Precision Engineering Hunting PLC 2019 Annual Report and Accounts Welcome to Hunting Hunting Is a Key Supplier to the Upstream Oil and Gas Industry

Hunting PLC 2019 Annual Report and Accounts Precision engineering Hunting PLC 2019 Annual Report and Accounts Welcome to Hunting Hunting is a key supplier to the upstream oil and gas industry. Our strategy is to manufacture products and deliver services to our customers, wherever in the world they are operating. Hunting’s product offering extends across the life cycle of an oil and gas well, and this focus allows us to create, distribute and sustain value for our shareholders and stakeholders. Hunting is a premium-listed Company, quoted on the London Stock Exchange and is a constituent of the FTSE 250 Share Index. Highlights Market Financial** 2019 2018 2019 2018 Average WTI crude $57 $65 Revenue $960.0 $911.4 oil price per barrel per barrel million million Year-end WTI crude $61 $45 Net cash before $123.1 $61.3 oil spot price lease liabilities* per barrel per barrel million million Global average onshore 1,844 1,982 Underlying profit $94.3 $104.7 rig count from operations* units units million million Global average offshore 242 201 Reported profit $46.8 $75.4 rig count from operations units units million million Global onshore drilling and $165.8 $179.8 Underlying diluted 43.9 49.6 production expenditure earnings per share* billion billion cents cents Global offshore drilling and $63.6 $54.4 Reported diluted 23.5 52.3 production expenditure earnings per share billion billion cents cents Source: Bloomberg/Spears & Associates. * Non-GAAP measure (“NGM”) see pages 179 to 183 and note 26. ** 2018 data does not reflect the adoption of IFRS 16 Leases. 01 Hunting PLC / 2019 Annual Report and Accounts Highlights of the Year Operational and corporate Financial Culture and Purpose Good growth within US, EMEA and Asia Pacific operating Revenue increased by 5% to $960.0m (2018 – $911.4m). segments as offshore and international market activity • Supported by new products and higher levels of offshore activity. improved. • US and Asia Pacific operating segments increased revenue by • Premium connections, accessories and advanced manufacturing 10% and 37% respectively. and subsea product groups all report strong year-on-year growth • Hunting Titan revenue declined in the year by 10% as onshore within the US segment. completion activity reduced and competition increased, as well • European OCTG businesses report good growth as North Sea as customers moving to lower cost completion products. activity improved in the year. • Improved performance year-over-year in Asia Pacific due EBITDA*. Stakeholders and Model Business to improved activity levels and new customer wins. • Underlying and reported EBITDA of $139.7m (2018 – $142.3m and $141.3m respectively). Hunting Titan reports lower results in the year as the US • Underlying and reported EBITDA margin of 15% (2018 – 16%). onshore market slowed. New products launched in the year, partially offsetting the decline in sales. Profit from operations. • Performance adversely impacted by lower US onshore • Underlying profit from operations of $94.3m (2018 – $104.7m). completion expenditure. • Reported profit from operations of $46.8m (2018 – $75.4m). • Proactive actions to address excess inventory levels and convert to cash have impacted margins. Amortisation and exceptional items totalled $47.5m • New perforating and energetics products and setting tools (2018 – $29.3m). commercialised in the year with good customer adoption. • Charge for amortisation $28.5m (2018 – $29.3m). • Higher efficiency, lower cost automated manufacturing cells • Impairment of drilling tools rental fleet of $19.0m (2018 – $nil). commissioned at Milford and Pampa facilities. ROCE*. Acquisition of RTI Energy Systems Inc. (“RTI”) completed • Underlying ROCE in the year 8% (2018 – 9%). Strategy Business in August 2019 to broaden and diversify overall subsea product portfolio. Net cash at year-end of $77.9m (2018 – $61.3m)*. • RTI manufactures titanium and stainless steel stress joints • Cash of $123.1m (2018 – $61.3m), less lease liabilities of $45.2m used in offshore developments. (2018 – $nil). • $12.5m consideration paid for the business and assets. • Lease accounting standard adopted from 1 January 2019. • Integration of business progressing well, with new orders • Net cash generated in year of $70.0m (2018 – $32.0m). won since year-end. Total dividends declared for 2019 increased by 22% to Acquisition of Enpro Subsea Limited (“Enpro”) completed 11.0 cents per share (2018 – 9.0 cents per share). Performance in February 2020. • Subject to shareholder approval, final dividend declared of • Enpro is a leader in subsea production technology, offering 6.0 cents per share, absorbing $9.9m, to be paid on 15 May 2020 low cost, flexible field development solutions including well to shareholders on the register on 17 April 2020. production and intervention modules to enhance recovery from oil and gas wells. • $33.0m cash consideration paid for the business, with an additional maximum earn-out of $3.0m agreed, Governance subject to key financial milestones being met. Board changes. • As announced on 23 January 2020, Peter Rose will retire as Finance Director at the Company’s Annual General Meeting (“AGM”) on 15 April 2020. • Bruce Ferguson proposed as successor, with appointment submitted to shareholders for approval at the AGM. statements Financial * Non-GAAP measure (“NGM”) see pages 179 to 183 and note 26. 02 Hunting PLC / 2019 Annual Report and Accounts Contents To help you navigate this report, we have structured it into six sections: Strategic Report Purpose and Business Model Business Culture and Stakeholders Strategy Hunting’s Purpose and Culture will help Our business model explains how we Our business strategy will tell you about you understand the Company’s licence to create value for our stakeholders and our our short- and long-term growth plans, operate and vision. We have also highlighted engagement mechanisms to understand our achievements in the year in delivering the key drivers of our business that help us the needs of our key partners. on key strategic objectives and the principal create value for the long term. risks attached to our plans. At a Glance 04 Business Model 10 Chief Executive’s Statement 28 Chairman’s Statement 06 – Resources 12 Outlook 30 Our Purpose 08 Shareholders 12 Market Analysis 32 Our Culture 09 Lenders 14 Our Business Strategy 34 Facilities and Intellectual Property 15 Case Study – Operational Excellence 36 – Operating Segments 16 Risk Management 38 – Products and Services 18 Case Study – Connections Technology 48 – Our Stakeholders 20 Customers 20 Employees 22 Suppliers 24 Environment 24 Governments 26 Communities 26 03 Hunting PLC / 2019 Annual Report and Accounts Purpose and Culture and Purpose Financial Stakeholders and Model Business Performance Governance statements Our Performance in the year reports Our Governance section details how Hunting Our Financial Statements report on the on how our business strategy translated is managed and governed, through the Company’s performance in the year and into financial results for the year ended responsibilities and work of the Board, its position at the end of the year and provides 31 December 2019, with details on how Committees and the senior leadership team. detailed financial information, in line with each of our operating segments performed our statutory reporting responsibilities. Business Strategy Strategy Business in the period. Group Review 50 Chairman’s Introduction 71 Independent Auditor’s Report to the Segmental Review 54 Directors and Company Secretary 72 Members of Hunting PLC 110 Performance Case Study – Corporate Sustainability 62 Executive Committee 74 Consolidated Income Statement 117 Key Performance Indicators 64 Corporate Governance Report 75 Consolidated Statement of Directors’ Report and Compliance Remuneration Committee Report 84 Comprehensive Income 118 Statements 66 – Directors’ Remuneration Policy Consolidated Balance Sheet 119 Summary 88 Consolidated Statement of Changes – Annual Report on Remuneration 93 in Equity 120 Governance Nomination Committee Report 104 Consolidated Statement of Cash Flows 121 Audit Committee Report 106 Notes to the Consolidated Financial Statements 122 Company Balance Sheet 168 Company Statement of Changes in Equity 169 Company Statement of Cash Flows 170 Financial statements Financial Notes to the Company Financial Statements 171 Non-GAAP Measures 179 Financial Record 184 Shareholder and Statutory Information 185 Glossary 189 Professional Advisers 192 04 Hunting PLC / 2019 Annual Report and Accounts At a Glance Global footprint Our operations Our operating facilities need to be close to our Conventional oil and gas basin Unconventional oil and gas basin customers and are therefore based in or near Key operating locations the main oil and gas producing regions. Group overview Segmental revenue Operating sites 36 34 Split of external revenue by segment Year to 31 December 2019 2019 2018 Distribution centres Hunting Titan 39% 19 18 US 33% 2019 2018 Asia Pacic 13% Countries of operation EMEA 12% 11 11 Canada 3% 2019 2018 Patents granted and 691 690 pending 2019 2018 Employees 2,956 2,772 2019 year-end 2018 year-end Internal manufacturing 0.30% 0.22% reject rate 2019 2018 05 Hunting PLC / 2019 Annual Report and Accounts Our products and services Our business relationships Culture and Purpose Hunting generates value through the manufacture of products, Oil Country Tubular Goods (“OCTG”) provision of related services and supply of rental equipment to The Group owns proprietary connection technology

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