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CALGARY, Dec. 17, 2014 /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 capital budget of $36 million for 2015 to complete previously announced capital spending projects and to address maintenance and incremental growth opportunities next year.
The budget includes $31.8 million of capital expenditures which consists primarily of the previously announced upgrading and commissioning of Rigs 115 and 116. Growth spending in 2015 will also include rental equipment and ancillary snubbing equipment for the Canadian operations to address specific customer needs. Budgeted maintenance capital expenditures in 2015 of $4.2 million will ensure that the equipment in both Papua New Guinea ("PNG") and Canada continue to operate at the highest industry standards.
Tim Braun, CEO, stated "The long term demand for clean energy in Asia will in part be fulfilled by LNG imports. Papua New Guinea with its large natural gas reserves, and operating LNG export facility, is well positioned to help fulfill this demand. High Arctic will benefit from this opportunity as a substantial portion of our revenue is earned operating under fixed term contracts in PNG. We continue to evaluate other growth opportunities in both PNG and Canada, and recognize that this capital budget provides flexibility to increase our capital spending throughout the year if expansion opportunities materialize."
High Arctic has a strong balance sheet and growing cash flows from operations. The budgeted expenditures will be funded from cash on hand and from operating cash flows generated in 2015. The deployment of Rig 115 and Rig 116 remains on schedule with our previously announced timeline.
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.
For further information: Ken Olson, Chief Financial Officer, Phone: 403-508-7836, Email: [email protected]