Red Deer, Canada – November 14, 2011– The following is Management‟s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of High Arctic Energy Services Inc. (the “Corporation” or “High Arctic”) for the three and nine months ended September 30, 2011 as compared to the same periods in 2010. It also contains information on the Corporation‟s future outlook based upon currently available information. This MD&A should be read in conjunction with the unaudited interim consolidated financial statements and accompanying notes for the three and nine months ended September 30, 2011 (the “Interim Financial Statements”) and the audited financial statements for the year ended December 31, 2010 and annual MD&A of those audited financial statements. Readers should also read the “Forward-Looking Statements” contained at the end of this document.
The Interim Financial Statements and the MD&A are reported in Canadian dollars unless otherwise stated. The Interim Financial Statements of the Corporation have been prepared in accordance with IAS 34 Interim Financial Reporting and IFRS 1 First Time Adoption of International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”). The Interim Financial Statements do not include all the information and disclosures required in the consolidated annual financial statements, and therefore this MD&A should be read in conjunction with the Corporation‟s consolidated annual financial statements as at December 31, 2010.
Corporate Profile
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 contract drilling and work over services and other oilfield services to the oil and gas industry in Canada and Papua New Guinea (“PNG”).
The Canadian operation is focused on the provision of snubbing services and the supply of nitrogen to a large number of oil and natural gas exploration and production companies operating in Western Canada. The Corporation fleet of equipment in Canada at September 30, 2011 included 21 snubbing units, 10 nitrogen pumpers, 5 nitrogen transports and 3 rack and pinion underbalanced work-over units. High Arctic is active in Papua New Guinea where it provides contract drilling and work-over services and supplies rig matting and drilling support equipment on a rental basis. The Corporation owns and operates the only heli-portable hydraulic workover rig in PNG and is contracted to operate up to three heli-portable drilling rigs owned by a major oil and gas company.
Outstanding Share Data
The Corporation‟s authorized share capital consists of an unlimited number of common shares and an unlimited number of preferred shares.
On June 15, 2011, the Corporation completed a consolidation of its common shares on the basis of one (1) new post- consolidation common share for every five (5) pre-consolidated common shares. The 252,183,147 common shares then outstanding were consolidated to 50,436,637 common shares. As at September 30, 2011 and November 10, 2011, there were 49,596,637 issued and outstanding common shares. That number includes 3,620,000 shares held in the Share Incentive Plan (see Note 12 of the Interim Financial Statements) some of which may be cancelled under certain circumstances related to a three year vesting period requirement.
The Corporation‟s common shares trade on the Toronto Stock Exchange under the symbol HWO. The closing price of the shares on November 14, 2011 was $1.45 per share. Based upon issued common shares on that date of 49,596,637, the Corporation has an approximate market capitalization of $71.9 million.
Further Information
Additional information on the Corporation, including the Annual Information Form for the year ended December 31, 2010, can be found on SEDAR at www.sedar.com.
Dennis Sykora
Executive Vice President and General Counsel
Phone: 403 340 9825
Email: dennis.sykora@dev.haes.ca
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