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Trinidad Drilling slashes dividend to reduce cash outlays, writes down assets

CALGARY – Trinidad Drilling Ltd. is reducing its dividend by 80 per cent and reporting an $86.6 million loss for the third quarter in the latest sign of how the oil rout is hurting Alberta’s energy sector.

The Calgary-based company — which provides drilling equipment and services to oil and gas companies — says the dividend reduction to one cent per share from five cents per share will reduce cash outflow by $35.5 million a year.

The dividend cut was announced after Tuesday’s market close along with Trinidad’s third-quarter report, which showed revenue was down 49.2 per cent from a year ago and operations consumed $5.6 million of cash, or three cents per share.

Net loss was $86.6 million or 48 cents per share, and adjusted net income dropped to $1.01 million or one cent per share.

The net loss included $138.8 million in impairment charges, including $111.8 million related to the long-term value of its U.S. and international operations. A further $26.9 million related to a writedown of the value of barge rigs.

In last year’s third quarter, which was at a time that oil prices were higher, Trinidad’s net income was $19.1 million or 34 cents per share, its adjusted net income was $14.6 million or 11 cents per share and operations provided $60.1 million of cash.