Oilfield services company Wood Group sees only modest recovery

June 29 (UPI) -- Oilfield services company Wood Group said it was seeing signs of only minor recovery in the energy market, even as it lands a new offshore contract.

"In the first half [of the year], we have seen continued challenges in our core oil and gas market with modest recovery only in certain areas," the company said in a statement Thursday.

Profits for full-year 2016 were 62 percent lower than the previous year, which the company said matched its expectations.

Looking forward to a 2017 market on the road to recovery, Chief Executive Robin Watson said in February that challenges remain and caution prevailed for near-term conditions on the oil and gas market.

Spending on exploration and production was supported in the first half of the year by oil prices moving above $50 per barrel on the back of an agreement led by the Organization of Petroleum Exporting Countries to stem production. Gains elsewhere, notably from the United States, have led to lingering over-supply concerns and oil prices are now about 12 percent below where they started the year.

In a separate statement, Wood Group said it was awarded a "multimillion dollar contract" to help Canadian oil company Husky Energy complete the design work for a platform designated for waters off the eastern coast of Canada.

Wood Group CEO Robin Watson said the agreement to help complete the White Rose development offshore Canada aligns with the company's "clear focus on adding value and delivering cost savings and efficient project delivery."

Nevertheless, the company said its performance during the first half of the year was weaker than expected.

"We are more cautious on the full year outlook but anticipate a stronger second half," the company said.

In June, shareholders of Wood Group approved an all-share offer to take over rival Amec Foster Wheeler, which the company said should strengthen its sector footprint.