High Arctic Energy Services Inc T.HWO

Oil Search has solid quarter

[40YardLine]

“Our developments are also regaining momentum. During the quarter, the PNG Parliament passed all remaining amendments to Acts for Papua LNG fiscal stability. Extensive assurance reviews were completed for the Pikka Unit development and the project is ready to enter front-end engineering design in early 2021.Oil Search has solid quarter (miningweekly.com)

[MiguelSanchez1]

Are we invested in oil search or HWO? The only reason they had a good quarter was they didn't spend anything. Thus HWO got no business 

[impega]

Oil Search is not their only client in PNG. Business is picking up in Western Canada. HWO is on track for a nice recovery.

[MiguelSanchez1]

Oh I agree, but this has clearly become a 2022 story for PNG side of things. Best case scenario maybe q4 2021

[AVALONSHARK]

It doesnt need to wait till Q4 2021 for their operations to restart. That announcement can come anyday now. Total's Papua LNG is also supposed to be announced in the coming months. While we might argue about how soon or late can there be updates, one thing we should agree is that the valuation is insanely cheap.  Market Cap of $ 51 mil with $33 mil in cash, 14 mil in receivables, 160

[MiguelSanchez1]

I am not selling or buying less. I simply think thesis will need to be pushed back a couple quarters. From a long term perspective, meaningless. But for 2021, nothing might happen for months here

[impega]

Perhaps the company will do share buybacks now that the price has come down. Would be prudent

[MiguelSanchez1]

considering they could max out ncib with less than 10% of cash, yeah id be profoundly disappointed if they weren't at least buying some

[MiguelSanchez1]

  You're just wrong about the drilling man. Oil search literally just said in their 2021 guidance that they're not drilling any wells in PNG in 2021. If you take a look at High arctics november presentation, this is their main customer for drilling.    

[AVALONSHARK]

"During 2019, the Corporation provided Drilling Services to two large multinational/regional customers (2018 – two) which individually accounted for greater than 10% of the Corporation’s consolidated revenue during 2019. Sales to these customers were approximately $84.3 million and $22.8 million for the year ended December 31, 2019 (2018 - $86.7 million and $23.2 million)."

[MiguelSanchez1]

"You're just wrong about the drilling man. Oil search literally just said in their 2021 guidance that they're not drilling any wells in PNG in 2021. If you take a look at High arctics november presentation, this is their main customer for drilling.  "   I never said they were the only, I said they were the main. And unless I'm way off base, they are the

[MiguelSanchez1]

I don't think we really have any disagreements here other than whether it is possible there is a return to drilling soon or in 2022. I see nothing that leads me to believe it will be soon. But this is mostly a moot point and simply allows me to buy more this year at a cheaper price

[impega]

It seems the market agrees with Miguel on this, continuing to sell it down on the Oil Search news. Might drift for a while.

[MiguelSanchez1]

honestly I'm disappointed but it'll be irrelevant 2-3 years from now. Just gives opportunity to but more lower

[MiguelSanchez1]

all that's really happened was thesis is pushed back 6-12 months imo. I was hoping for a summer or fall restart. Now I suspect 1h 2022

[AVALONSHARK]

I agree, the oil search announcement was certainly dissapointing and is the sole reason for the drop in the last 5 days. However, I am hopeful of soome positive news to come out of PNG soon wrt the Papua LNG project. The country desparately needs these projects to be kicked off. Any such news will be a net positive for HWO. Till then, accumulation is the only option. Also, I came across this

[Tradestay]

agree they did state that, but avanonshark has a point. When they stated that oil was hovering 51 dollars a barrel we are up 6 since then. Also factor in the strong movement in the underlying physical market and rollout of covid 19 vaccine. 5 million vaccine a day approximately being rolled out and that number will rise. I think they will change their strategy by mid year. That's my opinion.

[AVALONSHARK]