High Arctic Announces 2021 First Quarter Financial and Operating Results
CALGARY, Canada – May 13, 2021 – High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High Arctic”) released its’ first quarter results today.
Mike Maguire, Chief Executive Officer commented:
“We navigated the difficult past twelve months with a keen focus on safe and effective operations and maintaining our reputation for superior quality service. High Arctic is emerging from the global crisis with a strong balance sheet and is positioned well to ride the improved market conditions in 2021. With oil and gas prices having sustained a return to pre-pandemic levels, our customer base is considering opportunities to expand their business activities. Sequential quarterly increases in utilization of our services in Canada has been achieved and I believe we are well placed for high growth in a significantly stronger Canadian market.
In PNG a Covid-19 spike put a stop to almost all activities during the quarter, resulting in a short-term drain on our earnings as we continued to maintain operational readiness. We expect to benefit from this readiness later in 2021 as government and industry covid-19 prevention strategies take hold, travel restrictions are lessoned and business activities increase. In addition, the Papua LNG partners recently announced remobilization to complete project pre-feed which is a key step on the pathway to a final investment decision. I believe that our commitment to PNG will, in time, provide significant upside for our shareholders.”
The following highlights the Corporation’s results for Q1-2021:
- First quarter revenue of $17.8 million, EBITDA of $1.2 million, compared to $39.6 million and $5.5 million respectively in Q1-2020 and a slight improvement over Q4-2020 with $16.6 million and $0.7 million respectively.
- Total Energies SA recently announced its intention to remobilize teams and resources needed to proceed with development of the Papua LNG project.
- Balance sheet and liquidity remains strong with cash of $21.0 million, no long-term debt and liquidity that includes an undrawn $45.0 million revolving loan facility.
- Patent pending on a new low emission electric service rig design.
The Corporation’s strategic priorities for 2021 include:
- Safety excellence and focus on quality service delivery through consistent global standards;
- Cost control focused on operating cash flow, while balancing strategic priorities to fuel growth;
- The pursuit of opportunities that secure the Corporation’s future as a lower emissions energy services provider;
- Growth and divestiture opportunities that enhance shareholder value, align with our core service offerings, and are located in well understood markets; and
- Disciplined working capital management and capital stewardship to improve returns for shareholders that potentially include dividends and common share buybacks.
For more than a year High Arctic has been internally progressing work on a practical process to convert existing Concord well servicing rigs to a reliable, efficient and inexpensive electric drive. We are pleased to announce that patent is pending on the design and we plan to identify industry partners to further test the technology at a pilot site in 2021. We see tremendous opportunity for the deployment of this technology in Western Canada, particularly in thermal well applications where existing supply of electrical power of adequate capacity is already available. Crucially at this stage of development the upgraded service rig maintains its ability to self-propel down the highway. The upgrade is estimated to reduce the Co2 emissions of a well service rig over the well-bore by more than 35% compared to current diesel-powered rigs.
The unaudited interim consolidated financial statements (“Financial Statements”) and management discussion & analysis (“MD&A”) for the quarter ended March 31, 2021 will be available on SEDAR at www.sedar.com, and on High Arctic’s website at www.haes.ca. Non-IFRS measures, such as EBITDA, Adjusted EBITDA, Adjusted net earnings (loss), Oilfield services operating margin, Operating margin %, Percent of revenue, Funds provided from operations, Working capital and Net cash are included in this News Release. See Non-IFRS Measures section, below. All amounts are denominated in Canadian dollars (“CAD”), unless otherwise indicated.
Within this News Release, the three months ended March 31, 2021 may be referred to as the “Quarter” or “Q1-2021”. The comparative three months ended March 31, 2020 may be referred to as “Q1-2020”. References to other quarters may be presented as “QX-20XX” with X being the quarter/year to which the commentary relates.
For further information contact:
Michael J. Maguire
Chief Executive Officer
P: +1 (587) 318 3826
P: +1 (800) 688 7143
High Arctic Energy Services Inc.
Suite 500, 700 – 2nd Street S.W.
Calgary, Alberta, Canada T2P 2W1