Hunting warns of unclear and challenging short-term outlook

The rapid and unexpected drop in oil prices has left all actors in the sector scratching their heads as to when and at what level prices will stabilise.

As both equity analysts’ and companies’ forecasts and business plans have been left quickly out-dated investors may be in for negative surprises, oil-field services firm Hunting said in an operational update released on Monday morning.

The group said: “The company does not believe that [analysts’] estimates should be relied upon as an accurate indicator of 2015 financial performance.”

“Equally […] given the changes in its markets, Hunting does not believe that it is appropriate at this stage to provide financial guidance for 2015.”

The company went on to warn that the full impact of the oil price decline will not be felt until the second quarter of the year, but lower levels of activity are expected as global rig counts decline.

Hence, it has begun to reduce costs across all of its operating units, including head-count reductions at the most affected divisions.

The Well Completion and Well Construction businesses are expected to be the hardest hit, management explained.

Nonetheless, Hunting concluded by saying that: “While the short term outlook for the industry remains unclear and challenged, we are also mindful of the longer term strategic growth opportunities for Hunting.”

The company’s preliminary 2014 results will be released on 5 March 2015.

As of 10:36 shares of Hunting were lower by 7.31% to 458.3p.