CALGARY, Alberta – May 14, 2026, High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High Arctic”) released its first quarter 2026 financial and operating results. The unaudited condensed interim consolidated financial statements (the “Financial Statements”) and management discussion & analysis (“MD&A”) for the quarter ended March 31, 2026 will be available on SEDAR+ at www.sedarplus.ca, and on High Arctic’s website at www.haes.ca.
All amounts are denominated in thousands of Canadian dollars (“CAD”), unless otherwise indicated.
In the following disclosure, the three months ended March 31, 2026, may be referred to as the “quarter” or “Q1 2026” and the comparative three months ended March 31, 2025, may be referred to as “Q1 2025”. References to other quarters may be presented as “QX 20XX” with X/XX being the quarter/year to which the commentary relates. Additionally, the year ended December 31, 2025, may be referred to as “FY 2025”.
Lonn Bate, Interim Chief Executive Officer commented:
“Our rental services business delivered solid financial and operational results in Q1 2026 despite volatile crude oil and natural gas pricing and lower activity levels and rig count. We witnessed an acceleration of customer activity in central Alberta, driven by increased development in the Duvernay near our Red Deer operations. Our current service offerings and facility locations position us to provide our customers with the assets they need while allowing us to maintain an exceptional level of customer service.
Team Snubbing, of which High Arctic maintains a 42% equity interest, continued to be active in 2026 on the Alaskan North Slope and elsewhere in Alaska performing complex workovers and plug and abandonment work. These developments have validated their strategic entry into the Alaskan market, providing them with increased scale and a solid platform for future profitable growth.
As always, we remain committed to delivering our high standard of customer service with a relentless focus on safety, service quality, and continued cost management across the business.”
Outlook
High Arctic continues to anticipate firm customer activity levels in central Alberta for the remainder of 2026, as certain oil and gas producers continue to ramp their capital spending as they drill, complete and tie-in their Duvernay wells which are conveniently located in close proximity to our primary operations in Red Deer. For Team Snubbing, ongoing work in Alaska has driven profitable and meaningful cash flow in the quarter. Although High Arctic’s revenues, Adjusted EBITDA and liquidity position are not directly impacted by the results of Team Snubbing due to the Corporation’s minority equity ownership, the continued oversight of the capitalization of Team Snubbing, including its debt leverage levels remains a top priority for High Arctic.
High Arctic’s business is driven by its customers’ decisions to drill new oil and natural gas wells combined with the subsequent activity to complete these wells for production, both of which are tied to their expectations for commodity prices. As such, the financial and operational performance of High Arctic’s rental assets and investment in the snubbing industry are highly dependent on the forecast for commodity prices combined with the fundamentals associated with both drilling and well completion trends in the WCSB and in the US state of Alaska.
Despite ongoing economic uncertainty and persistent geopolitical conflicts, global energy supply–demand dynamics have remained relatively resilient. Industry fundamentals, including global energy security dynamics, have been materially impacted by the ongoing conflict in the Middle East involving Iran, the US and Israel. This ongoing conflict appears to be supportive of oil and natural gas drilling and production activity, particularly in Canada, providing cautious optimism for supportive commodity pricing over the medium to longer term.
In the near term, our customers are closely monitoring volatility in oil and gas prices in the context of their underlying production economics, which influence their activity levels, capital spending plans, and, by extension, product pricing. Additionally, the current political landscape and the impact of tariffs in both the United States and Canada continue to introduce potential near-term uncertainty, including within the energy sector.
While global economic uncertainty persists, Canada’s energy industry has opportunities for future growth, as evidenced by recent energy infrastructure developments and a new and seemingly more aggressive mandate at the federal level for Canada to become a global energy superpower. In addition to the potential implications related to global energy security as a result of the ongoing conflict in the Middle East, further recent developments include the announcement of the US approval of the Bridger Pipeline Expansion, completion of the Trans Mountain pipeline system expansion in 2024, and the commencement, and subsequent output ramp-up of West coast LNG exports in 2025, all of which are positive developments supporting improved long-term fundamentals for High Arctic’s business and the upstream energy services sector.
In summary, the Corporation will build on the positive results achieved in the first quarter of 2026 as it continues to execute on its strategic objectives, with progress to date being evidenced by our leadership, safety performance, balance sheet preservation; general and administrative expense reductions, selective capital expenditure investments supporting organic growth in the rentals business, and oversight of its equity investments.
2026 Strategic Objectives
High Arctic’s 2026 strategic objectives are as follows:
• Relentless focus on safety excellence and quality service delivery;
• Organically grow our core businesses through selective and opportunistic investments;
• Seek accretive acquisitions in Canada to drive shareholder value;
• Steward capital and liquidity to preserve balance sheet strength and financial flexibility; and
• Actively manage direct operating costs and general and administrative expenses.
First Quarter 2026 Highlights and Summary
• Revenue of $2,735 for Q1 2026 increased by $400 or 17% compared to Q1 2025. The increase in revenue is attributable to improved overall customer demand combined with the impact of customer sales mix.
• High Arctic generated oilfield services operating margin of $1,122 for Q1 2026 with a corresponding operating margin percentage of 42.9% compared to $1,187 and 53.1% for the prior year comparative quarter. Operating margin was impacted by higher revenues as noted above, offset by the reduction in operating margin percentage which was driven by an increase in third-party rental revenues combined with an increase in repairs and maintenance expenses.
• High Arctic’s rental services business delivered solid financial and operational results for Q1 2026 and continues to perform well despite volatile crude oil and natural gas pricing and lower activity levels and rig count when compared to Q1 2025.
• Adjusted EBITDA for Q1 2026 was $388, or 14% of revenue, compared to the prior year comparative quarter of $504 and 22% of revenue. Adjusted EBITDA was primarily impacted by the same factors impacting oilfield services operating margin as noted above.
• Operating loss was $204 in the current year quarter compared to a loss of $128 in Q1 2025. The increase in operating loss is attributable to the same factors impacting oilfield services operating margin, as noted above, combined with modestly higher general and administrative expenses.
• Net income was $855 in Q1 2026 compared to a net loss of $120 in Q1 2025. This increase in net income was a result of Team Snubbing’s strong performance in the quarter and the gain on asset dispositions recorded, partially offset by the same factors impacting operating loss as noted above.
• The Corporation maintained operational excellence and safety throughout the quarter as evidenced by the continuation of recordable incident free work.
• Exited Q1 2026 with strong financial liquidity, with net working capital of $4.7 million, including $3.2 million of cash.