Hunting goes on prowl with cash from Canadian sale

By Jonathan Cable

LONDON (Reuters) - Oil services company Hunting (HTG.L) said it plans to make several acquisitions with the C$1.27 billion (623 million pound) proceeds from selling its Canadian oil and gas division, sending its shares up 14 percent.

The sale of Gibson Energy to private equity firms Riverstone Holdings and Carlyle Group CYL.UL would fund bolt-on acquisitions and reduce debt, Hunting said on Wednesday.

"We have looked at companies... We haven't just been sitting here waiting for this deal to close. We are hopeful that by the end of the year we will be able to announce something along the acquisition line," Chief Executive Dennis Proctor told reporters.

Proctor said the group had debt of just under 200 million pounds and would now focus on supplying well construction and completion equipment.

Oil services companies are recording strong profit as high oil prices prompt more investment in exploration and production. Hunting said in February that 2007 net profit rose 20 percent to 62.5 million pounds and gave a buoyant outlook for coming years.

Gibson Energy, which owns distribution terminals, pipelines, and storage depots, had profit from operations of 48.4 million pounds on revenue of 1.55 billion pounds in 2007.

The group said the deal represented a multiple of 13 times Gibson Energy's profit from operations last year and it would make a profit on the sale of around 305 million pounds.

Shares in Hunting, which have lagged the UK oil equipment and services sector .FTASX0570 by 17 percent over the last year, were up 10.3 percent at 874 pence by 9:01 a.m., having hit 903-1/2p, valuing the group at around 1.2 billion pounds.