Trinidad Drilling Ltd. (TDG-T; $8.90 intra-day) Rig Purchase/Sale Streamlines Ops; Moving to Strong Buy on Share Price Weakness

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1 Special Situations Energy Services Trinidad Drilling Ltd. (TDG-T; $8.90 intra-day) Recommendation: Strong Buy Greg Colman, (416) ; Alex MacDonald, P.Eng. (416) ; June 9, 2011 All values in C$ unless otherwise noted. Current Price $8.90 Target Price (12-Month) $12.00 Expected Capital Gain 35% Current Yield (Div. $0.20/annum) 2% Total Projected Return 37% CFPS 2011E CFPS 2012E DPS 2011E 2011E Payout Ratio Recommendation Target Price Old $1.57 $7.93 $ % New $1.56 $1.96 Unchanged Unchanged Buy Strong Buy $12.00 Unchanged Company Profile Trinidad is a growth oriented drilling rig contractor with operations in Canada, onshore and offshore US and international growth aspirations. With completion of announced build programs Trinidad will have a fleet of 127 drilling & 4 barge rigs, & and 20 preset/coring rigs. Trinidad is the 3 rd largest drilling contractor in Canada, outperforming the industry in terms of utilization rates and margins to deliver strong returns to shareholders. Rig Purchase/Sale Streamlines Ops; Moving to Strong Buy on Share Price Weakness Sale of non-core service rigs for $38mm... View implied sale price of $1.7mm/rig as attractive vs. replacement cost of ~$1.8mmE; non-core division has minimal impact on forecast. and purchase of core 4 deep triple 1,500 HP rigs for U$44mm. New rigs should be online in Q3 & Q4; after netting out estimated service rig division EBITDA, takes 2012E EBITDA up 1% (Exhibit 1). Streamlining focus more towards deep drilling. Although we are bullish on rising well maintenance costs (and hence, svc rigs), sale of this non-core division a positive given attractive sale price. Moving to Strong Buy on price weakness; $12.00 one-year target. 6.5x 2012E EV/EBITDA drives our target; we view recent pullback to sub-$9.00 as seasonal weakness and remain bullish on TDG s deep fleet. Price Chart Price $ $12.00 $10.00 Volume (000s) 3,500 3,000 Financial Summary Total Shrs O/S (mm) Week Trading Range $ $4.70 Market Capitalization (mm) $1,076 Average Weekly Volume 2,393,529 Net Debt (current, mm) $589 Market Float (mm) $968 Enterprise Value (mm) $1,665 Net Book Value/Shr.* $6.89 $8.00 $6.00 $4.00 $2.00 $- 1/6/10 2/6/10 3/6/10 4/6/10 5/6/10 6/6/10 7/6/10 8/6/10 9/6/10 10/6/10 11/6/10 12/6/10 1/6/11 2/6/11 3/6/11 4/6/11 5/6/11 6/6/11 Source: Thomson ONE 2,500 2,000 1,500 1, Forecasts E 2012E Drilling Days (days) 20,955 27,423 30,715 32,619 Daily Rate ($/day/rig) 23,430 21,854 22,836 23,927 Utilization Rate 49% 63% 71% 71% Revenue ($mm) $583 $647 $774 $847 EBITDA ($mm) $194 $198 $243 $283 Cash Flow Per Shr (CFPS) $1.34 $0.45 $1.56 $1.96 Distributions Per Shr (DPS) $0.20 $0.20 $0.20 $0.20 Payout Ratio 15% 44% 13% 10% Earnings Per Shr (EPS) ($0.21) ($0.68) $0.31 $0.72 Valuation P/E (x) (42.8x) (13.1x) 28.9x 12.3x EV/EBITDA (x) 8.4x 8.4x 6.6x 5.2x Forecast Yield 2.2% 2.2% 2.2% 2.2% Target EV/EBITDA 10.4x 10.3x 8.1x 6.5x *NBV/sh Includes $0.70 per share of goodwill and intangibles Source: Wellington West Capital Markets Inc., Company Reports Please see disclaimers on the last two pages of this report.

2 Exhibit 1: Summary of Estimate 2011E 2012E Old New Absolute % Old New Absolute % Revenue (mm) $ $ $ % $ $ $ 1.1 0% EBITDA (mm) $ $ $ 0.1 0% $ $ $ 3.2 1% Avg. # Rigs Drilling % % Service 24 6 (18) -77% 25 - (25) -100% Barge 5 5-0% 5 5-0% Source: Company reports, Wellington West Capital Markets Inc. estimates Greg Colman ; gcolman@wwcm.com June 9,

3 Exhibit 2: Summary Financial Forecasts Segmented Revenue ($m) E 2012E CDN Drilling Revenues 155, , , , , , , ,307 US & Int'l Drilling Revenues 5, , , , , , , ,310 Total Drilling Revenues 260, , , , , , , ,989 Barge Rigs - - 9,057 57,591 34,550 37,016 51,869 64,050 Barge Rigs Mgmt Contract 2,000 2,869 3,424 2,365 2,365 2,365 Service Rigs 10,677 23,619 26,543 23,435 20,976 28,630 18,128 0 Titan Coring/Mastco/Other 16,665 86,122 70,490 30,092 32,658 (20,655) - - Total Revenue 288, , , , , , , ,405 Expenses Operating 167, , , , , , , ,275 Adjusted Operating Margin 41.8% 46.5% 44.7% 40.8% 42.4% 39.0% 38.7% 39.8% General and Administrative 26,183 51,627 60,165 50,272 53,117 53,949 56,606 57,000 % of sales 9.1% 8.9% 9.6% 6.6% 9.1% 8.3% 7.3% 6.7% EBITDA 94, , , , , , , ,130 % of sales 32.7% 37.6% 35.1% 34.2% 33.2% 30.6% 31.4% 33.1% EBITDA Per Share $1.60 $2.63 $2.65 $2.85 $1.79 $1.64 $2.01 $2.34 YoY EBITDA Per share Growth 37% 64% 1% 8% -37% -9% 23% 17% Depreciation & Amortization 28,486 52,201 72,260 94,342 87, , , ,963 Interest 5,600 20,724 49,595 58,643 56,569 81,165 45,081 36,900 Unit Based Compensation 3,116 7,105 2,450 2,465 4,366 3,971 5,799 - Total Expenses 231, , , , , , , ,138 Earnings Before Taxes 57, ,076 96, ,690 45,658 11,222 72, ,267 FX - (1,197) 12,709 (21,870) 24,638 7, Impairment of intangibles 23,189 59, Current Income Taxes 1,420 (388) 1,917 1,504 1,871 6,315 7,425 9,200 Future Income Taxes 8,183 15,955 2,603 41,965 7,741-19,154 17,500 Other Taxes Total Tax Provision 9,603 15,567 4,520 43,469 9,612 6,315 26,579 26,700 Loss (Gain) on Disposition (83) 10,544 20, Net Income 47, ,706 79,504 82,174 (22,439) (82,133) 46,017 86,567 Foreign currency translation adjustment ,795 - Net Earnings to Common 47, ,706 79,504 82,174 (22,439) (82,133) 37,222 86,567 Net Margin 16.4% 21.3% 12.6% 10.8% -3.9% -12.7% 4.8% 10.1% Earnings from Discontinued Operations Retained Earnings Opening Balance 30,989 78, ,743 (23,981) 2,399 (42,828) (149,129) (111,907) Add Net Earnings to Common 47, ,706 79,504 82,174 (22,439) (82,133) 37,222 86,567 Less Other - (379) - (55,664) (22,788) (24,168) - - Closing Balance 78, , ,247 2,529 (42,828) (149,129) (111,907) (25,340) Earnings Per Unit/Share Earnings Per Share - Basic $0.81 $1.49 $0.95 $0.90 -$0.21 -$0.68 $0.31 $0.72 Earnings Per Share - FD $0.79 $1.46 $0.85 $0.90 -$0.21 -$0.68 $0.31 $0.72 Source: Company reports, Wellington West Capital Markets Inc. estimates Greg Colman ; gcolman@wwcm.com June 9,

4 Disclaimers The particulars contained herein were obtained from sources that we believe to be reliable, but are not guaranteed by us and may be incomplete or inaccurate. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation of offer to buy or sell the securities mentioned herein. Wellington West Capital Markets Inc. ( WWCM ) may act as financial advisor, fiscal agent or underwriter for certain of the companies mentioned herein, and may receive remuneration for its services. WWCM and/or its principals, officers, directors, representatives, and associates may have a position in the securities mentioned herein and may make purchases and/or sales of these securities from time to time in the open market or otherwise. This report may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever nor may the information, opinions or conclusions contained herein be referred to without in each case the prior written consent of WWCM. U.S. Institutions may conduct business through our affiliate Wellington West Capital Markets (USA) Inc. Wellington West Capital Markets (USA) Inc. accepts the contents of this research report, however, the company that prepared this report may not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This report will be forwarded to our affiliate Wellington West Capital Inc. ( WWCI ). Subject to WWCI management review and approval, this report may be distributed to clients of WWCI. WWCI and WWCM are members of the Canadian Investor Protection Fund ( CIPF ). Wellington West Capital Markets Stock Rating System The rating system is based on the stock s expected absolute total return over the next 12 months. Generally, Strong Buy rating is expected to produce a total return of 25% or more, Buy a total return of 10% to 25%, Market Perform a total return of 0% to 10% and Underperform a negative total return. Speculative Buy rating is expected to produce a total return of 25% or more, but is based on factors and forecasts that have high degrees of uncertainty. The distribution of the recommendations for the last three-month period and their relationship with investment banking business are available on request by ing to compliance@wwcm.com. Analyst Compensation Research analysts receive compensation based on a number of factors as determined by WWCM s management. Compensation is affected by all of the firm s business activities, including revenue generated from capital markets and investment banking. No part of the compensation of the analyst who authored this report is based on the specific recommendation or views expressed in this report. Analyst Trading WWCM permits analysts to own and trade in the securities and/or derivatives of those companies under their coverage, subject to the following restrictions: no trades can be executed in anticipation of the initiation of coverage; no trades can be executed for five days after dissemination of launching coverage or a material change Greg Colman ; gcolman@wwcm.com June 9,

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