/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION
MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW/
CALGARY,
March 11, 2016 /CNW/ - High Arctic
Energy Services Inc. (TSX: HWO) - "High Arctic" or the
"Corporation" announces its results for 2015 with growth in in
revenue of 22% to $209.9 million and
30% growth in Adjusted EBITDA to $64.0
million.
Tim Braun, High
Arctic's Chief Executive Officer, stated: "2015 was a significant
year of accomplishments for High Arctic. In spite of market
pressures, we successfully executed on our international growth
initiatives commenced in 2014 with excellent up time and safety
performance. In Canada, we
continue to manage through the current industry weakness, and
proactively managing costs has allowed our Canadian division to
remain profitable in a difficult environment. I am proud of
our employees' focus on delivering not only this positive financial
performance in 2015, but doing so safely and with consistently high
levels of service quality. I believe this culture will
continue to benefit High Arctic as we face higher expectations from
customers facing a challenging market in 2016. I am confident
we can meet those expectations and continue to enhance our safety
and service quality."
Highlights
A summary of High Arctic's quarterly and annual
results follows. For a complete copy of High Arctic's yearend
financial statements and management's discussion and analysis
("MD&A") please visit www.sedar.com.
High Arctic's $95.7
million in capital investments over the last two years,
combined with a stronger U.S. dollar and strong operational
performance allowed High Arctic to achieve year over year revenue
and EBITDA growth. These positive growth results were
achieved in an otherwise challenging global market for the oil and
gas industry, which is adapting to an extended low commodity price
environment.
Fourth Quarter 2015:
- Revenue increased 26% to $58.0
million from $46.2 million in
the fourth quarter of 2014.
- First full quarter of revenue contribution from all four
heli-portable drilling rigs operated in PNG. This increased
revenue contribution from PNG and a strong U.S. dollar revenue in
the quarter offset lower Canadian revenue, which was negatively
impacted by lower industry activity levels.
- Increased revenue and the Corporation's continued focus on
improving operational efficiencies and reducing operation costs
resulted in a 56% increase in adjusted EBITDA to $20.8 million in the quarter from $13.3 million in the fourth quarter of 2014.
Full Year 2015:
- Revenue for 2015 was the highest in High Arctic's history
totalling $209.9 million (2014 -
$171.8 million).
- Adjusted EBITDA increased 30% to a record $64.0 million from $49.3
million in 2014.
- Commissioning of High Arctic's two new heli-portable drilling
rigs was completed in 2015, with the rigs commencing commercial
operations in the first and third quarters. High Arctic owns
or operates four heli-portable drilling rigs in PNG, which
currently represents 100% of the active heli-portable rigs
operating in the country.
- Cost reduction initiatives undertaken throughout the year in
both PNG and Canada offset
contract concessions and lower equipment and rental utilization
levels.
- High Arctic distributed a total of $16.6
million to shareholders in 2015 via $5.7 million in share buybacks under the
Corporation's Normal Course Issuer Bid ("NCIB") and $10.9 million in dividends which represent 21% of
funds provided from operations for the year.
2015 was a significant year for High Arctic as
the Corporation executed on its PNG expansion plans initiated in
2014, which saw a material expansion of its drilling operations and
market share in PNG through the purchase of two heli-portable
drilling rigs. These two rigs are two of the most advanced
heli-portable rigs currently operating in the world. In
addition, High Arctic invested in additional rental equipment in
2015 to support the two new drilling rigs as well as niche growth
opportunities in Canada.
Consistent with the growth in revenue and EBITDA
for 2015, adjusted net earnings increased to $31.9 million ($0.58 per share) for the year ended 2015 from
$28.2 million ($0.54 per share) in 2014. For the fourth
quarter, adjusted net earnings increased to $9.7 million ($0.18
per share) from $8.5 million
($0.15 per share) in the comparative
period.
The Corporation continues to maintain a strong
balance sheet with a positive net cash position of $11.5 million at December
31, 2015 and a positive working capital balance of
$43.2 million. Funds provided
from operations were a record $19.8
million during the fourth quarter of 2015 and $52.8 million for fiscal 2015, an increase of 60%
and 23%, respectively, over the comparative periods in 2014.
High Arctic's prudent fiscal management has
placed the Corporation in a strong financial position to maintain
the Corporation's existing dividend and share buyback programs in
2016 and provide financial flexibility to execute on potential
growth opportunities that may present themselves in the current
industry downturn.
Financial Highlights
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31 |
|
Years
Ended
December 31 |
$ millions (except per share
amounts) |
2015 |
2014 |
|
2015 |
|
2014 |
|
2013 |
Revenue |
58.0 |
46.2 |
|
209.9 |
|
171.8 |
|
152.7 |
EBITDA(1) |
19.3 |
13.2 |
|
56.2 |
|
47.2 |
|
42.7 |
Adjusted
EBITDA(1) |
20.8 |
13.3 |
|
64.0 |
|
49.3 |
|
41.5 |
Adjusted EBITDA % of
revenue |
36% |
29% |
|
30% |
|
29% |
|
27% |
Operating earnings |
14.5 |
9.7 |
|
45.5 |
|
35.3 |
|
30.8 |
Net earnings |
9.0 |
8.5 |
|
27.1 |
|
28.2 |
|
24.6 |
|
per share (basic)(2) |
0.17 |
0.15 |
|
0.49 |
|
0.54 |
|
0.51 |
|
per share (diluted)(2) |
0.17 |
0.15 |
|
0.48 |
|
0.53 |
|
0.50 |
Adjusted Net
earnings(1) |
9.7 |
8.5 |
|
31.9 |
|
28.2 |
|
24.6 |
|
per share (basic)(2) |
0.18 |
0.15 |
|
0.58 |
|
0.54 |
|
0.51 |
|
per share (diluted)(2) |
0.18 |
0.15 |
|
0.57 |
|
0.53 |
|
0.50 |
Funds provided from
operations(1) |
19.8 |
12.4 |
|
52.8 |
|
42.9 |
|
35.3 |
|
per share (diluted)(2) |
0.36 |
0.21 |
|
0.96 |
|
0.82 |
|
0.73 |
|
per share (diluted)(2) |
0.36 |
0.20 |
|
0.94 |
|
0.80 |
|
0.72 |
Dividends |
2.7 |
2.7 |
|
10.9 |
|
9.4 |
|
7.2 |
|
per share(2) |
0.05 |
0.05 |
|
0.20 |
|
0.18 |
|
0.15 |
Capital expenditures |
0.6 |
14.7 |
|
40.0 |
|
55.7 |
|
21.9 |
Working Capital |
|
|
|
43.2 |
|
41.6 |
|
41.9 |
Total assets |
|
|
|
244.1 |
|
188.7 |
|
137.1 |
Total non-current financial
liabilities |
|
|
|
6.6 |
|
0.4 |
|
6.7 |
Net cash, end of period
(1) |
|
|
|
11.5 |
|
37.2 |
|
27.0 |
Shareholders' Equity |
|
|
|
201.2 |
|
165.6 |
|
111.8 |
Shares outstanding - end of
period(2) |
|
|
|
54.4 |
|
55.8 |
|
50.0 |
|
|
(1) |
Readers are cautioned that EBITDA, Adjusted EBITDA, Adjusted
net earnings, Funds provided from operations, net cash and working
capital do not have standardized meanings prescribed by IFRS - see
"non IFRS Measures". |
(2) |
The restricted shares held by a trustee under the Executive and
Director Incentive Share Plan are included in the shares
outstanding. The number of shares used in calculating the net
earnings per share amounts is determined differently as explained
in the Financial Statements. |
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31 |
|
Year Ended
December 31 |
($ millions) |
2015 |
|
2014 |
|
Change |
|
% |
|
2015 |
|
2014 |
|
Change |
|
% |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PNG |
50.1 |
|
30.8 |
|
19.3 |
|
63% |
|
177.8 |
|
123.5 |
|
54.3 |
|
44% |
|
Canada |
7.9 |
|
15.4 |
|
(7.5) |
|
(49%) |
|
32.1 |
|
48.3 |
|
(16.2) |
|
(34%) |
|
Total |
58.0 |
|
46.2 |
|
11.8 |
|
26% |
|
209.9 |
|
171.8 |
|
38.1 |
|
22% |
Consolidated revenue increased 26% to
$58.0 million in the fourth quarter
of 2015 from $46.2 million in the
fourth quarter of 2014. This increase was driven by the
additional revenue contribution from the two new drilling rigs
added to High Arctic's PNG fleet, combined with a 16% increase in
the average U.S. dollar to Canadian dollar exchange rate. The
increased revenue contribution was partially offset by a 49%
decline in Canadian revenues due to lower industry activity levels
in Canada.
On a full year basis, High Arctic generated
record revenue of $209.9 million,
which was a 22% increase over the $171.8
million in revenue generated in 2014. Although High
Arctic's two new drilling rigs were not available throughout the
entire year, their partial year revenue contribution as well as a
16% favorable increase in the average U.S. dollar exchange rate
allowed the Corporation's PNG revenue to increase 44% over
2014. Partially offsetting the increased revenue from PNG was
a 34% decline in Canadian revenues due to lower industry activity
levels throughout 2015.
Operations in PNG
PNG's large, relatively unexplored resource
base, low cost production and proximity to Asian markets, provides
PNG with a competitive advantage over other higher cost LNG
sources. This competitive advantage has led to the development of
large long-term LNG projects in PNG, which has provided for growth
in activity levels over the recent years.
In response to customer demand in PNG, High
Arctic purchased two heli-portable drilling rigs in 2014 and
completed extensive upgrades on the rigs to prepare them for the
challenging PNG drilling environment. These two rigs are
contracted to a large independent oil and gas exploration company
operating in PNG on two year take-or-pay contracts. Revenue
generation for the rigs commenced on the date each rig cleared
customs in PNG and the two year contract term for each rig
commences on the date each rig spuds its first well.
Upgrades on the first rig, Rig 115, were
completed in the first quarter of 2015 and the rig commenced
earning "moving rate" revenue in March
2015, which increased to its higher daily drilling rate in
mid-June upon the spudding of its first well. Upgrades to Rig
116 were completed in the second quarter and Rig 116 commenced
earning revenues at a "standby" rate upon clearance of PNG customs
in late August. Rig 116's first well is not anticipated to be
spudded until late 2016 or early 2017, at which time its two year
contract term will commence.
In addition to the two new rigs owned by High
Arctic, the Corporation continues to lease and operate two rigs
(Rigs 103 and 104) owned by a customer in PNG. Both rigs were
fully active throughout 2015 and for all but thirteen days in
2014. These rigs are operating under three year contracts
which are due for renewal in June
2016. Management is currently in discussions with the
customer regarding the renewal of these contracts.
The addition of the new rigs, combined with a
16% increase in the average U.S. dollar exchange rate during 2015
resulted in a 65% increase in PNG drilling revenue to $151.8 million for fiscal 2015 versus
$92.1 million in 2014. With the
full contribution of all four rigs in the fourth quarter of 2015,
PNG drilling revenue increased to $43.2
million in the quarter, which was a 71% increase from the
$25.2 million generated in the fourth
quarter of 2014.
Partially offsetting the increased drilling
revenue was an 18% decline in rental and other services revenue
during the year to $25.9 million from
$31.4 million in 2014. The
Corporation's rental fleet includes approximately 10,000 Dura-Base®
mats, of which approximately 5,700 mats were under contract at the
end of 2015. Additional rental revenues are also generated
from heli-portable camps and various trucks, cranes and other
oilfield equipment. On a full year basis, rental revenue from
this equipment was lower year over year; however, an increase in
equipment associated with the addition of Rigs 115 and 116 resulted
in an increase in equipment rental revenue in the fourth quarter to
$6.9 million versus $5.7 million in the fourth quarter of 2014.
A portion of the decline for rental revenues is also related to
some equipment now being captured under the Corporation's drilling
contract revenue.
The increased drilling revenue partially offset
by the lower rental revenues resulted in a 44% increase in PNG
revenue to $177.8 million for fiscal
2015 versus $123.5 million in
2014. With the full contribution of all four rigs in the
fourth quarter of 2015, PNG revenue increased to $50.1 million, which was a 63% increase from the
$30.8 million generated in the fourth
quarter of 2014.
Operations in Canada
The sharp decline in world commodity prices in
late 2014 and into 2015, combined with infrastructure constraints
and regulatory uncertainty, has negatively impacted industry
activity levels in Canada,
resulting in lower demand and competitive pricing pressure for High
Arctic's Canadian services.
As a result of the industry slowdown, the
Corporation reduced its fleet of marketed snubbing units in 2015 to
9 units out of the Corporation's total owned fleet of 18
units. In conjunction with the reduced marketed units, the
Corporation also reduced its operating support structure to reflect
the reduced operating capacity. The remaining un-marketed
units have been parked and will be reactivated as industry activity
improves. Utilization for High Arctic's marketed snubbing
units was 52% and 45% for year and fourth quarter 2015,
respectively. In comparison, the Corporation marketed an
average of 18 snubbing rigs in 2014 achieving utilization rates of
37% and 46% for the comparable periods. Equipment utilization
is determined by dividing the number of twelve hour days a unit
operates by the total number of days in the relevant period.
The reduced activity levels in 2015, combined
with lower average pricing, generated a 34% decline in snubbing
revenue to $22.4 million in 2015
versus $33.7 million in 2014.
Similar impacts were seen in the fourth quarter, with revenue
declining to $5.2 million from
$11.1 million in the fourth quarter
of 2014.
Similar to the decline experienced in the
snubbing division, revenues for the Corporation's nitrogen and
equipment rental services declined 45% for the year to $6.7 million from $12.1
million in 2014. Fourth quarter revenue declined to
$1.8 million from $3.5 million in 2014. Nitrogen services are
often supplied in conjunction with snubbing activities, however,
the Corporation has also been pursuing opportunities to provide
nitrogen services in conjunction with industrial and pipeline
maintenance activities.
The lower snubbing and nitrogen service revenues
generated a 34% decline in Canadian revenues in 2015 to
$32.1 million from $48.3 million in 2014. The continued
slowdown in the industry throughout 2015 and the further softening
of revenue rates resulted in a 49% decline in revenues in the
fourth quarter to $7.9 million from
$15.4 million in the fourth quarter
of 2014.
While these lower activity levels and pricing
pressures are anticipated to continue in 2016, the Corporation has
experienced higher levels of activity with its deeper capacity
snubbing units. The units are suited for the deep long
lateral horizontal wells that are currently being drilled in the
industry.
Oilfield Services Expense and Operating
Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31 |
|
Year Ended
December 31 |
($ millions) |
2015 |
|
%
(1) |
|
2014 |
|
% (1) |
|
2015 |
|
% (1) |
|
2014 |
|
% (1) |
Oilfield services expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel costs |
13.6 |
|
23% |
|
12.6 |
|
27% |
|
53.8 |
|
26% |
|
45.8 |
|
27% |
Drilling rig and other rental costs |
9.3 |
|
16% |
|
10.2 |
|
22% |
|
42.9 |
|
20% |
|
37.8 |
|
22% |
Material and supplies cost |
6.8 |
|
12% |
|
4.7 |
|
10% |
|
25.0 |
|
12% |
|
17.5 |
|
10% |
Equipment operating and maintenance costs |
2.5 |
|
4% |
|
2.2 |
|
5% |
|
7.9 |
|
4% |
|
8.7 |
|
5% |
Other |
0.7 |
|
1% |
|
0.1 |
|
0% |
|
1.5 |
|
1% |
|
0.8 |
|
0% |
Total oilfield services expenses |
32.9 |
|
57% |
|
29.8 |
|
65% |
|
131.1 |
|
62% |
|
110.6 |
|
64% |
Oilfield services operating margin |
25.1 |
|
43% |
|
16.4 |
|
35% |
|
78.8 |
|
38% |
|
61.2 |
|
36% |
(1) Operating costs as a % of total
revenue.
Consistent with the growth of High Arctic's PNG
operation, oilfield service expense increased for fiscal 2015 and
the fourth quarter. However, as a percentage of revenue,
oilfield service expense decreased to 62% for the year and 57% for
the fourth quarter, versus 64% and 65% in the comparative periods
in 2014.
The primary drivers for the decrease in oilfield
service expense as a percentage of revenue were:
- Economies of scale for fixed operating costs through the growth
of the PNG operations. While fixed operating costs were
required to support the growth of the PNG operations, the
incremental cost added was smaller than the incremental
contribution of the PNG revenue growth;
- A reduction in drilling rig rental costs as a percentage of
revenue as High Arctic has full ownership of the two new
heli-portable drilling rigs added in PNG. Partially
offsetting this cost reduction was an increase in material and
supplies costs, associated with operating these owned rigs.
Maintenance costs will also be expected to increase; however,
because these rigs are new, there was minimal impact to maintenance
costs associated with these rigs in 2015;
- Rig 116 was not operating and was earning standby revenue;
therefore, revenue was being generated with minimal operating
costs, thus skewing margins higher than they would otherwise be
under normal operations;
- In response to lower activity levels in Canada, management undertook a number of cost
reduction initiatives, which have resulted in lower operating costs
in the Corporation's Canadian operations. High Arctic maintains a
scalable cost infrastructure wherever possible which adjusts to
changing activity and provides substantial operating leverage when
activity changes. The impact of the reductions was first seen
in the second quarter and continues to be realized.
- Partially offsetting the positive margin impacts identified
above was a reduction in higher margin equipment and matting rental
revenue in 2015 versus 2014.
The above factors related to the PNG drilling
rigs had a greater impact on High Arctic's fourth quarter results
relative to the full year results as the fourth quarter was the
first full quarter where both of the new rigs were within High
Arctic's operating fleet. This impact is seen through the
further reduction in operating costs as a percentage of revenue to
57% in the fourth quarter versus the 62% incurred for the full
fiscal 2015 year.
General and Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31 |
|
|
Year
Ended
December 31 |
|
($ millions) |
2015 |
|
2014 |
|
Change |
|
|
2015 |
2014 |
Change |
|
General and
administration |
4.3 |
|
3.1 |
|
1.2 |
|
|
14.8 |
11.9 |
2.9 |
|
|
Percent of revenue |
7% |
|
7% |
|
|
|
|
7% |
7% |
|
|
General and administration expenses (G&A)
for the three months and year ended December
31, 2015 increased over the same periods in 2014 as a result
of staffing increases and other outlays made to support both
current and expected increased activity in the PNG operations and
the initiation of a regional office in Brisbane, Australia. As a percentage of
revenue, G&A costs have remained consistent at 7%.
Loss on short-term investments
Since June, 2015 High Arctic has accumulated
short term investments in select publicly traded oilfield service
companies at a cost of $16.5
million. These investments were made by the
Corporation as strategic investments while it evaluates potential
acquisition opportunities. Subsequent to purchasing these
investments, broad declines in market valuations for oilfield
service companies in general have occurred. As a result of a
decline in value in the third quarter, the Corporation recorded a
$4.1 million impairment loss on the
investments, which was recorded in the Corporation's third quarter
net income. A further decline in value of $1.8 million was incurred in the fourth quarter,
of which $0.7 million was recorded as
impairment in the income statement, with the remaining $1.1 million recorded in other comprehensive
income. All losses recorded on these investments are
unrealized as the Corporation continues to hold the
investments.
Amortization
Amortization cost increased to $16.7 million for the year versus $12.8 million in 2014. The increase in
amortization cost is associated with the Corporation's $95.7 million capital expenditures made in 2014
and 2015. The majority of this capital expenditure relates to the
two new drilling rigs that commenced operations in 2015, at which
time amortization of the capital costs associated with these rigs
began. Amortization cost for the fourth quarter of 2015 was
$5.9 million which includes a full
quarter of amortization for Rig 116.
Share-based Compensation
The increase in share-based compensation expense
to $1.8 million for the year ended
December 31, 2015, from $1.4 million in 2014, is attributable to full
year impact of the share-based compensation expense for the
Corporation's 2014 option grants, the majority of which were
granted in the second half of the year. An additional 0.6
million stock options were granted in 2015.
Foreign Exchange Transactions
The Corporation has exposure to U.S. dollar and
other currencies such as the Kina though its operations in
PNG. As a result the Corporation is exposed to foreign
exchange gains and losses through the settlement of foreign
denominated transactions as well as the conversion of the
Corporation's U.S. dollar based subsidiaries into Canadian dollars
for financial reporting purposes.
Gains and losses recorded by the Canadian parent
on its U.S. denominated cash accounts, receivables, payables and
intercompany balances are recognised as a foreign exchange gain or
loss in the statement of earnings.
High Arctic is further exposed to foreign
currency fluctuations through its net investment in foreign
subsidiaries. The value of these net investments will
increase or decrease based on fluctuations in the U.S. dollar
relative to the Canadian dollar. These gains and losses are
unrealized until such time that High Arctic divests of its
investment in a foreign subsidiary. These unrealized gains
and losses are recorded in other comprehensive income as foreign
currency translation gains for foreign operations for both 2015 and
2014.
During the year, the Canadian dollar incurred a
significant decline in value relative to the U.S. dollar. The
U.S. dollar exchange rate was 0.86 at December 31, 2014, fell to a low of 0.71 in
December, 2015 and closed the year at 0.72. The average
exchange rate for 2015 was 0.78. Since a significant portion
of the Corporation's operations are conducted in U.S. dollars
through its PNG operations, a decline in the Canadian dollar
relative to the U.S. dollar generally had a positive impact on High
Arctic's financial results, as evidenced in the Corporation's
fiscal 2015 operating results.
While a weakening in the Canadian dollar
relative to the U.S. dollar had a positive impact on High Arctic's
2015 operating results, it negatively impacted High Arctic through
the Canadian parent's settlement and conversion of U.S. dollar
denominated liabilities. As a result, the Corporation
recorded $0.7 million in foreign
exchange losses in net income for fiscal 2015.
Conversely, the weakening Canadian dollar
results in an increase in the value of the Corporation's net
investment in its U.S. dollar denominated subsidiaries. As a
result, the Corporation recorded a $24.2
million unrealized gain in other comprehensive income
related to the Canadian dollar increase in the Corporation's net
investment in its U.S. dollar denominated foreign subsidiaries
during 2015.
Interest and Finance Expense
While the Corporation has maintained a net
consolidated positive cash balance throughout 2015, there are
occasions when temporary advances are made on the Corporation's
corporate debt facilities to meet Canadian cash needs when foreign
funds are not immediately available. Interest on these
temporary borrowings combined with fees associated with the
Corporation's debt facilities amounted to $0.4 million for 2015, which is consistent with
2014. As at December 31, 2015,
the Corporation had drawn $4.0
million on its debt facilities, which was fully repaid
subsequent to year end.
Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31 |
|
|
Year
Ended
December 31 |
($ millions) |
|
2015 |
|
2014 |
|
Change |
|
|
2015 |
|
2014 |
|
Change |
Net earnings before income
taxes |
|
13.3 |
|
9.8 |
|
3.5 |
|
|
39.1 |
|
34.0 |
|
5.1 |
Current income tax expense |
|
3.1 |
|
1.1 |
|
2.0 |
|
|
10.8 |
|
5.6 |
|
5.2 |
Deferred income tax expense |
|
1.2 |
|
0.2 |
|
1.0 |
|
|
1.2 |
|
0.2 |
|
1.0 |
Total income tax expense |
|
4.3 |
|
1.3 |
|
3.0 |
|
|
12.0 |
|
5.8 |
|
6.2 |
|
Percent of net earnings before income taxes |
|
32% |
|
13% |
|
|
|
|
31% |
|
17% |
|
|
The Corporation's effective tax rate increased
to 31% in 2015 from 17% in the prior year. This increase was
related to higher taxable income generated from PNG.
The Corporation's activities in Canada are not subject to current income taxes
due to its ability to utilize various tax pools and losses carried
forward from prior years. As a result of these existing tax
pools, the Corporation has not recorded any tax expense for
Canada during 2015. As at
December 31, 2015, the Corporation
had approximately $113.00 million in
total tax pools available for use in Canada, of which the Corporation has only
recorded a deferred tax asset value of $5.0
million on the Corporation's balance sheet.
In addition to the statutory income taxes
applicable on net earnings generated in the Corporation's
subsidiaries, withholding taxes may apply to certain distributions,
such as dividends, made from the Corporation's subsidiary companies
to the Corporate parent company. No distributions that are
subject to withholding taxes were made in 2015. As at
December 31, 2015, the Corporation's
subsidiaries had approximately $81.6
million (2014 - $61.8 million)
in undistributed earnings which could be subject to dividend
withholding taxes. The average dividend withholding tax rate
is estimated to be 17%. No provision has been made for
withholding and other taxes that would become payable on the
distribution of these earnings as the Corporation controls the
relevant entities and has no committed plans to repatriate the
earnings in the foreseeable future.
Liquidity and Capital Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31 |
|
Year
Ended
December 31 |
($ millions) |
2015 |
|
2014 |
|
Change |
|
2015 |
|
2014 |
|
Change |
Cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
5.7 |
|
4.1 |
|
1.6 |
|
45.5 |
|
43.8 |
|
1.7 |
|
Investing activities |
(0.6) |
|
(11.5) |
|
10.9 |
|
(59.4) |
|
(52.0) |
|
(7.4) |
|
Financing activities |
(9.6) |
|
(2.6) |
|
(7.0) |
|
(12.0) |
|
8.8 |
|
(20.8) |
Effect of exchange rate changes |
(1.5) |
|
1.2 |
|
(2.7) |
|
4.2 |
|
2.9 |
|
1.3 |
Increase (decrease) in cash and cash
equivalents |
(6.0) |
|
(8.8) |
|
2.8 |
|
(21.7) |
|
3.5 |
|
(25.2) |
Working capital(1) |
|
|
|
|
|
|
43.2 |
|
41.6 |
|
1.6 |
|
Working capital ratio(1) |
|
|
|
|
|
|
2.3:1 |
|
2.9:1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash(1) |
|
|
|
|
|
|
11.5 |
|
37.2 |
|
(25.7) |
Undrawn availability under debt
facilities |
|
|
|
|
|
|
21.5 |
|
29.2 |
|
(7.7) |
(1) See non-IFRS measures
The Corporation manages its capital structure so
as to provide the capital resources to meet the requirements of its
business and instill confidence in investors, creditors and the
capital markets. For the year ended 2015, the Corporation
continued to maintain a strong balance sheet with no outstanding
net debt, and significant financial resources available via working
capital, cash and undrawn availability under the Corporation's debt
facilities.
Management believes High Arctic's current
capital resources, plus anticipated cash generated from operating
activities in 2016, will be sufficient to meet the Corporation's
planned 2016 capital expenditure program of $15.5 million and anticipated dividends and share
repurchases under the Corporation's NCIB for 2016. Management
will reassess the Corporation's capital resource needs as changes
occur in the Corporation's business operations and as future growth
opportunities arise.
Operating Activities
Consistent with the increase in EBITDA for 2015,
funds provided from operations increased 23% to $52.8 million for 2015 from $42.9 million in 2014. After working
capital adjustments, net cash generated from operating activities
during 2015 was $45.5 million
compared to $43.8 million for
2014. Funds provided from operations for the three months
ended December 31, 2015 were
$19.8 million (2014 - $12.4 million). After working capital
adjustments, net cash generated from operating activities during
the fourth quarter was $5.7 million
compared to $4.1 million for
2014. The $14.1 million
variance from funds provided from operations for the quarter
relates mainly to a $13.2 million
increase in accounts receivable in the quarter due to customer
payment delays. The outstanding accounts have been received
subsequent to year end.
Investing Activities
During the year ended December 31, 2015, capital expenditures were
$40.0 million (2014 - $55.7 million), which primarily related to the
completion of upgrades to the two heli-portable drilling rigs
purchased in 2014 as well as the purchase of rental equipment.
During the year, High Arctic also accumulated
$16.5 million in short term
investments in select publicly traded oilfield service
companies. These investments were made by the Corporation as
strategic investments while it evaluates potential acquisition
opportunities.
Financing Activities
The $12.0 million
in funds used in financing activities during 2015 primarily relates
to $10.9 million in dividend payments
and $5.7 million in share purchases
under the Corporation's NCIB. These outflows were partially
offset by $4.0 million in proceeds
from the Corporation's debt facilities, which were repaid
subsequent to year end.
Throughout 2015, the Corporation declared a
monthly dividend of $0.0165 per share
which was an increase over the average monthly dividend paid in
2014 of $0.0150 per share.
During the year, the Corporation purchased
1,569,983 of its common shares under a NCIB at a cost of
$5.7 million.
On July 28, 2014,
the Corporation completed a public offering of 5,051,000 common
shares at a price of $4.95 per share
for net proceeds of $24.6
million. These proceeds were partially offset by
$9.1 million in dividends paid in
2014 and $6.7 million debt repayments
in the Corporation's financing activities.
Outlook
High Arctic's significant exposure to PNG has
been beneficial for the Corporation during the ongoing global low
commodity price environment. The majority of drilling
activity in PNG is associated with LNG development, and the
country's vast reserves of gas are some of the most competitive
globally. The LNG projects require significant upfront
exploration and development, which extends over a long-term
period. A significant portion of High Arctic's drilling
activities in PNG are currently focused on exploration and
appraisal drilling to support the development of PNG's second LNG
facility, Papua LNG, as well as expansion for the existing LNG
facility, PNG LNG. Development of these LNG facilities is led
by large global oil and gas companies who have the capital
resources necessary to undertake these long-term projects.
PNG is a relatively underexplored and
underdeveloped resource base with vast reserves, which positions
the country as one of the lowest cost LNG source for Asian
markets. Management believes PNG's competitive position in
the LNG market will continue to drive exploration and development
activities in the country for the foreseeable future.
Rigs 103 and 104 remain active and are under
contract until the end of June
2016. Rig 103 is currently mobilizing to a well in the
Western Province for a new customer and Rig 104 is being prepared
to commence drilling in Muruk. Activity for these rigs is
expected to remain steady for 2016 and management continues
discussions with its customer for contract renewals. Given
the strong demand for top tier drilling services in the country,
management is confident of a positive outcome from the
negotiations.
Rig 115 has been fully utilized since entering
PNG in the first quarter of 2015. The rig is currently
assigned to the customer's joint venture partner in the
Elk/Antelope field and is completing the first well for the joint
venture partner. With this assignment, High Arctic continues to
expand its customer base in PNG. Upon completion of this
well, the rig will revert back to the original customer under its
take or pay contract.
Rig 116 is currently on standby in Port Moresby awaiting assignment for its first
well. Management anticipates that the rig will not be
mobilized for its first well until the end of 2016 or early
2017. The rig is under a take or pay contract and is
currently earning standby rates until it spuds its first
well. The contract term will continue until two years after
the first well is spudded.
Matting utilization in PNG is expected to be
approximately 50% for 2016 as a number of mats came off contracts
in the second half of 2015. Management is actively evaluating new
markets for expansion and redeployment of its non-contracted mat
inventory. Rental demand for the Corporation's remaining
drilling support equipment and camps will continue to coincide with
drilling activity in PNG.
In Canada,
lower industry activities continue to impact High Arctic's
operating results. However, a large percentage of the
Corporation's Canadian activity is with larger exploration and
development companies who have maintained a higher level of
activity relative to smaller oil and gas companies in the current
low industry activity cycle. Management continues to
proactively adjust the Corporation's Canadian operating cost
structure and to adapt to the current business environment.
As a result, although equipment utilization levels are down, the
Canadian operations have remained profitable.
Looking to 2016, the Corporation's contracted
status in Papua New Guinea,
continued delivery of high quality service and proactive cost
management should result in further EBITDA growth when compared to
2015. However, a further strengthening of the Canadian dollar
relative to the U.S. dollar could soften some of the positive
contributions on the Corporation's financial results experienced
over the recent quarters due to the favorable U.S. dollar exchange
rate. Additionally, further capital budget reductions for the
Corporation's customers may result in lower year over year
equipment utilization in Canada.
Non-IFRS Measures
This Press Release contains references to
certain financial measures that do not have a standardized meaning
prescribed by IFRS and may not be comparable to the same or similar
measures used by other companies. High Arctic uses these
financial measures to assess performance and believes these
measures provide useful supplemental information to shareholders'
and investors. These financial measures are computed on a
consistent basis for each reporting period and include the
following:
EBITDA
Management believes that, in addition to net earnings reported in
the consolidated statement of earnings and comprehensive income,
EBITDA (earnings before interest, taxes, depreciation and
amortization) is a useful supplemental measure of the Corporation's
performance prior to consideration of how operations are financed
or how results are taxed or how depreciation and amortization
affects results. EBITDA is not intended to represent net
earnings calculated in accordance with IFRS.
Adjusted EBITDA
Adjusted EBITDA is calculated based on EBITDA (as referred to
above) prior to the effect of loss on short term investments,
share-based compensation, gains or losses on sale of assets or
investments, excess of insurance proceeds over costs and foreign
exchange gains or losses. Management believes the add-back for
these items provides a more comparable measure of the Corporation's
operational financial performance between periods. In
addition, the add back of the loss on short term investment's
reflects the anticipated accounting treatment for such losses under
IFRS 9, which the Corporation anticipates adopting effective
January 1, 2016. Adjusted EBITDA as
presented is not intended to represent net earnings or other
measures of financial performance calculated in accordance with
IFRS.
The following tables provide a quantitative
reconciliation of consolidated net earnings to EBITDA and Adjusted
EBITDA for the three months and year ended December 31:
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31 |
|
Year
Ended
December 31 |
$ millions |
2015 |
2014 |
|
2015 |
|
2014 |
|
2013 |
Net earnings for the period |
9.0 |
8.5 |
|
27.1 |
|
28.2 |
|
24.6 |
Add: |
|
|
|
|
|
|
|
|
Interest and finance expense |
0.1 |
- |
|
0.4 |
|
0.4 |
|
0.8 |
Income taxes |
4.3 |
1.3 |
|
12.0 |
|
5.8 |
|
5.0 |
Amortization |
5.9 |
3.4 |
|
16.7 |
|
12.8 |
|
12.3 |
EBITDA |
19.3 |
13.2 |
|
56.2 |
|
47.2 |
|
42.7 |
Add: |
|
|
|
|
|
|
|
|
Loss on short-term investments |
0.7 |
- |
|
4.8 |
|
- |
|
- |
Share-based compensation |
0.4 |
0.4 |
|
1.8 |
|
1.4 |
|
0.8 |
Loss (gain) on sale of assets |
- |
- |
|
0.5 |
|
(0.2) |
|
0.3 |
Excess of insurance proceeds over costs |
- |
- |
|
- |
|
- |
|
(2.7) |
Foreign exchange loss (gain) |
0.4 |
(0.3) |
|
0.7 |
|
0.9 |
|
0.4 |
Adjusted EBITDA |
20.8 |
13.3 |
|
64.0 |
|
49.3 |
|
41.5 |
Adjusted Net Earnings
Adjusted net earnings is calculated based on net earnings prior to
the effect of the loss on short term investments. Management
believes the add back for these losses provides a more comparable
measure of the Corporation's operational financial performance
between periods. In addition, the add-back of the loss on
short term investment's reflects the anticipated accounting
treatment for such losses under IFRS 9, which the Corporation
anticipates adopting effective January 1,
2016. Adjusted net earnings as presented is not
intended to represent net earnings or other measures of financial
performance calculated in accordance with IFRS. Adjusted net
earnings per share and Adjusted net earnings per share - diluted
are calculated as Adjusted net earnings divided by the number of
weighted average basic and diluted shares outstanding,
respectively.
The following tables provide a quantitative
reconciliation of net earnings to Adjusted net earnings for the
three months and year ended December
31:
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31 |
|
Year
Ended
December 31 |
$ millions |
2015 |
2014 |
|
2015 |
|
2014 |
|
2013 |
Net earnings for the period |
9.0 |
8.5 |
|
27.1 |
|
28.2 |
|
24.6 |
Add: |
|
|
|
|
|
|
|
|
Loss on short term investments, net of tax |
0.7 |
- |
|
4.8 |
|
- |
|
- |
Adjusted net earnings |
9.7 |
8.5 |
|
31.9 |
|
28.2 |
|
24.6 |
Oilfield Services Operating Margin
Oilfield services operating margin is used by management to analyze
overall operating performance. Oilfield services operating
margin is not intended to represent operating income nor should it
be viewed as an alternative to net earnings or other measures of
financial performance calculated in accordance with IFRS.
Oilfield services operating margin is calculated as revenue less
oilfield services expense.
Oilfield Services Operating Margin %
Oilfield services operating margin % is used by management to
analyze overall operating performance. Oilfield services
operating margin % is calculated as oilfield services operating
margin divided by revenue.
Percent of Revenue
Certain figures are stated as a percent of revenue and are used by
management to analyze individual components of expenses to evaluate
the Corporation's performance from prior periods and to compare its
performance to other companies.
Funds Provided from Operations
Management believes that, in addition to net cash generated from
operating activities as reported in the consolidated statements of
cash flows, cash flow from operating activities before working
capital adjustments (funds provided from operations) is a useful
supplemental measure as it provides an indication of the funds
generated by High Arctic's principal business activities prior to
consideration of changes in items of working capital.
This measure is used by management to analyze
funds provided from operating activities prior to the net effect of
changes in items of non-cash working capital, and is not intended
to represent net cash generated from operating activities as
calculated in accordance with IFRS.
The following tables provide a quantitative
reconciliation of net cash generated from operating activities to
funds provided from operations for the three months and year ended
December 31:
|
|
|
|
|
|
|
|
Three Months
Ended
December 31 |
|
Year Ended
December 31 |
$ millions |
2015 |
2014 |
|
2015 |
2014 |
2013 |
Net cash generated from operating
activities |
5.7 |
4.1 |
|
45.5 |
43.8 |
36.8 |
Less: |
|
|
|
|
|
|
Net change in items of non-cash working
capital |
14.1 |
8.3 |
|
7.3 |
(0.9) |
(1.5) |
Funds provided from operations |
19.8 |
12.4 |
|
52.8 |
42.9 |
35.3 |
Working capital
Working capital is used by management as another measure to analyze
the operating liquidity available to the Corporation. It is
defined as current assets less current liabilities.
Net cash
Net cash is used by management to analyze the amount by which cash
and cash equivalents exceed the total amount of debt. The
amount, if any, is calculated as cash and cash equivalents less
total long-term debt. The following tables provide a
quantitative reconciliation of cash and cash equivalents to net
cash as at December 31:
|
|
|
|
|
|
|
|
|
Year ended
December 31 |
$ millions |
|
2015 |
|
2014 |
|
2013 |
Cash and cash equivalents |
|
15.5 |
|
37.2 |
|
33.7 |
Less: |
|
|
|
|
|
|
Long-term debt |
|
4.0 |
|
- |
|
6.7 |
Net Cash |
|
11.5 |
|
37.2 |
|
27.0 |
Risks and Uncertainties
Certain activities of the Corporation are
affected by factors that are beyond its control or influence.
Additional risks and uncertainties that management may be unaware
of, or that they determine to be immaterial may also become
important factors which affect the Corporation. Prior to making any
investment decision regarding High Arctic, investors should
carefully consider, among other things, the risk factors set forth
in the Corporation's most recent Annual Information Form which is
available under the Corporation's profile at www.sedar.com or by
contacting the Corporation.
High Arctic Energy Services Inc.
Consolidated Statements of Financial Position
As at December 31, 2015 and 2014
(Canadian $ Million) |
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
2014 |
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
15.5 |
|
37.2 |
|
|
Accounts receivable |
|
|
42.4 |
|
20.6 |
|
|
Short term investments |
|
|
10.6 |
|
- |
|
|
Inventories |
|
|
8.0 |
|
5.0 |
|
|
Prepaid expenses |
|
|
0.9 |
|
0.8 |
|
|
|
|
77.4 |
|
63.6 |
|
Non-current assets |
|
|
|
|
|
|
|
Property and equipment |
|
|
161.7 |
|
119.9 |
|
|
Deferred tax asset |
|
|
5.0 |
|
5.0 |
|
|
Loans due from related parties |
|
|
- |
|
0.2 |
|
|
|
|
|
|
|
|
Total assets |
|
|
244.1 |
|
188.7 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
23.6 |
|
17.4 |
|
|
Current portion of deferred revenue |
|
|
2.2 |
|
0.2 |
|
|
Income taxes payable |
|
|
7.5 |
|
3.5 |
|
|
Dividend payable |
|
|
0.9 |
|
0.9 |
|
|
|
|
34.2 |
|
22.0 |
|
Non-current liabilities |
|
|
|
|
|
|
|
Deferred revenue |
|
|
2.6 |
|
0.4 |
|
|
Long-term debt |
|
|
4.0 |
|
- |
|
|
Deferred tax liability |
|
|
2.1 |
|
0.7 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
42.9 |
|
23.1 |
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
201.2 |
|
165.6 |
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity |
|
|
244.1 |
|
188.7 |
|
|
|
|
|
High
Arctic Energy Services Inc.
Consolidated Statements of Earnings and Comprehensive Income
For the years ended December 31, 2015 and 2014
(Canadian $ Million, except per share amounts) |
|
|
|
|
|
|
|
|
2015 |
|
2014 |
|
|
|
|
Revenue |
209.9 |
|
171.8 |
Expenses |
|
|
|
|
Oilfield services |
131.1 |
|
110.6 |
|
General and administration |
14.8 |
|
11.9 |
|
Amortization |
16.7 |
|
12.8 |
|
Share-based compensation |
1.8 |
|
1.4 |
|
Total expenses |
164.4 |
136.7 |
Operating earnings |
45.5 |
35.1 |
|
|
|
|
|
Loss on short term investments |
4.8 |
|
- |
|
Foreign exchange loss |
0.7 |
|
0.9 |
|
Loss (gain) on sale of property and equipment |
0.5 |
|
(0.2) |
|
Interest and finance expense |
0.4 |
|
0.4 |
Net earnings before income
taxes |
39.1 |
34.0 |
|
|
|
|
|
Current income tax expense |
10.8 |
|
5.6 |
|
Deferred income tax expense |
1.2 |
|
0.2 |
|
|
|
|
Net earnings for the year |
27.1 |
28.2 |
|
|
|
|
Earnings per share: |
|
|
|
|
Basic |
0.49 |
|
0.54 |
|
Diluted |
0.48 |
|
0.53 |
|
|
|
|
|
|
|
|
|
2015 |
|
2014 |
|
|
|
|
Net earnings for the year |
27.1 |
|
28.2 |
Other comprehensive income: |
|
|
|
Items that may be reclassified
subsequently to net income: |
|
|
|
Foreign currency translation gains for
foreign operations |
24.2 |
|
9.0 |
Loss on short term investments, net of
tax |
(1.1) |
|
- |
|
|
|
|
Comprehensive income for the
year |
50.2 |
|
37.2 |
|
High Arctic Energy Services Inc.
Consolidated Statements of Cash Flows
For the years ended December 31, 2015 and 2014
(Canadian $ Million) |
|
|
|
|
|
|
|
|
|
2015 |
|
2014 |
|
|
|
|
|
|
Net earnings for the
year |
|
|
27.1 |
|
28.2 |
Adjustments for: |
|
|
|
|
|
|
Unrealized loss on short term investments |
|
|
4.8 |
|
- |
|
Amortization |
|
|
16.7 |
|
12.8 |
|
Share-based compensation |
|
|
1.8 |
|
1.4 |
|
Loss (gain) on sale of property and equipment |
|
|
0.5 |
|
(0.2) |
|
Foreign exchange loss |
|
|
0.7 |
|
0.5 |
|
Deferred income tax expense |
|
|
1.2 |
|
0.2 |
|
|
|
52.8 |
|
42.9 |
Net changes in items of working
capital |
|
|
(7.3) |
|
0.9 |
Net cash generated from operating
activities |
|
|
45.5 |
|
43.8 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
Additions of property and equipment |
|
|
(40.0)
|
|
(55.7)
|
|
Acquisition of short term investments |
|
|
(16.5) |
|
- |
|
Disposal of property and equipment |
|
|
0.2 |
|
0.6 |
Net changes in items of working
capital |
|
|
(3.1) |
|
3.1 |
Net cash used in investing
activities |
|
|
(59.4) |
|
(52.0) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
Dividend payments |
|
|
(10.9) |
|
(9.1) |
|
Issuance of common shares, net of costs |
|
|
0.4 |
|
24.6 |
|
Purchase of common shares for cancellation |
|
|
(5.7) |
|
- |
|
Long-term debt proceeds (repayment) |
|
|
4.0 |
|
(6.7) |
|
Loan receivable receipts |
|
|
0.2 |
|
- |
Net cash (used in) provided by
financing activities |
|
|
(12.0) |
|
8.8 |
Effect of exchange rate
changes |
|
|
4.2 |
|
2.9 |
Net change in cash and cash
equivalents |
|
|
(21.7) |
|
3.5 |
Cash and cash equivalents -
beginning of year |
|
|
37.2 |
|
33.7 |
Cash and cash equivalents - end of
year |
|
|
15.5 |
|
37.2 |
|
|
|
|
|
|
Cash paid for: |
|
|
|
|
|
Interest |
|
|
0.4 |
|
0.3 |
Income taxes |
|
|
6.8 |
|
4.1 |
|
|
|
|
|
|
Forward-Looking Statements
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, statements pertaining to the
following: general economic and business conditions which will,
among other things, impact demand for and market prices for the
Corporation's services; expectations regarding the Corporation's
ability to raise capital and manage its debt obligations; commodity
prices and the impact that they have on industry activity;
estimated capital expenditure programs for fiscal 2016 and
subsequent periods; projections of market prices and costs; factors
upon which the Corporation will decide whether or not to undertake
a specific course of operational action or expansion; treatment
under governmental regulatory regimes and political uncertainty and
civil unrest. With respect to forward-looking statements contained
in this Press Release, the Corporation has made assumptions
regarding, among other things, its ability to: obtain equity and
debt financing on satisfactory terms; market successfully to
current and new customers; obtain equipment from suppliers;
construct property and equipment according to anticipated schedules
and budgets; remain competitive in all of its operations; and
attract and retain skilled employees.
The Corporation's actual results could differ
materially from those anticipated in these forward-looking
statements as a result of the risk factors set forth above and
elsewhere in this Press Release, along with the risk factors set
out in the 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 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.
SOURCE High Arctic Energy Services Inc.