CALGARY, Alberta – August 14, 2024, High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High Arctic”)
has released its’ second quarter financial and operating results. The unaudited consolidated financial statements,
management discussion & analysis (“MD&A”), for the three and six months ended June 30, 2024 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.
Completion of Reorganization
On June 17, 2024, the Corporation held its Annual and Special General Meeting where the Corporation’s shareholders
approved, amongst other things, a special resolution approving a reorganization of the Corporation by way of a plan of
arrangement (the “Arrangement”) and a return of capital of up to $0.76 per common share of High Arctic (the “Return
of Capital”). Pursuant to the reorganization of the Corporation, the PNG business was spun out to the current High
Arctic shareholders through a new publicly listed entity High Arctic Overseas Holdings Corp. (“SpinCo”) that will trade
on the TSX Venture Exchange under the trading symbol HOH.
On June 27, 2024, the Corporation received a final order approving the Arrangement from the Alberta Court of King’s
Bench, and the Return of Capital was distributed to shareholders on July 17, 2024. On August 1, 2024, the Corporation
was able to fulfill the last major condition in the Arrangement which was the receipt of conditional approval from the
TSX Venture Exchange to have the SpinCo shares trade on its exchange. All other terms and conditions to the
Arrangement were satisfied subsequent to receipt of conditional approval from the TSX Venture Exchange and the
Arrangement was completed on August 12, 2024 and the final approval from the TSX and TSX Venture exchange was
received on August 14, 2024. The shares of SpinCo are expected to commence trading on the TSX Venture Exchange
on or about August 16, 2024.
Pursuant to the Arrangement, each shareholder of High Arctic received one-quarter of one (1/4) common share of
SpinCo and one-quarter of one (1/4) common share of post-Arrangement High Arctic for each common share of High
Arctic held. As a result of the Arrangement, each shareholder continues to own its pro rata portion of both SpinCo and
post-Arrangement High Arctic.
SpinCo’s now stand-alone PNG business begins with intact senior leadership and management, a new and
independent Board of Directors , a separate stock exchange listing, a strong capital structure, no long-term debt and
positive working capital of approximately US$19 million, including US$13 million in cash.
Mike Maguire, Chief Executive Officer commented:
“Our businesses in both Canada and PNG have performed well in the first half of 2024, setting up both High
Arctic and SpinCo with strong financial positions for the commencement of trading as independently listed
companies. I am very pleased to have completed the strategic re-organization of the Corporation and excited
to be on the precipice of a new chapter in the High Arctic story as the two entities commence separate trading
later this week.
Both High Arctic and SpinCo have no net debt and access to cash at bank to finance budgeted activities and
provide a platform for growth for each business to realize its potential and maximize value for their
shareholders.
In Canada the performance of our rental business in the first half of 2024 is in-line with our pre-transaction
expectations following the acquisition and integration of Delta Rental Services. Having a cash positive
business, when adjusted for re-organization costs, positions High Arctic as an attractive vehicle for future
growth and transactions.
In PNG Rig 103 completed services and was stacked at the forward base in the Southern Highlands, as
expected. We anticipate a period of modest activity, through our rentals and manpower provision, as we await
significant strategic decisions on major project advancement now expected in 2025.”
Additional Information Pertaining to the Reorganization
The Corporation has received final approval today to list the post-Arrangement common shares of High Arctic (the
“New High Arctic Common Shares”) on the Toronto Stock Exchange (“TSX”). The existing common shares are
expected to be delisted from the TSX as of the close of business on August 15, 2024. The New High Arctic Common
Shares are expected to commence trading on the TSX at the market opening on August 16, 2024 and the CUSIP
number for the New High Arctic Shares will be “42964L109”.
Pursuant to the completion of the Reorganization the Corporation has today terminated its normal course issuer bid
arrangement which has been in place since December 13, 2023.
With the completion of the reorganization and in accordance with the Arrangement, the Corporation is obliged for
Canadian taxation compliance purposes to determine the fair market value of the SpinCo shares. The Corporation and
SpinCo have begun the valuation process to determine the fair market value for SpinCo and expects to provide the fair
market value of the SpinCo shares to shareholders prior to November 2024.