High Arctic Announces $92 Million Offer to Acquire Wenzel Downhole Tools

High Arctic Energy Services Trust reports that on May 30, 2006, an indirect subsidiary of the trust mailed a cash offer to acquire all shares of Wenzel Downhole Tools Ltd. of Calgary.

Pursuant to the offer, 1244467 Alberta Ltd, a wholly-owned subsidiary of High Arctic Energy Services Limited Partnership, an indirect subsidiary of the Trust, is offering to purchase all shares of Wenzel for, at the election of each Wenzel shareholder, $2.75 in cash; or $2.30 in cash, for each Wenzel share. A Wenzel shareholder who does not properly indicate an election will be deemed to have elected to receive $2.75 per share for all Wenzel shares deposited under the offer for which a proper election has not been made.

Certain Wenzel shareholders have entered into a voting and tender agreement with the Trust pursuant to which such holders have agreed, among other things, to deposit an aggregate of 10,803,773 common shares and 4,600,000 preferred shares of Wenzel (representing approximately 40% of the issued and outstanding shares of Wenzel (on a fully diluted basis)) under the offer and to elect to receive $2.30 per Wenzel share pursuant to the offer. The offer represents an aggregate sum of approximately $92 million on a fully diluted basis.

The offer provides Wenzel shareholders with the opportunity to realize upon their investment at a significant premium to market prices. The offer, on the basis of $2.75 per Wenzel Share, represents a 36% premium over the weighted average trading price of $2.02 for the 10-day period ended April 4, 2006, the last day of trading prior to the announcement by the Trust that it had entered into the voting and tender agreement. The offer, on the basis of $2.75 per Wenzel Share, also represents a 15.5% premium over the closing trading price on the Toronto Stock Exchange on May 29, 2006, the last trading day prior to the announcement of the offer and a 17% premium over the weighted average trading price of $2.35 for the 10-day period prior to the announcement of the offer.

The offer will be open for acceptance until 5:00 p.m. (Calgary time) on July 5, 2006, unless withdrawn or extended. The offer is conditional (unless waived or amended by the offeror) upon, among other conditions: (a) there being validly deposited under the offer and not withdrawn that number of Wenzel shares as represents, together with the Wenzel shares owned by the offeror and its affiliates, at least 90% of the Wenzel shares outstanding on a fully-diluted basis; and (b) the shareholder rights plan of Wenzel being waived or the outstanding rights of Wenzel being redeemed or the shareholder rights plan otherwise being rendered ineffective with respect to the offer.

Wenzel shareholders wishing to accept the offer must deposit their Wenzel shares, together with a properly completed and duly executed letter of transmittal with Valiant Trust Company, the depositary, at its offices in Calgary or Toronto. Wenzel shareholders whose Wenzel shares are registered in the name of an investment dealer should contact their investment advisor for assistance in depositing their Wenzel shares to the offer.

Brookfield Bridge Lending Fund Inc. has provided High Arctic Energy Services Limited Partnership with a bridge financing facility to support the offer, which will fully fund the acquisition of Wenzel shares.

Wolverton Securities Ltd. of Calgary, Alberta is acting as financial advisor as well as dealer manager and has undertaken to form the soliciting dealer group to solicit acceptances of the offer from Wenzel shareholders resident in Canada. Questions may be directed to the dealer manager, at 1-888-263-8808 (toll-free).

High Arctic Energy Services Trust, through its subsidiaries, is a global provider of underbalanced oilfield equipment and services, including drilling, completion and workover operations. High Arctic's new underbalanced drilling technology and equipment is recognized for its ability to improve oil and gas production capabilities and is expected to develop greater acceptance in international markets. Based in Red Deer, High Arctic has domestic operations in Alberta, British Columbia and the Northwest Territories. International operations are currently active in the Middle East and former Soviet Republics.