High Arctic Announces Reorganization to Create Two Energy Services Companies, Return of Capital to Shareholders, and Annual General and Special Meeting of Shareholders

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW

CALGARY, Alberta, May 11, 2024 (GLOBE NEWSWIRE) -- High Arctic Energy Services Inc. (TSX: HWO) ("High Arctic" or the "Corporation") is pleased to announce that its Board of Directors (“Board”) has unanimously approved the reorganization of High Arctic to separate the Corporation's North American and Papua New Guinea ("PNG") businesses, by way of a court-approved plan of arrangement (the "Arrangement"), as well as a distribution of surplus cash to shareholders by way of a return of capital of up to $38.2 million (up to $0.76 per common share) of High Arctic (the "Return of Capital"). The Arrangement will transfer High Arctic's PNG business to a separate, dedicated, and independent, publicly traded company named "High Arctic Overseas Holdings Corp." ("SpinCo"), while High Arctic will continue to own and operate the Corporation's existing North American Business. Each of the two companies will have its own management and operational teams and separate Board of Directors.

Under the proposed Arrangement, each shareholder of High Arctic ("Shareholder") will receive one-quarter of one (1/4) common share of SpinCo ("SpinCo Common Share") and one-quarter of one (1/4) common share of post-Arrangement High Arctic for each common share of High Arctic held. The Arrangement, the Return of Capital, and other resolutions related to the reorganization, as well as annual meeting matters, will be put to the Shareholders for approval at an annual general and special meeting of shareholders of the Corporation to be held in Calgary, Alberta on June 17, 2024 (the "Meeting"). As a result of the Arrangement, each Shareholder will continue to own its pro rata portion of both SpinCo and post-Arrangement High Arctic.

Strategic Rationale

High Arctic’s Board and management are of the view that the Corporation has historically been unable to ‎derive appropriate value from the market that represents the sum of the parts. The Corporation has also found a lack of ‎synergy between the businesses in PNG and Canada. In separating the PNG business from the ‎Corporation, High Arctic’s Board and management believe value can be created for the Shareholders. For ‎the holders of SpinCo Common Shares, separation provides the opportunity for SpinCo to consider ‎transactions with a wider group of PNG focused companies, and greater flexibility to relocate in the future to a ‎market that better understands PNG and is likely to ascribe greater value to SpinCo. For the holders of post-Arrangement ‎High Arctic common shares, the transaction opens-up opportunities for High Arctic to participate in Canadian ‎M&A activity where the PNG business may have been perceived as an impediment to accretive transactions.‎