Aug. 11 (UPI) -- With oil and gas revenue dropping 18 percent, British project manager Amec Foster Wheeler said it was moving in the right direction by merging with Wood Group.
Wood Group announced plans in March to purchase the company for $2.6 billion in a move that will combine two of Britain's largest energy services companies. Amec Foster Wheeler said it would sell off parts of its exploration and production business in anticipation of concerns from the British Competition and Markets Authority.
In its latest financial statement, the company said challenging conditions in the exploration and production side of the oil and gas sector were offset by improvements in overall operational performance.
"Operational discipline has improved, we have more than delivered on our cost saving targets and we have also seen the first tangible signs of sustainable growth," CEO Jonathan Lewis said in a statement.
Lewis said last year saw record gains for some sectors, though challenges were apparent in 2017, particularly for oil and natural gas activity. For that segment, the company said underlying revenue fell 18 percent as "long-standing challenging conditions" continued in the market.
Crude oil prices remain stuck in a narrow band around $50 per barrel as multilateral efforts to balance the market steered by the Organization of Petroleum Exporting Countries run up against internal and external production gains. Last year, Wood Group cut about 35 percent of its payroll and drew down overhead costs by $96 million. In June, the company said it was still facing headwinds in its core oil and gas market, with only modest recovery elsewhere.
Amec Foster Wheeler nonetheless said there were improvements, with nearly two dozen new contracts on the books so far this year.
"Looking forward, I am confident Amec Foster Wheeler is now moving in the right direction, and I believe that our people and shareholders will have an exciting future as part of the Wood Group, once the deal closes in the fourth quarter," Lewis said.