By Alex MacDonald

LONDON--John Wood Group PLC (WG.LN) said Thursday it is on track to deliver higher earnings this year due to a strong performance from its Wood Group PSN production services division, which will offset lower earnings from its engineering and turbine activities units, and despite a slump in oil prices.

Wood Group said in a trading statement the oil-price slump to a five-year low is leading oil and gas producers to shelve spending plans for next year, which will have a knock-on effect on service providers such as itself, but that it expects to show some resilience in 2015 due to its spread of businesses, long-term contracts and recent acquisitions.

At its engineering division, earnings before interest, taxes and amortization for 2014 will be 15% lower than the level indicated last December because of the slower pace of engineering work. This has been partially offset by several offshore projects and U.S. onshore and pipeline work driven by the shale boom.

The company expects its PSN production services division to deliver strong growth this year, led by U.S. shale oil and gas-related activity, including the benefit of U.S-based services provider Elkhorn acquired last year. The North Sea business is also robust and the company continues to benefit from several large long-term contracts secured this year with companies such as ExxonMobil (XOM) in Papua New Guinea and Malaysia.

The company said the performance of its power-sector-focused turbine activities division has improved in the second half although Ebita this year will be significantly lower than in 2013. The division should show that it is on track to recover its first-half financial position at its full-year results.

At 0903 GMT, the company's shares are up 3.8% at 584 pence a share, resulting in a market capitalization of GBP2.1 billion($3.3 billion.)

Wood Group said its balance sheet remains strong enough to support its investment in further acquisitions and organic growth; working capital should improve significantly in the second half of the year, in line with typical seasonal fluctuations.

The U.K.-listed oil and gas engineering-services firm also said it has secured a $750 million, five-year contract from BP PLC (BP) to provide engineering, procurement and construction services at six North Sea offshore fields and the Forties pipeline system.

It has also acquired Swaggart Brothers, a U.S.-based provider of civil construction and fabrication services to the U.S. oil and gas, industrial and agricultural sectors for an initial consideration of $36.3 million.

Write to Alex MacDonald at alex.macdonald@wsj.com

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