John Wood powers ahead as it seals BP deal and snaps up American rival

Shares in John Wood Group jumped today as the oil and gas services provider shrugged off the falling oil price by landing a $750 million (£479 million) North Sea contract with BP and buying a US rival.

The company said that profits would be significantly lower than the target set in 2013 as the impact of oil prices and reduced activity takes it toll. The price of Brent crude has tumbled by 43% since mid-June and is hovering around five-year lows.

But John Wood shares rose by 15.96p, or 3%, to 578.46p today after the group revealed it had won a five-year contract with BP to carry out engineering and construction in the North Sea. The contract will create 150 new jobs and safeguard at least 700 more.

The group warned that the tumbling price of oil is “leading operators to reconsider their spending plans for 2015”, which was having a knock-on effect on companies serving the sector. BP yesterday revealed it is slashing spending plans and jobs in reaction to the price fall.

John Wood has also snapped up Swaggart Brothers, a provider of construction and fabrication services to the US oil and gas industry for $36.3 million, with the possibility of further payments depending on future performance.