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Disclaimer

Trinidad Drilling Ltd. ("Trinidad") uses reasonable commercial efforts to ensure that the information contained on this web site is accurate but does not in any way guarantee the currency, accuracy, completeness, non-infringement or authenticity of such information. All information contained on this web site, including all stock price information, is provided for convenience and information purposes only and is not intended for trading, business, financial or other purposes. Your use of this site is in itself acceptance of the foregoing disclaimer.

Taxation Information

Conversion to Trinidad Drilling Ltd. – March 10, 2008

Effective March 10, 2008, Trinidad Energy Services Income Trust announced that it had received the securityholder and court approvals necessary to approve the plan of arrangement in which Trinidad converted to a growth oriented dividend paying corporation continuing under the name “Trinidad Drilling Ltd.”.

Trinidad Election Package
Letter of Transmittal

Canadian Tax Information – Corporation

All dividends paid by Trinidad Drilling Ltd., are, pursuant to subsection 89(14) of the Income Tax Act (Canada), designated as eligible dividends. An eligible dividend paid to a Canadian resident individual is entitled to the enhanced dividend tax credit.

U.S. Tax Information - Corporation

In 2011, the company did not undertake any organizational action which required the filing of U.S. Form 8937.

The following information is being provided to assist U.S. individual shareholders of Trinidad Drilling Ltd. ("Trinidad") in reporting distributions received from Trinidad during 2008 on their Internal Revenue Services ("IRS") Form 1040, "U.S. Individual Income Tax Form"("Form1040"). This summary is of a general nature only and is not intended to be legal or tax advice to any particular holder or potential holder of Trinidad’s shares. Holders or potential holders of Trinidad’s shares should consult their legal and tax advisors as to their particular tax consequences of holding Trinidad’s shares.

In consultation with its U.S. tax advisors. Trinidad believes that its shares should be properly classified as equity in a corporation and that dividends paid to individual U.S. shareholders should be "qualified dividends" for U.S. federal income tax purposes and qualify for reduced rates of tax applicable to capital gains.

The following table provides, on a per share basis, the "qualified dividend", prior to Canadian withholding tax. The amounts shown on the following table are in U.S. dollars as converted on the applicable payment dates. This table is for information purposes only.

Record Date Distribution Date Distribution Paid (CDN$) Exchange Rate Distribution Paid (US$) Taxable Qualified Dividend (US$)
31-Mar-08 15-Apr-08 0.050 0.9822 0.0491 0.0491
30-Jun-08 15-Jul-08 0.150 0.9980 0.1497 0.1497
30-Sep-08 15-Oct-08 0.150 0.8473 0.1271 0.1271
31-Dec-08 15-Jan-09 0.150 0.7921 0.1188 0.1188
Total   0.500   0.4447 0.4447

Canadian Tax Information – Trust Pre-Conversion

Under the Canadian Income Tax Act, Trinidad Energy Services Income Trust is an open-ended mutual fund trust and therefore its distributions were considered taxable income to Trinidad’s unitholders. The cash distributions received by unitholders consist of both interest income and dividend income, depending on the tax deductions the trust is able to claim against its overall income.

Unitholders who received cash distributions during 2008 from the Trust will receive a T3 form in the mail. The T3 will outline the full amount of cash distributions as well as the percentage of interest income and dividend income. Unitholders must report the income as shown on the T3 return.

The distribution amount for 2008 is classified as income at 100.0% interest income.

Click to view the T3 tax form break down for past years:

2008 2007 2006 2005 2004 2003 2002

U.S. Tax Information - Pre-Conversion

The following information is being provided to assist U.S. individual unitholders of Trinidad in reporting distributions received from Trinidad during 2008 on their Internal Revenue Services (“IRS”) Form 1040, “ U.S. Individual Income Tax Form” (“Form1040”).
This summary is of a general nature only and is not intended to be legal or tax advice to any particular holder or potential holder of Trinidad trust units. Holders or potential holders of Trinidad trust units should consult their legal and tax advisors as to their particular tax consequences of holding Trinidad trust units.
In consultation with its U.S. tax advisors, Trinidad believes that its trust units should be properly classified as equity in a corporation and that dividends paid to individual U.S. unitholders should be “qualified dividends” for U.S. federal income tax purposes and should qualify for the reduced rate of tax applicable to capital gains.

The following table provides, on a per unit basis, the breakdown of the amount of cash distribution, prior to Canadian withholding tax, paid by Trinidad for the 2008 fiscal year. The amounts are segregated between the portion of the cash distribution that could be considered “qualified dividends” for 2008 and the portion reported as non-taxable return of capital (and/or capital gain). The amounts shown on the following table are in U.S. dollars as converted on the applicable payment dates. This table is for information purposes only.

2008

Record Date Distribution Date Distribution Paid (CDN$) Exchange Rate Distribution Paid (US$) Taxable Qualified Dividend (US$) Non-Taxable Return of Capital (US$)
31-Jan-08 15-Feb-08 0.0500 0.9984 0.04992 0.04992 0
29-Feb-08 17-Mar-08 0.0500 1.0022 0.05011 0.05011 0
Total   0.1000   0.10003 0.10003 0

2007

Record Date Distribution Date Distribution Paid (CDN$) Exchange Rate Distribution Paid (US$) Taxable Qualified Dividend (US$) Non-Taxable Return of Capital (US$)
31-Jan-07 15-Feb-07 0.115 0.8592 0.0988 0.0821 0.0167
28-Feb-07 15-Mar-07 0.115 0.8505 0.0978 0.0813 0.0165
31-Mar-07 16-Apr-07 0.115 0.8842 0.1017 0.0845 0.0172
30-Apr-07 15-May-07 0.115 0.9110 0.1048 0.0871 0.0177
31-May-07 15-Jun-07 0.115 0.9634 0.1108 0.0921 0.0187
30-Jun-07 16-Jul-07 0.115 0.9588 0.1103 0.0916 0.0186
31-Jul-07 15-Aug-07 0.115 0.9306 0.1070 0.0889 0.0181
31-Aug-07 17-Sep-07 0.115 0.9701 0.1116 0.0927 0.0189
30-Sep-07 15-Oct-07 0.115 1.0248 0.1179 0.0979 0.0199
31-Oct-07 15-Nov-07 0.115 1.0196 0.1173 0.0974 0.0198
30-Nov-07 17-Dec-07 0.115 0.9928 0.1142 0.0949 0.0193
31-Dec-07 15-Jan-08 0.115 0.9834 0.1131 0.0940 0.0191
Total   1.38   1.3051 1.0845 0.2206

Non-Canadian Shareholders/Past Unitholders

Trinidad recommends that shareholders/unitholders from outside Canada consult their tax professional for advice on how distributions are treated in their country of residence. According to the Income Tax Act of Canada, the usual taxation rate for non-Canadian residents is 25% unless a tax treaty designates a reduced rate. Please visit the Canadian government tax-treaty webpage for taxation information specific to your country.