Trinidad Energy Services Income Trust Announces $65.0 Million Dollar U.S. Expansion
Release Date: March 28, 2005
CALGARY, March 28 /CNW/ – Trinidad Energy Services Income Trust (“TDG.UN”) (“Trinidad” or the “Trust”) is pleased to announce the construction of six new diesel electric triple drilling rigs to be deployed into the United States. The new rigs include two 1,500 horsepower (6,000 metres) rigs and four 1,000 horsepower (5,000 metres). Each of the new rigs are backed by take or pay contracts which provide for committed days and drilling rates over three years. The rigs have been commissioned and the first two will begin drilling during the third quarter of 2005. An additional two rigs will be added in the fourth quarter of 2005 and the final two in the first quarter of 2006. The total capital costs of the construction will be approximately $ 65.0 million and will be funded from internal cash flow and use of the Trust’s debt facility. As part of the financing for this investment Trinidad expanded its debt facility with banking syndication to $165.0 million (CDN).
With its operational performance in Canada, Trinidad has been asked to provide additional capacity to the United States from our existing customer base. Trinidad’s investment in new drilling rig technology is improving the efficiency of the entire drilling operation for Trinidad’s customers. Trinidad’s ability to provide new and innovative drilling rigs operated by strong operational personnel has continued to provide Trinidad with opportunities to add incremental drilling capacity. Trinidad’s expansion into the United States will provide access to a drilling market where utilization is not as dependent on weather conditions. Trinidad’s growth strategy is focused on providing our unitholders with enhanced distribution capabilities adding to the stability of distributable cash flow for the Trust. This new rig construction program will achieve both for Trinidad’s unitholders.
Trinidad is a growth oriented income trust that trades on the TSX under the symbol TDG.UN. Trinidad’s divisions operate in the drilling and well servicing sectors of the Canadian oil and gas industry. Trinidad has 52 drilling rigs ranging in depths from 1,000 to 5,500 metres with 87% of its fleet less than 5 years old. The Trust also currently has 8 service rigs and will have 12 service rigs that are either new or have been completely retrofitted. Our drilling fleet is known to be one of most modern, adaptable and competitive in the industry.
The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.
/For further information: please contact: Michael Heier, Chairman or Brent Conway, Chief Financial Officer at (403) 265-6525, Fax: (403) 265-4168, E-mail: twood(at)trinidaddrilling.com/