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CALGARY, July 28, 2014 /CNW/ - High Arctic Energy Services Inc. (TSX: HWO) ("High Arctic" or the "Corporation") is pleased to announce that it has completed the previously announced acquisition (the "Acquisition") of two heli-portable drilling rigs and associated ancillary equipment for approximately USD$29 million. The total commitment to purchase, deliver, upgrade and commission the two drilling rigs has been estimated at USD $52 million. The rigs are currently on route to Houston, Texas to be upgraded and commissioned. Rig 115 will be completed first and then shipped to Papua New Guinea ("PNG") to be deployed under the previously announced two year drilling contract with an anticipated first spud date in early 2015. Efforts continue to secure a contract for Rig 116 in PNG.
The Acquisition was partially funded with a bought deal public financing (the "Offering") through a syndicate of underwriters led by National Bank Financial Inc. that included PI Financial Corp., AltaCorp Inc. and Lightyear Capital Inc., and which closed on June 11, 2014. Pursuant to the Offering, High Arctic issued 5,051,000 subscription receipts (the "Subscription Receipts") at a price of $4.95 per Subscription Receipt for gross proceeds of approximately CND$25 million. In accordance with their terms, each Subscription Receipt was exchanged for one common share of the Corporation ("Common Share") on July 28, 2014 upon closing of the Acquisition and the proceeds from the sale of the Subscription Receipts were released from escrow. Holders of Subscription Receipts are not required to take any action in order to receive the Common Shares to which they are entitled. Holders of the Subscription Receipts shall receive an amount equal to the $0.015 per Common Share dividend that was paid on July 14, 2014 to holders of record at June 30, 2014. This amount will be paid on July 28, 2014 to the holders of Subscription Receipts on the exchange date.
At July 28, 2014, High Arctic has 55,434,952 Common Shares outstanding, including the Common Shares issued pursuant to the Subscription Receipts.
Certain statements contained in this news release constitute forward-looking information. These statements relate to future events or the Corporation's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events. In particular, forward-looking statements contained in this press release include, but are not limited to: the expected effects of the Acquisition and the payment of the dividend equivalent amount to Subscription Receipt holders. These forward-looking statements are based on assumptions and are subject to numerous risks and uncertainties, certain of which are beyond the Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, competition, stock market volatility and the ability to access sufficient capital. Actual future results may differ materially. The Corporation's annual information form for the year ended December 31, 2013 and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.
About High Arctic
The Corporation is a provider of specialized oilfield equipment and services for drilling, completion and work over operations. Based in Alberta, High Arctic has operations throughout Western Canada and in Papua New Guinea. The Corporation's most recent investor presentation can be found at www.haes.ca.
SOURCE: High Arctic Energy Services Inc.
For further information: Ken Olson, Chief Financial Officer, Phone: 403 580 7836 ext 103, Email: email@example.com