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CALGARY, Alberta, Aug. 09, 2018 (GLOBE NEWSWIRE) --
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High Arctic Energy Services Inc is pleased to announce that it has agreed to terms with Oil Search Limited (“OSL”, http://www.oilsearch.com/) for a three year contract renewal for its primary contracts in Papua New Guinea (“PNG”) covering the Drilling Rigs 103 and 104 and the drilling support services related to the supply of personnel and rental equipment to support the related drilling operations. The renewal will be effective August 1, 2018 for a three year term and includes options to further extend on the same terms and conditions.
The two parties have agreed to suspend any further discussions on the formation of a joint owned drilling company but have not ruled out revisiting discussions on a commercial arrangement regarding the ownership and operations management of the OSL drilling rigs in PNG again in the future.
Commenting on the renewal, Bill Easson, General Manager Drilling, for OSL, said; “The renewal of these contracts follows a long period of joint review of the best commercial mechanisms to most cost effectively deliver high quality drilling services in Papua New Guinea. Over the last decade, our companies have forged a strong partnership that continues to set the benchmark for safe and efficient well construction in the challenging PNG environment. This contract commitment reflects Oil Search’s recognition of, and confidence in, High Arctic’s quality service delivery in Papua New Guinea.”
The PNG-LNG facility which was shutdown for a period following a significant earthquake in February has returned to full production (more details can be found at http://www.pnglng.com). High Arctic anticipates the announcement of a decision to expand this facility and develop the Papua LNG project as per guidance provided by the main participants earlier this year. With a new three year agreement in place, High Arctic is well positioned to deliver the services required by OSL to continue both its exploration-appraisal and development program that will contribute to the expansion of the PNG-LNG facility. Currently Rig 103 is drilling Barakewa 3 which aims to confirm additional gas reserves in that field. It is anticipated that Rig 104 will soon recommence moving to the Muruk 2 well site, where it will test the extent of the field discovered last year with the drilling of Muruk 1.
Mike Maguire, President - International for High Arctic, commented “We have been working with OSL continuously since first arriving in Papua New Guinea in 2007 and have been committed from day one to being their partner of choice in accomplishing their goals in Papua New Guinea. We are pleased when reflecting back on the growth of our two organizations during the past ten years together. OSL has a deep commitment to PNG and invests heavily in the communities it works in. They led from the front during the recent earthquake on recovery and support and we were pleased to be able to help them. Our joint focus on safety and the wellbeing of those in our community underpins this commitment. We are proud to be OSL’s drilling service company of choice, helping them to deliver on their commitments to the country, their communities, workers and shareholders.”
The terms of the extensions are substantially similar to the previous contracts with some inflationary provisions in the drilling rig day rates applying annually through the term, and some increased flexibility in scaling the operation and reducing costs to both parties. This cornerstone contract is flexible and scalable with activity and positions High Arctic well to respond quickly to the future drilling opportunities.
About High Arctic
High Arctic is a publicly traded company listed on the Toronto Stock Exchange under the symbol “HWO”. The Corporation’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 Canadian operation provides well servicing, well abandonment, snubbing and nitrogen services and equipment on a rental basis to a large number of oil and natural gas exploration and production companies operating in Western Canada.
For further information contact:
|J. Cameron Bailey|
Chief Executive Officer
P: (587) 318-3826
Chief Financial Officer