Trinidad Drilling Ltd. Announces 2017 Capital Budget and Operational Update - Seite 2

Canada and US

At January 17, 2017, Trinidad had 38 rigs or 53% of its Canadian fleet operating, up from an average of 20% during the third quarter of 2016. Demand remains strongest in the Montney and the Deep Basin, with a growing number of rigs also operating in Saskatchewan. On the same date, in the Company's US and international division, 24 rigs or 36% of the fleet were operating, up from an average of 19% during the third quarter of 2016. The Permian Basin continues to be the strongest area of demand, with 75% of the active US fleet operating in this basin. In addition, the Company currently has rigs operating in the Eagle Ford and Haynesville shales.

Trinidad has successfully crewed its rigs as they have gone back to work, despite a high level of rig reactivations in a short period of time. As part of this rig reactivation process, Trinidad has remained focused on ensuring the training and safety of its crews meets its usual high levels and the Company has continued to record excellent operational and safety performance.

As activity has grown over the past few months, the Company is beginning to see opportunities to increase dayrates, particularly in the US and for specific, high-performance rigs. Trinidad has taken advantage of the improving industry conditions and has added four new long-term contracts to its contract base. These contracts range in term from 18 months to two years and bring the Company's overall contract base to 29 rigs or 19% of the fleet, with an average term remaining of 1.3 years. Of the current contract base, 12 contracts expire during 2017. Given the current industry fundamentals and future outlook, Trinidad expects to be in a position to renew contracts over the coming year.

Joint Venture

Trinidad's joint venture operations continue to contribute positively to the Company. On January 17, 2017, in Saudi Arabia, three rigs were operating with a fourth rig receiving standby revenue. In Mexico, one rig recently returned to work and three rigs continue to receive standby revenue. At September 30, 2016, the joint venture had approximately $68 million ($41 million Trinidad's share) of cash on hand. Trinidad and its joint venture partner anticipate that future cash distributions will be made to the partners, depending on working capital and capital expenditure requirements within the joint venture.