Market Overview

Trinidad Drilling Ltd. Reports Third Quarter and Year-To-Date 2015 Results; Cost Control Measures and Solid Contracts Drive Margin Strength. Fourth Quarter Dividend Announced.

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CALGARY, ALBERTA--(Marketwired - Nov. 3, 2015) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Trinidad Drilling Ltd. ("Trinidad" or the "Company") (TSX:TDG) reported third quarter and year-to-date 2015 results and declared the Company's fourth quarter dividend today. Weak commodity prices led to lower activity levels and reduced customer demand in the third quarter and first nine months of 2015, driving lower adjusted EBITDA(1) and net earnings compared to the same periods in 2014. Weak industry conditions also led to an impairment charge being recorded in the current quarter, mainly related to the Company's goodwill assets, with an additional impairment recorded on the barge assets. The negative impact of these challenging conditions was partly offset by cost control measures implemented throughout the period and Trinidad's contract base, which provided revenue stability on contracted rigs, as well as lump sum and standby revenue on rigs that were terminated early. In addition, higher relative utilization of larger, high specification rigs helped to limit dayrate and margin erosion. The growing contribution from the Company's international joint venture with Halliburton and the addition of CanElson Drilling Inc.'s (CanElson's) operations during the third quarter also positively impacted Trinidad's results in 2015.

Trinidad's board of directors declared a cash dividend for the fourth quarter of 2015 of $0.01 per common share to be paid on January 15, 2016 to shareholders of record on December 31, 2015. This dividend represents a reduction of $0.04 per common share from the previous quarterly dividend level. The dividend is designated as an "eligible dividend" for Canadian Income Tax purposes. In addition to reductions in general and administrative expense, operating costs and lower capital spending, Trinidad chose to lower its dividend payment in order to conserve cash during these challenging conditions. The annualized cash savings from the dividend reduction totaled approximately $35.5 million. This reduced cash outlay, along with the ability to repatriate cash from the joint venture with Halliburton and relaxed covenants following the CanElson acquisition, provide additional financial flexibility for the Company.

"Trinidad has responded strongly to the weak industry conditions we have seen to date in 2015," said Lyle Whitmarsh, Trinidad's Chief Executive Officer. "We have reviewed our operations and resized them to function more efficiently in the current environment. Some of the benefits gained from these cost control measures are incorporated in the results to date in 2015 and additional benefits are expected to flow through in the remainder of 2015 and into 2016. We will continue to review all aspects of our business over the coming months for further efficiency gains, while also remaining prudent with our overall spending in order to conserve cash. Our focus on providing well-performing, safe equipment for our customers has not changed. This focus, along with the changes we have implemented, will help position us well during this downturn."

(1) See Non-GAAP Measures Definitions and Additional GAAP Measures Definitions section at the end of this document for further details.

FINANCIAL HIGHLIGHTS



----------------------------------------------------------------------------
Three months ended September 30,
---------------------------------------------
($ thousands except share and
per share data) 2015 2014 % Change
----------------------------------------------------------------------------
Revenue 124,285 244,538 (49.2)
Revenue, net of third party
costs(1) 117,824 230,985 (49.0)
Operating income(1) 52,009 80,536 (35.4)
Operating income percentage(1) 41.8% 32.9% 27.1
Operating income - net
percentage(1) 43.9% 34.7% 26.5
EBITDA(2) (99,112) 67,207 (247.5)
Per share (diluted)(1) (0.54) 0.48 (212.5)
Adjusted EBITDA 44,953 64,619 (30.4)
Per share (diluted)(2) 0.25 0.47 (46.8)
Cash provided by operations (5,640) 60,143 (109.4)
Per share (basic /
diluted)(2) (0.03) 0.44 (106.8)
Funds provided by operations(1) 16,392 46,554 (64.8)
Per share (basic /
diluted)(2) 0.09 0.34 (73.5)
Net (loss) earnings (87,618) 19,156 (557.4)
Per share (basic /
diluted)(2) (0.48) 0.34 (442.9)
Adjusted net (loss) earnings(1) 1,014 14,602 (93.1)
Per share (basic /
diluted)(2) 0.01 0.11 (90.9)
Capital expenditures 21,628 100,453 (78.5)
Dividends declared 11,104 6,910 60.7
Shares outstanding - basic
(weighted average)(2) 182,574,890 138,195,784 32.1
Shares outstanding - diluted
(weighted average)(2) 182,574,890 138,664,015 31.7
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Nine months ended September 30,
---------------------------------------------
($ thousands except share and
per share data) 2015 2014 % Change
----------------------------------------------------------------------------
Revenue 413,894 664,988 (37.8)
Revenue, net of third party
costs(1) 393,895 621,647 (36.6)
Operating income(1) 166,187 221,333 (24.9)
Operating income percentage(1) 40.2% 33.3% 20.7
Operating income - net
percentage(1) 41.9% 35.6% 18.4
EBITDA(2) (19,902) 153,907 (112.9)
Per share (diluted)(1) (0.13) 1.11 (111.7)
Adjusted EBITDA 139,660 174,706 (20.1)
Per share (diluted)(2) 0.93 1.26 (26.2)
Cash provided by operations 108,909 150,662 (27.7)
Per share (basic /
diluted)(2) 0.73 1.09 (33.0)
Funds provided by operations(1) 77,616 137,696 (43.6)
Per share (basic /
diluted)(2) 0.52 0.99 (47.5)
Net (loss) earnings (76,955) 20,103 (482.8)
Per share (basic /
diluted)(2) (0.51) 0.15 (440.0)
Adjusted net (loss) earnings(1) 18,750 36,791 (49.0)
Per share (basic /
diluted)(2) 0.12 0.26 (53.8)
Capital expenditures 113,556 203,246 (44.1)
Dividends declared 24,447 20,728 17.9
Shares outstanding - basic
(weighted average)(2) 150,077,401 138,168,514 8.6
Shares outstanding - diluted
(weighted average)(2) 150,077,401 138,854,145 8.1
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As at
($ thousands except September 30, December 31,
percentage data) 2015 2014 % Change
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Total assets 2,372,949 1,941,621 22.2
Total long-term liabilities 811,101 628,047 29.1
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1. Readers are cautioned that Operating income, Operating income
percentage, Operating income - net percentage, EBITDA, Adjusted EBITDA,
Funds provided by operations, Adjusted net earnings and the related per
share information do not have standardized meanings prescribed by IFRS -
see Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions at the end of this document for further details.
2. Basic shares include the weighted average number of shares outstanding
over the period. Diluted shares include the weighted average number of
shares outstanding over the period and the dilutive impact, if any, of
the number of shares issuable pursuant to the Incentive Option Plan.

OPERATING HIGHLIGHTS

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Three months ended Nine months ended
September 30, September 30,
% %
2015 2014 Change 2015 2014 Change
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Land Drilling Market
Operating days(1)
Canada 2,109 3,424 (38.4) 4,832 8,932 (45.9)
United States and
International 2,199 4,906 (55.2) 7,096 13,657 (48.0)
Rate per operating day(1)
Canada (CDN$) 23,695 24,669 (3.9) 25,330 25,277 0.2
United States and
International (CDN$) 30,223 22,842 32.3 32,269 23,422 37.8
United States and
International (US$) 23,582 21,092 11.8 26,160 21,492 21.7
Utilization rate - operating
day(1)
Canada 34% 66% (48.5) 31% 55% (43.6)
United States and
International 40% 96% (58.3) 49% 84% (41.7)
Number of drilling rigs at
period end(4)
Canada 82 61 34.4 82 61 34.4
United States and
International 72 54 33.3 72 54 33.3
Barge Drilling Market
Operating days(1) - 334 (100.0) 57 837 (93.2)
Rate per operating day
(CDN$)(1) - 37,967 (100.0) 30,098 37,918 (20.6)
Rate per operating day
(US$)(1) - 35,072 (100.0) 26,130 34,836 (25.0)
Utilization rate -
operating day(1) - 73% (100.0) 7% 61% (88.5)
Number of barge drilling
rigs at period end(4) - 2 (100.0) - 2 (100)
Number of barge drilling
rigs under Bareboat
Charter Agreements at
period end(4) - 3 (100.0) - 3 (100.0)
TDI Joint Venture
Operations(2)
Operating days(1) 595 1,521
Rate per operating day
(CDN$)(1) 59,609 60,416
Rate per operating day
(US$)(1) 46,591 48,536
Utilization rate -
operating day(1) 99% 96%
Number of drilling rigs at
period end(4) 8 4 100.0 8 4 100.0
DCM Joint Venture
Operations(3)
Number of drilling rigs at
period end(4) 2 2
Number of service rigs at
period end(4) 2 2
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1. See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document for further details.
2. Trinidad is party to a joint venture with a wholly-owned subsidiary of
Halliburton (TDI). These rigs are owned by the joint venture. Operating
data prior to 2015 has not been provided given the start-up nature of
the operations.
3. As part of the CanElson acquisition, effective August 11, 2015, Trinidad
acquired a 50% ownership of a joint venture operating under the name
Diavaz CanElson de Mexico, S.A. de C.V. (DCM).
4. Refer to the Results from Operations section for details on the changes
to the rig count.



OVERVIEW

Weak commodity prices and slowing customer demand in the third quarter and first nine months of 2015 led to lower activity levels and reduced profitably compared to the same periods last year. The impact of these challenging conditions was partly offset by the addition of CanElson's operations during the third quarter and continuing strong performance from the Company's international joint venture operations.

In the third quarter and first nine months of 2015, adjusted EBITDA was $45.0 million and $139.7 million, respectively. Adjusted EBITDA decreased by 30.4% in the quarter and 20.1% year to date, compared to the same periods in 2014, as weaker market conditions reduced the number of operating days and continued to put downward pressure on dayrates. In reaction to these conditions, Trinidad reviewed its cost structure and resized its business to better manage through the downturn. The Company lowered general and administrative costs, restructured its manufacturing division and significantly lowered costs in non-core operating areas such as its barge drilling operations. In addition to these cost cutting initiatives, the impact of higher early termination and standby revenue and a growing contribution from Trinidad's international joint venture helped mitigate the impact of weaker customer demand on cash flow generation and margins in the current periods.

Trinidad recorded a net loss of $87.6 million or $0.48 per share - diluted in the quarter, down 557.4% from net income of $19.2 million in the same quarter last year, largely as a result of lower adjusted EBITDA, higher finance and transaction costs, and an impairment of goodwill and property and equipment, partly offset by lower depreciation and deferred income tax expenses in the current period. Year to date in 2015, Trinidad recorded a net loss of $77.0 million or $0.52 per share - diluted, down 482.8% from the same period last year. Net earnings decreased year to date as a result of the items impacting the current quarter and were further impacted by higher foreign exchange expense and a smaller gain on sale of property and equipment in the current period.

On August 11, 2015, Trinidad closed the previously announced acquisition of CanElson. This transaction added 51 land drilling rigs to Trinidad's operations across North America, growing the Company's geographic relevance in key operating areas, expanding its product offering and customer base, and reducing overall corporate leverage. The acquisition was financed through a combination of $295.2 million of shares issued and $50.0 million of cash paid. Integration of the operations began in the third quarter and is expected to be largely complete by the end of 2015.

After a brief improvement during the second quarter of 2015, crude oil prices continued to weaken in the third quarter of 2015. Natural gas prices increased slightly in the current quarter compared to the previous quarter of 2015 but remained weak year over year. Continued weakness in commodity prices led to cutbacks in capital spending for oil and gas producers and lower activity in the current quarter and year to date in 2015. Industry utilization in Canada typically improves in the third quarter as seasonal conditions allow rigs to return to work. In the third quarter of 2015, activity levels did improve from the previous quarter; however, the magnitude of improvement was significantly smaller than in 2014 and historical normal activity. The active rig count in the US continued to lower in the third quarter, reaching levels below those experienced in the 2009 industry downturn.

INDUSTRY STATISTICS



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Full Full
2015 Year 2014 Year 2013
Q3 Q2 Q1 2014 Q4 Q3 Q2 Q1 2013 Q4
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Commodity
Prices
Aeco natural
gas price
(CDN$ per
gigajoule) 2.76 2.54 2.60 4.28 3.44 3.82 4.45 5.34 3.01 3.33
Henry Hub
natural gas
price (US$
per mmBtu) 2.75 2.73 2.87 4.36 3.76 3.94 4.59 5.15 3.72 3.84
Western
Canada
Select crude
oil price
(CDN$ per
barrel) 41.22 59.40 43.52 82.00 65.42 85.68 91.34 85.81 75.84 69.62
WTI crude oil
price (US$
per barrel) 46.48 57.85 48.49 93.06 73.21 97.60 103.06 98.72 98.01 97.56
Canadian / US
dollar
exchange
rate 1.31 1.23 1.24 1.10 1.14 1.09 1.09 1.10 1.03 1.05

US Activity
Average
industry
active land
rig count(1) 829 935 1,403 1,789 1,843 1,828 1,781 1,705 1,685 1,679
Average
Trinidad
active land
rig count(2) 26 24 30 50 52 53 47 48 50 49

Canadian
Activity
Average
industry
utilization
(3) 24% 13% 35% 44% 45% 46% 28% 58% 40% 43%
Average
Trinidad
utilization
(4) 32% 7% 46% 52% 57% 61% 24% 68% 48% 48%
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1. Baker Hughes rig counts (information obtained from Tudor, Pickering,
Holt & Co. weekly rig roundup report).
2. Includes US and international rigs.
3. Canadian Association of Oilwell Drilling Contractors (CAODC)
utilization.
4. Based on drilling days (spud to rig release dates).



THIRD QUARTER AND YEAR-TO-DATE 2015 HIGHLIGHTS



-- Adjusted EBITDA in the third quarter was $45.0 million and $139.7
million year to date in 2015, down 30.4% and 20.1% from the same periods
last year. Adjusted EBITDA declined in the current periods largely as a
result of lower activity in the Canadian and US operations driven by
weakening commodity prices. The impact of lower activity levels was
partly offset by the addition of the CanElson operations, higher early
termination and standby revenue received in the US and international
operations and a growing contribution from the Company's international
joint venture with Halliburton.
-- Operating income - net percentage was 43.9% in the third quarter and
41.9% year to date for 2015, up from 34.7% and 35.4% for the same
periods in 2014. Operating income - net percentage increased as a result
of higher early termination and standby revenue and cost cutting
initiatives undertaken by Trinidad. In addition, in the current periods,
there was lower manufacturing revenue than in the prior year. The
manufacturing division typically generates lower margins than Trinidad's
drilling operations as the external new builds are constructed for
Trinidad's joint venture company and joint venture partner Halliburton
at cost plus a small margin.
-- Net loss was $87.6 million for the third quarter compared to net
earnings of $19.2 million in the third quarter of 2014. Net loss was
$77.0 million year to date for 2015 compared to net earnings of $20.1
million in the prior year. The decrease in net earnings from the prior
year was largely driven by a larger impairment expense and higher
foreign exchange expense in the current period, partly offset by lower
depreciation and deferred income tax expenses. Year to date, net loss
was also impacted by a lower gain on sale of property and equipment in
the current year. The impairment expense recorded in the current period
was $138.8 million, of which $26.9 million related to the remaining
value on the Company's barge rigs and $111.8 million related to goodwill
in its US and international operations.
-- In the third quarter, Trinidad closed the previously announced
acquisition of CanElson. This transaction added 51 rigs to Trinidad's
operations across North America, increasing the Company's geographic
market share in key operating areas, expanding its product offering and
customer base, and reducing overall corporate leverage.
-- At the end of the third quarter, Trinidad had Consolidated Total Debt to
Bank EBITDA of 2.65:1. Due to the closing of the CanElson acquisition in
the third quarter, Trinidad's maximum covenant is relaxed to 4.50:1 for
the following two quarters, after which it reverts to 4.00:



RESULTS FROM OPERATIONS

Canadian Operations



----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands except
percentage and operating % %
data) 2015 2014 Change 2015 2014 Change
----------------------------------------------------------------------------
Operating revenue(1) 50,981 84,481 (39.7) 123,412 225,769 (45.3)
Other revenue 142 180 (21.1) 215 1,260 (82.9)
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51,123 84,661 (39.6) 123,627 227,029 (45.5)
Operating costs(1) 29,604 47,843 (38.1) 73,201 130,867 (44.1)
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Operating income(3) 21,519 36,818 (41.6) 50,426 96,162 (47.6)
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Operating income - net
percentage(3) 42.1% 43.5% 40.8% 42.4%

Operating days(3) 2,109 3,424 (38.4) 4,832 8,932 (45.9)
Drilling days(3) 1,987 3,170 (37.3) 4,471 8,201 (45.5)
Rate per operating day
(CDN$)(3) 23,695 24,669 (3.9) 25,330 25,277 0.2
Utilization rate -
operating day(3) 34% 66% (48.5) 31% 55% (43.6)
Utilization rate - drilling
day(3) 32% 61% (47.5) 29% 50% (42.0)
CAODC industry average(2) 24% 46% (47.8) 24% 43% (44.2)

Number of drilling rigs at
period end 82 61 34.4 82 61 34.4
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1. Operating revenue and operating costs for the three months ended
September 30, 2015 and 2014 exclude third party recovery and third party
costs of $4.5 million and $9.5 million, respectively. Operating revenue
and operating costs for the nine months ended September 30, 2015 and
2014 exclude third party recovery and third party costs of $12.4 million
and $28.9 million, respectively.
2. CAODC industry average is based on drilling days divided by total days
available.
3. See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document for further details.



Trinidad's Canadian operations were impacted by weak commodity prices and reduced customer demand in the third quarter and first nine months of 2015. Lower activity levels resulted in reduced operating days, utilization and operating income in 2015, compared to the same period last year. The impact of weak industry conditions was slightly offset by the acquisition of CanElson, which added 28 drilling rigs to Trinidad's Canadian division during the third quarter.

Operating revenue for the three and nine months ended September 30, 2015, decreased by $33.5 million and $102.4 million, respectively, from 2014. Revenue declined entirely as a result of the reduction in operating days, which decreased by 38.4% and 45.9%, respectively. The impact of lower activity was slightly offset by the addition of the CanElson rigs, which contributed 459 operating days in the quarter. Despite the challenging market conditions, Trinidad was able to maintain utilization levels eight percentage points higher than the industry average, reflecting the Company's solid contract base and its ongoing focus on strong operational performance and safety. Dayrates remained relatively unchanged compared to the same periods last year as the impact of weaker customer demand was largely offset by higher relative utilization of larger, high specification rigs.

Operating income - net percentage declined slightly in the three and nine months ended September 30, 2015, by 1.4% and 1.6%, respectively. Trinidad's operating costs are highly variable allowing the Company to lower its operating costs largely in line with the lower activity level. The slight decline in profitability was due to the fixed nature of some operating support costs spread over fewer operating rigs. Trinidad has continued to work with its suppliers to reduce costs in all aspects of its operations. As well, the Company continues to monitor repair and maintenance expenditures, incurring expenses on rigs only as they return to work.

In the third quarter of 2015, Trinidad's rig count increased by 21 rigs compared to the same quarter last year. The rig count increased as a result of the CanElson acquisition which added 28 rigs to the Canadian rig fleet in the third quarter. As well, one new build was delivered in the first quarter of 2015 from Trinidad's manufacturing operations, and eight rigs were decommissioned at December 31, 2014.

Third quarter of 2015 versus second quarter of 2015

Operating revenue and operating income increased by $38.9 million and $18.2 million, respectively, in the third quarter of 2015, compared to the second quarter of 2015. The second quarter is typically affected by spring break-up, as weather conditions and road bans restrict the movement of heavy equipment, resulting in lower activity. During the third quarter, drilling activity typically increases as areas become more accessible to drilling rigs. Dayrates declined in the current quarter by 25.3% to $23,695 per day compared to $31,731 per day in the previous quarter. The second quarter had fewer operating days but higher relative utilization of high specification rigs, driving a higher average dayrate. The third quarter had more operating days and a more diverse group of rigs working, reflecting a more normalized dayrate in the period. Operating margin - net percentage increased in the third quarter to 42.1% compared to 27.4% in the second quarter of 2015 as a result of higher revenue generation combined with cost control programs implemented earlier in the year.

United States and International Operations



----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands except
percentage and operating % %
data) 2015 2014 Change 2015 2014 Change
----------------------------------------------------------------------------
Operating revenue(1) 66,454 124,742 (46.7) 230,744 351,643 (34.4)
Other revenue 87 99 (12.1) 472 212 122.6
-------------------------------------------------
66,541 124,841 (46.7) 231,216 351,855 (34.3)
Operating costs(1) 35,526 82,588 (57.0) 118,614 230,998 (48.7)
-------------------------------------------------
Operating income(1) 31,015 42,253 (26.6) 112,602 120,857 (6.8)
-------------------------------------------------
Operating income - net
percentage(2) 46.6% 33.8% 48.7% 34.3%

Land Drilling Rigs
Operating days(2) 2,199 4,906 (55.2) 7,096 13,657 (48.0)
Drilling days(2) 1,964 4,303 (54.4) 6,168 11,881 (48.1)
Rate per operating day
(CDN$)(2) 30,223 22,842 32.3 32,269 23,422 37.8
Rate per operating day
(US$)(2) 23,582 21,092 11.8 26,160 21,492 21.7
Utilization rate -
operating day(2) 40% 96% (58.3) 49% 84% (41.7)
Utilization rate - drilling
day(2) 35% 85% (58.8) 43% 73% (41.1)
Number of drilling rigs at
period end 72 54 33.3 72 54 33.3

Barge Drilling Rigs
Operating days(2) - 334 (100.0) 57 837 (93.2)
Rate per operating day
(CDN$)(2) - 37,967 (100.0) 30,098 37,918 (20.6)
Rate per operating day
(US$)(2) - 35,072 (100.0) 26,130 34,836 (25.0)
Utilization rate -
operating day(2) - 73% (100.0) 7% 61% (88.5)
Number of barge drilling
rigs at period end - 2 (100.0) - 2 (100.0)
Number of barge drilling
rigs under
Bareboat Charter
Agreements at period end - 3 (100.0) - 3 (100.0)
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1. Operating revenue and operating costs for the three months ended
September 30, 2015 and 2014 exclude third party recovery and third party
costs of $1.6 million and $3.7 million, respectively. Operating revenue
and operating costs for the nine months ended September 30, 2015 and
2014 exclude third party recovery and third party costs of $6.5 million
and $13.4 million, respectively.
2. See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document for further details.



In the three months and nine months ended September 30, 2015, Trinidad's US and international operations were also impacted by lower commodity prices and reduced capital spending by oil and gas producers. Despite these market conditions, Trinidad recorded increased operating income - net percentage and higher dayrates compared to the prior year, mainly as a result of increased early termination revenue recorded in 2015. Additionally, Trinidad's overall revenue generation was positively impacted by the CanElson acquisition which added 21 rigs to the US drilling operations during the third quarter of 2015. As well, Trinidad's US and international operations were positively impacted by the foreign exchange fluctuations in 2015 as the US dollar was significantly stronger than the Canadian dollar in the current periods.

Dayrates in the three and nine months ended September 30, 2015 for the US land drilling operations increased by US$2,490 per day and US$4,668 per day, respectively, when compared to 2014. Dayrates increased in the current periods mainly as a result of higher early termination and standby revenue recorded in 2015. Additionally, a change in rig mix led to a higher proportion of contracted high specification rigs operating in the current year. Excluding all early termination and standby revenue, dayrates increased by US$864 per day in the current quarter and US$373 per day year to date, compared to the same periods last year reflecting the higher specification rigs operating in 2015.

Utilization for land rigs decreased to 40% and 49%, respectively, in the three and nine months ended September 30, 2015, compared to 96% and 84%, respectively, for the same periods in 2014. Operating days recorded in 2015 were also lower by 2,707 days and 6,561 days, respectively, in the first three and nine months of 2015 compared to the prior year. During 2015, lower commodity prices caused oil and gas producers to significantly cut back capital programs, which was reflected in Trinidad's utilization and operating days in 2015. The reduction in operating days was slightly offset by the CanElson acquisition which closed in August of 2015 and added 273 additional operating days to the current quarter.

Trinidad's drilling contracts assisted in mitigating the effects of weakened industry conditions in 2015, as a number of customers chose to terminate contracts early due to reduced capital spending plans. Early termination and standby revenues for the three and nine months ended September 30, 2015 was US$6.8 million and US$34.7 million, respectively (2014 - US$0.3 million and US$7.8 million, respectively). The early termination and standby revenues reflect the operating income that would have been recorded over the period of time the contract was originally extended. For the three months ended September 30, 2015 and 2014, all early termination revenue would have been earned in the current period had the contracts remained ongoing. For the nine months ended September 30, 2015 and 2014, US$2.6 million and US$1.3 million, respectively, would have been earned outside of the current period had the contracts remained ongoing.

Operating income - net percentage increased quarter over quarter and year over year in 2015 compared to the same periods in 2014. Higher early termination and standby revenue combined with a stronger US dollar versus Canadian dollar had a positive impact on revenue generation and operating income - net percentage as this revenue has no associated costs, which causes an increase in the margin. As a result of weaker industry conditions and lower activity levels, Trinidad has reduced its operating cost structure. In addition to lower wages and reduced headcount, the Company has closed field offices and reduced supply costs wherever possible.

At September 30, 2015, Trinidad's US and international rig count totaled 72 rigs, an increase of 18 rigs from the same period last year. The rig count increased as a result of the addition of 21 rigs from the CanElson acquisition, three contracted new build rigs delivered by Trinidad's manufacturing division during 2015, and one new rig in the Middle East. This was partly offset by the decommissioning of seven rigs at December 31, 2014.

Operations in the barge drilling market reflected the continued softening of market conditions in 2015 and Trinidad recorded no operating days during the second and third quarters of the current year. As dayrates in the industry continued to decline and competition intensified for available drilling work, Trinidad chose to stack all five barge rigs during the first quarter of 2015. The Company scaled back staffing levels and costs to reflect the current market and Trinidad did not extend the Bareboat Charter Agreements that expired at the end of the first quarter. Due to the downturn of the barge market, Trinidad has decided not to market its barge rigs in the near term in order to focus on its core land drilling business. Therefore, as of September 30, 2015, all barge rigs have been removed from Trinidad's rig count, and all barge rig assets have been impaired to nil value.

Third quarter of 2015 versus second quarter of 2015

Compared to the second quarter of 2015, operating revenue and operating income decreased by $6.6 million and $7.1 million, respectively, in the third quarter of 2015. Activity levels and utilization continued to decline as commodity prices remained weak causing lower customer demand. This decrease in activity was partly offset by the CanElson acquisition which allowed Trinidad to record 273 additional operating days in the third quarter. The Company recorded US$6.8 million of early termination and standby revenue in the third quarter of 2015 compared to US$11.8 million in the second quarter of 2015. Excluding all early termination and standby revenue in each quarter, land drilling dayrates were US$1,017 lower on average in the third quarter than in the second quarter.

Trinidad recorded no operating days in the barge drilling operations in either of the second or third quarter of 2015 due to the continued downturn in the barge rig market. As at September 30, 2015, the Company decided to focus on its core land drilling business and does not intend to operate in the barge drilling market in the near term. As such, the remaining two barge rigs have been removed from Trinidad's rig count, and all barge rig assets have been impaired to nil value.

Joint Venture Operations

Trinidad Drilling International (TDI):

Amounts are presented at 100% of the value included in the statement of operations and comprehensive income for TDI; Trinidad owns 60% of the shares of TDI.



----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands except
percentage and operating % %
data) 2015 2014(2) Change 2015 2014(2) Change
----------------------------------------------------------------------------
Operating revenue 36,954 11,136 231.8 95,053 24,589 286.6
Operating costs 20,026 7,161 179.7 52,620 14,483 263.3
-----------------------------------------------
Operating income(1) 16,928 3,975 325.9 42,433 10,106 319.9
-----------------------------------------------
Operating income - net
percentage(1) 45.8% 35.7% 44.6% 41.1%

Operating days(1) 595 1,521
Rate per operating day
(CDN$)(1) 59,609 60,416
Rate per operating day
(US$)(1) 46,591 48,536
Utilization rate - operating
day(1) 99% 96%
Number of drilling rigs at
period end 8 4 100.0 8 4 100.0
Number of active drilling
rigs at period end 7 3 133.3 7 3 133.3
----------------------------------------------------------------------------

1. See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document for further details.
2. Operating data prior to the first quarter of 2015 has not been provided
given the start-up nature of the operations.



Operating revenue for the three and nine months ended September 30, 2015, increased by $25.8 million and $70.5 million, respectively, relative to the same periods in the prior year. These increased are due to expanding operations in each of Saudi Arabia and Mexico. Trinidad recorded increased operating days in 2015 on the four rigs located in Saudi Arabia. Additionally, at September 30, 2015, all four of TDI's Mexico rigs were in country and were either actively drilling, or waiting on location and collecting standby and mobilization revenue. As these rigs were delivered over the past 12 months, this has significantly improved operations in the current year.

For the three and nine months ended September 30, 2015, dayrates were positively impacted by mobilization and standby revenue recorded on TDI's Mexico rigs. Operating income and operating income - net percentage also increased in the current periods, driven by increasing activity levels as well as mobilization and standby revenue. Mobilization and standby revenue is recorded with no associated operating days or operating costs, increasing the overall average dayrate and operating income - net percentage.

TDI took ownership of the remaining two rigs for its Mexican operations in the first quarter of 2015, bringing the total rig count in the joint venture to eight. As at September 30, 2015, TDI had all four rigs in Saudi Arabia and three rigs in Mexico drilling, with the remaining Mexico rig waiting on location.

Diavaz CanElson de Mexico, S.A. de C.V. (DCM):

As part of the CanElson acquisition, which closed effective August 11, 2015, Trinidad acquired a 50% ownership of Diavaz CanElson de Mexico, S.A. de C.V., a joint venture which operates drilling and service rigs in Mexico. DCM currently has two drilling rigs and two service rigs in Mexico. For the period August 11 to September 30, Trinidad's portion of DCM's income was a loss of $0.2 million due to minimal operations during this period. Subsequent to the quarter close, DCM had one service rig and one land rig begin operations.

Manufacturing Operations



----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands except % %
percentage) 2015 2014 Change 2015 2014 Change
----------------------------------------------------------------------------
Operating revenue(1) 162 21,452 (99.2) 39,049 42,719 (8.6)
Other revenue (2) 32 (106.3) 4 45 (91.1)
-------------------------------------------------
160 21,484 (99.3) 39,053 42,764 (8.7)
Operating costs(1) 977 20,330 (95.2) 36,986 39,414 (6.2)
-------------------------------------------------
Operating income(2) (817) 1,154 (170.8) 2,067 3,350 (38.3)
-------------------------------------------------
Operating income - net
percentage(2) (510.6%) 5.4% 5.3% 7.8%
----------------------------------------------------------------------------

1. For the three months ended September 30, 2015, excluded from operating
revenue and operating costs are downstream elimination entries of $3.1
million and $3.0 million, respectively (2014 - $17.3 million and $16.3
million, respectively). For the nine months ended September 30, 2015,
excluded from operating revenue and operating costs are downstream
elimination entries of $54.6 million and $52.0 million, respectively
(2014 - $34.1 million and $31.5 million, respectively). These entries
remove Trinidad's percentage of profits related to the manufacturing of
rigs for the TDI joint venture.
2. See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document for further details.



Activity in Trinidad's manufacturing operations declined significantly in the current quarter as rig construction was largely complete. During the quarter, the Company restructured its manufacturing operations, resizing its cost base to better reflect the weak industry conditions and lower activity levels. These changes are expected to reduce operating costs in future periods.

For the nine months ended September 30, 2015, Trinidad recognized revenue and expenses related to the rigs it was building for the Mexico joint venture operations and for the training rig it was building for Halliburton. For the nine months ended September 30, 2014, Trinidad recognized revenue and expenses related to the rigs it was building for the joint venture operations in Saudi Arabia and Mexico, as well as amounts related to the training rigs it was building for Halliburton.

During 2015, Trinidad constructed three new rig builds under long-term, take-or-pay contracts for its US operations. The rigs were all high performance Candrill, 1,500 horsepower, alternating current (AC) rigs with walking systems and 7,500 pounds per square inch (PSI) circulating systems. One of the rigs was completed in each of the first, second and third quarters of 2015.

The purpose of the manufacturing operations is to support rig builds, rig maintenance and re-certifications for all of Trinidad's divisions, including all associates and joint ventures. Management does not commit to building a rig with the intention to earn significant profits on the rig build, and instead evaluates projects based on capital allocation and returns for the Company as a whole. All contracts are based on a cost-plus formula which is calculated in order for Trinidad to break even on rig builds when all costs, including general and administrative expenses, are factored in. Contracts are negotiated depending on the Company's varying involvement, which can range from full scale design and manufacturing to project management with a large degree of outsourcing.

Trinidad continues to support current operations through its manufacturing division; however, no rig builds are scheduled at this time.

FINANCIAL HIGHLIGHTS - QUARTERLY ANALYSIS



----------------------------------------------------------------------------
2015 2014 2013
($ millions except
per share data and
operating data) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
----------------------------------------------------------------------------
Revenue 124.3 95.2 194.4 276.4 244.5 168.9 251.5 224.6
Operating income(1) 52.0 41.9 72.3 93.9 80.5 45.6 95.2 99.6
Operating income
percentage(1) 41.8% 44.0% 37.2% 34.0% 32.9% 27.0% 37.8% 44.4%
Operating income -
net percentage(1) 43.9% 46.3% 38.5% 35.6% 34.7% 28.3% 41.1% 47.0%
Net (loss) earnings (87.6) (1.5) 12.1 (13.5) 19.2 (24.8) 25.9 28.8
Adjustments for:
Depreciation and
amortization 26.6 19.7 23.6 34.0 33.4 27.3 30.3 29.5
Foreign exchange 3.3 - 6.2 (0.1) 0.5 1.5 3.1 0.9
(Gain) loss on
sale of property
and equipment (0.6) (0.4) (1.1) 3.5 0.1 (1.3) (10.5) 0.1
Impairment of
property and
equipment 26.9 - - 56.9 - 20.6 - -
Impairment of
goodwill 111.8 - - - - - - -
(Gain) loss from
investment in
joint ventures (2.8) (0.6) (1.2) (1.3) 1.6 (0.4) 0.1 0.8
Finance and
transaction costs 17.9 12.9 11.4 9.8 9.7 10.0 10.0 12.0
Income taxes (56.1) (3.4) 4.4 (8.9) 4.9 (7.2) 15.3 11.1
Interest Income - - - - (0.1) (0.1) (0.2) (0.1)
Other expense (1.9) 1.4 2.9 0.6 (4.0) 5.3 5.5 1.5
Income taxes paid (1.1) (2.0) (1.6) (0.3) (0.7) (0.7) (0.5) (1.8)
Income taxes
recovered 2.9 0.1 0.2 0.4 1.3 0.2 0.3 1.5
Interest paid (22.9) (1.1) (20.7) (1.4) (19.5) (0.5) (18.7) (1.1)
Interest received - - - - 0.1 0.1 0.2 0.1
--------------------------------------------------------
Funds provided by
operations 16.4 25.1 36.1 79.7 46.5 30.0 60.8 83.3
Net earnings (loss)
per share
(diluted)(1) (0.48) (0.01) 0.09 (0.10) 0.14 (0.18) 0.19 0.23
Funds provided by
operations per
share (diluted)(1) 0.09 0.19 0.27 0.58 0.34 0.22 0.44 0.67
----------------------------------------------------------------------------

1. See the Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document for further details.



NON-GAAP MEASURES HIGHLIGHTS - QUARTERLY ANALYSIS



----------------------------------------------------------------------------
2015 2014 2013
($millions except per share
data) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
----------------------------------------------------------------------------
EBITDA(1) (99.1) 27.7 51.5 21.3 67.2 5.4 81.3 81.2
Per share (diluted)(2) (90.5
4) 0.21 0.39 0.15 0.48 0.04 0.58 0.65
Adjusted EBITDA(1) 45.0 34.7 60.0 77.3 64.6 30.6 79.4 83.8
Per share (diluted)(2) 0.25 0.26 0.45 0.56 0.47 0.22 0.57 0.68
Adjusted net (loss)
earnings(1) 1.0 (0.3) 18.0 23.6 14.6 (5.6) 27.7 31.2
Per share (diluted)(2) 0.01 - 0.13 0.17 0.11 (0.04) 0.20 0.25
----------------------------------------------------------------------------

1. See the Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document for further details.
2. Diluted shares include the weighted average number of shares outstanding
over the period and the dilutive impact, if any, of the number of shares
issuable pursuant to the Incentive Option Plan.



OPERATING HIGHLIGHTS - QUARTERLY ANALYSIS



----------------------------------------------------------------------------
2015 2014 2013
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
----------------------------------------------------------------------------
Land Drilling
Market
Operating days(1)
Canada 2,109 380 2,343 3,271 3,424 1,430 4,077 2,935
United States
and
International 2,199 2,202 2,695 4,820 4,906 4,441 4,311 4,470
Rate per
operating day(1)
Canada (CDN$) 23,695 31,731 25,764 26,624 24,669 26,338 25,415 25,102
United States
and
International
(CDN$) 30,223 33,184 33,194 25,150 22,842 22,890 24,630 27,243
United States
and
International
(US$) 23,582 26,755 27,778 22,476 21,092 20,819 22,641 26,213
Utilization rate
- operating
day(1)
Canada 34% 8% 50% 62% 66% 26% 74% 52%
United States
and
International 40% 50% 61% 97% 96% 80% 76% 71%
Number of
drilling rigs at
period end(4)
Canada 82 54 54 53 61 59 61 61
United States
and
International 72 49 47 47 54 56 61 64
Barge Drilling
Market
Operating days
(1) - - 57 212 334 259 244 394
Rate per
operating day
(CDN$)(1) - - 29,993 36,616 37,967 37,953 37,815 34,810
Rate per
operating day
(US$)(1) - - 26,051 32,795 35,072 34,599 34,767 33,490
Utilization rate
- operating
day(1) - - 13% 46% 73% 57% 54% 86%
Number of barge
drilling rigs at
period end(4) - 2 2 2 2 2 2 2
Number of barge
drilling rigs
under
Bareboat
Charter
Agreements at
period end(4) - - 3 3 3 3 3 3
TDI Joint Venture
Operations(2)
Operating days(1) 595 516 410
Rate per
operating day
(CDN$)(1) 59,609 60,555 61,412
Rate per
operating day
(US$)(1) 46,591 48,959 50,825
Utilization rate
- operating
day(1) 99% 95% 94%
Number of
drilling rigs at
period end(4) 8 8 8 6 4 4 3
DCM Joint Venture
Operations (3)
Number of
drilling rigs at
period end(4) 2
Number of service
rigs at period
end(4) 2
----------------------------------------------------------------------------

1. See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document for further details.
2. Trinidad is party to a joint venture with a wholly-owned subsidiary of
Halliburton (TDI). These rigs are owned by the joint venture. Operating
data prior to 2015 has not been provided due to the start-up nature of
the operations.
3. As part of the CanElson acquisition, effective August 11, 2015, Trinidad
acquired 50% ownership of a joint venture operating under the name
Diavaz CanElson de Mexico, S.A. de C.V. (DCM).
4. Refer to the Results from Operations section for details on changes to
the rig count.



GENERAL AND ADMINISTRATIVE



----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands except % %
percentage) 2015 2014 Change 2015 2014 Change
----------------------------------------------------------------------------
General and administrative
(1) 14,388 15,867 (9.3) 44,029 46,660 (5.6)
% of revenue 11.6% 6.5% 10.6% 7.0%
------------------------------------------------
Share-based payment expense (2,202) (5,108) 56.9 (473) 4,223 (111.2)
Third party recoverable
costs 292 311 (6.1) 1,092 962 13.5
------------------------------------------------
Total general and
administrative 12,478 11,070 12.7 44,648 51,845 (13.9)
------------------------------------------------
% of revenue 10.0% 4.5% 10.8% 7.8%
----------------------------------------------------------------------------

1. General and administrative expenses excluding share-based payment
expense and third party recoverable costs. This number is discussed as
"Other G&A" per the below analysis.



For the three and nine months ended September 30, 2015, total general and administrative (G&A) expenses increased by 12.7% and decreased by 13.9%, respectively, when compared to the same periods in 2014.

For the three and nine months ended September 30, 2015, Other G&A expenses decreased by $1.5 million and $2.6 million, respectively, when compared to the prior year. In light of poor market conditions, Trinidad implemented several measures in the first quarter of 2015 to lower its G&A expenses. These measures included a headcount reduction, a 10% reduction in salaries and board fees for all executives and directors and a company-wide average wage rollback of 7% for salaried employees. Additionally, Trinidad has significantly reduced expenditures in non-core business activities. As such, cost savings in Trinidad's barge market operations reduced overall G&A in 2015. These reductions were partly offset by higher rent expense recorded in 2015 as well as added costs related to the CanElson acquisition. Additional cost control measures have been implemented in the fourth quarter of 2015 and are expected to continue to lower Other G&A expenses for the remainder of 2015 and into 2016.

For the three months ended September 30, 2015, share-based payment expense increased by $2.9 million compared to the same period in 2014. In the prior year, Trinidad recorded a credit as a result of a decrease in share price and a large number of Performance Share Units (PSUs) were forfeited. These combined factors caused a decrease in the PSU liability, offsetting the expense. When compared to the current quarter, this credit resulted in an increase in the share-based payment expense in the third quarter of 2015.

For the nine months ended September 30, 2015, share-based payment expenses decreased by $4.7 million mainly due to a lower share price in 2015. This decrease was partly offset by an increase in the number of Deferred Share Units and PSU's outstanding during the current year.

Third party recoverable costs relate to costs incurred by Trinidad on behalf of the TDI joint venture. As these costs are fully recoverable, Trinidad records a related revenue entry for this same amount, causing a nil net income effect.

FINANCIAL SUMMARY



As at September 30, December 31,
($ thousands) 2015 2014 $ Change
----------------------------------------------------------------------------
Working capital (1) 92,797 166,502 (73,705)

Senior notes 598,317 519,759 78,558
Credit facility 84,888 15,000 69,888
Limited partnership loans 2,854 - 2,854
---------------------------------------------
686,059 534,759 151,300
---------------------------------------------
Less: unamortized debt issue
costs (5,917) (6,951) 1,034
---------------------------------------------
Total long-term debt 680,142 527,808 152,334
---------------------------------------------
Total long-term debt as a
percentage of assets 28.7% 27.2%
----------------------------------------------------------------------------

Total assets 2,372,949 1,941,621 431,328
Total long-term liabilities 811,101 628,047 183,054
---------------------------------------------
Total long-term liabilities as
a percentage of assets 34.2% 32.3%
----------------------------------------------------------------------------

Nine months ended June 30, 2015 2014 $ Change
----------------------------------------------------------------------------
Cash provided by operations 108,794 150,662 (41,868)
Cash used by investing (205,259) (262,334) 57,075
Cash provided (used) by
financing 41,227 (20,132) 61,359
----------------------------------------------------------------------------

1. See Non-GAAP Measures Definitions section at the end of this document
for further details.



For the nine months ended September 30, 2015, working capital decreased by $73.7 million when compared to December 31, 2014, due to a decrease in current assets of $126.1 million partly offset by a decrease in current liabilities of $52.3 million.

Current assets decreased in the year mainly due to a reduction in accounts receivable as a result of lower activity in 2015. As well, costs included in inventory and prepaid expenses at December 31, 2014, mainly relating to the manufacturing of external rig builds, were removed as Trinidad's manufacturing division completed work on the remaining external builds in the first half of 2015.

Current liabilities decreased in the current period mainly as a result of a decrease in accounts payable due to lower activity during the period for operations in Canada and the US, combined with lower activity on external rig builds. Deferred revenue declined as the manufacturing division completed its external rig builds and recognized the corresponding amounts collected in advance. This was slightly offset by the increase in dividends payable due to the increased number of shares outstanding at September 30, 2015 versus December 31, 2014, as well as an increase in the current portion of long-term debt due to acquired debt balances. Both of these increases were a result of the CanElson acquisition.

Trinidad's total long-term debt balance at September 30, 2015 increased by $152.3 million compared to December 31, 2014. This increase was largely due to an increase in the Senior Notes at September 30, 2015, as a result of the increase in the US to Canadian dollar exchange rate at quarter end, as these notes are held in US funds. The Senior Notes are translated at each period end and, as such their aggregate value fluctuates with exchange rates. The Senior Notes are due on January 15, 2019 and interest is payable semi- annually in arrears on January 15 and July 15. At September 30, 2015, $84.9 million was drawn on Trinidad's Canadian dollar revolving credit facility, compared to $15.0 million at December 31, 2014.

At September 30, 2015, the Company has available capacity of $115.1 million on its $200.0 million Canadian revolving facility and the entire US$200 million of the US revolving facility. In addition, Trinidad had $24.7 million in cash on hand.

The Canadian and US revolving facilities require quarterly interest payments that are based on Bankers Acceptance and LIBOR rates and incorporate a tiered interest rate, which varies depending on the results of the Consolidated Total Debt to EBITDA ratio.

Capital Expenditures



----------------------------------------------------------------------------
Nine months ended September 30,
($ thousands) 2015 2014
----------------------------------------------------------------------------
New builds 54,837 113,834
Capital upgrades and enhancements 19,274 63,647
Maintenance and infrastructure 11,487 25,765
Capital spares inventory 27,958 -
----------------------------------------------------------------------------
Total 113,556 203,246
----------------------------------------------------------------------------



During the nine months ended September 30, 2015, a total of $113.6 million was spent on capital expenditures compared to $203.2 million in the prior year. These capital expenditures were substantially related to the Company's rig build program for its US operations as well as completing upgrades on existing equipment and capital inventory related to canceled projects for new builds and upgrades.

In addition to the amounts above, Trinidad spent $39.3 million related to its portion of capital spending for the TDI joint venture in the first three quarters of 2015. TDI took ownership of the remaining two rigs for its Mexican operations in the first quarter of 2015.

2015 Annual Capital Budget



----------------------------------------------------------------------------
($thousands)
----------------------------------------------------------------------------
Growth capital (Trinidad owned equipment) 95,000
Capital inventory 35,000
Maintenance and infrastructure capital 15,000
145,000
Joint venture capital (Trinidad's 60% share) 40,000
----------------------------------------------------------------------------
Total 2015 capital budget 185,000
----------------------------------------------------------------------------



In 2015, Trinidad expects to spend a total of approximately $185.0 million on capital projects, which includes the original $175.0 million plus an additional $10.0 million due to the CanElson acquisition. This total includes the completion of three US new builds for Trinidad's fleet and two Mexican new builds for the joint venture. Certain items purchased for new builds and upgrades that have been cancelled will be put into capital inventory for use in Trinidad's existing fleet and future operations.

CanElson Acquisition

Effective August 11, 2015, Trinidad acquired all of the issued and outstanding shares of CanElson at 1.0631 common shares of Trinidad for each CanElson share, or $4.90 in cash per CanElson share to a maximum cash consideration of $50.0 million. As a result of the elections made by CanElson shareholders, Trinidad paid the full $50.0 million in cash and the remainder of the acquisition in common shares. The consideration paid for this acquisition was $70.9 million in net cash and $295.2 million in equity value (88,661,926 Trinidad common shares); whereby Trinidad acquired total capital additions worth a fair value of $395.0 million.

Trinidad expects cash provided by operations and the Company's various sources of financing to be sufficient to meet its debt repayments, future obligations and to fund planned capital expenditures.

Current financial performance is within the financial ratio covenants under the revolving credit facility as reflected in the table below:



RATIO September 30, December 31, THRESHOLD
2015 2014
----------------------------------------------------------------------------

Consolidated Senior Debt to
Consolidated Bank EBITDA (1) 0.29:1 (0.18):1 3.50:1 maximum
Consolidated Total Debt to
Consolidated Bank EBITDA (1) 2.65:1 1.93:1 4.50:1 maximum
Consolidated Bank EBITDA to
Consolidated Cash Interest
Expense (1) 4.80:1 6.20:1 2.75:1 minimum
----------------------------------------------------------------------------

1. Please see the Non-GAAP Measures Definitions section at the end of this
document for further details.



At September 30, 2015, Consolidated Total Debt to Bank EBITDA was 2.65 times, compared to 1.93 times at December 31, 2014. Consolidated Total Debt to Bank EBITDA increased due to lower adjusted EBITDA for the first half of 2015 compared to the prior year and a higher debt balance at September 30, 2015, resulting from a stronger US dollar translation and draws on the credit facility. Due to the CanElson acquisition, Trinidad has been granted a covenant relaxation for the Consolidated Total Debt to Consolidated Bank EBITDA from 4.00 to 4.50 for the fourth quarter of 2015 and the first quarter of 2016. Additionally, Trinidad will be including an amount of EBITDA related to the twelve trailing months based on the amount that would have been included had Trinidad acquired CanElson during this time.

Consolidated Bank EBITDA does not include EBITDA from investment in the joint ventures. Dividends paid to Trinidad from the joint venture would be eligible for inclusion in Consolidated Bank EBITDA in the period that payment occurs. At September 30, 2015, the cumulative adjusted EBITDA from the investment in the TDI joint venture was $21.2 million, of which no amounts have been paid back by the joint venture. Given the start-up nature of the operations, no payments of cumulative adjusted EBITDA from investment in the TDI joint venture have been made. If Trinidad's portion of the unpaid cumulative adjusted EBITDA from TDI's joint venture was included at September 30, 2015, the Total Debt to Bank EBITDA would be 2.37:1.

Readers are cautioned that the ratios noted above do not have standardized meanings as calculated under IFRS.

OUTLOOK

To date in the fourth quarter, activity levels in North America have remained relatively stable with those experienced towards the end of the third quarter. Crude oil prices continue to trade in a band between US$40 and US$50 per barrel, keeping the active rig count low and limiting the number of plays that are economic for oil and gas producers. Dayrates remain under pressure and Trinidad anticipates that these market conditions will remain in place throughout the upcoming winter drilling season and into 2016, unless there is an improvement in commodity prices.

Trinidad has restructured its business to operate in this weaker environment, further lowering its headcount and continuing to work with suppliers to lower costs. While these changes do not entirely offset the impact of lower activity levels and dayrates, the Company has significantly lowered its cost structure and has been able to maintain reasonable margins and cash flow generation in this challenging environment.

Following the close of the CanElson acquisition in the third quarter, Trinidad's management team has been focused on integrating the operations. To date, the integration of CanElson is progressing as planned and Trinidad expects the operations to be substantially integrated by the end of 2015.

Trinidad's joint venture operations with Halliburton continue to operate well, providing stable activity levels and profitability. The Company is evaluating a number of international opportunities with the potential to relocate existing idle assets to international locations. These opportunities are both through the Halliburton joint venture and for Trinidad independently.

Trinidad's contracts have helped to mitigate the effect of some of the weakness in the industry conditions to date in 2015. The long -term contracts have provided a level of stability and lump sum payments, partially offsetting lower activity levels on the remainder of the fleet. Trinidad currently has approximately 35% of its fleet under long-term contracts with an average term remaining of just under 1.5 years.

Trinidad is currently evaluating its 2016 capital program and while the details are yet to be confirmed, the Company expects to be extremely prudent with its expenditures. Capital expenditures are highly variable in the drilling business and Trinidad is able to significantly limit its cash outflows. Trinidad expects to use current inventory on future projects, thus reducing the capital expenditures required in the future.

At the end of the third quarter, Trinidad had $84.9 million drawn on its credit facility, with $115.1 million remaining on its Canadian credit facility and US$200.0 million available on its US credit facility. In addition, Trinidad had $24.7 million of cash on hand at the end of the third quarter. The Company also has the ability to repatriate cash totaling $21.2 million from its joint venture with Halliburton (TDI). Trinidad is responsive to market conditions and focused on preserving financial flexibility, as demonstrated by its fourth quarter dividend reduction. The relaxation of Trinidad's covenants following the CanElson acquisition and the ability to bring cash back from its TDI joint venture give the Company more room within its covenants; however, Trinidad will continue to monitor market conditions closely and will maintain an open dialogue with its banking syndicate.

The past year has proven to be a challenging time in the oilfield services sector. Trinidad has risen to this challenge, resizing its operations and improving its efficiencies to manage through the downturn. These changes along with an ongoing focus on safe, well-performing operations help differentiate Trinidad from its competition and maintain its strong position in the drilling industry.

CONFERENCE CALL



Conference Call: Wednesday, November 4, 2015
9:00 a.m. MT (11:00 a.m. ET)
877-291-4570 (toll-free in North America) or 647-
788-4922 approximately 10 minutes prior to the
conference call.

Archived Recording: Available from approximately 12:30 p.m. MT on
November 4, 2015 until midnight November 18, 2015.
The dial-in number is 800-585-8367or 416-621-4642.
Conference ID: 36597064.

Webcast: Available at
https://www.trinidaddrilling.com/investors/events-
presentations



TRINIDAD DRILLING LTD.

Trinidad is a corporation focused on sustainable growth that trades on the Toronto Stock Exchange under the symbol TDG. Trinidad's divisions currently operate in the drilling sector of the North American oil and natural gas industry, with operations in Canada and the United States (US). In addition, through joint venture arrangements, Trinidad operates drilling rigs in Saudi Arabia and Mexico, and is currently assessing operations in other international markets. 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.



CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

----------------------------------------------------------------------------
As at September 30, December 31,
($ thousands) - unaudited 2015 2014
----------------------------------------------------------------------------

Assets
Current Assets
Cash and cash equivalents 24,727 71,062
Accounts receivable 169,216 223,750
Inventory 16,186 29,618
Prepaid expenses 8,003 19,755
----------------------------------------------------------------------------
218,132 344,185

Property and equipment 1,841,088 1,325,730
Intangible assets and goodwill 14,771 99,678
Deferred income taxes 49,945 8,070
Investment in joint ventures 249,013 163,958
----------------------------------------------------------------------------
2,372,949 1,941,621
----------------------------------------------------------------------------

Liabilities
Current Liabilities
Accounts payable and accrued liabilities 108,747 156,003
Dividends payable 11,104 6,758
Deferred revenue and customer deposits 2,630 14,922
Current portion of long-term debt 2,854 -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
125,335 177,683

Long-term debt 677,288 527,808
Deferred income taxes 116,439 100,239
Non-controlling interest 17,374 -
----------------------------------------------------------------------------
936,436 805,730

Shareholders' Equity
Common shares 1,374,656 1,093,426
Contributed surplus 64,851 59,005
Accumulated other comprehensive income 177,340 62,470
Deficit (180,334) (79,010)
----------------------------------------------------------------------------
1,436,513 1,135,891
----------------------------------------------------------------------------
2,372,949 1,941,621
----------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME AND LOSS

----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands) - unaudited 2015 2014 2015 2014
----------------------------------------------------------------------------

Revenue
Oilfield service revenue 123,766 243,916 412,111 662,509
Other revenue 519 622 1,783 2,479
----------------------------------------------------------------------------
124,285 244,538 413,894 664,988
----------------------------------------------------------------------------

Expenses
Operating expense 72,276 164,002 247,707 443,655
General and administrative 12,478 11,070 44,648 51,845
Depreciation and amortization 26,648 33,389 69,953 91,074
Foreign exchange 3,318 509 9,517 5,298
(Gain) loss on sale of property and
equipment (635) 105 (2,119) (11,704)
Impairment of property and equipment 26,937 - 26,937 20,630
Impairment of goodwill 111,847 - 111,847 -
----------------------------------------------------------------------------
252,869 209,075 308,490 600,798
----------------------------------------------------------------------------

(Gain) loss from investment in joint
ventures (2,824) 1,645 (4,741) 1,357
Finance and transaction costs 17,947 9,715 42,267 29,723
----------------------------------------------------------------------------
(Loss) earnings before income taxes (143,707) 24,103 (132,122) 33,110
----------------------------------------------------------------------------

Income taxes
Current 134 (267) 3,371 3,628
Deferred (56,089) 5,214 (58,538) 9,379
----------------------------------------------------------------------------
(56,089) 4,947 (55,167) 13,007
----------------------------------------------------------------------------
Net (loss) income (87,618) 19,156 (76,955) 20,103

Other comprehensive income
Foreign currency translation
adjustment for foreign operations,
net of income tax 58,980 33,497 114,870 34,753
Foreign currency translation
adjustment for non-controlling
interest, net of income tax 279 - 279 -
----------------------------------------------------------------------------
59,259 33,497 115,149 34,753
----------------------------------------------------------------------------
Total comprehensive income (28,359) 52,653 38,194 54,856
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net (loss) Income attributable to:
---------------------------------------
Shareholders of Trinidad (87,540) 19,156 (76,877) 20,103
---------------------------------------
Non-controlling interest (78) - (78) -
---------------------------------------
Total comprehensive income (loss)
attributable to:
---------------------------------------
Shareholders of Trinidad (28,560) 52,653 37,993 54,856
---------------------------------------
Non-controlling interest 201 - 201 -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share
Net (loss) income
Basic / Diluted (0.48) 0.14 (0.51) 0.15
----------------------------------------------------------------------------
----------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

----------------------------------------------------------------------------
For nine months
ended September
30, 2015 and 2014 Accumulated
other
($ thousands) - Common Contributed comprehensive Total
unaudited shares surplus income(1) (Deficit) equity
----------------------------------------------------------------------------
Balance at December
31, 2014 1,093,426 59,005 62,470 (79,010) 1,135,891
Shares repurchased
through normal
course issuer bid (14,015) 5,665 - - (8,350)
Share-based payment
expense - 181 - - 181
Total comprehensive
income - - 114,870 (76,877) 37,993
Dividends - - - (24,447) (24,447)
Share issuance
(net) 295,245 - - - 295,245
----------------------------------------------------------------------------
Balance at
September 30, 20151,374,656 64,851 177,340 (180,334) 1,436,513
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Balance at December
31, 2013 1,117,197 50,607 4,404 (58,120) 1,114,088
Exercise of stock
options 807 (215) - - 592
Share-based payment
expense - 421 - - 421
Total comprehensive
income - - 34,753 20,103 54,856
Dividends - - - (20,728) (20,728)
----------------------------------------------------------------------------
Balance at
September 30, 20141,118,004 50,813 39,157 (58,745) 1,149,229
----------------------------------------------------------------------------
----------------------------------------------------------------------------

1. Accumulated other comprehensive income consists of the foreign currency
translation adjustment. All amounts will be reclassified to profit or
loss when specific conditions are met.



CONSOLIDATED STATEMENTS OF CASH FLOWS



----------------------------------------------------------------------------
For nine months ended September 30,
($ thousands) - unaudited 2015 2014
----------------------------------------------------------------------------

Cash provided by (used in)
Operating activities
Net (loss) earnings (76,955) 20,103
Adjustments for:
Depreciation and amortization 69,953 91,074
Foreign exchange 9,517 5,298
(Gain) on sale of property and equipment (2,119) (11,704)
Impairment of property and equipment 26,937 20,630
Impairment of goodwill 111,847 -
(Gain) loss from investment in joint
ventures (4,741) 1,357
Finance and transaction costs 42,267 29,723
Income taxes (55,167) 13,007
Interest income (32) (376)
Other (1) 2,392 6,819
Income taxes paid (4,729) (1,795)
Income taxes recovered 3,208 1,768
Interest paid (44,794) (38,584)
Interest received 32 376
----------------------------------------------------------------------------
Funds provided by operations 77,616 137,696
Change in non-cash operating working capital 31,293 12,966
----------------------------------------------------------------------------
Cash provided by operations 108,909 150,662
----------------------------------------------------------------------------

Investing activities
Purchase of property and equipment (113,556) (203,246)
Proceeds from disposition of property and
equipment 5,481 132,678
Investment in joint ventures (50,759) (147,396)
Acquisition of CanElson (net) (70,911) -
Purchase of intangibles (1,082) -
Change in non-cash working capital 25,568 (44,370)
----------------------------------------------------------------------------
Cash used by investing (205,259) (262,334)
----------------------------------------------------------------------------

Financing activities
Proceeds from long-term debt 144,888 -
Repayments of long-term debt (75,000) -
Repurchase of shares (8,350) -
Proceeds from exercise of options - 592
Dividends paid (20,100) (20,724)
Finance costs (211) -
----------------------------------------------------------------------------
Cash provided (used) by financing 41,227 (20,132)
----------------------------------------------------------------------------

Cash flow from operating, investing and
financing activities (55,123) (131,804)
Effect of translation of foreign currency cash 8,788 5,312
----------------------------------------------------------------------------
Decrease in cash for the period (46,335) (126,492)
----------------------------------------------------------------------------

Cash and cash equivalents - beginning of
period 71,062 268,160
----------------------------------------------------------------------------
Cash and cash equivalents - end of period 24,727 141,668
----------------------------------------------------------------------------

1. Other includes share-based payment expense and elimination of downstream
transactions in the Manufacturing Operations net earnings.



SEGMENTED INFORMATION

The following presents the result of Trinidad's operating segments:



----------------------------------------------------------------------------
For three months ended United States /
September 30, 2015 Canadian International Manufacturing
($ thousands) Operations Operations Operations
----------------------------------------------------------------------------

Operating revenue 50,981 66,454 3,341
Other revenue 142 173 (2)
Third party recovery 4,526 1,643 -
General and administrative -
third party recovery - - -
Inter-segment revenue - - 23,868
Elimination of downstream
transactions - (86) (3,179)
----------------------------------------------------------------------------
55,649 68,184 24,028
----------------------------------------------------------------------------
Operating costs 29,604 35,526 3,972
Third party costs 4,526 1,643 -
Inter-segment operating - - 23,868
Elimination of downstream
transactions - - (2,995)
----------------------------------------------------------------------------
Operating income 21,519 31,015 (817)
----------------------------------------------------------------------------
Depreciation and amortization 10,391 15,432 825
(Gain) loss on sale of assets (13) (618) (12)
Elimination of downstream
transactions - 8 -
----------------------------------------------------------------------------
Impairment of capital assets - 26,937 -
Impairment of goodwill - 111,847 -
----------------------------------------------------------------------------
10,378 153,606 813
Segmented (loss) income 11,141 (122,591) (1,630)
Gain from investment in joint
ventures - - -
General and administrative - - -
General and administrative -
third party costs - - -
Foreign exchange - - -
Finance and transaction costs - - -
Income taxes - - -
----------------------------------------------------------------------------
Net (loss) earnings 11,141 (122,591) (1,630)
----------------------------------------------------------------------------
Purchase of property and
equipment 463 21,165 -
----------------------------------------------------------------------------

----------------------------------------------------------------------------
For three months ended
September 30, 2015 Joint Venture Inter-segment
($ thousands) Operations(1) Eliminations Corporate Total
----------------------------------------------------------------------------

Operating revenue - - - 120,776
Other revenue - - - 313
Third party recovery - - - 6,169
General and administrative -
third party recovery - - 292 292
Inter-segment revenue - (23,868) - -
Elimination of downstream
transactions - - - (3,265)
----------------------------------------------------------------------------
- (23,868) 292 124,285
----------------------------------------------------------------------------
Operating costs - - - 69,102
Third party costs - - - 6,169
Inter-segment operating - (23,868) - -
Elimination of downstream
transactions - - - (2,995)
----------------------------------------------------------------------------
Operating income - - 292 52,009
----------------------------------------------------------------------------
Depreciation and amortization - - - 26,648
(Gain) loss on sale of assets - - - (643)
Elimination of downstream
transactions - - - 8
----------------------------------------------------------------------------
Impairment of capital assets - - - 26,937
Impairment of goodwill - - - 111,847
----------------------------------------------------------------------------
- - - 164,797
Segmented (loss) income - - 292 (112,788)
Gain from investment in joint
ventures (2,824) - - (2,824)
General and administrative - - 12,186 12,186
General and administrative -
third party costs - - 292 292
Foreign exchange - - 3,318 3,318
Finance and transaction costs - - 17,947 17,947
Income taxes - - (56,089) (59,089)
----------------------------------------------------------------------------
Net (loss) earnings 2,824 - 22,638 (87,618)
----------------------------------------------------------------------------
Purchase of property and
equipment - - - 21,628
----------------------------------------------------------------------------

1. The gain from investment in joint ventures reflects the Company's share
of the financial performance of TDI and DCM during the period. The
Company's share of individual assets and liabilities are recognized as
an investment on the consolidated statements of financial position.

----------------------------------------------------------------------------
For three months ended United States /
September 30, 2014 Canadian International Manufacturing
($ thousands) Operations Operations Operations
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Operating revenue 84,481 124,742 38,779
Other revenue 180 99 32
Third party recovery 9,493 3,748 -
General and administrative -
third party recovery - - -
Inter-segment revenue - - 25,434
Elimination of downstream
transactions - - (17,327)
----------------------------------------------------------------------------
94,154 128,589 46,918
----------------------------------------------------------------------------
Operating costs 47,843 82,588 36,586
Third party costs 9,493 3,748 -
Inter-segment operating - - 25,434
Elimination of downstream
transactions - - (16,256)
----------------------------------------------------------------------------
Operating income 36,818 42,253 1,154
----------------------------------------------------------------------------
Depreciation and amortization 12,321 20,684 384
(Gain) loss on sale of assets (198) 303 -
Elimination of downstream
transactions - - -
Impairment of capital assets - - -
----------------------------------------------------------------------------
12,123 20,987 384
----------------------------------------------------------------------------
Segmented (loss) income 24,695 21,266 770
Loss from investment in joint
ventures - - -
General and administrative - - -
General and administrative -
third party costs - - -
Foreign exchange - - -
Finance and transaction costs - - -
Income taxes - - -
----------------------------------------------------------------------------
Net (loss) earnings 24,695 21,266 770
----------------------------------------------------------------------------
Purchase of property and
equipment 71,511 28,942 -
----------------------------------------------------------------------------

----------------------------------------------------------------------------
For three months ended
September 30, 2014 Joint Venture Inter-segment
($ thousands) Operations(1) Eliminations Corporate Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Operating revenue - - - 248,002
Other revenue - - - 311
Third party recovery - - - 13,241
General and administrative -
third party recovery - - 311 311
Inter-segment revenue - (25,434) - -
Elimination of downstream
transactions - - - (17,327)
----------------------------------------------------------------------------
- (25,434) 311 244,538
----------------------------------------------------------------------------
Operating costs - - - 167,017
Third party costs - - - 13,241
Inter-segment operating - (25,434) - -
Elimination of downstream
transactions - - - (16,256)
----------------------------------------------------------------------------
Operating income - - 311 80,536
----------------------------------------------------------------------------
Depreciation and amortization - - - 33,389
(Gain) loss on sale of assets - - - 105
Elimination of downstream
transactions - - - -
Impairment of capital assets - - - -
----------------------------------------------------------------------------
- - - 33,494
----------------------------------------------------------------------------
Segmented (loss) income - - 311 47,042
Loss from investment in joint
ventures 1,645 - - 1,645
General and administrative - - 10,759 10,759
General and administrative -
third party costs - - 311 311
Foreign exchange - - 509 509
Finance and transaction costs - - 9,715 9,715
Income taxes - - 4,947 4,947
----------------------------------------------------------------------------
Net (loss) earnings (1,645) - (25,930) 19,156
----------------------------------------------------------------------------
Purchase of property and
equipment - - - 100,453
----------------------------------------------------------------------------

1. The gain from investment in joint ventures reflects the Company's share
of the financial performance of TDI and DCM during the period. The
Company's share of individual assets and liabilities are recognized as
an investment on the consolidated statements of financial position.

----------------------------------------------------------------------------
For nine months ended United States /
September 30, 2015 Canadian International Manufacturing
($ thousands) Operations Operations Operations
----------------------------------------------------------------------------

Operating revenue 123,412 230,744 93,666
Other revenue 215 695 4
Third party recovery 12,387 6,519 -
General and administrative -
third party recovery - - -
Inter-segment revenue - - 95,524
Elimination of downstream
transactions - (223) (54,617)
----------------------------------------------------------------------------
136,014 237,735 134,577
----------------------------------------------------------------------------
Operating costs 73,201 118,614 88,952
Third party costs 12,387 6,519 -
Inter-segment operating - - 95,524
Elimination of downstream
transactions - - (51,966)
----------------------------------------------------------------------------
Operating income 50,426 112,602 2,067
----------------------------------------------------------------------------
Depreciation and amortization 25,763 42,188 2,002
(Gain) loss on sale of assets 1,185 (2,801) (511)
Elimination of downstream
transactions - 8 -
Impairment of capital assets - 26,937 -
Impairment of goodiwll - 111,847 -
----------------------------------------------------------------------------
26,948 178,179 1,491
----------------------------------------------------------------------------
Segmented income 23,478 (65,557) 576
Gain from investment in joint
ventures - - -
General and administrative - - -
General and administrative -
third party costs - - -
Foreign exchange - - -
Finance and transaction costs - - -
Income taxes - - -
----------------------------------------------------------------------------
Net (loss) earnings 23,478 (65,577) 576
----------------------------------------------------------------------------

Purchase of property and
equipment 19,864 93,484 208
----------------------------------------------------------------------------

----------------------------------------------------------------------------
For nine months ended
September 30, 2015 Joint Venture Inter-segment
($ thousands) Operations(1) Eliminations Corporate Total
----------------------------------------------------------------------------

Operating revenue - - - 447,822
Other revenue - - - 914
Third party recovery - - - 18,906
General and administrative -
third party recovery - - 1,092 1,092
Inter-segment revenue - (95,524) - -
Elimination of downstream
transactions - - - (54,840)
----------------------------------------------------------------------------
- (95,524) 1,092 413,894
----------------------------------------------------------------------------
Operating costs - - - 280,767
Third party costs - - - 18,906
Inter-segment operating - (95,524) - -
Elimination of downstream
transactions - - - (51,966)
----------------------------------------------------------------------------
Operating income - - 1,092 166,187
----------------------------------------------------------------------------
Depreciation and amortization - - - 69,953
(Gain) loss on sale of assets - - - (2,127)
Elimination of downstream
transactions - - - 8
Impairment of capital assets - - - 26,937
Impairment of goodiwll - - - 111,847
----------------------------------------------------------------------------
- - - 206,618
----------------------------------------------------------------------------
Segmented income - - 1,092 (40,431)
Gain from investment in joint
ventures (4,741) - - (4,741)
General and administrative - - 43,556 43,556
General and administrative -
third party costs - - 1,092 1,092
Foreign exchange - - 9,517 9,517
Finance and transaction costs - - 42,267 42,267
Income taxes - - (55,167) (55,167)
----------------------------------------------------------------------------
Net (loss) earnings 4,741 - (40,173) (76,955)
----------------------------------------------------------------------------

Purchase of property and
equipment - - - 113,556
----------------------------------------------------------------------------

1. The gain from investment in joint ventures reflects the Company's share
of the financial performance of TDI and DCM during the period. The
Company's share of individual assets and liabilities are recognized as
an investment on the consolidated statements of financial position.

----------------------------------------------------------------------------
For nine months ended United States /
September 30, 2014 Canadian International Manufacturing
($ thousands) Operations Operations Operations
----------------------------------------------------------------------------

Operating revenue 225,769 351,643 76,799
Other revenue 1,260 212 45
Third party recovery 28,945 13,433 -
General and administrative -
third party recovery - - -
Inter-segment revenue - - 50,518
Elimination of downstream
transactions - - (34,080)
----------------------------------------------------------------------------
255,974 365,288 93,282
----------------------------------------------------------------------------
Operating costs 130,867 230,998 70,897
Third party costs 28,945 13,432 -
Inter-segment operating - - 50,518
Elimination of downstream
transactions - - (31,484)
----------------------------------------------------------------------------
Operating income 96,162 120,858 3,351
----------------------------------------------------------------------------
Depreciation and amortization 32,282 57,611 1,181
(Gain) loss on sale of assets (404) (29,426) -
Elimination of downstream
transactions - 18,126 -
Impairment of capital assets 13,367 7,263 -
----------------------------------------------------------------------------
45,245 53,574 1,181
----------------------------------------------------------------------------
Segmented income 50,917 67,284 2,170
Loss from investment in joint
venture - - -
General and administrative - - -
General and administrative -
third party costs - - -
Foreign exchange - - -
Finance and transaction costs - - -
Income taxes - - -
----------------------------------------------------------------------------
Net (loss) earnings 50,917 67,284 2,170
----------------------------------------------------------------------------

Purchase of property and
equipment 104,539 98,543 164
----------------------------------------------------------------------------

----------------------------------------------------------------------------
For nine months ended
September 30, 2014 Joint Venture Inter-segment
($ thousands) Operations(1) Eliminations Corporate Total
----------------------------------------------------------------------------

Operating revenue - - - 654,211
Other revenue - - - 1,517
Third party recovery - - - 42,378
General and administrative -
third party recovery - - 962 962
Inter-segment revenue - (50,518) - -
Elimination of downstream
transactions - - - (34,080)
----------------------------------------------------------------------------
- (50,518) 962 664,988
----------------------------------------------------------------------------
Operating costs - - - 432,762
Third party costs - - - 42,377
Inter-segment operating - (50,518) - -
Elimination of downstream
transactions - - - (31,484)
----------------------------------------------------------------------------
Operating income - - 962 221,333
----------------------------------------------------------------------------
Depreciation and amortization - - - 91,074
(Gain) loss on sale of assets - - - (29,830)
Elimination of downstream
transactions - - - 18,126
Impairment of capital assets - - - 20,630
----------------------------------------------------------------------------
- - - 100,000
----------------------------------------------------------------------------
Segmented income - - 962 121,333
Loss from investment in joint
venture 1,357 - - 1,357
General and administrative - - 50,883 50,883
General and administrative -
third party costs - - 962 962
Foreign exchange - - 5,298 5,298
Finance and transaction costs - - 29,723 29,723
Income taxes - - 13,007 13,007
----------------------------------------------------------------------------
Net (loss) earnings (1,357) - (98,911) 20,103
----------------------------------------------------------------------------

Purchase of property and
equipment - - - 203,246
----------------------------------------------------------------------------

1. The gain from investment in joint ventures reflects the Company's share
of the financial performance of TDI and DCM during the period. The
Company's share of individual assets and liabilities are recognized as
an investment on the consolidated statements of financial position.



ADVISORY

NON-GAAP MEASURES DEFINITIONS

This document contains references to certain financial measures and associated per share data that do not have any standardized meaning prescribed by IFRS, and may not be comparable to similar measures presented by other companies. These financial measures are computed on a consistent basis for each reporting period and include Operating income, Operating income percentage, Operating income - net percentage, EBITDA, Adjusted EBITDA, EBITDA from investment in joint ventures, Adjusted EBITDA from investment in joint ventures, Funds provided by operations, Adjusted net earnings, debt, working capital, Senior Debt to Bank EBITDA, Total Debt to Bank EBITDA, Bank EBITDA to Cash Interest Expense, drilling days, operating days, utilization rate - drilling day, utilization rate - operating day, and rate per operating day or dayrate. Please see the Non-GAAP Measures Definitions and Additional GAAP Measures Definitions sections of this MD&A (beginning on page 31) for details with respect to definitions of these measures.

"EBITDA" is a measure of the Company's operating profitability. EBITDA provides an indication of the results generated by 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. 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.

EBITDA is derived from the consolidated statements of operations and comprehensive income and is calculated as follows:



----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands) 2015 2014 2015 2014
----------------------------------------------------------------------------
Net (loss) earnings (87,618) 19,156 (76,955) 20,103
Plus:
Finance and transaction costs 17,947 9,715 42,267 29,723
Depreciation and amortization 26,648 33,389 69,953 91,074
Income taxes (56,089) 4,947 (55,167) 13,007
----------------------------------------------------------------------------
EBITDA (99,112) 67,207 (19,902) 153,907
----------------------------------------------------------------------------



"EBITDA from investment in joint ventures" provides an indication of the results generated by the Company's joint ventures operations prior to how these activities are financed, how assets are depreciated and amortized and how the results are taxed in various jurisdictions.

EBITDA from investment in the joint ventures is derived from the consolidated statements of operations and comprehensive income of Trinidad Drilling International (TDI) and Diavaz CanElson de Mexico S.A. de C.V. (DCM) and is calculated as follows:



----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands) 2015 2014 2015 2014
----------------------------------------------------------------------------
Gain from investment in joint
ventures 2,824 (1,645) 4,741 (1,357)
Plus:
Finance costs 188 - 408 -
Depreciation and amortization 4,142 902 11,002 1,244
Income taxes 752 1,005 2,305 1,112
----------------------------------------------------------------------------
EBITDA from investment in joint
ventures 7,906 262 18,456 999
----------------------------------------------------------------------------



"Adjusted EBITDA" is used by management and investors to analyze EBITDA (as defined above) prior to the effect of foreign exchange, share-based payment expense, impairment expenses and the sale of assets. Adjusted EBITDA also takes into account the Company's portion of the principal activities of the joint venture arrangements by removing the (gain) loss from investment in joint ventures and including Adjusted EBITDA from investment in joint ventures. Adjusted EBITDA is not intended to represent net earnings (loss) as calculated in accordance with IFRS. Adjusted EBITDA provides an indication of the results generated by the Company's principal business activities prior to how these activities are financed: how assets are depreciated, amortized and impaired: the impact of foreign exchange: how the results are taxed in various jurisdictions and effects of share-based payment expense. 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.

Adjusted EBITDA is calculated as follows:



----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands) 2015 2014 2015 2014
----------------------------------------------------------------------------
EBITDA (99,112) 67,207 (19,902) 153,907
Plus:
Gain on sale of property and
equipment (635) 105 (2,119) (11,704)
Impairment of property and
equipment 26,937 - 26,937 20,630
Impairment of goodwill 111,847 - 111,847 -
Share-based payment expense (2,202) (5,108) (473) 4,223
Foreign exchange 3,318 509 9,517 5,298
Gain from investment in joint
ventures (2,824) 1,645 (4,741) 1,357
Plus:
Adjusted EBITDA from investment in
joint ventures 7,624 261 18,594 995
----------------------------------------------------------------------------
Adjusted EBITDA 44,953 64,619 139,660 174,706
----------------------------------------------------------------------------



"Adjusted EBITDA from investment in joint ventures" is used by management and investors to analyze EBITDA (as defined above) prior to the effect of foreign exchange, share-based payment expense, impairment expense and the sale of assets. Adjusted EBITDA from investment in joint ventures is not intended to represent net (loss) earnings as calculated in accordance with IFRS. Adjusted EBITDA from investment in joint ventures provides an indication of the results generated by TDI's principal business activities prior to how these activities are financed, assets are depreciated, amortized and impaired, the impact of foreign exchange, how the results are taxed in various jurisdictions and effects of share-based payment expense.

Adjusted EBITDA from investment in joint ventures is calculated as follows:



----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
($ thousands) 2015 2014 2015 2014
----------------------------------------------------------------------------
EBITDA from investment in joint
ventures 7,906 262 18,456 999
Plus:
Foreign exchange (282) (1) 138 (4)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted EBITDA from investment in
joint ventures 7,624 261 18,594 995
----------------------------------------------------------------------------



"Adjusted net earnings" is used by management and the investment community to analyze net earnings prior to the effect of foreign exchange, share-based payment expense, any gains or losses on the sale of assets in the period and impairment charges, including taking into account the tax effects of these items. This measure is not intended to represent net earnings as calculated in accordance with IFRS. Adjusted net earnings is a useful measure because it provides an indication of results of the Company's principal business activities before consideration of fluctuations in foreign exchange gains and losses, impairment and share-based payment expenses, which are not consistently incurred period over period. Adjusted net earnings is calculated using 100% of the related amounts from all entities controlled by Trinidad where Trinidad may not hold 100% of the outstanding shares.

"Working capital" is used by management and the investment community to analyze the operating liquidity available to the Company.

"Senior Debt to Bank EBITDA" is defined as the consolidated balance of the revolving facility and other debt secured by a lien at quarter end to consolidated Bank EBITDA for the trailing 12 months (TTM). Bank EBITDA used in this financial ratio is calculated as EBITDA plus impairment expense, loss (gain) on sale of property and equipment, loss (gain) from investment in joint ventures, share-based payment expense and unrealized foreign exchange.

"Total Debt to Bank EBITDA" is defined as the consolidated balance of long-term debt, which includes the Senior Debt, Senior Notes Payable and dividends payable at quarter end less unrestricted cash in excess of $10.0 million, to consolidated Bank EBITDA for the TTM. Bank EBITDA used in this financial ratio is calculated as EBITDA plus impairment expense, loss (gain) on sale of property and equipment, loss (gain) from investment in joint ventures, share-based payment expense and unrealized foreign exchange.

Total Debt to Bank EBITDA is calculated as follows:



----------------------------------------------------------------------------
As At September 30, December 31,
($ thousands) 2015 2014
----------------------------------------------------------------------------
Total Debt:
Senior notes, principal (US$450.0 million) 600,525 522,045
Other debt 2,854 -
Draw on credit facility 84,888 15,000
Dividends payable 11,104 6,758
Cash in excess of $10.0 million (14,727) (61,062)
----------------------------------------------------------------------------
684,644 482,816
Bank EBITDA (TTM):
Net earnings (90,462) 6,596
Income taxes (64,098) 4,076
Financing and transaction costs 52,075 39,531
Depreciation and amortization 103,891 125,012
Impairment 195,689 77,535
(Gain) loss from investment in joint venture (6,117) (19)
(Gain) loss on sale of property and
equipment 1,347 (8,238)
Unrealized foreign exchange 9,236 4,580
Share-based payment expense (3,932) 765
CanElson Pro-Forma inclusion (TTM) 60,792 -
----------------------------------------------------------------------------
258,421 249,838
Total Debt to Bank EBITDA 2.65 1.93
----------------------------------------------------------------------------



"Bank EBITDA to Cash Interest Expense" is defined as the consolidated Bank EBITDA for TTM to the cash interest expense on all debt balances for TTM. Bank EBITDA used in this financial ratio is calculated as EBITDA plus impairment expense, loss (gain) on sale of property and equipment, loss (gain) from investment in joint ventures, share-based payment expense and unrealized foreign exchange.

"Drilling days" is defined as rig days between spud to rig release.

"Operating days" is defined as moving days (move in, rig up and tear out) plus drilling days (spud to rig release).

"Utilization rate - drilling day" is defined as drilling days divided by total available rig days.

"Utilization rate - operating day" is defined as operating days divided by total available rig days.

"Rate per operating day" or "Dayrate" is defined as operating revenue (net of third party costs) divided by operating days (drilling days plus moving days).

ADDITIONAL GAAP MEASURES DEFINITIONS

To assess performance, the Company uses certain additional GAAP financial measures within the financial statements and MD&A that are not defined terms under IFRS. Management believes that these measures provide useful supplemental information to investors, and provide the reader a more accurate reflection of our industry. These financial measures are computed on a consistent basis for each reporting period and include Funds provided by operations, Operating income, Operating income percentage and Operating income - net percentage. These additional GAAP measures are defined as follows:

"Funds provided by operations" is used by management and investors to analyze the funds generated by Trinidad's principal business activities prior to consideration of working capital, which is primarily made up of highly liquid balances. This balance is reported in the consolidated statements of cash flows included in the cash provided by operating activities section.

"Operating income" is used by management and investors to analyze overall and segmented operating performance. Operating income is not intended to represent an alternative to net (loss) earnings or other measures of financial performance calculated in accordance with IFRS. Operating income is calculated from the consolidated statements of operations and comprehensive income and from the segmented information contained in the notes to the consolidated financial statements. Operating income is defined as revenue less operating expenses.

"Operating income percentage" is used by management and investors to analyze overall and segmented operating performance, including third party recovery and third party costs, as well as inter-segment revenue and inter-segment operating costs. Operating income percentage is calculated from the consolidated statements of operations and comprehensive income and from the segmented information in the notes to the consolidated financial statements. Operating income percentage is defined as operating income divided by revenue.

"Operating income - net percentage" is used by management and investors to analyze overall and segmented operating performance excluding third party recovery and third party costs, as well as inter-segment revenue and inter-segment operating costs, as these revenue and expenses do not have an effect on consolidated net (loss) earnings. Operating income - net percentage is calculated from the consolidated statements of operations and comprehensive income and from the segmented information in the notes to the consolidated financial statements. Operating income - net percentage is defined as operating income less third party G&A expenses divided by revenue net of operating and G&A third party costs.

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 MD&A. The forward-looking information and statements included in this MD&A 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 MD&A may contain forward-looking information and statements pertaining to the completion of announced rig construction programs on a timely basis and economical terms; the assumption that Trinidad's customers will honour their take-or-pay contracts; future liquidity levels; fluctuations in the demand for Trinidad's services; the ability for Trinidad to attract and retain qualified personnel, in particular field staff to crew the Company's rigs; the existence of competitors, technological changes and developments in the oilfield services industry; the existence of operating risks inherent in the oilfield services industry; assumptions respecting capital expenditure programs and other expenditures by oil and gas exploration and production companies; assumptions regarding commodity prices, in particular oil and natural gas; assumptions respecting supply and demand for commodities, in particular oil and natural gas; assumptions regarding foreign currency exchange rates and interest rates; the existence of regulatory and legislative uncertainties; the possibility of changes in tax laws; and general economic conditions including the capital and credit markets; assumptions made about our future banking covenants and liquidity; assumptions made about future performance and operations of joint ventures and partnership arrangements; assumptions made about the business combination with CanElson.
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 MD&A, financial statements, Annual Information Form and Trinidad and CanElson's Joint Management Information Circular. The forward-looking information and statements contained in this MD&A speak only as of the date of this MD&A 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.

FOR FURTHER INFORMATION PLEASE CONTACT:
Trinidad Drilling Ltd.
Lyle Whitmarsh
Chief Executive Officer


Trinidad Drilling Ltd.
Brent Conway
President


Trinidad Drilling Ltd.
Lisa Ottmann
Vice President, Investor Relations
(403) 294-4401
investors@trinidaddrilling.com

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