WTI (Apr) $74.66 +10c, Brent (Apr) $81.40 u/c, Diff -$6.74 -10c
USNG (Apr) $2.92 -13c, UKNG (Apr) 138.0p -14.96p, TTF (Apr) €53.705 -€2.76

Oil price

After taking a breather oil is better again today, WTI is $78 and Brent nearly $84 primarily as further attacks by on Iran concentrate on the revolutionary guard. Whilst this happens the Straits of Hormuz remain shut and although it may not be for the long term supplies are being concentrated with  producers who can’t get them to market. 

Even natural gas, which might be a likely long term problem has actually eased off the highs but on a week ago is still scary. Inventory stats don’t obviously reflect this and are clearly going to be sidelined for a while. 

Hunting

Hunting has announced its results for the year ended 31 December 2025.

Financial Highlights 

• EBITDA increased by 7%, to $135.7m.
• EBITDA margin of 13%, up from 12%.
• Gross margin improved to 27%.
• Revenue decreased by 3%, to $1,018.8m.
• Non-oil and gas revenue up 10%, to $82.9m.
• Adjusted diluted earnings per share 34.1 cents, up 9%.
• Sales order book $358.0m comprising $120.7m of subsea and $98.6m of non-oil and gas opportunities.
• Free cash flow of $96.6m – representing an EBITDA conversion of 71%.
• Cash and bank / (borrowings) $62.9m, after c.$145m of net outflows related to acquisitions, share buybacks, treasury share purchases, and dividends.
• Total dividends declared in the year up 13% to 13.0 cents per share, from 11.5 cents in 2024. A Final Dividend of 6.8 cents is being declared today. The dividend payment date will be 8 May 2026, with a record date of 10 April 2026 and an ex-dividend date of 9 April 2026.
• Adjusting items totalling $14.2m recorded related to restructuring and acquisition-related costs.
• Adjusted profit before tax of $79.7m in 2025, compared to $75.6m in the prior year. Statutory profit before tax was $65.5m compared to a loss before tax of $33.5m in 2024.
• 2026 EBITDA guidance of $145-$155m retained, with EBITDA to Free Cash Flow conversion targeted at 50% or greater.

Commenting on the results Jim Johnson, Chief Executive, said:  
“During the year, Hunting reaffirmed its commitment to disciplined capital allocation, strategic portfolio expansion and operational efficiency improvements.  Our results reflect the strong performance of our teams around the world and I would like to thank them all for their hard work and dedication in what was a highly volatile and unpredictable market.

“Over the course of 2025, we strengthened our balance sheet, executed targeted acquisitions, exited lower‑return segments, and broadened our geographic footprint, all while expanding our EBITDA margin and setting a clear path towards our stated 15% medium‑term ambition under our Hunting 2030 Strategy.

“As we diversify into higher‑growth markets, enhance our subsea and non‑oil and gas offerings, and continue to enhance our returns to shareholders, Hunting is building a more resilient, higher‑quality earnings base. 

“Our ability to compound value for shareholders through consistent execution, prudent investment and a sharper, more profitable portfolio remains a key area of differentiation for our business. 

“We are well placed to build on the strong momentum we have generated in 2025, with Hunting continuing to drive its product offering onto the global stage and capture the many opportunities that are available to us.” 

Hunting continues to deliver and today is no exception, investors who attended the Capital Markets Day in September 2023 and have listened to the 2030 objectives and acted accordingly have done very well indeed.

The results are very much in line with guidance with EBITDA of $135.7m up 7%, net profits of $42.8m giving a gross margin of 27% and an EBITDA margin of 13%, well on the way to the company’s mid-term target of 15%. EBITDA guidance for this year stays at $145-155m. 

Net cash was $62.9m with FCF of $96.6m and the balance sheet continues to strengthen, indeed it has made the capital allocation policy, which includes ongoing buy backs easily achievable. The dividend was 6.8c, making 13c for the year up 13% and in line with the distribution policy of increasing the payout by 13% to the end of the decade. 

In the analysts presentation the company went to great lengths to stress that such payments did not in any way suggest that they have taken their foot off the acquisition pedal, indeed although a couple of targets didn’t come to fruition they are very much on the M&A trail. 

And Hunting are very good at it, with those of FES and OOR last year already fitting in very well indeed and already making significant contributions.  I was fortunate enough to visit FES in the autumn and with its complementary subsea activity, the cross fertilisation benefits are already bearing fruit. As for OOR, the recent test in Texas by Buccaneer Energy, although modest in size has had a major impact, production has doubled and the water cut reduced to zero. This year OOR joins the Subsea division. 

Another pointer to further success for Hunting is the performance of Titan, ‘really improving’ according to CEO Jim Johnson and whilst not in the order book is specifically doing very well in comparison to its peers. 

Whilst on the order book, at $358m it is  slightly down but ‘very much in line with the norms’ and although the KOC work has passed through it is being replaced by a great deal of subsea work and is of a very high quality, no longer made up by a pile of pipes, so to speak. Also the company are in the run up to another KOC tender process which whilst slightly delayed should see Hunting partaking in April or shortly thereafter. 

Hunting is firing on all cylinders, apart from OOR and subsea systems, the OCTG product group ‘continues to report a strong tender pipeline across all key operating regions’ with the tenders being pursued in the Middle East and with significant strength in the US market product lines being cross sold in other international markets. 

The outlook for the JV in India is bright and with the country urgently needing to build upon its historically small energy base they need a great deal of help from service companies. Other international sales are having a significant effect and revenues from South America and the Gulf of America are being joined by countries such as Australia, Algeria and Libya to name but three. Work for Exxon in Guyana is going well across the board and provides huge support to the order book. 

Elsewhere the non-oil and gas potential is also substantial and whilst electronics to the oil industry has lagged a bit there are huge growth opportunities in medical, aviation and commercial aerospace, nuclear, power generation, telecoms  and of course wind farm technology and its applications. 

I have been banging on about Hunting for a while now as it exhibits tremendous growth opportunities from a very modest rating, indeed delivering exceptional EBITDA margins with continued growth and a capital allocation policy that pays dividends, achieves buybacks and still has capacity for imaginative M&A is paying off, big time. 

I have added the separate RNS on the cost reduction plan below this announcement, in it the company continues its assault on costs, planning to increase profitability by streamlining centralised costs by c.415m in addition to those already announced. 

The shares have performed very well, up 15% on a month, 62% on six months and 75% year on year. In recent weeks it has sailed through my 500p TP which I indicated in January would have to be upgraded so today I take that opportunity and I think that a new TP of 600p is achievable and maybe even conservative.

Hunting remains the outstanding play in the oilfield service company peer group and it has a strong position in not just energy markets but in high tech, high margin and importantly high growth areas. The company can build via organic and inorganic means, has the balance sheet to do it and a fantastic management team to execute it, the road to 2030 looks a great one to be on. 

In January I had the pleasure to interview Jim Johnson, CEO of Hunting and although I published it then I repeat it below, it gives great insight into this long term call and how the company is delivering it. 

Core Finance interview: Jim Johnson, CEO of Hunting PLC

2025 Strategic and Operational Highlights

Robust delivery of Hunting 2030 objectives

• $64.8m acquisition of Flexible Engineering Solutions in June 2025 to build out subsea offering.
• $18.2m purchase of Organic Oil Recovery technology in March 2025 to accelerate commercialisation.
• $231m orders for Kuwait Oil Company (KOC) completed, supporting robust performance of the OCTG product group.
• Improved performance of Perforating Systems product group with increased EBITDA to $13.9m (2024 – $1.4m).
• Disposal of Rival Downhole Tools for $13.0m releasing capital to invest in higher return product lines.
• New facility in Dubai opened in September 2025 to service the Middle East. 

Continued focus on cost efficiencies

• Progress on the restructuring of the EMEA operating segment – annualised savings of c.$11m, after closure of Fordoun, Aberdeen, operating site, in June 2026.
• Completion of Hunting Titan restructuring to deliver c.$6m p.a. savings.
• Commitment to reduce centralised and other costs by a further $15m by the end of 2027. 

Revised capital allocations announced

• Commitment to increase dividend distributions by 13% p.a. to the end of the decade.
• $40m share buyback commenced in August 2025, expanded to $60m in December 2025 – target completion mid-March 2026.
• $53.1m returned to shareholders in respect of 2025 (2024 – $18.2m), including dividends and share buybacks.
• Second share buyback programme proposed today totalling $40m to be completed by March 2028.

Financial Summary

Financial Performance measures as defined by the Group*

*Non-GAAP measure, see pages 236 to 243 of the 2025 Annual Report and Accounts

Financial Performance measures as derived from IFRS 

Outlook Statement

Hunting is well placed to build on its strong 2025 performance during the year ahead and, following the successful delivery of the KOC and ExxonMobil contracts, management is actively converting its high-value tender pipeline to backfill capacity and scale the order book. 

Our OCTG product group continues to report a strong tender pipeline across all key operating regions. Large tenders in the Middle East are being pursued with our strategic mill partners, while in North America we are now driving our TEC-LOCK™ product line into the international market arena following strong growth within our domestic US markets. A key region of growth will be the Middle East where unconventional resource development is accelerating.

Hunting’s Subsea product group will incorporate OOR fully from 1 January 2026, with the technology seeing strong interest across the Americas, Middle East and Africa. With the projected increase in subsea tree awards and FPSO builds, our Stafford, Spring, and FES businesses are seeing multiple opportunities to drive margin through integrated bundling, providing a unified ‘life-of-field’ solution across the subsea landscape in the year ahead.

Hunting’s Perforating Systems business is launching new technology, which will drive our market share in North America, along with the projected International growth in the Middle East and South America.

The Advanced Manufacturing group continues to pivot to more non-oil and gas sales, with a strong focus on aviation and space markets.

We continue to streamline our operations, reduce our cost base and improve efficiencies to focus our resources on, and align our profitability with, those markets where the strongest growth opportunities are in the medium term.

In line with our stated capital allocation policy, we have proposed a second share buyback totalling $40m to be completed over the next two years. This will mean that our returns to shareholders to 2030 will be c.$290m.

While we are closely monitoring the evolving situation in the Middle East, the Group’s financial outlook remains robust. Although some tender and order slippage is possible in the event of a protracted conflict, given our strategic concentration on offshore and subsea markets, alongside our growing international diversification, our 2026 projections carry minimal exposure to the Middle East. Consequently, while minor timing shifts in orders are possible, we do not anticipate a material impact on our long-term growth trajectory.

Overall, Hunting is anticipating further earnings growth in the year ahead and, having demonstrated that the Group can deliver growth and returns against a challenged macroeconomic backdrop, the Directors remain confident that our skilled workforce will rise to these challenges as we continue to deliver our Hunting 2030 Strategy.

Cost Reduction Plans

Hunting has also provided an update to its cost reduction plans, as part of the Group’s Hunting 2030 Strategy, in addition to updating investors on its ongoing capital allocation priorities.

Highlights

• Cost reduction plan to be completed through to the end of 2027 will increase profitability and further streamline centralised costs with projected savings of c.$15 million, in addition to those already announced.
• Proposed second Share Buyback programme, totalling $40 million, to be executed over two years up until March 2028.

Cost Reduction

Since 2024, Hunting has continued to maximise profitability through the significant restructuring of its Hunting Titan and EMEA operating segments. Costs of c.$20 million have been eliminated to date and will be realised by June 2026, once the Group’s Fordoun, Aberdeen, operating site is closed.

In addition to these programmes, the Group implemented regional shared-service business functions in Q4 2025 in Europe and North America. This is expected to result in further ongoing SG&A cost savings. Other operational and centralised cost savings are also being pursued and are expected to result in additional savings of c.$15 million per annum by 2028. 

Proposed New $40 million Share Buy Back Programme

The Directors have continued to review their capital allocation priorities and pursue bolt-on acquisitions and other growth opportunities. The Directors today announce the intention to complete a further $40 million Share Buyback programme. The new Share Buyback programme is to be completed over a two-year period, with c.$20 million per annum being targeted for completion, and the Share Buyback will be subject to pre-agreed parameters. This quantum of repurchases broadly matches the proposed dividend distributions in this timescale, with the Directors targeting a balanced capital allocation and return to shareholders over the next two years.

Commenting on the restructuring and updated capital allocation, Jim Johnson, Chief Executive of Hunting said:

“Our business remains focused on maximising profitability and cash generation, alongside pursuing our Hunting 2030 Strategy to deliver top line revenue growth through our key products and technology offering.

“In addition, the proposed new $40 million Share Buyback programme reflects our confidence in our cash generation and increases our returns to shareholders, providing an ambition which now extends to 2028.”

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog