City analysts will be looking closely at half-year margins at John Wood (WG.) as the oil services provider struggles to secure contracts in the face of a continued slump in crude oil prices. The group's business mix is slanted towards operational and maintenance contracts, which should help to offset an anticipated fall-away in upstream development spending. But these types of contracts are generally lower margin, so earnings may come under increased pressure.
The good news is that John Wood was recently awarded a three-year offshore engineering order by PEMEX Procurement International for field development in the Gulf of Mexico. The agreement, valued at up to $28m (£17.9m), is hardly colossal by industry standards, but the group's ability to increase its footprint in Mexico will be seen as highly favourable given the nascent liberalisation of the country's oil and gas industry.
