High Arctic Energy Services Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 12, 2023

There are 10 speakers on the call.

Operator

Good afternoon, ladies and gentlemen, and welcome to the High Arctic Energy Services 2023 Q1 Results Conference Call. I would now like to turn the meeting over to High Arctic's Chief Executive Officer, Mike McGuire. Please go ahead, Mr. McGuire.

Speaker 1

Thank you, Paul, and good afternoon to everyone. Welcome to HyOptics' Q1 conference call. Today, I will be providing an update on the press release we issued yesterday, May 11. Following my remarks, I will hand the call over to our Chief I will now turn the call over to Lance Mierendorf. Lance will be discussing our financial performance for the Q1 of 2023.

Speaker 1

As usual, after our formal comments, we will open the call to answer any questions that you may have. Before we begin though, I'd like to remind you that certain information presented today may include forward looking statements. Such Statements reflect HyArctic's current expectations, estimates, projections and assumptions. These forward looking statements are not guarantees of future performance and they are subject to certain risks, which could cause actual performance Please take a look at our management's discussion and analysis and the 2022 annual information form, both of which Following the collection last quarter of the final $28,000,000 payment and High Arctic placed at a strategic crossroads. Having liquidated our underperforming well servicing business, The company remains focused on the positive opportunities in Papua New Guinea.

Speaker 1

Reinvestment in Canada remains competitive in our area of expertise And we believe that further Canadian service sector consolidation is needed to balance supply with customer demand over the business cycle. Yesterday, the corporation announced an intention to make a $38,200,000 cash return of capital to shareholders and an intention to reorganize the legal entity structure. The recommendation to reorganize is expected to include the following elements. 1, a spin off of the international business to shareholders as a private company. 2, maintaining the Canadian publicly listed company Focused on growing the Canadian business and utilizing the available $130,000,000 non capital tax loss carry forwards And 3, rightsizing the general and administrative infrastructure to align with the new corporate Turning to operations, during the Q1, Rig 103 was placed onto the contract operational rate and commenced drilling operations during March.

Speaker 1

Drilling of the first well has now been completed And we are moving to the next location. My Arctic anticipates Rig 103 will operate consistently through the term of the contract, which runs through to July 2025. As well as the return to full drilling operations with Rig 103, We have steadily increased deployment of rental assets month on month through the quarter. While the deferral of other projects pushed The redeployment of rig 115 out from this year, there is a growing catalog of projects under discussion for potential rig deployment in 2024 and beyond. Our optimism for the future drilling in PNG Is underpinned by the advancement of the Total Energy's led Papua LNG project, which announced last week up State owned Kumul Petroleum is advancing appraisal of other gas discoveries in PNG and have recently stated their desire to contribute to growing domestic energy needs and additional LNG export processing facilities.

Speaker 1

These LNG projects and other large scale mining and infrastructure projects moving through the pipeline will require tens of thousands of new workers and more skilled and supervisory personnel that do not exist in P and G today. Through PIMS, P&G Industry Manpower Solutions, we have added the provision of recognized safety training, Competency verification and equipment licensing services. We have long provided these training and competency solutions in house. Hinz also taps into our large pool of talent to provide manpower, skilled and semi skilled labor, Trades qualified personnel and professionals in P&G. We are excited to be playing a significant role in preparing PNG citizens to be job ready.

Speaker 1

In Canada, our operations were marginally impacted by severe cold weather events, However, delivered a result consistent with our expectations. Our pressure control focused rentals fielding inquiries from an increasingly broad range of customers and we took optimistic decision to invest in additional blowout preventers to augment our rental offerings. Team Snubbing is Canada's largest snubbing provider and we have a 42% They have almost tripled their active Canadian snubbing activity since the transaction with High Arctic last July. Pricing, team has a 50% interest in an international partnership marketed under the name Team Snubbing International. This partnership commenced their first services this week under a contract to a large U.

Speaker 1

S. Independent in Alaska, where 2 snubbing units have now been domiciled. I would now like to pass the call over to Lance to discuss key financial highlights from the quarter in more detail.

Speaker 2

Good afternoon to those During the Q1, High Arctic mobilized a significant amount of equipment and personnel to support this Oilfield Service operating margins were higher in Q1 2020 18.5 percent in Q1 of 2022. The increase is primarily related to the Corporation's shift to higher margin Businesses in Canada after the sales transactions in Q3 2022, as well as the G and A costs were $2,100,000 in Q1, lower than the 2.4 21.7 percent of revenue, which we expect will decrease and trend lower as we move throughout 2023 as higher revenues are Adjusted EBITDA was $1,300,000 in Q1 or 10 high Arctic during the quarter, of course, was our drilling segment. Drilling services activity accounted for $6,300,000 of compared to $9,600,000 in Q1 of 2022 when RIG115 was out of the way. Q1, 'twenty three, Operating margins were 19% in line with the 21.9 percent. Our Ancillary Services Segment spreads across both P and G and Canada continues to be our highest margin operating margin generator.

Speaker 2

We operating margin on $3,200,000 revenues in Q1 compared to 63% margin or on $4,700,000 of revenue in Q1 of 2022. It expects that Q1 margins and the activity levels that delivered We expect to continue with modest capital spending in 2020, mostly directed at maintaining and growing our rental fleet We ended the quarter with $46,700,000 of Interest income partially funded our monthly $0.05 a share dividend, while we evaluate the best use of the excess funds Following receipt of the $28,000,000 final payment, cash payment for the Concorde well servicing sale that took place in January. Working capital position remained

Speaker 1

Thank you, Lance. I'm excited about the reorganization of the corporation, starting with the tax Efficient return of cash to shareholders. The proposed spin off of the Papua New Guinean business will allow senior management to concentrate where we have had the most success in the past. The remaining publicly listed company with Canadian assets and tax creates an attractive vehicle for future growth and transactions. Our P and G business has been consistently undervalued by the public market and we believe that the current market conditions make it appropriate to take steps to unlock value.

Speaker 1

We intend to put the recommendation to shareholder vote before the end of September. I believe our customers and employees in both P&G and Canada We'll appreciate and benefit from a locally managed business. I'll now turn the conference back over to Paul, the operator, we will open the line for questions.

Operator

Thank you. Yes, we will now take questions from the telephone lines. Please clearly state your name to register your question. We now have a first question. And the first question is from Joseph Schachter.

Operator

Please go ahead. Your line is open.

Speaker 3

Thank you very much. Thanks, Mike and Lance, for taking my questions. Am I to assume that if this is approved at the shareholder meeting in September, That we're going to be getting, number 1, a very significant dividend, dollars 0.78 with interest, it may be more. And then are we going to get 2 pieces of public paper listed on Canadian exchanges or will the Papua New Guinea company no longer be listed in Canada?

Speaker 1

Thanks, Joseph. Glad to take your questions. I can confirm that In September, our intent will be to put to vote the return of Capital and the spin off of the P and G business or more specifically our international business, Which is focused on P and G. The manner of that is not finalized at this time. We are working through the most Tax efficient and appropriate mechanism to deliver upon it and once we have concluded those investigations And prepared the documentation, we will issue them to shareholders so that they can contemplate those ahead of the vote.

Speaker 3

Just adding to it, if you're still looking at options, are you looking at Keeping of having, let's say, a venture relationship for the Papua New Guinea as well as an Aussie public listing And does Papua New Guinea have a stock exchange as well?

Speaker 1

Good questions. I'm going to answer them in reverse order. Papua New Guinea does have a stock exchange. It's the POMSOX, POMSOX, Port Moresby Stock Exchange. At this time, we do not we have any intention of listing any entity On any other stock exchange.

Speaker 3

Okay, good. Now, if the upside that we We're all optimistic about 4 P and G occurs. Will you need to have a certain amount of capital in the spin off company Of some magnitude to provide for upgrading of equipment, paying bills, While there's a ramp up in putting more equipment to work?

Speaker 1

Really good question. The our anticipation of return to work in Papua New Guinea continues to be slow We're anticipating that we'll operate this year with Rig 103, but we're not anticipating returning any additional rigs to work During 2023. In 2024, we're optimistic about the return to work of 1 or possibly more rigs in Papua The rigs that we are contemplating that may be called to return to service have been maintained in very good condition While they've been idle and we do not anticipate any substantive refurbishment costs to return them to service. That said, those projects may require specific upgrades or modifications to suit customer Program intentions, drilling program intentions and it would be our intention to align our Pricing to recoup any such modification cost at the time of mobilization. This should mean that we do not need to retain a substantive amount of access to capital to return the rigs to work.

Speaker 1

However, we continue to explore our options for access to capital, both sources of capital and debt To ensure that the company will have an adequate line of to liquidity.

Speaker 3

Okay. Well, I look forward to seeing the documents when it comes out and hopefully Canadians will be able to participate on a Canadian exchange in the Growth potential of the P and G in the years ahead. That's it for me. Thanks very much, Mike.

Speaker 1

Thanks for your comments and questions, Joseph.

Operator

Thank you. The next question is from

Speaker 4

Franco Jankovic.

Operator

Please go ahead. Your line is open.

Speaker 4

Good afternoon, gentlemen. I think Joseph kind of asked some of the stuff I was going to Oscar Ram, but I'm I was sort of assuming this being a private company that there wouldn't be a listing. But I was curious if you were aware

Speaker 5

of whether there was any possible

Speaker 4

liquidity avenues Available like I know in Canada, we used to have an over the counter listing where companies didn't have the full Public status, but some of these things could still be traded and not there.

Speaker 1

Thank you, Franco. Appreciate your question. At this point in time, we have not got we're not able to provide any guidance on how we may Arrive at and the spin off or possible avenues of liquidity. We may however have Further information that we can include in the shareholder circular that will be distributed once we are ready to call for a vote.

Speaker 4

Okay. And then, I guess, my other question was the international operations, which sort of looks like the old high Arctic to me, Which was a good cash flow machine and dividends to shareholders. Could you see that sort of Intent with the company there that even if it's private, it's sort of a income generating Vehicle for investors?

Speaker 1

I think, Franco, the thing that I can do to try to address that question To reflect on the performance of the Papua New Guinean operation back in the years through say 2010 to 2017, 2018, where it can generate a substantial amount of free cash flow and that free cash flow Essentially, financed our share buybacks and dividends in Canada. I would anticipate that If we are able to realize the level of activity that we've seen in the past, which we do expect, Management does expect in the latter years of this decade that as these projects move forward, we expect that we could be as busy as Busier than we've ever been before and under such circumstances, I'd expect that shareholders could expect A reasonable return on their investment.

Speaker 6

Okay.

Speaker 4

Great. Thanks very much. I think that's all for me and good luck going forward. Thanks.

Speaker 1

Thank you, Branko, and to you too.

Operator

Thank you. The next question is from

Speaker 5

Dave Plumb.

Operator

Please go ahead. Your line is open.

Speaker 5

I think Franco just sort of asked my question. I'm not that Sophisticated investor, but if I end up with shares in a private company based on Papua New Guinea,

Speaker 4

How do I get rid

Speaker 5

of them if I don't want them?

Speaker 1

Yes, it's a very straightforward question you've asked there Dave. And at the moment, I cannot give you a direct answer to that question. If there is a buyer and there is a seller, a transaction can be made. As far as an intermediary to potentially facilitate such transaction, That is something I'm not able to answer at this time.

Speaker 5

Okay. And then we'll move on to that to a couple of other questions. Yesterday at the annual meeting, you mentioned 8 or 9 large bore wells being drilled. What would be the revenue from each one of those wells?

Speaker 1

That would be speculating, I guess. My answer to that question is that I haven't speculated on that internally, let alone to speculate on it Certainly. But I can inform you that the time taken to drill the wells at hides, Which we expect to be the Antelope Wells will be designed in a similar manner, took on average between 60 5 to 100 days. And if you look at our drilling services Reporting, you can probably make some form of estimate then of what that might look at as total revenue.

Speaker 5

Okay. And I think I have another question, but I can't remember it at the moment. So I'll pass the line over to somebody else.

Speaker 1

I'm sure that Paul will

Speaker 7

be happy to return to

Speaker 1

you if you think of your question again, Dave.

Speaker 5

Yes. Thank you.

Operator

Yes, no problem at all. Thank you very much. Great. So we'll get to the next question. The next question is

Speaker 6

from Asensra, Private Investor.

Operator

Please go ahead. Your line is open.

Speaker 6

Hi, guys. My question the first question is will current dividend remain in place?

Speaker 1

The current dividend, we've not made any decision to cancel that at this point in time. So I would say our expectation is current dividend will continue Until such time as the directors deem it, it is not appropriate to continue. That might be something that they contemplate when issuing The information memorandum to shareholders for the purpose of vote.

Speaker 6

Okay. And with regard to the Cyrus plan, Because I'm not sure if there's any board members available, but otherwise maybe you can answer or maybe one of them. As it goes private, Would I plan to buy as much of the PNG shares as possible or would I want to uphold their 45%?

Speaker 1

There are no directors here with us at the moment. And I'm At this time, unable to comment as to the intentions of any particular directors or shareholders. However, That may be revealed as part of the documentation issued when Calling for the special meeting to have a vote on the intention to proceed.

Speaker 6

Okay. Maybe you can answer the technical question then. Is there a maximum Percentage threshold size can buy shares on the open market before they need to make an offer.

Speaker 1

Before they need to make an offer? Sorry.

Speaker 6

An offer, yes, is that a percentage? Yes, exactly. I'll elaborate on it. Well, basically, they're now only 45%. Let's say, they keep buying.

Speaker 6

Is there a certain threshold that they can pass before they need to make an offer to everyone?

Speaker 1

Right, for compulsory acquisition?

Speaker 6

Jackie?

Speaker 1

I'm going to hand over to Lance, because I don't know the answer to that.

Speaker 2

Well, if I just take a step back, Our largest shareholder has had its ownership percentage retained or maintained for a significant period of time and they're not Right now, changing that ownership structure. So they're not participating. If anything, it's left up to the company participate as with an NCIB that we have that even with our repurchases, it Not result in them being over 50%. Over 50% is a threshold which will require them It's a step change in the investment in a public company. So it will require them, it will be a change control of High Arctic.

Speaker 2

So that is certainly not contemplated, hasn't been contemplated or discussed at all in the past. So I don't see That being a trigger between now and when we put forth this information to shareholders That relates to this transaction we're talking about.

Speaker 6

Okay. And if we can stay with you then, Lance. If you look at the current quarter, it's about €8,000,000 for PNG. This is with the rig only starting end of the quarter. So what would be an average quarter Compared to the $8,000,000 with the rig running full time in the quarter.

Speaker 2

Yes, I think you're right, it started at The latter part, we were building it up building up activity in PNG leading up to that commencement of full drilling operations. So there is Revenue generated throughout the Q1 related to Rig 103. I could see that stepping up at full activity. You're going to be upwards of US dollars, I think, dollars 10,000,000 top line revenue for a quarter. So I anticipate our revenue to be up between 13 $15,000,000 up from its what's now $9,500,000 consolidated revenue, We could be up to $14,500,000 of revenue, Canadian dollars consolidated for quarters going forward.

Speaker 6

Okay. That makes sense. And then the last question because I don't always I'm Dutch and I don't always get the circulars. So with regard to international people And with everything going on and ultimately the transfer of, let's say, the private company, how will that work? Or will you come back to that?

Speaker 1

So Art, Mike here. I'm in the same boat as you. I'm not Dutch, I'm Australian. And so I'm not really well.

Speaker 6

You got a long time, that's good, right, Mike?

Speaker 1

Yes, yes. Some of my best friends are people of Dutch descent. So yes, I'm in the same boat as you and I'd be keen to ensure that all of our international shareholders Have adequate time to receive the documentation to participate in the voting.

Speaker 6

Okay. Okay. Well, that's clear. Thank you for all your

Speaker 1

answers. Thanks, Aart. Appreciate your questions.

Speaker 6

Take care.

Speaker 1

You too.

Operator

Thank If you have a question. The next question is from

Speaker 7

Dave Reed, Retail Investor.

Operator

Please go ahead. Your line is open.

Speaker 7

Hi, guys, and thanks for giving us the time for the call. I think this was touched on a little bit earlier. It sounds like there's a lot of elements to this that aren't fully defined, but You must have some color from Cerus in terms of what their long term plan is. Are they hoping to make an offer to take out The minority shareholders or what is sort of the plan as we go towards? I do know you need to flesh out the details, but what's sort of the superstructure

Speaker 1

Yes, thanks Dave. Thanks for the question. I'm unable to answer on behalf of Cyrus on what their intentions Maybe and they've not indicated to me or to the Board of any intent to take out minority shareholders in any discussions we've had Related to the announcement from yesterday or in any other manner. But they are not controlled by So they will like all shareholders I believe make their own decision with regards to their voting intentions when we table the resolution To shareholders. What I would say just historically Cyrus has been a shareholder of ours for over a decade And Cyrus has twice participated in capital raisings in that period as well.

Speaker 1

They've been a long term supporter of Hyattic And they've had directors on our board for many years. I find working with the Cyrus directors to be Rewarding and also informative, but certainly I don't know what their voting intentions would be.

Speaker 7

No, I'm not surprised, but I had to ask the question nonetheless. Well, yes, I anticipated your response. In any event, just to get some sort of color and it was good to hear that they were Long term investors that was actually my next question. So let me ask in the numerous Buybacks that we've done over the last 4 or 5 well, certainly not in the last 2 years, but say in the previous 5 years, Did they tender in line or did they stick and slowly see their percentage rise?

Speaker 1

Yes, I cannot recall Cyrus Actively participating in selling their holding in NCIB in recent years, Albeit in recent years, we have not done a substantive amount of buybacks with the NCIB. We have been active. We have issued instruction. The Board of Directors do consider that instruction when they meet and we have adjusted our instructions to our bankers from time to time Based on the Board's view of value for the corporation. But yes, I'll just come back to the really part of the answer.

Speaker 1

I can't recall them participating. Their holding has slowly ticked up, not in a meaningful amount, But that bill so is due to the fact that we haven't bought back a meaningful amount of shares either.

Speaker 4

Sure. Well,

Speaker 7

I guess the elephant in the room and I'll go ahead and say it. We've shareholders have held out over the last 3 years because we know fundamentally that this is a sound business, particularly with respect to PNG. I mean, one only needs to look at The gross margin differential on a dollar of revenue and here we are going into, in your own words, a fairly substantial uptick in revenue over the next couple of years, Assured. The only thing not sure is how many rigs get activated in 2024. It appears Exceptionally opportunistic.

Speaker 7

And while I don't expect you to provide any kind of response to this because you're in a delicate position, I want it Clearly stated for the record and I'm sure Cirrus is listening that there is Definitely a view that this is exceptionally opportunistic. So I'm going to be looking very closely at what I'm provided And making decisions from that point forward. Just putting that out there in the most respectful way possible, Mike.

Speaker 1

Thanks for your comments, Dave.

Speaker 7

Fair enough. That's my comments.

Operator

Thank you. The next question is from Dave Plumb. Please go ahead. Your line is open.

Speaker 5

Okay. I remember my question. You announced the distribution of $38,200,000 in cash, right? And the market reaction basically is about $9,000,000 Do you have a reaction to that?

Speaker 1

Well, I'm pleased to see that there's a lot of Buying in our shares, a lot of appetite for buying our shares today. Over the past few weeks, there had been an investor and we don't know who they are, who has Been selling into the market and did see the price push down substantively, pleased to see the price returning back to I think there's still movement that could be more movement there, but pleased to see the price moving back in the right direction. Part of the reason that we articulated our position here is that having looked at Opportunities to deploy this cash to grow the business and to improve returns for shareholders and not coming Not being able to get to the finish line on something that made sense, we thought it was appropriate that we point out to the market that we're not going to just sit on it And in doing so, make it very clear that there's a lot of value in our business that hasn't been unlocked when you look at the Can I say that I hope that shareholders who are on the call today who were not in the blackout I did get the opportunity to take advantage of buying into high Arctic stock at very attractive prices through that period?

Speaker 1

But I do know that today the volumes are somewhere in the realm of 160,000 shares turning over and even in the selling period there that were averaging only around 35,000 shares per day and prior to that seller getting into the market and disposing of their shares, we were averaging around 15,000 shares And trading between about $1.40 $1.55 I think there's still room day for that price to appreciate given the announcement we've made as Investors look at what we've put out into the public domain and do their own calculations on value of the components of high Arctic And I'm hoping that pretty soon that I'll be able to get back in and buy some as we exit blackout here this week.

Speaker 5

Well, people would be watching you on that and I just hope it's a typical small cap lag on news.

Speaker 1

Thank you. Any other questions, Dave?

Speaker 5

No, I'm done. Thank you. Have a good weekend.

Speaker 8

All

Speaker 1

right. Thank you, Dave.

Operator

You too. Thank you. Sorry, the next question is from Luke. Please go ahead. Your line is open.

Speaker 9

Yes. Hi, guys. Can you hear me okay?

Speaker 1

Yes. Hearing you loud and clear, Luke.

Speaker 9

Perfect. Yes. Just I want to say congrats on the announcement. And obviously, you guys have been thinking long and hard about what to do with the capital. My question, I guess, is regarding I'm not a lawyer and I don't pretend to be 1, but just was wondering from a governance standpoint how HyArctic will kind of review this, whether you'll set up kind of an independent committee, whether there's a requirement for a fairness opinion.

Speaker 9

And I'll apologize in advance. I joined the call about 10 minutes late. So if you've addressed this, Just say

Speaker 5

so.

Speaker 1

No, good questions, Luke. And full disclosure, I'm not a lawyer and neither is Lance as well. We will be getting a valuation done on the Papua New Guinean business and we'll be disclosing that Part of the information memorandum when it gets distributed. As far as whether an independent committee on the Board or a It's going to be dependent upon the mechanism or mechanisms that are finally arrived on once we complete our full review here of the most Tax efficient and effective way of completing this transaction for the benefit of shareholders. The other thing I'd just like to add is It would be our intention that all shareholders are treated equally.

Speaker 9

Yes. Thanks. And just an unrelated, but follow-up question on, Let's call it the Canadian or North American operations in recognition that there's some substantial residual tax losses. What kind of has to happen in order for you guys to be able to realize on that as a Very real asset on the balance sheet.

Speaker 1

Yes, excellent question and something that we have been Doing a bit of research on and bearing in mind again, I'm not a lawyer and things too. So this is not legal advice, but My understanding here is that there are a few rules that we will need to stay on side with to ensure that we don't damage That availability of those tax losses, capital and operating tax losses. The 2 of them that stick immediately in my mind are that we need to maintain an essentially similar business, So that we can utilize those tax losses and there can't be an acquired change of control. And so we'll be keen to make sure we stay on side with those as we detail in our business plans.

Speaker 9

That's great. Thank you so much. I don't have any other questions, but just appreciate what you guys are doing and going through This transaction whatever follows in the future.

Speaker 1

Thanks for those kind words, Luke. Have a good weekend.

Operator

Thank you. The next question is from Murray. Please go ahead. Your line is open.

Speaker 8

Hey, Mike. And I think you answered the question. 1 of the gentlemen earlier, I think it was Dave, was Saying this transaction could be seen as very opportunistic for Cyrus. And I don't Understand the thought process that because in your comment and then you answered it, I'm just going to talk about it for a second. You said that all shareholders would be treated equally.

Speaker 8

So just thinking out loud here, I create SpinCo. SpinCo goes into PrivateCo. I as a shareholder get my pro rata shares of PrivateCo. Cyrus gets their pro rata shares of private co, I. E.

Speaker 8

45 So unless I'm missing something and I guess educating me if I am, private So as you anticipated today and I know you have to flush a bunch of things out, I would end up owning whatever my number is, 100,000 shares or whatever the number ends up being in private co representing the same percentage I own today In PublicCo and Cyrus would also own 45% of PrivateCo on that transaction. There's no not going through a process where Cyrus can come in and acquire 100% of the company. Each shareholder collectively Oh, it's the same percentage post transaction. Am I correct in my understanding?

Speaker 1

Yes, Murray, as you said, we still work through some of the finer details, but in essence, yes, what you've outlined is in line with What we're contemplating. We don't we're not contemplating putting something out there that would see 1 shareholder Have the ability to have preferential treatment over another.

Speaker 8

Right. Okay. That was my understanding as well. And as I understand this transaction, there's really 3 components to it. There's cash, Everybody gets their pro rata share of the cash.

Speaker 8

There's a public company listing, Which has $130,000,000 in tax pools, not capital tax pools in it. And to your point, The answer there is you cannot trigger an acquisition of control, which is different than a change in That can be a change of control. You just can't have an acquisition of control. And if you don't, you don't necessarily have to have The same line of business. If you trigger an acquisition of control, it streams those tax pools So that they can only be used in the same type of business.

Speaker 8

I know it's a nuance, but that is how CRA is going to look at it. So the 3 components again are cash, we all get pro rata, a ownership in an entity which Maybe still listed on the TSX Senior Board, the Venture Exchange may have Requirements in there that say you don't meet certain thresholds, so you get pushed from the senior to the junior board, but again that will be in the details. And the 3rd component is a piece of P&G Co. So again, everybody, every shareholder Owns the same thing today or after the transaction as they do currently, It's just in different buckets. Is that is my understanding correct on that?

Speaker 1

Thanks, Murray. I'll address I think the two points there. So yes, thank you for clarifying on the acquisition of Control and the use of Forward use of the non capital tax loss carry forwards. And on that second point, I agree that is a reasonable read of what we have announced is that essentially every shareholder We'll have what they have today, but it will be in the form of cash, listed Public Co and shares in private PNG

Speaker 8

code. Okay. Thank you. No further questions.

Speaker 1

Thank you, Murray.

Operator

Thank you. There are no further questions At this time, I will return the call back to Mr. Maguire. Please go ahead.

Speaker 1

Based on today's questions, Both the number of them and the number of people asking them and the number of people who are on the call, I can getting a lot of understanding there's Tremendous amount of interest in what we've announced, interest both from those who analyze and advise in our business and those who are shareholders of it today. I'd like to thank you for participating in today's call and for the questions that you've posed. I look forward to taking this forward and then bringing To shareholders, the information memorandum to enable us to move forward to a vote. Thank you and good week and a good weekend to all.

Operator

Thank you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.

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High Arctic Energy Services Q1 2023
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