Hunting share price (HTG) rises as it returns to profit on the US shale boom
Energy services firm Hunting returned to profit in 2017 as the US shale boom helped the company recover from a three-year downturn in the oil industry, but the firm is eyeing an eventual recovery in offshore drilling.
The figures
Hunting’s underlying profit from continuing operations rose to $13.7m (£9.95m) from a loss of $92.2m the previous year due to an “exceptional” performance by the firm’s Titan unit, which works with shale oil companies. Revenue grew to $722.9m from $455.8m in 2016.
The firm reported a net cash position of $30.4m in December 2017, up from a net debt of $1.9m.
Shares in the FTSE 250 firm rose 3.86 per cent to 632p in morning trading.
While it did not recommend a dividend for 2017, Hunting said it would consider shareholder distributions if the firm’s current performance is maintained.
Why it’s interesting
Jim Johnson, who became the company’s chief executive in September, told City AM Hunting’s 2017 numbers were very good, but while the company is happy, it is not content.
Johnson said the offshore oil market has remained challenging following the oil price crash in 2014, but the company has not given up on it.
“Many times in my career people have written off the Gulf of Mexico and the North Sea, but I’m very confident they’ll come back,” he said. Offshore markets dwarf shale in terms of supplies, with offshore producing 30 to 35 per cent of the world’s oil and shale contributing about five per cent, Johnson said.
While he did not predict when the offshore market will fully recover, Johnson said by the second half of the year the market will be much stronger.
“We don’t want to be a one-trick pony,” Johnson said. “As much as we love Titan, we don’t want that to be the only game we have.”
Read more: Hunting’s chairman of 26 years is set to step down and shares are tumbling
What Hunting said
In a statement, Johnson said: “The group’s results for 2017 have been supported by an exceptional performance by Hunting Titan, leading to Hunting reporting a return to underlying profit for the year as a whole.”
Onshore drilling and completion activity in the US shale basins has led the strong recovery for those businesses within Hunting focused on this market. Elsewhere across the group, cost cutting initiatives and general market stability have helped narrow losses.
Read more: Hunting excites investors with full-year profit expectations