High Arctic Q2 Revenue Up 23% on Duvernay Drilling Demand

High Arctic Energy Services (TSX: HWO) reported second-quarter revenue of $2.8 million, up 23% from a year earlier, on stronger drilling and completion work for Duvernay wells near the company's Red Deer operations in central Alberta.

Revenue for the six months through June 30 reached $5.4 million, up 20%, the company said in results released Aug. 7. The oilfield services operating margin slipped to 46.2% in Q2 from 49.1% a year earlier, a decline High Arctic attributed to heavier use of third-party rental equipment to meet customer demand, plus repairs and maintenance costs booked in the first quarter. The same items weighed on the six-month margin.

High Arctic also recorded a $340,000 gain in the first quarter on equipment sold through a rent-to-own agreement.

Lonn Bate, interim chief executive, said the Duvernay trend should carry into the third quarter. "Our current service offerings and facility locations position us to provide our customers with the assets they need while allowing us to maintain an exceptional level of customer service," Bate said.

Equipment deliveries were weighted to the first half to line up with customer well planning, so capital spending in the second half of 2026 is expected to be significantly lower, the company said. In the Western Canadian Sedimentary Basin, rental demand in central Alberta has held up. Customers are accelerating spending to drill and complete more Duvernay wells, work that sits close to High Arctic's main operations centre.

The larger swing sits in the equity portfolio. High Arctic holds a 42% non-operating interest in Team Snubbing, the Alaska workover and snubbing operator that bought its assets from High Arctic in 2022. Team Snubbing posted record net income for the quarter, topping any prior second-quarter result since that transaction, and High Arctic's share came to $108,000 against a $348,000 loss a year earlier.

Team Snubbing revenue rose 38% to $8.1 million in Q2 and 52% to $21.3 million for the half. The gains trace to steady well workover demand on the North Slope and to plug and abandonment work in southern Alaska that concluded early in the quarter, the company reported. The stronger results let Team Snubbing make meaningful repayments to its primary lender, cutting debt and improving working capital.

Canadian activity ran flat against 2025, held back by persistently low AECO natural gas prices. Delayed gas well completions across the Western Canadian Sedimentary Basin remain a challenge, and High Arctic's own rental business faces the same pressure even with the Duvernay buffer.

Over a longer horizon, the company cited a batch of pipeline and export projects as supportive of demand: the West Coast Oil Pipeline from Alberta to the B.C. coast, the Northern Shield Energy Corridor, the U.S.-approved Bridger Pipeline Expansion, the Trans Mountain expansion completed in 2024 and the ramp-up of west coast LNG exports that began in 2025. High Arctic described the egress buildout as part of a federal mandate for Canada to become a global energy superpower.

Revenue from the company's industrial property in Clairmont, Alberta, was $124,000 in Q2, up from $98,000 a year earlier, helped by inflation escalators in the lease.

High Arctic expects Team Snubbing to keep building customer relationships in Alaska and end the year in a favorable position with three rig packages marketed and labour contract opportunities, the company said.