Oil and gas bounce set to deliver for Wood Group

Energy services giant Wood Group is confident of delivering a robust full-year performance as it continues to benefit from buoyant conditions in the oil and gas sector.

In a trading update, the Aberdeen-based group said its engineering division was performing well, with a strong order book thanks to high activity in upstream operations. Downstream levels have been affected by “subdued” spending in US refining.

At its PSN division, which carries out engineering work for oil, gas and utilities clients, losses of between $15 million (£9.3m) and $20m are predicted in Oman, but it has enjoyed a strong performance in the North Sea and North America, where it is expanding its shale operations with the $135m acquisition of Mitchell’s Oil Field Services. The division has also been boosted by a recent A$232m (£147m) contract to provide maintenance services for Melbourne Water.

Wood said its GTS turbine division was confident of securing more deals following a number of contract wins in the US.

The group told investors: “We anticipate strong operating cash flow in the second half, and our strong balance sheet provides a robust platform for growth.”

Analysts at Investec are forecasting pre-tax profits of around $377.6m for the full year, up from $254.1m in 2011.