Wood Group Gains After Winning New Maintenance Contract with Esso Australia

Shares of Wood Group (LON: WG.) rose more than 2% on Monday after the company announced a major new contract with Esso Australia. 

Despite the uptick, Wood Group's stock remains down over 58% over the past 12 months.

The company explained in its press release that the contract involves providing long-term maintenance solutions for onshore and offshore assets in the Gippsland Basin, Victoria. 

This region is crucial as it supplies around 40% of Australia's east coast natural gas demand and is the largest single source of natural gas for the domestic market in Australia.

Under the agreement, Wood will deliver maintenance services and shutdown support to enhance the operational performance of the Gippsland Basin Joint Venture's offshore assets in the Bass Strait, as well as the Longford and Long Island Point facilities. 

The contract, won through a competitive tender process, will start this month and is expected to create approximately 250 jobs in Victoria early next year.

Ken Gilmartin, CEO of Wood, commented: “Wood is a market leader in integrated operations and maintenance solutions with a growing portfolio in Australia as we bring our expertise to an expanding client base. This contract award recognises the quality of our delivery capability, our commitment to safe operations.” 

The new contract win for Wood Group comes on the heels of a recently awarded five-year contract renewal for delivering brownfield engineering, procurement, and construction solutions across the same Gippsland Basin assets.

The Gippsland Basin Joint Venture is a 50-50 partnership between Esso Australia Resources Pty Ltd and Woodside Energy Pty Ltd, operated by Esso Australia.