North-East energy services firm Wood Group yesterday said it was confident about the long-term prospects for its lucrative markets in oil and gas and gas-fired power generation.
In a pre-close trading update ahead of the company’s year-end, Wood said energy markets remained “favourable” and added that it expects good growth this year in line with its expectations.
The firm, which enjoys revenues of more than $6 billion and employs 42,000 people in 50 countries, also said that it was confident about its future programme of work.
However, the Aberdeen-headquartered group said its gas turbine power operations had been hit by delays as it tracked new work opportunities.
In the US, work on new deals in Houston and California has commenced, but work to make a power plant in Tracy more energy efficient has been hit by reduced margins.
A new power station in Israel, built in partnership with Dorad Energy, is likely to be completed in the fourth quarter of the new year.
Meanwhile, Wood’s PSN division which specialises in brownfield production, including the extraction of remaining oil from old fields continues to grow thanks to a strong performance in the North Sea and North America.
It said operations in shale gas regions were particularly encouraging, and highlighted the October acquisition of North Dakota oil-field services firm Mitchells.
Losses on a problematic Omani contract are expected to run to $20 million this year, but the company says it has “taken steps on a number of key matters” and the hit will be reduced next year.
The project, alongside Petroleum Development Oman, is now expected to turn its first profit in 2014.
Wood had previously blamed unforeseen “complexities” and changes to local employment law for its troubles there.
The group’s engineering business was said to be performing well, with full-year earnings in the division expected to be up by around 30% before tax, amortisation and interest.
Projects are under way in Australia, Angola and the Gulf of Mexico, but activity in Canadian oil sands is expected to reduce next year.
Wood said sub-sea and pipeline activity is strong in the North Sea and north-west Australia, while onshore pipeline work is also good in North American markets.
Downstream, the group said the market was “subdued”, with some signs of improvements during the second half.
Wood Group will unveil its results for the year to the end of December in early March.
Shares closed down 35p at 733.50p.
business@thecourier.co.uk