CALGARY, Canada – November 12, 2021 – High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High Arctic”) released its’ third quarter results today.
Mike Maguire, Chief Executive Officer, commented:
“The market and High Arctic have reached an inflection point. Commodity prices have increased significantly, a rig is being mobilized to location in Papua New Guinea, operating hours are increasing in Canada and many customers are receptive to pricing discussions.
The past 18 months have been exceptionally challenging as we dealt with the impact of the Covid-19 pandemic and an oil price collapse. I want to thank our employees and shareholders for being supportive through this difficult period. We are implementing initiatives to reward our loyal employees, attract new staff and continue to provide high quality services to our clients in this period of renewed opportunity.
The recent $0.20 special dividend underscores the confidence of board and management in the significantly improving market conditions and our business fundamentals..”
• PNG continues to be a strategic investment for the Corporation. During Q3-2021 we began mobilizing equipment and personnel within our drilling services segment and expect to commence wellsite activity in the latter half of Q4-2021. In the process, we extended recordable incident free activity in PNG out to 5 years and over 2.5 million work hours.
• Growth in High Arctic’s Canadian production services and ancillary services were assisted by operating rate improvements but hindered by Covid-19 outbreaks in August and September and soft utilization in one of our main well servicing contracts. High Arctic has subsequently enacted a Covid vaccination or negative-test requirement to ensure the employee is safe to work. Despite a difficult quarter, our well servicing utilization of 41% remained above the industry average of 38%.
• Consolidated Q3-2021 revenues were $18.7 million ($18.5 million in Q3-2020). The Corporation generated EBITDA of $1.3 million and $3.3 million during Q3-2021 and YTD-2021, respectively.
• Cost reduction initiatives undertaken in 2020 delivered $2.7 million or 26.6% lower general and administrative costs during the first nine months of 2021.
• In October of 2021, the Corporation announced a special one-time dividend payment of $0.20 per share to holders of common shares and paid dividends of $9.7 million on November 5, 2021. The dividend emphasizes High Arctic’s strong balance sheet position and ability to return surplus cash to shareholders. Post dividend, the Corporation has a substantive net cash balance and with improving EBITDA, increasing access to funds under a $45 million loan facility to fund growth initiatives.
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;
• Investment initiatives 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 reside 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.
Nov 12 2021 – Q3 Press Release