Calgary, Canada – August 13, 2020 – High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High Arctic”) released its’ second quarter results today.
The following highlights the Corporation’s results for Q2-2020 and YTD-2020:
- Focus on working capital management to preserve our cash balances and maintain a strong balance sheet during the current global coronavirus (“COVID-19”) crisis has positioned High Arctic to be ready once restrictions loosen through the following:
o Increased net cash balance by $5.2 million.
o Strong working capital position of $49.7 million at June 30, 2020, and
o Unused bank credit facility of $35.0 million.
- Revenue of $16.1 million and $55.7 million for the three and six months ended June 30, 2020 (2019 – $46.6 million and $93.1 million, respectively) and adjusted EBITDA of $1.2 million and $3.9 million (2019 – $4.0 million and $9.5 million) for the Quarter and YTD, respectively.
- On a year to date basis as compared to 2019, capital expenditures and business acquisition expenditures have been reduced by $12.0 million, dividends have been reduced by $3.4 million and cost reduction and control measures have been implemented throughout the organization.
- Year to date oilfield services expenses have been reduced by $31.7 million as compared to 2019. After the inclusion of $0.9 million in YTD-2020 restructuring costs, as well as $0.6 million in bad debt provision, general and administrative expenses have decreased by $0.1 million.
- Service delivery to our customers with safety of personnel and quality of service top of mind during this COVID-19 crisis, lifted the Canadian market share of Concord Well Servicing to 26% in Q2-2020.
- Benefits from the Canadian Emergency Wage Subsidy (“CEWS”) were obtained, which provided $2.1 million toward wages of Canadian workers and was utilized to retain a capable workforce to service current and prospective customers now, and when restrictions loosen and markets improve.
Mike Maguire, Chief Executive Officer commented: “The health and economic environments have been exceptionally challenging and we have risen to the challenge. We have reacted swiftly to restructure and flatten our Management reporting lines, remove costs, suspend our dividend and reduce our Capex. In the field, our ability to react has been made possible because of our people. They range from dedicated individuals in Papua New Guinea who remained in working “isolation bubbles” for months without seeing their families, to teams in Canada and USA working in their own “bubbles” through harsh seasonal conditions wearing additional layers of PPE and adopting special protocols to prevent exposure to and spread of COVID-19.
It is not possible at this point to predict when global economic conditions will improve, but we are confident that we have found a way to operate effectively through these challenges. Corporately, a disciplined balance sheet management approach will continue to be our objective, including cost control measures that will allow us to capitalize on strategic opportunities. In the meantime, we expect to continue to increase our activity through working closely with our customers who are planning work programs for resumption of shut-in production as commodity prices continue to lift, and from the various Western Canada well abandonment programs as the focus shifts more towards isolating and capping wellbores.”
For the full copy of the release click the link below.