Hunting (LSE:HTG) — H1 Trading Update

0:00 Good afternoon, and welcome to the HUNTING PLC investor presentation. Throughout the quarter presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company can view all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO, Jim Johnson. Good afternoon, sir.

0:30 Hello, everybody. Thank you for taking the time to attend this webinar here and to get some more information on our recently announced this morning trading update. Before we get started, I just wanna say it's been a good day, and more importantly, it's been a good first half of the year for HUNTING. The the results that we showed, I think, are very strong when you consider all the market dynamics that are going on today. And before we get too far into the presentation, I really wanna thank the team that I'm fortunate to work with every day that have done amazing things, on a daily basis to deliver the results that we have and to give us the positive outlook we have for our future. So if we go to slide two, there's all the things that you're supposed to look at that we're supposed to tell you about on the presentation, so we'll need you to go to slide three.

1:22 And I would like at this time to just kinda remind everybody because I'm sure we have some new potential investors in here. Just kinda give you an overview of the company today before we get into some of the more details, starting with our investment proposition. But you'll see a number of graphs there, share price graph on the lower right, financial performance shows the progress that we've made coming out of the worst downturn in probably my career, which happened because of the COVID, outbreak that we had. But our core competencies remain the same. We are focused on high technology. We are focused on being experts in proprietary products for the oil and gas business as well as as well as looking at things for, energy transition.

2:12 We remain, experts on manufacturing, on metallurgy. And, again, I think that all this comes together, and you'll see this in the different product offerings that we had. We we have a very strong financial background backing right now. Company's in in very good shape for where we're at in the cycle. We're very, very good stewards, we think, of the cap of the capital in the company, and we've shown today through some things we're gonna do at enhancing returns to shareholders that we listen to our shareholders, value them, and we wanna make sure that they see returns for their investment in the company. If we go to slide four, it's really kind of the overview of what is the company today. Go to slide four.

2:59 There we go. On breakdown of the company's products quickly, on perforating systems, our Titan business is our perforating gun explosive and other accessory tools that go with that primarily for the fracking of wells. It's a business that's heavily focused on North America land, but the big upside has also been the growth that we've seen in the international markets. We're one of the leading independent providers of these systems, have a lot of IP tied up in our explosive technology as well as our gun assembly. Subsea has been the newest growth area for the company. We've made a number of acquisitions over the last few years. The most recent one that we just announced was the purchase of Flexible Engineered Solutions out of England, which adds more product depth to the company's offering.

3:51 And, again, it's it's products that are mission critical. Failure is not an option. And because of that, we enjoy, margins that, in many cases, exceed where our targets have been laid out for our 2030 strategy. OCTG is really where the company started. It's the roots of the company's business. It's focused primarily on our premium connection technology. That technology is engineered in Houston, Texas. We've been leaders in that field for decades. We have a couple different business models in North America. We sell our product, our technology, our connections through distribution systems. Internationally, we actually purchase OCTG, which is the pipe from a number of different mills, and it really gives us kind of a virtual mill approach to the marketplace.

4:44 This year, we had some great business in Kuwait, and a special, thanks to our team led by Daniel Tan in in Singapore for the excellent work that they have have done delivering some great results. Actually, I would say in my long career hunting, our margins in our OCTG business have been probably the highest I've ever seen, and we couple our OCTG sales along with the accessory business, which is, again, the bits and pieces in jewelry that put the tubing and casing strings together. Advanced manufacturing consists of two facilities, one in Houston, Texas, one in Fryburn, Maine. In Maine, we have our manufacturing technology operation there where we make highly precision parts for not only the oilfield, but for space and for aerospace and defense.

5:34 And, again, mission critical parts, extremely close tolerances. Few people in the world can do what we do in our operation in Maine. We couple that with a facility in Houston, Texas that makes advanced electronic assemblies and components and PCB boards, primarily oilfield related, and it goes out to the major oilfield service companies in the industry to be inserted in things like their MWD tools. And then lastly, we've got a topic there on energy transition. It's been an area where the activity levels have been slower than what we'd like to see, mainly because of political issues, not because of anything the company is doing. The primary revenue generation in that business to date has been on the geothermal side.

6:21 If we go to the next slide, slide five, kinda gives our global locations, our outlook. Excuse me. We are a global player there. I think the map's pretty self explanatory. And, again, thanks to our, over 2,000 employees worldwide that helped deliver the results we do today. Next slide on number six talks about IP. We continue to focus on product development and developing products to solve our customers' problems. Our whether it's in subsea, perforating systems, premium connections, well intervention, our machining technology that we do, our investments in three d manufacturing, all that plays into things that we hope gives us a competitive advantage and not in an area where we are commoditized when we go to the marketplace. So it shows a number of patents. You can see the numbers up there. We're proud of that, and I'm thankful for the all the brains in our engineering groups around the world that continue to bring these new products to the marketplace.

7:28 Slide seven, we show some of our blue chip customers. I would need probably 50 more pages if I put the rest of the client base on there, but these are some of the more prominent ones on there. HUNTING's reputation is second to none in the client base. We work hard to make our customers happy as far as delivering them products that give them an edge in their competitive opportunities out there. And you'll see world leading customers on there, and we're very thankful and proud to be a supplier to these people. On the next slide, talks about we're gonna talk about our 2030 strategy and progress to date, and I'll quickly go to the next slide on number nine. And it talks about what we were trying to do when we laid out our strategy for 2030. And first and foremost, I'm I'm not gonna read all of these. You'll have time to see them, and this will be online. But a key was to get the EBITDA margins 15% or higher.

8:28 A a note to that is the recent acquisitions that we have made all have will have EBITDA contribution much higher than the 15%. Those are the things that we're looking at. We've given some revenue growth targets out there, return on capital targets, you can see, of 15% or or better. Cash flow is important. And then other issues such as, again, rewarding shareholders for being patient investors with the company. We've announced a targeted increase in our dividend. My feeling on that is a company that's paying a dividend is showing financial strength and through good times or bad, which we are in a cyclical business, so there will be the ups and downs. But we wanna make sure that there's a reason to be invested in HUNTING. And things like the dividend and a share buyback, we think, will enhance those returns for our shareholders.

9:22 Operational excellence that y'all kinda talked about, I'm very proud of our safety record, our environmental record. Health and safety is is number one in what we do. If you go around our facilities, they're world class. We have a leadership team that is ingrained in the fact that we have to have no harm to people, no harm to the environment, and to make sure we do things the right way. And then at ESG, there's other targets there. We remain focused on improving our emissions out outputs. And, again, if you saw our facilities, we don't have smokestacks all over the place. Our facilities, I like to say, would be like walking into a factory of a Tesla factory or the like. They're clean. They're well maintained.

10:07 They're organized, and they're safe. Again, we'll now go to slide number 10, which goes through some of the progress that we've accomplished on our goals to our our 2030. We have increased our presence in the OCTG business. As it says there, it was 44% of our revenue. A lot of that driven by very strong performance out of Asia Pac for orders in The Middle East. And in North America, our team here, led by and Travis Kelly, has really bucked the trend on the rig count as we've exceeded what I would say is our our our market share has grown, and we've exceeded our output versus what the rig count is. Subsea, very strong business for us right now, one that has a great upside. We've said we wanted to grow that. Some of our investors that I've talked to, we've mentioned that 2025 would be a year of acquisitions.

11:02 We did two of them this year, and subsea has been where the bulk of the money has been spent over the last couple years. Cost savings, we continue to focus on doing things the right way and looking at where we're at. We've had significant cost savings at at the HUNTING PITON business. We've seen that business turn around on and pro provide a better financial performance of of as of late as well as we're focusing on things like streamlining our EMEA operation to increase our profitability throughout the group. Energy transition sales, I recently talked about, again, kinda slow, but we've picked up some nice wins in places like Utah with the forge project for Titan products as well as in The Philippines recently with our partnership with a mill in China called utilizing our premium connections.

11:52 And, again, comments there on the working capital, goals that we've set out. The dividend, we'll talk about a little bit more later, but we're increasing our target on that due to the financial strength of the company and what we can do. Slide number 11, the next one we turn to, is very, very interesting. As you go back to, like, the pre COVID days, the bulk of our EBITDA profile was in the Titan business because of the boom that went on in the North American land business. That has kinda subsided. It slowed down. It is affected by rig counts, and you've noticed a big swing there now where the OCTG business and the subsea business are now greater contributors of our performance than they were a couple years ago, replacing what was the Titan business.

12:40 We still think the Titan business has a lot of room for growth, especially if we're seeing great opportunities in the international marketplace. Slide 12,

12:51 excuse me, goes into our trading update that we released this morning. I think a pretty strong set of numbers considering, again, what market we're in. We're far from a boom market, but we've managed to make market share gains, made and do it profitably based on everything driving around our technology and the fact that we're not out there selling me too products to people. So we're we're happy about the performance for the first half of the year. We had, again, very good business, in the far in The Middle East driven by the KOC orders. Those are widening down right now. We're seeing incoming orders for our subsea business. Thankfully, we're benefiting from some of the decommissioning that's going on in the North Sea as well as new opportunities in the Gulf Of Mexico with client customers such as BP.

13:42 And I guess the big news is the acquisitions that we've done, the purchase of flexible engineered solutions out of England, which recently happened, as well as earlier this year, the organic oil recovery acquisition, which gives us total control over that. And then some areas where we needed to not be in the business anymore, such as when we were able to sell our equity stake in Rival Downhole Tools, which was a business that we formed a few years ago consolidating what was our drilling tools business with a company called Rival, and so we were able to crystallize that investment this year. I talked earlier about the EMEA restructuring, which is ongoing. Basically, our operations in Holland today are totally closed, and we're in the process of moving operations or have been to Dubai to a new facility that we'll talk about later. Dividend target increase. We know the dividend is important to a lot of our shareholders.

14:37 Again, we looked at wanting I think in our 2030 strategy, wanting to deliver $200,000,000 of of cumulative returns by 2030. This is a step to make sure that we do that and that maybe even greater

14:52 than that. And then the share buyback program was announced, again, $40,000,000 starting August 28. And we think based on the float of the shares and what we can do, it'll take twelve months or so or probably more in order to complete that. We'll update people on that. And I think most importantly, even with all the issues in the market today, we've been able to maintain our guidance for 2025 in that 135 to one hundred and forty five million EBITDA range. Next slide. A little bit of talk here about the acquisition of, FES. We're extremely excited about that opportunity. Again, I wanna thank Rob Anderson and Ian Latimer, the two owners of that business, for having the faith and trust in HUNTING to take on their legacy and to make sure that business continues to grow. For us, it was a process. It took many, many months to get this done. But the picture that you're seeing right now shows the DBSC, which is the diverless bend stiffener connections.

15:59 That is one of the main products that's on the turret. That basically what it basically does with this acquisition, it allows us to participate in FPSO work globally in any water depth. So as many of you may remember, we acquired a company called it was RTI Energy Systems a few years ago, and and and that company manufactures and has the proprietary technologies, the titanium risers that we supply to people like Exxon in Guyana. But there are certain applications on FPSO where they're not gonna use a a regular or rigid riser, and they're gonna use umbilicals or flexibles. And now with this technology through the purchase of FES, we can now play in all these areas.

16:46 So very substantial order book outlook for us as far as tender pipeline. It's a great company, and we think there's gonna be a lot of upside as we continue to now do the consolidation within the organization. On slide 14, that actually is a picture showing a turret, but it gives you some more details on FES. Talks about our £50,000,000 purchase price that we made. The 46 people that we inherited are now part of the HUNTING family. Key part is the two owners are staying around to help us for a while as we make the transition. And, again, the company has great market leadership, and we just see a lot of opportunities that grow this internationally through expanding the the sales effort throughout the HUNTING network.

17:36 On slide 15, there's some of the more the reasons why, what the multiples were there. I think the key is it allows hunting to, again, be bundling and cross selling more of our products, especially when it comes to EnPro and the HUNTING titanium riser business, is in Spring, Texas. And we can now talk to an operator about any FPSO development that there's something for us there as well as the fact that the more places you can touch a client, the better off you are to have their attention to it to it show your enhanced credibility in the marketplace. And what I like about it is the fact that, as I as I always like to say, 70 plus percent of the world's covered by water. The margin profile in subsea is very good, and it's one of those businesses that is not so affected by the daily swings, excuse me, of oil prices. Today, a lot of the breakeven prices for deepwater are in the 40 to $45 a barrel range.

18:40 People plan long term for these developments, and we just see this as an area of steady growth for the future. On slide 16, it shows you a number of the products. I'm not gonna go through all of them. I think one of the interesting things is the company has had business in the renewable sector for offshore wind with some of the product lines. So we view that as some potential upside, but the bulk of it has been oil and gas, and it has been globally. But as you can see, a number of products, I call it, it's big steel, very highly engineered, a lot of IP going into these products. And more importantly, it had they have the respect of our customers out there and the integrity of these products.

19:27 Slide 17. Didn't just kinda show some of the areas where the company does business. One of the issues when we made this acquisition, we didn't want people freaking out as, oh, we're buying a UK company, and they're stuck with The UK sector, the North Sea, and that is by far not the story. So when you see this, you'll see that they've had products, delivered globally. We intend to enhance that and hopefully expand the sales presence in places like Southeast Asia as well as in the Gulf Of Mexico. On the next slide on 18, talks about some future growth opportunities in the subsea distribution system side of the business as well as, as I mentioned, being able to play with the umbilical and flow line part of SURF.

20:14 Again, it's just more opportunities we have, a broader product range, great technology, and it's a product line very much in favor with the tier one EPIC EPIC providers out there for subsea and offshore work.

20:31 Slide number 19 is kind of the financial overview. I'm not gonna again, I I don't I'm not good at reading PowerPoint slides. I like to talk through this, but you'll see the data up there. Right now, we're we see a lot of opportunities. And, again, if you look at the FPSO market out there, it's one that's continuing to expand and grow, and we will be a growing part of that. So

20:56 good pipeline and tender activity out there. Revenue and EBITDA numbers for 2024 provided good margin generation. So, again, we're happy with this acquisition. It's exciting for all of us. On slide number the next slide, actually, I wanna hand it over to Bruce Ferguson, who I like to say the same on the call with gold recovery. Oh, thanks, Jim. I was happy to talk about organic gold recovery. This is a product we're really excited about. We've been working with the with our partners at organic old recovery since 2017. We finally acquired the company back in March this year. That allowed us access to all the intellectual property and know how and also the global territorial rights as well. So it's a really exciting technology for us.

21:44 We've been working hard on the commercialization of the products. We've now got 60,000,000 of contracts secured within the North Sea, which we believe will get great mark for us as well. What's also really exciting is the the very good margins that we can attract. It's a really it's a compelling economic case, which could attract really good margins and fits into our Capital Market Day targets of achieving well over the 50% EBITDA margins. So you can see a range of customers that we're working with all over the globe. We've actually recently hired a couple of microbiologists and business development for The States, and that'll give us slide 21. That's going on to, sorry, 21, Jim. If you look at slide 21 there, we're looking at the the customer base. So we're probably engaging with over 40 clients around the globe, and that's across in whether it's Far East, Middle East, West Africa, Europe, and also The States as well. So really exciting point of the journey in terms of commercializing the technology. This year, we'll all be all all be about sort of accelerating that commercialization, building out the infrastructure, and getting the the product to market.

22:51 If you look a little bit more detail, just on slide 22, we're looking at the in terms of the acquisition, it was $18,000,000. I think it's it's good value. Now I've got that access to global market. The technical and sales personnel, which will be key, is now I've now been hired. We don't need a lot of personnel unless a large investment to scale this up. We believe we can effectively address the global market with another four or five people. One lab in The Middle East, which again will be hundreds of thousands of dollars of investment. It's not a significant CapEx project on this as well. We're sampling. We're evaluating a number of projects, oil fields around the globe. And, you know, we've got we've got ambitious targets. I'd be shocked if we don't do a 100,000,000 of revenue on this product line by the end of the decade.

23:40 And with the EBITDA margins on there in excess of 50%, that's exactly the type of product that we're interested in, and we're really looking to accelerate the commercialization over the next few years. Okay, Jim. That's all I've got on that one. Alright. Next slide. It's an interesting picture. That's one of our our team members in Wuxi, China. Our board was just there, having a board visit to have employee engagement and to see the facility there. And that pipe that's being lifted by a crane is prior to that, it's on its way to Kuwait anyhow. So there's some ten and three quarter product going there. And, again, very thankful. Special thanks to our team in China. On slide 24, we show talk or we talk there about our our latest OCTG investment, which is our joint venture in India with Jindel Saw.

24:32 That is performing very, very well. It's very rare, I think, that a JV generates a profit its first full year of operation just for this you know, all the things that have to happen and systems that have to be put in place. But we did. We've got a great partner. It's a market that's gonna continue to grow. I think everybody knows India is a very dynamic marketplace right now. They need hydrocarbons. They're going to be expanding drilling operations both onshore and offshore, and we've got a great partner and a key business there utilizing our premium connection technology. Slide 25, kind of an update there on our new facility in Dubai. We we had an older facility. We needed more room because, basically, we've moved a lot of our European assets in manufacturing to Dubai, especially in areas like the well testing and well intervention.

25:28 The bulk of our client base is now in that market, and we need to be in country more. So new facility, which will be more efficient in the in manufacturing and the delivery of products to our client base. Again, we're very, very bullish on The Middle East as we saw with our OCTG business, as we've seen with the Titan business on the gun side, and as we've seen and have continued to see in the well testing and well intervention side of the business. Slide number 26, just briefly on South America. Been a huge growth area for us. Right there is a picture of one of our titanium stress joints leaving our operation in Spring, Texas. Huge activity we've had over the last couple years in Guyana with ExxonMobil. We thank them for the confidence they have in hunting and delivering these products safely and on time and performing well. We see a long runway ahead of us in Guyana with ExxonMobil and new opportunities around the corner in Suriname.

26:28 We see increased activity in Argentina for the Titan business due to the shell play down there and the continued use of, working the unconventionals. We, in the past year, opened up actually an office in Brazil, so we have a sales presence on the ground there. And with the acquisition of FES, it becomes even more important to have a presence there in one of the largest offshore markets in the world and growing every year. Next slide. Talking a little bit about our capital allocation and guidance. Again, something out of the ordinary. We typically have not been a share buyback company. But considering our financial performance and, again, wanting to make sure that we show our shareholder base that we want to show them returns.

27:15 That is something that we've done. If you look at Slide number 28, it kinda goes into that. I mean, first and foremost is we wanna make sure we're investing in the company. So what we're not doing is we're not skimping on CapEx to make sure that we are the most efficient out there in the world in what we do. Most of our CapEx, the last couple years, has been replacement CapEx, primarily in the area of machine tools because we make things, and we wanna make sure our people have the right tools in place. And so we have a continuous improvement program in place to drive efficiencies, but we also wanna make sure we have the latest and greatest machine tools out there to deliver the value to our organization.

28:01 Dividends, we've talked about increasing our target on that from 10% annually to 13%. Value accretive m and a, we've shown that with the two that we've talked about earlier with FES and with OOR. And then the newest one is the additional shareholder distributions with the share buyback. All of that taking into into consideration, we still have a very strong balance sheet and a lot of liquidity to do more m and a when opportunities come up, and we are still continuing to look at m and a opportunities real time. And we I hope that that isn't the these aren't the last two for the year, but we'll continue to see how that plays out. Slide 29. Again, I just basically already talked about that, but it does show a capital investment this year in that 35,000,000 to $40,000,000 range, which is close to what our depreciation is yearly.

28:54 There's no big greenfield site projects we're looking at this year, though one of the opportunities we are exploring and we want to do is something on the East Coast Of India. And, again, we'll look at other things, but at whatever makes sense. The share buyback, I've talked about a little bit already. We think it's gonna take at least twelve months for that to be completed. And depending on other opportunities or whatever, we'll just we'll take it take it a month at a time. But our goal is to spend that $40,000,000, buy and cancel those shares. And, again, it's a it's an enhancement to shareholder returns. On the next slide, our 2025 guidance, you can see we're maintaining our EBITDA guidance with the margins probably closer to the 13% range. Tax rate is there. I've talked about CapEx.

29:42 A big thing is the bottom is our is our cash and bank, and we're saying selling that as being positive at the end of the year in the 65 to $75,000,000 range. Free cash flow conversion of 50% or greater. So I think all in all, and especially in consideration of our peer group, I think these are very good results and very good outlook going forward in a very challenging marketplace. Next slide. Actually, we can skip on to slide number 32, kind of our summary. So I'm very pleased with what the team has delivered for the first half of the year. And, again, it's been a, it's a challenging market. Every day is a new day when you're talking tariffs, political issues, oil prices, wars, pick one. It's been one that's been you know, the the oil price has been kinda all over the place. But what we do know is that we have a very strong foundation built in the businesses that we have. We're very pro hydrocarbon development.

30:46 We see the oil and natural gas market being strong for decades and decades to come. We maintain our strong balance sheet with our good liquidity. We have lots of room for more bolt on m and a. And I just wanna say that we're that we are picky buyers. So when people look at you know, it it takes taken a while. The opportunity, for example, with FES, that started last year. And so we look at things closely from a financial point of view, from an IP point of view, but also from a cultural fit point of view. Because for me, one of the strengths of HUNTING is the culture of the company and its people. So we remain a strong cash generating company right now. I can't tell you what oil prices are gonna be. It's it's, like, kinda like the broken clock. I could give you a price, but I won't give you a date because it remains a big unknown with what OPEC's gonna do and and the like. But I will say that today, our product

31:41 line offering is very diverse, And whether it's onshore, offshore, North America, international, we touch a lot of points that I think will deliver value for our shareholders going forward. So I'm happy with where we finished up for the first half of the year. Optimistic for the second half of the year and even past that. But, again, I will say there's just a lot of unknowns as we do face the second half of twenty twenty five. And with that, Bruce, do have anything else to add? I think I'm done with my slides. No, Jim. I just got a a two or three questions that have come through. So I'll just Okay. I'll pitch them to you. Okay. The first one, how do you see do you see a recovery in The Gulf drilling in the near future?

32:29 Well, I I do. And what I'm counting on is the fact that, basically, during during the Biden administration, we had zero lease activity in the Gulf Of Mexico. And now with the current administration, they've greenlighted that there will be more lease activity. At the end of the day, you gotta have lease activity to make anything happen. So we're at historically low levels of rig rig count in The Gulf. I mean, we're down to levels that were at the low of the COVID time period. And so it's almost like it has to get up because how much lower can it get? But I'm very bullish on the Gulf Of Mexico over the near term because of the fact of more more opening of of acreage as well as the fact that we have a commodity price that will support further development.

33:16 Yep. Another question here around the POC order. The POC orders have been such a positive for the company. Give them any update today. Are there specific opportunities or orders you can speak to that can replicate the QSC awards given you will be working them off the order book? Well, I think that I've said in the past that in most of my career in hunting, a good OCTG order was in the 10 to $20,000,000 range. That was, like, amazing. And we're gonna continue to see a lot of those type of orders feed into the organization, again, through the hard work our Asia Pac team is doing. There are more KOC tenders that will be coming up later this year. So it's again, it's very hard to predict that business. It's very hard to say exactly when the oil company is gonna pull the trigger, when the tender's gonna be out, what product lines are being not product lines, what sizes, grates, and weights of pipe are gonna be offered.

34:12 But the trend is going in the right direction. And whether it's KOC, whether it's opportunities in Southeast Asia, in Thailand, or Australia, or further business in the geothermal side, You you know, it's again, I can't put my finger on one today that this is something we're gonna nail. But because of our virtual mill concept, we will be a player whenever those opportunities come up. Could you provide more detail on the expected contribution and the integration timeline for FES and OOR? And how are these acquisitions expected to influence group level margins over the medium term? Well, the implementation is going on as we speak. So we've had the Dane Tipton, who heads our subsea business, has been over at the facility in England.

34:59 We are getting people into the HUNTING way. We've got organizational things to do with this finance and and all in all, just to make sure we're all on the same same page. We were not buying this expecting a ton of synergies. We are buying this based on the technology and the sales upside and margin contribution that it'll it'll add. So today, I would again, I'd say the the the work on bringing the organization into the hunting fold is ongoing, and I would say stay tuned. Hey. Go for time for two more. Sure. Given given the current market volatility and the softening in the North American onshore market, how is HUNTING balancing short cycle exposure with its pivot to longer cycle, more stable revenue streams?

35:47 So I think the one slide I showed earlier showed the big swing we've had in earnings from the Titan business and subsea and OCTG to a couple years ago to where it is today. I think Adam Dice, who runs our Titan business, has done an amazing job in the last six to nine months reorganizing doing some reorganization in that business, focusing on clients that value technology. And that's been a big key to the turnaround we've seen in improvement in the Titan business. Additionally, the international upside for us remains a big, big positive. And we're seeing, again, Argentina, The Middle East, two areas, very, very strong inquiry level increases and business upside. And so that short cycle business, it's not going away.

36:35 You're seeing a bigger intensity in the wells that are being drilled. So while we have a smaller rig count right now, and I think in The US, the rig count has declined, like, ten weeks in a row. So that's not healthy. But the wells that are being drilled today where it used to be the standard was a two mile lateral, now a three mile lateral, are now u shaped wells. And those complicated wells, you know, you can't afford to have a gun failure downhole. So that's where you have to emphasize the performance of your products. That's something that's driven our premium connection business onshore, as I've talked about earlier. Again, cost of failure is an issue, and we're a company that delivers solutions where failure doesn't happen. K. Let me just finish off a question on 2026 guidance, Jim. What what is your view on the 2026 guidance?

37:25 Better. That's all I'm gonna say. It's too early to talk about 2026. I mean, we're we're we think the trend's gonna be a much more positive. There's no way I'm gonna come out and say numbers or anything like that today. I have again, I have no idea what the price of oil is gonna be in three months. What I do know is the international activity and the offshore activity is going to remain strong and continue to grow. So regardless, as I said, those oil prices, we don't see any downturn in those marketplaces. We see, for example you know, I I would say except for one area, which is usually disappointing, which is in The UK. But if you look at West Africa, if you look at The Middle East, if you look at South America, strong areas of growth regardless of what happens to the oil price, and I think that'll drive a lot of our earnings expectation into '26.

38:14 Onshore in North America, we have leading positions in what we do, focusing on our technology. And to date, we've actually I like I said, I think we've bucked the trend on rig count, and so I remain very optimistic there. And additionally, other areas like our advanced manufacturing, we're seeing more upside with our client base out of Dearborn, which is our machine side. We've even seen now two quarters of a row of profitability with our investment in Cumberland, our three d manufacturing company. So a lot of things that we continue to work on to drive our earnings, and I'm expecting '26 to be a a very positive year for the company. Okay. Thanks, Jim. I think that that's all we've got time for. Anything else? It's all good.

39:00 Well well, Jim, Bruce, thanks very much for answering those questions from investors. Of course, company can view the questions submitted today and we will publish the responses on the Investor Meet company platform. But just before redirecting investors, try to get their feedback, it's important to the company. Jim, could I just ask you for a few closing comments? Well, like I said before, the shares are on sale today, so buy while you can. I mean, I I just I'm very optimistic. I'm very confident of our future. I'm more confident today than I've ever been, and that's due to the credit of the team that I get to work with every day. So we've got great products, a great organization. I'm bullish on the industry, and I'm bullish on hunting. So I wanna thank you all for taking the time to listen to this today. That's great. Well well, Jim, Bruce, thank you once again for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations.

39:53 On behalf of the management team of HUNTING PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.