Calgary, Canada – October 30, 2017 – High Arctic Energy Services Inc. (“High Arctic” or the “Corporation”) announces that it has reached an agreement with its customer, a super major operator in Papua New Guinea (“PNG”), on the take-or-pay contract for Rig 116.
The original contract signed with InterOil Corporation (“InterOil”) contemplated a two year take-or-pay drilling services term from the spud of the first well. After the recent takeover of Interoil by High Arctic’s customer, the customer commenced discussions with High Arctic in regards to this rig.
In an effort to work collaboratively with the customer with a view towards future services opportunities, the Corporation has agreed to a deemed spud date of November 2nd, 2016. This deemed spud date coincides with the commencement of drilling on Antelope 7 which was completed with Rig 115 at another customer’s request due to its proximity to the wellsite location, however, this well could have been drilled with Rig 116 which would have resulted in the commencement of the two year take-or-pay drilling services term. As a result the rig will remain under its take-or-pay contract until November 2, 2018.
In conjunction with the customer’s acquisition of InterOil and the associated drilling contracts, the customer conducted a contractor qualification review for High Arctic related to future work in PNG. As a result of this review, supported by High Arctic’s strong track record in PNG, the Corporation is pleased to announce that High Arctic has been recognized as a qualified vendor providing High Arctic with the opportunity to participate in the bidding process for additional drilling and related services in PNG beyond the contract for Rig 116.
Michael Binnion commented “Being recognized as a qualified vendor is a testament to the tier one performance and safety that High Arctic can be counted on in the PNG market. We are pleased that an equitable solution was found for both High Arctic and our customer after the change in ownership of our former client.”
This Press Release contains forward-looking statements. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “seek”, “propose”, “estimate”, “expect”, and similar expressions are intended to identify forward-looking statements. Such statements reflect the Corporation’s current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Corporation’s actual results, performance or achievements to vary from those described in this Press Release. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this Press Release as intended, planned, anticipated, believed, estimated or expected. Specific forward-looking statements in this Press Release include, among others, the Corporation’s opportunity to bid on drilling and related services in PNG with the customer that has recognized the Corporation as a qualified vendor. In addition to the risk factors set out above and elsewhere in this Press Release, readers are directed to the additional risk factors set out in the Corporation’s most recent Annual Information Form filed on SEDAR at www.sedar.com.
The forward-looking statements contained in this Press Release are expressly qualified in their entirety by this cautionary statement. These statements are given only as of the date of this Press Release. The Corporation does not assume any obligation to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.
About High Arctic
High Arctic is a publicly traded company listed on the Toronto Stock Exchange under the symbol “HWO”. The Corporation’s principal focus is to provide drilling and specialized well completion services, equipment rentals and other services to the oil and gas industry.
High Arctic’s largest operation is in Papua New Guinea where it provides drilling and specialized well completion services and supplies rig matting, camps and drilling support equipment on a rental basis. The Canadian operation provides well servicing, well abandonment, snubbing and nitrogen services and equipment on a rental basis to a large number of oil and natural gas exploration and production companies operating in Western Canada.
For more information, please contact:
Interim President & CEO
Chief Financial Officer