Interim Management Statement
Wood Group, the international energy services provider, issues the following
Interim Management Statement. A full year trading update will be provided on 17
December, 2009.
Market conditions remain broadly consistent with those outlined in our half
year results statement issued on 26 August 2009, and we are continuing to
benefit from a robust performance from our production support related
activities, which make up around 55% of revenue across the Group's three
divisions.
In our development related Engineering activities, we are continuing to see
delays both in the pace at which projects are being progressed and in further
awards and, although we have a good prospect list, these two factors will
continue to impact both activity and margins. Volumes in subsea and pipelines
have remained robust and we have recently secured a three year project
management contract for a gas storage development offshore Spain.
In Production Facilities, we have seen good opex related activity across our
longer term contracts in the North Sea, including work on the new awards
secured in the second half of 2008, and we have recently announced a new three
year contract with Chevron to support their North Sea assets. In international
markets, we have continued our investment to build up our Australian hub and
have recently been selected to provide operations, maintenance and
modifications to two Peregrino wellhead platforms in Brazil. We announced the
acquisition of Baker Energy for $38m on 1 October. Baker Energy provides a
broad range of operations & maintenance services to oil & gas operators, both
onshore and offshore. The company has a strong presence in the US, including a
market leading position in deepwater activity, and operates in various
countries in Africa and Asia Pacific. Baker Energy will be integrated with our
existing Production Facilities operations.
In Well Support, our Electric Submersible Pumps business continues to make good
progress in developing its international activities, including securing a new
contract in Colombia and increased activity in Kuwait and Chad. For Pressure
Control and Logging Services US gas related activities, the US rig count
appears to have stabilised and is expected to increase into 2010 which should
provide positive momentum for our businesses. We retain our focus on expanding
Pressure Control's business globally, recently strengthening our position in
Mexico and the Middle East.
In Gas Turbine Services, demand for our aftermarket services in oil & gas, and
power & industrial applications has generally remained robust and we recently
secured a number of operations & maintenance agreements, including a five year
agreement with Brick Power and a nine year agreement with J Power, both in the
US. In our fast track power package activities, we continue to see strong
enquiry levels, but the timing of awards continues to be delayed.
Our financial position remains strong and we anticipate good operating cash
flow for the year. Overall, we believe our 2009 performance will be in line
with expectations. We remain confident in the medium and longer term
fundamentals for our business, and believe that our market leading services and
products will enable us to resume good growth as energy markets recover.
Ends -
Notes to editors:
Wood Group is an international energy services company with approximately $5 bn
sales, employing approximately 27,000 people worldwide and operating in 50
countries. The Group has three businesses - Engineering & Production
Facilities, Well Support, and Gas Turbine Services - providing a range of
engineering, production support, maintenance management and industrial gas
turbine overhaul and repair services to the oil & gas, and power generation
industries worldwide.
Enquiries:
Wood Group
Nick Gilman / Carolyn Smith 01224 851000
Brunswick
Patrick Handley / Nina Coad 020 7404 5959
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