WTI (Jan) $77.28 +$1.89, Brent (Feb) $82.70 +$2.02, Diff -$5.42 +13c, USNG (Jan) $6.43 -50.0c, UKNG (Jan) 328.0p -3.0p, TTF (Jan) €134.385 +€1.64

Oil price - Baby it’s cold outside…

The oil price is nearly 8 dollars off the bottom and not just because the Keystone pipeline is leaking nor even because rates only went up by 50 bp’s and the greenback is weak although that helps. No, its because it’s getting cold, pretty much wherever you are in the Northern hemisphere and some others too and prices are reacting accordingly.

The Fed raised by 50 bp’s and the BoE has done the same today, the ECB are to follow suit later, even the EIA inventory stats didn’t help with a big build of 10m in crude and also in gasoline and less in distillates.

PetroTal Corp

PetroTal has announced the following corporate update.

River Transportation Reopened
On December 14, 2022, the Asociacion Indigena de Desarrollo y Conservacion de Bajo Puinahua (“AIDECOBAP”) removed the river blockade to allow oil barge transportation access in and out of the Company’s operating area coinciding with positive working table discussions held on December 14, 2022 where the Junta of Authorities of Puinahua, Perupetro, and PetroTal also participated.

Production Ramp Up To Commence Immediately
With the reopening of river access, the Brazilian export route is now available.  Production ramp up will commence immediately over the next few days and is expected to again reach approximately 18,000 barrels of oil per day for the remainder of December 2022.  Inclusive of social downtime since late November, the Company estimates Q4 2022 oil production levels to average between 8,500 and 9,500 bopd.

Manuel Pablo Zuniga-Pflucker, President and Chief Executive Officer, commented:
“We are pleased the Puinahua Channel has reopened and believe the forthcoming addendum incorporating the 2.5% Social Trust Fund to the Block 95 License Contract will provide long term stability and a material quality of life enhancement to the communities of the Puinahua District.” 

Excellent news from PTAL and they will see production get back to normal quickly as they can now use barge transportation to and from the company’s operating area. 

The shares are up some 10% as 41p but I havent changed my L/T share price target of 150p there is still a huge amount of upside.

Kistos

The board of directors of Kistos yesterday announced that further to its announcement on 22 November 2022 and the circular prepared by the Company in relation to the proposed scheme of arrangement under Part 26 of the Companies Act 2006, as amended, copies of which have been sent to shareholders of the Company and made available for inspection on the Kistos website: https://kistosplc.com/investors/circulars/ , a court meeting was held today 2022 at 10.30 a.m. and a general meeting of the Company occurred thereafter at 10.50 a.m. 

The Company is pleased to announce that all resolutions proposed at the Court Meeting and the GM were duly passed by shareholders.

Good news for shareholders as this will create a holding company for Kistos which will provide capital and enable separation of debt and allow the company to make distributions to shareholders as in previous incarnations. 

Hunting

Hunting has today issued a year-end trading update ahead of announcing its 2022 Final Results on Thursday 2 March 2023.

Highlights

• 2022 trading and financial outturn remains in line with market expectations, with an EBITDA of c.$50m projected.
• Hunting’s sales order book continues to improve following further order wins within the Subsea Technologies business group. The Group’s total sales order book now approaches c.$500m.
• 2023 market expectations raised with an EBITDA target in the range of c.$85m-$90m – previously c.$80m.
• Formation of global Energy Transition sales group to pursue carbon capture, geothermal and other low carbon technologies.

Trading Statement
Trading in Q4 2022 has remained in line with management’s expectations with EBITDA still anticipated to be c.$50m for the full year.

The Group’s sales order book has continued to strengthen through the quarter and now approaches record levels of c.$500m, following a further large order win for titanium stress joints and accessories for a client operating in South America. This order book will mainly be delivered during 2023; however, due to the long delivery cycles of certain product lines, a proportion of sales will be recognised in 2024 and 2025.

Hunting Titan continues to report steady sales across North America as clients maintain activity levels. New opportunities continue to be pursued in South America, with drilling and completion activity accelerating as unconventional resources are developed, coupled with the continued migration of clients to new technology. In the coming months, Titan is to launch the H-4 perforating system, which is a self-orientating system that improves the accuracy of completions and which will provide new sales opportunities in Titan’s core markets of the US and Canada.

Within the North America operating segment, the Premium Connection, Accessories Manufacturing and Subsea business units continue to report strong momentum. Further, the performance of the Advanced Manufacturing group has continued to report improving results through the quarter, as supply chain constraints lessen.

The EMEA operating segment also reports improving results, supported by the Tubacex contract for Brazil. The Group’s Netherlands facility is now operating three shifts in support of this contract, with a second shift being added in Aberdeen in support of the order, and as broader activity levels increase across the region.

In Asia Pacific, the segment has reported steadily improving performance since the middle of the year as drilling activity in the Middle East and South East Asia increases. The segment has commenced the CNOOC order, which will see revenue and profits being recognised in 2023.

The Group’s balance sheet remains strong, with net assets as at 30 November 2022 of c.$847m. Cash and bank was $24m as at 30 November 2022, with a year-end position likely to be c.$20m as raw material purchases continue to support the Group’s order book. Capital expenditure for the full year is now anticipated to be up to c.$20m.

2023 Trading Expectations
Given the record sales order book noted above, the Board now believes that 2023 will see a stronger performance than anticipated previously. EBITDA for the year ahead is now targeted at $85m-$90m – previously c.$80m.

Formation of Energy Transition Sales Group
The Board of Hunting PLC is pleased to announce the formation of a new Energy Transition global sales group to pursue energy transition opportunities. Following a review of its portfolio of products and geographical presence, the Group has formed the new sales group under the leadership of Sean O’Shea. Sean has a strong engineering and sales background and has worked within Hunting’s EMEA and Asia Pacific operating segments developing the Group’s international sales presence across many of Hunting’s product lines.

Given the opportunities to participate in geothermal and carbon capture projects, with many initiatives being announced in Asia Pacific, Europe and the US, the Group will utilise its engineering expertise across all of its current operating segments to participate in this important market segment.

Hunting’s key product lines, which naturally align with energy transition markets, include the Group’s broad range of premium and semi-premium connections; its pipe supply businesses and supply chain channels; its accessories manufacturing capabilities, including couplings and valves; in addition to existing intervention and subsea products, all of which align with both onshore and offshore carbon capture and geothermal projects. Furthermore, the Group’s licenced Organic Oil Recovery technology will form part of the business group, which continues to see high levels of interest with major oil and gas companies.

Jim Johnson, Chief Executive of Hunting, commented:
“2022 has been a year of rebuilding for the industry with 2023 now likely to be a strong year of growth for the Group. All of our operating segments are reporting good levels of enquiries, and with our order book now approaching $500m, our earnings visibility for the year ahead is robust, despite recessionary fears.

“The formation of our Energy Transition global sales group is another step in our strategy to expand our revenue base to new and complementary sub-sectors of the energy industry. Hunting is well placed to capture a meaningful market share in the component supply chain for many low carbon projects, given the alignment of current technologies with the traditional oil and gas industry and the international commitments made by governments to reduce carbon emissions.”

This is another ripper of a trading statement from Hunting in so many ways. Trading is ‘in-line’ with market expectations and EBITDA will be c. $50m for this year and guidance for next year has been upped from $80m to $85-90m. Also the order book has improved substantially and is now a record c. $500m and the balance sheet remains strong. 

Hunting shares are 273p up from a low of 184p in July which had fallen sharply from 350p after the company found out that there were misleading forecasts in the market and were forced into a profit warning. This was an expensive lesson to learn, and proves that however brilliantly the company is doing operationally it should not dismiss IR (incidentally if you check out the website there is no one named under the IR contact tab).

But that is only why the shares aren’t a lot higher than they are now, at 273p they are ludicrously low, the management, led by the excellent Jim Johnson is pretty much the best in class and these figures show that they are delivering the goods and will so for the foreseeable future. He is right to say that 2022 was a year for rebuilding with growth going forward and Hunting will be at the front of that growth. 

The first step for the share price is to retrace to 350p, historically this company effectively went on Christmas holidays at Thanksgiving time, to have such a bullish statement on 15th December fills me with excitement for HTG in 2023. 

Getech

Getech yesterday announced the completion of the first step in developing the Inverness green hydrogen hub. Working with SGN Commercial Services, phase one has seen the successful deconstruction of Inverness’ former gas holder, paving the way to convert a legacy natural gas holder site into a future green hydrogen storage and distribution facility.

The site forms an important element of Getech’s broader hydrogen network development for the Scottish Highlands. Situated alongside Inverness’ rail head, it is ideally positioned to supply clean fuel to the hydrogen trains that will operate in this region.

The completion of phase one represents an encouraging step in the process to develop a multi-hub green hydrogen network, with Inverness at its core. Through revitalising this legacy gasworks as a green hydrogen hub, the site can maintain its significance to energy storage and distribution in a net zero future. This asset will kick start the decarbonisation of rail across the Scottish Highlands by providing a facility specifically designed to service hydrogen train fleets in the centre of the Scottish Highlands.

The time-lapse video of the gas holder deconstruction is available here: https://getech.com/media/

Dr Jonathan Copus, Getech CEO, commented:
“The completion of demolition of the SGN gas holder site demonstrates tangible progress in our hydrogen operations in Inverness and forms part of a range of broader strategic initiatives being undertaken by Getech to achieve the production, storage and supply of green hydrogen – supporting our ambition to establish at least 500MW of new geoenergy and green hydrogen assets by 2030. Hydrogen has a critical role to play in the clean energy transition and we continue work closely with stakeholders, including The Highland Council, to establish a network of green hydrogen hubs across the Scottish Highlands.”

Marcus Hunt, Director, SGN Commercial Services, said:
“This is an important milestone in transforming the site of our old gas holder to create a hydrogen supply and distribution hub, which will play a key role in decarbonising transport across the Highlands and wider Scottish economy. It will not only help reduce carbon emissions but will deliver jobs and skills opportunities in the local area. We look forward to working with the Scottish Government to help build the regulatory and policy frameworks that will support the build out of the hydrogen economy at pace across Scotland.”

Dr Nigel Holmes, Chief Executive Officer of the Scottish Hydrogen and Fuel Cell Association, said:
“This project in Inverness is a pioneering example of the hydrogen economy’s potential to help decarbonise a number of sectors across Scotland. It builds on a number of Scotland’s existing success stories, from the expanding hydrogen bus fleet in Aberdeen to the world-first H100 Fife project in Levenmouth, that will be delivering green hydrogen for up to 300 customers next year. With an abundance of renewable potential across the country, there is a fantastic opportunity to generate even more hydrogen and put Scotland on a clear path to reach net zero by 2045.”

Nothing to add…..

KeyFacts Energy Industry Directory: Malcy's Blog