Oil services group Hunting PLC (LON:HTG) said higher oil prices had “improved stability” in the US and around the world, but the Canadian market remains “subdued”.
The FTSE 250-listed group said that results for the first half of the year, due in late August, would show higher revenues than the same period last year and underlying earnings (EBITDA) was expected to be “marginally ahead”.
Titan, the pipeline equipment division where tighter profit margins in the first quarter sparked concerns that have seen the shares fall 20% since, was said to have generated revenue “broadly in line” with last year, though operating profits and margins in the period were still lower.
During the second quarter, Titan’s trading performance “strengthened” as new technologies were added, with capacity expansion programmes “now largely complete and expected to make a contribution to production efficiencies going forward”.
While the price of a barrel of West Texas Intermediate has risen from US$45 to US$58, Hunting directors said their optimism about “encouraging signs” in the US and increased activity levels in the North Sea and Middle East was balanced by an acknowledgement about “the potential impact of a volatile oil price on markets and activity levels” and clients desire to maintain spending discipline amid this environment.
Looking at Hunting's geographic segments, the US traded ahead of expectations, Canada “remains challenging” given the oil and gas production offtake constraints in Alberta and the government-mandated production slowdown for oil and gas companies in the early months of the year, while the newly formed Europe Middle East and Africa segment reported reduced operating losses from contributions from good activity in the North Sea and particularly the Middle East.
Net cash is predicted to have risen to US$85mln-US$90mln by 30 June from US$61.3mln at the end of December.