Canadian drilling and well servicing company Trinidad Drilling has embarked on a formal process to initiate a strategic review to consider various options, including a corporate sale or merger.
The company noted that the move is warranted due to low current trading price of its common shares, below the expected value.
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Apart from merger and corporate sale, the options being considered by the board includes a sale of selected assets, a strategic partnership and various capital re-deployment opportunities in an attempt to enhance shareholder value.
In connection with the process, the company has appointed a special committee of independent directors to facilitate and lead the review.
TD Securities will serve as the company’s financial advisor, while Blake, Cassels & Graydon is set to provide legal advisory services for the review.
In a statement, Trinidad Drilling said: “Trinidad is in a strong financial position, generating free cash flow from its core business to fund its previously announced capital programme, and also has additional liquidity through its existing credit facilities.
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By GlobalData“Throughout the strategic review process, Trinidad will continue to execute on its business strategy.”
Last month, the Petroleum Services Association of Canada (PSAC) has issued a revised Canadian drilling activity forecast for this year.
As per the revised estimate, the number of wells drilled across the country for this year is expected to be 7,600 wells, which marks a decrease of 300 wells, or 4%, from PSAC’s original 2018 drilling forecast released in late October last year.
Trinidad expects to move five high-specification rigs to the US this year from Canada and Saudi Arabia.
