15th Apr 2015 06:39
LONDON (Alliance News) - Energy services company Hunting PLC on Wednesday said the tough oil and gas industry market conditions in the first quarter will result in a sharp drop in operating profit for the company, with its headcount reduced in the quarter and the outlook for both the rest of 2015 and 2016 unclear.
FTSE 250-listed Hunting said market conditions in the oil and gas sector continued to be volatile in the first quarter to the end of March, with global rig counts falling, particularly in the North American market, the average oil price remaining relatively low and capital expenditure plans across the industry reduced or placed on review.
That market environment has resulted in operating profits across the business being around 60% lower in the first quarter year-on-year, Hunting said. Only its subsea, electronics and Dearborn divisions managed to improve their year-on-year performances in the quarter, it said.
It added that as US oil inventory growth and the rig count declined, it has cut around 20% of its staff numbers since the start of the year.
Hunting said its capital expenditure plan for the year remains on track, with new facilities under construction in Texas and Maine in the US and in Cape Town in South Africa.
The group said that while the outlook for 2015 and 2016 is unclear at present, it remains of the view that capital investment and activity levels in the oil and gas industry will recover once the supply and demand balance in the industry is resolved.
By Sam Unsted; [email protected]; @SamUAtAlliance
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