Oil price, Hunting, Sintana. And finally…

WTI (Oct)* $86.83 +$2.33, Brent (Oct) $93.78 +$2.16, Diff -$6.95 +$1.16*

USNG (Sep) $2.73 -8c, UKNG (Sep) 162.58p +4.82p, TTF (Oct)* €66.055 +€2.225.

*Denotes expiry of September contracts for WTI and TTF.

Oil price

The war continues and this afternoon as inflammatory statements go the Iranian President made one today by asking the US to surrender while Tehran is ahead…

Oil is mixed today, WTI having moved onto the October contract overnight is off slightly but Brent is slightly up, the US for their part has pressured any potential Iranian supporters who provide ‘any type of benefit to the country’ ahead of Scott Bessent holding a press conference on Monday to ‘talk about exactly what we are going to do’.

Hunting

Hunting has announced its results for the six months ended 30 June 2026.

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

“Today’s results demonstrate the benefits of the transformation of Hunting’s portfolio and our ability to capitalise on the structural growth opportunities in the end-markets we serve. In particular, the strong margins delivered from our Subsea product group, following our strategic repositioning in this area over the past seven years, are strengthening the quality of our earnings into the long-term, a key deliverable of our 2030 strategic ambition. We have also seen encouraging momentum in our Perforating Systems product group, as our technology offering continues to be embraced by the industry, with record international sales supporting the Group’s overall results.

“The second half of the year will be driven by continued progress in these areas, alongside improved results from our OCTG and Advanced Manufacturing product groups.

“Hunting remains well positioned to capture the growth opportunities emerging across the energy industry around the world. Whilst current instability in the Middle East has caused some delays to tendering, we expect activity in the region to rapidly recover once stability returns, supporting our confidence in our medium-term growth prospects for the region. Elsewhere, AI-driven investment is driving power demand growth in North America, while activity is rising across South America and West Africa as governments around the world increasingly focus on energy security and sovereign capabilities.”

The good news is that the fundamentals at Hunting are still excellent and despite the problems caused by the Gulf war the underlying is still extremely strong and for choice, and providing that the dispute is settled before too long, there is every chance that the recovery will be substantial. 

So, as the CEO did on this morning’s analyst call, let’s get the 800lb elephant out of the room. I see this as being a twofold problem, firstly the facts about the KOC contract and secondly the fact that it has caused on its own, the reduction in EBITDA guidance. I shall address the IR situation later…

As for the KOC situation it is clear that another very substantial contract, the largest in Hunting history, was very close to being secured and was pulled due to the war, apparently it is going to re-tender in the coming months but although Hunting were apparently the favourites to win it they do start again from scratch next time round. 

There is another KOC contract up for grabs, and it may well be that Hunting win that but I suspect that even if they do we are talking about 2027 and visibility is not to be taken as read in terms of time or size of either piece of work. However I do think that Hunting will be highly competitive in the fight for what will be a worthwhile contract.

Elsewhere the operating news is excellent, Triton appears to be recovering very well and there has been a ‘step change’ in the performance of the Subsea Division as forecast here on increasing margins and it is good to see FES contributing so well. 

Perforating systems has made meaningful gains in market share in North America as well as  international markets such as Argentina, Australia, Indonesia and Saudi Arabia whilst there has been progress in OOR internationally in North America Brazil and the North Sea. 

Geographically it looks like there have been notable successes as mentioned above but Guyana, Argentina and Saudi have clearly been outstanding and the work for Exxon with differing products and bundling working well between product lines has clearly worked well.  

The confidence around the company is tangible and the board clearly remain bullish about their product offering into a strong and growing market, despite any local difficulties margins are still on target for the 15% target and clearly subsea is leading the way. 

Confidence is manifested in the dividend announcement, at 7 cents it is up 13% with plenty of scope going forward. Hunting shares have been disappointing, at 411p they are down 13% today which one might expect given market guidance has been lowered and broker EBITDA forecasts are being trimmed by $10m, the company advise $138-141m. 

This has happened before when the company wasn’t aware that consensus was too high, the shares are down 12% m/m, -20% over 6 months but still up 30% year on year so the market expected bad news. This happens when IR is out of touch with either the company or the market or both but to me it shouldn’t have been such a surprise.

I’m not losing any faith and whilst my target price of 600p looks a bit demanding at the moment I have the utmost of time for what is still the best management in the sector and the long term projections are very much still totally achievable which makes the shares very cheap indeed. 

Financial Highlights

Financial Performance measures as defined by the Group 

*Non-GAAP measure, please see pages 40 to 46 of the 2026 Half Year Report

**Adjusted profit measures, recorded before items agreed to be one-off and excluded by the Audit and Risk Committee

Financial Performance measures as derived from IFRS 

The Group’s Perforating Systems and Subsea product groups performed well, delivering notable increases in revenue year-on-year due to strong organic growth within our established product groups, offset by lower results from the OCTG, Advanced Manufacturing and Other Manufacturing product groups. Revenue in H1 2026 declined overall by 6% to $497.0m compared with the prior period, while EBITDA fell by 12% in the period to $62.1m from $70.2m in H1 2025. This was due to the absence of orders completed for Kuwait Oil Company (“KOC”) in H1 2025, which did not recur in H1 2026, together with slower activity in the Advanced Manufacturing product group.

Interim Dividend

An interim dividend of 7.0 cents per share (H1 2025 – 6.2 cents) has been declared. The dividend will be paid in Sterling on 30 October 2026, with the Sterling value of the dividend payable per share fixed and announced approximately two weeks prior to the payment date, based on the average spot exchange rate over the three business days preceding the announcement date. The dividend will be paid to those shareholders on the register at the close of business on 2 October 2026, with an ex-dividend date of 1 October 2026. 

Retirement of Chief Executive

On 1 June 2026, the Company announced that Jim Johnson, Chief Executive, had given notice of his intention to retire as a Director of the Company. The Nomination Committee has appointed an international search firm to support the search for a new Chief Executive, and a further update will be provided at the appropriate time.

Strategic Highlights

$63.5m of new titanium stress joint orders secured for offshore Guyana

In April 2026, Hunting announced that it had secured new orders totalling $63.5m for its titanium stress joint offering for ExxonMobil in Guyana, to be delivered by 2027.

Step change in performance of Subsea Technologies operating segment

The strong earnings performance and heightened margins in the Subsea Technologies operating segment were driven primarily by recent order momentum and improved trading conditions, together with a good contribution from Flexible Engineered Solutions, acquired in June 2025.

Strong performance in the Perforating Systems product group

In the period, a material improvement in the performance of the Perforating Systems product group was recorded, with further market share gains secured across North America, supported by continued growth in international sales, particularly into Australia, Argentina, Indonesia and Saudi Arabia.

Progress with Organic Oil Recovery (“OOR”) commercialisation

The Group continues to make encouraging progress in the commercialisation of its OOR technology, with a number of clients sampling or field testing the OOR technology and strong well test results reported by a US operator; a master service agreement was executed with a customer in Brazil in Q2, with initial injections to commence in H2; and positive well test data reported by customers operating in North America and the North Sea.

$15m of cost reductions planned by the end of 2027

In March 2026, the Group announced a further cost cutting programme to increase efficiencies. Shared service functions have been initiated in Europe and North America to save back-office costs. The new programme will also incorporate a review of the Group’s SG&A costs, with cost savings on track to be delivered by 2027.

EMEA restructuring

The Group’s planned restructuring of its EMEA operating segment is near completion, with facilities in the Netherlands and Norway closed and the Fordoun, UK facility to be closed in September. Annualised savings of c.$11m have been captured through these initiatives, which will return the EMEA operating segment to profitability from H2 2026.

Capital allocation strategy remains unchanged

M&A – In line with the Hunting 2030 Strategy, management continues to assess acquisitions, with a targeted pipeline of transactions under review during the period. Subsea and intelligent well completion businesses remain a particular area of focus for the Group.

Dividend – The Board is declaring an interim dividend of 7.0 cents per share (H1 2025 – 6.2 cents), which represents a 13% increase over the interim dividend paid in 2025. The Directors also project that dividend distributions will continue to rise at 13% per annum through to the end of the decade, consistent with our ambition of annual increases of at least 10% published at the Group’s Capital Markets Day in 2023.

Share buyback programme – the Group announced a second buyback programme in March 2026. The $40m programme is underway and is due to be completed by March 2028. By this point, the Company will have returned $100m to shareholders through two buyback programmes.

H1 2026 investment in working capital anticipated to unwind in H2

In H1 2026, the Group recorded a $58.0m working capital outflow compared with a $25.8m inflow in H1 2025, driven by forward material purchases within the Hunting Titan and Subsea Technologies operating segments, in addition to an increase in receivables balances within both these operating segments, reflecting recognised revenue in the period.

Combination of EMEA and Asia Pacific operating segments

Following completion of the restructuring of the EMEA operating segment, the Directors announced in April 2026 that the EMEA and Asia Pacific operating segments would be combined to form an International operating segment from January 2027 to better align the business with customer requirements and improve our commercial offering.

Trading Outlook

In North America, activity levels are expected to increase steadily as new data centres and AI-driven hyper-scalers accelerate demand for energy and power.

Across South America, onshore and offshore activity is projected to continue growing. Unconventional resource development in Argentina continues to accelerate, while new offshore projects in Brazil, Guyana and Suriname will require new FPSO builds and high-performance equipment, creating significant opportunities for Hunting’s enlarged Subsea offering.

In West Africa, emerging opportunities in Angola and Namibia support continued growth in offshore/deepwater activity beyond the end of the decade.

In India, the Group expects good growth from its joint venture, in addition to its planned new facility on the east coast of India.

Across Asia Pacific, new drilling activity is expected to accelerate as operators seek to mitigate potential future supply disruptions such as those experienced during the reporting period.

The Group previously highlighted the potential for near-term volatility in the Middle East due to the ongoing and evolving conflict and this remains the case. Linked to this, Kuwait Oil Company (“KOC”) has provided a verbal indication to all vendors that it will now re-run the OCTG tender process, which was originally issued in April 2026. An accelerated tender process is now expected to be re-issued during Q3 2026, with the result announced within a month of issuance. Any new contracts awarded will not be recognised until 2027. Hunting has a strong relationship with KOC that is built on more than six years of technical collaboration and supply-chain qualification. Therefore, the Directors continue to believe that Hunting remains well-placed to secure further orders from KOC and other tenders underway across the Middle East and Asia Pacific. 

As previously guided, Hunting’s earnings profile for 2026 will be weighted towards the second half. The KOC tender process delay will have an impact of c.$10m on 2026 EBITDA, resulting in a revised 2026 EBITDA guidance range of $138-141m, slightly below previous guidance. Projected year-end total cash and bank position is broadly unchanged at c.$50-$60m as working capital investments in H1 unwind.

The Directors anticipate continued year-on-year growth into 2027 given Hunting’s diversified portfolio. Dependent on the timing and outcome of the KOC tender, it will have a maximum adverse impact of c.$10m on current 2027 EBITDA consensus¹. 

The Directors expect activity in the Middle East to rapidly recover once the conflict is resolved and regional stability returns, enabling production to be restored and suspended projects to be resumed.

Overall, the Directors remain positive on the outlook for both the wider industry and the Group, with Hunting’s portfolio well-positioned for strong short- to medium-term growth.

1)     Hunting 2027 EBITDA consensus prior to the release of this announcement = $165m, source: Bloomberg

Sintana Energy

Sintana has announced, further to a previous announcement dated 20 January, 2026, the entry into definitive documentation providing for the acquisition of a 44% interest in Maravilla Oil and Gas (Pty) Ltd, a privately held, Namibian company focused on high-impact opportunities in West Africa.  Maravilla is indirectly controlled by Knowledge Katti, a Non-Executive Director of the Company.

Maravilla has assets in Namibia and is exploring additional opportunities in emerging frontier geographies regionally.  It is the owner of an 80% controlling shareholding in Paragon Oil and Gas (Pty) Ltd. (“Paragon”), also a privately held, Namibian company which in turn owns a 100% operated interest in Petroleum Exploration License 37 (“PEL 37”) located in the Walvis Basin, offshore Namibia. Sintana’s investment in Maravilla provides an indirect 35% interest in PEL 37.

Key Investment Highlights

·    Strategic Partnership With Maravilla Opens Access and Creates Shared Resources

–  Sintana’s investment in Maravilla provides resources to further develop, mature and refine opportunities including an inventory of prospects on PEL 37

–  Additionally, the partnership provides a platform for both parties to work together to continue identifying and evaluating capital efficient, high-impact opportunities in West Africa more broadly

·    PEL 37 is a Large, Highly Prospective License with Significant Seismic Coverage

–  PEL 37 covers an area of 17,295km², in relatively shallow waters (100 – 1,500m), with identified prospects at water depths between 300 and 600m, and with multiple large fans directly overlying a proven, mature oil-prone Aptian source rock

–  PEL 37 benefits from an extensive technical database already in place, including 2,813 km² (2014) of 3D seismic data, ~1,000 line kms of 2D seismic data (2014), and historical drilling activity (Cormorant-1 (2018), Sasoil (1995))

·    PEL 37 is Positioned to Benefit from Upcoming Offset Exploration Activities

–  PEL 37 sits north and easterly inboard of Petroleum Exploration License 82 (“PEL 82”) operated by an affiliate of Chevron Corporation (“Chevron”) and in which Sintana’s Namibian affiliate Custos Energy (Pty) Ltd (“Custos”) maintains a 10% interest (Sintana holds a 49% shareholding in Custos)

–  PEL 82 is approximately 70% covered in 3D seismic and is home to the Murumbe-1 and Wingat-1 wells previously drilled by HRT Participações em Petróleo S.A. which intersected underlying source rock and from which light oil was brought to surface

–  Chevron has indicated an expectation of exploration activities including a potential inaugural exploration well in 2027

–  Given the geographic and technical setting of PEL 37 relative to PEL 82, the outcomes of future drilling on PEL 82 could have significant “read through” implications for PEL 37

·    PEL 37 Offers Expanded Exposure to the Next Phase of Namibian Offshore

–  A successful opening of the Walvis Basin would represent the next major phase of the expansion of the broader Namibian offshore environment, following the enormous discovery successes in the Orange Basin to the south

–  In addition to upcoming activities on PEL 82 led by Chevron, in April 2026, Eco (Atlantic) Oil & Gas Ltd announced the farm down of interests in three of its licences in the Walvis Basin (adjacent to PEL 82 and PEL 37) to bp PLC, and is expecting to conduct significant activities on these licences over the coming 12-24 months. This includes seismic acquisition, reprocessing and potential exploration well decisions

In conjunction with Sintana’s investment, Maravilla will make a Namibian $1MM donation to the communities in the Erongo Region to be distributed in co-ordination with the Office of the Governor, the Honorable Dr. Natalia IGoagoses and the Knowledge Foundation, led by Knowledge Katti.

Robert Bose, CEO of Sintana, said: 

“Expanding our platform though an investment in Maravilla is the continuing demonstration of our ability to secure cost-effective exposure to high-impact exploration licenses in emerging basins.  The expansion of our Walvis Basin footprint positions us to participate in the next chapter of Namibia’s offshore success.  We look forward to providing updates on progress in the coming quarters.”

This is confirmation of the previously announced deal that adds potentially significant assets to Sintana’s high quality portfolio and is really only just more of the company following through on its oft stated policy of adding substantial projects in the worlds finest post codes.

This provides a very low cost entry point into what is a material position in a block in the heart of the Walvis Basin offshore Namibia. It has significant local interest, with Chevron, who have upcoming drilling to the south, where interestingly Sintana are a carried partner in that block and therefore must have a pretty good idea of the geology and subsurface trends in the area. 

Other interesting guides are that BP has farmed into the Eco Atlantic blocks on either side recently which adds further interest and again ratifies the Sintana strategy who will stand to benefit from all the offset work locally. Given the huge interest in the region it is no surprise that there have been many other companies looking at this block but Sintana has secured it which is another tick in the box for them. 

At 21.75p the shares are trading at a significant discount to my target price of 75p but I am hugely confident that once the massive potential is recognised in what is a hugely valuable portfolio of assets then the shares will reflect their true value. 

And finally…

It is a big weekend for sports fans after a meagre diet in recent weeks.

The Dutch Grand Prix at Zandvoort will be the last ever as the organisers cannot make it pay, the sprint race is at 11:00 tomorrow morning and the final GP is at 14:00 on Sunday. Max has signed a new contract at Red Bull until 2030 so that ends that then.

The 1st test match at Headingly finished with a damp squib, England won by an innings and 103 runs having bowled out Pakistan for 171 and 135 having posted 409 themselves. Bad luck if you have tickets for tomorrow but the ECB should hang its head in shame, firstly for starting on a Wednesday and also for not scheduling any Ashes test next year in the north, none at all……

The Premier League is back, Champions the Gooners host Championship winners the Sky Blues tonight at 20:00 whilst tomorrow the Red Devils go to new boys the Tigers tomorrow lunchtime. The Toffees host the Eagles, the Black Cats go to the Tractor Boys, Forest entertain Leeds and the London derby sees the Spurs at the Bees.

On Sunday the Seagulls host the Villa, the Cherries are at the Noisy Neighbours and the Magpies host Liverpool. Worth noting a standout tie in the Championship as the Hammers visit the Addicks…

And a stray rugby union match but a goody, at 16:10 tomorrow the All Blacks are playing the Springboks…

And the York Juddmonte festival ends with the City of York stakes and the Ebor.