John Wood Group Plc sees “good growth” this year after the oil and gas services company expanded in the U.S. shale industry through acquisitions.
Spending and “the contribution of completed acquisitions is expected to lead to growth,” Chief Executive Officer Bob Keiller said. Wood Group has 4,500 people working on U.S. shale, he said. The Aberdeen, Scotland-based company today reported a 14 percent increase in 2013 pretax profit to $412.8 million.
Wood Group rose 6.7 percent in London trading, the biggest one-day gain in 11 months. The stock closed at 721.5 pence, valuing the company at 2.71 billion pounds ($4.5 billion).
A slower pace of “significant” offshore contracts, following customer spending cuts and the completion of major projects, will be countered by growth in subsea and pipeline business in the engineering unit, the group said in a statement.
The company agreed last year to buy Elkhorn Holdings, a Wyoming-based provider of construction services for midstream oil and gas facilities in the U.S. shale market. It also expects to complete a joint venture with Siemens AG in the so-called GTS power business in the first half, according to the statement.
Wood Group is agreeing on an exit plan in Oman after its contract there continued to lose money, the company said.