Wood Group Order Book to Provide Resilience in 2015
Oilfield services firm Wood Group said Thursday that it expects its business to prove resilient in 2015 as the recent reduction in the price of oil leads operators to reconsider their spending plans.
The firm said that its largely-reimbursable order book and prospects, balance of operating expenditure and capital spending activities, range of longer-term contracts and spread of business will provide it with relative resilience in 2015.
Wood Group said that it anticipates a full-year performance in 2014 that will be in line with expectations and an improvement on 2013, with growth in its Wood Group PSN Production Services business offsetting the reduction in Wood Group Engineering and its turbine activities.
Wood Group Engineering is expected to deliver a reduction in EBITDA for 2014 that will be less than the 15 percent anticipated at the end of last year. The division's upstream activity on offshore projects such as the Ivar Aasen, Stampede and White Rose developments – together with onshore work in the US – have lessened the impact of the slower pace of awards of detailed engineering work. Wood Group said the engineering division also continues to work on more early-stage projects than in recent years and that it sees this as "a good indicator of future activity".
In the division's subsea & pipelines activity, Wood Group says it has seen good activity overall – including work with BP on Azerbaijan's Shah Deniz field and with Tullow in Ghana.
Wood Group PSN Production Services is expected to deliver strong growth in 2014, primarily attributable to its performance in the Americas – led by US shale-related activity. The division continues to provide a range of activities, including well site preparation, infrastructure development and ongoing maintenance across key shale regions for a broad customer base, Wood Group said.
The firm also announced Thursday that it was buying Swaggart, a provider of civil construction and fabrication services to the US oil and gas and industrial sector, which it believes will help extend Wood Group PSN's service offering.
Meanwhile, Wood Group PSN's North Sea business has "remained robust", benefiting from work performed under long-term operations and maintenance contracts that provide longer-term revenue visibility together with service expansion from the firm's Pyeroy acquisition in 2013.
In early December, Wood Group PSN and Wood Group Mustang won a multi-year contract with ExxonMobil Exploration and Production Malaysia that the firm estimates has a value of approximately $750 million. The firm noted that internationally it secured a number of other important contracts in 2014, including Woodside in Australia and ExxonMobil in Papua New Guinea, and it is seeing customer-led expansion in Iraq with TAQA and BP.
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