Red Deer, Canada – May 9, 2011 – High Arctic Energy Services Inc. (TSX: HWO) (“High Arctic” or the “Corporation”) is pleased to announce that it has entered into a financing agreement with HSBC Bank Canada for new credit facilities to replace the existing senior credit facilities. The main components of the new credit facilities are a $20 million, two year committed term loan with a four year amortization, a $5 million demand revolving operating loan and a $5 million revolving evergreen loan. The $20 million was advanced to the Corporation on May 6, 2011. The credit facilities are secured by all of the assets of High Arctic and by unlimited guarantees of its foreign subsidiaries.
The funds from the $20 million term loan, together with a cash payment of $3.7 million, were used to repay High Arctic’s existing term loan on May 6, 2011. The Corporation is required to make quarterly principal payments on the term loan of $1,250,000 beginning September 30, 2011. The term loan carries an annual interest rate of the bank’s prime interest rate plus 1.75% and has a maturity date of June 30, 2013.