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Strong international revenue growth continues
RED DEER, AB, Nov. 15 /CNW/ - High Arctic Energy Services Inc. (TSX: HWO)
(the "Corporation" or "High Arctic") today announced its results for the third
quarter ended September 30, 2007.
Third Quarter Highlights:
- International revenue increased by 169% to $17.2 million for the
three months ended September 30, 2007, as compared to $6.4 million
for the three months ended September 30, 2006.
- A 4.3% increase in third quarter revenue from $27.8 million in the
three months ended September 30, 2006 to $29.0 million in the same
period in 2007 and a reduction in EBITDA from $9.5 million in the
three months ended September 30, 2006 to $3.1 million in the same
period in 2007.
- Awarded an additional US$78-million contract for drilling operations
in Papua New Guinea, bringing the anticipated total contract value in
excess of US$160-million.
- Commenced Underbalanced Drilling ("UBD") and Managed Pressure
Drilling ("MPD") operations in Mexico, with the redeployment of
- Commenced operations in Kuwait on a five year contract, including a
US$34-million extension, bringing the total contact value to US$68-
- Mobilized a RAPAD(TM) Drilling Rig and commenced operations on a one-
year contract in Tunisia.
- Signed a Letter of Intent ("LOI") with Schlumberger to form a Joint
Venture (Joint Venture contract executed on October 29, 2007).
"Ongoing concerns over natural gas commodity prices and the uncertainty
surrounding Alberta royalty rates have continued to dramatically impact
oilfield activity in Western Canada, including our Canadian utilization
rates," said Jed Wood, President and CEO of High Arctic. "I am, however, very
pleased with the increased efforts High Arctic has undertaken to profitably
redeploy underutilized Canadian equipment into quality, long-term
The earnings before interest, taxes, depreciation and amortization
(EBITDA) in the three months ended September 30, 2007 was $3.1 million,
compared to EBITDA of $9.5 million in the same period last year. For the nine
months ended September 30, 2007, EBITDA was $5.5 million compared to
$26.0 million for the nine months ended September 30, 2006. EBITDA in 2007 has
been negatively affected by lower domestic revenues, greater competitive
pressures in the Canadian market, costs associated with the start-up of new
international projects and a large provision for a disputed account.
The net loss in the three months ended September 30, 2007 was
$13.4 million, compared to net earnings of $5.9 million in the same period
last year. For the nine months ended September 30, 2007, the net loss was
$14.4 million compared to net earnings of $12.9 million for the nine months
ended September 30, 2006.
"Our intention and efforts to expand internationally over the last 9
months are having the positive impact that we were expecting. Over the coming
quarters, our focus will be on ensuring that we are operating efficiently and
effectively throughout our six international areas of operations," said Mr.
The Corporation has restated its Financial Statements for the quarters
ended March 31, 2007 and June 30, 2007 to more accurately reflect the
allocation of income between quarters.
The Financial Statements and Management Discussion and Analysis dated
September 30, 2007, along with the restated Financial Statements and
Management Discussion and Analysis can be viewed on SEDAR at www.sedar.com
under High Arctic Energy Services Inc.
EBITDA (being earnings before the deduction of depreciation,
amortization, interest expense or income taxes) is not a recognized measure
under GAAP. Management believes that, in addition to net earnings, EBITDA is a
useful supplemental measure of the Corporation's performance prior to
consideration of how operations are financed or how results are taxed.
Investors are cautioned that this should not be construed as an alternative to
net earnings determined in accordance with GAAP as an indicator of the
Corporation's performance. The Corporation's method of calculating EBITDA may
differ from the methods used by other issuers and, accordingly, it may not be
comparable to similarly titled measures used by other issuers.
This news release may contain forward-looking statements relating to
expected future events and financial and operating results of the Corporation
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 market and general economic conditions and
the risks and uncertainties detailed in the Corporation's Management
Discussion and Analysis for the nine months ended September 30, 2007 and in
the Trust's Annual Information Form for the year ended December 31, 2006 and
the Trust's Information Circular dated May 29, 2007, all found on SEDAR
(www.sedar.com). Due to the potential impact of these factors, the Corporation
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.
About High Arctic
The Corporation, through its subsidiaries, is a global provider of
specialized oilfield equipment and services, including drilling, completion
and workover operations. High Arctic's new underbalanced drilling technology
and equipment is recognized for its ability to improve oil and gas production
capabilities and is expected to develop greater acceptance in international
markets. Based in Red Deer, High Arctic has domestic operations in Alberta,
British Columbia and the Northwest Territories. International operations are
currently active in the Middle East, Asia and Mexico.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this news release.
For further information:
For further information: Peter Julien, Interim Chief Financial Officer,
High Arctic Energy Services Inc., Tel: (403) 340-9825, firstname.lastname@example.org