Questor: Pressure Technologies has halved in size but growth is now back on the agenda

Environmental campaigners will gnash their teeth but higher hydrocarbon prices and the prospect of limited or sanctioned Russian supply are prompting fresh spending on drilling and production. 

This cash is flowing from the major oil firms down through to equipment and services specialists such as Schlumberger and Halliburton and then in turn to their sub-suppliers, of which Pressure Technologies is one.

Input cost pressures are a new complication, and the global economic outlook feels increasingly uncertain as inflation and interest rates advance, so nothing can be taken for granted, especially with such a small stock.

But the balance sheet means brave investors can be patient with a company whose previous peak in net profits was £3.7m and whose market value is just £29.5m, compared with 2014’s zenith just above £100m.

It feels like momentum may (finally) be building at Pressure Technologies. Hold.

Questor says: hold

Ticker: PRES

Share price at close: 95p

Update: i3 Energy

It is a case of so far, so good at i3 Energy, whose strategy is to acquire conventional oil and gas fields as cheaply as it can, run the assets and pay dividends from the resulting cash flow.

The shares trade at more than twice our initial entry point in September last year, helped by rising hydrocarbon prices, the start of monthly dividend payments and a farm-out deal at the Serenity oil discovery in the North Sea. But there could be more to come.

A trading update last week reported record production in the first quarter of 2022 of more than 20,000 barrels of oil equivalent a day, from a standing start a year ago. Firm oil and gas prices could help to maximise returns and boost free cash flow, up to 30pc of which could be paid out as dividends. 

The board is currently looking at a minimum distribution of £11.8m, equivalent to a yield of 3.8pc relative to the £309m market value. Oil prices remain a wildcard but i3 Energy is cooking on gas right now. Hold.

Questor says: hold

Ticker: I3E

Share price at close: 27.4p

Russ Mould is investment director at AJ Bell, the stockbroker

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