Market Overview

Trinidad Drilling Ltd. Reports First Quarter Results; Solid Operating Margins and Lower Debt Levels, Despite Weak Industry Conditions

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CALGARY, ALBERTA--(Marketwired - May 9, 2016) -

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 first quarter 2016 results today. In the first three months of 2016, Trinidad remained focused on managing its operations through the downturn. Commodity prices remained weak in the first quarter, driving lower activity levels and resulting in lower adjusted EBITDA(1) and net income compared to the same periods in 2015. The negative impact of these challenging conditions was partly offset by cost control measures implemented throughout the period, a strong contribution from the joint venture operations 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.

"Trinidad has proactively adapted its business to the current industry conditions," said Lyle Whitmarsh, Trinidad's Chief Executive Officer. "We have cut costs across our operations, lowered capital expenditures, relaxed our debt covenants and suspended our dividend in reaction to reduced customer demand and limited future visibility. In addition, during the quarter we recorded positive funds from operations and improved our financial flexibility by lowering debt levels and distributing funds from our joint venture. We have positioned the Company well to withstand the current downturn and are actively preparing for the rebound."

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

FINANCIAL HIGHLIGHTS



----------------------------------------------------------------------------
Three months ended March 31,
($ thousands except share and per
share data) 2016 2015 % Change
----------------------------------------------------------------------------
Revenue 107,650 194,396 (44.6)
Revenue, net of third party costs (1) 102,130 186,079 (45.1)
Operating income (1) 46,679 72,282 (35.4)
Operating income percentage (1) 43.4% 37.2% 16.7
Operating income - net percentage (1) 45.4% 38.5% 17.9
Adjusted EBITDA (1) 44,207 60,031 (26.4)
Per share (diluted) (2) 0.20 0.45 (55.6)
Cash provided by operations 15,893 928 1,612.6
Per share (basic / diluted) (2) 0.07 0.01 600.0
Funds provided by operations (1) 8,700 36,092 (75.9)
Per share (basic / diluted) (2) 0.04 0.27 (85.2)
Net income (4) 11,303 12,130 (6.8)
Per share (basic / diluted) (2)(4) 0.05 0.09 (44.4)
Capital expenditures 20,164 50,134 (59.8)
Dividends declared (3) - 6,671 (100.0)
Shares outstanding - diluted
(weighted average) (2) 222,087,270 133,694,825 66.1
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As at March 31, December 31,
($ thousands except percentage data) 2016 2015 % Change
----------------------------------------------------------------------------
Total assets 2,073,537 2,236,200 (7.3)
Total long-term liabilities 685,632 783,254 (12.5)
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(1) Readers are cautioned that Operating income, Operating income
percentage, Operating income - net percentage, Revenue, net of third
party costs, adjusted EBITDA, Funds provided by operations, 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.
(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.
(3) $0.00 per share declared in the first quarter of 2016. $0.05 per share
declared in the first quarter of 2015.
(4) Net income is net income attributable to shareholders of Trinidad. Net
income per share is calculated as net income attributable to
shareholders of Trinidad divided by the weighted average number of
common shares outstanding, both adjusted for dilutive factors.



OPERATING HIGHLIGHTS



----------------------------------------------------------------------------

Three months ended March 31, 2016 2015 % Change
----------------------------------------------------------------------------
Land Drilling Market
Operating days(1)
Canada 2,001 2,343 (14.6)
United States and International 1,733 2,695 (35.7)
Rate per operating day (1)
Canada (CDN$) 24,635 25,764 (4.4)
United States and International
(CDN$) 28,529 33,194 (14.1)
United States and International
(US$) 20,438 27,778 (26.4)
Utilization rate - operating day (1)
Canada 31% 50% (38.0)
United States and International 29% 61% (52.5)
Number of drilling rigs at period end
(4)
Canada 72 54 33.3
United States and International 67 47 42.6
Barge Drilling Market
Number of barge drilling rigs at
period end (4) - 2 (100.0)
Number of barge drilling rigs under
Bareboat
Charter Agreements at period end
(4) - 3 (100.0)
TDI Joint Venture Operations (2)
Operating days (1) 690 410 68.3
Rate per operating day (CDN$) (1) 64,894 61,412 5.7
Rate per operating day (US$) (1) 46,676 50,825 (8.2)
Utilization rate - operating day
(1) 95% 94% 1.1
Number of drilling rigs at period
end (4) 8 8 -
DCM Joint Venture Operations (3)
Number of drilling rigs at period
end (4) 2 - 100.0
Number of service rigs at period
end (4) 2 - 100.0
----------------------------------------------------------------------------
(1) See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document.
(2) Trinidad is party to a joint venture with a wholly-owned subsidiary of
Halliburton. These rigs are owned by the joint venture.
(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

In the first quarter of 2016, Trinidad continued to manage its operations through challenging industry conditions, adjusting costs and operations where possible to improve efficiencies. In addition, the Company improved its liquidity by suspending its dividend, reducing debt levels and receiving a distribution from its joint venture operations in the quarter.

Weak commodity prices and slowing customer demand in the first three months of the year led to lower activity levels and reduced profitability compared to the same quarter last year. The impact of these challenging conditions was partly offset by the addition of CanElson rigs, acquired in the third quarter of 2015, and the continued strong performance from the Company's international joint venture operations. In addition, early termination and standby revenue recorded in the current quarter positively impacted revenue and operating income - net percentage.

In the first quarter of 2016, adjusted EBITDA was $44.2 million, down 26.4% from the same period in 2015. Adjusted EBITDA was lower in the current quarter as weaker market conditions reduced the number of operating days and continued to put downward pressure on dayrates. In the first quarter of 2016, Trinidad's Canadian operations received more early termination and standby revenue, while the US and international operations received less, when compared to the same quarter last year. On a consolidated basis, early termination and standby revenue was lower in the current period at $9.7 million, compared to $19.5 million in the same quarter last year.

Despite weak market conditions, Trinidad was able to maintain a solid operating income - net percentage in the current quarter of 45.4%, compared to 38.5% for the same quarter last year. An ongoing focus on cost reduction, a higher proportion of high specification rigs operating and less manufacturing revenue, which typically generates a lower margin, contributed to improved operating income - net percentage in the current quarter. Excluding the impact of early termination and standby revenue, Trinidad's operating income - net percentage still remained strong at 39.6% compared to 31.4% in the first quarter of 2015.

Trinidad recorded net income of $11.3 million or $0.05 per share (diluted) for the quarter ended March 31, 2016, down $0.8 million from net income of $12.1 million in the same quarter of 2015. The reduction in net income was mostly a result of lower adjusted EBITDA, higher depreciation and amortization expense, higher finance and transaction costs; offset partly by a foreign exchange gain, an increased gain from investment in joint venture and a deferred tax recovery in 2016.

During the quarter, Trinidad was able to lower its total long-term debt by $88.4 million. Trinidad's improved liquidity in the current quarter was driven by a $21.5 million distribution paid by the TDI joint venture in the first quarter, a weaker US dollar compared to the Canadian dollar which lowered the translated value of US dollar based Senior Notes, a decrease in the revolving facility of $50.5 million and the suspension of the Company's dividend.

INDUSTRY STATISTICS

Commodity prices continued to weaken in the first quarter of 2016, leading to a further pull back in capital spending by oil and gas producers and sharp reductions in drilling activity. Crude oil prices dropped below US$30.00 per barrel towards the middle of the first quarter, partially recovering in second half of the quarter to end at US$38.34 per barrel. On average, WTI crude oil was US$33.78 per barrel in the first quarter, down 30% from the same quarter last year and 20% from the fourth quarter of 2015. Natural gas prices also lowered in the first quarter of 2016, with Henry Hub natural gas averaging US$1.99 per mmBtu, down 31% from the same quarter last year and 6% from the fourth quarter of 2015. Industry activity levels in the first quarter were directly impacted by the reduction in capital spending as activity levels across North America lowered, largely in tandem with decreasing commodity prices.



----------------------------------------------------------------------------
Full
2016 Year 2015
Q1 2015 Q4 Q3 Q2 Q1
----------------------------------------------------------------------------
Commodity Prices
Aeco natural gas price (CDN$
per gigajoule) 1.81 2.57 2.35 2.76 2.54 2.60
Henry Hub natural gas price
(US$ per mmBtu) 1.99 2.61 2.11 2.75 2.73 2.87

Western Canada Select crude
oil price (CDN$ per barrel) 36.79 45.26 37.05 41.22 59.40 43.52
WTI crude oil price (US$ per
barrel) 33.78 48.68 42.02 46.48 57.85 48.49
Canadian / US dollar
exchange rate 1.37 1.28 1.34 1.31 1.23 1.24

US Activity
Average industry active land
rig count (1) 533 983 757 829 935 1,403
Average Trinidad active land
rig count (2) 19 27 26 26 24 30

Canadian Activity
Average industry utilization
(3) 20% 23% 21% 24% 13% 35%
Average Trinidad utilization
(4) 29% 29% 28% 32% 7% 46%
----------------------------------------------------------------------------

------------------------------------------------------------
Full
Year 2014
2014 Q4 Q3 Q2
------------------------------------------------------------
Commodity Prices
Aeco natural gas price (CDN$
per gigajoule) 4.28 3.44 3.82 4.45
Henry Hub natural gas price
(US$ per mmBtu) 4.36 3.76 3.94 4.59

Western Canada Select crude
oil price (CDN$ per barrel) 82.00 65.42 85.68 91.34
WTI crude oil price (US$ per
barrel) 93.06 73.21 97.60 103.06
Canadian / US dollar
exchange rate 1.10 1.14 1.09 1.09

US Activity
Average industry active land
rig count (1) 1,789 1,843 1,828 1,781
Average Trinidad active land
rig count (2) 50 52 53 47

Canadian Activity
Average industry utilization
(3) 44% 45% 46% 28%
Average Trinidad utilization
(4) 52% 57% 61% 24%
------------------------------------------------------------
(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).



FIRST QUARTER 2016 HIGHLIGHTS



-- Adjusted EBITDA in the first quarter was $44.2 million, down 26.4% from
the same period last year. Adjusted EBITDA declined in the current
period largely as a result of lower activity in the Canadian and US
operations driven by weakening commodity prices and less early
termination and standby revenue. The impact of lower activity was
slightly offset by the addition of the CanElson rigs in August of 2015,
cost cutting initiatives and a stronger US/CDN dollar translation in the
first quarter of 2016 compared to the same quarter of 2015.

-- Operating income - net percentage was 45.4% in the first quarter of
2016, up from 38.5% for the same period last year. Operating income -
net percentage increased as a result of cost cutting initiatives, a
higher proportion of high specification rigs working and less activity
in the manufacturing division. 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 income was $11.3 million in the first quarter of 2016, down from net
income of $12.1 million in the same quarter last year. The decrease in
net income from the prior comparative quarter was largely driven by
lower adjusted EBITDA, higher depreciation and amortization expense,
higher finance and transaction costs; offset by a foreign exchange gain,
an increased gain from investment in joint venture and a deferred tax
recovery recorded in 2016.

-- During the first quarter of 2016, Trinidad lowered its total long-term
debt by $88.4 million mainly due to a decrease in the Senior Notes as
the US dollar foreign exchange rates lowered compared to the Canadian
dollar at March 31, 2016 compared to December 31, 2015. As well,
Trinidad was able to pay down the revolving facility showing a decrease
of $50.5 million during the quarter.

-- In the first quarter of 2016, Trinidad's Joint Venture paid a
distribution of $21.5 million to Trinidad. This payment increased cash
on hand and is eligible to be included as Bank EBITDA in the Company's
debt covenant calculations.

-- On March 2, 2016, Trinidad's board of directors voted to suspend the
dividend in 2016. Trinidad chose to suspend the dividend in order to
manage cash flows and add further financial flexibility.



RESULTS FROM OPERATIONS

Canadian Operations



----------------------------------------------------------------------------
Three months ended March 31,
($ thousands except percentage and
operating data) 2016 2015 % Change
----------------------------------------------------------------------------
Operating revenue (1) 50,358 60,370 (16.6)
Other revenue 232 45 415.6
---------------------------------------
50,590 60,415 (16.3)
Operating costs (1) 26,689 34,822 (23.4)
---------------------------------------
Operating income (3) 23,901 25,593 (6.6)
---------------------------------------
Operating income - net percentage (3) 47.2% 42.4%

Operating days (3) 2,001 2,343 (14.6)
Drilling days (3) 1,875 2,135 (12.2)
Rate per operating day (CDN$) (3) 24,635 25,764 (4.4)
Utilization rate - operating day (3) 31% 50% (38.0)
Utilization rate - drilling day (3) 29% 46% (37.0)
CAODC industry average (2) 20% 35% (42.9)

Number of drilling rigs at period end 72 54 33.3
----------------------------------------------------------------------------
(1) Operating revenue and operating costs for the three months ended March
31, 2016 and 2015 exclude third party recovery and third party costs of
$3.7 million and $6.6 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 the quarter ended March 31, 2016, operating revenue and operating income was $50.4 million and $23.9 million, respectively, down 16.6% and 6.6%, respectively, from the prior year. Operating revenue and operating income lowered in the current quarter largely as a result of fewer operating days in 2016, which decreased by 14.6% or 342 operating days. The impact of weak demand on operating revenue and operating income was partly offset by higher early termination and standby revenue in the current quarter. Additionally, overall revenue generation was positively impacted by increased operating days from the rigs acquired as part of the CanElson acquisition.

Dayrates in the current year decreased by $1,129 per day compared to the prior period, mainly due to weak customer demand and strong industry competition. The impact of lower dayrates was partly offset by an increase in early termination and standby revenue recorded in 2016. Total early termination and standby revenue recorded in 2016 was $4.6 million, or $2,284 per operating day, compared to $0.3 million, or $142 per operating day, in 2015. The early termination and standby revenue recorded in 2016 mainly related to lump sum amounts collected for three rigs with contracts that had all expired by March 31, 2016. Trinidad's contract base helped to offset the decline in revenue generation caused by lower utilization in the first quarter of 2016.

A decline in commodity prices throughout 2015 and into 2016 significantly affected utilization rates for the drilling industry as a whole. Trinidad's utilization decreased by 19 percentage points in the first quarter compared to the same quarter last year. However, despite current depressed market conditions, Trinidad was able to achieve utilization of nine percentage points above the industry average.

Operating income - net percentage increased in the current quarter to 47.2% compared to 42.4% in the prior year. The Canadian operations was able to record increased operating income - net percentage as a result of higher early termination and standby revenues and cost cutting initiatives. Removing all early termination and standby revenue, operating income - net percentage in the first quarter of 2016 was 42.0%, in-line with the prior year's adjusted operating income - net percentage of 42.0%, mainly due to cost cutting initiatives and the current rig mix. Throughout 2015 and into 2016, Trinidad has closely monitored repair and maintenance expenditures, incurring expenses only as rigs return to work. As well, the Company has worked with its suppliers to reduce costs in all aspects of its operations. As fewer rigs are working in 2016, these rigs tend to be higher specification rigs with higher margins; therefore, causing an increase in profitability.

Trinidad's Canadian rig count totaled 72 rigs at March 31, 2016, an increase of 18 rigs compared to the first quarter of 2015. The rig count increased as a result of the CanElson acquisition which closed in August of 2015 and added 28 rigs to the Canadian rig fleet in the third quarter of 2015. This was offset by the reduction of 10 rigs removed at December 31, 2015, as Trinidad reviewed the existing rig fleet and chose to decommission low specification rigs.

First quarter of 2016 versus fourth quarter of 2015

Operating revenue and operating income decreased by $10.7 million and $1.4 million, respectively, in the first quarter of 2016 compared to the fourth quarter of 2015. Typically the first quarter is the most active period in the Canadian drilling industry; however, lower commodity prices in the current period caused exploration and development companies to cut back capital spending programs for 2016. Operating days were significantly depressed when compared to prior years. As such, increased competition caused a decline in spot market pricing and revenue generation.

Although overall operating income decreased, Trinidad recorded increased profitability in the first quarter of 2016 with operating income - net percentage of 47.2% compared to 41.4% in the fourth quarter of 2015. Trinidad's strong contract base helped to mitigate the decline in revenue generation caused by lower utilization in 2016. As such, the Company recorded early termination and standby revenue of $4.6 million in the first quarter of 2016 compared to $2.8 million in the fourth quarter of 2015, positively impacting profitability.

United States and International Operations



----------------------------------------------------------------------------
Three months ended March 31,
($ thousands except percentage and
operating data) 2016 2015 % Change
----------------------------------------------------------------------------
Operating revenue (1) 49,450 91,189 (45.8)
Other revenue 7 275 (97.5)
--------------------------------------
49,457 91,464 (45.9)
Operating costs (1) 26,347 48,006 (45.1)
--------------------------------------
Operating income (1) 23,110 43,458 (46.8)
--------------------------------------
Operating income - net percentage (2) 46.7% 47.5%

Land Drilling Rigs
Operating days (2) 1,733 2,695 (35.7)
Drilling days (2) 1,470 2,266 (35.1)
Rate per operating day (CDN$) (2) 28,529 33,194 (14.1)
Rate per operating day (US$) (2) 20,438 27,778 (26.4)
Utilization rate - operating day (2) 29% 61% (52.5)
Utilization rate - drilling day (2) 24% 51% (52.9)
Number of drilling rigs at period end 67 47 42.6

Barge Drilling Rigs
Number of barge drilling rigs at
period end - 2 (100.0)
Number of barge drilling rigs under
Bareboat Charter Agreements at
period end - 3 (100.0)
----------------------------------------------------------------------------
(1) Operating revenue and operating costs for the three months ended March
31, 2016 and 2015 exclude third party recovery and third party costs of
$1.5 million and $1.2 million, respectively.
(2) See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document.



For the quarter ended March 31, 2016, operating revenue and operating income was $49.5 million and $23.1 million, respectively, down 45.8% and 46.8%, respectively, from the prior year. Weakening commodity prices in 2015 and into 2016 caused a significant reduction in demand for land drilling rigs which led to lower activity. Utilization decreased to 29% from 61% in 2015, and operating days declined to 1,733 days compared to 2,695 days in the prior year. Additionally, profitability showed a decline year over year, mainly due to less early termination and standby revenue recorded in 2016. The decrease in overall revenue generation was slightly offset by the additional rigs acquired as part of the CanElson acquisition in the third quarter of 2015.

Dayrates in the current quarter decreased by US$7,340 per day compared to the same quarter in the prior year. The decrease in the current period was a result of lower early termination and standby revenue recorded in 2016 as well as downward pressure on spot market pricing in 2016. Trinidad recorded early termination and standby revenue of US$3.7 million in the first quarter of 2016, compared to US$16.1 million in the first quarter of 2015. Excluding early termination and standby revenue, dayrates in the current period were US$18,299, compared to US$21,802 per day in the same period of 2015. Early termination and standby revenue for 2016 mainly relates to three rigs that were terminated at the end of 2015 and one in early 2016, with an average remaining contract period of 18 months. Early termination and standby revenue recorded in the first quarter of 2015 mainly relates to lump sum amounts on 10 rigs with an average remaining contract period of two months. Lastly, as commodity prices continued to lower in the first quarter of 2016, pressure to reduce dayrates increased. As a result, dayrates on the drilling rigs operating in 2016 were lower than 2015.

Operating income - net percentage decreased slightly to 46.7% in the first quarter of 2016 compared to 47.5% in the same quarter of 2015. Lower early termination and standby revenue recorded in 2016 caused a decline in overall profitability year over year. Excluding early termination and standby revenue, operating income - net percentage increased to 40.5% in the first quarter of 2016, compared to 33.6% in the first quarter of 2015, mainly as a result of cost cutting measures undertaken by the Company. In addition to lower wages and reduced headcount, the Company has reduced supply costs and scaled back repairs and maintenance to only those rigs expected to work in the near term.

At March 31, 2016, Trinidad's US and international rig count totaled 67 rigs, an increase of 20 rigs compared to the same period last year. In the third quarter of 2015, Trinidad's US and international rig fleet increased by 21 rigs as a result of the CanElson acquisition. Additionally in 2015, three contracted new build rigs were delivered by Trinidad's manufacturing division to the US and international operations and one new rig was added in the Middle East. This was offset by the reduction of five low specification rigs decommissioned at December 31, 2015.

Due to the downturn, Trinidad has chosen to discontinue marketing its barge rigs in order to focus on its core land drilling business. Therefore, as of September 30, 2015, all barge rigs were removed from Trinidad's active rig count with no operations in 2016.

First quarter of 2016 versus fourth quarter of 2015

Operating revenue and operating income decreased by $17.5 million and $9.2 million, respectively, in the first quarter of 2016 compared to the fourth quarter of 2015. Activity levels in Trinidad's US and international operations continued to decline into 2016 as commodity prices further weakened. Trinidad recorded 645 less operating days in the first quarter of 2016 compared to the fourth quarter of 2015.

Profitability was also negatively impacted in 2016 by lower overall revenue generation as well as less early termination and standby revenue recorded in 2016. Trinidad recorded early termination and standby revenue of US$3.7 million in the first quarter of 2016 related to three rigs that were terminated at the end of 2015 and one in early 2016, with an average remaining contract period of 18 months. In the fourth quarter of 2015, Trinidad recorded US$4.6 million of early termination and standby of which US$1.0 million related to early termination lump sum payments for one rig with contract terms expiring in 2016.

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 Trinidad Drilling International (TDI); Trinidad owns 60% of the shares of TDI.



----------------------------------------------------------------------------
Three months ended March 31,
($ thousands except percentage and
operating data) 2016 2015 % Change
----------------------------------------------------------------------------
Operating revenue 46,072 26,032 77.0
Other revenue - (19) (100.0)
------------------------------------------
46,072 26,013 77.1
Operating costs 26,760 15,469 73.0
------------------------------------------
Operating income (1) 19,312 10,544 83.2
------------------------------------------
Operating income - net percentage
(1) 41.9% 40.5%

Operating days (1) 690 410 68.3
Rate per operating day (CDN$) (1) 64,894 61,412 5.7
Rate per operating day (US$) (1) 46,676 50,825 (8.2)
Utilization rate - operating day
(1) 95% 94% 1.1
Number of drilling rigs at period
end 8 8 -
Number of active drilling rigs at
period end 8 5 60.0
----------------------------------------------------------------------------
(1) See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document.



In Trinidad's TDI joint venture operations, operating revenue and operating income for the first quarter of 2016 was $46.1 million and $19.3 million, respectively, up 77.0% and 83.2%, respectively, from the prior year. Expanding operations and an increased active rig count in the first quarter of 2016 drove improved results in the current year. During the first quarter of 2016, TDI had a total of eight drilling rigs actively working, four rigs in Saudi Arabia and four rigs in Mexico. In the first quarter of 2015, TDI had four rigs operating in Saudi Arabia and one rig operating in Mexico.

For the quarter ended March 31, 2016, dayrates declined slightly due to less mobilization and standby revenue recorded on TDI's Mexico rigs. In the first quarter of 2015, Trinidad recorded mobilization and standby revenue on three rigs in Mexico as they were waiting on location. As mobilization and standby revenue is recorded with no associated operating days or operating costs, it increases the overall average dayrate.

Operating income - net percentage remained strong in the current quarter at 41.9%, up slightly from 40.5% in the same quarter last year.

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 in 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 ended March 31, 2016, Trinidad's portion of DCM's income was less than $0.1 million.

Manufacturing Operations



----------------------------------------------------------------------------
Three months ended March 31,
($ thousands except percentage) 2016 2015 % Change
----------------------------------------------------------------------------
Operating revenue (1) 2,082 34,196 (93.9)
Other revenue 1 4 (75.0)
-------------------------------------------
2,083 34,200 (93.9)
Operating costs (1) 2,738 31,536 (91.3)
-------------------------------------------
Operating income (2) (655) 2,664 (124.6)
-------------------------------------------
Operating income - net percentage
(2) (31.4)% 7.8%
----------------------------------------------------------------------------
(1)For the three months ended March 31, 2016, excluded from operating
revenue and operating costs are downstream elimination entries of $3.1
million and $3.1 million, respectively (2015 - $49.1 million and $46.7
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.



Towards the end of 2015, due to lower demand for new and upgraded equipment, the Company chose to restructure its manufacturing operations, resizing its cost base to better reflect the lower activity levels. As such, the manufacturing operations recorded reduced revenue generation and profitability in the current year compared to 2015.

For the period ended March 31, 2016, Trinidad recognized revenue and expenses related to one upgrade project and various repairs and maintenance type work performed on the TDI joint venture rigs located in Mexico and Saudi Arabia. In the first quarter of 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 the Company's joint venture partner, Halliburton.

By reducing the cost base of the manufacturing operations, the Company expects to reduce operating costs in future periods.

FINANCIAL HIGHLIGHTS - QUARTERLY ANALYSIS



----------------------------------------------------------------------------
2016 2015
($ millions except per share
data and operating data) Q1 Q4 Q3 Q2 Q1
----------------------------------------------------------------------------
Revenue 107.7 138.0 124.3 95.2 194.4
Operating income (1) 46.7 56.0 52.0 41.9 72.3
Operating income percentage (1) 43.4% 40.6% 41.8% 44.0% 37.2%
Operating income - net
percentage (1) 45.4% 42.5% 43.9% 46.3% 38.5%

Net income (loss) (4) 11.1 (141.3) (87.6) (1.5) 12.1
Adjustments for:
Depreciation and amortization 43.2 49.0 26.6 19.7 23.6
Foreign exchange (2.4) (2.3) 3.3 - 6.2
(Gain) loss on sale of
property and equipment (1.2) 0.5 (0.6) (0.4) (1.1)
Impairment of property and
equipment - 178.7 26.9 - -
Impairment of goodwill - - 111.8 - -
(Gain) loss from investment
in joint ventures (21.4) 6.2 (2.8) (0.6) (1.3)
Finance and transaction costs 14.1 13.7 17.9 12.9 11.4
Income taxes (10.4) (66.7) (56.1) (3.4) 4.4
Interest income - - - - -
Other expense 0.9 0.8 (1.9) 1.4 2.9
Income taxes paid (0.9) (5.8) (1.1) (2.0) (1.6)
Income taxes recovered 0.1 - 2.9 0.1 0.2
Interest paid (24.4) (2.2) (22.9) (1.1) (20.7)
Interest received - - - - -
---------------------------------------------
Funds provided by operations
(1) 8.7 30.6 16.4 25.1 36.1
Per share (diluted) (2) 0.04 0.14 0.09 0.19 0.27
----------------------------------------------------------------------------
Adjusted EBITDA (1) 44.2 47.0 45.0 34.7 60.0
Per share (diluted) (2) 0.20 0.21 0.25 0.26 0.45
Net income (loss) attributable
to Trinidad (3) 11.3 (141.5) (87.5) (1.5) 12.1
Per share (diluted) (2) (3) 0.05 (0.64) (0.48) (0.01) 0.09
----------------------------------------------------------------------------

----------------------------------------------------------
2014
($ millions except per share
data and operating data) Q4 Q3 Q2
----------------------------------------------------------
Revenue 276.4 244.5 168.9
Operating income (1) 93.9 80.5 45.6
Operating income percentage (1) 34.0% 32.9% 27.0%
Operating income - net
percentage (1) 35.6% 34.7% 28.3%

Net income (loss) (4) (13.5) 19.2 (24.8)
Adjustments for:
Depreciation and amortization 34.0 33.4 27.3
Foreign exchange (0.1) 0.5 1.5
(Gain) loss on sale of
property and equipment 3.5 0.1 (1.3)
Impairment of property and
equipment 56.9 - 20.6
Impairment of goodwill - - -
(Gain) loss from investment
in joint ventures (1.3) 1.6 (0.4)
Finance and transaction costs 9.8 9.7 10.0
Income taxes (8.9) 4.9 (7.2)
Interest income - (0.1) (0.1)
Other expense 0.6 (4.0) 5.3
Income taxes paid (0.3) (0.7) (0.7)
Income taxes recovered 0.4 1.3 0.2
Interest paid (1.4) (19.5) (0.5)
Interest received - 0.1 0.1
---------------------------
Funds provided by operations
(1) 79.7 46.5 30.0
Per share (diluted) (2) 0.58 0.34 0.22
----------------------------------------------------------
Adjusted EBITDA (1) 77.3 64.6 30.6
Per share (diluted) (2) 0.56 0.47 0.22
Net income (loss) attributable
to Trinidad (3) (13.5) 19.2 (24.8)
Per share (diluted) (2) (3) (0.10) 0.14 (0.18)
----------------------------------------------------------
(1) See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document.
(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.
(3) Net income (loss) is net income attributable to shareholders of
Trinidad. Net income per share is calculated as net income attributable
to shareholders of Trinidad divided by the weighted average number of
common shares outstanding. Both are adjusted for dilutive factors.
(4) Net income (loss) used in the consolidated statement of cash flows in
total net income (loss) before adjustments for non-controlling interest
amounts.



OPERATING HIGHLIGHTS - QUARTERLY ANALYSIS



----------------------------------------------------------------------------
2016 2015
Q1 Q4 Q3 Q2 Q1
----------------------------------------------------------------------------
Land Drilling Market
Operating days (1)
Canada 2,001 2,471 2,109 380 2,343
United States and
International 1,733 2,378 2,199 2,202 2,695
Rate per operating day (1)
Canada (CDN$) 24,635 24,079 23,695 31,731 25,764
United States and
International (CDN$) 28,529 28,171 30,223 33,184 33,194
United States and
International (US$) 20,438 21,209 23,582 26,755 27,778
Utilization rate - operating
day (1)
Canada 31% 31% 34% 8% 50%
United States and
International 29% 36% 40% 50% 61%
Number of drilling rigs at
period end (4)
Canada 72 72 82 54 54
United States and
International 67 67 72 49 47
Barge Drilling Market
Number of barge drilling rigs
at period end (4) - - - 2 2
Number of barge drilling rigs
under
Bareboat Charter Agreements
at period end (4) - - - - 3
TDI Joint Venture Operations
(2)
Operating days (1) 690 668 595 516 410
Rate per operating day (CDN$)
(1) 64,894 60,619 59,609 60,555 61,412
Rate per operating day (US$)
(1) 46,676 45,898 46,591 48,959 50,825
Utilization rate - operating
day (1) 95% 97% 99% 95% 94%
Number of drilling rigs at
period end (4) 8 8 8 8 8
DCM Joint Venture Operations
(3)
Number of drilling rigs at
period end (4) 2 2 2
Number of service rigs at
period end (4) 2 2 2
----------------------------------------------------------------------------

----------------------------------------------------------
2014
Q4 Q3 Q2
----------------------------------------------------------
Land Drilling Market
Operating days (1)
Canada 3,271 3,424 1,430
United States and
International 4,820 4,906 4,441
Rate per operating day (1)
Canada (CDN$) 26,624 24,669 26,338
United States and
International (CDN$) 25,150 22,842 22,890
United States and
International (US$) 22,476 21,092 20,819
Utilization rate - operating
day (1)
Canada 62% 66% 26%
United States and
International 97% 96% 80%
Number of drilling rigs at
period end (4)
Canada 53 61 59
United States and
International 47 54 56
Barge Drilling Market
Number of barge drilling rigs
at period end (4) 2 2 2
Number of barge drilling rigs
under
Bareboat Charter Agreements
at period end (4) 3 3 3
TDI Joint Venture Operations
(2)
Operating days (1)
Rate per operating day (CDN$)
(1)
Rate per operating day (US$)
(1)
Utilization rate - operating
day (1)
Number of drilling rigs at
period end (4) 6 4 4
DCM Joint Venture Operations
(3)
Number of drilling rigs at
period end (4)
Number of service rigs at
period end (4)
----------------------------------------------------------
(1) See Non-GAAP Measures Definitions and Additional GAAP Measures
Definitions section at the end of this document.
(2) Trinidad is party to a joint venture with a wholly owned subsidiary of
Halliburton (TDI). These rigs are owned by the joint venture.
(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 March 31,
($ thousands except percentage) 2016 2015 % Change
----------------------------------------------------------------------------
General and administrative (1) 12,654 15,976 (20.8)
% of revenue 11.8% 8.2%
------------------------------------------
Share-based payment expense 674 427 57.8
Third party recoverable costs 323 567 (43.0)
------------------------------------------
Total general and administrative 13,651 16,970 (19.6)
------------------------------------------
% of revenue 12.7% 8.7%
----------------------------------------------------------------------------
(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 months ended March 31, 2016, total general and administrative (G&A) expenses were $13.7 million, down $3.3 million or 19.6%, when compared to the first quarter of 2015, mainly due to a reduction in Other G&A in the current year. In light of weak industry conditions in 2015, Trinidad implemented several measures to lower costs including a headcount reduction, a reduction in salaries and board fees for all executives and directors of approximately 20% and a company-wide average wage rollback of 12% for salaried employees. As such, the Company was able to reduce costs incurred related to salary expenses in 2016. The Company also recorded lower expenses related to rent, insurance, and travel and entertainment in 2016, compared to the first quarter of 2015.

Additionally, Trinidad has significantly reduced expenditures in non-core business activities, such as the Company's barge and manufacturing operations. Based on these initiatives, each of the barge and manufacturing operations recorded lower other G&A expenses in the first quarter of 2016 compared to the first quarter of 2015. Trinidad will continue to monitor operations in order to identify further efficiencies across all operations.

For the three months ended March 31, 2016, share-based payment expense increased by $0.2 million compared to the same period in 2015. This increase was mainly due to increased PSU and DSU units outstanding in 2016 due to the annual grants of each in the first quarter of 2016. This was slightly offset by a lower stock price in 2016 versus 2015.

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.

For the three months ended March 31, 2016, G&A as a percentage of revenue increased to 12.7% compared to 8.7% in the prior year due to lower revenue generation year over year.

FINANCIAL SUMMARY



----------------------------------------------------------------------------
As at March 31, December 31,
($ thousands) 2016 2015 $ Change
----------------------------------------------------------------------------
Working capital (1) 48,758 61,372 (12,614)

Limited partnership loans 2,237 2,609 (372)
Senior notes 582,553 620,661 (38,108)
Credit facility 39,352 89,873 (50,521)
-----------------------------------------
624,142 713,143 (89,001)
-----------------------------------------
Less: unamortized debt issue costs (5,663) (6,223) 560
-----------------------------------------
Total long-term debt 618,479 706,920 (88,441)
-----------------------------------------
Total long-term debt as a
percentage of assets 29.8% 31.6%
----------------------------------------------------------------------------


Total assets 2,073,537 2,236,200 (162,663)
Total long-term liabilities 685,632 783,254 (97,622)
-----------------------------------------
Total long-term liabilities as a
percentage of assets 33.1% 35.0%
----------------------------------------------------------------------------

Three months ended March 31, 2016 2015 $ Change
----------------------------------------------------------------------------
Cash provided by operations 15,893 928 14,965
Cash provided (used) by investing 21,693 (42,453) 64,146
Cash (used) provided by financing (51,771) 34,653 (86,424)
----------------------------------------------------------------------------
(1) See Non-GAAP Measures Definitions section at the end of this document.



For the three months ended March 31, 2016, working capital decreased by $12.6 million when compared to December 31, 2015, due to a decrease in current assets of $40.7 million partly offset by a decrease in current liabilities of $28.1 million.

Current assets decreased in the current quarter mainly due to a reduction in accounts receivable as a result of lower activity in 2016 compared to the prior year across each of the Canadian and US and international operations. As well, prepaid expenses decreased mainly due to a reduction in prepaid insurance expenses. Cash decreased as a result of lower revenue generation partly offset by a distribution from the TDI joint venture. These were slightly offset by the increase in assets held for sale due to the addition of a non-drilling disposal group held for sale at March 31, 2016.

Current liabilities decreased in the current period mainly as a result of a decrease in accounts payable and accrued liabilities due to lower activity across Canada and the US and international operations. Additionally, dividends payable decreased following the suspension of the dividend in the first quarter of 2016 compared to a $0.01 per share dividend declared at December 31, 2015. Lastly, there was a slight decrease in the current portion of long-term debt due to a payment made in the first quarter of 2016. These decreases were slightly offset by an increase in deferred revenue related to the termination of one drilling contract with an average remaining contract period of 18 months. The majority of the amount included in deferred revenue at March 31, 2016 will be recognized in the second quarter of 2016.

Trinidad's total long-term debt balance at March 31, 2016 decreased by $88.4 million compared to December 31, 2015. This decrease was largely due to a decrease in the translated value of the Senior Notes and the amount drawn on the credit facility in the first quarter of 2016 compared to December 31, 2015. The Senior Notes decreased entirely as a result of the foreign currency fluctuations in the first quarter as the Canadian dollar strengthened in value compared to the US dollar closing at 1.2987 compared to 1.3840 at December 31, 2015. 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 US to Canadian 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. Trinidad has designated the Senior Notes as a hedge of the US and international operations. As a result, unrealized gains and losses on the US dollar Senior Notes are offset against foreign exchange gains and losses arising from the translation of the foreign subsidiaries and included in the cumulative translation account in other comprehensive income.

Trinidad's total long-term debt balance also decreased due to a lower balance outstanding on the credit facility at March 31, 2016. At March 31, 2016, $16.0 million and US$18.0 million was drawn in Trinidad's Canadian and US dollar revolving facilities, respectively. Compared to December 31, 2015, where $65.0 million and US$18.0 million was drawn, respectively.

At March 31, 2016, the Company has available capacity of $134.0 million on its $150.0 million Canadian revolving facility and US$132.0 million on its US$150.0 million US revolving facility. In addition, Trinidad had $48.4 million in cash on hand at quarter end. 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 Total Debt to Bank EBITDA ratio.

2016 Capital Expenditures

In 2016, Trinidad expects to spend approximately $30.0 million in capital expenditures, comprised mostly of capital for maintenance and infrastructure projects necessary to maintain the Company's current operations. Trinidad expects to utilize existing capital inventory items to upgrade and maintain its fleet.



----------------------------------------------------------------------------
Three months ended March 31,
($ thousands) 2016 2015
----------------------------------------------------------------------------
New builds - 24,608
Capital upgrades and enhancements 9,471 7,936
Maintenance and infrastructure 2,090 4,213
Capital spares inventory 8,603 13,377
--------------------------------
Total capital expenditures for Trinidad 20,164 50,134
Non-cash working capital allocated to
investing activities 13,437 (15,291)
--------------------------------
Total capital expenditures adjusted for non-
cash items - Trinidad 6,727 65,425
TDI joint venture capital expenditures
(Trinidad's 60% share) 2,249 23,700
----------------------------------------------------------------------------
Total capital expenditures adjusted for non-
cash items - Trinidad and TDI joint venture 8,976 89,125
----------------------------------------------------------------------------



During the quarter ended March 31, 2016, a total of $20.2 million was spent on capital expenditures in Trinidad, compared to $50.1 million in the prior year. Of the $20.2 million, $13.4 million related to non-cash changes for deposits and payables with no actual cash outflow in 2016. The additional $6.7 million of capital expenditures mainly related to upgrading assets that are expected to work in 2016.

In addition to the amounts spent on Trinidad's capital, the Company spent $2.2 million related to its portion of capital spending for the TDI joint venture. The majority of the capital spend in 2016 for the joint venture related to upgrading the rigs and investing in capital inventory items.

Capital Resources

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 March 31, December 31, THRESHOLD
2016 2015
----------------------------------------------------------------------------

Senior Debt to Bank EBITDA (1) 0.04:1 0.21:1 3.00:1 maximum
Total Debt to Bank EBITDA (1) 3.54:1 3.45:1 6.00:1 maximum (2)
Bank EBITDA to Cash Interest
Expense (1) 2.95:1 3.49:1 2.00:1 minimum (2)
----------------------------------------------------------------------------
(1) Please see the Non-GAAP Measures Definitions section at the end of this
document.
(2) Refer below to the covenant threshold requirements for future periods.



At March 31, 2016, Total Debt to Bank EBITDA was 3.54 times, compared to 3.45 times at December 31, 2015. Total Debt to Bank EBITDA increased in the current year due to lower adjusted EBITDA, as a result of weaker activity in the first quarter of 2016 compared to the first quarter of 2015; offset by a lower debt balance at March 31, 2016, mainly due to a stronger CAD dollar translation as well as a lower revolving debt balance. The closing USD/CAD exchange rates fluctuated to 1.2987 at March 31, 2016, from 1.3840 at December 31, 2015, significantly affecting the Canadian equivalent of all US dollar debt held by Trinidad.

The Bank EBITDA does not include the adjusted EBITDA from investment in the joint ventures. Dividends and distributions paid to Trinidad from the joint ventures are eligible for inclusion in the Bank EBITDA in the period that payment occurs. In the first quarter of 2016, the TDI joint venture distributed approximately $36.0 million, of which $21.5 million was paid to Trinidad. At March 31, 2016, the TDI joint venture has approximately $4.7 million available for distribution.

Credit Facility and Debt Covenants

On December 14, 2015, Trinidad announced that it had amended its credit facility, choosing to reduce the size of its credit facility in order to lower standby fees on funds it does not expect to access and has not historically utilized as well as adjust required covenants in order to allow the Company financial flexibility over the next two years.

The amended credit facility includes a Canadian revolving facility of $150.0 million (previously $200.0 million) and a US revolving facility of US$150.0 million (previously US$200.0 million) which matures in December 2018. The Company's syndicated loan facility is subject to three covenants, with increased focus on the Total Debt to Bank EBITDA. Based on the amended credit facility, this covenant was adjusted to the following:



----------------------------------------------------------------------------
Credit Facility Covenants
----------------------------------------------------------------------------
Total Leverage Covenant Maximum of 6.00:1 January 1, 2016 -
March 31, 2017
Total Debt to Bank EBITDA (1)
--------------------------------------------
Maximum of 5.50:1 April 1, 2017 - June
30, 2017
--------------------------------------------
Maximum of 5.00:1 July 1, 2017 -
December 31, 2017
--------------------------------------------
Maximum of 4.00:1 January 1, 2018 -
forward
----------------------------------------------------------------------------
Minimum of 2.00:1 January 1, 2016 -
Interest Coverage December 31, 2017
--------------------------------------------
Bank EBITDA(1)/ Cash Interest Minimum of 2.50:1 January 1, 2018 -
Expense forward
----------------------------------------------------------------------------
(1) Please see the Non-GAAP Measures Definitions section at the end of this
document.



In addition to the financial covenants, the credit facility contains other covenants with threshold limitations on various day to day events, including the following: incurring additional debt and liens on assets; investments, including advances to the TDI joint venture; asset sales; repurchase of Senior Notes; and making restricted payments. At March 31, 2016, Trinidad is in compliance with all of the covenants of the credit facility.

Senior Notes

The Senior Notes are unsecured and have no financial covenant compliance reporting requirements. There are other covenant limitations, including the following; incurring additional debt; investments, including advances to the TDI joint venture; asset sales; and restricted payments. Restricted payments are allowed within a basket, calculated as the accumulated net income from October 1, 2010 to the current period at 50% of net income or 100% of net loss, plus equity issued for cash and the net fair market value of other restricted assets added for equity. As at March 31, 2016, Trinidad has a significant positive restricted payment basket available.

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

OUTLOOK

To date in the second quarter of 2016, utilization rates and demand for drilling equipment have remained low. Competition for available work continues to be high; however, the ongoing reduction in dayrates appears to have slowed. In response to strong pressure from oil and gas producers to reduce dayrates over the past 12 to 18 months, the oilfield services industry has worked hard to lower its cost structure. With limited ability for additional cost reductions, Trinidad does not expect to see further material reductions in spot market dayrates, unless current market conditions change significantly.

Activity levels in the Canadian operations are typically low at this time of year as a result of spring break-up and are currently at 6%. The US and international operations currently have 8 rigs or 12% of the fleet working, with an additional three rigs idle but contracted. In the Company's Joint Venture operations, Trinidad currently has five rigs operating, with repair work being completed on one rig in Saudi Arabia and two rigs in Mexico currently on standby.

Oil prices have improved over the past month, holding above $40 per barrel. This level remains below the price needed for a significant number of oil and gas developments to be economic; however, the relative improvement from earlier in 2016 and lowering production levels in North America are causing some optimism from industry experts. Trinidad expects that activity levels will remain weak in the second quarter of 2016, with improvement possible towards the end of 2016 or in 2017, dependent on further improvement in commodity prices.

Long-term contracts continue to play an important part in Trinidad's operations. The Company expects to record approximately $38 million in early termination revenue in the second quarter as a result of contracts on three US-based rigs canceled at the end of 2015 and one US-based rig in early 2016. To date in the second quarter, Trinidad has not received any additional early termination revenue. Trinidad currently has 33 rigs or 22% of its fleet under long-term contract, with an average term remaining of 1.4 years. Contracts on eight of these rigs expire throughout the remainder of 2016.

In light of ongoing weak industry conditions, Trinidad is continuing to review its operations for opportunities to reduce costs and improve efficiencies. In the second quarter of 2016, the Company expects to further lower overhead costs by centralizing administrative and support functions to its head office and significantly scaling back its manufacturing operations. Trinidad's operating divisions will each manage their own future repair and maintenance work and select engineering and design personnel have been retained to assist where needed. In 2016, Trinidad expects Other G&A expenses to be approximately $45 million, down 27% from the previous year.

In late 2015, Trinidad amended its debt covenants, providing additional financial flexibility through till late 2017; under current industry conditions and expectations, Trinidad believes it will be able to operate within these covenants. Given the lack of visibility into the second half of 2016 and into 2017, Trinidad continues to closely monitor its position and its covenants.

Trinidad is well positioned to withstand the downturn with its lower cost structure, reduced cash outflows and improved financial flexibility; however, the Company is also ready for the rebound. Trinidad's modern, high performance fleet will compete strongly in future opportunities both in North America and internationally. The Company's growing diversity and international exposure is opening new areas of growth and adding new opportunities to put idle equipment to work. Trinidad has retained its best performing and most experienced people, and when the market rebounds, the Company will be ready to respond.

CONFERENCE CALL



Conference Call: Tuesday, May 10, 2016
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
Conference ID: 67526212

Archived Recording: Available from approximately 12:30 p.m. MT on May 10,
2016 until midnight
May 24, 2016. The dial-in number is 800-585-8367 or 416-
621-4642
Conference ID: 67526212

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



Trinidad is a corporation focused on sustainable growth that trades on the Toronto Stock Exchange under the symbol TDG. Trinidad's divisions operate in the drilling sector of the North American oil and natural gas industry with operations in Canada and the United States. In addition, through joint ventures, Trinidad operates drilling rigs in other international markets such as Saudi Arabia and Mexico. 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 March 31, December 31,
($ thousands) - unaudited 2016 2015
----------------------------------------------------------------------------

Assets
Current Assets
Cash and cash equivalents 48,393 63,686
Accounts receivable 90,031 113,870
Inventory 6,992 7,136
Prepaid expenses 5,278 7,423
Assets held for sale 3,482 2,744
----------------------------------------------------------------------------
154,176 194,859

Property and equipment 1,561,215 1,656,268
Intangible assets and goodwill 33,992 35,048
Deferred income taxes 49,587 54,367
Investment in joint ventures 274,567 295,658
----------------------------------------------------------------------------
2,073,537 2,236,200
----------------------------------------------------------------------------

Liabilities
Current Liabilities
Accounts payable and accrued liabilities 63,655 93,795
Dividends payable - 2,221
Deferred revenue and customer deposits 38,837 34,862
Current portion of long-term debt 2,237 2,609
Liabilities held for sale 689 -
----------------------------------------------------------------------------
105,418 133,487

Long-term debt 616,242 704,311
Deferred income taxes 52,170 60,495
Non-controlling interest 17,220 18,448
----------------------------------------------------------------------------
791,050 916,741

Shareholders' Equity
Common shares 1,374,656 1,374,656
Contributed surplus 64,929 64,884
Accumulated other comprehensive income 155,627 203,947
Deficit (312,725) (324,028)
----------------------------------------------------------------------------
1,282,487 1,319,459
----------------------------------------------------------------------------
2,073,537 2,236,200
----------------------------------------------------------------------------



CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME



----------------------------------------------------------------------------
Three months ended March 31,
($ thousands) - unaudited 2016 2015
----------------------------------------------------------------------------

Revenue
Oilfield service revenue 107,087 193,503
Other revenue 563 893
----------------------------------------------------------------------------
107,650 194,396
----------------------------------------------------------------------------

Expenses
Operating expense 60,971 122,114
General and administrative 13,651 16,970
Depreciation and amortization 43,247 23,612
Foreign exchange (2,450) 6,159
(Gain) on sale of property and equipment (1,237) (1,100)
----------------------------------------------------------------------------
114,182 167,755
----------------------------------------------------------------------------

(Gain) from investment in joint ventures (21,432) (1,271)
Finance and transaction costs 14,132 11,426
----------------------------------------------------------------------------
Income before income taxes 768 16,486
----------------------------------------------------------------------------

Income taxes
Current 286 2,646
Deferred (10,659) 1,710
----------------------------------------------------------------------------
(10,373) 4,356
----------------------------------------------------------------------------
Net income 11,141 12,130

Other comprehensive (loss) income
Foreign currency translation adjustment for
foreign operations, net of income tax (48,320) 64,578
Foreign currency translation adjustment for
non-controlling interest, net of income tax (298) -

----------------------------------------------------------------------------
(48,618) 64,578
----------------------------------------------------------------------------
Total comprehensive (loss) income (37,477) 76,708
----------------------------------------------------------------------------

Net income (loss) attributable to:
------------------------------
Shareholders of Trinidad 11,303 12,130
------------------------------
Non-controlling interest (162) -
------------------------------
Total comprehensive (loss) income attributable
to:
------------------------------
Shareholders of Trinidad (37,017) 76,708
------------------------------
Non-controlling interest (460) -
----------------------------------------------------------------------------
Earnings per share
Net income
Basic / Diluted 0.05 0.09
----------------------------------------------------------------------------



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



----------------------------------------------------------------------------
For three months
ended March 31,
2016 and 2015
Accumulated
other
($ thousands) - Common Contributed comprehensive Total
unaudited shares surplus income (1) (Deficit) equity
----------------------------------------------------------------------------
Balance at
December 31, 2015 1,374,656 64,884 203,947 (324,028) 1,319,459
Share-based
payment expense - 45 - - 45
Total
comprehensive
(loss) income - - (48,320) 11,303 (37,017)
----------------------------------------------------------------------------
Balance at March
31, 2016 1,374,656 64,929 155,627 (312,725) 1,282,487
----------------------------------------------------------------------------

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 - 13 - - 13
Total
comprehensive
(loss) income - - 64,578 12,130 76,708
Dividends - - - (6,671) (6,671)
----------------------------------------------------------------------------
Balance at March
31, 2015 1,079,411 64,683 127,048 (73,551) 1,197,591
----------------------------------------------------------------------------
(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 three months ended March 31,
($ thousands) - unaudited 2016 2015
----------------------------------------------------------------------------

Cash provided by (used in)
Operating activities
Net income 11,141 12,130
Adjustments for:
Depreciation and amortization 43,247 23,612
Foreign exchange (2,450) 6,159
(Gain) on sale of property and equipment (1,237) (1,100)
(Gain) from investment in joint ventures (21,432) (1,271)
Finance and transaction costs 14,132 11,426
Income taxes (10,373) 4,356
Interest income (1) (18)
Other (1) 930 2,884
Income taxes paid (953) (1,638)
Income taxes recovered 87 210
Interest paid (24,392) (20,676)
Interest received 1 18
----------------------------------------------------------------------------
Funds provided by operations 8,700 36,092
Change in non-cash operating working capital 7,193 (35,164)
----------------------------------------------------------------------------
Cash provided by operations 15,893 928
----------------------------------------------------------------------------

Investing activities
Purchase of property and equipment (20,164) (50,134)
Proceeds from disposition of property and
equipment 4,469 1,584
Net investment in joint ventures 2,442 (9,194)
Distribution and dividends received from joint
venture 21,509 -
Change in non-cash working capital 13,437 15,291
----------------------------------------------------------------------------
Cash provided (used) by investing 21,693 (42,453)
----------------------------------------------------------------------------

Financing activities
Proceeds from long-term debt 130,188 49,948
Repayments of long-term debt (179,714) -
Repurchase of shares - (8,350)
Dividends paid (2,221) (6,758)
Finance costs (24) (187)
----------------------------------------------------------------------------
Cash (used) provided by financing (51,771) 34,653
----------------------------------------------------------------------------

Cash flow from operating, investing and
financing activities (14,185) (6,872)
Effect of translation of foreign currency cash (1,108) 5,079
----------------------------------------------------------------------------
Decrease in cash for the period (15,293) (1,793)
----------------------------------------------------------------------------

Cash and cash equivalents - beginning of
period 63,686 71,062
----------------------------------------------------------------------------
Cash and cash equivalents - end of period 48,393 69,269
----------------------------------------------------------------------------
(1) Other includes share-based payment expense and elimination of downstream
transactions in the Manufacturing Operations net income.



SEGMENTED INFORMATION

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



----------------------------------------------------------------------------

For three months Joint
ended United States / Venture
March 31, 2016 Canadian International Manufacturing Operations
($ thousands) Operations Operations Operations (1)
----------------------------------------------------------------------------

Operating revenue 50,358 49,450 5,193 -
Other revenue 361 104 1 -
Third party recovery 3,730 1,467 - -
General and
administrative -
third party recovery - - - -
Inter-segment revenue - - 706 -
Elimination of
downstream
transactions (129) (97) (3,111) -
----------------------------------------------------------------------------
54,320 50,924 2,789 -
----------------------------------------------------------------------------
Operating costs 26,689 26,347 5,818 -
Third party costs 3,730 1,467 - -
Inter-segment
operating - - 706 -
Elimination of
downstream
transactions - - (3,080) -
----------------------------------------------------------------------------
Operating income 23,901 23,110 (655) -
----------------------------------------------------------------------------
Depreciation and
amortization 17,708 24,918 621 -
(Gain) loss on sale
of assets 11 (1,221) (27) -
----------------------------------------------------------------------------
17,719 23,697 594 -
----------------------------------------------------------------------------
Segmented income 6,182 (587) (1,249) -
(Gain) from
investment in joint
ventures - - - (21,432)
General and
administrative - - - -
General and
administrative -
third party costs - - - -
Foreign exchange - - - -
Finance and
transaction costs - - - -
Income taxes - - - -
----------------------------------------------------------------------------
Net income 6,182 (587) (1,249) 21,432
----------------------------------------------------------------------------

Purchase of property
and equipment 10,925 9,031 208 -
----------------------------------------------------------------------------

------------------------------------------------------------
For three months
ended
March 31, 2016 Inter-segment
($ thousands) Eliminations Corporate Total
------------------------------------------------------------

Operating revenue - - 105,001
Other revenue - - 466
Third party recovery - - 5,197
General and
administrative -
third party recovery - 323 323
Inter-segment revenue (706) - -
Elimination of
downstream
transactions - - (3,337)
------------------------------------------------------------
(706) 323 107,650
------------------------------------------------------------
Operating costs - - 58,854
Third party costs - - 5,197
Inter-segment
operating (706) - -
Elimination of
downstream
transactions - - (3,080)
------------------------------------------------------------
Operating income - 323 46,679
------------------------------------------------------------
Depreciation and
amortization - - 43,247
(Gain) loss on sale
of assets - - (1,237)
------------------------------------------------------------
- - 42,010
------------------------------------------------------------
Segmented income - 323 4,669
(Gain) from
investment in joint
ventures - - (21,432)
General and
administrative - 13,328 13,328
General and
administrative -
third party costs - 323 323
Foreign exchange - (2,450) (2,450)
Finance and
transaction costs - 14,132 14,132
Income taxes - (10,373) (10,373)
------------------------------------------------------------
Net income - (14,637) 11,141
------------------------------------------------------------

Purchase of property
and equipment - - 20,164
------------------------------------------------------------
(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 Joint
ended United States / Venture
March 31, 2015 Canadian International Manufacturing Operations
($ thousands) Operations Operations Operations (1)
----------------------------------------------------------------------------

Operating revenue 60,370 91,189 83,252 -
Other revenue 45 337 4 -
Third party
recovery 6,551 1,199 - -
General and
administrative -
third party
recovery - - - -
Inter-segment
revenue - - 41,402 -
Elimination of
downstream
transactions - (62) (49,056) -
----------------------------------------------------------------------------
66,966 92,663 75,602 -
----------------------------------------------------------------------------
Operating costs 34,822 48,006 78,198 -
Third party costs 6,551 1,199 - -
Inter-segment
operating - - 41,402 -
Elimination of
downstream
transactions - - (46,662) -
----------------------------------------------------------------------------
Operating income 25,593 43,458 2,664 -
----------------------------------------------------------------------------
Depreciation and
amortization 9,131 13,894 587 -
(Gain) loss on
sale of assets 42 (1,142) - -
Elimination of
downstream
transactions - - - -
Impairment of
capital assets - - - -
----------------------------------------------------------------------------
9,173 12,752 587 -
----------------------------------------------------------------------------
Segmented income 16,420 30,706 2,077 -
(Gain) from
investment in
joint venture - - - (1,271)
General and
administrative - - - -
General and
administrative -
third party
costs - - - -
Foreign exchange - - - -
Finance and
transaction
costs - - - -
Income taxes - - - -
----------------------------------------------------------------------------
Net income 16,420 30,706 2,077 1,271
----------------------------------------------------------------------------

Purchase of
property and
equipment 14,723 35,247 164 -
----------------------------------------------------------------------------

-----------------------------------------------------------
For three months
ended
March 31, 2015 Inter-segment
($ thousands) Eliminations Corporate Total
-----------------------------------------------------------

Operating revenue - - 234,811
Other revenue - - 386
Third party
recovery - - 7,750
General and
administrative -
third party
recovery - 567 567
Inter-segment
revenue (41,402) - -
Elimination of
downstream
transactions - - (49,118)
-----------------------------------------------------------
(41,402) 567 194,396
-----------------------------------------------------------
Operating costs - - 161,026
Third party costs - - 7,750
Inter-segment
operating (41,402) - -
Elimination of
downstream
transactions - - (46,662)
-----------------------------------------------------------
Operating income - 567 72,282
-----------------------------------------------------------
Depreciation and
amortization - - 23,612
(Gain) loss on
sale of assets - - (1,100)
Elimination of
downstream
transactions - - -
Impairment of
capital assets - - -
-----------------------------------------------------------
- - 22,512
-----------------------------------------------------------
Segmented income - 567 49,770
(Gain) from
investment in
joint venture - - (1,271)
General and
administrative - 16,403 16,403
General and
administrative -
third party
costs - 567 567
Foreign exchange - 6,159 6,159
Finance and
transaction
costs - 11,426 11,426
Income taxes - 4,356 4,356
-----------------------------------------------------------
Net income - (38,344) 12,130
-----------------------------------------------------------

Purchase of
property and
equipment - - 50,134
-----------------------------------------------------------
(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.
----------------------------------------------------------------------------

Joint
As at March 31, United States / Venture
2016 Canadian International Manufacturing Operations
($ thousands) Operations Operations Operations (1)
----------------------------------------------------------------------------
Property and
equipment 629,566 895,671 35,978 -
Intangible assets
and goodwill 19,510 13,532 950 -
Total assets less
deferred tax
asset 681,244 961,930 106,209 274,567
Deferred income
tax (asset)
liability (45,559) 47,742 400 -
----------------------------------------------------------------------------

-----------------------------------------------------------

As at March 31,
2016 Inter-segment
($ thousands) Eliminations Corporate Total
-----------------------------------------------------------
Property and
equipment - - 1,561,215
Intangible assets
and goodwill - - 33,992
Total assets less
deferred tax
asset - - 2,023,950
Deferred income
tax (asset)
liability - - 2,583
-----------------------------------------------------------
----------------------------------------------------------------------------

Joint
As at March 31, United States / Venture
2015 Canadian International Manufacturing Operations
($ thousands) Operations Operations Operations (1)
----------------------------------------------------------------------------
Property and
equipment 545,132 852,276 24,842 -
Intangible assets
and goodwill - 107,788 715 -
Total assets less
deferred tax
asset 502,537 1,248,771 112,891 189,297
Deferred income
tax (asset)
liability (23,815) 113,231 1,386 -
----------------------------------------------------------------------------

-----------------------------------------------------------

As at March 31,
2015 Inter-segment
($ thousands) Eliminations Corporate Total
-----------------------------------------------------------
Property and
equipment - - 1,422,250
Intangible assets
and goodwill - - 108,503
Total assets less
deferred tax
asset - - 2,053,496
Deferred income
tax (asset)
liability - - 90,802
-----------------------------------------------------------
(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, adjusted EBITDA, adjusted EBITDA from investment in joint ventures, 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. These non-GAAP measures are identified and defined as follows:

"Adjusted EBITDA" is used by management and investors to analyze the Company's profitability based on 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. Additionally, in order to focus on the core business alone, amounts are removed related to foreign exchange, share-based payment expense, impairment expenses and the sale of assets, as the Company does not deem these to relate to the core drilling business. 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 income as calculated in accordance with IFRS. 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 March 31,
($ thousands) 2,016 2015
----------------------------------------------------------------------------
Net income 11,141 12,130
Plus:
Finance and transaction costs 14,132 11,426
Depreciation and amortization 43,247 23,612
Income taxes (10,373) 4,356
------------------------------
58,147 51,524
------------------------------
Plus:
Gain on sale of property and equipment (1,237) (1,100)
Share-based payment expense 674 427
Foreign exchange (2,450) 6,159
(Gain) from investment in joint ventures (21,432) (1,271)
Plus:
Adjusted EBITDA from investment in joint
ventures 10,505 4,292
----------------------------------------------------------------------------
Adjusted EBITDA 44,207 60,031
----------------------------------------------------------------------------



"Adjusted EBITDA from investment in joint ventures" is used by management and investors to analyze the results generated by the Company's joint venture operations prior to how these activities are financed, how assets are depreciated and amortized and how the results are taxed in various jurisdictions. Additionally, in order to focus on the core drilling business, amounts related to foreign exchange, share-based payment expense, impairment adjustments to property and equipment as well as preferred shares and the sale of assets are removed. Lastly, amounts recorded for the revaluation on the investment of the TDI joint venture are removed as these are non-cash entries and unrelated to the operations of the business. Adjusted EBITDA from investment in joint ventures is not intended to represent net income as calculated in accordance with IFRS.

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



----------------------------------------------------------------------------
Three months ended March 31,
($ thousands) 2016 2015
----------------------------------------------------------------------------
Gain from investment in joint ventures 21,432 1,271
Plus:
Finance costs 452 99
Depreciation and amortization 6,256 2,416
Income taxes 1,670 306
-------------------------------
29,810 4,092
-------------------------------
Plus:
TDI investment - fair value adjustment (20,398) -
Dividend expense 14,891 -
Foreign exchange 110 200
Preferred share valuation (13,908) -
----------------------------------------------------------------------------
Adjusted EBITDA from investment in joint
ventures 10,505 4,292
----------------------------------------------------------------------------



"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 net income before interest, taxes, depreciation and amortization, 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 net income before interest, taxes, depreciation and amortization, 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. Bank EBITDA also includes all distributions received from the Company's joint ventures during the period.

Total Debt to Bank EBITDA is calculated as follows:



----------------------------------------------------------------------------
As At March 31, December 31,
($ thousands) 2016 2015
----------------------------------------------------------------------------
Total Debt:
Senior Notes, principal (US$450.0 million) 584,415 622,800
Other debt 2,237 2,609
Draw on credit facility (1) 39,377 89,873
Letters of credit 454 499
Dividends payable - 2,221
Cash (less amounts held in Bermuda) in
excess of $10.0 million (35,287) (52,700)
----------------------------------------------------------------------------
591,196 665,302
Bank EBITDA (TTM):
Net income (219,335) (218,346)
Income taxes (136,505) (121,776)
Finance and transaction costs 58,557 55,851
Depreciation and amortization 138,535 118,900
Impairment 317,475 317,475
(Gain) from investment in joint ventures (18,631) 1,530
(Gain) on sale of property and equipment (1,708) (1,571)
Unrealized foreign exchange (4,305) 7,915
Share-based payment expense 38 (208)
Non-controlling interest 158 (4)
Cash distributions (TDI joint venture) 21,509 -
CanElson Pro-forma inclusion (TTM) 11,346 33,354
----------------------------------------------------------------------------
167,134 193,120
Total Debt to Bank EBITDA 3.54 3.45
----------------------------------------------------------------------------
(1) For the period ended March 31, 2016, draw on credit facility included
US$18.0 million and $16.0 million.



"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 net income before interest, taxes, depreciation and amortization, 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 Operating revenue or revenue net of third parties, Funds provided by operations, Operating income, Operating income percentage and Operating income - net percentage. These additional GAAP measures are defined as follows:

"Operating revenue" or "Revenue, net of third party costs" is defined as revenue earned for drilling activities excluding all third party revenues. Third party revenues mainly consist of rental activities and other services provided by third parties for which Trinidad does not earn a mark-up on. This metric is used by analysts and investors to assess the operations of each segment based on the core drilling business alone and more accurately reflects the health of those operations. The operating revenue for each reportable segment is disclosed in the segmented information included in the consolidated financial statements.

"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 income 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 income. 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 document. The forward-looking information and statements included in this document 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 document 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 honor 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 internal 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 future expected cash flows and potential distributions from joint venture partners including Trinidad Drilling International (TDI); 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 Drilling Inc. completed in the third quarter of 2015 ("CanElson" or the "CanElson acquisition").
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 Management Information Circular. The forward-looking information and statements contained in this document speak only as of the date of this document 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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