- Trio of agreements signed with BP
- Based on decades-long partnership
- Potential for four year extension
Global oil and gas engineering firm Wood Group (WG.) jumped 10% to 70.2p after signing a trio of global engineering and project delivery agreements with BP (BP.).
The positive news gave some respite to the embattled company, which has seen its shares drop by 58% year-to-date.
Shares in the FTSE 250 firm fell as much as 40% in May 2024 after private equity investor Apollo Asset Management abruptly ended takeover talks following the rejection of its fifth and final offer pitched at 240p per share.
Today’s agreements cover all of BP’s business units and will see the Scottish-based oil and gas engineering and services firm providing support for offshore and onshore assets within the upstream, midstream, and downstream energy markets.
WHAT DID THE COMPANY SAY?
CEO Ken Gilmartin commented: ‘We are delighted to enhance our partnership with bp, which continues to go from strength-to-strength.
‘As a company we thrive in supporting our clients to deliver some of the most complex and challenging projects in the energy and materials markets and we look forward to working with BP to support the full lifecycle of capital projects worldwide.’
The new agreement will run for three years initially with potential for extensions of an additional four years.
Shareholders will be hoping for further good news flow after management rejected the offer from Apollo which at the time was priced at a 60% premium to the prevailing share price, valuing the company at £1.7 billion, compared with £450 million today.
The board said it remains confident in the company’s ‘strategic direction and long-term prospects following a transformative year in 2022’ which included the sale of its built-environment consulting business for $1.9 billion and a reduction in its debt pile.
