THE Hunting family, which controls the London-listed contractor of the same name, has cashed in on a soaring share price and increased activity in the mid and upstream oil and gas sectors by flagging a £45.7 million capital-raising.
The raising, to be achieved through a one-for-four rights issue, will provide funds to expand Hunting both organically and through acquisitions.
The Hunting family, whose forebear Charles Hunting founded the company in 1874, said that it would not take up its rights. As a result, the family’s holding is expected to drop from 27 per cent to about 22 per cent.
Hunting’s shares slipped 8p to 252p in anticipation of the stock dilution, valuing the group at £255 million. The capital-raising, underwritten by Hoare Govett, comes at an opportune time. The company’s shares are at their highest level in four years, buoyed by a soaring oil price that has triggered an exploration rush to find new oil and gas deposits. Hunting supplies the drilling industry but also derives profits from its Canadian oil marketing and transport business.
With oil prices easing after this week’s record run to above $60 a barrel, investors took the opportunities to lock away profits in many independent oil and gas companies. Cairn Energy, the sector leader, was off 44p at £13.63, Premier Oil dipped 8p to 691½p and Dana Petroleum shed 1½p to 645½p. Granby Oil & Gas, steady at 129½p, could come under pressure today after reporting an unsuccessful North Sea exploration well in the late afternoon.
Advertisement
But profit-taking in the energy sector failed to dampen the good mood among smaller stocks, with the FTSE 250 closing 18.7 points firmer at 7,329.1.
The stronger performance was led by Corus Group, up 2¼p to 42¾p, and Vedanta Resources, the Indian metals company, up 12p to 505½p. Computacenter recovered 9¾p to 190¾p to make some amends for Tuesday’s profit warning that wiped 51p off its price.
Sound Oil enjoyed a strong AIM debut, closing at 7½p. The cash shell had raised £10.5 million at 5.5p to fund investment in oil and gas opportunities in northern and western Africa.