Shares in precision engineering group Hunting (HTG) hit five-year highs after a trading update from customer Buccaneer Energy (BUCE). The latter announced positive pilot test results at its Pine Mills oil field in East Texas using Hunting’s technology.
| Share price: 495p (+3%) | PE: 21.5x |
| Market cap: £975m | Yield: 1.9% |
100% uplift in production
In its update, AIM-listed Buccaneer revealed an increase of 100% in production in the northern section of the Pine Mills field. In addition, the firm said water cut decreased from 80% to zero in one of its treated wells.
The improvement was down to the use of Hunting’s OOR (Organic Oil Recovery) technology. OOR involves injecting a nutrient mixture into the reservoir to stimulate the growth of naturally occurring microorganisms.
The pilot project was in a section of the oil field where the water injector had been shut in for over two years. Moreover, not only did average production double following treatment but it continued at double the original rate according to Buccaneer.
The firm said based on the test results it would treat other wells in the same area next month. It will also work with Hunting to expand the use of OOR across the Pine Mills field in Q2.
Hunting really deserves a higher profile, given its leading edge technology which spans energy, healthcare, power generation, aviation and space. Savvy investors have clearly cottoned onto the stock, and the shares have had a good run without any hoopla.
Last month the firm posted strong FY25 results, with an increase in sales, margins and earnings, and raised its outlook. It also said cash flow would hit 50% of EBITDA and committed to 13% annual dividend growth to 2030.
Although today’s news may be small beer in the grand scheme of things, it shows Hunting’s strength as a niche player. The test results suggest OOR could be used as a recovery solution in many oil wells across the globe.
Having been on and off our radar for years, we’ll take a closer look at the stock in the coming weeks.
Read the Buccaneer press release here: https://buccaneerenergy.co.uk/investors/
Read more about Hunting here: https://huntingplc.com/investors/
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