Coming into 2009, we could see the sharp pullback in drilling activity in both the Canadian and US sectors. Our results in 2009 reflect this weak environment, with lower revenue, EBITDA and net earnings than the previous year. Even though our results were weaker, we were pleased, given the circumstances, with our efforts, and Trinidad posted solid results. Our utilization in Canada remained above the industry average, as it has in the past, with 35 percent utilization in the year for Trinidad compared to 24 percent for the industry as a whole. In the US, our active rig count stayed significantly more stable than that of the broader market, which, at its low point, fell 62 percent from the peak compared to 24 percent for Trinidad. Trinidad’s higher activity levels are largely a reflection of our in-demand style of equipment and our high contract coverage. Trinidad not only kept a larger proportion of its fleet active but did not have to compromise profitability to do so. A combination of contracted dayrates and a focus on cost control allowed the company in 2009 to record a strong gross margin percentage of 42 percent in the year compared to 41 percent in 2008.

While we were focused on running our business as efficiently as possible during the downturn, we did not lose sight of our long-term goals and reached several milestones during the year.

A summary of the key operational milestones we reached in 2009 includes:

• We added six new purpose-built, deep capacity rigs to our US operations where they are all currently working under contract in unconventional shale plays;
• Strong performance from our first three rigs in Mexico led us to expand our operations to a total of seven rigs in the country by the end of the third quarter. These rigs were all redeployed from Canada where they were under-utilized and put to work in Mexico under long-term contracts;
• Our expansion further south grew our operations in Latin America, with one rig operating in Chile. This rig was redeployed from Trinidad’s existing US fleet and is working under long-term contract.

In addition to expanding our operations, we also improved our financial flexibility during the year. We reduced our net debt levels from $559 million at the end of 2008 to $457 million at the end of this year, a reduction of 18 percent. With the challenging operating environment, we were aware of the need to lower our indebtedness and took several steps to make this happen. We reduced our dividend from $0.15 per share per quarter to $0.05 per share per quarter and we lowered our forecast capital expenditures, delaying six rigs that had originally been scheduled for construction and delivery in 2009. Towards the middle of the year, we raised $140 million from an equity issue which was applied against existing debt levels. We have closely monitored market conditions over the past year and in light of a recent improvement in industry conditions, construction has resumed on the delayed rigs with delivery now scheduled for 2010 and the rigs remaining under contract with the original customer.

The first few months of 2010 have shown some improvement in industry utilization levels and higher confidence for a return of stronger market conditions. Although these are promising signs, we remain cautious in our outlook for 2010. Natural gas storage levels in North America remain high and we believe that natural gas prices will remain under pressure until demand, largely generated by the US economy, returns to stronger levels or until supply levels decrease significantly.

The recovery of natural gas prices is a very complex area with a number of variables that can be difficult to quantify and that make it challenging to forecast the timing of an industry rebound. Supply levels have begun to decrease and storage levels are now sitting around the five-year average level. An extended period of lower production or an increase in demand could lead to lower storage levels and cause natural gas prices to increase. Our best estimate of sustained improvement in the drilling sector is towards the third or fourth quarter of 2010.

Trinidad is well positioned in the current market and for the return of stronger conditions. We have shown our ability to redeploy existing assets to higher utilization, strong dayrate areas, while spending only minimal amounts of capital. This is a strategy that allows us to increase the contribution of existing equipment and add value for our investors. We will continue to pursue more opportunities like this, assessing any additional risk and ensuring any redeployments provide returns in excess of our internal benchmarks and fit with our strategic direction.

In addition, as the outlook in the market improves, we expect to see an increased number of opportunities to work with existing and new customers to build equipment or enhance existing equipment. As in the past, any new builds will be backed by long-term, take-or-pay contracts that provide us with a guaranteed revenue stream over the payback period of the investment.

We see several frontiers for expansion moving forward. In North America, we see opportunities to grow our market share in the unconventional shale plays with an increased presence in areas like the Haynesville shale or the Montney where we have an established reputation as a strong performer. We are also pursuing opportunities to branch out into the newer shale plays like the Marcellus in northeastern US or to use some of the drilling techniques that have been proven in the unconventional shale plays in existing, conventional areas like the Cardium play in western Canada’s Deep Basin. International expansion prospects continue to develop and we are continuously evaluating and assessing these possibilities. We continue to focus on South America where our established operations give us a head start with existing operators in the area and an understanding of local business practices; however, we are also considering opportunities in the Middle East, Indonesia and elsewhere in the world. It is typical for international opportunities to take longer to crystallize than we would expect in North America, and we are patiently moving ahead with those that we see as real possibilities for Trinidad.

As we grow our business into 2010 and beyond, we will ensure we maintain a high level of financial flexibility. We reduced our debt levels last year and expect to continue to monitor these levels with a view to being in a position to repay or refinance our existing debt facilities before they mature in the next few years. As the rigs under construction are put into operation, Trinidad’s ability to generate free cash flow and repay debt is expected to increase. We remain committed to reducing our debt levels over the longer term and will carefully assess all capital expenditures, ensuring we balance our growth opportunities with our debt repayment strategy.

This past year has presented Trinidad with a number of challenges and opportunities. We are fortunate to have a strong Board of Directors that provides us with strategic direction and guidance. We also have a dedicated and loyal team of employees whose hard work and commitment to superior performance have allowed Trinidad to earn its reputation as an industry leader. Without these efforts, Trinidad would not be in the strong position it is today. We would like to thank our employees and our directors for their hard work and the critical part they played in achieving the successes we have to date.

We are entering 2010 with a guarded approach. While we see the improving trends both in the drilling sector and in the world economy, we believe it may take some time before the recession and its impact on the oil and gas industry are truly behind us. Trinidad was built to withstand the inevitable cycles of the drilling sector. By having the right equipment to meet the new challenges of our industry and extensive contract coverage, we are well positioned to withstand the remaining downturn and to excel once a stronger market returns. We are confident that the "Trinidad Advantage" will allow us to retain our position as a leader in the industry and a driller of choice with our customers.