CALGARY, Alberta – November 13, 2024, High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High
Arctic”) has released its’ third quarter financial and operating results. The unaudited consolidated financial statements
and management discussion & analysis (“MD&A”) for the three and nine months ended September 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.
Mike Maguire, Interim Chief Executive Officer commented on the Corporation’s third quarter 2024 financial and
operating results:
“I am very pleased that we completed the strategic re-organization of the Corporation in the third quarter,
returning a sizeable amount of capital to our shareholders and spinning out the PNG Business to shareholders
via High Arctic Overseas Holdings Corp. listed on the TSX Venture Exchange.
The acquisition and integration of Delta Rental Services has delivered positive adjusted EBITDA and cash
generation. We have commenced cost rationalization, particularly focussed on general and administrative
costs along with overhead cost reduction initiatives. Combined with our equity investment in Team Snubbing
and owned real estate, High Arctic is positioned as an attractive vehicle for future growth and transactions.”
2024 THIRD QUARTER HIGHLIGHTS
Completed the re-organization of High Arctic including the return of $37.8 million to shareholders and the spinout
of the PNG Business as High Arctic Overseas Holdings Corp., independently listed on the TSX Venture
Exchange.
Increased revenue from operations from $2.3 million to $8.0 million year to date on a comparative basis as a
result of the Delta Acquisition.
Exited Q3 2024 with net positive working capital of $4.9 million and access to $4.1 million of cash at bank.
Reconciled and took action to reduce general and administrative costs, including a sizeable reduction in board
cost and director compensation.
Progressed post-reorganization transitional arrangements towards establishing dedicated stand-alone
leadership of the Corporation.
2024 THIRD QUARTER RESULTS
Increased revenue from continuing operations by $1,491 or 147% in the quarter when compared to revenue
of $1,015 from Q3 2023 as a result of the impact of the Delta Acquisition on the 2024 results.
Generated net income from continuing operations of $125 in the quarter as compared to $498 in Q3 2023.
The decrease is primarily due to the 2023 $615 gain on sale of the nitrogen business, $373 lower interest
income with the return of capital to shareholders, and $403 lower equity investment income from Team
Snubbing in the quarter.
Achieved positive Adjusted EBITDA from continuing operations of $383 in the quarter versus negative
Adjusted EBITDA for Q3 2023 of $700.
Production Service’s 42% equity investment share of Team Snubbing Services Inc. (“Team Snubbing”) net
income returned to positive earnings of $105 in the quarter compared to a loss of $889 in Q2 2024 and earnings
of $508 in the comparative third quarter of 2023.
2024 YEAR TO DATE RESULTS
Similar to the discrete quarter results, High Arctic’s revenue from continuing operations increased 242% to
$8,027 compared to revenue of $2,347 achieved in the first nine months of 2023 as a result of the Delta
Acquisition on 2024 results.
Generated a net loss from continuing operations of $1,402 in the quarter as compared to $1,208 in Q3 2023.
The higher loss, despite an improvement of $1,323 in operating income, is primarily due to the 2023 $615 gain
on sale of the nitrogen business, $262 lower interest income with the July 2024 return of capital to
shareholders, and $745 lower equity investment income from Team Snubbing in the year-to-date period.
Achieved strong oilfield services operating margins from continuing operations of 50.6% for the nine months
in 2024.
Production Service’s 42% equity investment share of Team Snubbing Services Inc. net loss was $294 for the
nine months ended September 30, 2024 as compared to positive net income of $451 in the comparative period
in 2023. Regional expansion into Alaska has weighed on earnings during the past twelve months.
Cash from operating activities from continuing operations was $487 in the quarter and a use of $42 for the
nine months ended September 30, 2024, an improvement for the quarter as compared to the respective prior
year comparatives of $172 and $359.
Significantly lowered the use of funds flow from operations from continuing operating activities as the nine
months of 2024 generated a use of funds of $46 compared to a use of funds of $957 for the nine months of
2023 driven by strong operational performance from the Delta Acquisition partially offset by the significant
additional G&A expenses incurred in 2024 due to the corporate reorganization initiatives.
In the above results discussion, the three months ended September 30, 2024 may be referred to as the “quarter” or
“Q3 2024” and the comparative three months ended September 30, 2023 may be referred to as “Q3 2023”. References
to other quarters may be presented as “QX 20XX” with X/XX being the quarter/year to which the commentary relates.
Additionally, the nine months ended September 30, 2024 may be referred to as “YTD” or “YTD 2024”. References to
other nine-month periods ended September 30 may be presented as “YTD 20XX” with XX being the year to which the
nine-month period ended September 30 commentary relates. All amounts are expressed as thousands of Canadian
dollars.