High Arctic Announces 2013 Capital Budget and Financial Update
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RED DEER, AB, Feb. 1, 2013 /CNW/ - High Arctic Energy Services Inc. (TSX: HWO) ("High Arctic" or the "Company") is pleased to announce that its Board of Directors has approved a total capital budget of $32 million for 2013. This budget includes growth capital expenditures of $21 million, maintenance capital expenditures of $7 million and approximately $4 million for the building of the previously announced facility in Grande Prairie, Alberta. Included in the $32 million is $6 million of capital expenditures that were committed during fiscal 2012 but which had not yet been completed at year-end and are thus carried into 2013. The 2013 capital expenditures are anticipated to be funded from the 2013 operating cash flow and cash on hand.
The growth spending in 2013 will be more heavily weighted to the operations in Papua New Guinea as the Company continues to see its best opportunities there. The Papua New Guinea capital expenditures will include investing in matting and other rental equipment to service the region, purchasing ancillary support equipment, such as cranes, and purchasing specialized tools to increase operational efficiency.
In addition to the new Grande Prairie facility, capital spending in Canada will include retrofitting some existing equipment in response to specific client requests to address certain challenges at the wellhead, as well as purchasing certain wellhead tools which will continue to differentiate the Company's service offering.
Capital spending plans may be adjusted throughout the year in accordance with changes in regional market conditions or due to the ability of the Company to secure contracts with acceptable returns.
High Arctic continued to experience consistent activity levels in its global operations in the fourth quarter of 2012. Consolidated fourth quarter revenue is expected to range between $37 million and $39 million which is nearly identical to the revenue earned in the fourth quarter of 2011. For the year ended December 31, 2012, consolidated revenue is anticipated to range between $145 million and $147 million. The significant improvement in year over year revenue reflects the investments made by the Company in its Papua New Guinea operations during 2011 and 2012. Adjusted EBITDA(1) for the fourth quarter on a consolidated basis is anticipated to range between $8 million and $10 million, which would result in total Adjusted EBITDA(1) for 2012 to be between $38 million to $40 million.
In light of the softer Canadian oil and gas activity levels and pricing pressures across its product lines, the Company expects flat to modest EBITDA growth in 2013.
These results are based on management's review of the internally prepared preliminary operating results for the year ended 2012 and are subject to the review and approval of the Company's auditor and Board of Directors.
This news release may contain forward-looking statements relating to expected future events and anticipated financial and operating results of the Company, including for the fourth quarter and year ended December 31, 2012, 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 unanticipated adjustments to the fourth quarter and year-end operating results which could occur as a result of the year-end audit process, market and general economic conditions, and the risks and uncertainties detailed in both the Company's Management Discussion and Analysis for the year ended December 31, 2011 and the Annual Information Form for the year ended December 31, 2011 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.
(1) Readers are cautioned that Adjusted EBITDA does not have standardized meanings prescribed by IFRS. Adjusted EBITDA is defined by the Company as net earnings before interest, income taxes, depreciation, stock based compensation and foreign exchange gains or losses.
About High Arctic
The Company, through its subsidiaries, is a provider of specialized oilfield equipment and services, including drilling, completion and workover operations. Based in Red Deer, Alberta, High Arctic has domestic operations throughout Western Canada and international operations primarily in Papua New Guinea. The Company's most recent investor presentation can be found at www.haes.ca.
SOURCE: High Arctic Energy Services Inc.For further information:
Chief Financial Officer
Phone: 403-508-7836 ext 103