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CALGARY, Oct. 22, 2015 /CNW/ - High Arctic Energy Services
Inc. (TSX: HWO) ("High Arctic" or the "Company") is
pleased to provide a third quarter 2015 operations
update.
Third Quarter Update
In Papua New Guinea
("PNG"), Rigs 103, 104 & 115 were all fully-utilized
through the third quarter of 2015 and should continue to be
fully-utilized through the year end and into 2016. The customer
base is expanding as windows of opportunity arise in the drilling
schedules of the Company's primary customers, resulting in drilling
activity with new customers. As a result of the lower global
commodity prices, the Company has been focused on reducing labour
and operating expenses in response to the revenue reductions being
experienced by High Arctic's customers. Operational teams remain
focused on delivering a high level of service quality, which
resulted in the Company earning incremental performance incentive
payments in the quarter.
The second heli-portable rig that High Arctic purchased in 2014,
Rig 116, arrived in Papua New
Guinea during the quarter and began earning standby revenue
in August, slightly earlier than the Company forecasted. The rig is
currently in Port Moresby awaiting
deployment to its first drilling site. Mobilization to the first
location will commence in 2016 once the customer has finalized
their drilling plans. The two year contract term with
the customer will commence when the first well is spudded.
In Canada, activity levels
continue to be significantly lower than those experienced in the
prior year. The operations remain profitable as the business
infrastructure has been adjusted to match the current demand for
equipment and services. Utilization levels and rental
equipment demand in the third quarter were higher than the Company
forecasted. This, coupled with a reduced fixed cost structure,
resulted in better than anticipated Canadian results.
As a result of the incremental earnings delivered from Rigs 115
and 116 compared to the prior year, the stronger U.S. dollar,
strong operational performance in PNG, and the better utilization
realized in Q3 from Canadian operations, the Company expects the
third quarter 2015 adjusted EBITDA to exceed $18 million.
The Company's contracted status in Papua New Guinea, the strong US dollar
exchange rate, continued service quality levels, and similar
quarter to quarter demand in Canada should result in fourth quarter
adjusted EBITDA being similar to the third quarter.
The Company expects to announce third quarter 2015 financial and
operating results after the market closes on Thursday, November 12th.
EBITDA & Adjusted EBITDA
Earnings before interest,
taxes, depreciation and amortization (EBITDA) and adjusted EBITDA
are non-GAAP measures. EBITDA is a useful supplemental measure of
the Company's performance prior to consideration of how operations
are financed or how results are taxed or how depreciation and
amortization affects results. Adjusted EBITDA is used by
management to analyze EBITDA prior to the effect of share-based
compensation, gains or losses on sale of assets or investments,
excess of insurance proceeds over costs and foreign exchange gains
or losses. These measures do not have a standardized meaning as
prescribed by International Financial Reporting Standards
(IFRS). Both measures are not intended to represent net
earnings as calculated in accordance with IFRS and may not be
comparable to similar measures presented by other issuers. This
information should not be considered in isolation or as a
substitute for measures prepared in accordance with IFRS.
Forward-Looking Statements
This news release may
contain forward-looking statements relating to expected future
events and financial and operating results of the Company that
involve risks and uncertainties. Actual results may differ
materially from management expectations, as projected in such
forward-looking statements for a variety of reasons, including
market and general economic conditions and the risks and
uncertainties detailed in both the Company's Management's
Discussion and Analysis for the quarter ended June 30, 2015 and in the Annual Information Form
for the year ended December 31, 2014
found on SEDAR (www.sedar.com). Due to the potential impact
of these factors, the Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, unless
required by applicable law.
About High Arctic
High Arctic is a publicly traded
company listed on the Toronto Stock Exchange under the symbol
"HWO". Based in Alberta, the
Company'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 snubbing services, nitrogen supplies
and equipment on a rental basis to a large number of oil and
natural gas exploration and production companies operating in
Western Canada.
Further Information
A full copy of High Arctic's
results including the Management's Discussion and Analysis and the
Consolidated Financial Statements for quarter ended June 30, 2015 and the notes contained therein can
be found on the Investor Relations page of High Arctic's website
www.haes.ca or at www.sedar.com. The Corporation's most
recent investor presentation can be found at www.haes.ca.
SOURCE High Arctic Energy Services Inc.