Trinidad Drilling Ltd. Announces 2017 Capital Budget and Operational Update

CALGARY, ALBERTA--(Marketwired - Jan. 17, 2017) -

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Trinidad Drilling Ltd. (TSX:TDG) ("Trinidad" or "the Company") announced today that it expects to spend approximately $40 million in capital expenditures in 2017. The capital budget is comprised of anticipated maintenance capital of approximately $18 million and select upgrade projects totaling approximately $22 million.

"Market conditions have improved over the past few months and we are seeing increased demand and growing activity levels," said Lyle Whitmarsh, Trinidad's Chief Executive Officer. "We are cautiously optimistic that industry conditions will improve in 2017 and beyond; however, we have chosen to maintain a conservative capital budget for 2017. Our capital expenditures will be spent in-line with customer demand and, to the extent that customer demand increases throughout the year, we may choose to be opportunistic in adding to our contract base and our upgrade program."

2017 Capital Budget

Trinidad's 2017 capital budget includes maintenance capital to re-certify existing equipment and replenish drill pipe inventory, as a growing number of rigs return to work. In addition, upgrade projects are planned for eight rigs, four in Canada and four in the US. These projects include increasing the pressure capacity of mud circulating systems, adding mud pumps and high-torque top drives, and making certain bi-fuel upgrades. Trinidad expects that these upgrades will provide increased utilization and margins as demand for high spec equipment grows. Trinidad also expects to utilize existing capital inventory items to upgrade and maintain its fleet in 2017. Although Trinidad continues to evaluate a number of opportunities in its joint venture, at this time, there are no planned capital expenditures in 2017 for joint venture operations.

Operational Update

Since the end of the third quarter of 2016, activity levels have improved in both Canada and the US. Announcements by industry participants to cut oil production, improving commodity prices and winter drilling seasonality have all provided positive momentum for drilling activity. Trinidad is actively pursuing opportunities to move idle equipment from lower demand areas to higher activity areas, both domestically and internationally.