High Arctic reports 2026 second quarter results

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CALGARY, Alberta, Aug. 07, 2026 (GLOBE NEWSWIRE) -- High Arctic Energy Services Inc. (TSX: HWO) (the “Corporation” or “High Arctic”) released its second quarter 2026 financial and operating results. The unaudited condensed interim consolidated financial statements (the “Financial Statements”) and management’s discussion and analysis (“MD&A”) for the three and six months ended June 30, 2026 will be available on SEDAR+ at www.sedarplus.ca, and on High Arctic’s website at www.haes.ca.

All amounts are denominated in thousands of Canadian dollars (“CAD”), unless otherwise indicated.

In the following disclosure, the three months ended June 30, 2026 may be referred to as the “quarter” or “Q2 2026” and the comparative three months ended June 30, 2025 may be referred to as “Q2 2025”. References to other quarters may be presented as “QX 20XX” with X/XX being the quarter/year to which the commentary relates. Additionally, the six months ended June 30, 2026 may be referred to as “YTD” or “YTD-2026”. References to other six-month periods ended June 30 may be presented as “YTD-20XX” with XX being the year to which the six-month period ended June 30 commentary relates.

Lonn Bate, Interim Chief Executive Officer commented:

“Our Delta Rental Services business continued to deliver solid financial and operational results in Q2 2026 as our customers continue to accelerate their development of the Duvernay near our Red Deer operations, a trend we see continuing into the third quarter of 2026. Our current service offerings and facility locations position us to provide our customers with the assets they need while allowing us to maintain an exceptional level of customer service.

Team Snubbing, in which High Arctic holds a 42% non-operating equity interest, continued its strong operational momentum on Alaska's North Slope and delivered record net income during the quarter. These results significantly exceeded any prior second-quarter performance since Team Snubbing acquired the snubbing assets from High Arctic in 2022. Team continues to build relationships with existing and prospective customers across Alaska and is pursuing international opportunities that could provide meaningful growth in the second half of 2026 and beyond. These achievements validate Team Snubbing's growth strategy and the strength of its services offerings. With increasing scale, a growing opportunity set, and a proven operating track record, they are well positioned to continue generating profitable growth and creating long-term value High Arctic.

As always, we remain committed to delivering our high standard of customer service with a relentless focus on safety, service quality, and continued cost management across the business.”

Highlights

Revenue increased with planned customer well completions, enabled by first half weighed capital expenditure program;

Customer relationships strengthened with Q2 2026 operational execution;

Profit margin percentage compressed due to mix of rental services and increased Q1 2026 equipment maintenance costs;

Significant net income turnaround from 42% equity investment in Team Snubbing, an increase of $1.15 million over YTD-2025;

G&A expenses increased $0.15 million over YTD-2025 with appointment of full-time Interim CEO last August, and professional fees, and

Liquidity of $4.4 million, comprised of $3.0 million cash and cash equivalents and undrawn bank facility.

Second Quarter 2026 Summary

Revenue of $2,941 for Q2 2026 increased by $550 or 23% compared to Q2 2025. The increase in revenue is attributable to improved customer demand and stable pricing for our rental service offerings.

High Arctic generated oilfield services operating margin of $1,302 for Q2 2026 with a corresponding operating margin percentage of 46.2% compared to $1,126 and 49.1% for the prior year comparative quarter. Operating margin was impacted by higher revenues as noted, offset by the reduction in operating margin percentage which was driven by a higher concentration of lower margin well stimulation services. Well stimulation services typically involve a higher labour component, contracted through a third-party.

Adjusted EBITDA for Q2 2026 was $504, or 17% of revenue, compared to the prior year comparative quarter of $482 and 20% of revenue. Adjusted EBITDA was primarily impacted by the same factors impacting oilfield services operating margin as noted above.

Operating loss was $126 in the current year quarter compared to a loss of $254 in Q2 2025. The decrease in operating loss is attributable to the same factors impacting oilfield services operating margin, partially offset by 9% higher general and administrative expenses.

Net income was $3 in Q2 2026 compared to a net loss of $295 in Q2 2025. This increase in net income was a result of the same factors impacting operating income (loss), Team Snubbing’s $456 stronger performance in Q2 2026 versus Q2 2025 offset by the $362 fair value adjustment recorded in Q2 2025 relating to the contingent consideration payable pursuant to the 2023 Delta Services Ltd. (“Delta”) acquisition.

The Corporation maintained operational excellence and safety throughout the quarter as evidenced by the continuation of lost time and recordable incident free work.

High Arctic exited Q2 2026 with net working capital of $4,579, including $3,025 of cash and cash equivalents, an undrawn credit facility and $2,916 in long-term debt.

First Half 2026 Summary

YTD revenue of $5,676 increased by $950 or 20% compared to YTD-2025. Consistent with Q2 2026 results, the increase in revenue is attributable to improved customer demand and stable pricing for our rental service offerings.

High Arctic generated oilfield services operating margin of $2,424 for YTD-2026 with a corresponding operating margin percentage of 44.6% compared to $2,313 and 51.1% for the prior year comparative period. Operating margin was impacted by higher revenues as noted above, offset by the reduction in operating margin percentage which was driven by a higher concentration of lower margin well stimulation services combined with an increase in equipment repairs and maintenance expense.

Adjusted EBITDA for YTD-2026 was $892, or 16% of revenue, compared to the prior year comparative period of $986 and 21% of revenue. Adjusted EBITDA was primarily impacted by the same factors impacting oilfield services operating margin and 9% higher YTD-2026 general and administrative expenses.

Operating loss for YTD-2026 was $330 compared to a loss of $382 for YTD-2025. The decrease in operating loss is attributable to the same factors impacting oilfield services operating margin, as noted above, partially offset with modestly higher general and administrative expenses.

Net income was $858 for YTD-2026 compared to a net loss of $415 for YTD-2025. This $1,273 differential was primarily driven by Team Snubbing’s $1,153 stronger YTD-2026 performance, $382 in gains on equipment disposals, partially offset by the $362 gain recorded in YTD-2025 on the fair value adjustment on the contingent consideration payable to pursuant to the 2023 Delta acquisition.

During the first half of 2026, working capital increased $935 and long-term debt decreased by $87.

Select Comparative Financial Information The following is a summary of select financial information of the Corporation:

Outlook High Arctic’s business is driven by its customers’ decisions to drill new oil and natural gas wells combined with subsequent activity to complete these wells for production. This drilling and completion activity is tied to expectations for commodity prices and pipeline egress to access markets. As such, the financial and operational performance of High Arctic’s business and the non-operated equity investment in Team Snubbing are highly dependent on these customer factors, in combination with fundamentals associated with both drilling and well completions in the WCSB and in the US state of Alaska.

In the WCSB, High Arctic rental equipment and service operations continue to experience a high level of customer demand in central Alberta as certain customers accelerate their capital spending to drill, complete and tie-in more of their Duvernay wells. This work is conveniently located in close proximity to High Arctic’s primary operations centre. In terms of High Arctic’s capital expenditure levels, the second half of 2026 is expected to be significantly lower. Equipment deliveries were first half loaded to benefit from timing associated with customer well planning.

For High Arctic’s non-operated interest in Team Snubbing, investment net income expectations are that first half operational execution has built positive momentum that will carry through the second half of 2026. While the WCSB continues to look challenging in terms of delayed natural gas well completions, Alaska has positive oil well workover production trends. High Arctic expects Team Snubbing to continue to build its customer relationships in Alaska and end the year in a favourable position with three rig packages marketed and labour contract opportunities.

While global economic and geopolitical uncertainty persists and in many respects is escalating, Canada’s energy industry has opportunities for future growth through new pipeline egress to overseas and USA markets. Recent energy infrastructure initiatives to expand throughput of existing pipelines and build new capacity to access tidewaters are developments highlighting a mandate at the federal level for Canada to become a global energy superpower. These initiatives include the announcement of both the West Coast Oil Pipeline from Alberta to the B.C. coast and the Northern Shield Energy Corridor, the US approval of the Bridger Pipeline Expansion, completion of the Trans Mountain pipeline system expansion in 2024, and the commencement, and subsequent output ramp-up of West coast LNG exports in 2025, all of which are positive developments supporting improved long-term fundamentals for High Arctic’s business in the upstream energy services sector.

In summary, the Corporation’s strategic objectives carry forward priorities and accomplishments from the first half of 2026. They focus on safe and value based operational execution for customers, cost control, and equipment offerings to enable lasting market opportunities to drive organic growth and enhanced shareholder value.

2026 Strategic Objectives High Arctic’s 2026 strategic objectives are as follows:

Relentless focus on safety excellence and quality service delivery;

Organically grow our core businesses through selective and opportunistic investments;

Seek accretive acquisitions in Canada to drive shareholder value;

Steward capital and liquidity to preserve balance sheet strength and financial flexibility; and

Actively manage direct operating costs and general and administrative expenses.

Operating Results Rental Services Segment

(1) See “Non-IFRS Measures”

The rental services segment consists of High Arctic’s oilfield rental equipment and labour services in Canada, centered upon pressure control equipment and equipment supporting the high-pressure stimulation of oil and gas wells in the WCSB.

Revenue for Q2 2026 of $2,817 was $524 or 23% higher than the prior year comparative quarter. Revenue for the six months ended June 30, 2026, of $5,430 was $900 or 20% higher than the prior year comparative period. The increase in revenue experienced for both Q2 2026 and YTD-2026, versus the comparable periods in 2025, was driven primarily by stronger customer activity experienced throughout 2026. The increase in gross operating expenses for both Q2 2026 compared to Q2 2025 and YTD-2026 was the result of the increase in revenues, the impact of customer sales mix, increased utilization of third-party rental services and for the YTD-2026 period, higher repairs and maintenance related expenses incurred in Q1 2026.

Oilfield services operating margin for Q2 2026 of 46.2% was approximately three percent lower (on a gross basis) than the 49.1% realized in Q2 2025. Operating margin in Q2 2026 was negatively impacted by increased utilization of third-party rental services in the current year quarter as compared to the prior year quarter. This increased utilization of third-party rental equipment combined with higher repairs and maintenance related expenses incurred in Q1 2026 negatively impacted the YTD-2026 margin when compared to YTD-2025 operating margin.

Other Rental Services Items During Q1 2026, the Corporation recognized a gain of $340 related to assets disposed of pursuant to a rent-to-own agreement. Additional details related to this transaction are fully described later in this MD&A.

Investments and Corporate Segment The investments and corporate segment contain all other assets and activity of the Corporation, namely, High Arctic’s equity investment in Team Snubbing, its equity investment in the Seh’ Chene Well Servicing Partnership (“Seh’ Chene Partnership”), industrial property in Clairmont, Alberta, head office functional support, and monetary investments and borrowings. Select analysis and discussion of these results follows by major heading. Readers are advised to reference Note 20, Segmented Information, in the Corporation’s Financial Statements.

Clairmont Industrial Property Revenue attributable to the Corporation’s industrial property in Clairmont, Alberta, was $124 for Q2 2026 compared to $98 in the prior year comparative quarter (YTD-2026 revenue of $246 compared to revenue of $196 for YTD-2025). The change in revenue is due largely to the reclassification of the reimbursement of property taxes from the lessee as a component of revenue in Q4 2025; previously, the reimbursement was included as a reduction of the underlying operating expense. Gross lease revenue was positively impacted by inflation escalators that are provided for under the lease agreement.

Team Snubbing Equity Investment The Corporation accounts for the results of its 42% interest in Team Snubbing using the equity method of accounting. The Corporation’s proportionate share of Team Snubbing’s net income for Q2 2026 was $108 compared to a loss of $348 experienced in Q2 2025. Team Snubbing realized revenues for Q2 2026 of $8,112 compared to $5,897 for the prior year comparative quarter and YTD-2026 revenue of $21,289 compared to revenue of $13,989 for YTD-2025, an increase of 38% and 52% respectively. See Note 9 in the Corporation’s Financial Statements for additional details.

Team Snubbing realized improved financial and operational performance for both Q2 2026 and YTD-2026, versus the comparable periods in 2025. The improvements in both revenue and net income for the Q2 2026 and YTD-2026 are primarily attributable to improved customer activity in Team Snubbing’s operations in Alaska, US. Activity levels in the US operations were favourably impacted by steady customer demand, comprised of well workovers on the Alaskan North Slope combined with complex workovers and plug and abandonment work in southern Alaska that concluded in early Q2 2026. Canadian activity levels have been comparable to what was witnessed in 2025 driven primarily by persistently low AECO natural gas pricing. As a result of the improved 2026 YTD financial and operational performance, Team Snubbing continued to make meaningful debt repayments to its primary lender and accordingly continued to reduce debt and improve its working capital position in the quarter.

Liquidity and Capital Resources

(1) See “Non-IFRS Measures”

Operating Activities

Cash generated from operating activities for Q2 2026 was $205, compared to a use of $477 from operating activities in Q2 2025. Funds from operating activities totaled $484 in Q2 2026 compared to $310 for Q2 2025 (see “Non-IFRS Measures”). In Q2 2026, changes in non-cash operating working capital totaled an outflow of $279 compared to an outflow of $787 in Q2 2025.

For YTD-2026, cash from operating activities from continuing operations was $1,020 compared to $407 for YTD-2025. Funds flow from operating activities from continuing operations totaled $310 for YTD-2026 compared to $805 for YTD-2025 (see “Non-IFRS Measures”). For YTD-2026, changes in non-cash operating working capital from continuing operations totaled an inflow of $787 compared to $398 for YTD-2025.

Changes in cash from operating activities and funds flow from operating activities for Q2 2026 compared to Q2 2025, and for YTD-2026 compared to YTD-2025, were largely the result of improved financial results for Q2 2026 compared to Q2 2025 combined with the impact of changes in non-cash working capital (as noted above).

Investing Activities

During Q2 2026, the Corporation’s net cash used in investing activities totaled $235 compared to an outflow of $128 for the prior year comparative quarter (YTD-2026 outflow of $1,032 compared to an outflow of $817 for YTD-2025). In the second quarter of 2026 and 2025, the majority of investing related cash outflows related to sustaining and growth capital expenditures for the rental services segment. Offsetting investing cash outflows was the receipt of payments on notes and other receivables and proceeds received on the disposition of assets.

The change in cash flows from investing activities for Q2 2026 compared to the prior year comparative quarter is due to increased property and equipment expenditures partially offset with the increased payments received related to notes receivable. The change in cash flows from investing activities for YTD-2026 compared to the prior year comparative period is due to increased property and equipment expenditures, an increased payment on the contingent consideration obligation relating to the Delta acquisition, partially offset with the increased payments received related to notes receivable.

Financing Activities

During Q2 2026, the Corporation’s net cash used in financing activities of $135 was consistent with the prior year comparative quarter of $140. For YTD-2026, net cash used in financing activities of $270 was comparable to $275 for YTD-2025. Cash flows related to financing activities consist of the normal course payments and receipts on the Corporation’s lease liabilities and long-term debt.

Working Capital

As at June 30, 2026, the Corporation’s working capital balance was $4,579 compared to $3,644 as at December 31, 2025. The increase in working capital was driven by positive EBITDA generated during YTD-2026 combined with the addition of the Team Snubbing 2026 receivable pursuant to the rent-to-own agreement and the sale of the Corporation’s US snubbing assets.

Long-term Debt

The Corporation has mortgage financing secured by lands and buildings owned by High Arctic located within Alberta, Canada. The mortgage has a remaining initial term of under six months with a fixed interest rate of 4.30% with payments occurring monthly. The mortgage financing contains certain non-financial covenants requiring lenders’ consent including changes to the underlying business. As at June 30, 2026 and December 31, 2025, the Corporation was compliant with all covenants associated with the mortgage financing.

Non-IFRS Measures

This Press Release contains references to certain financial measures that do not have a standardized meaning prescribed by IFRS and may not be comparable to the same or similar measures used by other companies. High Arctic uses these financial measures to assess performance and believes these measures provide useful supplemental information to shareholders and investors. These financial measures are computed on a consistent basis for each reporting period and include EBITDA (Earnings before interest, tax, depreciation and amortization), Adjusted EBITDA, oilfield services operating margin and margin percentage, operating income (loss), funds flow from operating activities and working capital. These do not have standardized meanings.

These financial measures should not be considered as an alternative to, or more meaningful than, net income (loss), cash from operating activities, current assets or current liabilities, cash and/or other measures of financial performance as determined in accordance with IFRS.

For additional information regarding non-IFRS measures, including their use to management and investors and reconciliations to measures recognized by IFRS, please refer to the Corporation’s MD&A, which is available online at www.sedarplus.ca and through High Arctic’s website at www.haes.ca .

Forward-Looking Statements This Press Release contains forward-looking statements. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “seek”, “propose”, “estimate”, “expect”, and similar expressions are intended to identify forward-looking statements. Such statements reflect the Corporation’s current views with respect to future events and are subject to certain risks, uncertainties, and assumptions. Many factors could cause the Corporation’s actual results, performance, or achievements to vary from those described in this Press Release.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this Press Release as intended, planned, anticipated, believed, estimated or expected. Specific forward-looking statements in this Press Release include, among others, statements pertaining to the following: general economic and business conditions, which will include, among other things, the outlook for the energy industry inclusive of commodity prices, producer activity levels (inclusive of drilling completions and tie-in activity) and general energy supply and demand fundamentals that may impact the energy industry as a whole and more specifically as it relates to the Corporation’s customers in Western Canada and Alaska, United States; expectations related to current and future expansion of oil throughput on existing pipelines, new oil pipeline capacity and LNG export projects and the impact, if any, on future pricing; the impact, if any, of geo-political events, changes in government, changes to tariffs or related trade policies and the potential impact on the Corporation’s ability to execute its 2026 strategic objectives; fluctuations in interest rates and commodity prices; expectations regarding the Corporation’s ability to manage its liquidity risk, raise capital and manage its debt finance agreements; the nature and the timing of the settlement of future contingent consideration payments; projections of market prices and costs; factors upon which the Corporation will decide whether or not to undertake a specific course of operational action or expansion; the Corporation’s capital expenditure levels; including the anticipated weighting of equipment deliveries in the first half of the year; the Corporation’s ongoing relationship with its major customers; the Corporation’s ability to seek and execute accretive acquisitions including the timing thereof and the potential operational and financial benefits; management of general and administrative expenses; the maintenance of a strong balance sheet, its liquidity position and related financial flexibility; the performance of the Corporation’s non-operated equity investment in Team Snubbing and Team Snubbing’s ability to continue as a going concern; expectations regarding Team Snubbing’s ability to expand operations in Alaska, including rig packages marketed and labour contract opportunities; operational and financial performance of the Corporation’s Canadian rental and related labour services business in 2026; the Corporation’s expectations for customer activity levels for 2026; expectations regarding future natural gas pricing, included the potential impact of LNG Canada exports on AECO pricing; scaling the Corporation’s Canadian business; execution on one or more corporate transactions; and estimated credit risks.

With respect to forward-looking statements contained in this Press Release, the Corporation has made assumptions regarding, among other things, that commodity prices will continue at levels supportive of customer activity; and the Corporation’s ability to: maintain its ongoing relationship with major customers; successfully market its services to current and new customers; devise methods for, and achieve its primary objectives; source and obtain equipment from suppliers; successfully manage, operate, and thrive in an environment which is facing much uncertainty; remain competitive in all its operations; attract and retain skilled employees; obtain equity and debt financing on satisfactory terms and manage its liquidity risk, and successfully renew or refinance its mortgage facility upon expiry; and that Team Snubbing will continue as a going concern and be able to meet its financial obligations.

Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: economic and financial conditions, including volatility in commodity prices; volatility in interest and exchange rates and capital markets; the level of demand and financial performance of the energy industry; changes in customer demand; and developments and changes in laws and regulations, including in the energy industry.

The Corporation’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth above and elsewhere in this Press Release, along with the risk factors set out in the most recent Annual Information Form filed on SEDAR+ at www.sedarplus.ca.

The forward-looking statements contained in this Press Release are expressly qualified in their entirety by this cautionary statement. These statements are given only as of the date of this Press Release. The Corporation does not assume any obligation to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.

About High Arctic Energy Services High Arctic is an energy services provider. High Arctic provides pressure control equipment and equipment and related labour services supporting the high-pressure stimulation of oil and gas wells and other oilfield equipment ‎on a rental basis to exploration and production companies, from its bases in Whitecourt and Red Deer, Alberta‎. Additionally, High Arctic maintains a minority equity interest in Team Snubbing, a leading provider of well-control services to the oil and gas drilling industry with operations in Western Canada and Alaska, US.

For further information contact:

Lonn Bate Interim Chief Executive Officer P: 587-318-2218 P: +1 (800) 688 7143

High Arctic Energy Services Inc. Suite 2350, 330 – 5th Ave SW Calgary, Alberta, Canada T2P 0L4 website: www.haes.ca Email: info@haes.ca

Globe Newswire

August 7, 2026 - 6:00 AM PDT

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