
|
|
9,315
|
|
|
34,749
|
|
|
1,172
|
|
|
-
|
|
|
-
|
|
|
369
|
|
|
45,605
|
Depreciation and amortization
|
|
|
|
8,101
|
|
|
18,947
|
|
|
382
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
27,430
|
Loss (gain) on sale of assets
|
|
|
|
55
|
|
|
(4,073)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4,018)
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
2,748
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,748
|
Impairment of capital assets
|
|
|
|
13,367
|
|
|
7,263
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
20,630
|
|
|
|
|
21,523
|
|
|
24,885
|
|
|
382
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
46,790
|
Segmented income (loss)
|
|
|
|
(12,208)
|
|
|
9,864
|
|
|
790
|
|
|
-
|
|
|
-
|
|
|
369
|
|
|
(1,185)
|
Income from investment in joint venture
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(419)
|
|
|
-
|
|
|
-
|
|
|
(419)
|
General and administrative
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
19,215
|
|
|
19,215
|
General and administrative - third party costs
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
369
|
|
|
369
|
Foreign exchange
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,635
|
|
|
1,635
|
Finance costs
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
10,049
|
|
|
10,049
|
Income taxes
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(7,219)
|
|
|
(7,219)
|
Net earnings (loss)
|
|
|
|
(12,208)
|
|
|
9,864
|
|
|
790
|
|
|
419
|
|
|
-
|
|
|
(23,680)
|
|
|
(24,815)
|
Purchase of property and equipment
|
|
|
|
19,992
|
|
|
51,496
|
|
|
100
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
71,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For three months ended
|
|
|
|
|
|
|
United States /
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
|
Canadian
|
|
|
International
|
|
|
Manufacturing
|
|
|
Joint Venture
|
|
|
Inter-segment
|
|
|
|
|
|
|
($ thousands)
|
|
|
|
Operations
|
|
|
Operations
|
|
|
Operations
|
|
|
Operations (1)
|
|
|
Eliminations
|
|
|
Corporate
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
|
|
37,110
|
|
|
118,834
|
|
|
190
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
156,134
|
Other revenue
|
|
|
|
13
|
|
|
24
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
37
|
Third party recovery
|
|
|
|
4,087
|
|
|
5,189
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
9,276
|
General and administrative - third party recovery
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Inter-segment revenue
|
|
|
|
-
|
|
|
-
|
|
|
9,012
|
|
|
-
|
|
|
(9,012)
|
|
|
-
|
|
|
-
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
41,210
|
|
|
124,047
|
|
|
9,202
|
|
|
-
|
|
|
(9,012)
|
|
|
-
|
|
|
165,447
|
Operating costs
|
|
|
|
28,783
|
|
|
71,086
|
|
|
651
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
100,520
|
Third party costs
|
|
|
|
4,087
|
|
|
5,189
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
9,276
|
Inter-segment operating
|
|
|
|
-
|
|
|
-
|
|
|
(9,012)
|
|
|
-
|
|
|
9,012
|
|
|
-
|
|
|
-
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Operating income
|
|
|
|
8,340
|
|
|
47,772
|
|
|
(461)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
55,651
|
Depreciation and amortization
|
|
|
|
7,710
|
|
|
19,405
|
|
|
487
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
27,602
|
Loss (gain) on sale of assets
|
|
|
|
94
|
|
|
1,241
|
|
|
(4)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,331
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Impairment of capital assets
|
|
|
|
131
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
131
|
|
|
|
|
7,935
|
|
|
20,646
|
|
|
483
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
29,064
|
Segmented income (loss)
|
|
|
|
405
|
|
|
27,126
|
|
|
(944)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
26,587
|
Income from investment in joint venture
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
General and administrative
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
17,884
|
|
|
17,884
|
General and administrative - third party costs
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Foreign exchange
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(21)
|
|
|
(21)
|
Finance costs
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
9,989
|
|
|
9,989
|
Income taxes
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,612)
|
|
|
(1,612)
|
Net earnings (loss)
|
|
|
|
405
|
|
|
27,126
|
|
|
(944)
|
|
|
-
|
|
|
-
|
|
|
(26,240)
|
|
|
347
|
Purchase of property and equipment
|
|
|
|
10,209
|
|
|
5,152
|
|
|
130
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
15,491
|
(1)
|
The joint venture is recorded using the equity method of accounting. The
Company's share of individual assets and liabilities are recognized as
an investment on the consolidated statements of financial position, and
revenues and expenses are recognized with net earnings as income from
investment in joint venture on the consolidated statements of
operations and comprehensive income. The joint venture was effective
September 3, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For six months ended
|
|
|
|
|
|
|
United States /
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2014
|
|
|
|
Canadian
|
|
|
International
|
|
|
Manufacturing
|
|
|
Joint Venture
|
|
|
Inter-segment
|
|
|
|
|
|
|
($ thousands)
|
|
|
|
Operations
|
|
|
Operations
|
|
|
Operations
|
|
|
Operations (1)
|
|
|
Eliminations
|
|
|
Corporate
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
|
|
141,288
|
|
|
225,195
|
|
|
39,726
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
406,209
|
Other revenue
|
|
|
|
1,080
|
|
|
113
|
|
|
13
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,206
|
Third party recovery
|
|
|
|
19,452
|
|
|
9,685
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
29,137
|
General and administrative - third party recovery
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
651
|
|
|
651
|
Inter-segment revenue
|
|
|
|
-
|
|
|
-
|
|
|
21,672
|
|
|
-
|
|
|
(21,672)
|
|
|
-
|
|
|
-
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
(16,753)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(16,753)
|
|
|
|
|
161,820
|
|
|
234,993
|
|
|
44,658
|
|
|
-
|
|
|
(21,672)
|
|
|
651
|
|
|
420,450
|
Operating costs
|
|
|
|
83,024
|
|
|
146,704
|
|
|
36,018
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
265,746
|
Third party costs
|
|
|
|
19,452
|
|
|
9,685
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
29,137
|
Inter-segment operating
|
|
|
|
-
|
|
|
-
|
|
|
21,672
|
|
|
-
|
|
|
(21,672)
|
|
|
-
|
|
|
-
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
(15,230)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(15,230)
|
Operating income
|
|
|
|
59,344
|
|
|
78,604
|
|
|
2,198
|
|
|
-
|
|
|
-
|
|
|
651
|
|
|
140,797
|
Depreciation and amortization
|
|
|
|
19,961
|
|
|
36,927
|
|
|
797
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
57,685
|
Gain on sale of assets
|
|
|
|
(206)
|
|
|
(29,729)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(29,935)
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
18,126
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
18,126
|
Impairment of capital assets
|
|
|
|
13,367
|
|
|
7,263
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
20,630
|
|
|
|
|
33,122
|
|
|
32,587
|
|
|
797
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
66,506
|
Segmented income (loss)
|
|
|
|
26,222
|
|
|
46,017
|
|
|
1,401
|
|
|
-
|
|
|
-
|
|
|
651
|
|
|
74,291
|
Income from investment in joint venture
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(288)
|
|
|
-
|
|
|
-
|
|
|
(288)
|
General and administrative
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
40,124
|
|
|
40,124
|
General and administrative - third party costs
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
651
|
|
|
651
|
Foreign exchange
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,789
|
|
|
4,789
|
Finance costs
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
20,008
|
|
|
20,008
|
Income taxes
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
8,060
|
|
|
8,060
|
Net earnings (loss)
|
|
|
|
26,222
|
|
|
46,017
|
|
|
1,401
|
|
|
288
|
|
|
-
|
|
|
(72,981)
|
|
|
947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
33,029
|
|
|
69,601
|
|
|
163
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
102,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For six months ended
|
|
|
|
|
|
|
United States /
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2013
|
|
|
|
Canadian
|
|
|
International
|
|
|
Manufacturing
|
|
|
Joint Venture
|
|
|
Inter-segment
|
|
|
|
|
|
|
($ thousands)
|
|
|
|
Operations
|
|
|
Operations
|
|
|
Operations
|
|
|
Operations (1)
|
|
|
Eliminations
|
|
|
Corporate
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
|
|
152,552
|
|
|
230,409
|
|
|
484
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
383,445
|
Other revenue
|
|
|
|
57
|
|
|
46
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
103
|
Third party recovery
|
|
|
|
17,788
|
|
|
11,297
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
29,085
|
General and administrative - third party recovery
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Inter-segment revenue
|
|
|
|
-
|
|
|
-
|
|
|
21,170
|
|
|
-
|
|
|
(21,170)
|
|
|
-
|
|
|
-
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
170,397
|
|
|
241,752
|
|
|
21,654
|
|
|
-
|
|
|
(21,170)
|
|
|
-
|
|
|
412,633
|
Operating costs
|
|
|
|
88,374
|
|
|
140,100
|
|
|
1,064
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
229,538
|
Third party costs
|
|
|
|
17,788
|
|
|
11,297
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
29,085
|
Inter-segment operating
|
|
|
|
-
|
|
|
-
|
|
|
21,170
|
|
|
-
|
|
|
(21,170)
|
|
|
-
|
|
|
-
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Operating income
|
|
|
|
64,235
|
|
|
90,355
|
|
|
(580)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
154,010
|
Depreciation and amortization
|
|
|
|
19,143
|
|
|
37,320
|
|
|
998
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
57,461
|
Loss (gain) on sale of assets
|
|
|
|
235
|
|
|
1,136
|
|
|
(4)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,367
|
Elimination of downstream transactions
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Impairment of capital assets
|
|
|
|
131
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
131
|
|
|
|
|
19,509
|
|
|
38,456
|
|
|
994
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
58,959
|
Segmented income (loss)
|
|
|
|
44,726
|
|
|
51,899
|
|
|
(1,574)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
95,051
|
Income from investment in joint venture
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
General and administrative
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
34,198
|
|
|
34,198
|
General and administrative - third party costs
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Foreign exchange
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(26)
|
|
|
(26)
|
Finance costs
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
19,959
|
|
|
19,959
|
Income taxes
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
7,825
|
|
|
7,825
|
Net earnings (loss)
|
|
|
|
44,726
|
|
|
51,899
|
|
|
(1,574)
|
|
|
-
|
|
|
-
|
|
|
(61,956)
|
|
|
33,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
27,119
|
|
|
5,515
|
|
|
194
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
32,828
|
(1)
|
The joint venture is recorded using the equity method of accounting. The
Company's share of individual assets and liabilities are recognized as
an investment on the consolidated statements of financial position, and
revenues and expenses are recognized with net earnings as income from
investment in joint venture on the consolidated statements of
operations and comprehensive income. The joint venture was effective
September 3, 2013.
|
ADVISORY
NON-GAAP MEASURES DEFINITIONS
This document contains references to certain financial measures and
associated per share data that do not have any standardized meaning
prescribed by IFRS and may not be comparable to similar measures
presented by other companies. These financial measures are computed on
a consistent basis for each reporting period and include EBITDA, EBITDA
from investment in joint venture, Adjusted EBITDA, Adjusted net (loss)
earnings, working capital, Senior Debt to Bank EBITDA, Total Debt to
Bank EBITDA, Bank EBITDA to Cash Interest Expense, drilling days,
operating days, utilization rate - drilling day, utilization rate -
operating day, and rate per operating day or dayrate. These non-GAAP
measures are identified and defined as follows:
"EBITDA" is a measure of the Company's operating profitability. EBITDA provides
an indication of the results generated by the Company's principal
business activities prior to how these activities are financed, assets
are depreciated and amortized or how the results are taxed in various
jurisdictions.
"EBITDA from investment in joint venture" provides an indication of the results generated by the Company's joint
venture operations prior to how these activities are financed, assets
are depreciated and amortized or how the results are taxed in various
jurisdictions.
"Adjusted EBITDA" is used by management and investors to analyze EBITDA (as defined
above) prior to the effect of foreign exchange, share-based payment
expense, impairment expense and the sale of assets. Adjusted EBITDA
also takes into account the Company's portion of the principal
activities of the joint venture arrangement by removing the loss (gain)
from investment in joint venture and including Adjusted EBITDA from
investment in joint venture. Adjusted EBITDA is not intended to
represent net (loss) earnings as calculated in accordance with IFRS.
Adjusted EBITDA provides an indication of the results generated by the
Company's principal business activities prior to how these activities
are financed, assets are depreciated, amortized and impaired, the
impact of foreign exchange, how the results are taxed in various
jurisdictions and effects of share-based payment expense.
Adjusted EBITDA is calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
($ thousands)
|
|
|
|
|
2014
|
2013
|
|
|
2014
|
2013
|
EBITDA
|
|
|
|
|
5,445
|
36,326
|
|
|
86,700
|
118,340
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
(Gain) loss on sale of property and equipment
|
|
|
|
|
(1,270)
|
1,331
|
|
|
(11,809)
|
1,367
|
|
Impairment of property and equipment
|
|
|
|
|
20,630
|
131
|
|
|
20,630
|
131
|
|
Share-based payment expense
|
|
|
|
|
3,756
|
2,174
|
|
|
9,331
|
4,965
|
|
Foreign exchange
|
|
|
|
|
1,635
|
(21)
|
|
|
4,789
|
(26)
|
|
(Income) from investment in joint venture
|
|
|
|
|
(419)
|
-
|
|
|
(288)
|
-
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA from investment in joint venture
|
|
|
|
|
867
|
-
|
|
|
733
|
-
|
Adjusted EBITDA
|
|
|
|
|
30,644
|
39,941
|
|
|
110,086
|
124,777
|
"Adjusted EBITDA from investment in joint venture" is used by management and investors to analyze EBITDA (as defined
above) prior to the effect of foreign exchange, share-based payment
expense, impairment expense and the sale of assets. Adjusted EBITDA
from investment in joint venture is not intended to represent net
(loss) earnings as calculated in accordance with IFRS. Adjusted EBITDA
from investment in joint venture provides an indication of the results
generated by TDI's principal business activities prior to how these
activities are financed, assets are depreciated, amortized and
impaired, the impact of foreign exchange, how the results are taxed in
various jurisdictions and effects of share-based payment expense.
Adjusted EBITDA from investment in joint venture is calculated as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
($ thousands)
|
|
|
|
|
2014
|
2013
|
|
|
2014
|
2013
|
EBITDA from investment in joint venture
|
|
|
|
|
867
|
-
|
|
|
737
|
-
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange
|
|
|
|
|
-
|
-
|
|
|
(4)
|
-
|
Adjusted EBITDA from investment in joint venture
|
|
|
|
|
867
|
-
|
|
|
733
|
-
|
"Adjusted net (loss) earnings" is used by management and the investment community to analyze net
(loss) earnings prior to the effect of foreign exchange, share-based
payment expense, any gains or losses on the sale of assets in the
period and impairment charges, including taking into account the tax
effects of these items. This measure is not intended to represent net
(loss) earnings as calculated in accordance with IFRS. Adjusted net
(loss) earnings is a useful measure because it provides an indication
of results of the Company's principal business activities before
consideration of fluctuations in foreign exchange gains and losses,
impairment and share-based payment expense, which are not consistently
incurred period over period.
"Working capital" is used by management and the investment community to analyze the
operating liquidity available to the Company.
"Senior Debt to Bank EBITDA" is defined as the consolidated balance of the revolving facility and
other debt secured by a lien at quarter end to consolidated Bank EBITDA
for the trailing 12 months (TTM). Bank EBITDA used in this financial
ratio is calculated as EBITDA plus impairment expense, loss (gain) on
sale of property and equipment, loss (gain) from investment in joint
venture, share-based payment expense and unrealized foreign exchange.
"Total Debt to Bank EBITDA" is defined as the consolidated balance of long-term debt, which
includes the Senior Debt, Senior Notes Payable and dividends payable at
quarter end, to consolidated Bank EBITDA for the TTM. Bank EBITDA used
in this financial ratio is calculated as EBITDA plus impairment
expense, loss (gain) on sale of property and equipment, loss (gain)
from investment in joint venture, share-based payment expense and
unrealized foreign exchange.
"Bank EBITDA to Cash Interest Expense" is defined as the consolidated Bank EBITDA for TTM to the cash
interest expense on all debt balances for TTM. Bank EBITDA used in
this financial ratio is calculated as EBITDA plus impairment expense,
loss (gain) on sale of property and equipment, loss (gain) from
investment in joint venture, share-based payment expense and unrealized
foreign exchange.
"Drilling days" is defined as rig days between spud to rig release.
"Operating days" is defined as moving days (move in, rig up and tear out) plus drilling
days (spud to rig release).
"Utilization rate - drilling day" is defined as drilling days divided by total available rig days.
"Utilization rate - operating day" is defined as operating days divided by total available rig days.
"Rate per operating day" or "Dayrate" is defined as operating revenue (net of third party costs) divided by
operating days (drilling days plus moving days).
ADDITIONAL GAAP MEASURES DEFINITIONS
The Company uses certain additional GAAP financial measures within the
financial statements and document that are not defined terms under IFRS
to assess performance. Management believes that these measures provide
useful supplemental information to investors. These financial measures
are computed on a consistent basis for each reporting period and
include Funds provided by operations, Operating income, Operating
income percentage and Operating income - net percentage. These
additional GAAP measures are identified and defined as follows:
"Funds provided by operations" is used by management and investors to analyze the funds generated by
Trinidad's principal business activities prior to consideration of
working capital, which is primarily made up of highly liquid balances.
This balance is reported in the Consolidated Statements of Cash Flows
included in the cash provided by operating activities section.
"Operating income" is used by management and investors to analyze overall and segmented
operating performance. Operating income is not intended to represent
an alternative to net (loss) earnings or other measures of financial
performance calculated in accordance with IFRS. Operating income is
calculated from the consolidated statements of operations and
comprehensive income (loss) and from the segmented information
contained in the notes to the consolidated financial statements.
Operating income is defined as revenue less operating expenses.
"Operating income percentage" is used by management and investors to analyze overall and segmented
operating performance, including third party recovery and third party
costs, as well as inter-segment revenue and inter-segment operating
costs. Operating income percentage is calculated from the consolidated
statements of operations and comprehensive income (loss) and from the
segmented information in the notes to the consolidated financial
statements. Operating income percentage is defined as operating income
divided by revenue.
"Operating income - net percentage" is used by management and investors to analyze overall and segmented
operating performance excluding third party recovery and third party
costs, as well as inter-segment revenue and inter-segment operating
costs, as these revenues and expenses do not have an effect on
consolidated net (loss) earnings. Operating income - net percentage is
calculated from the consolidated statements of operations and
comprehensive income (loss) and from the segmented information in the
notes to the consolidated financial statements. Operating income - net
percentage is defined as operating income less third party G&A expenses
divided by revenue net of operating and G&A third party costs.
FORWARD-LOOKING STATEMENTS
This document contains certain forward-looking statements relating to
Trinidad's plans, strategies, objectives, expectations and intentions.
The use of any of the words "expect", "anticipate", "continue",
"estimate", "objective", "ongoing", "may", "will", "project", "should",
"believe", "plans", "intends", "confident", "might" and similar
expressions are intended to identify forward-looking information or
statements. Various assumptions were used in drawing the conclusions or
making the projections contained in the forward-looking statements
throughout this document. The forward-looking information and
statements included in this document are not guarantees of future
performance and should not be unduly relied upon. Forward-looking
statements are based on current expectations, estimates and projections
that involve a number of risks and uncertainties, which could cause
actual results to differ materially from those anticipated and
described in the forward-looking statements. Such information and
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking information or
statements. In particular, but without limiting the foregoing, this
document may contain forward-looking information and statements
pertaining to the completion of announced rig construction programs on
a timely basis and economical terms; the assumption that Trinidad's
customers will honour their take-or-pay contracts; fluctuations in the
demand for Trinidad's services; the ability for Trinidad to attract and
retain qualified personnel, in particular field staff to crew the
Company's rigs; the existence of competitors, technological changes and
developments in the oilfield services industry; the existence of
operating risks inherent in the oilfield services industry; assumptions
respecting capital expenditure programs and other expenditures by oil
and gas exploration and production companies; assumptions regarding
commodity prices, in particular oil and natural gas; assumptions
respecting supply and demand for commodities, in particular oil and
natural gas; assumptions regarding foreign currency exchange rates and
interest rates; the existence of regulatory and legislative
uncertainties; the possibility of changes in tax laws; and general
economic conditions including the capital and credit markets;
assumptions made about future performance and operations of the joint
venture arrangement. Trinidad cautions that the foregoing list of
assumptions, risks and uncertainties is not exhaustive. The
forward-looking information and statements contained in this document
speak only as of the date of this document and Trinidad assumes no
obligation to publicly update or revise them to reflect new events or
circumstances, except as may be required pursuant to applicable
securities laws.
SOURCE Trinidad Drilling Ltd.
|
|