The audited consolidated financial statements, management discussion & analysis ('MD&A'), and annual information form for the year ended
All amounts are denominated in Canadian dollars ('CAD'), unless otherwise indicated.
The divestment of underperforming businesses in
Highlights
The following highlights the Corporations results for Q4-2022 and YTD-2022: Disposition of underperforming assets in
Executed a strategic consolidation of the snubbing industry in
Retained profitable Rental and Nitrogen Services businesses and real estate in
After a slowdown prolonged by the pandemic in PNG, rig operations recommenced in 2022.
In April, reinstated a monthly dividend of
Generated Adjusted EBITDA of
The significant loss was due to non-cash impairment expense of
Strategy
High Arctic's 2023 Strategic Objectives build on the platform we created in 2022, and include:
Safety excellence and quality service delivery,
Redeployment of idled assets in PNG, Scaling our Canadian business, Opportunities for growth and corporate transactions that enhance shareholder value, and Examination of the Corporation's optimal capital structure and dividend policy.
Drilling Services activities rose in 2022 with PNG seeing drilling rig activity following a long period of relative inactivity during the Covid-19 pandemic. Early in 2022, the Corporation utilized Rig 115 to complete the abandonment of a complex legacy well for a key customer while in Q3-2022 the Corporation executed a three-year renewal of the contract for the provision of drilling services with its principal customer using Rig 103. 2022 also saw the Corporation take steps to formalize the provision of personnel services to the PNG industry following the success of doing the same in 2021. Provision of personnel to both key PNG customers remained strong throughout the year. With higher industry activity, the Corporation increased utilization of its rental equipment including camps, matting, and mobile material handling equipment. The combination of these service activities led to High Arctic achieving revenues of
In 2022, the Papua-LNG joint venture entered front-end-engineering-and-design ('FEED') and commenced early works activity, foreshadowing a final investment decision ('FID') in the second half of 2023. The operator of the PNG-LNG joint venture announced the signing of a gas agreement for the development of the P'nyang gas field in the
In preparation for year-end verification and active drilling in 2023, High Arctic conducted comprehensive substantive procedures to verify the current asset carrying value of inventory. This resulted in a
On
The Canadian well servicing business was sold for an aggregate purchase price of
The Canadian snubbing business was sold to Team Snubbing for a consideration consisting of 42% equity ownership in the post-closing outstanding shares in Team Snubbing, valued at
High Arctic retains its Ancillary Services Segment in
As a result of the Sale Transactions, the Corporation has a significantly reduced Canadian business and has written down the deferred tax assets of
Outlook
The Corporation begins 2023 with a strong balance sheet, access to substantial cash resources on hand and is well positioned. This enables High Arctic to pursue opportunistic growth in both our PNG and Canadian businesses return value to shareholders, and weather market turbulence due to high inflation or recession.
The fundamentals for sustained high LNG demand, particularly in
To date, the recommencement of drilling activity has been slower than the Corporation anticipated. Currently, customer plans have deferred mobilisation of Rig 115, and both Rig 115 and Rig 116 remain preserved in condition ready to be deployed. The positive effect of the slower ramp up in activity is that the Corporation expects to be able to fund reactivation activities out of PNG cash flow. With the modification and upgrade works completed, Rig 103 commenced drilling operations last week. Given PNG market conditions and current customer plans, we expect Rig 103 to operate consistently through the term of its contract, which is up for renewal in 2025.
Notwithstanding the foregoing, High Arctic recently received advise from the
High Arctic maintains a presence in the Canadian market, through its investments in Team Snubbing, HAES rentals and our nitrogen pumping operations.
NON - IFRS MEASURES
This News Release contains references to certain financial measures that do not have a standardized meaning prescribed by International Financial Reporting Standards ('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 Oilfield services operating margin, EBITDA (Earnings before interest, tax, depreciation, and amortization), Adjusted EBITDA, Operating loss, Funds flow from operating activities, Working capital and Long-term financial liabilities. These do not have standardized meanings.
These financial measures should not be considered as an alternative to, or more meaningful than, net income (loss), cash from operating activities, current assets or current liabilities, cash and/or other measures of financial performance as determined in accordance with IFRS.
For additional information regarding non-IFRS measures, including their use to management and investors and reconciliations to measures recognized by IFRS, please refer to the Corporation's MD&A, which is available online at www.sedar.com and through High Arctic's website at www.haes.ca.
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, but are not limited to, statements pertaining to the following: general economic and business conditions which will include, among other things, continued improvement in energy services outlook; continued impact of
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.
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 is an energy services provider. High Arctic is a market leader in
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Tel: +1 (403) 508-7836
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