WEIR Group's stock market worth surged by nearly £140m yesterday after chief executive Keith Cochrane highlighted the potential for the Glasgow-based engineering company to cash in on the developing shale oil and gas boom in North America.

Mr Cochrane told City investors and analysts that current conditions in this market, to which Weir Group supplies pumps and flow-control equipment, were “strong”. He highlighted in particular further increases in the US horizontal rig count in April and May, as the drive to exploit shale oil and gas accelerates.

Shares in Weir Group, which supplies the well services companies with the equipment for the process of fracturing or “fracking” which exploitation of shale deposits requires, surged by 66p or 3.31% to 2057p yesterday.

The shares are close to their recent all-time high of £20.77, having ended 2009 at 717.5p and having traded below 300p in late 2008 at a time of grave concern over the global economic outlook.

Yesterday’s rise in Weir Group shares increased the company’s stock market worth from about £4.21bn to £4.35bn.

A spokeswoman for Weir Group noted the shift in shale exploitation from gas into oil, and the need in recent times for pumps with increased horsepower for the fracturing process.

She pointed out that the exploitation of harsher shale fields was harder on the equipment and therefore required more frequent servicing and replacement of hardware.

Mr Cochrane yesterday highlighted moves by Weir Group to increase the production capacity of its SPM business at Forth Worth in Texas to meet demand arising from the shale oil and gas boom.

Weir Group has recently launched the “Destiny” pump range, aimed at this market-place.

While the current focus of exploiting shale oil and gas deposits is in the US and Canada, China has highlighted its ambitions to cash in on its reserves. Shale gas projects are meanwhile under way in Poland.

Mr Cochrane, who succeeded Mark Selway as chief executive of Weir Group in November 2009, told the City yesterday that “plans are now being developed to further expand capacity to support the ongoing growth” of the SPM business.

In March, Weir Group highlighted plans to invest $40m over 18 months to increase manufacturing and servicing capacity at SPM’s Fort Worth plant.

Highlighting the shale oil and gas opportunities, Mr Cochrane talked about “positive fundamentals underpinning the medium-term outlook” for the Weir Group division which serves the upstream oil and gas sector.

The Weir SPM management team yesterday declared that their business had “a market leadership position in one of the fastest growing upstream oil and gas sectors, with growth in the installed base and increased operating intensities driving further after-market opportunities and an accelerated original equipment replacement cycle”.

Weir Group has been one of the big corporate success stories in Scotland in recent times.

It was promoted to the UK’s FTSE-100 index of leading shares last September, and has consolidated its position within this top flight with a further strong rise in its share price since.

Weir Group achieved a 58% jump in underlying annual pre-tax profits to £295m last year.

Its oil and gas business was the star performer – enjoying a 122% rise in operating profits in 2010. The minerals division, which serves the global mining sector, achieved a 24% increase in operating profits. Weir Group’s third division, which serves the power and industrial markets, turned in a more muted performance but still managed an 11% increase in operating earnings.