Hunting Share Discussion Threads

[bubface] 16/11/2008 20:11

dex...see above article 1020 confirming co has £140m debts pre disposal.still looks cheap to me if £50m profits are sustainable!

[dextroisomerism] 16/11/2008 18:51

Let me know if I have got this wrong.
Market capitalisation in the Sunday Times today is £566m.
With the sale of Gibson they will get c.£650m.
Therefore the remaining business making £50m profit a year is valued at
minus £80million

[pyman] 14/11/2008 11:36

canadian dollar at 1-80 to the £sterling. price agreed at 1-97 from memory so currency going the right way re gibson sale.As pound falls HTG earnings will benefit from overseas earnings.

[mercury123] 11/11/2008 09:11

Well I'm well in now and looking forward to major profits on this share. My average price is woefully about 6.5 but I see that loss turning into a profit in the next six months and a good profit too.

[nurdin] 08/11/2008 15:52

Still a month to go before the Gibson deal is signed,sealed and delivered.Anything could happen in the interim...but the case is compelling here must say.

[huggybear1954] 08/11/2008 12:46

From The Mail today 'Hunting for a bargain could be worth your while'

Sometimes, the stock market's mistrust of companies becomes irrational.

Hunting, the oil services company, has received a fearful mauling from the bears who have taken a dislike to risky smaller companies.

Since the start of September, it has almost halved in value. However, that pounding has been more vicious than anything we have seen in the wider market.

Its shares are listed in the FTSE 250 Index, which has fallen 30 per cent in the past two months, while the FTSE 350 - which includes Britain's biggest 100 companies - is down by a quarter in the same period.

There is no good explanation for this rapid demise --particularly when you remember that Hunting is expecting to receive £625million in cash imminently after agreeing to sell its Gibson oil storage and transportation operation to private equity firm Riverstone.
That is the equivalent of 350p a share (current share price 456¾p) after the company's £140million debts are paid off.

So this means the rump of the rump business, Hunting Energy Services, which makes and sells drilling and pipe equipment, is worth around £1 a share.

That puts it on an earnings multiple roughly half that of any other business in the sector.

Yet the operation has grown at a compound annual rate of 50 per cent over the past five years, and generated operating profits of £37million in 2007, representing 40 per cent of total earnings.

Riverstone, which hired former BP chief Lord Brown, has the funds in place provided by UBS and has jumped past all the regulatory hoops and hurdles.

It would actually make more sense for buyout group to reprice its offer, or bid for Hunting in its entirety. But again there has been no indication that this is about to happen.

Once Gibson is sold, Hunting's prospects rely on chief executive Dennis Proctor spending the cash wisely.

He already has two deals lined up worth a total of £100million - one in the US and the other in the Middle East.

Both are expected to be earnings enhancing from day one.

Brokers expect Hunting's main markets to remain buoyant for another three years and value the company at as much as 950p a share.

Perhaps this is too generous with the oil price hovering around $60 a barrel.
But then the current share price of 460p a share is far too pessimistic about Hunting's prospects.

VERDICT: Buy while still cheap.

[old giggleswickian] 07/11/2008 16:44

Oil sands still viable at US$60 a barrel: Suncor
Carrie Tait, Financial Post Published: Wednesday, October 29, 2008

The market has become increasingly concerned about the viability of Canada's oil sands.
CALGARY -- Suncor Energy Inc., which last week rolled out massive spending cuts because of the credit crisis and slumping oil prices, said it will earn C$28 for every barrel of oil it produces should crude trade at US$60/barrel and Canadian dollar hover around US78 cents.

Under the same scenario, Suncor's cash flow netback would be about C$34 a barrel. At US$60 per barrel of oil, the realized price in Canadian dollars is $77. Then, on each barrel of oil, Suncor takes a $4 discount because of the quality of its crude, pays $4 in royalties, hands over $35 in operating costs, and then eats about $6 in non-cash charges.

"This is not a case of us not being able to make money at [US$60 per barrel]. There seems to be a lot of misunderstandings and panic out there in the market on that," said Rick George, the company's chief executive in a conference call discussing Suncor's third quarter earnings on Wednesday. "The advantage that we have in the oil sands business on that is no decline curves – and you're going to see some big decline curves, I believe, worldwide – and no exploration costs."

As the global financial world teeters, the market has become increasingly concerned about the viability of Canada's oil sands, which may hold 175 million barrels of oil, and are estimated to be the largest oil reserves outside Saudi Arabia. Indeed, a number of delays have already been announced, including Suncor's decision pull back on spending, which will push back the startup of its third upgrader by about a year, to 2012.

Suncor's cash flow from operations – a key number since the company plans to fund projects out of cash flow as the market crushes the availability of new debt – rang in at $1.346-billion in the third quarter, compared with $957-million in the same period last year.

The oil sands giant earned $815-million, or 87 cents per share, compared with $627-million, or 68 cents per share in the same quarter last year. Knocking out the impact of foreign exchange on the company's U.S. dollar denominated long-term debt, as well as project start-up costs, Suncor earned $971-million, or $1.04 per share, up from $538-million, or 58 cents per share, last year.

[huggybear1954] 04/11/2008 13:15

So the deal has been delayed until early December. Could work in HTGs favour as the canadian dollar has strengthened in recent days and it may strengthen further if the UK interest rate cuts are anything like the values being suggested. The remaining c$1170m payable currently equates to about £630m.

[huggybear1954] 30/10/2008 09:06

bubface, thanks for posting that. It's certainly more than I was able to glean from the company when I called them 2 days ago!
I'm not sure I see the failure of the deal to complete as the doomsday scenario. C$100m is not an insubstantial amount for nothing and Gibson is a profitable concern. However, it would probably throw up some more buying opportunities.
I just wonder if Riverstone want to re-negotiate the price. A bit like corporate 'gazundering'. In any case, it look like further delays are on the cards.

[handycam] 29/10/2008 12:24

Bossman you are totally wrong. Bears wear more risk than bulls - but then they do more homework.

[pyman] 23/10/2008 21:29

Hit £3-98 to buy at one point/ Wish I had some more but missed the opp. Agreed- presume shorting. However why HTG? why risk shorting unless the deal is dead- even then as a preicous poster pointed out:£49m in the bank from deposit and thanks very much. Biz is fine.

[huggybear1954] 23/10/2008 17:37

Can't disagree with that, but at some point in the next few weeks HTG are going to complete the Gibson deal and have £625 million in the bank. If they've nothing better to do with it, they could start a major share buy-back operation which could quickly reverse the trend.

Incidentally, does anyone know how to find what the total short position in HTG is?

[dancing piranha] 23/10/2008 17:29

Most shares are getting shorted in this financial meltdown, it's the only way to make money at present... fundamentals mean jack!

[bossman1978] 23/10/2008 15:41

I believe this share has been shorted for the last few weeks. It is far too cheap at the moment.

[pyman] 23/10/2008 11:44

well- how cheap will she get ? Did anyone see the downgrades yesterday on Wood grp etc. Was HTG downgraded too? I saw no mention.

[pyman] 20/10/2008 09:56

carlye - $40bn in cash. My guess is if they decide to buy something for 1.2bn canadian they complete.

[pyman] 17/10/2008 20:12

too right!!! in any case the buyer is not a tin pot

[old giggleswickian] 17/10/2008 16:21

In which case we could keep the £49m deposit which has been paid and would leave us looking at a profit of £130m for the year excluding the £49m windfall. Not bad for a £600m company in the oil services sector.

Ian.

[piedro] 17/10/2008 14:26

There could yet be a problem with the sale of Gibson energy - the funds could be hard to come by ......

[old giggleswickian] 17/10/2008 12:00

huggy,
With long term contracts in a conservative industry I do not think that recession will be of any great significance to HTG. The biggest problem I can see is that the pension (closed) surplus could be much reduced. Not such a big deal. Off to look down the back of the sofa.

Ian.

[pyman] 17/10/2008 10:13

sshhhhhhhhhhh

[huggybear1954] 17/10/2008 06:47

HTG is now worth less that the cash they are soon to receive for the sale of Gibson energy and the remaining business which made £50 million profit last year is worth less than nothing! Have I got that right?