Calgary – On Feb. 20 Calgary-based Trinidad Drilling Ltd. announced that its board of directors has commenced a formal process to initiate a strategic review in an effort to enhance shareholder value. Trinidad believes that the current trading price of its common shares does not reflect the value of the company, despite improving industry fundamentals and recent steps taken by Trinidad to improve shareholder value.
Trinidad has a significant presence in southeast Saskatchewan, with 13 drilling rigs working out of its Carlyle shop. As of Feb. 20, according to sister publication Rig Locator (riglocator.ca), five of Trinidad’s rigs were working in Saskatchewan. Four were in the Oungre and Torquay areas, and one was in the Steelman area.
The company recently made headlines for moving some of its rigs to the United States for work.
In connection with this process, the board intends to undertake a comprehensive review to identify and consider a broad range of alternatives and their potential to enhance shareholder value, including, but not limited to, a sale of selected assets, a merger, a corporate sale, a strategic partnership, various capital re-deployment opportunities or any combination of the foregoing. The company does not intend to set a definite schedule to complete its evaluation or process and cautions that there are no assurances or guarantees that the process will result in a transaction or, if a transaction is undertaken, the terms or timing of such a transaction.
The board has appointed a special committee of independent directors, chaired by Trinidad’s lead director, Ken Stickland, to facilitate and lead the review. The board has engaged TD Securities Inc. and Blake, Cassels & Graydon LLP as its financial and legal advisors, respectively, to assist it with the review.
Trinidad said in a release it is in a strong financial position, generating free cash flow from its core business to fund its previously announced capital program, and also has additional liquidity through its existing credit facilities. Throughout the strategic review process, Trinidad said it will continue to execute on its business strategy. Trinidad’s management team and the board are committed to acting in the best interests of the company and believe this will ultimately benefit shareholders, staff and customers.
Trinidad said it will continue to provide industry-leading solutions and high quality operational performance for its clients. The company does not intend to periodically or otherwise disclose developments with respect to the strategic review process unless the board has approved a specific transaction or action plan, or otherwise determines that disclosure is necessary or appropriate.
Trinidad is one of the largest drilling contractors in Canada, with 68 land rigs, making up 11 per cent of the total fleet. They also have 66 land rigs in the United States, six in Mexico, one in Bahrain and one in the United Arab Emirates.
The company was founded by Mike Heier, originally of Estevan, who was chief executive officer from 2000 to 2008, and is currently its chair of the board.
