all about the outlookA few highlights. Pricing improvements in Canada !; compare that to say Essential Energy.
High Arctic anticipates continuous improvement in profitability throughout 2022.
Improved fleet utilization in Canada, combined with cost inflation, has led to improvements in pricing, as seen in the rise of our hourly revenue during Q4-2021. This pricing trend is continuing in Q1-2022, with further increases being agreed with major customers.
Papua New Guinea continues to be key to High Arctic’s long-term business strategy due to the significant LNG investments made by large oil and gas companies in the country and high barriers for entry due to the technical expertise required to operate the heli-portable drilling rigs in remote locations. With Rig 115 operations recently restarting, management is optimistic 2022 will be the start of an upward trend in revenue growth for High Arctic in PNG.
High Arctic anticipates further investments in LNG infrastructure in PNG in the coming years. The Shell LNG market update published in February 2022 highlighted a large and growing supply deficit through 2040 and the need for significant new project investment for supply to meet demand. The PNG-LNG project, commissioned in 2014, has demonstrably de-risked PNG as a source of world-class, low-cost gas supply in a location well positioned for the Asian market. LNG is ideal to both meet demand growth and deliver long-term climate benefits by reducing coal consumption in Asia. The Papua LNG project is underway again with personnel recently remobilised into PNG with indications they are progressing work towards a project FID in 2023. On February 22, 2022, the PNG government and PNG-LNG partners announced the signing of the P’nyang Gas Agreement. The development of P’nyang has been seen as a possible catalyst to expand the existing LNG plant and these two projects alone are anticipated to more than double LNG supply from the country. With Arran Energy announcing intention to make an FID for its Stanley Gas Condensate Development early this year, the stage is set for a meaningful near term ramp up of activity. High Arctic remains exceptionally well positioned to benefi