CALGARY, Canada – March 28, 2023, High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High Arctic”) released its’ fourth quarter and year-end results today. The audited consolidated financial statements, management discussion & analysis (“MD&A”), and annual information form for the year ended December 31, 2022 will be available on SEDAR at, and on High Arctic’s website at All amounts are denominated in Canadian dollars (“CAD”), unless otherwise indicated.

Mike Maguire, Chief Executive Officer commented:
“High Arctic enters 2023 well positioned to increase our service activity in Papua New Guinea in support of the significant LNG commitments made by our customers there. High Arctic has developed a strong position in PNG through top-tier equipment, local logistics expertise and a loyal and well-trained local workforce.
The divestment of underperforming businesses in Canada has provided funds to pursue opportunistic growth in both our PNG and Canadian businesses and return value to shareholders, while weathering any market turbulence due to high inflation or recession.“


The following highlights the Corporations results for Q4-2022 and YTD-2022:
• Disposition of underperforming assets in Canada for $38.2 million.
• Executed a strategic consolidation of the snubbing industry in Canada by partnering with Team Snubbing, a large snubbing specialist.
• Retained profitable Rental and Nitrogen Services businesses and real estate in Canada.
• After a slowdown prolonged by the pandemic in PNG, rig operations recommenced in 2022.
• In April, reinstated a monthly dividend of $0.005 per share and returned $2.2 million to shareholders.
• Generated Adjusted EBITDA of $5.7 million YTD-2022 and a negative Adjusted EBITDA of $0.9 million in Q4-2022 while realizing a net loss of $36.6 million YTD-2022 and net loss of $9.1 million Q4-2022.
• The significant loss was due to non-cash impairment expense of $9.7 million and elimination of $7.7 million deferred tax asset both associated with the Canadian business sales, a $3.9 million PNG inventory adjustment and obsolescence provision in Q4-2022 in PNG, and $17.7 million in depreciation expense.


High Arctic’s 2023 Strategic Objectives build on the platform we created in 2022, and include:
• Safety excellence and quality service delivery,
• Redeployment of idled assets in PNG,
• Scaling our Canadian business,
• Opportunities for growth and corporate transactions that enhance shareholder value, and
• Examination of the Corporation’s optimal capital structure and dividend policy.

Papua New Guinea – Drilling and Ancillary Services
Drilling Services activities rose in 2022 with PNG seeing drilling rig activity following a long period of relative inactivity during the Covid-19 pandemic. Early in 2022, the Corporation utilized Rig 115 to complete the abandonment of a complex legacy well for a key customer while in Q3-2022 the Corporation executed a three-year renewal of the contract for the provision of drilling services with its principal customer using Rig 103. 2022 also saw the Corporation take steps to formalize the provision of personnel services to the PNG industry following the success of doing the same in 2021. Provision of personnel to both key PNG customers remained strong throughout the year. With higher industry activity, the Corporation increased utilization of its rental equipment including camps, matting, and mobile material handling equipment. The combination of these service activities led to High Arctic achieving revenues of $30.7 million in 2022 as compared to $10.7 million in 2021 in its Drilling Services segment.
In 2022, the Papua-LNG joint venture entered front-end-engineering-and-design (“FEED”) and commenced early works activity, foreshadowing a final investment decision (“FID”) in the second half of 2023. The operator of the PNG-LNG joint venture announced the signing of a gas agreement for the development of the P’nyang gas field in the Western Province of PNG, which is anticipated to result in the addition of further gas liquefaction capacity in the world class PNG-LNG export facility.
In preparation for year-end verification and active drilling in 2023, High Arctic conducted comprehensive substantive procedures to verify the current asset carrying value of inventory. This resulted in a $3.9 million inventory adjustment in the fourth quarter of 2022.

Canada – Production and Ancillary Services
On July 27, 2022, High Arctic executed two separate asset sales transactions resulting in the effective divestment of the Corporation’s Production Services segment (the “Sale Transactions”).
The Canadian well servicing business was sold for an aggregate purchase price of $38.2 million to be settled in cash consideration. The Well Servicing Transaction involved the sale of well servicing rigs, associated rental equipment, and real estate used in the support of these operations along with the transfer of field personnel and a large majority of the office support personnel. The sale price was $38.2 million, which resulted in impairment of $9.0 million recognized in 2022. The well servicing business was originally purchased by the Corporation in August 2016 for $42.8 million in cash with a non-cash $12.7 million gain on the acquisition booked to PP&E.
The Canadian snubbing business was sold to Team Snubbing for a consideration consisting of 42% equity ownership in the post-closing outstanding shares in Team Snubbing, valued at $7.7 million, and a convertible promissory note of $3.4 million. The note has a five-year term, with interest accruing at 4.5% from January 1, 2023, and principal repayments commencing July of 2024. High Arctic’s investment in the share capital of Team Snubbing allows for significant influence of key corporate, strategic and financial decisions and High Arctic has rights to the net assets of Team Snubbing. The sale resulted in a 2022 impairment loss of $0.7 million.
High Arctic retains its Ancillary Services Segment in Canada comprised of the Nitrogen Pumping business and a Rentals business focused on pressure control equipment.
As a result of the Sale Transactions, the Corporation has a significantly reduced Canadian business and has written down the deferred tax assets of $7.7 million while retaining $126.7 million of operating tax loss carry-forward in Canada. Additionally, the $37.0 million revolving bank loan credit facility was terminated effective July 28, 2022.


The Corporation begins 2023 with a strong balance sheet, access to substantial cash resources on hand and is well positioned. This enables High Arctic to pursue opportunistic growth in both our PNG and Canadian businesses return value to shareholders, and weather market turbulence due to high inflation or recession.
The fundamentals for sustained high LNG demand, particularly in Asia, positions PNG for substantive LNG export growth. The advancement of the TotalEnergies led Papua-LNG project’s FEED continues with early-works activity underway and an FID on the multi-train project expected in the 2nd half of 2023. This project is expected to be followed by the P’nyang gas field development in the Western Province of PNG, which is anticipated to result in the addition of further gas liquefaction capacity in the world class PNG-LNG export facility. These developments underpin our optimism of an expanding PNG energy sector and increasing future demand for our equipment, personnel and expertise.
To date, the recommencement of drilling activity has been slower than the Corporation anticipated. Currently, customer plans have deferred mobilisation of Rig 115, and both Rig 115 and Rig 116 remain preserved in condition ready to be deployed. The positive effect of the slower ramp up in activity is that the Corporation expects to be able to fund reactivation activities out of PNG cash flow. With the modification and upgrade works completed, Rig 103 commenced drilling operations last week. Given PNG market conditions and current customer plans, we expect Rig 103 to operate consistently through the term of its contract, which is up for renewal in 2025.
Notwithstanding the foregoing, High Arctic recently received advise from the PNG Central Bank instructing the Corporation to settle our contract for Rig 103 in PNG Kina. The Corporation observes that this follows similar well publicized instructions issued by the PNG Central Bank to other large PNG companies. High Arctic has engaged dialogue with the bank aimed at reinstating approval to settle the contract in USD, dialogue is ongoing. Meanwhile the Corporation has taken steps to minimise the impact of any currency conversion delays on its business.
High Arctic maintains a presence in the Canadian market, through its investments in Team Snubbing, HAES rentals and our nitrogen pumping operations. Canada is the world’s fourth-largest producer of oil and gas, with vast reserves and additional export pathways coming onstream in the coming years. We continue to evaluate opportunities for investment as they arise in the Canadian market, while remaining attentive to opportunities to best realize a return on the investments in our existing Canadian service lines, and the inactive snubbing assets in the USA.

This News Release contains references to certain financial measures that do not have a standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and may not be comparable to the same or similar measures used by other companies High Arctic uses these financial measures to assess performance and believes these measures provide useful supplemental information to shareholders and investors. These financial measures are computed on a consistent basis for each reporting period and include Oilfield services operating margin, EBITDA (Earnings before interest, tax, depreciation, and amortization), Adjusted EBITDA, Operating loss, Funds flow from operating activities, Working capital and Long-term financial liabilities. These do not have standardized meanings.
These financial measures should not be considered as an alternative to, or more meaningful than, net income (loss), cash from operating activities, current assets or current liabilities, cash and/or other measures of financial performance as determined in accordance with IFRS.
For additional information regarding non-IFRS measures, including their use to management and investors and reconciliations to measures recognized by IFRS, please refer to the Corporation’s MD&A, which is available online at and through High Arctic’s website at

This press release contains forward-looking statements. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “seek”, “propose”, “estimate”, “expect”, and similar expressions are intended to identify forward-looking statements. Such statements reflect the Corporation’s current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Corporation’s actual results, performance or achievements to vary from those described in this press release.Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Specific forward-looking statements in this press release include, but are not limited to, statements pertaining to the following: general economic and business conditions which will include, among other things, continued improvement in energy services outlook; continued impact of Russia-Ukraine conflict; continued impact of Covid-19; ability to prioritize a strong balance sheet and liquidity position; activity increases in PNG; opportunities to invest and enhance shareholder value; the Corporation’s ability to maintain a USD bank account and conduct its business in USD in PNG; dialogue with the central bank in PNG aimed at reinstating approval to settle the contract in USD; market fluctuations in interest rates, commodity prices, and foreign currency exchange rates; restrictions to repatriate funds held in PGK; expectations regarding the Corporation’s ability to raise capital and manage its debt obligations; estimated capital expenditure programs; projections of market prices and costs; expectations for improving customer demand in the near-term, factors upon which the Corporation will decide whether or not to undertake a specific course of operational action or expansion; the Corporation’s ongoing relationship with major customers; treatment under governmental regulatory regimes and political uncertainty and civil unrest; a final Papua-LNG investment decision in 2023; the addition of further gas liquefaction capacity to the PNG-LNG export facility; the Corporation’s ability to innovate its PNG service offerings and contribute to the reduction of the emissions intensity of the energy industry there; the Corporation’s ability to weather any market turbulence due to high inflation or recession; optimism of an expanding PNG energy sector and increasing future demand for our equipment, personnel, and expertise; expectations of Rig 103 to operate consistently through the term of its contract and estimated credit risks and tax losses.
The Corporation’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth above and elsewhere in this press release.

The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. These statements are given only as of the date of this press release. The Corporation does not assume any obligation to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.

About High Arctic Energy Services
High Arctic is an energy services provider. High Arctic is a market leader in Papua New Guinea providing drilling and specialized well completion services and supplies rental equipment including rig matting, camps, material handling and drilling support equipment. In western Canada High Arctic provides nitrogen services and pressure control equipment on a rental basis to exploration and production companies.
For further information contact:

Lance Mierendorf
Chief Financial Officer
P: +1 (403) 508-7836
P: +1 (800) 688 7143
High Arctic Energy Services Inc.
Suite 2350, 330 – 5th Ave SW
Calgary, Alberta, Canada T2P 0L4


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