# High Arctic Energy (HWO.TO)



## TomB19 (Sep 24, 2015)

Why is this stock performing so well when oil is scraping bottom? It's barely down 20% from mid 2014 highs while other oil stocks have plummeted.

What sorcery is this?


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## doctrine (Sep 30, 2011)

I've owned shares in this for years, one of my biggest positions. Most of their revenue comes from Papal New Guinea, where they use special heli-portable rigs to go where no one else can and are signed to multi-year contracts. Their drilling supports PNG's operating LNG plants which are still being expanded. Pacific nat gas is exposed to much higher Asia nat gas prices. Here's the best part - they have no debt, in fact usually have 10-15% of market cap in net cash, and fund their ongoing capital expenditures and dividend out of net earnings. When they bought two new rigs a year and a half ago, they did a $50M share issue rather than borrow - back in the 2000's, this company got into trouble with too much debt and had to recapitalize...they learned their lesson early, which is definitely paying off now. HWO, as far as I know, is the top or one of the top performing oil service companies in Canada by a mile in the last year. Even so, I believe it almost hit $5.60 in 2014 so it's down about 30% from the high. There's a non-operating shareholder who owns a big chunk of stock, I believe 10-15M shares, from the recapitalization back in 2007-8, who was selling at $5.50 and holding the stock down. Probably a bit of a long term cap on the stock until he's out, or if they happen to be taken out. Definitely a great buy when it sells off, which happens all the time, hit $3.30 in Sep.


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## TomB19 (Sep 24, 2015)

Thanks!


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## thepitchedlink (Feb 17, 2014)

HHmmmm...strikes me as ticking away happily in PNG, making $, if any LNG projects happen here at home they can be part of that...if not, just keep going in PNG doing what not may others can......interesting


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## AltaRed (Jun 8, 2009)

thepitchedlink said:


> HHmmmm...strikes me as ticking away happily in PNG, making $, *if any LNG projects happen here at home *they can be part of that...if not, just keep going in PNG doing what not may others can......interesting


Off-topic but thought I'd comment on the part I've bolded. The reason LNG projects work in Papua New Guinea and not here is two fold: 1) The gas supply is only worth what it costs to produce in PNG (no local market in PNG - hence worthless), and 2) much closer to Korean and Japanese markets (less transportation cost and less loss due to vapourization/refrigeration). Virtually impossible for Canada to compete with that.


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## gibor365 (Apr 1, 2011)

HWO dropped more than 5% in the afternoon ....Couldn't find any news...


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## gibor365 (Apr 1, 2011)

Dropped today more than 7% ...again, couldn't find any news...


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## AltaRed (Jun 8, 2009)

Look at the 3 month or one year chart. That will tell you why.... way too fast of a recovery from Feb -Mar depths. It got way ahead of itself. Profit taking from those that bottom feed.....half the CMFers I think playing in commodities


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## hollyhunter (Mar 10, 2016)

HWO.TO has an ongoing P/E of 8.33, which indicates that it is highly undervalued. Bullish technical indication.


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## gibor365 (Apr 1, 2011)

Down 6% today , however AH very good 1st Q report got released. 

http://www.marketwired.com/press-re...016-first-quarter-results-tsx-hwo-2124898.htm


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## doctrine (Sep 30, 2011)

I like HWO, but you have to start pricing in big revenue drops when their 2 year fixed price contracts run out over the next 12-18 months. It is still very impressive that they maintain a net cash position but I don't think it reaches a crazy multiple.


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## gibor365 (Apr 1, 2011)

True, but still a very impressive report comparing to 2015's


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## hollyhunter (Mar 10, 2016)

HWO.TO has been showing support at 3.44 and resistance at 4.10. Technicals are showing great signs of upside potential.


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## thepitchedlinkagain (Jul 4, 2016)

bit of a drop here in the last while...anyone pay it more attention??


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## leeder (Jan 28, 2012)

Very healthy balance sheet. The drop is likely due to the uncertainty with their contracts. HWO has extended a service contract for Rig 104 to October 31. However, per their press release: 

"HWO remains in discussions with its customer for renewals of its contracts for Rigs 103 and 104. Consistent with steps being undertaken throughout the global oilfield services industry during the current downturn in the market, the Corporation's customer has indicated that they will canvas the market, which is expected to result in competitive bids being received for these contracts. Due to the current weakness in the global oilfield services industry, High Arctic anticipates material price concessions will be made for these contracts which would be partially offset by reduced operating costs."

Either HWO will lose the customer or it will sign an unfavorable contract as a result of the industry weakness.

That said, I think this stock price drop is an overreaction. I initiated a small position at $3.70 in my TFSA; I might add to it if I see it dip further.


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## gibor365 (Apr 1, 2011)

What's going on with HWO?! Stock down 5% today on news below


> * High Arctic announces executive resignation and appointment of new director
> * High Arctic Energy Services Inc - in conjunction with his resignation Mr. Alford has also stepped down from High Arctic's board of directors
> * High Arctic Energy Services Inc - Michael Binnion, chairman of board, will temporarily assume his duties
> * High Arctic Energy Services - special committee of board is leading search for a permanent president and CEO
> * High Arctic Energy Services Inc - has appointed Jim Hodgson to board and audit committee


Anybody buying dip/selling news?


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## thepitchedlinkagain (Jul 4, 2016)

I'd like to know what is going on as well.....This is where I bought in last time...


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## SixesAndSevens (Dec 4, 2009)

anyone know what is going on with High Arctic?
all I know is there was an election and the new president wants to stop export of LNG.
is that the reason or something else?


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