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Petrofac and Hunting updates to lift lid on oil & gas sector

Published: 15:59 24 Jun 2022 BST

Hunting PLC -

Against a backdrop of high oil prices, energy sector services providers Petrofac PLC and Hunting PLC (LSE:HTG) deliver results next week, following contrasting updates last time.

Petrofac warned in May headwinds are building and the focus of Tuesday’s trading update will be how strong they are blowing.

These headwinds will impact the performance in the contracting and engineering arm (E&C), it added in its update, with a small underlying loss in the division now expected in 2022.

Its other divisions, Assets Solutions and IES, were said to be trading well.

Assuming an average US$100 brent price, IES for example is expected to deliver EBITDA of between US$80mln and US$90mln.

Like many involved in fossil fuels, Petrofac is pivoting towards new greener energy technologies and has set a target of US$1bn in revenues from these out of a medium term goal of US$4-5bn at an operating margin of 6-8%.

Expect those targets to be reiterated with the update.

Meanwhile, oilfield services group Hunting has received a big leg-up from the recent rise in crude and gas prices with its share price up by around 60% since the start of 2022.

Underlying profit (EBITDA) in March was the best since 2020 it said in an update in April with orders now back above pre-pandemic levels.

“The sharp increase in global commodity prices is also leading to an increase in industry investment sentiment, with energy security and oil and gas reserve depletion driving a new phase of growth,” it added.

There were some caveats about components and raw material in the update, but with oil prices still comfortably above US$100 per barrel the tone next week should still be bullish.

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