Wood Group heralds pick-up

City A.M. Reporter
Oil and gas services contractor John Wood Group yesterday forecasted a pick-up in its engineering business in the second half of the year as oil and gas companies launch more projects.

Wood expects higher levels of potential work and recent contract wins, such as the detailed design for Chevron’s Jack and St Malo deepwater facility in the Gulf of Mexico, to boost its performance in the second half and in 2011.

The company, which supplies platforms, pumps, valves and pipelines used in oil drilling, said the gas turbine services market remained relatively weak, but growing demand and cost-cutting would boost the division’s second half performance.

The group said its power division had recently won a $150m deal in California, helping to boost orders in 2011.

It said it believed its performance for the full year would meet expectations.

Wood said longer-term fundamentals of the oil and gas service and gas-fired power generation markets remained strong.

“We are well positioned to deliver good medium term growth,” the group said.

Shares in Wood Group, which have risen 39 per cent since the start of the year, ended yesterday up 20.5p, or nearly five per cent, higher at 449.90p.