CANADIAN well completion services company High Arctic Energy Services is on track to improve its year on year results after securing new business for its Papua New Guinea operations, the group announced.
High Arctic chief executive Tim Braun said the heli-portable rigs the company had introduced to Papua New Guinea meant the group could expect growth in revenues and earnings.
One of these, Rig 116, arrived in PNG in early August and on clearing customs would be moved to a yard until its customer had selected their first planned well site.
The rig will collect standby revenue in accordance with the terms of the contract until it commences drilling, which is expected early in 2016, at which time the two year contracted term will begin, High Arctic said.
“With the recent arrival of Rig 116 into PNG, the percentage of revenue generated from drilling services will continue to increase and we remain on track to deliver improved year over year results,” Mr Braun said.
“The announcement by the PRL 15 joint venture participants of the potential development of a second PNG facility named the Papua LNG project is a positive indicator for additional development in the country despite the current global commodity prices.”
High Arctic generated net earnings for the first six months of the 2015 calendar year of US$12 million, down US$4 million or 25 per cent on the previous year.
But revenues generated in the first half of 2015 were up 11%, or US$9.1 million, to US$93.4 million on the back of an increase in PNG drilling services and the effects of a stronger US dollar.
These offset lower PNG rentals and Canadian revenues, the company said, while second quarter revenues were up 22% to US$48.7 million.
Mr Braun said the fact Rigs 103, 104 and 115 were fully utilised during the quarter had helped it deliver improved quarter on quarter results.
All three rigs were expected to continue to be fully utilised throughout the third quarter, with Rig 104 expected to take up a contract to drill two wells in the Western province of PNG at some point during the year.
High Arctic said its clients in Papua New Guinea were continuing to focus on LNG development, adding that demand for its services remained stable.
The company expects use of its matting will be between 60% and 75% throughout the year, with a number of mats to be redeployed throughout the third quarter of 2015 and early 2016 under new contracts signed earlier this year.
The company said it expected its activity levels in Canada to remain low through the remainder of 2015 and 2016, despite a rationalisation of its marketed fleet and associated infrastructure in the first quarter of 2015.
“Management continues to evaluate new markets for expansion and redeployment of our rental assets,” the company said.