Red Deer, Canada – August 14, 2013 – High Arctic Energy Services Inc. (TSX: HWO) (“High Arctic” or the “Corporation”) today announced its operating and financial results for the quarter ended June 30, 2013. First Half Highlights During the first half of 2013 the Corporation saw the following achievements: Completed the negotiations for the extensions of contracts that cover the drilling operations for Rigs 103 and 104 in Papua New Guinea (“PNG”) and the drilling support services related to the supply of personnel and rental equipment to support the related drilling. The extensions are effective July 1, 2013 for a three year term to June 30, 2016. Deployed a new 104 man heli-portable camp in PNG in January, 2013, under the terms of a three year contract. Adjusted EBITDA was $6.6 million for the three months ended June 30, 2013 as compared to $5.2 million for the same period in 2012 and stayed consistent for the first half of 2013 at $19.2 million (2012 – $19.5 million).· Increased revenue by 8% to $77.7 million for the first half of 2013 as compared to the six months ended June 30, 2012 (11% increase to $32.9 million for the three months ended June 30, 2013 as compared to the same period in 2012). Increased the monthly dividend to $0.0125 per share in March, 2013, a 25% increase from the previous monthly dividend amount. Commenting on the results, Bruce Thiessen, High Arctic’s Chief Executive Officer, stated: “In spite of a prolonged spring break-up in Canada which resulted in lower activity levels compared to the prior year, the Corporation was able to increase both year-over year consolidated revenue and EBITDA in the second quarter due to the strong performance of our PNG operations. Despite the challenges inherent in working in PNG, our business there continues to grow and we see long term opportunities continuing to develop in the country. ” Consolidated revenue for the first six months increased 8% to $77.7 million compared to $71.8 million for the first half of 2012. The growth in revenue for the period was driven by increased activity in PNG with revenues of $58.2 million compared to $48.6 million for the first six months of 2012 ($28.3 million for the three months ended June 30, 2013; $25.1 million for the three months ended June 30, 2012) as a result of having a second active drilling rig operating in the first half of 2013. The Corporation continues to see increased revenues derived from its rental fleet with growth of approximately $2.6 million from its rental operations in PNG contributing to increased revenues for the first six months of 2013. The operations in PNG generated significantly higher revenue in the first half of 2013 which offset the slower activity levels in the Canadian operation. Despite increased revenues, adjusted EBITDA decreased 3% to $19.2 million for the six months ended June 30, 2013 from $19.5 million for the same period in 2012 due primarily to a reduction in the Canadian operating margin attributable to normal spring break-up and an overall reduced industry activity level. Revenue for Canada was $4.6 million for the second quarter of 2013 (2012 – $4.5 million). For the first six months of 2013, revenues decreased by $3.7 million (16%) for the same period in 2012 due to reduced revenue levels in the first quarter from the core snubbing and nitrogen businesses as both activities were softer with overall industry activity down. The operating margins in Canada were adversely affected by the reduced revenue levels and by competitive pricing conditions primarily in the nitrogen operations. Consolidated oilfield services operating margins continued to be strong at 30% of revenue for the six months but fell slightly from 33% earned for the six months ended June 30, 2012. The percentage was affected by the higher rig rental costs associated with operating an additional active rig in PNG in 2013 and the lower operating margins in Canada which caused the overall reduction of $0.4 million of operating margin. As a result of its continued strong financial results, High Arctic increased its monthly dividend to $0.0125 per share in March, 2013, a 25% increase from the previous monthly dividends paid. At this monthly rate, the annual dividend will total approximately $7.5 million, which represents an annualized rate of 22% of funds provided from operations during the trailing twelve months ended June 30, 2013. At June 30, 2013, the Corporation had $19.6 million of net cash on hand (June 30, 2012 – $12.6 million) and working capital of $38.2 million (June 30, 2012 – $31.7). The Corporation also continues to generate strong cash flows from its operations. For the six months ended June 30, 2013, High Arctic generated $16.3 million (2012- $16.8 million) of funds provided from operations. Selected Comparative Financial Information The following is a summary of selected financial information of the Corporation. All figures are derived from financial information that is prepared or presented in accordance with International Financial Reporting Standards (“IFRS”): Three Months Ended June 30 Six Months Ended June 30 $ millions (except per share amounts) 2013 2012 Change % 2013 2012 Change % Revenue 32.9 29.6 3.3 11 77.7 71.8 5.9 8 EBITDA(1) 6.3 4.6 1.7 37 18.7 18.6 0.1 1 Adjusted EBITDA(1) 6.6 5.2 1.4 27 19.2 19.5 (0.3) (2) Operating earnings 3.5 2.3 1.2 52 13.3 14.0 (0.7) (5) Net earnings 2.1 5.7 (3.6) (63) 10.5 16.4 (5.9) (36) per share (basic)(2) 0.04 0.12 (0.08) 0.22 0.36 0.14 per share (diluted)(2) 0.04 0.12 (0.08) 0.21 0.35 0.14 Funds provided by operations(1) 5.1 3.4 1.7 50 16.3 16.8 (0.5) (3) per share (basic)(2) 0.11 0.07 (0.04) 0.34 0.36 (0.02) per share (diluted)(2) 0.10 0.07 (0.03) 0.33 0.35 (0.02) Dividends 1.8 0.5 1.3 3.4 0.5 2.9 Capital expenditures 4.9 5.3 (0.4) … Read more