August 11, 2009 / 1:56 PM / 9 years ago

UPDATE 2-Trinidad Drilling posts Q2 loss

* Sees pricing pressure, lower rig utilization to continue

* Q2 shr loss C$0.09 vs EPS C$0.01 a year ago

* Says remains well within all debt covenants

* Shares fall 4 pct

(Recasts; adds conference call details, updates stock movement)

BANGALORE, Aug 11 (Reuters) - Trinidad Drilling Ltd (TDG.TO) on Tuesday posted a second-quarter loss hurt by lower utilization rates and day rates, and said it expects the next several quarters “to be challenging.”

Trinidad said it expects to see the ongoing pricing pressure and lower industry rig utilization for the rest of the year with a potential return to more robust conditions in early to mid 2010.

Canada’s oil drilling sector has been under pressure with weaker commodity prices pushing down rates for rigs, but industry experts expect a recovery in 2010.

On a conference call with analysts, the company said it is not expecting any meaningful recovery in drilling activity in Canada until the first quarter of 2010.

However, the company said it believes day rates were at the bottom or close to bottom and does not expect further significant downward movement in day rates.

“Demand for energy in North America had decreased dramatically, however, the impact of lower supply levels from vastly reduced drilling activity is expected to be felt in the near future,” Trinidad Drilling said in a statement.

The Canadian drilling company, which has about 120 land drilling rigs, had halved its capital expenditure forecast and cut its quarterly dividend by two-thirds to preserve cash.

“We remain well within all our debt covenants and focussing on the free cash flow in the coming years to be in a position to refinance the convertible debentures,” the company said.


The Canadian drilling company posted a net loss of C$8.6 million ($7.9 million), or 9 Canadian cents a share, compared with a profit of C$1.1 million, or 1 Canadian cent per share, in the same period last year.

Net earnings were impacted by a foreign exchange loss of C$9.5 million and a loss on disposal of assets of C$5.6 million, the company said.

Net loss before stock-based compensation was C$6.9 million, or 7 Canadian cents per share. Revenue fell 11 percent to C$125.5 million.

Analysts on average had expected a loss of 4 Canadian cents a share, before items, on revenue of C$116.9 million, according to Reuters Estimates.

Drilling utilization rate in Canada fell 54.8 percent to 14 percent, while utilization rate in the United States fell about 30 percent to 61 percent.

Shares of the company were trading down 4 percent at C$4.77 in late afternoon trade on the Toronto Stock Exchange. ($1=1.09 Canadian Dollar) (Reporting by Chakradhar Adusumilli and R. Manikandan in Bangalore; Editing by Gopakumar Warrier, Pradeep Kurup)

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