High Arctic Energy Services Inc. (TSX: HWO) (“High Arctic” or the “Company”) has received a letter of award from its primary customer in Papua New Guinea to supply a new 104 man oilfield camp plus a 4 man “pioneer” camp. The heli-portable camp is a new build that will be constructed in Dubai by a supplier with considerable experience in supplying camps of this nature in PNG. A number of design changes will be incorporated to substantially reduce the footprint of the main camp and to make it easier to reassemble when moving to a new location by helicopter. These design changes were the result of a collaborative effort with the customer and should bring substantial cost savings and environmental benefits by reducing the size of the drilling locations. The pioneer camp is a self sufficient camp suitable for a small crew to set up at a new location prior to the arrival of the main camp.
The total capital cost of the main camp and pioneer camp is budgeted at $4.6 million including transportation to PNG and is being constructed under a fixed price contract. Delivery date in the field is planned for November, 2012. The award is for a firm one year term with demobilisation fees to apply if not extended beyond the one year period.
With this latest commitment, High Arctic has now committed approximately $9.6 million during 2012 for growth capital expenditures in Papua New Guinea. High Arctic has continued to add to its Durabase matting rental fleet with the order of a further 1,700 mats during 2012 all of which are committed to existing customers with delivery expected in the third and fourth quarters of 2012.
This news release may contain forward-looking statements relating to expected future events and 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 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, 2011 and in the Annual Information Form for the year ended December 31, 2011 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 global provider of specialised oilfield equipment and services, including drilling, completion and workover operations. Based in Red Deer, Alberta, High Arctic has domestic operations throughout western Canada and international operations in Papua New Guinea.
For further information:
Chief Financial Officer