WTI (Aug) $68.33 +40c, Brent (Sep) $70.15 +57c, Diff -$1.82 +17c
USNG (Aug) $3.34 -7c, UKNG (Aug) 82.36p +1.81p, TTF (Aug) €34.35 +€0.375

Oil price

Oil has drifted a bit after a good run over the Opec+ meeting, it seems, as the Saudis showed by increasing its list prices indicating a premium was deserved and the market is tighter than some thought.

Union Jack Oil

Union Jack has announced that the Company has signed a farm-in agreement with Reach Oil and Gas Inc (“Reach”) to acquire a 60% working interest (paying 80%) in the Sark well, planned to be drilled early Q3 2025, located in Central Oklahoma, USA.

• 3D supported Sark well will drill a dip and fault closed large structure of 156 acres area and 40 feet relief
• Estimated recoverable resources of 1,440,000 barrels of oil gross
• Cost to drill, complete and develop circa US$1,100,000 net, including back costs of $236,800
• Estimated success case of NPV10% circa US$10,900,000 net, based on a US$65/bbl oil price
• Counter-regional fault down to the east in the Graben formed by the Wilzetta Fault with structural closure at Arbuckle level with further upside potential of 1,500,000 barrels of oil gross
• Hunton and 2nd Wilcox formations are the objective targets with Total Depth estimated at 5,500 feet
• Secondary targets productive in the immediate area include the Prue Sands, Red Fork and Base Pennsylvanian Sands
• Adjacent to an oilfield that produced circa 1,600,000 barrels of oil from the Hunton and 2nd Wilcox sands
• Chance of Success of finding movable hydrocarbons in this robust, multiple target structure is 65%

Sark is an untested Hunton and Wilcox structure with two main and several secondary targets present, adjacent to a producing oilfield.  Closure exists throughout the prospective sequence beneath the 2nd Wilcox and the well will be drilled to the Arbuckle formation.

David Bramhill, Executive Chairman of Union Jack, commented: 
“We are pleased to be able to announce a further agreement with our partners, Reach, on the high-impact Sark well that on success will be another material oil development project for Union Jack.

“Sark is the next welcome addition to our rapidly growing portfolio of activities in Oklahoma and follows the successful oil discovery at Moccasin where such play types are now designated a high chance of success.

“In just over 15 months the Company has drilled four consecutive discoveries and compiled a portfolio of what we believe to be dynamic projects, forming the foundations of a second valuable commercial business in the USA, complementing our sound and profit-making revenues from Wressle in the UK.

“The recent success at Moccasin has been a catalyst and Union Jack is now entering into a period of sustained activity in Oklahoma, where we have every reason to be confident following the Board’s decision to expand operations into the USA.”

Back to the USA again for Union Jack as they have farmed-in to the Sark well in Oklahoma for a 60% WI for 80% of the cost of the well which is to be drilled early in the 3rd quarter of this year. The well is expected to cost c. $1.1m including back costs of $236,800, has an estimated recoverable resource of 1,440,000 barrels and an estimated success case of NPV10% circa US$10,900,000 net, based on a US$65/bbl oil price.

The prospective resources are in the Hunton and the 2nd Wilcox formations with Total Depth of an estimated 5,500 feet and there are secondary targets producing in the immediate area including the Prue sands, Red Fork and Base Pennsylvanian Sands. These targets are the reason that, along with an oilfield that produced 1,600,000 barrels of oil from the Hunton and 2nd Wilcox sands, the Chance of Success is some 65% in what is described as a ‘multiple target structure’ by the company. 

I really like the strategy of investment in the USA which has already been successful and this project adds to that dynamic portfolio. It also more than adequately demonstrates the significant growth available in a rapid timetable not possible in the UK. With a ‘period of sustained activity in Oklahoma’ Union Jack have every chance of adding significant value in coming months in their new back yard.

Hunting

• Hunting has today published its H1 2025 Trading Update, announces an increase to its annual targeted dividend distributions, and proposes a Share Buyback programme of up to $40 million.
• Highlights 
• Good year-on-year growth in EBITDA to c.$68-$70 million in H1 2025, up c.16% from H1 2024, led by a robust contribution from the OCTG product group.
• EBITDA margin of c.13% generated in the period.
• Total cash and bank / (borrowings) of c.$79 million as at 30 June 2025, with significant additional liquidity available via the Group’s credit facilities to fund growth.
• Period-end sales order book of c.$450 million, ahead of Q1 2025 position of $439 million, with a tender pipeline of c.$1.1 billion.
• $38 million of new orders secured for the Group’s titanium stress joints in the Gulf of Mexico and new plug and abandonment and field decommissioning projects in the North Sea.
• Net acquisition spend of c.$69 million after purchase of Flexible Engineered Solutions (Group) Holdings Limited (“FES”) and Organic Oil Recovery (“OOR”) technology and disposal of the Rival Downhole Tools investment.
• Ongoing restructuring of EMEA operating segment to save annualised costs of c.$10 million.
• Targeted annual dividend increase raised from 10% to 13%.
• Share Buyback programme of up to $40 million scheduled to commence following publication of the 2025 half year results, with the intention to complete over next 12 months.
• 2025 full year EBITDA guidance of c.$135-$145 million retained. Targeted year-end total cash and bank / (borrowings) position of c.$65-$75 million. 

Jim Johnson, Chief Executive of Hunting, commented:
“Hunting has taken a significant step forward in the execution of its 2030 Strategy, with the completion of two acquisitions, which will accelerate growth in revenue and EBITDA to the end of the decade. Both FES and OOR demonstrate strong margin profiles, well in excess of the Group’s long-range stated target of 15%.

“Our sales order book supports the robust outlook for the Group while our success within our Subsea product group in the Gulf of Mexico and North Sea confirms our strategy of pivoting our sales profile to longer cycle, more stable revenue opportunities.

“The first half of 2025 has seen strong trading for the Group. Hunting’s robust cash generation and significant financial flexibility enables us to commence a Share Buyback and increase our targeted annual dividend distributions. We also continue to actively monitor further bolt-on M&A opportunities.”

This first half trading update from Hunting perfectly proves that the 2030 strategy is working well, EBITDA of $68-70m is 16% up from last year’s interim with a special mention for the OCTG product group for a ‘robust performance’.

The number beats the whisper and my own bullish numbers and with the margin increasing to 13% (12%) and heading steadily towards the group’s stated target of 15%. Strong FCF has led to net cash of some $79m and with a strong order book of $450m up on Q1 end and a tender pipeline of c.$1.1bn I remain optimistic.

Operationally Hunting is firing on all cylinders, Perforating systems leads in explosion techniques and detonation and energetics whilst in Subsea they lead in couplings and joints and it is here that acquisitions are likely, FES looks like a fantastic business with high margins and high growth.  

In OCTG we have heard much lately, premium connections and with strong order book drive whilst in Advance Manufacturing, which is also precision engineered products, for the oil and gas, aviation, commercial space, naval, medical, power generation and military end-markets.

Guidance is positive but measured, full year EBITDA is compatible with c.$135-145m expectations and looks very achievable after first half performance hit the straps well enough. Internationally Hunting is represented in South America where they have an office now for Petrobras work and of course Guyana has blown the numbers away thanks to Exxon. We know how good EMEA has been after the Kuwait order and Asia Pacific has been delivering including the JV in India.

Finally the Capital Allocation is crystal clear, firstly invest in the business, then have a progressive dividend policy, value accretive M&A and ‘additional action for shareholders, including the buy back announced today. We have seen an increase in the dividend growth rate rise to 13% today and that may not be the last of it…

With FES bedding in fine and probably with more to come on the acquisition front,  growing returns to shareholders and activity from subsea to aerospace I remain hugely positive about Hunting. I am happy to stick with my Target Price of 500p in what could be another very good year.

Trading Update

Delivery of Hunting 2030 Strategy
Hunting completed two acquisitions in the period, which will accelerate growth, generate higher cash flows, and improve capital returns going forward. The acquisition of FES, announced on 24 June 2025, for a consideration of $63 million, after closing adjustments, and the acquisition of the OOR technology from its founding shareholders on 7 March 2025, for a consideration of $18 million, are key milestones in the delivery of the Hunting 2030 Strategy. Hunting also disposed of its interest in Rival Downhole Tools in March 2025 for $12 million. Acquisition costs of c.$3 million have been incurred in the period and will be recorded as a one-off adjusting item in the 2025 half year results.

During the period, the Group announced strong progress in expanding its regional and end-user presence for its titanium stress joint offering. The Subsea Spring business secured a new order from BP in the Gulf of Mexico, which represents a new blue-chip client for Hunting for this product. In addition, the Group’s Enpro Subsea business secured a field decommissioning order for its Flow Access Module in the North Sea.

In January 2025, the Group announced a material restructuring and cost reduction programme across its EMEA operating segment to save at least $10 million per annum. Hunting is in the process of closing its operating sites in the Netherlands and Norway and transferring assets to Indonesia, Saudi Arabia, the UAE and the UK, while retaining a sales presence in Norway. A restructuring charge of c.$9 million will be recorded as a one-off adjusting item in the Group’s 2025 half year results. 

Product groups
In the period, the Group’s OCTG product group traded ahead of management’s expectations, as stronger margins were delivered through the final four shipments of OCTG and premium connections to Kuwait Oil Company (“KOC”). These are in addition to strong bookings received within Hunting’s North America OCTG business, as demand for high-torque, longer lateral well completions was reported.

Despite the softening in the North American onshore market, the Perforating Systems product group returned to profitability in the period as the impact of the recent restructuring and the focus on improving production variances, including a higher level of cost overhead absorption for certain product lines being delivered, led to the improved performance.

Hunting’s Subsea product group’s performance is expected to be second-half weighted, with a number of planned deliveries in H2 2025, alongside the contribution from FES.

The Advanced Manufacturing product group reported performance marginally behind plan as slower MWD/LWD component sales were partially offset by more robust non-oil and gas sales.

Overall, the outlook for all product groups remains solid with opportunities for growth in all of Hunting’s key operating regions, despite the market volatility seen in the first half of the year.

Operating segments
In respect of the Group’s reported operating segments, results have overall been in line with expectations, with North America and Asia Pacific ahead of expectations and EMEA and Subsea Technologies marginally behind plan.

The restructuring of the EMEA operating segment will be completed by the end of Q3 2025, with a neutral EBITDA being projected for the operating segment for the full year.

Sales order book and tender pipeline
Although there was significant market volatility during the quarter, the Group reports a period-end sales order book of c.$450 million, which is ahead of the Q1 2025 position of $439 million, as new OCTG, Subsea and Advanced Manufacturing orders were secured.

With the acquisition of FES, coupled with potential orders for OCTG across the Group’s international footprint, the Group’s tender pipeline remains extremely strong at c.$1.1 billion.

2025 full year guidance
Based on these trading results, the Directors remain comfortable with full year EBITDA guidance of c.$135-$145 million, in line with market expectations. Year-end total cash and bank / (borrowings) position is expected to be c.$65-$75 million, before the proposed Share Buyback and any other possible M&A.

Proposed Share Buyback Programme (the “Share Buyback”)

The Directors regularly review the Group’s cash performance and ongoing capital requirements within the capital allocation framework. The Board concluded that it is currently appropriate to undertake a capital return of up to $40 million (excluding stamp duty and expenses) through a Share Buyback.

Hunting will retain sufficient financial flexibility to continue investing in its strategy to deliver sustainable growth and attractive returns.

The Directors reserve the right to pause or stop the Share Buyback if a compelling acquisition opportunity or strategic capital investment is approved by the Directors and is considered to be in the best interests of shareholders.

Any shares purchased by the Company pursuant to the Share Buyback programme will be cancelled and the Company’s share capital will be reduced accordingly.

Hunting proposes to commence the Share Buyback on Thursday 28 August 2025 when it publishes its 2025 half year results and exits its current close period. The Directors anticipate that the Share Buyback, if implemented in full, will take up to 12 months to complete.

A further announcement concerning the Share Buyback programme will be made upon its commencement. 

Dividend

The Directors continue to believe that a clear annual dividend policy is a key element of the Hunting investment case.

At the September 2023 Capital Markets Day (“CMD”), Hunting announced its long-term dividend policy, whereby total dividend distributions would increase at a minimum rate of 10% annually to 2030.

Reflecting the Company’s strong cash generation since the CMD and pivot to longer cycle sales, the Directors have decided to raise the targeted annual increase in dividends to 13% following the capital allocation policy review.

Other Capital Allocation Considerations

The Directors re-affirm the Board’s capital allocation policy whereby the Company will continue to invest in the Group’s core operations with organic capital investment remaining broadly in line with the Group’s depreciation to the end of the decade.

Further, the Directors continue to pursue bolt-on acquisitions in areas including subsea technologies, intelligent well completions and non-oil and gas, all of which form the basis of the Hunting 2030 Strategy.

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