Red Deer-based High Arctic Energy Services Inc. (TSX:HWO) posted net income of $3.8 million for the first quarter of 2010 — double its earnings from a year earlier.
A release issued by the company on Monday said revenues for the three months ended March 31 were $34.6 million, as compared with $41.8 million for the same quarter in 2009. It added that the drop in revenue was due to international operations, including a 24 per cent decline in Papua New Guinea, where a hydraulic workover rig did not operate during the quarter.
The release said High Arctic’s services in Papua New Guinea are provided under long-term contracts and vulnerable to fluctuations in the drilling activities of its primary customer.
In Canada, High Arctic’s equipment utilization rate was 65 per cent.
“I am very pleased with the first quarter operating results,” said High Arctic CEO Bruce Thiessen. “Our Canadian operations, in particular, were well ahead of plan in a challenging environment.
“With an anticipated successful completion of the recently announced debt restructuring plan, we will have a platform to take advantage of future opportunities and to continue to improve our financial results.”
During the quarter, High Arctic sold three rigs that were not in active use. The resulting $14.7 million in proceeds were applied to senior debt, which stood at $50.7 million as of the end of March.
It was $65.4 million on Dec. 31 and $92 million on March 31, 2009.
This reduction in debt has decreased High Arctic’s interest expense from $3.4 million in the first quarter of 2009 to $1.9 million in the first quarter of 2010, the company said.
High Arctic provides specialized oilfield equipment and services, including drilling, completion and workover operations. It has operations across Western Canada and is also currently active in Papua New Guinea.
The company’s first-quarter profits equated to nine cents a share, up from four cents in the same period of 2009.
In trading Monday on the Toronto Stock Exchange, High Arctic shares closed at 25 cents, up 0.5 cents.