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CALGARY, Alberta, Jan. 08, 2018 (GLOBE NEWSWIRE) -- Trinidad Drilling Ltd. (TSX:TDG) ("Trinidad" or "the Company") provided an update on progress rolling out its RigMinder technology platform. In addition, the Company is lowering its guidance for 2018 general and administrative (G&A) expenses to $43 million, following a thorough review of its cost structure. The new guidance represents a reduction of nearly 20% from prior guidance for 2018 and a 25% reduction from expected 2017 G&A expenses.
RigMinder Rollout Progress Update
Since the acquisition of RigMinder Operating LLC in August 2017, exploration and production (E&P) customers have expressed strong interest in RigMinder’s four technology platforms, which Trinidad now offers along with its traditional contract drilling service.
The four technology platforms provide E&P customers with an ability to drill wells more quickly and efficiently; they provide cost savings and the convenience of a one-stop drilling service while also delivering new revenue streams for Trinidad. As noted below, three of the technology platforms are now commercially active while the fourth is in the test phase.
Cost Cutting Initiatives
Trinidad undertook a review of its cost structure to ensure that its practices are in-line or ahead of its competitors and provide long-term value for its shareholders. Following the review, Trinidad has decided to reduce headcount, roll back salaries and tighten expense management. The majority of the headcount reductions will affect the Company’s corporate office.
As part of the cost cutting and restructuring efforts, Randy Hawkings, Executive Vice President, US Operations has elected to step down from his operational position. Mr. Hawkings will continue to consult with Trinidad in the Company’s performance drilling business group with a focus on growth and maximizing returns. Trinidad looks forward to the continuing relationship with Mr. Hawkings.
Cost-cutting initiatives include a 15% reduction in executive salaries and directors’ board fees. Trinidad is currently reviewing its operations for additional opportunities to create efficiencies, including a review of under-utilized facilities for further cost savings or potential asset sales.
Trinidad further notes that it has made several changes to its compensation programs in the past few years to align them with shareholders’ interests. These changes include:
Trinidad will continue to develop its performance metrics and ensure they are aligned with both best practice and the enhancement of shareholder value.
Trinidad believes that its new and prior initiatives improve the efficiency of the Company and position it as a cost-efficient drilling contractor with one of the lowest cost structures in the drilling sector.
(1) See Non-GAAP Measures Definitions section at the end of this document.
About Trinidad
Trinidad is an industry-leading contract driller, providing safe, 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. Trinidad provides contract drilling and related services in Canada, the US, Saudi Arabia and Mexico.
Trinidad is headquartered in Calgary, Alberta, Canada. The Company’s common shares are listed on the Toronto Stock Exchange under the trading symbol TDG. For more information, please visit www.trinidaddrilling.com.
For further information, please contact:
Brent Conway
President and Chief Executive Officer
403.265.6525
Lesley Bolster
Chief Financial Officer
403.265.6525
Lisa Ottmann
Vice President, Investor Relations
403.294.4401
email: investors@trinidaddrilling.com
NON-GAAP MEASURES DEFINITIONS
This document contains references to Adjusted EBITDA and Return on Gross Assets that do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Adjusted EBITDA and Return on Gross Assets are computed on a consistent basis for each reporting period and are defined as follows:
Adjusted EBITDA is used by management and investors to analyze the Company's profitability based on the Company's principal business activities prior to how these activities are financed, how assets are depreciated and amortized and how the results are taxed in various jurisdictions. Additionally, in order to focus on the core business alone, amounts are removed related to foreign exchange, share-based payment expense, impairment expenses, the sale of assets, and fair value adjustments on financial assets and liabilities, as the Company does not deem these to relate to the core drilling business. Adjusted EBITDA also takes into account the Company’s portion of the principal activities of the joint venture arrangements by removing the loss (gain) from investments in joint ventures and including adjusted EBITDA from investments in joint ventures. Adjusted EBITDA is not intended to represent net (loss) as calculated in accordance with IFRS. Adjusted EBITDA is calculated using 100% of the related amounts from all entities controlled by Trinidad where Trinidad may not hold 100% of the outstanding shares.
Return on Gross Assets is defined as consolidated net earnings (loss) before share-based payments, foreign exchange, after-tax finance costs, deferred income taxes, gain (loss) on sale of property and equipment, depreciation and amortization and impairments of assets divided by the sum of the average value of Accounts Receivable, Property and Equipment and Goodwill for the year.
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. In particular, but without limiting the foregoing, this document may contain forward-looking information and statements pertaining to:
Trinidad cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. Additional information on these and other factors that could affect Trinidad’s business, operations or financial results are described in reports filed with securities regulatory authorities, accessible through the SEDAR website (www.sedar.com) including but not limited to Trinidad’s annual management discussion and analysis, financial statements, Annual Information Form and Management Information Circular. 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.