OILFIELD services company High Arctic Energy has recorded an increase in comprehensive income for the 2015 calendar year to C$50.2 million, though net earnings for the year were slightly lower.
The company, which holds a range of heli-portable drilling rigs as well as rolling stock support equipment for rent in Papua New Guinea, recorded net earnings of C$27.1 million for 2015, slightly below the C$28.2 million earned in 2014.
This was on the back of an increase in revenue to C$209.9 million, 22 per cent over the C$171.8 million earned in 2014 and the highest level recorded in company history.
Earnings before interest, tax, depreciation and amortisation were also higher at C$56.2 million, up from the previous year’s C$47.2 million.
“Although High Arctic’s two new drilling rigs were not available throughout the entire year, their partial year revenue contribution as well as a 16% favourable increase in the average US dollar exchange rate allowed the corporation’s PNG revenue to increase 44% over 2014,” the company said.
Rigs 115 and 116, purchased in 2014 but requiring refurbishment and customs clearance before they were deployed in PNG, were responsible for a 65% increase in PNG drilling revenue in 2015, High Arctic said.
A 16% increase in the average US dollar exchange rate during 2015 also contributed to the profit increase, which saw revenue of C$151.8 million recorded from the company’s PNG drilling operations alone, up on the C$92.1 million recorded in 2014.
“With the full contribution of all four rigs in the fourth quarter of 2015, PNG drilling revenue increased to C$43.2 million in the quarter, which was a 71% increase from the C$25.2 million generated in the fourth quarter of 2014,” the company said.
The increased drilling revenue was partially offset by an 18% fall in revenue from rental and other services during the year – to C$25.9 million from C$31.4 million in 2014.
For the year ahead, High Arctic said it believed PNG’s competitive position in the LNG market would continue to drive exploration and development activities in the country for the foreseeable future.
“The corporation’s contacted status in PNG, continued delivery of high quality service and proactive cost management should result in further earnings before interest, tax, depreciation and amortisation growth when compared to 2015,” High Arctic said.
Rig 115 was expanding its customer base in PNG while working on the Elk Antelope field, but will revert back to its original customer once the well is completed, the company said.
High Arctic said it expected Rig 116 would not be mobilised for drilling until the end of 2016, with the rig continuing to earn stand by rates until the first well is spudded.
Rigs 103 and 104 are under contract until the end of June, while matting utilisation is expected to be about 50% in 2016 as a number of mats come off contracts in the second half of the year.