Hunting PLC ($HTG)

Okay. All right. I think we've got everybody. Welcome again. A few just administrative points. First, this presentation is being recorded, so you can watch it again. And we will try and deal with all your questions after Jim has done his formal presentation. So please submit any inquiries you might have via the question button on your screen. And the company will be talking to a slide deck that is already on the Hunting website, Investor Relations page, along with many other useful materials. Right. We're very pleased to welcome back Jim Johnson, the CEO. And I'm now going to hand over to you, Jim, to start proceedings.

Okay. Thanks, Andy. I want to thank Andy Edmond and the Equity Development team for putting this together for us, and hello to everybody that is logging on and listening to this. Exciting times for the company right now. We're going to give this little presentation to go over the key points on where we've come from in the last year and more importantly, where we think we're going to be going in the future. So if we turn to the next slide, Andy. There's all the disclaimers. If you need to go to sleep some night, you can take a look at that and get some sleep. And Slide 2, we're going to talk about the investment proposition. So I'm sitting here right now with a very unique company that I'm very proud to be associated with. It's one that brings a lot of talent to our oilfield service industry with all the skills that we have. We are known for our leadership in manufacturing and system design, our proprietary technology. Our strategic position is very unique, whereas we are not just a North American play, but literally globally, we sell products around the world, onshore, offshore, even areas like space, defense and aviation. The graph on the bottom left shows our financial performance coming out of COVID. I'd like to show that the EBITDA percentage continues to rise. Our share price is up right now, but it's all based on the fact that we have a very solid business plan and are delivering excellent results to all of our shareholders. Next slide. Just kind of a breakdown to show everybody just what we do and where we play in the world right now that we're part of. I'll talk first about our perforating system business, otherwise known as Titan, and we are one of the leading independent suppliers of perforating guns and explosives globally. It's a business that obviously benefits from the work being done in the shale fields for oil and natural gas extraction, but it has a long history of also being involved in conventional work around the globe. The business operates with most of its manufacturing done in Texas here in the U.S.A., but a global reach in supplying the markets everywhere. Subsea is our fastest-growing part of the company from an acquisition point of view. We have a number of product lines. If you go back prior to 2018, we had one business that was involved in the Subsea side. Now that we've added many, many more, we can focus on areas like the installation of FPSOs globally as well as the subsea environment that goes on for all the components around the subsea tree that get production off to the shore. On OCTG, it's a business that the company first started in and has its legacy in going clear back to the 1960s when we initially were in the business supporting the North Sea. Today, our OCTG business has a global reach. A very big presence in North America, where we benefit again from all of the work being done in the onshore shale plays, but also providing the highest spec premium connections in areas like Kuwait, deepwaters Gulf of America and other challenging environments. The business also is complemented by our accessory business, where we manufacture a lot of the completion tools that go in the tubing strings that are then working in conjunction with people like Schlumberger and Halliburton, where they're doing the completion contracts in areas like Brazil or Guyana. Advanced manufacturing is the one area we have an extensive exposure to non-oil and gas. As a matter of fact, our largest non-oil and gas exposure. It consists of 2 facilities, one in Fryeburg, Maine, which is our advanced machine technology facility. And there, about 80% of our business is focused on defense, aviation, power generation. And recently, we've seen an uptick in our nuclear business. The other part of that business is based in Houston, Texas, where we manufacture electronic components and PCB boards for high-end equipment primarily that goes downhole, like MWD equipment that has to withstand severe environmental shocks, whether it be temperature or shaking from the -- just the actions related to drilling. Along with that, we've also added some medical and defense customers to that as well. And then in energy transition, it's an area which has been slower to go more because of just the government's uncertainty over plans for things like geothermal and carbon capture, but it is one in which we have invested heavily. We have relationships with mills such as Jiuli which provides high-end nickel-based materials for the most corrosive geothermal and carbon capture applications. So we're working that now, and we see that as being a growing part of the business over the next decade. Next slide, please. I wouldn't be here today without this board showing all the key customers that we have, and we're very proud to add all these clients as customer customers to us. Some of these customers like the Chevrons and the Halliburton, literally my whole career with Hunting, they've been a key customer of ours. But we enjoy the fact that we work with a Blue [indiscernible] group of clients worldwide. Next slide. Operational highlights, just talk about what we did for 2025, which we view as a very, very successful year. We completed 2 acquisitions, part of our strategy for Hunting 2030, where we want to grow some of the company organically as well as through acquisitions. We purchased Flexible Engineered Solutions based in Northern England for $64.8 million, which allowed us to benefit more from additional growth in the offshore market space. Organic Oil Recovery, which has been in the press a lot lately, we took control of that, bought that business. We now have the handcuffs basically off us. We had issues where we were, for example, unable to do sales work in the Western Hemisphere or really invest in what we saw as needed things for the growth of that business. So that's gone and totally under our control right now. We completed the big KOC order. That went through successfully and thanks to our crew out of Southeast Asia and our Houston team that did the engineering on the premium connections. The Perforating System, the Titan business, one of the best stories of the year, had a significant turnaround in profitability. I take my hat off to the management team there that's focused on the new technology we have as well as focusing on clients that value our technology and the dependability that those products bring to them in their daily operations. In other businesses that we -- when we looked at our portfolio, we sold off and disposed of our Rival Downhole Tools joint venture for $13 million and used that cash to recycle it back into the organization and make other acquisitions. We continue to focus on the cost side. We're continuing to work on our EMEA restructuring. That should be completed by the end of June, a saving of $11 million captured in that. We've also then announced a further $15 million of cost savings planned over the next 2 years. And one of the thing that I think has been very attractive as an investment to outsiders has been our revised capital allocation plan. We've completed a number of tranches of our share buyback. We're now in the fact of finishing up the last one, which will be a total of $60 million sometime in March. And now we're guiding to a further $40 million over the next 2 years. So all in all, we're looking at growth in the dividend, buying back shares and of course, increasing our earnings to give a better return for our shareholders. Next slide. This one is just kind of a quick snapshot. Obviously, the WTI crude oil price on the upper right, that's going to be changing based on where we're at today. But the real highlight was the nice generation of cash that we did last year, the EBITDA number of $135.7 million. Sales order book sitting slightly under $400 million right now. We anticipate that ramping up significantly in Q2 due to our tender outlook for OCTG as well as in Subsea. And I remind people that are tuning in for the first time that, that order book typically doesn't include much or anything from Titan due to the short nature of the cycles that we sell into that. Next slide. Scorecard, a number of points, some of them I've already talked about. I think the one that's most important or one of the key ones that I like to talk about is the one in the upper right-hand corner, where we talk about the total cash generation, where we ended up with $63 million of cash, but that's after an impressive $145 million spent on M&A, dividends and share buybacks. The rest of it I've talked about already. EBITDA margins are important that we continue to see that going in the right direction. Our goal is to get to 15% or higher. We're at 13% now, and we think we're making continuing progress to have that growth forward. Next slide. Next slide is basically our EBITDA growth and delivery over the year. It shows you the areas where we're above plan and some where we're below plan, all of them being a work in progress to increase as we go on. OCTG at 19% is historically a very high number. Credit to our team globally, both in the connection business and the accessory business for delivering those numbers. Subsea at 17% was a good number. We anticipate that going significantly higher as we have the FES business come online for the full year and the opportunities we see expanding in international markets for offshore activity. Advanced manufacturing, as I mentioned earlier, has a little work to do. Dearborn performance was good. The electronics business is what dragged down below the goals that we've set, primarily due to a slowdown in capital equipment purchases from the major OEMs. And then there's Titan there going in the right direction. The year before, it was at 0. So a nice progress there in a very, very competitive marketplace, but we're very optimistic that number will also accelerate in the year forward. Next slide. Briefly on the 2 acquisitions that we made, Flexible Engineered Solutions. The picture that you see there on the left is an FPSO and all those red items are what we manufacture, the Diverless Bend Stiffener Connections. When we looked at the global offshore marketplace, we have a very strong presence in some FPSO work with our Titanium Stress Joint offering. However, not every FPSO in the world is going to use a Titanium Stress Joint. It depends on the water depth, different issues that come up to the operation. With the acquisition of Flexible Engineered Solutions, we now can play and have a market space in every FPSO globally. And we look at that potential market of exceeding $100 billion on every FPSO that's under construction in the world today. So that, along with other opportunities in things like floating offshore wind and some of the down subsea environment around the wellhead and the tree will again provide us more opportunities there. Organic Oil Recovery, I mentioned earlier, we wanted to bring this in-house, so we had control of it. Some of you may have seen the recent press release from Buccaneer Energy, one of our new customers in East Texas, in which they were able to double their production and take their water cut basically to 0. It's a great advertisement for us, a great piece of success, especially when you consider there are hundreds of thousands of wells in North America that produce less than 15 barrels a day, and this could be a way to really jump up production. Additionally, it can delay because of the success of this product, delay the cost of decommissioning in areas like the North Sea or the Gulf of America because the production can be enhanced, they can to say bluntly kick the can down the road to keep those operations more profitable. Today, we're waiting on the results from Harbor for the Catcher development, but we have interesting pilots going on right now with ExxonMobil in Angola and in Brazil and other areas around the world. Next slide. OCTG, another great year of delivery. TEC-LOCK product line, you'll see in the upper left. It's really a product line that continues to go from strength to strength. It's a product that literally didn't exist before 2018, designed specifically for the applications on the shale operations. What we have seen and why we've driven the growth of this is really because, again, customers trust in the technology of the product as lateral lengths continue to get longer and more challenging. Today, in North America, upwards of 40% of all shale wells drilled today extend 3 miles or longer in their lateral length, some of them even doing U-shaped wells, and the cost of failure is too high not to have a good technology attached to that product, hence, our growth in North America. Accessory business I showed on the bottom, doing well last year, even with a tepid offshore Gulf of America market, but really a lot of activity in places like Brazil and Guyana. Our KOC business, I talked about a couple of slides ago. That's completed. Fortunately, we don't have any pipe on the water waiting to get through the straight moves, but we're anticipating further upside in '26 with more business with Kuwait. And our Jindal, our Hunting joint venture in India continues to perform very, very well, adding some good earnings to the bottom line. Next slide. Non-oil and gas shows you the progression there, going in the right direction, actually up 10% year-over-year on revenue, most of it driven by our business at Dearborn due to the increase in the aviation, defense, power gen and now nuclear business. Next slide. Cost reduction and restructuring we talked about. We announced today $15 million of savings planned over the next 2 years. A lot of that has to do with a lot of moving pieces from shared services globally that we're looking on to be more efficient, looking at our footprint. As I mentioned, we're in the process of winding down our EMEA European business, which will have more cost savings. And then I always like to highlight that our lean manufacturing program entered its 17th year. And historically, that business has delivered 7 figures worth of savings every year. And so my hats off to that manufacturing team globally that seeks to do things quicker, faster, better at the highest quality level every day. Next slide. The balance sheet, again, good returns back to our shareholders, talks about the free cash flow. Some of that was down over the year just due to the change in the winding down of the KOC orders, but you'll see the dividend continuing to rise, inventory turns going in the right direction. So we think we're managing the business very well from a cash flow point of view. Next slide. Product group review, I'll talk a little bit about this. The connection business, as I mentioned earlier, had a great year. We see no downside going forward. The order book, you'll see in the far right is down. A lot of that is due to the extraordinary size of the KOC order, which was our biggest order in the company's history. Right now, there were tenders supposed to be out in -- they were out that supposed to be submitted in February. Those were delayed until March, now the end of March. So right now, with all that's going on in the Middle East, it's kind of unclear exactly when the delivery dates will occur. Fortunately, for our outlook in '26, we don't have a lot of that planned for our guidance. But the good news is there's lots of opportunities globally in other areas. Completion accessory work continues to pick up in the Gulf of America and in South America. We see continued market share gains onshore in our TEC-LOCK product line. And we see a lot of opportunities in other international markets such as Indonesia, which looks to be rising and getting busier this year. Next slide. Subsea, I mentioned a good bit about that to start with. Enpro business performing well. FES now under our wing. The integration of that business has gone very, very well. The sales order book up in '25. It was an interesting year in '25. It was actually a down year globally for subsea tree awards. But we're seeing that resurge right now. And we've actually seen in areas such as our Stafford, Texas business, where we make components for subsea trees for clients such as FMC, we've seen our backlog there double year-over-year. So we're very optimistic that we have the right products, and we're in the right geographies to benefit from further growth in Subsea. We've opened up an office in Kuala Lumpur to expand our presence in Southeast Asia, and we continue to see a bright future. Next slide. Titan perforating systems, it's really, to me, part of our AI story. And I say that with all seriousness that if you look at our commanding position in the natural gas markets in the Marcellus, Utica and the Haynesville from a sales point of view, and you look at the incredible demand being put on the electrical industry for generation, it's going to have to be solved and sourced through natural gas. We're seeing data centers being starting out or plan on a daily basis around the country. And the electricity demands, we think are just going to drive further and further exploitation of the shale resources that were plentiful in North America, along with increased LNG with things like the -- what's going on in the Middle East right now being a factor. So for us, it's a very strong story going ahead for Titan. Additionally, I tell everybody that shale rocks are the most common sedimentary rock in the world, and they're all over the place. They're extensive, obviously, in North America, but they're also in Mexico, Argentina, Saudi Arabia, Algeria, Turkey, literally everywhere around the globe. Australia is a new hot place right now and most exciting. And where those places get -- when they get developed, we will be there with our Titan product line to service our clients. Next slide, please. This is our AMG business that I talked about between Dearborn up in Maine and our Houston Electronics facility. It was nice to see some other new clients come on board last year. For example, Dearborn a couple of decades ago was a big supplier in the nuclear industry. And we've seen those first orders come back to us last year, and we expect further orders in the future as there will probably be a resurgence in nuclear demand, again, driven by the demand for electricity. Defense and aviation, 2 strong areas when we're already manufacturing product for power generation with natural gas-fired turbines. So a good portfolio. One of the things we've had to do, and if you went back 10 years ago, our Dearborn business was 80% oil and gas, 20% non-oil and gas. We've totally flipped that. So it's almost like we're having a reinvention of our assets in Maine to make sure we can take on the new business. And also satellite business has been exciting for us supplying to both SpaceX and Blue Origin. On the electronics business, as I mentioned, we have some work to do, but that's one where we have landed a couple of defense contractors. We've had a long relationship with the client with medical supplies, medical components, and we hope to grow that. And we anticipate a resurgence in the CapEx cycle of the OEM oilfield service customers we have as tools wear out and sooner or later, they have to be replaced. Next slide. Other manufacturing, I won't spend too much time on this, but it's one of the things we did highlight was part of our EMEA restructuring. We closed 2 facilities in the Netherlands, relocated equipment and personnel to our new shop in Dubai. Part of that is in our well testing business, where we make these components that people like Schlumberger buy from us for well testing, for stand filtering and the like. Now we're closer to the clients of where the orders were actually at, which is in the international, Southeast Asia, Middle East market, but it also allowed us to reduce our costs and make us more competitive in that offering. OOR, the Organic Oil Recovery business, starting in January, that will be moved to the subsea and all those numbers will be recorded there. But we're excited that, that happened. And then our Trenchless business had a nice performance in the year, which is driven by things like fiber optic installation in North America, where people have to do industrial drilling to put in things like water lines, fiber optics and things like that. Next slide. Finance report. Next slide, there you go. I've talked about this already to a big degree. So I'm not going to spend a lot more time on it. We talked about dividends, return on capital of 10% normalized -- a normalized backlog that we intend to build up. We've extended the maturity of our RCF by 12 months. So we have a lot of firepower if needed for further acquisitions. But the key is we basically are sitting with cash in the balance sheet, and that gives us a lot of flexibility when looking at other M&A deals. Working capital to revenue ratio of 33% continues to get better, but a lot of work done on that finance team. Next slide. And this right here, revenue by product line. You can see the huge amount of OCTG we had. Again, a lot of that driven by KOC, Titan # 2, and there's a further breakdown of Subsea and advanced manufacturing. Next slide. Earnings and profitability for the year. There's all the numbers. I'm not going to repeat them. I've already hit the high points of those, but the key was our $135.7 million of EBITDA that we generated in the year and the 13% EBITDA margins, up year-over-year and one that we're going to continue to work on going forward to have it even better. The dividend has increased, and our goal is to increase that 13% a year from here on going forward. Next slide. There's just a breakdown if anybody wants to take a deeper dive into it by segments and by area. I'm not going to let a lot of comments on that, and it is what it is. It was a good year, but it shows where everything was at in the company. Next slide. Balance sheet. One of the keys of being a successful oilfield service company is managing your balance sheet well. In this industry, I mean, I've been in it all my career, but it's one that is in a cyclical industry. And one of the things you need to do is make sure your balance sheet is secure that you're not overloaded with debt. We're in a good position, as I mentioned right now. We're good stewards of the capital that our shareholders have trusted us with, and we continue to see that as one of the core things that we do. Working capital to revenue numbers are highlighted out there, but I think our finance team has done a great job. And again, the operational team delivered the results to do that. Next slide. Working capital improvements. You can see all that on there. Bruce Ferguson, our CFO, can go into a lot more detail on that, but the bottom line is it's better. We continue to work on our inventory, our turns, our DPOs, DSOs, not much else I can say about that except it's improving year-over-year. Next slide. There's kind of a waterfall or whatever you have that talks about where the cash came in, where the cash came out, how we ended up with the $62.9 million at the end of the year after the $145 million of outflows that I talked about earlier. And next slide. Order book visibility. As I mentioned, we have some work to do to really crystallize the quotation work that we've done in the past few months. We're anticipating Q2 to be a strong bookings period, primarily for OCTG and for Subsea. Our Dearborn operation right now has a backlog in the $100 million range. That should continue to grow based on our strong presence in natural gas-fired power generation and our good relationship with people like Pratt & Whitney for defense and aviation business. Next slide. Our guidance right now remains unchanged. We're guiding to $145 million to $155 million of EBITDA -- you see CapEx of about $40 million to $50 million. No huge projects going on. A lot of it is replacement equipment to make sure our people have the best tools to do the job and do it right. EBITDA margin, we're wanting to progress that from the 13% up to 14% ultimately to our target of 15% or more and free cash flow conversion of 50% or we're hoping greater. Next slide. So strategic steps. I mean, I've talked a lot about this, but it's just kind of some pointers. One of the things we focus on is new technology. Even in a cyclical business, I think we've been a good stewards of working to make sure we have the latest products and technology that our customers are asking for. I'll show a little bit more about that later. International growth in Titan is a key part of what we think will be a continuous transformational story of the Titan business is profitability. As I mentioned earlier, there's lots of unconventional resources around the world. And if anything, energy security is even more important today than it was 9 or 10 days ago. OCTG, same story unconventionals, actually because of the lengths of laterals and what has to go on there, technology is more required for those products, and we have them to satisfy our clients' need. And additionally, we also supply OCTG products in some of the most challenging deepwater wells in the world. So it's a product line that's not limited by geography or by well operating needs. Non-oil and gas, as mentioned earlier, we continue to grow that, pretty bright outlook for things like nuclear, aviation, defense and power gen. And then subsea, one of the things we're really focusing on is being able to bundle all the products that we have right now to sit in front of our clients and show them a list of things we can do, whether it's an FPSO development or construction coming on or a subsea development on the ocean floor where we can be a component supplier. Next slide. On the new technology, we broke it down into a couple of areas. On the subsea, the FAM is part of the Enpro product line. The one on the bottom, the stack FAM is really a new product, which is a variation of our flow access module, and it allows for faster development at brownfield sites where they can then implement tiebacks quicker, which should again reduce the operator's cost and bring oil -- first oil market quicker. OCTG remains a constant work in progress. Our testing facility in Houston literally is working around the clock, continuing to design new products because operators have new grades of steel that they're using, new diameters of pipe that they're using, and we want to make sure that we're able to play in the field when the tenders become available. Well intervention is kind of a focus more on the smart side of tolls, having more precision and more feedback to the operators, whether it's a slick line operator or somebody doing a -- running a string of guns and perforating guns. And things like the Opti-TEK, it allows for a smaller footprint, which enhances safety on the rig floor, the operating floor. Perforating systems, examples there are 2 tools that we are in the rental business on. We have designed them to, a, provide the top technology and information back to the operators. But b, they've also been designed with some of the lean initiatives we had to make sure from a rental point of view, that it's cost effective for us to be able to repair these, get them back in the shop -- get them back in the field in a quick time period. Next slide. International sales, I've talked about this a little bit more. Just below shows just Argentina and Saudi Arabia, but there's a bigger world out there that's developing in unconventionals. And as I mentioned, we've seen business in Turkiye. We've seen business in Indonesia. We just see this as being a trend that's going to continue to enhance our business for a long time to come. Next slide. OCTG, lots of areas where we continue to supply product into. I want to take my hat off, I didn't mention much to our Canadian team, which also had an excellent year. Again, lots of unconventional work going up there, especially for natural gas, but also in areas like heavy oil, where we supply products to. And then the map kind of speaks for itself and shows you where we're playing out right now. Our new -- our joint venture is now a couple of years old in India continues to perform well. All of the product that we manufacture in India stays in India because people like ONGC and the like need to have domestic energy sources. And so we see that as a very good growth area for us. Areas like the Philippines, that's driving our non-oil and gas business when we're looking at things like geothermal for our OCTG business. Next slide. Some more opportunities listed on non-oil and gas. Some of it I think I've already talked about, so I'm not going to spend a lot more time on it. But we are engaged with a number of companies that we're supplying parts to for aviation and defense. The addition of FES brought us into the floating wind market. It's some of the same connector technology that we use for FPSOs is utilized on wind projects. Right now, it's a small part of our business, but it's one that we see probably growing in international markets in the years ahead. And as I mentioned, I'm also excited about the nuclear business. It's small today, but it's one where everything that you read and talk to people on nuclear is going to be part of the energy supply story over the next decade or 2. And we have the reputation and the track record of supplying components to the nuclear industry. Next slide. Subsea bundling, I mentioned about earlier. Again, it's taking a lot of new products together and being able to go into the client and talk about opportunities. We have a lot of work right now focused on the FPSO market, but we're also with beefing up our presence in Southeast Asia, expanding more into areas like Indonesia, offshore Malaysia in those areas. OOR, the Organic Oil Recovery product line, we think has huge upside for the company, and I list there talking about ExxonMobil in Angola and Brava in Brazil. And just -- and the nice thing is the fact that you're in talking to Exxon about FPSOs and Titanium Stress Joints opens up the door for things like OOR. So in summary, I'm proud of what the team has been able to do in 2025. I think we delivered strong results in line with what we stated in our goals for our 2030 outlook and strategy. Our EBITDA margin continues to increase. I think we've been a great stewards of our capital and our capital allocation policy benefited shareholders if you love dividends or if you like the share back story. It's kind of the best of both worlds, and we continue to see that going. And then again, our guidance, right now, there's lots of uncertainty in the world, but what's not uncertain is the dependability of Hunting products, the relationships we have with clients, our desire to grow our business globally and bring those more of these products to the marketplace. So we're sitting in a good place. And even at a time of lots of uncertainty, I'm very uncertain that hunting -- I'm very certain that Hunting is a great investment going forward. And with that, I think we're done. And back to you, Andy.

Yes. Thank you very much, Jim. A lot to talk about, a very good year and a very, very comprehensive presentation. And I encourage people to keep putting questions through. We've got a lot. So let's dive straight in.

We have a couple of questions about your acquisitions last year. Firstly, on Organic Oil Recovery. Can you just go into a little more detail as to how you think its scale will grow? And specifically, what is needed for it to win a full-scale field deployment contract and roughly when that might that happen to match your ambitions?

Well, that can happen any day right now. So one of the things we're waiting on is the test results back from Harbor for the Catcher development in the North Sea. Typically, these treatments can take anywhere from a month to 9 months to work through the system as we inject our nutrient packages into these fields and then they have to progress through the reservoir and then the results are finally shown. So I think the key is in some areas like with Exxon and like Brava, they bypass the initial pilots and are into it right now to see without doing much testing, but let's just get on with it and see what happens. So right now, I think it's one of those stay tuned. We have beefed up our sales force. We have beefed up the human capital in our laboratory response. Those are things that we were hindered with prior to the acquisition. We've beefed up the tools that we use to analyze the fluids and put this product to work. So I think, again, it's one of these works in progress. We have Blue [indiscernible] customers now using it. And I'm sure that there will be press releases when the successes are confirmed and rolled out.

Great. We look forward to that. And then on FES, could you say what you have learned about the business since the acquisition? And are you already seeing any evidence of how its order winning potential has improved since it became part of the much wider Hunting group?

Well, I'd like to say that we did a lot of extensive due diligence. It took us 9 months basically to get that deal done. So I don't think I learned anything today that I didn't know 6 months ago. So it's been one of those cases that from a reputation point of view, we very much admired the owners of that business and what they had built over the time frame. We went into the acquisition very conscious of what they could bring to the table and how important it was for us to be able to enhance our bundling to our offshore clients. So I don't think there's any real surprises. I think as I mentioned, a lot is planned for Q2, a lot of tender activity, specifically in Brazil, but it's also in Guyana, Gulf of America, literally globally wherever the deepwater going on. So it's one we're a good buyer. We did our due diligence properly, and we're excited about the upside in the future for FES with Hunting.

Thank you. And a follow-up question, you pointed out the pleasantly large uptick in the Subsea order book. Can you say vague how much of that is down to FES contributing this year?

Not a lot. Most of it is with the titanium especially in the staff and the Enpro businesses. So most of the upside for FES -- I mean, we have the FES business, correct. But really, the big tenders are a second quarter event we're counting on.

Got it. Your results statement made the -- well, encouraging point that in the context of the group, the Middle East is not at the moment a source of material exposure. And you did during your presentation comment about further extended delays in KOC follow-on orders. But can you go into a bit more detail about where other significant OCTG tenders on the horizon may be coming up in the next few months?

Sure. We've recently seen an increase in OCTG tenders more in Central Asia. We've seen an increase in West Africa. We've seen an increase in completion work in the Guyana, Brazil area, and we've seen a steady tender turn in North America. Nothing out there to match the tenders proposed for Kuwait right now. But it's a pretty steady -- it's pretty much what I would say, normalized that we've seen most of our time in the OCTG business. Prior to KOC, our typical OCTG business order was in this $10 million to $20 million range. And for those, just as a summary, in North America, we don't sell pipe. So we rely on our great distribution partners that hold the pipe, buy the pipe and source that from the mill. Internationally, we own the pipe, and that's where we go to trusted suppliers that we have alliances with, and we bundle that pipe with our premium connections at our manufacturing sites and take them to the marketplace. So one of the keys that I should have probably stressed more is we really sell ourselves as being the virtual mill. So we're not relying on any one skill source. But really, the story on tender activity is global.

Yes. That makes a lot of sense. Advanced manufacturing, as you seek to grow non-oil and gas revenues, can you tell us a little bit more about the medium and longer-term prospects for the electronics and the Dearborn businesses?

Well, I think both of them sit in pretty sweet spots right now. I think when you look at the U.S. government and tariff issues and wanting to onshore more manufacturing and the fact that our key customers are people like Caterpillar and Pratt & Whitney, for example, 2 blue-chip clients, there's a lot of growth upside available for us at Dearborn. We -- that business got started decades ago servicing the U.S. naval program, making submarine components. So it's a wide list of things that we can make there. And we would never have envisioned 20 years ago, we'd be supplying components to Elon Musk. So there's lots of growth opportunities there. Electronics, we're one of the few people that can make the mission-critical hard environmentally challenging electronics. When you think about these going -- these boards and components going into drilling tools that are 25,000 feet in the ground with high temperatures and shaken night, we don't have a lot of people that do that. The key is really getting to the point where there is a resurgence in the capital equipment buying cycle. And that's kind of what we're waiting for, but we're just not waiting. We're also, again, trying to grow those areas with military and defense. In the last year or 2, people like Textron and Cubic have come on board as a component where we supply components to as good customers. So again, both of them, I think, are growth stories.

Yes. And following on from that, there's a question of whether advanced manufacturing because it's not in oil and gas might not be seen as a long-term core business. And I don't want to answer it for you, but I presume a degree of diversity is good for balance in the group. And any business that is generating attractive margins and return on capital is a good business to have.

No, you're right. As far as I'm concerned, they are a core part of the company's portfolio. We had a goal in our 2030 strategy to have about 25% of our revenue being non-oil and gas. And as far as being a career oilfield service guy, I know that there are cycles that you have. So we're counting on some of that to really balance things out when times are -- when the cycle is moving right now. But for us, it's a core part of our business.

Good to hear. A question on capital allocation. Cash flow has been a great strength for Hunting. But can you talk a little bit more about the financial headroom for potential M&A deals given the new share back that you've announced? And conversely, if you, as a group, didn't do any deals in the next coming year or so, would the Board have in their minds, a net funds threshold, which could trigger further shareholder distributions?

Yes. So I mean, we're very fortunate to have the balance sheet that we do right now. We generated a lot of cash. We have over $200 million of available borrowing with no hindrance to the company's operations with our financial availability. Plus, again, we finished with $63 million in the bank last year. So plenty of firepower to go do M&A. The issue on M&A is something we look at literally every month we look at a deal. And we've had cases where I've mentioned we've had our heart broken a couple of times, getting deep into due diligence. And because we do an excellent job on due diligence, we found things that stopped us from making a transaction. So whatever we buy, it's going to strategically fit the company and the growth plans that we've laid out, and it's going to also fit the financial metrics that we put in place. And that's really all I can say right now. As far as the Board and accumulating more cash, I think that our investors should have seen with our recent announcement of another $45 million projected on buybacks over the next 2 years that we're going to always look at that real time. I'm not a big fan of debt, especially in this industry. And so it will all be a balanced scenario we look at to what we think makes best for all stakeholders in the long term.

Got it. A question on, first of all, raw material input pricing. Can you give a general idea of the current mix? And are there any areas given the political stress that we've talked about, where there might be any supply chain bottlenecks if the strike continues in the Middle East and other areas?

Yes. Well, first of all, right now, I'm not seeing or don't know of any bottlenecks. And we don't really rely on the Middle East for any of our main supplies. I mean the biggest thing that we buy is steel. And I like to tell the story about kind of like the 2 -- the guys in a race and 2 of them and it's like, I don't have to be -- I just have to run faster than you. So if I look at our business and I look at the competitive landscape, everybody is in the same boat that I am. So as long as I can be more nimble and stay ahead, I don't worry about it too much. If you look at things like OCTG prices in the States, those pipe prices are like at a 12-month low right now. And while we don't buy the pipe, we do buy a lot of the mechanical tubing and things like that for our accessory business and for our perforating guns. So I would say right now, we're used to handling inflation. It's one of these things that comes and goes, but it's not anything that I'm concerned about at the moment.

Great. M&A, the other side of the balance sheet strength. Are you pleased with the pipeline that you're looking at, at the moment? And in a perfect world, which we definitely don't live in, in what divisions or which regions would you most like to buy?

Well, we've stated that our #1 area we're looking at is more Subsea. And the reason is we like the margin profile, and we like the fact that it's an international story. Other things that we've looked at would be things that we could tie and enhance the Titan business. And then we also look at non-oil and gas. I'm not real happy with what's out there. It's been a really challenging couple of years. I think coming out of COVID and earnings, a lot of people pulled back saying, well, tomorrow will be a better day and multiples will be higher and I'll get a better price. And a lot of things that we looked at that were brought to us really strategically made no sense and didn't fit for the long-term growth of the company. So it is a challenging marketplace, but there are things that we're looking at literally every month.

Great. And you mentioned that you are a very international business, and we've got a couple of questions on South America. What we have here. Venezuela has been replaced on the front pages of the newspapers by Iran. But do you see good opportunities there for Hunting in the future as U.S. oil majors start reinvesting in the country?

Yes, but that's not going to be in my budget for '26 or '27. I mean at one time, Hunting had facilities in Venezuela. We got out of those years ago before Chavez grew in the country. It's one of those areas that the first uptick we will see will most likely be business supporting our larger OEM clients like Schlumberger, Halliburton, Baker, Weatherford, people like that. But I think it's going to be a long road to go. And in the previous times where we did business there, it was also a fairly low tech market. So the oil production, it wasn't that challenging from a technical point of view as far as OCTG and things like that.

Yes. It will not be a quick journey, as you say. And related -- well, bordering, I suppose, we have a question whether there are any implications positive, if possible, for your work in Guyana. Now that Venezuela is moving in a slightly different direction, whereas previously, of course, it was making territorial claims against Guyana. No change or a slight positive.

No change. I don't think Exxon had any change in plans on their 10-year strategy down there based on the rumblings that we had in Venezuela a while back. So no, there's been no change there. If anything, some new areas, I mean, we're excited about Exxon going into Trinidad. We view that as being a mirror of what's in Guyana, and they're going to start a drilling program down there. So I think there will be more activity down there. Suriname is another place with the Total Apache discovery down there. So I think it's going to be a great basin for long-term growth for Hunting.

Good to hear. And just time, I think, for a final question. We have one. Your business seems to be a mini conglomerate of oil services. Is this an optimal business structure with synergies across segments? Or is it more to enable you to manage the unpredictable cycles in oil and gas?

Well, I think I don't like to view it as being a conglomerate because I go back to that we are Hunting in one team. I think we just want to make sure that any place in the world where there's going to be exploration and production for hydrocarbons, we can play. In some areas, it's going to be onshore, like we've seen in the U.S. and Canada or in Argentina. Offshore, we want to have that flexibility to supply products globally. So I'm really happy with our portfolio. I think our team does a very good job of working cross-selling, synergizing. So no, I'm pleased with the setup and the way it is now. I think we're in a great position.

Excellent. Good note on which to finish. I'd like to thank our audience for their attention and their questions. You will get some feedback questions, which the company would be very interested in what your replies are. Enormous thanks to Jim at what must be one of the busiest weeks in his career, I would think, ongoing to make time for shareholders and stakeholders. And perhaps I can just pass over to you, Jim, for a few closing remarks.

Well, thanks for taking the time. It's good seeing you again. I appreciate being able to do this. And I'm going to say what I said last week, I think our shares are on sale. So buy now while you can. It's a good buy, it's a good return. I think the upside is very, very strong, and we've got the assets in place to really benefit from a good future in the extraction of hydrocarbons and what we do on the non-oil and gas side. So again, thanks for your time. Thanks for everybody for taking part in this.

And thank you. Thank you very much, Jim.

Thanks, Andy. I hope that sounded okay. You never know [indiscernible] I don't like reading PowerPoint.

I shall cut you off just whilst it's still live. So best of luck with the rest of this busy week.

All right. Take care yourself. Thanks.

Speak soon.

Bye.