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CALGARY, Alberta, Oct. 20, 2021 (GLOBE NEWSWIRE) -- High Arctic Energy Services Inc. (TSX: HWO) (“High Arctic” or the “Corporation”) is pleased to announce that its Board of Directors has approved a special one-time dividend payment of $0.20 per share to holders of common shares. The dividend is payable on November 5, 2021 to holders of High Arctic common shares of record at the close of business on October 27, 2021. The ex-dividend date is October 26, 2021. The dividend is designated as an "eligible dividend" for Canadian Income Tax purposes.
With the first quarter 2020 declaration of the Covid-19 Pandemic and emergence of an oil price crisis, the Board of Directors (the “Board”) suspended regular dividends, halted share repurchases and borrowed $10 million on its revolving loan facility to preserve financial strength. Since this time, the Board and management has continuously monitored business conditions and the financial assets of the Corporation. This included workforce and asset preservation while streamlining business processes within a global leadership structure. Improvement led the Corporation to repay the $10 million dollars drawn from the revolving loan facility during the first quarter of 2021. Continuing improvement during 2021 positioned the Corporation to consider the best use of surplus cash carried since 2019.
Currently, positive developments position High Arctic to pay a special one-time dividend while preserving a strong capital structure. Notwithstanding continuing Covid-19 Pandemic challenges, these developments include: economic recovery in the Canadian and global economy, a recovery in global demand for energy, sustained high energy prices for oil and natural gas, the annual Canadian “breakup” seasonal activity low having passed, a resurgence in demand for energy services in Canada and High Arctic’s revenue generating activity in Papua New Guinea recommencing.
Mike Maguire, Chief Executive Officer, stated: “Having considered other investment options available to us, it is our view that the most appropriate action right now is to return surplus cash to shareholders by way of special dividend. Post dividend the Corporation will still have a substantive cash balance, an undrawn loan facility and with improving EBITDA increasing access to funds under our $45 million loan facility to fund growth initiatives.
We continue to prudently explore opportunities to use our assets to increase shareholder value. This is evidenced by our Q3 2021 investment in modern hydraulic catwalks in our Canadian business and an available Normal Course Issuer Bid to repurchase common shares of the Corporation. We will continue to monitor market conditions, the outlook for our business activities, access to funds and the financial assets of the Corporation with a view to optimising the returns to shareholders including consideration of the timing and amount of any prospective return to regular dividend payments.”
About High Arctic
High Arctic’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 is a market leader providing drilling and specialized well completion services and supplies rig matting, camps, and drilling support equipment on a rental basis in Papua New Guinea. The western Canadian operation provides well servicing, well abandonment, snubbing and nitrogen services and equipment on a rental basis to exploration and production companies.
For further information, please contact:
Chief Financial Officer
High Arctic Energy Services Inc.
Suite 500, 700 – 2nd Street S.W.
Calgary, Alberta, Canada T2P 2W1