High Arctic Swings to Profit on Cost Cuts and Alaskan Success

CALGARY, Alberta – March 31, 2026 – High Arctic Energy Services Inc. (TSX: HWO) has posted a significant financial turnaround, reporting a net profit for 2025 after a substantial loss the previous year. The Calgary-based company's results underscore a successful strategy focused on aggressive cost management, strong performance in its core Canadian rentals business, and a pivotal contribution from its equity investment in Team Snubbing's Alaskan operations.

For the fiscal year ending December 31, 2025, High Arctic recorded a net income from continuing operations of $356,000. This marks a dramatic reversal from the $2.1 million net loss reported in 2024. The company's Adjusted EBITDA, a key measure of operational profitability, surged by 90% to reach $2.0 million for the year. This progress was achieved despite what the company described as a "challenging Western Canada oil and gas environment" marked by volatile commodity prices.

“2025 was a year of meaningful financial and operational progress for both High Arctic and Team Snubbing,” commented Lonn Bate, Interim Chief Executive Officer. “Although we are keenly aware of the near‑term uncertainty that exists in the current environment, High Arctic remains optimistic for 2026.”

A Disciplined Financial Turnaround

The foundation of High Arctic's return to profitability was a rigorous focus on internal efficiency. General and administrative expenses were slashed by $1.86 million, a 34% reduction compared to the prior year. This cost-cutting discipline, described as right-sizing corporate functions for the existing business, provided a crucial boost to the bottom line while revenue from continuing operations saw a modest increase to $10.6 million.

This financial prudence fortified the company’s balance sheet. High Arctic ended the year with a healthy working capital position of $3.6 million, including $3.3 million in cash. The company further enhanced its financial flexibility during the fourth quarter by securing a new credit facility, providing up to $3.0 million in additional liquidity.

The annual results paint a picture of a company regaining its footing quarter by quarter. While the fourth quarter still posted a net loss of $160,000, it was a vast improvement over the $715,000 loss in the same period of 2024, signaling growing momentum heading into the new year.

The Alaskan Advantage Pays Off

A significant driver of the positive results was the performance of Team Snubbing, a well-control services provider in which High Arctic holds a 42% equity interest. High Arctic’s share of Team Snubbing’s earnings swung from a $690,000 loss in 2024 to an income of $882,000 in 2025. This income was a major contributor to High Arctic’s overall net profitability.

The turnaround was largely attributed to Team Snubbing’s successful operations on the Alaskan North Slope. According to Bate, the deployment of an additional snubbing package in Alaska during the year validated the company's strategic decision to enter that market. This move has provided Team Snubbing with "increased scale and a solid platform for future profitable growth."

While High Arctic’s results are not directly consolidated due to its minority stake, the strong performance of the investment underscores the success of its diversified strategy and its ability to identify and capitalize on opportunities beyond its core Canadian operations.

Fortifying the Core in Canada

High Arctic’s primary Canadian rentals segment, which provides pressure control and other high-pressure stimulation equipment, also demonstrated resilience and growth. The segment's revenue for the year was $10.15 million, with an improved oilfield services operating margin of 48.9%.

The company noted an acceleration in customer activity during the second half of 2025, particularly in the Duvernay formation, which is conveniently located near High Arctic's main operations center in Red Deer. This localized demand helped offset a slower first half of the year.

In line with its strategic objectives, the company invested $1.2 million in capital expenditures, with the majority focused on growing its high-margin rental equipment business. This selective investment strategy aims to enhance its service offerings to meet increasing customer demand.

Underscoring its operational excellence, High Arctic also announced it had completed 2025 without any recordable incidents, marking six consecutive calendar years with a zero Total Recordable Incident Frequency Rate (TRIF). This achievement highlights a relentless focus on safety, a critical factor for success in the high-stakes energy services industry.

Navigating an Uncertain Horizon

Looking ahead to 2026, High Arctic's management expressed cautious optimism. The company reports that the majority of its key customers have increased their spending plans for the coming year, and its teams are busy executing on current work while preparing for an anticipated increase in activity.

The company is also positioned to benefit from broader industry trends. The completion of the Trans Mountain pipeline expansion and the ramp-up of West Coast LNG exports are seen as positive long-term developments that will support improved fundamentals for the entire upstream energy services sector in Canada.

However, the company remains pragmatic about the challenges ahead, acknowledging that geopolitical conflicts, economic uncertainty, and volatile commodity prices continue to create a difficult environment. High Arctic's strategic priorities for 2026 remain consistent with the formula that proved successful in 2025: a relentless focus on safety, selective investment in its core business, active cost management, and a continued search for accretive acquisitions to drive shareholder value.