WTI (Apr) $66.31 -$1.95, Brent (May) $69.30 -$1.74, Diff -$2.99 +21c.

USNG (Apr) $4.45 +10c, UKNG (Apr) 99.89p -2.77p, TTF (Apr) €41.665 -€1.88.

Oil price

Oil remains under pressure, Tariffs don’t inspire confidence and Opec is appearing to add to the crude stocks, inventories didn’t help either with crude building 3.614m barrels against the guesses of +300/-.

Touchstone Exploration

Touchstone has announced 2024 year-end reserves. 

Touchstone’s independent reserves evaluation was prepared by GLJ Ltd. (“GLJ”) with an effective date of December 31, 2024 (the “Reserves Report”). Highlights of our total proved developed producing (“PDP”), total proved (“1P”), and total proved plus probable (“2P”) reserves from the Reserves Report are provided below. Unless otherwise stated, all financial amounts referenced herein are stated in United States dollars. Readers are further cautioned to read the applicable advisories contained herein.

Paul Baay, President and Chief Executive Officer, commented:

“Our year-end 2024 reserves report highlights the substantial potential of our asset base in Trinidad with the NPV10 of future net revenues of 2P reserves valued at approximately $671 million and $309 million on a before tax and after-tax basis, respectively. The combination of our base crude oil production and the early-stage development of our natural gas properties supports our ongoing transition from an exploration-driven company to one focused on predictable production growth.

The reserve estimates for this year reflect a material balance assessment approach based on the data collected at Cascadura. This revised methodology, compared to the previous volumetric interpretation, aligns reserve estimates with our forecasted production curves.

The addition of light oil reserves from the Cascadura-3ST1 discovery underscores the significant potential of this emerging play. While the current reserves include a limited number of future crude oil drilling locations, we plan to expand this potential through further delineation and development in the Rio Claro block.

A key highlight of the year is the previously announced acquisition of Shell Trinidad Central Block Limited, which provides access to the lucrative Trinidad liquefied natural gas market. Notably, our year-end 2024 reserves report does not reflect any additional reserves from the proposed acquisition. An independent evaluation of the acquired reserves will be provided following the expected completion of the proposed transaction.“

This reserve estimate reflects the revision made of the Cascadura field and presented to analysts and shareholders at their Capital Markets Day back in December so it shouldn’t come as a shock or a surprise to the market. 

Whilst there may be an element of disappointment from those who didn’t pick up the detail back then, (prior to that the management estimates were made from the data collected at Cascadura on a volumetric interpretation) it is realistic given the forecasted production curves shown to us on the analysts visit last autumn. 

Indeed I think that there is plenty in the statement that gives cause for a much more bullish stance at present. Firstly the report doesn’t include the light oil potential at the Cascadura-3ST-1 discovery and while the report does include some wells there, the newly acquired Rio Claro block will add further profitable development. 

Secondly, the acquisition of the Central block from Shell will, when completed, not only add reserves but also mean that a great deal of the gas produced by Touchstone will enable ‘access to the lucrative Trinidad liquefied natural gas market’ a subject I wrote about in a recent report on the company. 

Finally, on a much clearer note the valuation has ‘NPV10 of future net revenues of 2P reserves valued at approximately $671 million and $309 million on a before tax and after-tax basis, respectively’. In its comments the company makes a valid point that they are transitioning from an E&P driven company to one which has ‘predictable production growth’. In this context I feel that ‘ New’ Touchstone deserves a higher rating and has significant upside from here.

2024 Operational Highlights

·   Successfully completed the Cascadura C pipeline and facility expansion, increasing processing capacity and supporting future production growth.

·     Drilled and brought onstream the Cascadura-2ST1 and Cascadura-3ST1 wells.

·    Advanced the development of the CO-1 crude oil block with the drilling and production commencement of the CO-374 and CO-375 wells.

·   Delivered strong performance from our CO-1, WD-4 and WD-8 blocks through targeted infill drilling, optimization programs, and recompletion activities, resulting in notable increases in light and medium crude oil reserves.

·   Fourth quarter production was strengthened by the successful startup of the Cascadura-2ST1 and Cascadura-3ST1 development wells, resulting in average quarterly net production of 5,287 boe/d and 2024 annual average net production of 5,734 boe/d.

Year-end 2024 Reserves Overview and Highlights

Touchstone’s year-end reserves highlight the successful addition of crude oil reserves from the Cascadura-3ST1 discovery, located east of Fault-C, alongside a revision to the natural gas and NGL reserves west of Fault-C at Cascadura. Comprehensive data from the Cascadura field underscores the need for further development drilling to fully realize the natural gas potential. With an established pipeline network and infrastructure in place, the Company is positioned for efficient and cost-effective future development.

·     The net present value of future net revenues discounted at 10 percent (“NPV10”) on a before tax 1P basis decreased by 5 percent to $354.4 million and declined by 8 percent to $671 million on a 2P basis from the prior year.

·     Realized after tax 1P NPV10 of $178.8 million represented a decrease of 7 percent from the prior year and after tax 2P NPV10 declined by 10 percent from year-end 2023 to $308.5 million.

·     Relative to year-end 2023 and after 2024 production, gross 1P reserves declined by 14 percent to 29,070 Mboe and gross 2P reserves decreased by 26 percent to 50,063 Mboe in 2024.

·   Reductions in our year-end reserves balances from 2023 reflected technical revisions to the natural gas reserves and NGL yields at Cascadura, reserve discoveries at Cascadura-3ST1, positive technical revisions at our crude oil blocks, acquisition and development activities, and increased annual production volumes in 2024.

·    We continue to maintain an extensive producing reserve life index of 8.7 years 1P and 12.9 years 2P, reflecting the long producing life of our asset base.

2024 Year-end Reserves Report Summary

Touchstone’s year-end light and medium crude oil, heavy crude oil, conventional natural gas and natural gas liquid reserves in Trinidad were evaluated by an independent reserves evaluator, GLJ, in accordance with definitions, standards, and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). 

The reserve estimates set forth below are based upon GLJ’s Reserves Report dated March 5, 2025, with an effective date of December 31, 2024. The Reserves Report uses the average price forecasts of the three leading Canadian oil and gas evaluation consultants (GLJ, McDaniel & Associates Consultants Ltd., and Sproule Associates Ltd. (collectively, the “Consultants”)). All values in this announcement are based on the three Consultants’ average forecast pricing and GLJ’s estimates of future operating and capital costs as of December 31, 2024.

Additional reserves information as required under NI 51-101 will be included in the Company’s Annual Information Form, which will be filed on SEDAR+ (www.sedarplus.ca) on or before March 31, 2025. Please refer to “Advisories: Reserves Disclosure” for further information. In certain tables set forth below, the columns may not add due to rounding.

2024 Reserves Summary by Category

 

PDP

1P

2P

Total gross reserves(1) (Mboe)

6,836

29,070

50,063

Reserve reductions(2) (Mboe)

4,614

2,529

15,219

NPV10 before income tax(3) ($000’s)

79,380

354,425

670,965

NPV10 after income tax(3) ($000’s)

66,444

178,841

308,536

Notes:

(1)    Gross reserves are the Company’s working interest share before deduction of royalty obligations.

(2)    Reserve reductions exclude 2024 annual production. See “Advisories: Oil and Gas Metrics”.

(3)    Based on the Consultants’ average December 31, 2024 forecast prices and costs. See “Forecast Prices and Costs” herein.

Summary of Crude Oil and Natural Gas Reserves by Product Type

Company Gross(1) Reserves

Light and Medium Crude Oil (Mbbl)

Heavy Crude Oil

(Mbbl)

Conventional Natural Gas (MMcf)

Natural Gas Liquids (Mbbl)(2)

Total Oil Equivalent (Mboe)

 

Proved

Developed producing

3,661

276

17,158

40

6,836

Developed non-producing

1,232

–

–

–

1,232

Undeveloped

4,468

–

96,219

498

21,002

Total Proved

9,360

276

113,377

537

29,070

Probable

8,889

56

70,750

257

20,993

Total Proved plus Probable

18,249

332

184,127

794

50,063

Company Net(3) Reserves

Light and Medium Crude Oil (Mbbl)

Heavy Crude Oil

(Mbbl)

Conventional Natural Gas (MMcf)

Natural Gas Liquids (Mbbl)(2)

Total Oil Equivalent (Mboe)

 

Proved

Developed producing

2,206

246

15,013

35

4,989

Developed non-producing

847

–

–

–

847

Undeveloped

3,318

–

84,192

435

17,785

Total Proved

6,371

246

99,205

470

23,621

Probable

6,762

50

61,906

225

17,354

Total Proved plus Probable

13,133

295

161,111

695

40,975

Notes:

(1)    Gross reserves are the Company’s working interest share before deduction of royalty obligations.

(2)    NGLs are comprised of 100% condensate.

(3)    Net reserves are the Company’s working interest share after the deduction of royalty obligations.

Summary of Net Present Values of Future Net Revenues

Net Present Values Before Income Taxes(1) ($000’s)

Undiscounted

Discounted at 5%

Discounted at 10%

Discounted at 15%

Discounted at 20%

 

Proved

Developed producing

107,621

91,031

79,380

70,773

64,166

Developed non-producing

35,598

27,992

23,371

20,155

17,733

Undeveloped

399,971

313,410

251,674

206,219

171,844

Total Proved

543,190

432,432

354,425

297,147

253,743

 

586,975

420,133

316,540

247,058

197,997

Probable

586,975

420,133

316,540

247,058

197,997

Total Proved plus Probable

1,130,164

852,565

670,965

544,204

451,739

Net Present Values After Income Taxes(1)(2) ($000’s)

Undiscounted

Discounted at 5%

Discounted at 10%

Discounted at 15%

Discounted at 20%

 

Proved

Developed producing

76,254

72,452

66,444

60,866

56,103

Developed non-producing

12,725

11,918

11,115

10,407

9,762

Undeveloped

169,089

129,627

101,282

80,492

64,930

Total Proved

258,068

213,997

178,841

151,765

130,794

Probable

237,847

173,085

129,696

99,906

78,732

Total Proved plus Probable

495,915

387,081

308,536

251,671

209,526

Notes:

(1)    Based on the three Consultants’ average December 31, 2024 forecast prices and costs. See “Forecast Prices and Costs” herein.

(2)    The after-tax net present values prepared by GLJ in the evaluation of the Company’s petroleum and natural gas assets presented herein are calculated by considering current Trinidad tax regulations and are based on the Company’s estimated tax pools and non-capital losses as of December 31, 2024. The values reflect the expected income tax burden on the assets on a consolidated basis. Values do not represent an estimate of the value at the business entity level or consider tax planning, which may be significantly different. See “Advisories: Unaudited Financial Information”.

Reconciliation of Gross Reserves by Product Type

The following table sets forth a reconciliation of the Company’s total gross proved, gross probable, and gross proved plus probable reserves as of December 31, 2024, by product type against such reserves as at December 31, 2023, based on forecast prices and cost assumptions.

Reserves Category and Factors

Light and Medium Crude Oil (Mbbl)

Heavy Crude Oil

(Mbbl)

Conventional Natural Gas (MMcf)

Natural Gas Liquids (Mbbl)(1)

Total Oil Equivalent (Mboe)

 

 

 

 

 

 

Total Proved

December 31, 2023(2)

8,538

234

140,743

1,467

33,696

Discoveries(3)

375

–

15

–

378

Extensions and improved recovery(4)

763

–

–

–

763

Technical revisions(5)

552

63

(17,758)

(882)

(3,227)

Acquisitions(6)

162

–

–

–

162

Dispositions(6)

(619)

–

–

–

(619)

Economic factors(7)

15

–

(7)

–

14

Production

(425)

(21)

(9,616)

(48)

(2,097)

December 31, 2024

9,360

276

113,377

537

29,070

 

Total Probable

December 31, 2023(2)

8,084

58

145,180

1,344

33,683

Discoveries(3)

609

–

–

–

609

Extensions and improved recovery(4)

365

–

–

–

365

Technical revisions(5)

(108)

(10)

(74,422)

(1,088)

(13,609)

Acquisitions(6)

45

–

–

–

45

Dispositions(6)

(115)

–

–

–

(115)

Economic factors(7)

8

8

(8)

–

15

December 31, 2024

8,889

56

70,750

257

20,993

Total Proved plus Probable

December 31, 2023(2)

16,622

292

285,923

2,811

67,379

Discoveries(3)

984

–

15

–

986

Extensions and improved recovery(4)

1,129

–

–

–

1,129

Technical revisions(5)

444

53

(92,180)

(1,969)

(16,836)

Acquisitions(6)

207

–

–

–

207

Dispositions(6)

(734)

–

–

–

(734)

Economic factors(7)

23

8

(15)

–

28

Production

(425)

(21)

(9,616)

(48)

(2,097)

December 31, 2024

18,249

332

184,127

794

50,063

Notes:

(1)    NGLs are comprised of 100 percent condensate.

(2)    Prior year reserve estimates per GLJ’s independent reserves evaluation dated February 29, 2024 with an effective date of December 31, 2023.

(3)    Discoveries are associated with the positive evaluation of Cascadura-3ST1.

(4)    Reserve amounts for Infill Drilling, Extensions and Improved Recovery are combined and reported as “Extensions and Improved Recovery”.

(5)    Technical revisions factor includes all changes in reserves due to well performance and previously booked wells which were drilled in the year.

(6)    Touchstone completed an asset swap with a third party, exchanging the Company’s interest in the San Francique field for the counterparty’s interest in the Balata East EPSC effective June 1, 2024. Touchstone disposed its working interest in the CO-2 block effective August 1, 2024.

(7)    Economic factors are the change in reserves exclusively due to changes in pricing.

As of December 31, 2024, gross proved plus probable reserves were 50,063 Mboe, reflecting a decrease of 17,316 Mboe (26 percent) from the 67,379 Mboe reported the previous year.

Compared to December 31, 2023, proved plus probable light and medium crude oil reserves increased by 1,627 Mbbl, driven primarily by oil discoveries at Cascadura, positive technical revisions, enhanced recovery, and drilling extensions at the WD-4, WD-8, CO-1, and Balata East blocks. These gains were partially offset by 2024 annual production and net acquisition and disposition activities at the San Francique, CO-2, and Balata East blocks. Proved plus probable heavy crude oil reserves rose by 40 Mbbl year-over-year, reflecting positive technical revisions at our Fyzabad property, partially offset by 2024 production.

Conversely, proved plus probable conventional natural gas reserves declined by 101,796 MMcf, primarily due to technical revisions at Cascadura and annual production from the Cascadura and Coho fields.

In addition, proved plus probable NGL reserves fell by 2,017 Mbbl, attributed to lower forecasted NGL yields at Cascadura and 2024 production.

Future Development Costs

The following table provides information regarding the development costs deducted in the estimation of the Company’s future net revenue using forecast prices and costs as included in the Reserves Report.

Year ($000’s)

 

1P

2P

2025

20,570

25,875

2026

29,691

46,745

2027

33,462

40,116

2028

22,569

62,905

2029

17,967

27,404

Thereafter

–

–

Total undiscounted

 

124,259

203,045

Total discounted at 10% per year

 

99,373

159,561

The following table sets forth the changes in undiscounted future development costs (“FDC”) included in the Reserves Report against such costs in our December 31, 2023, reserves report prepared by GLJ dated February 29, 2024.

($000’s unless otherwise stated)

 

1P

2P

Decrease in forecasted well costs

(1,660)

(2,460)

Increase in forecasted well locations

47,953

64,266

Increase in forecasted facility and pipeline costs

560

563

Total increase in FDC from 2023

 

46,853

62,369

Total increase in FDC from 2023 (%)

 

61

44

Forecast Pricing and Costs

Forecast pricing and costs are prices and costs that are generally acceptable, in the opinion of GLJ, as being a reasonable outlook of the future as of the evaluation effective date. The forecast cost assumptions consider inflation with respect to future operating and capital costs. The following table sets forth the benchmark reference commodity prices and inflation rates reflected in the Reserves Data as of December 31, 2024. These price assumptions were provided to the Company by GLJ and represented the average price forecast of the three Consultants as of the date of the Reserves Report.

Consultants Average Price Forecast

Forecast Year

Brent Spot Crude Oil(1)

($/bbl)

Henry Hub Natural Gas(1)

($/MMBtu)

Inflation Rate

(% per year)

2025

75.58

3.31

0.0

2026

78.51

3.73

2.0

2027

79.89

3.85

2.0

2028

81.82

3.93

2.0

2029

83.46

4.01

2.0

2030

85.13

4.09

2.0

2031

86.83

4.17

2.0

2032

88.57

4.26

2.0

2033

90.31

4.34

2.0

2034

92.08

4.43

2.0

Thereafter

+2.0% / year

+2.0% / year

2.0

Note:

(1)    This summary table identifies benchmark reference pricing schedules that might apply to a reporting issuer. Product sales prices will reflect these reference prices with further adjustments for specific marketing arrangements, quality differentials and transportation to point of sale.

January 2025 Production Volumes

In January 2025, we attained average net sales volumes of 4,800 boe/d, as the Cascadura-3ST1 well was shut in for 13 days to accommodate the drilling rig move to the Cascadura B pad. January 2025 net sales volumes were comprised of:

·      average net natural gas sales volumes of 21.3 MMcf/d (3,550 boe/d); and

·      average net crude oil and natural gas liquid sales volumes of 1,250 bbls/d.

Drilling Update

Drilling operations at Cascadura-4 have been temporarily suspended to facilitate critical repairs on the drilling rig. During drilling operations, one of the three mud pumps experienced a mechanical failure, necessitating an operational pause to ensure safety and efficiency. The well, spudded on January 19, 2025, had reached a depth of 4,500 feet, and has now been plugged back to the base of the surface casing at 1,135 feet.

A replacement pump is expected to arrive in Trinidad by mid-March 2025, after which installation will take place. Drilling will resume once the new pump is in place, allowing operations to continue as planned.

Hunting

Hunting has announced its results for the year ended 31 December 2024.

Financial Highlights

·       

Sales order book $508.6m.

·       

Revenue increased by 13% to $1,048.9m.

·       

Non-oil and gas revenue $75.1m.

·       

Gross margin improved to 26%.

·       

EBITDA increased by 23% to $126.3m.

·       

EBITDA margin of 12% up from 11%.

·       

Adjusted diluted earnings per share 31.4 cents, up 11.1 cents.

·       

Free cash flow of $139.7m.

·       

Cash and bank / (borrowings) $104.7m, an increase of $105.5m from $(0.8)m.

·       

Total dividends declared in the year up 15% to 11.5 cents per share, up from 10.0 cents in 2023. The dividend payment date will be 9 May 2025, with a record date of 11 April 2025 and an ex-dividend date of 10 April 2025.

·       

Non-cash impairment recorded within the Hunting Titan operating segment, totalling $109.1m.

·       

Adjusted profit before tax of $75.6m in 2024, compared to $50.0m in the prior year. Statutory loss before tax, after impairment, of $(33.5)m, compared to a profit before tax of $41.1m in 2023.

·       

2025 EBITDA guidance of $135-$145m retained, with EBITDA to Free Cash Flow conversion targeted at 50%.

Commenting on the results Jim Johnson, Chief Executive, said:  

“I would like to thank our workforce and senior leadership team for delivering a further year of revenue, EBITDA and adjusted earnings growth, despite the volatile energy markets reported in 2024. Hunting continues to deliver on its 2030 strategic objectives, supported by strong offshore and international markets. Our cash generation in the year has also been outstanding, and we now look to deploy this to acquisitive growth and investments to enhance productivity and stronger dividend distributions.”

This is another knockout set of numbers by any means, EPS +55%, dividend 6c making 11.5c up 15%, EBITDA up 23% and gross margins of 26% and EBITDA margins of 12% (11%) and well on track for the long term 15% target. 

Perhaps more important the order book is $508.6m and with FCF of $139.7m cash at the bank is $104.7m up a massive $105.5m. This strong position, along with other liquidity gives the company a great deal of fire power in the M&A market. We are assured that the company are seeing plenty of good opportunities at ‘sensible’ prices and they are actively engaged with a number of candidates. 

Across the board OCTG is going very well as is offshore subsea where the pivot is working. I’ve liked the Advanced manufacturing with a real chance of diversification. Guidance for next year is quite conservative but maybe because drill baby drill hasn’t got through quite yet to the US onshore market. Also some restructuring of EMEA is to be expected. 

I remain convinced that Hunting is as strong as ever, a big order book with more to come and plenty of cash for those accretive acquisitions…

2024 Strategic and Operational Highlights

1.

Retain focus on global oil and gas opportunities, specifically growing international, subsea and offshore business

 

·       

$231m of contracts secured with Kuwait Oil Company

Product group: OCTG

In H1 2024, the Group announced the securing of record orders with KOC for OCTG threaded with Hunting’s proprietary SEAL-LOCK XD™ premium connection. The orders are a result of over five years of collaboration between Hunting, KOC and Hengyang Valin Steel in China to qualify the Group’s connections and OCTG raw material. The order commenced in July 2024 and will continue into 2025.

·       

Continuation of major orders from ExxonMobil and TPAO for Hunting’s titanium and steel stress joints

Product group: Subsea

Throughout 2024, the Group continued to execute on major orders for its titanium and steel stress joints (“TSJs”). The large orders for TSJs received in 2023 were worked on through the year for Guyana and the Black Sea. Orders were completed for the Yellowtail project in Guyana in the year, with work on the Uaru and Whiptail projects continuing into 2025.

·       

API threading licence at Nashik, India, facility secured

Product group: OCTG

The Group’s joint venture facility in Nashik, India, received its API threading licence in May 2024, which will support new tender activity across India. Management anticipates that the addressable market in India is c.$300-$400m per year for OCTG and accessories manufacturing, with the Jindal Hunting Energy Services joint venture being an early mover in-country, as local content requirements increase to meet India’s growing energy requirements.

·       

Five-year manufacturing agreement with Chevron

Product group: OCTG

Hunting’s US OCTG business entered into a new five-year manufacturing agreement with Chevron in the Gulf of Mexico, which will support the OCTG product group to the end of the decade.

 

2.

Deliver sales order book and revenue progress in non-oil and gas, energy transition and low carbon solutions

 

 

·       

Orders with an expected total value of $60m for licensed Organic Oil Recovery technology

Product group: Other Manufacturing

In August 2024, the Group received orders which, dependent on volumes and assumed extensions, could result in up to $60m of revenue for the deployment of its licensed OOR technology into the North Sea. The orders were secured with two major operators on the UK Continental Shelf and will be delivered over the next five years.

·             

$14.7m of energy transition sales completed in the year

Product group: OCTG

Hunting continued to win OCTG orders for geothermal and carbon capture projects in North America, Europe and Asia Pacific in the year. Orders for projects in the utility and agriculture sectors were won in the Netherlands, supporting Hunting’s long-term strategy of revenue diversification.

·             

Strategic partnership expansion with CRA-Tubulars B.V.

Product group: OCTG

In August 2024, Hunting secured the exclusive sales, manufacturing, and distribution rights for $0.3m for CRA-Tubular’s novel titanium-lined carbon fibre tubing, which has strong long-term market growth opportunities in carbon capture projects in North America and Europe, for five years. The collaboration will enable the Company to accelerate further testing of tubulars and connections against key connection standards, which is being assessed by a super major.

·             

$0.9m investment in Cumberland Additive

Product group: Advanced Manufacturing

In September 2024, Hunting invested a further $0.9m in Cumberland Additive, taking our interest to 30.7%, which will enable us to access 3D manufacturing opportunities across multiple sectors and applications.

3.

Strong focus on long-term profitability of the Group

·       

Restructuring of the Hunting Titan operating segment

Product group: Perforating Systems

Over the last 12 months Hunting has delivered cost savings in the segment to align with the long-term outlook for the US onshore completions market. The Wichita Falls operating site and a number of distribution centres were closed in the year. In March 2025 as part of wider cost savings initiatives, further restructuring was announced which included a 5% reduction in headcount to deliver additional SG&A savings.

·       

Restructuring of the EMEA operating segment

Product group: OCTG

With the further decline in North Sea oil and gas activity, primarily driven by UK political ambitions to decarbonise its energy supply chain, a restructuring of the Group’s EMEA operations was announced in January 2025. Annual cost savings are expected to be c.$8-$9m.

·       

Expansion of manufacturing in Dubai

Product group: OCTG / Other Manufacturing

During the year, the well testing product line continued its move from the Netherlands facility to Dubai together with Singapore’s well intervention product line to increase efficiencies and to be closer to our customers and pipeline of opportunities.

·       

Expansion of collection of greenhouse gas data

Product group: All product groups

The Group expanded its scope 3 greenhouse gas data collection to include the Subsea Technologies, EMEA and Asia Pacific operating segments following on from the collection of Hunting Titan’s scope 3 data for the first time in 2023.

Financial Summary

Financial Performance measures as defined by the Group*

 

2024

2023*

Variance

Revenue

$1,048.9m

$929.1m

+$119.8m

Non-oil and gas revenue

$75.1m

$75.9m

-$0.8m

EBITDA**

$126.3m

$102.4m

+$23.9m

EBITDA margin**

12%

11%

+1pp

Adjusted profit before tax**

$75.6m

$50.0m

+$25.6m

Adjusted diluted earnings per share**

31.4 cents

20.3 cents

+11.1 cents

Free cash flow**

$139.7m

$(0.5)m

+$140.2m

Total cash and bank / (borrowings)**

$104.7m

$(0.8)m

+$105.5m

Net assets

$902.3m

$950.1m

-$47.8m

ROCE**

9%

6%

+3pp

 

Final dividend proposed

6.0 cents

5.0 cents

+1.0 cents

 

*restated

**non-GAAP measure see pages 255 to 262 of the 2024 Annual Report and Accounts.

Financial Performance measures as derived from IFRS 

 

2024

2023*

Variance

Non-cash goodwill impairment

$109.1m

$nil

+$109.1m

Operating (loss) profit

$(21.1)m

$51.5m

-$72.6m

(Loss) profit before tax

$(33.5)m

$41.1m

-$74.6m

Diluted (loss) earnings per share

(17.6) cents

65.9 cents

-83.5 cents

Net cash inflow (outflow) from operating activities

$188.5m

$49.3m

+$139.2m

 

*restated

Outlook Statement

The Group has delivered excellent growth in adjusted earnings in 2024.

2025 should see steady growth in revenue and adjusted earnings as all market indicators point to further progress due to prevailing energy demand. The Directors anticipate an acceleration in activity in the second half of the year and into 2026, as market and geopolitical tail winds increase with robust commodity supply and demand dynamics supporting activity in the year ahead.

In the US, the new administration is indicating robust support for oil and gas, with energy security and appropriate pricing to drive economic growth. This will likely lead to continued activity across North America, but also new opportunities offshore as Gulf of Mexico licensing and LNG capacity permitting should increase to support broad-based upstream and downstream growth. While the political narrative is strong, company-level narrative indicates that the industry will likely retain capital discipline.

Balancing this growth drive, OPEC+ countries will likely unwind their production cuts during 2025, but at a rate which maintains stability across the market. The ongoing conflict in Ukraine and fragile peace across the Middle East will also be key factors in commodity pricing. Drilling discipline across North America will likely be balanced by pricing discipline.

A further factor is the introduction of international tariffs. This area is highly dynamic at the time of writing. While the Directors do not see an impact on our businesses given how our segments and supply channels are structured, the disruption across international markets in general may lead to unforeseen challenges.

For Hunting, the senior leadership team and Directors will continue to focus on those areas which are within our control.

As demonstrated in 2024, we have made solid progress on our 2030 journey, but there is still much to do in the coming year to continue this momentum. The Company is committed to capitalising on its proven precision engineering capabilities in energy services to drive growth and earnings, while further diversifying its revenue streams. As previously outlined, we have a disciplined capital allocation policy and our strong balance sheet gives us firepower to pursue value accretive M&A in the year ahead to grow and diversify our portfolio and revenue and earnings in line with the strategic goals outlined at Hunting’s Capital Markets Day in September

2023. The Group has evaluated numerous acquisition opportunities and continues to adopt a disciplined approach to M&A. The Board continues to look at subsea, intelligent well completions, and complementary non-oil and gas opportunities to drive increased EBITDA and capital returns in line with our 2030 targets.

We are excited about our position within global OCTG markets and see new Subsea opportunities opening up around the middle of the year. The Middle East and South America remain key areas of growth, given the tender activity across these regions. Management is focused on optimising the performance of our Perforating Systems business. Hunting Titan continues to deliver strong technology and services to our clients, and with a higher natural gas price, coupled with the completion of targeted cost cutting measures, a good increase in profitability within this important product group should be delivered. Steady progress within the Advanced Manufacturing group is also anticipated as more non-oil and gas opportunities are captured. 

The Directors are also excited about the prospects of the Organic Oil Recovery technology. Our progress with clients in the North Sea in 2024 should lead to more orders in the region and internationally as customer acceptance accelerates.

In the year ahead we also hope to make further progress in our chosen Energy Transition markets as the number of geothermal projects continues to increase and carbon capture projects are further progressed.

The Company continues to make progress towards the medium-term EBITDA margin target of 15% and is pleased to announce a 15% increase in the total dividend declared, ahead of our 2030 target of c.10% per annum. We have been pleased with the Group’s strong improvement in ROCE and we continue to target at least 15% as a short range target.

Finally, the management team remains focused on cost reduction and efficiency gains across our asset base. With the restructuring of our EMEA operating segment, which will remove a drag on the Group’s earnings and returns, coupled with the cost reduction initiatives within Hunting Titan and our Head Office functions, further gains in profitability should be captured in the year ahead. 

In summary, the Directors see good progress in the year ahead to deliver our growth objectives.

We look to the future with confidence.