CALGARY, Canada – November 15, 2023, High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High Arctic”) released
its’ third quarter financial and operating results. The unaudited interim consolidated financial statements, and management discussion
& analysis (“MD&A”), for the quarter ended September 30, 2023 will be available on SEDAR at www.sedarplus.ca, and on High Arctic’s
website at www.haes.ca. All amounts are denominated in Canadian dollars (“CAD”), unless otherwise indicated.
Mike Maguire, Chief Executive Officer commented:
“High Arctic’s businesses in both Canada and PNG have had a solid third quarter, contributing to increased net cash balances.
The closing of the sale of our Nitrogen Pumping business in Canada progressed the streamlining of our Canadian business. In
Canada we have a low operating cost high-margin rental business in addition to strategic investments in the oilfield services
industry.
Rig 103 continues drilling operations in PNG which are expected to be completed by the third quarter of 2024. In addition, the
Ancillary Services segment continues to perform at expectations and our manpower solutions revenue stream has had a
successful initiation during 2023. We continue to await a final investment decision on Papua LNG and the project operators
process, timetable and decision on drilling rig selection. This decision is expected to clarify development drilling specifications
and sets the stage for insights on exploration prospects where High Arctic’s owned assets carry distinct advantage given their
heli-portable design.
On the reorganization and tax efficient return of capital, we continue to work to addresses the concerns some shareholders
have shared with us and will revert with our intentions once that work is complete.”
Highlights
The following highlights the Corporations results for Q3-2023:
Full drilling utilization of PNG Rig 103 during the Quarter, pursuant to a 3-year contract renewed in August 2022.
Generated positive Adjusted EBITDA from continuing operations of $3.2 million on revenues of $17.8 million, funds flow
from continuing operations of $3.1 million, and incurred capital expenditures of $0.7 million.
Recorded a non-cash impairment loss of $20.5 million on PNG asset carrying values based on uncertainty around future
drilling activity levels.
Incurred a net loss from continuing operations of $15.0 million or ($0.31) per share in Q3-2023.
After the Quarter, suspended the monthly dividend to optimize capability to fund a pending tax-efficient return of capital
to shareholders, and
Closed the sale of the Corporation’s Canadian nitrogen transportation, hauling and pumping services business for total cash
consideration of $1.35 million resulting in a gain on sale of $0.6 million.
2023 Strategic Objectives
High Arctic’s 2023 Strategic Objectives build on the platform created in 2022, and include:
Safety excellence and quality service delivery,
Return idled assets in PNG to service,
Scaling our Canadian business,
Opportunities for growth and corporate transactions that enhance shareholder value, and
Examination of the Corporation’s optimal capital and overhead structure.