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High Arctic Energy (TSE:HWO)
:HWO
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High Arctic Energy Services
(OTC:HWO)
Rating:62Neutral
Price Target:
C$1.00
▲(16.28%Upside)
High Arctic Energy Services (HWO) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$10.92M
Dividend Yield418.6%
Average Volume (3M)7.78K
Price to Earnings (P/E)0.4
Beta (1Y)0.57
Revenue Growth-86.21%
EPS GrowthN/A
CountryCA
Employees15
SectorEnergy
Sector Strength53
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)-0.01
Shares Outstanding12,696,959
10 Day Avg. Volume4,834
30 Day Avg. Volume7,784
Financial Highlights & Ratios
PEG Ratio-0.08
Price to Book (P/B)2.62
Price to Sales (P/S)0.00
P/FCF Ratio79.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
High Arctic Energy Services Business Overview & Revenue Model
Company DescriptionHigh Arctic Energy Services (HWO) is a Canada-based company that operates within the oilfield services sector, primarily focused on providing specialized equipment and services to exploration and production companies in the oil and gas industry. The company's core offerings include drilling, well servicing, and rentals of specialized oilfield equipment. High Arctic Energy Services is recognized for its expertise in operating in remote and harsh environments, particularly in Canada and Papua New Guinea.
How the Company Makes MoneyHigh Arctic Energy Services generates revenue through multiple streams, primarily centered around its oilfield services and equipment rental divisions. The company earns income by providing drilling and well servicing operations, which involve the deployment of its specialized rigs and experienced personnel to client sites. Additionally, High Arctic rents out oilfield equipment, such as drilling rigs and support tools, to exploration and production companies, which contributes significantly to its revenue. The company's earnings are bolstered by long-term contracts and partnerships with major oil and gas producers, ensuring a steady flow of business. Furthermore, High Arctic's focus on operating in challenging environments allows it to command premium pricing for its specialized services and expertise.
High Arctic Energy Services Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q2-2024)
| % Change Since: 0.00%|
Next Earnings Date:Aug 15, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant achievements in the reorganization and strong performance in Canadian operations. However, challenges in the PNG and Alaskan operations, along with delayed project timelines, balanced the positive aspects.Q2-2024 Updates
Positive Updates
Successful Reorganization and Spin-Off
High Arctic has completed its reorganization, resulting in the spin-off of the PNG business into a new publicly listed entity named High Arctic Overseas Holdings Corporation (SpinCo).
Increased Revenues in Canadian Operations
Revenues from continuing operations increased approximately 3x for both the 3- and 6-month periods ended June 30, 2024, compared to the same periods in 2023, with Q2 2024 revenues at $2.5 million and a strong operating margin in the high 40% range.
Positive Cash Flow and Strong Financial Position
The Canadian business has positive working capital of approximately $5 million, including $4 million in cash, with only $3.4 million in mortgage debt.
Future Growth Optimism for PNG Operations
Despite current challenges, there is optimism for future drilling opportunities in PNG related to the Papua LNG project and other large-scale projects, which could significantly boost operations.
Negative Updates
Decreased PNG Revenue and Activity
PNG revenue declined from $16.6 million in Q2 2023 to $10.4 million in Q2 2024, largely due to the cessation of drilling operations with Rig 103 and the associated decrease in rental revenue.
Challenges in Alaska Operations
The Alaskan operations faced challenges, including low activity due to extreme weather and client scheduling, leading to a net after-tax loss of $2.1 million for Team Snubbing International.
Delay in Papua LNG Project Investment Decision
The final investment decision for the Papua LNG project has been delayed to Q4 2025 or Q1 2026, impacting the timeline for potential operational growth in PNG.
Company Guidance
During the Q2 2024 earnings call for High Arctic Energy Services (HWO.TO), executives provided guidance on several key metrics and strategic initiatives. Michael Maguire, the CEO, confirmed the completion of a corporate reorganization, resulting in the creation of a new publicly listed entity, High Arctic Overseas Holdings Corporation (SpinCo), with both entities now trading separately on the TSX Venture Exchange and TSX Main Exchange, respectively. This reorganization resulted in 12,448,166 new common shares for both High Arctic and SpinCo. In terms of operations, Rig 103 completed its drilling program, and rental activities in Papua New Guinea (PNG) have softened. Financially, the Delta Rentals acquisition has tripled revenues from continuing operations to $2.5 million in Q2 2024 and $5.5 million for the first half of the year, with a strong operating margin consistently in the high 40% range. SpinCo commences with no long-term debt and approximately USD 19 million in working capital, indicating a robust financial position to facilitate future growth, potentially through M&A activities in the region.High Arctic Energy Services Financial Statement Overview
Summary
High Arctic Energy Services faces significant challenges with declining revenue and inconsistent profitability. The balance sheet shows low leverage but declining assets. Cash flow improvements in operating cash are encouraging, but cash management issues persist in investing and financing activities.Income Statement
The company has experienced significant volatility in revenue and profitability over the years. Revenue has decreased from $185.5 million in 2019 to $10.47 million in 2024, indicating a negative growth trajectory. Despite a positive net income in 2024, previous years have shown significant net losses. Margins have been inconsistent, reflecting operational challenges.40
Negative
Balance Sheet
The company maintains a relatively low debt-to-equity ratio, suggesting prudent financial leverage. However, a declining equity base and the reduction in assets highlight financial weakening. The equity ratio remains strong, indicating a solid ownership structure despite asset reduction.55
Neutral
Cash Flow
Operating cash flow has shown improvement in recent years, and free cash flow has been positive. The free cash flow growth has been inconsistent, but recent figures are encouraging. However, negative investing and financing cash flows suggest potential cash management issues.60
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 10.47M | 61.93M | 80.02M | 76.44M | 90.80M |
| Gross Profit | 2.61M | 11.31M | -5.78M | -8.42M | -14.20M |
| EBITDA | 1.72M | -111.00K | -9.41M | 4.43M | 10.40M |
| Net Income | 28.31M | -13.14M | -36.58M | -18.61M | -25.90M |
Balance Sheet | |||||
| Total Assets | 30.87M | 123.14M | 133.96M | 185.45M | 214.20M |
| Cash, Cash Equivalents and Short-Term Investments | 3.12M | 50.33M | 19.56M | 12.04M | 32.60M |
| Total Debt | 4.66M | 6.35M | 5.70M | 16.52M | 19.20M |
| Total Liabilities | 9.76M | 23.80M | 18.73M | 36.60M | 36.90M |
| Stockholders Equity | 21.11M | 99.33M | 115.23M | 148.85M | 177.30M |
Cash Flow | |||||
| Free Cash Flow | 12.33M | 9.26M | 3.79M | -9.04M | 14.80M |
| Operating Cash Flow | 14.27M | 11.22M | 7.86M | -1.80M | 19.70M |
| Investing Cash Flow | -23.09M | 24.21M | 6.65M | -5.57M | -1.20M |
| Financing Cash Flow | -39.10M | -3.93M | -6.74M | -13.39M | 5.10M |
High Arctic Energy Services Technical Analysis
Neutral
0.86
Price Trends
0.83
Positive
0.92
Negative
1.03
Negative
Market Momentum
0.01
Negative
53.26
Neutral
70.09
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HWO, the sentiment is Neutral. The current price of 0.86 is above the 20-day moving average (MA) of 0.84, above the 50-day MA of 0.83, and below the 200-day MA of 1.03, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 53.26 is Neutral, neither overbought nor oversold. The STOCH value of 70.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:HWO.
High Arctic Energy Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$415.56M | 6.66 | 11.38% | 3.61% | 11.02% | 102.23% | |
75 Outperform | C$960.31M | 10.38 | 19.44% | 3.72% | 2.15% | -5.97% | |
74 Outperform | C$191.12M | 6.12 | 16.11% | ― | 18.29% | -94.32% | |
69 Neutral | C$307.48M | 16.91 | 3.00% | ― | -5.50% | -88.55% | |
66 Neutral | C$321.02M | 151.92 | -3.90% | ― | -5.98% | -121.37% | |
62 Neutral | C$10.92M | 0.43 | -3.83% | 418.60% | -86.21% | ― | |
52 Neutral | C$2.91B | -1.09 | -3.26% | 6.12% | 5.32% | -43.41% |
* Energy Sector Average
Performance Comparison
TSE:HWO
High Arctic Energy Services
0.86
-1.95
-69.38%
TSE:TCW
Trican Well Service
5.38
0.89
19.80%
TSE:TOT
Total Energy Services
11.09
2.19
24.61%
TSE:STEP
STEP Energy Services
4.42
0.45
11.34%
TSE:SHLE
Source Energy Services Ltd
14.11
1.52
12.07%
TSE:CFW
Calfrac Well Services
3.58
-0.80
-18.26%
High Arctic Energy Services Corporate Events
Executive/Board ChangesShareholder Meetings
High Arctic Energy Services Announces AGM Results and New Incentive Plan
Neutral
Jun 21, 2025
High Arctic Energy Services announced the results of its annual general and special meeting, where all proposed matters were approved by shareholders. The meeting included the election of four directors and the approval of a new omnibus equity incentive plan, replacing existing plans. Additionally, MNP LLP was appointed as the auditors of the corporation.
Business Operations and StrategyFinancial Disclosures
High Arctic Energy Services Reports Q1 2025 Financial Results Amid Strategic Growth Plans
Neutral
May 13, 2025
High Arctic Energy Services reported a 22% decrease in revenue for the first quarter of 2025 compared to the same period in 2024, despite achieving a higher operating margin percentage. The company has maintained operational excellence and safety, reduced administrative expenses significantly, and is well-positioned to capitalize on increased gas well completion rates. Strategic objectives for 2025 include focusing on safety, managing costs, and pursuing accretive acquisitions to enhance shareholder value.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.