High Arctic Signs a 2 Year Drilling Services Contract with InterOil and
Purchases Two Drilling Rigs
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CALGARY, April 9, 2014 /CNW/ - High Arctic Energy Services Inc. (TSX: HWO)
("High Arctic" or the "Company") is pleased to announce that it has signed a
new Drilling Services Agreement with InterOil Corporation for one
heli-portable drilling rig in Papua New Guinea ("PNG"). High Arctic has
agreed to provide one drilling rig and a 100 person camp for a firm contract
term of two years with an extension option available to InterOil for one
additional year. The two year term commences once the rig has been mobilised
and is ready to commence drilling operations. The contract is projected to
deliver annualized revenue of approximately US$30 million during the drilling
operations. The target spud date for the first well is November 2014.
In conjunction with the award of this contract, High Arctic has agreed to
purchase two heli-portable drilling rigs and associated ancillary equipment.
The total commitment to purchase and deliver the two rigs with upgrades is
estimated at US$52 million. The matching rigs are AC self-erecting 1500 HP
triple drilling rigs designed and manufactured as heli-portable. The rigs can
be broken down into 2700kg loads allowing maximum transportation versatility
and flexible alternatives in helicopter selection. Constructed in 2010, the
rigs feature the latest safety designs and drilling automation technology, and
have each had approximately one year of use.
Kevin Doran, High Arctic's President, International, stated; "The acquisition
of these two drilling rigs is a significant milestone for High Arctic and
reflects our continued commitment to expanding our presence within Papua New
Guinea. We are excited to be working with InterOil as they move towards
commercializing their resources. The second rig should position us to take
advantage of the growing activity in the country."
The rig purchase is subject to customary closing conditions and closing is
expected to occur by mid-May. The rigs are currently being prepared to be
shipped to PNG with an expected landing date in June. The first rig will then
be commissioned and upgraded at a customer supplied yard near Port Moresby.
The first rig is expected to be mobilised to the field in November at which
time revenue streams will commence. The second rig will then be commissioned
and is expected to be available for use in early 2015. The Company will
market the second rig to both existing and potential new customers in PNG.
The Company plans to acquire the rigs using existing cash on hand and
available capacity on its current revolving loan facility.
This news release may contain forward-looking statements relating to expected
future events and anticipated financial and operating results of the Company
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, but not limited to, 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,
2013 and the Annual Information Form for the year ended December 31, 2013
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.
About High Arctic
The Company 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
Company's most recent investor presentation can be found at www.haes.ca.
SOURCE High Arctic Energy Services Inc.
Ken Olson, Chief Financial Officer, Phone: 403 580 7836 ext 103, Email:
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CO: High Arctic Energy Services Inc.
NI: OIL ORDER
-0- Apr/09/2014 13:33 GMT
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