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CALGARY, Alberta, March 18, 2020 — High Arctic Energy Services Inc. (“High Arctic”) announces that it has received formal notification from our main customer in Papua New Guinea (“PNG”) that it is suspending all drilling operations in the country until further notice. The customer decision to suspend and defer operations is in reaction to the current low oil & gas prices and the COVID-19 pandemic. Accordingly, High Arctic is working with our customer to safely conclude work on active sites including suspension of a well currently under construction. We are releasing effected personnel under a joint plan and expect to phase-down rig operations for this customer by the end of April. With the current outlook for continued low oil & gas prices it is unclear when any PNG drilling activity might re-commence.
High Arctic has implemented plans to reduce the dependence on international rotational staff for the remainder of its business operations in PNG. The Company’s focus on developing a strong National workforce positions us well to provide labour solutions for both short term work and on-going essential operations.
High Arctic remains under contract through mid 2021 for drilling services and these recent developments are expected to defer drilling into 2021, at a minimum. Long term, it remains encouraging that customer dialogue with the PNG Government on the P’nyang Gas Agreement, which is required for LNG expansion and higher industry well site activity, is reportedly ongoing at this time.
While these developments negatively impact Drilling and Ancillary Services operating segments for High Arctic, business continuity remains a fundamental priority. High Arctic is positioning its PNG business to preserve its excellent workforce, maintain quick rig reactivation capabilities and control costs to maintain financial flexibility.
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 is a market leader providing drilling and specialized well completion services and supplies rig matting, camps and drilling support equipment on a rental basis in Papua New Guinea. The North American operations 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 and the United States.
For further information contact:
|J. Cameron Bailey||Christopher Ames|
|Chief Executive Officer||Vice President of Finance & Interim CFO|
|Phone: 587-318-3826||Phone: 587-318-2218|
|Email: [email protected]||Email: [email protected]|