Trinidad Drilling Ltd.

Trinidad Drilling Ltd.

November 26, 2013 16:04 ET

Trinidad Drilling Ltd. Announces Bought Deal Equity Financing

CALGARY, ALBERTA--(Marketwired - Nov. 26, 2013) -


Trinidad Drilling Ltd. ("Trinidad" or the "Corporation") (TSX:TDG) is pleased to announce it has entered into an agreement with a syndicate of underwriters led by Raymond James Ltd. ("Raymond James") and including RBC Capital Markets, FirstEnergy Capital Corp., TD Securities Inc., Scotiabank, Canaccord Genuity Corp., CIBC World Markets, Cormark Securities Inc., Paradigm Capital Inc. and Peters & Co. Limited (collectively the "Underwriters"), to offer on a bought deal basis, by way of a short form prospectus, 15,000,000 common shares at a price of $10.00 per share for gross proceeds of approximately $150.0 million (the "Offering"). In addition, the Underwriters have been granted an over-allotment option to purchase an additional 2,250,000 common shares under the same terms, which over-allotment option is exercisable for a period of 30 days following the closing of the Offering. If the over-allotment option is exercised in full, the gross proceeds of the Offering to Trinidad will be approximately $172.5 million.

The net proceeds raised from the Offering are expected to be used to fund upcoming capital expenditures on new and existing assets, as well as for potential growth initiatives and general corporate purposes. These capital expenditures are expected to primarily include: (i) the construction and upgrade of drilling rigs and related assets for sale to Trinidad Drilling International Luxembourg S.à.r.l., Trinidad's international joint venture with an affiliate of Halliburton Company; (ii) the construction of a 3,000 horsepower, 1.25 million pound hookload AC rig destined for the Liard Basin in northern Canada where it is anticipated to be drilling liquefied natural gas (LNG)-related wells under a take-or-pay arrangement with a large North American oil and gas company; and (iii) upgrades to existing rigs to improve their efficiency and marketability. Closing of the Offering is anticipated to occur on or about December 16, 2013, and is conditional upon the receipt of all necessary regulatory approvals.

While the availability of common shares under the Offering is subject to overall demand and cannot be assured, Trinidad has requested that Raymond James take reasonable steps to attempt to facilitate participation in the Offering by existing Trinidad shareholders. Existing Canadian shareholders should contact their Raymond James representative, or their individual investment advisor, as soon as possible for more information.

Trinidad is a corporation focused on sustainable growth that trades on the Toronto Stock Exchange (TSX) under the symbol TDG. Trinidad's divisions operate in the drilling and barge-drilling sectors of the North American oil and natural gas industry with operations in Canada, the United States and Mexico. In addition, through a joint venture, Trinidad has the opportunity to operate drilling rigs in other international markets such as Saudi Arabia. Trinidad is focused on providing modern, 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.

Advisory Respecting Forward-Looking Information

Certain statements contained in this news release constitute forward-looking information and statements within the meaning of applicable Canadian securities laws (collectively, "forward looking information"). The use of any of the words "expect", "anticipate", "may", "will", "intends" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this news release contains forward-looking information pertaining to the following: (i) the completion of the Offering, the issuance of common shares and the anticipated gross proceeds therefrom; (ii) the anticipated closing date of the Offering; (iii) the Corporation's intended use of the net proceeds of the Offering; (iv) anticipated growth opportunities in the Corporation's North American and international operations and (v) other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance.

Various material factors, expectations and assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking information throughout this news release including, without limitation expectations and assumptions relating to: (i) Trinidad's ability to receive regulatory approvals necessary for the Offering and the timing of receipt of such approvals; (ii) oil and natural gas production levels; (iii) future industry and economic conditions and areas for growth and development; (iv) commodity prices, foreign currency exchange rates and interest rates; (v) capital expenditure programs and other expenditures; (vi) supply and demand for oil and natural gas; (vii) schedules and timing of certain projects and Trinidad's strategy for growth; (viii) Trinidad's future operating and financial results; and (ix) treatment under governmental regulatory regimes and tax, environmental and other laws.

The forward-looking information included in this news release is not a guarantee of future performance and should not be unduly relied upon. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information including, without limitation: (i) volatility in market prices for oil and natural gas; (ii) volatility in exchange rates for the Canadian dollar relative to other world currencies; (iii) liabilities and risks inherent in the drilling, well-servicing and manufacturing industries, including technical problems; (iv) competition for, among other things, capital, the ability to secure manufacturers (other than Trinidad Design and Manufacturing, if necessary) for rig construction and skilled personnel; (vi) the ability and desire of Trinidad's customers to honour their take-or-pay contracts with Trinidad; (vii) changes in general economic, market and business conditions in Canada, North America, and worldwide; (viii) actions by governmental or regulatory authorities (both domestic and foreign), including changes in tax laws and the risk of nationalization and expropriation of assets; (ix) the ability for the customers of Trinidad and its subsidiaries to raise capital and to continue with their drilling programs; (x) the impact of adverse weather on the operations of Trinidad and its subsidiaries; and (xi) increases and overruns in construction costs. The outcome and timing of the proposed Offering may differ from that currently anticipated by Trinidad and regulatory approvals may not be obtained on the timelines anticipated or at all. While Trinidad intends to use the net proceeds from the Offering in the manner stated above, there may be circumstances that are not known at this time where a reallocation of the net proceeds may be advisable for business reasons that management believes are in Trinidad's best interests.

Trinidad cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. Additional information on these and other factors which could affect operations or financial results are included under the heading "Risk Factors" in the Corporation's annual information form for the year ended December 31, 2012. Additional information may also be found in Trinidad's other reports on file with the Canadian securities regulatory authorities. The forward-looking information contained in this news release is expressly qualified by this cautionary statement. Neither Trinidad nor any of the Underwriters undertake any obligation to publicly update or revise any forward-looking information except as expressly required by applicable securities laws.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy the shares in any jurisdiction. The shares offered will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States or to a United States person, absent registration, or an applicable exemption therefrom.

Contact Information

  • Trinidad Drilling Ltd.
    Lyle Whitmarsh
    Chief Executive Officer
    (403) 294-4401

    Trinidad Drilling Ltd.
    Brent Conway
    (403) 294-4401

    Trinidad Drilling Ltd.
    Lisa Ciulka
    Vice President, Investor Relations
    (403) 294-4401