Our business model
Hunting’s financial and operational resources enable us to leverage our core competencies in systems design and production, precision machining and quality print-part manufacturing. This allows us to add value for our stakeholders.
Our business model
Hunting’s financial and operational resources enable us to leverage our core competencies in systems design and production, precision machining and quality print-part manufacturing. This allows us to add value for our stakeholders.
We develop proprietary technology
The development of new technology and products is a key element of our business model and strategy. This intellectual property and know-how is introduced to our blue chip customers as the drive for more efficient and safer delivery of oil and gas continues as well as addressing the challenging environments that the geothermal and CCUS sectors operate in. In 2023, the Group held 538 patents and trademarks, covering 153 products.
We manufacture close to where our clients need us
Hunting has a global operating presence in strategic locations to ensure that we are close to where our customers are drilling and developing any resource type. Our established operating footprint ensures that we can support our customers in the oil and gas industry and can be leveraged to address global geothermal and CCUS projects. At 31 December 2023, we manufactured in 11 counties, from 27 operating sites and have 16 distribution centres.
We leverage our brand and reputation through strong quality assured products
The Hunting brand is supported by our strong reputation for quality assurance and health and safety. These credentials drive customer loyalty and form the basis of most industry tenders, which support our success in increasing our market share in key product lines and multiple end-markets. During 2023, the Group manufactured 23.0m parts (2022 – 16.6m) with an internal manufacturing reject rate of 0.20% (2022 – 0.13%). The reject rate for goods shipped was 0.0006% in the year (2022 – 0.0013%). These metrics demonstrate the impressive quality and reliability of our products. This performance strengthens Hunting’s standing in its end-markets.
We train our employees and keep them safe
Our health and safety protocols have been developed to keep our employees safe, with our safety performance measured using an industry-wide performance indicator, which is monitored closely. In 2023, the Group had 24 recordable incidents (2022 – 23) leading to a total recordable incident rate of 0.91 (2022 – 0.97) compared to the industry standard of 4.0.
We provide critical supply channels
Our products are often manufactured using critical raw materials, which enable them to perform in highly challenging environments. We work hard to provide competitive supply channels to lower project costs without compromising on quality. Hunting is an independent provider of premium and semi-premium connections and precision engineered accessories for all oil and gas resource types, providing cost agility for our customers. The Group has a number of strategic partnerships, including our joint venture partner Jindal SAW in India, which produces OCTG pipe and tubulars, to which Hunting’s premium connections are applied for the local Indian energy market. This venture meets local content requirements. The Group also has strategic supply chain partners to support the accelerating energy transition sector, including the ten-year alliance with Jiuli and the five-year agreement with CRA-Tubulars.
We target blue-chip customers and suppliers
Hunting is a trusted supplier to some of the world’s leading energy companies, including integrated energy companies, international services groups, independent oil and gas producers, as well as leading engineering companies who operate in the global aviation, commercial space, defence, medical and power generation sectors. We target clients and end-markets who value strongly assured products and services, and who demand high-performance technology and products. We have developed long-standing relationships with our customers through our market-leading reputation for health and safety, quality and reliability, differentiated technology, availability and delivery, and customer service and support.
We leverage our expertise in materials and engineering
Hunting’s workforce comprises highly skilled engineers and machinists who lead the development and manufacture of our high-performance technology and products. Our expertise in mechanical and materials engineering and metallurgy, ensures that our products will perform in high-pressure, high-temperature environments. We are able to leverage this expertise into energy transition markets as well as high-value non-oil and gas markets, such as aviation, commercial space, defence and medical for diversification opportunities.
We operate in a responsible and sustainable way
Hunting’s responsible and sustainable approach to its global operations includes the monitoring of waste and emissions to ensure we have a minimal impact on the environment. We have recycled for many years and, more recently, have started to monitor our carbon and climate impact, with initiatives being introduced to reduce this impact. In 2023, the Group announced new 2030 emissions reduction targets as part of the Board’s drive to improve our carbon reduction credentials and to assist in the preparation of a Net Zero transition plan.
Facilities
The Group has an established global network of operating sites and distribution centres located close to our customers and within the main global oil and gas producing regions.
Our operating sites are used for the manufacture, rental, trading and distribution of products. The manufacture of goods and the provision of related manufacturing services is, by far, the main source of income for the Group. A significant portion of our manufacturing occurs in high-end, specialist facilities utilising sophisticated machines. In Hunting’s rental businesses it is critical that an appropriate range of equipment is stored and maintained. Generally, this must be configured to meet specific customer requirements.
In certain product lines, particularly OCTG, Hunting holds inventory to support its customers’ requirements and to take advantage of particular market opportunities. Our distribution centres are primarily used in the Hunting Titan and intervention tools business groups, where close proximity to drilling operations is important.
Our operating segments
Hunting reports its performance based on its key geographic operating regions. Hunting Titan is a large, separate division, which is reported as a stand-alone segment that operates in several geographic locations. A description of each segment is noted below.
Hunting Titan
Hunting Titan manufactures and distributes perforating products and accessories. The segment’s products include perforating gun systems, shaped charge technologies and well completion instrumentation. The business has four manufacturing facilities in the US and one facility in Mexico, supported by 12 distribution centres, primarily located in Canada and the US.
North America
The North America segment was formed on 1 January 2021, following the merging of the Group’s US and Canada operating segments. The segment supplies OCTG, premium connections, subsea equipment, intervention tools, electronics and complex deep hole drilling and precision machining services for the US and overseas markets. The North America segment has 14 operating facilities, mainly located in Texas and Louisiana.
Europe, Middle East and Africa (“EMEA”)
The EMEA segment derives its revenue primarily from the supply of OCTG and intervention tools to operators in the North Sea. The segment has operations in the UK, the Netherlands, Norway, Saudi Arabia and the UAE. Revenue from the Middle East and Africa is generated from the sale and rental of intervention tools across the region, with local operations also acting as sales hubs for other products manufactured globally by the Group, including OCTG and perforating systems.
Asia Pacific
Revenue from the Asia Pacific segment is primarily derived from the manufacture of premium connections and accessories and OCTG supply. Manufacturing facilities are located in China, Indonesia and Singapore. The facility in China also manufactures perforating guns for Hunting Titan.
Subsea
The Subsea Technologies operating segment was formed on 1 January 2023 and comprises three business units: (i) Stafford, which manufactures hydraulic valves and couplings; (ii) Spring, which manufactures titanium and steel stress joints; and (iii) Enpro which manufactures flow access modules and flow intervention systems.
These businesses occupy different parts of the offshore / subsea equipment supply chain, with customers ranging from tier one OEMs to exploration and production companies.
The segment operates from three facilities, two being located in the US and one in Scotland, UK
Oil country tubular goods (“OCTG”)
Operating basis: Manufacturing trading
Overview
OCTG are steel alloy products and comprise casing and tubing used in the construction and completion of the wellbore. Hunting machines threads to connect OCTG using flush or semi-flush joints and can manufacture premium and semi-premium connections and accessories using our own technologies such as SEAL-LOCK™, WEDGE-LOCK™ and TEC-LOCK™.
We are licensed to apply a variety of third-party thread forms and generic API threads. We source OCTG products from a significant number of major global steel producers and have strong, long-term relationships in the US, Canada, Europe and Asia Pacific. Hunting also trades pipe, which is a lower margin activity, to help support customer relationships.
Differentiators
Hunting is one of the largest independent providers of OCTG connection technology, including premium connections.
Global operating presence
North America, EMEA and Asia Pacific.
Related principal risks
• Commodity prices
• Shale drilling
• Competition
• Product quality
Perforating Systems
Operating basis: Manufacturing
Overview
Hunting Titan manufactures perforating systems, energetics, firing systems and logging tools. Products are mainly used in the completion phase of a well. The production, storage and distribution of energetics is highly regulated and there are significant barriers for new entrants to the market. The business mainly “manufactures to stock” and hence uses a wide distribution network. Some manufacturing is done to order, sourced from international telesales.
Differentiators
Hunting has a market-leading position in the US, supported by a strong portfolio of patented and unpatented technology.
Global operating presence
Operating sites in North America, Mexico and China. Distribution centres in North America and Asia Pacific.
Related principal risks
• Commodity prices
• Shale drilling
• Competition
• Product quality
Advanced Manufacturing
Operating basis: Manufacturing
Overview
Advanced Manufacturing includes the Hunting Dearborn business, which carries out deep hole drilling and precision machining of complex measurement-while-drilling/ logging-while-drilling (“MWD/LWD”) and formation evaluation tool components.
The Hunting Electronics business manufactures printed circuit boards capable of operating in extreme conditions. These businesses work collaboratively with customers implementing their designs to their specifications. Hunting Specialty manufactures products used for onshore drilling and completion activities.
Differentiators
Hunting Dearborn is a world leader in the deep drilling of high grade, non-magnetic components. As a Group, Hunting has the ability to produce fully integrated advanced downhole tools and equipment, manufactured, assembled and tested to the customer’s specifications.
Global operating presence
North America
Related principal risks
• Commodity prices
• Product quality
Subsea
Operating basis: Manufacturing trading
Overview
The Subsea division produces high quality products and solutions for the global subsea industry covering hydraulic couplings, chemical injection systems, valves and weldment services.
Following the acquisition of RTI Energy Systems, now known as Subsea Spring, titanium and stainless steel stress joints and production risers have been added to the Group’s subsea portfolio.
The addition of Enpro Subsea’s product offering also brings modular production technology and know-how to our offshore capabilities.
Differentiators
Hunting’s expertise ranges from the manufacture of high pressure seals to complex welding of stress joints
Global operating presence
North America and EMEA.
Related principal risks
• Commodity prices
• Product quality
Intervention Tools
Operating basis: Manufacturing equipment rental trading
Overview
The Group manufactures a range of downhole intervention tools including slickline tools, e-line tools, mechanical plant, coiled tubing and pressure control equipment.
This business is capital intensive and results are dependent on asset utilisation and rental rates.
Differentiators
Hunting offers a comprehensive range of tools, including innovative and proprietary technologies.
Global operating presence
North America, EMEA and Asia Pacific.
Related principal risks
• Commodity prices
• Competition
Other non-oil and gas
Operating basis: Manufacturing
Overview
Across the Group, efforts have been stepped up to diversify revenue streams and leverage our core competencies into new markets.
In the year, Hunting has developed new sales streams in the military and medical sectors, primarily via our Dearborn and Electronics businesses.
In the year, the Group’s Asia Pacific segment also delivered its first batch of micro hydro generation systems.
Differentiators
Hunting’s complex, precision machining capabilities are applicable to many other sectors outside of oil and gas.
The Group has successfully positioned itself with a number of defence related businesses who recognise our expertise.
Global operating presence
North America, Asia Pacific.
Related principal risks
• Product quality
Our stakeholders
The Group’s stakeholders enable the delivery of Hunting’s business model and strategy.
Stakeholder engagement forms a key element of our culture and is an area which has increased over the past few years.
Understanding the needs of our shareholders, customers, suppliers and workforce is achieved by regular dialogue.
Shareholders & lenders
Our shareholders and lenders provide equity and loan capital to the Group. The Directors regularly engage with shareholders and lenders to discuss performance, strategy, governance and other matters. This feedback is used to refine our strategic plans.
Our employees
Hunting’s employees deliver our strategic plans and are the Group’s most important asset. We are committed to training and developing our workforce, and keeping them safe through the operation of stringent health and safety policies. The Board meets regularly with management and the workforce through site visits and engagement programmes.
Our customers
Our clients are critical to the financial success of the Group. Customer dialogue helps us shape our product development strategy and provides focus to our service offering. Hunting continuously works hard to deliver a secure supply chain for our clients and in the year signed new strategic agreements.
Suppliers
Our clients are critical to the financial success of the Group. Customer dialogue helps us shape our product development strategy and provides focus to our service offering. Hunting continuously works hard to deliver a secure supply chain for our clients and in the year signed new strategic agreements.
Environment & climate
The Group is committed to strong environmental stewardship. Our operating principals are focused on containing and reducing our carbon footprint, maximising recycling, reducing waste streams and increasing our climate change commitments.
Governments
The Group continues engagement with local regulators, tax authorities and governments throughout the year. Hunting continues to assist communities through a wide range of activities, including fund raising events and donations. Each region develops their own community initiatives to align with local cultural practices.
Our communities
The Group continues engagement with local regulators, tax authorities and governments throughout the year. Hunting continues to assist communities through a wide range of activities, including fund raising events and donations. Each region develops their own community initiatives to align with local cultural practices.
Sustainability accounting standards board (“SASB”) reporting
Throughout this section, Hunting has introduced the SASB reporting codes relevant to its non-financial data. Please refer to the SASB reporting tables on pages 226 and 227, which provide the detail to each area of reporting, Hunting’s compliance to the reporting recommendation and the page location of the relevant information.