CALGARY, Alberta – March 31, 2025, 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, 2024 will be available on SEDAR at www.sedar.com, and on High Arctic’s website at www.haes.ca. All amounts are denominated in Canadian dollars (“CAD”), unless otherwise indicated.
Mike Maguire, Interim Chief Executive Officer commented:
“With 2024 complete High Arctic has effectively been reset and is now a Canadian focused platform characterized by minimal debt, investment holdings, and an established and viable high margin rental business.
Our rental business footprint, while still small in scale, was bolstered by the Delta Acquisition completed in late 2023, an acquisition that is indicative of the type and structure of accretive investments High Arctic looks to pursue going forward.
The Board of Directors is currently undergoing a process to recruit and appoint a new Chief Executive Officer to augment and lead High Arctic’s vision and strategic plan which is to grow its equipment rentals business and position itself to benefit from upstream energy service activity levels in the western Canadian oil and gas industry.”
In the following discussion, the three months ended December 31, 2024 may be referred to as the “Quarter” or “Q4 2024”, and similarly the year ended December 31, 2023 may be referred to as “YTD 2023”. The comparative three months ended December 31, 2023 may be referred to as “Q4 2023” and similarly the year ended December 31, 2022 may be referred to as “YTD 2022”. References to other quarters may be presented as “QX 20XX” with X being the quarter/year to which the commentary relates.
2024 Highlights
• Successful integration of Delta Rental Services.
• Completed the reorganization of High Arctic including the return of $37.8 million to shareholders.
• Maintained operational excellence and safety as evidenced by the continuation of recordable incident free work.
• Exited Q4 with net positive working capital of $2.7 million, including $3.1 million of cash.
2025 Strategic Objectives
With the corporate restructuring and spinoff of the PNG business complete, the Corporation’s 2025 strategic objectives include:
• Relentless focus on safety excellence and quality service delivery;
• Grow the core businesses through selective and opportunistic investments;
• Actively manage direct operating costs and general and administrative costs;
• Steward capital to preserve balance sheet strength and financial flexibility; and
• Execute on accretive acquisitions in Canada to drive shareholder value and optimize available tax loss carry-forwards.
2024 Strategic Objectives
At the beginning of 2024, High Arctic established a set of strategic priorities. Our priorities and highlights of objectives met include:
• Continued relentless focus on safety excellence and quality service delivery.
o High Arctic’s Canadian business completed 2024 without any recordable incidents, contributing to the Corporation’s second calendar year running with a zero Total Recordable Incident Frequency Rate (“TRIF”) rate.
o High Arctic extended its recordable incident free activity in PNG, with 7 years and 353 days of continuous recordable incident free work conducted to the date of the spin-out, representing over 4 million work hours.
• The creation of appropriate capital and corporate structures for the current businesses, providing the opportunity to consider transactions which would create value for the Corporation’s shareholders.
o The Arrangement was overwhelmingly supported by shareholders and resulted in separate public companies each focused upon their area of expertise.
• A return of significant capital and spin out of the PNG Business to shareholders.
o The Arrangement resulted in separate public companies while also delivering a tax efficient return of capital totaling $37.8 million to shareholders.
o The Corporation retained its position on the main TSX (TSX: HWO); with High Arctic Overseas Holdings Corp. being listed on the TSX Venture Exchange (TSXV: HOH).
• Grow the core businesses through selective and opportunistic investments.
o The Corporation focused on the very successful integration and rebranding of its rentals business in 2024, following its acquisition and amalgamation of the Delta Acquisition at the end of 2023.
o The middle of the year was dedicated to the business of the Arrangement and the resulting transitionary work, however later in the year, the Corporation commenced the examination of selective investment opportunities, with this work continuing into 2025.
• Capital stewardship that preserves balance sheet strength and financial flexibility.
o The Delta acquisition has provided incremental free cash flow and operational synergies.
o The Corporation currently maintains low debt levels and associated leverage ratios.
o Exited 2024 with a working capital ratio of 1.6:1
• Building up the Canadian business with acquisitions that allow the Corporation to optimize its available tax loss carry-forwards.
o The Delta acquisition creates a blueprint for accretive acquisitions that position the Corporation to improve its ability to utilize its significant tax loss carry-forwards.
o The Corporation, under the stewardship of the Board, continues its strategic review of potential acquisition targets