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CALGARY, Alberta, Aug. 02, 2022 (GLOBE NEWSWIRE) — High Arctic Energy Services Inc. (TSX: HWO) “High Arctic” or the “Corporation” is pleased to announce that it has agreed to terms with its principal customer in Papua New Guinea (“PNG”) for a three-year contract renewal covering customer owned Heli-portable Drilling Rig 103 and High Arctic’s services related to the supply of personnel, camp accommodation and rental equipment to support the drilling operations. The renewals are effective August 1, 2022 and include options to further extend the contracts on the same terms and conditions beyond July 31, 2025.
In late 2021, High Arctic’s principal PNG customer merged with one of the largest energy exploration and production companies operating in the Asia Pacific, to create a regional champion of quality, size and scale. Both companies have extensive history in PNG. The resulting company has large stakes in the two LNG projects as well as operatorship of all producing PNG oil fields and several gas fields supplying the existing PNG-LNG export facility.
Mike Maguire, CEO of High Arctic, stated, “High Arctic has worked continuously with this principal customer since first arriving in Papua New Guinea in 2007. Together we have forged a strong partnership that set the benchmark for safe and efficient operations in the remote and logistically challenging PNG environment. We are proud to have continued our strong symbiotic relationship supporting their field operations through the challenges brought upon by Covid-19 and the recent transition of ownership. We are excited to be working closely with the new management team and are proud to remain their drilling service company of choice in PNG.”
Key technical personnel have started deployment and work is underway to prepare Drilling Rig 103 and its leapfrog unit for recommencement of drilling in early Q4 2022. The terms of the contract renewals are substantially similar to those contained within previous contracts. This cornerstone contract is flexible and scalable to align with activity which positions High Arctic to respond quickly to future incremental drilling opportunities.
This contract announcement follows recent positive developments that highlight the tremendous expansion potential for LNG production in PNG. On July 20, 2022, TotalEnergies, operator of the Papua-LNG joint venture, announced commencement of upstream FEED studies in PNG targeting a final investment decision on the two-train Papua-LNG project by the end of 2023, and commencement of production in 2027. Earlier this year ExxonMobil, operator of the PNG-LNG joint venture, announced the signing of a gas agreement for the development of the P’nyang gas field in the Western Province of PNG, which is anticipated to result in the addition of another train to the world class PNG-LNG export facility.
Mike Maguire, CEO of High Arctic, commented, “Papua New Guinea is key to High Arctic’s long-term business strategy. There have been significant LNG investments in PNG made by large oil and gas companies. High Arctic is positioned well to support future investments given high barriers to entry due to the technical expertise required to operate the heli-portable drilling rigs in remote locations. High Arctic’s contract drilling service history in PNG includes our long-term principal customer and both major multi-national companies operating the two LNG project joint ventures, among many others. We are currently providing services to both our principal customer and the PNG-LNG operator, and we are pleased to be returning to consistent drilling operations.”
All the rigs under High Arctic’s care have been maintained during the Covid-19 induced PNG drilling suspension and are in good preservation for quick redeployment into service. These include our principal customer’s other heli-portable Drilling Rig 104, High Arctic’s own versatile heli-portable Drilling Rigs 115 & 116 and our high-capacity heli-portable hydraulic workover unit Rig 102.
This press release contains forward-looking statements. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “seek”, “propose”, “estimate”, “expect”, and similar expressions are intended to identify forward-looking statements. Such statements reflect the Corporation’s current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Corporation’s actual results, performance or achievements to vary from those described in this press release.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Specific forward-looking statements in this press release include, but are not limited to, statements pertaining to the following: for recommencement of drilling in early Q4 2022, tremendous expansion potential for LNG production in PNG, a final investment decision on the two-train Papua-LNG project by the end of 2023, the addition of another train to the world class PNG-LNG export facility, quick redeployment of the rigs under High Arctic’s control, and, returning to consistent drilling operations.
The Corporation’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth above and elsewhere in this press release.
The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. These statements are given only as of the date of this press release. The Corporation does not assume any obligation to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.
About High Arctic
High Arctic is an energy services provider. High Arctic is a market leader in Papua New Guinea providing drilling and specialized well completion services and supplies rental equipment including rig matting, camps, material handling and drilling support equipment. In western Canada High Arctic provides nitrogen services and pressure control equipment on a rental basis to a number of exploration and production companies.
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Chief Financial Officer
High Arctic Energy Services Inc.