Red Deer-based High Arctic Energy Services Inc. (TSX: HWO) confirmed on Monday that it has completed the sale of its interest in Optimal Pressure Drilling Services to Schlumberger.
High Arctic and Schlumberger entered into a joint venture agreement two years ago to create Optimal, an underbalanced and managed pressure drilling company that was to support Schlumberger’s operations. High Arctic had a 51 per cent interest in the company and was to provide equipment and technology.
This April, High Arctic — which has been struggling with a high debt load — announced that it had struck a deal to sell its interest in Optimal to Schlumberger.
It said Monday that net proceeds of US$21.6 million from the sale have been applied against its senior credit facilities, which now stand at approximately $67.9 million. That’s down from $126.1 million in March 2008.
High Arctic said in a news release that its debt remains too high and a plan is being developed to further reduce it. The company also continues to negotiate an extension of senior credit facilities that matured in June, and must restructure $27.9 million in outstanding convertible debentures, including $1.4 million in unpaid interest that was due in June.
High Arctic provides specialized oilfield equipment and services, including drilling, completion and workover operations. It is active throughout Western Canada and internationally in Papua New Guinea.
In trading on the Toronto Stock Exchange on Monday, shares in High Arctic closed unchanged at eight cents.