Increased exposure to the US shale gas market has helped energy services giant Wood Group stay on track in the first half of 2014.
The north east based firm – which employs more than 40,000 staff and generated sales of more than $7 billion last year – said it expected to beat 2013 earnings for the full-year despite performance in its turbines joint venture lagging behind expectations.
In a pre-close trading update for the six months to June 30, the company said its shale gas interests in America had helped its PSN division to outstrip its first-half performance targets.
The firm said it had see organic growth within the US shale sector but it hailed a “significant contribution” from Elkhorn Holdings, the Wyoming based services provider to midstream oil and gas facilities which Wood Group acquired in a reported £125 million deal late last year.
“Growth in the first half has been led by performance in the Americas, principally in the US shale regions where we invested further in our fabrication and training capabilities and now have over 5,000 personnel,” the firm said yesterday.
“We have seen good organic growth in US shale, together with a significant contribution from Elkhorn, which was acquired in 2013.
“Underlying performance in the North Sea remains strong in an environment where operators are increasing their focus on efficiency.
“We are benefiting from significant contract renewals secured over the last 18 months, and are active in pursuing further opportunities.”
The firm said its engineering division was on track but its turbine activities – three joint venture businesses including Rolls Wood Group, TransCanada Turbines and Ethos Energy which it formed with Siemens last month – had fallen below target.
“Financial performance in Turbine Joint Ventures (TJV) is behind plan. This includes the impact of deferrals together with slower activity in certain areas,” Wood Group told investors.
“Overall for TJV we expect some improvement in performance in the second half although not to the level originally anticipated.”