International energy service group Hunting said yesterday that, despite current events in the Gulf of Mexico (GoM) and sluggish natural gas prices, its overall trading in the first half of 2010 had been very positive.
Chief executive Dennis Proctor said: “Our balance sheet remains strong, with a net cash position of around £310million at June 30, and we continue to seek value-enhancing acquisitions.
“The current circumstances in the Gulf of Mexico will inevitably have some effect on the second half of the year within the well-completion division, but we remain confident in the outlook for the overall group in the current year.
“Circumstances in the GoM have not altered the global demand fundamentals for oil and gas. Thus, we remain in a strong position with well placed assets.”
London-based Hunting said in a first-half trading update that with the exception of Canada, all global markets experienced much improvement on the second half of 2009 with well construction, well completion and well intervention reporting improved results and a strong backlog.
Mr Proctor said that, in well construction, drilling tools benefited from increased onshore oil-related activity and shale-gas development.
He said Hunting’s well-completion business traded strongly in the first half, although some exposure to deepwater GoM would have an impact during the rest of the year.
Mr Proctor added: “About 22% of the current premium connection backlog within this division is for deepwater GoM and in the first half of the year around 16% of production in its manufacturing facilities related to deepwater GoM. The financial impact of the drilling moratorium for the remainder of 2010 and beyond remains uncertain.
“South-east Asia and the North Sea showed continued strength during the period, as did the Middle East operations.
“Well intervention outperformed the second half of last year and has built a significant backlog, the majority of which is for international activity in Angola, Brazil, Australia and the Middle East. In the year to date the GoM has not had a material impact on results for this division.”
Hunting said its bases outside North America were benefiting from strong oil prices, improved drilling activity, new facilities and a good year-to-date performance.
The group has a significant presence in the north-east, where it employs about 300 in tubulars operations at Portlethen and Montrose, the Hunting Cromar wireline and pressure-control firm in the Granite City, and well-intervention specialist Welltonic, also in Aberdeen.
Hunting shares closed up 6.1p at 448.3p.