Wood in £1bn pledge to investors

The sale of Wood Group’s well support arm, which makes electric submersible pumps used to maximise oil production, will raise 2.8 billion US dollars (£1.75bn), with more than half of the proceeds set to go to shareholders.

Aberdeen-based Wood, which is listed in the FTSE 250 Index, will now focus on its engineering and production and gas turbine services divisions.

It said General Electric possessed the scale and reach to ensure the Houston-based Well Support business continued its international growth.

Wood Group chief executive Allister Langlands said: “The significant investment programme in Well Support over the years and the expertise and dedication of all our people is reflected in the price achieved.”

Following the disposal, which is subject to regulatory and shareholder clearance, Wood said it will return cash of not less than 1.7 billion US dollars (£1bn) to its shareholders.

It has also pledged to continue its growth strategy of geographic expansion in its core areas. This follows a deal in December to buy Aberdeen-based rival PSN in an agreement worth 955 million US dollars (£600m).

Wood’s production arm generates 47 per cent of its revenues from the UK North Sea, but the addition of PSN in areas such as North America, the Caspian and Russia will reduce its dependence on the UK and offer higher margin work.