High Arctic Energy Services Inc. (TSX: HWO) has secured its biggest contract ever, with anticipated revenues of $7.2 million.
The Red Deer-based company said Monday that it will supply rig matting and related support services for a major drilling company in Papua New Guinea. The contract will pay High Arctic approximately $400,000 a month over an 18-month term.
High Arctic said in a release that it has been developing its matting business through a product that is well-suited for the wet and boggy conditions in the southwestern Pacific country. It expects to have the mats for this contract by Nov. 1.
“I am excited about the long-term growth prospects of our matting business and the rental opportunities in Papua New Guinea as we continue to receive inquiries from a wide range of potential users,” said Kevin Doran, High Arctic’s vice president, international operations.
High Arctic also recently extended contracts for one of its rigs and for drilling support services.
Earlier this month, the company issued the financial results from its first quarter of 2011 operations.
These included revenues of $35.9 million and net earnings of $7.3 million for the three months ended March 31, up from $34.6 million and $4.5 million respectively for the same period in 2010.
Basic earnings per share were three cents, down from eight cents in the first quarter last year.
The company’s debt had been reduced by $12.8 million, to $23.7 million, as at March 31.
High Arctic’s Canadian operations produced $15.6 million in revenue in the quarter, up 23 per cent from $12.7 million to start 2010.
Revenue from international operations was $20.3 million during the quarter, which marked a seven per cent decrease from $21.9 million.
“We continue to see strong demand for our services as the Canadian industry continues to target liquids-rich gas to counter the impact of weak natural gas prices,” said High Arctic CEO Bruce Thiessen.
High Arctic provides specialized oilfield equipment and services. It operates throughout Western Canada and internationally primarily in Papua New Guinea.