COMPANY HISTORY
Trinidad's primary objective has been to create critical mass in the drilling business. Trinidad has met this objective thus far through completing construction of rigs and through corporate and asset acquisitions. Trinidad's marketing strategy has been focused on obtaining and sustaining higher utilization rates and a broader customer base.
Significant Acquisitions and Drilling Rig Construction
The company was founded in 1996 and moved forward with the construction of 4 identical 2800 metre depth capacity heavy telescopic double drilling rigs. On October 1, 1999 Trinidad completed the acquisition of Can-Am Drilling Ltd. and Rig #5. This added a medium depth triple rig to the Trinidad fleet with a depth capacity of 2,500 metres. On October 15, 1999 Trinidad acquired a 1,000 metre single rig which was modified and added to the fleet to drill at shallower depth capacities. Trinidad diversified its drilling services with the acquisition of eight service rigs by purchasing the assets of Progressive Well Servicing Ltd. (now Trinidad Well Servicing) on December 15, 2000. During 2001, Trinidad completed its construction of Rigs #8 through #12. These new rigs were designed and constructed to work at a depth capacity of 1,800 metres. They are heavy single rigs designed to capture the mid-depth drilling market.
In September 2002, Trinidad completed the Trust Arrangement.
On April 10, 2003, Trinidad completed the acquisition of substantially all of the assets of Saturn Drilling.The assets included three drilling rigs (two with a depth rating of 3,000 metres and one with a depth rating of 3500 metres), drill pipe, mud pumps, generators, boilers and spare parts. The addition of Saturn's assets provided Trinidad with increased drilling depth capacity from what previously existed within Trinidad’s fleet. This allowed Trinidad to broaden its coverage of the drilling market into depth ranges in which Trinidad did not previously operate.
On July 18, 2003, Trinidad completed the acquisition of certain of the assets of Bear Drilling. The acquired assets were comprised of three heavy double drilling rigs and two triple drilling rigs. The double drilling rigs have depth ratings of 3,300, 3,500 and 3,600 metres while the triple drilling rigs have depth ratings of 4,700 and 5,500 metres. The acquisition also included all drill pipe, spare parts and other miscellaneous inventory items related to the drilling rigs.
Early in 2004, rig construction was completed for 2 new 3,500 metre double telescopic drilling rigs in response to customer requests.
In March2004, Trinidad purchased substantially all of the assets of Arrow Drilling Inc. ("Arrow"). Such assets include five double drilling rigs and three single drilling rigs; the doubles have depth ratings of up to 2,600 metres while the singles have depth ratings of up to 1,400 metres. The acquisition also includes all drill pipe, spare parts and other miscellaneous inventory items related to the drilling rigs. All of the rigs being acquired have complete rig crews in place.
In July 2004, Trinidad closed the acquisition of substantially all of the assets of Wilson Drilling Ltd. Such assets include two triple drilling rigs and two heavy double drilling rigs; the triple drilling rigs have depth ratings of 4,000 and 4,700 metres while the double drilling rigs have depth ratings of 3,000 and 3,500 metres. The acquisition also included all drill pipe, spare parts and other miscellaneous inventory items related to the drilling rigs.
In 2004 and in early 2005, 5 more 3,600 metre double telescopic diesel electric drilling rigs were constructed in response to customer requests for additional drilling capacity. The new rigs are backed by take or pay contracts which provide for committed days and drilling rates. 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.
In November 2004, Trinidad closed the acquisition of substantially all of the assets of Jade Drilling Inc. and its affiliates. Such assets include 14 drilling rigs, drill pipe, related inventory, spare parts, rig camps and real estate. The purchased rigs include: one single drilling rig with a depth rating of 1,100 metres, 3 double drilling rigs with depth ratings of 1,600 metres, 5 double drilling rigs with depth ratings of 2,000 to 2,500 metres and 5 heavy double drilling rigs with depth ratings of 3,000 metres.
In January 2005, Trinidad Well Servicing announced the construction of 4 new service rigs capable of servicing wells up to 3,500 metres. The rigs will be designed and built to provide cost effective well servicing operations for Trinidad's clients. The new rigs are being built to satisfy the demand for incremental services from Trinidad's customer base. The new rigs will add to the capabilities of the well servicing division and expand the geographical focus into northern Alberta and British Columbia. It is anticipated that the construction of all 4 rigs will be completed by the end of 2005.
In March 2005, with its operational performance in Canada, Trinidad was asked to provide additional capacity to the United States from our existing customer base. Construction of 12 new diesel electric triple drilling rigs to be deployed into the United States began in March 2005. The new rigs include 1,500 horsepower (6,000) metres) rigs and 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. Additional rigs will be added in 2005 and the rest in the first quarter of 2006.
In May 2005, Trinidad closed the acquisition of Titan Surface Casing Ltd. Titan's assets include 14 preset drilling and coring rigs and associated inventory. These assets represent one of the largest concentrations of presetting and coring rigs in Western Canada and were combined with four similar style rigs acquired through the prior acquisition of the assets of T-Car Drilling. The presetting and coring business is seen as a natural diversification for Trinidad. The investment was in response to requests from Trinidad's client base requiring these types of specialized drilling services. Titan will remain operating as an independent operating division of Trinidad primarily in Western Canada.
In May 2005, Trinidad was awarded with long term contracts for two major North American oil and gas exploration and development companies whereby 22 new drilling rigs (including the new U.S. rigs) ranging in depth capacity from 3,600 metres to 6,000 metres will be constructed. Each of the 22 rigs is backed by either a three or five year take or pay contract which provides Trinidad with a minimum number of drilling days per annum resulting in a five year guaranteed minimum utilization rate of 66%. Each of these contracts is fixed at current market day rates consistent with the size and type of rig.
In October 2005, Trinidad closed the acquisition of the well servicing assets of Summit Energy Services Inc. and Yukon Energy Rentals Inc. The acquisition included 6 service rigs built in the last five years and all support equipment related to well servicing. Trinidad Well Servicing also has 2 more rigs under construction and will have a total of 18 service rigs once construction is complete.
In October 2005, Trinidad opened its new operations office and yard in Nisku, Alberta.
In December 2005, Trinidad closed the acquisition of the assets of Cheyenne Drilling L.P. in the United States. The assets include twenty (20) drilling rigs, drill pipe, related inventory, spare parts and real estate. The purchased rigs include 3 drilling rigs with depth ratings of 6,000 feet (2,000 meters), 8 drillings rigs with depth ratings of 10,000 feet (3,300 meters), 5 drilling rigs with depth ratings ranging from 12,000 feet (4,000 meters) to 13,500 feet (4,500 meters), and 4 drilling rigs with depth ratings ranging from 14,000 feet (4,600 meters) to 16,000 feet (5,300 meters).
In March 2006, Trinidad announced the amalgamation of one of its wholly owned subsidiaries with Mastco Derrick Service Ltd. Total consideration paid by Trinidad in the transaction was $61.8 million dollars, comprised of $37.1 million in cash and $24.7 million in trust units of the Trust. The Trust units were issued at a price of $ 16.54 per unit. The transaction will provide Trinidad with all the facilities, assets, inventory and employees of Mastco.
Mastco is a leader in the design, manufacture, sale and refurbishment of customized land based drilling rigs and related equipment. Mastco also designs, manufactures, sells and refurbishes service rigs and other oilfield equipment for North America and global markets. Mastco’s fabrication and engineering capabilities are ISO 9001 certified and equipment is all manufactured to industry accepted quality standards.
In January 2007, Trinidad continues work on additional long term contracts with three major North American oil and gas exploration and development companies whereby it will provide 5 new drilling rigs ranging in depth capacity from 5,000 metres to 5,500 metres. All five rigs will be operating in the United States, each backed by take-or-pay contracts. These five rigs being constructed will increase Trinidad’s United States drilling fleet to 42 rigs. The US fleet combined with the completed Canadian drilling fleet of 64 rigs will give Trinidad a total of 106 drilling rigs once all existing construction programs are completed.
In July 2007,
The Debentures have a face value of $1,000 per Debenture, a coupon of 7.75%, a maturity date of July 31, 2012, and are convertible at any time prior to maturity or the date fixed for redemption at the option of the holder, into trust units of