High Arctic Energy Services : Announces Acquisition of Tervita Corporation’s Production Services Division and Executive Retirement

High Arctic Energy Services Inc. Announces Acquisition of Tervita Corporation's Production Services Division and Executive Retirement

Calgary, Alberta August 29, 2016: High Arctic Energy Services Inc. ('High Arctic' or the 'Corporation') (TSX:HWO) is pleased to announce that it has entered into an asset purchase agreement to acquire all of the operating assets and business operations of Tervita Corporation's ('Tervita') Production Services Division (the 'PS Division') for an aggregate purchase price of $42.8 million, payable in cash (the 'Transaction').

Through this Transaction, High Arctic adds to its Canadian business operations a fleet of 68 marketed service rigs and related support equipment, a surface equipment rentals division and an engineering services division which provides solutions to assist in the management of abandonment and compliance programs. In addition, this Transaction provides High Arctic with seven new operational bases located in key basins in Alberta, five of which are owned.

Michael Binnion, High Arctic's Chairman, said 'With a 37-year history, Tervita and its predecessor, Concord Well Servicing, is one of the largest and preeminent leaders in western Canada's well servicing industry. Tervita's strong operational and safety performance has allowed it to achieve industry leading utilization with some of Canada's largest oil and gas exploration and production companies. This transaction diversifies our revenue base and provides us with immediate critical mass in the Canadian well servicing industry. We are excited about the operational synergies and future growth opportunities this broader platform provides.'

With approximately $64.0 million generated in revenue on a trailing twelve month basis, ending June 30, 2016, the PS Division adds significant growth to High Arctic's Canadian business operations and provides a platform for future growth.

Tervita's PS Division management team along with the combined team of approximately 300 experienced and trained personnel will join High Arctic and will continue to operate the business post-closing, ensuring continuity of quality service for the PS Division's customers.

STRATEGIC HIGHLIGHTS

Through this Transaction, High Arctic adds immediate growth to the Corporation's Canadian operations and is an important and measured step forward in adding diversification to its geographic business operations. With 68 marketed rigs, Tervita's PS Division operates the third largest marketed well servicing fleet in Canada (source: CAODC) and through its strong operational and safety performance has achieved industry leading utilization with some of the industry's largest exploration and production companies.

The combination of Tervita's PS Division with High Arctic's existing snubbing, N2 and rentals business in Canada will provide High Arctic a strong foundation to support future growth by leveraging off the following transaction benefits:

• Industry Leading Safety Performance - Safety is a cornerstone of High Arctic's business and the addition of the PS Division's industry leading safety performance further strengthens High Arctic's safety culture which is sought by the industry's leading exploration and production companies.
• Leverage to Production - Revenues are closely tied to production and the optimization of existing wells, which provides more stable activity levels.
• Expanded Service Offering - Ability to provide additional service solutions to High Arctic's customers.
• Geographic Coverage - The addition of seven new operating bases, five of which are owned, provides High Arctic with coverage across many of the key operating basins in Alberta and British Columbia.
• Diversification - Provides High Arctic with additional leverage to Canadian oil and gas activity and in particular long-term established heavy oil projects.

PURCHASE SUMMARY

High Arctic is acquiring the PS Division (excluding working capital) for $42.8 million. The transaction is being completed with High Arctic's existing cash and debt facility resources, with no current equity dilution to High Arctic's existing shareholders. Pro forma the transaction, High Arctic will maintain an attractive balance sheet with minimal net debt.

The Transaction is subject to customary commercial closing conditions and is expected to close on or about August 31, 2016. PillarFour Capital Inc. is acting as exclusive financial advisor to High Arctic with respect to the Transaction.

EXECUTIVE RETIREMENT

Tim Braun has informed the Corporation of his intent to retire. As a result, combined with the timing of the above acquisition, the decision was made to proceed immediately to appoint Thomas Alford as interim President and CEO. Mr. Alford brings over 35 years of experience in well servicing in Western Canada, having formerly been the President and CEO of IROC Energy Services and Bonus Resource Services Corp. Mr. Alford will remain on High Arctic's board.

Michael Binnion, Chairman of High Arctic's board of directors said 'We would like to thank Tim for his dedication and efforts in growing the drilling operations in our Papua New Guinea business over the last two years. Additionally we are excited about Tom agreeing to take on the interim President and CEO role and capitalizing on the potential growth that the Tervita transaction provides us.'

CONFERENCE CALL

High Arctic will be holding a conference call on August 29, 2016 at 2:00 p.m. MST to further discuss the transaction. To access the conference call by telephone dial:

1-866-225-0198 or 1-416-340-2218.

The conference call will be available for replay two hours after the call ends at 1-800-408-3053 and entering passcode 4945994. It will remain available until September 6, 2016. An audio recording of the call will also be available within 24 hours on the Corporation's website at www.haes.ca.

About High Arctic

High Arctic is a publicly traded corporation listed on the Toronto Stock Exchange under the symbol 'HWO'. The Corporation's principal focus is to provide drilling and specialized well completion services, equipment rentals and other services to the oil and gas industry.

High Arctic's largest operation is in Papua New Guinea where it provides drilling and specialized well completion services and supplies rig matting, camps and drilling support equipment on a rental basis. The Canadian operation will provide well servicing, well abandonment, snubbing, and nitrogen services, and equipment on a rental basis to a large number of oil and natural gas exploration and production companies operating in Western Canada.

For more information, please contact:

Thomas Alford

Interim President & CEO

Phone: (587) 318-3826 Email: tom.alford@haes.ca

Brian Peters

Chief Financial Officer

Phone: (587) 318-2218 Email: brian.peters@haes.ca

FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release constitute 'forward-looking statements' and/or 'forward-looking information' within the meaning of applicable securities laws (collectively referred to as 'forward-looking statements'). When used in this news release, the words 'may', 'would', 'could', 'will', 'intend', 'plan', 'anticipate', 'believe', 'seek', 'propose', 'estimate', 'expect', and similar expressions, as they relate to High Arctic, or its management, are intended to identify forward-looking statements. Such statements reflect the current views of the Corporation with respect to future events and operating performance and are subject to certain risks, uncertainties and assumptions. Such forward-looking statements speak only as of the date of this news release. Many factors could cause the Corporation's actual results, performance or achievements to vary from those described in this news release. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this news release as intended, planned, anticipated, believed, estimated or expected.

In particular, this news release contains or implies forward-looking statements pertaining to: corporate strategy; goals; general market conditions; the oil and natural gas industry, including ongoing activity levels and the impact of commodity pricing thereon; capital forecasts and spending by producers; demand for the Corporation's services and products, including those services and products to be acquired in connection with the Transaction; the Corporation's expansion and growth strategy; the impact of the reduction in oil and gas activity on the Corporation's 2016 activity and operations levels; the Corporation's proposed capital expenditure program and the intended use thereof; debt service; acquisition strategy and timing of potential acquisitions, including the expected closing of the Transaction; the impact of new facilities and products acquired in connection with the Transaction on the Corporation's financial and operational performance and growth opportunities; future capital needs; and access to capital.

Forward-looking statements concerning expected operating and economic conditions and the Transaction are based upon historical results experienced by Tervita and the Corporation, as well as assumptions concerning the levels of market activity and growth being consistent with historical industry activity in Canada and the U.S., taking into consideration similar phases of previous economic cycles.

Forward-looking statements concerning the relative future competitive position of the Corporation are based upon the assumption that economic and operating conditions, including commodity prices, crude oil and natural gas storage levels, interest and foreign exchange rates, the regulatory framework regarding oil and natural gas royalties, environmental regulatory matters, the ability of the Corporation to successfully market their services and products, and drilling and production activity generally in North America, will lead to sufficient demand for the Corporation's products and services, including demand for oilfield services, drilling and completion of oil and natural gas wells. Forward-looking statements concerning the relative future competitive position of the Corporation are also based on the assumption that the current business environment will remain substantially unchanged, and that present and anticipated programs and expansion plans of other organizations operating in the energy industry may change the demand for the Corporation's products and services, including those acquired as part of the Transaction. Forward-looking statements concerning the nature and timing of growth are based on historical factors that have affected the growth of the Corporation, past sources of growth and expectations relating to future economic and operating conditions.

Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such results will be achieved as stated, or at all. Readers are cautioned not to place undue reliance on these statements as a number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements, including but not limited to those factors referred to and listed under the heading 'Risk Factors' in the Corporation's Annual Information Form for the year ended December 31, 2015 available on www.sedar.com, and also those risks associated with the possible failure to realize the anticipated synergies in integrating the operating assets acquired in the Transaction with the current operations of High Arctic. The forward-looking statements in this news release are expressly qualified by this cautionary statement. Unless otherwise required by law, High Arctic does not intend, or assume any obligation, to update these forward-looking statements.