• High Arctic Energy (HWO) has successfully extended its current credit facility with HSBC for another two years
  • The facility now matures on August 31, 2023 and stipulates the company must maintain a funded debt to EBITDA ratio of between one and three
  • The company hopes the extension and increased flexibility terms will provide sufficient liquidity when combined with its recent $33.5 million cash balance
  • Thus far the company has drawn around $10 million from the facility, with $35 million still available
  • High Arctic Energy (HWO) remains unchanged and is trading at 68 cents per share

High Arctic Energy (HWO) has successfully extended its current credit facility with HSBC for another two years.

The facility now matures on August 31, 2023 and stipulates the company must maintain a funded debt to EBITDA ratio of between one and three.

The company hopes term extension and increased flexibility will provide sufficient liquidity when combined with its recent $33.5 million cash balance. Thus far the company has drawn around $10 million from the facility, with $35 million still available.

Chris Ames, CFO of High Arctic said the extension demonstrates the lenders’ confidence in the company and its business model.

 “Ongoing availability of the credit facility and disciplined cost control are cornerstones of our goal to take advantage of business opportunities as we emerge from the current market conditions. We continue to exercise capital discipline while pursuing our strategy to increase value for our shareholders,” he added.

Turning to its operations, High Arctic noted a recent announcement by the Prime Minister of Papua New Guinea, which outlined the Government’s plans to get the region’s P’nyang gas project off the ground.

As High Arctic operates in the region and provides drilling and well completion equipment to the oil and gas industry, any movement on the country’s long-stalled project could spell good news for the company.

Meanwhile in the US, the company has mothballed its Colorado and North Dakota operations following an internal review of the regional market. However, High Arctic is continuing to monitor the market for signs of improvement that could see operations resume.

High Arctic Energy (HWO) remains unchanged and is trading at 68 cents per share at 1:32pm EDT.

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