AJ Lucas Group Ltd (ASX:AJL) has signed a contract with Kestrel Coal Pty Ltd for the provision of a full suite of degasification and exploration drilling activities.
The contract is for an initial three-year period with an option to extend for a further two years by mutual agreement.
The contract is expected to generate revenues in the order of $70 million over the initial three-year term and extends an existing long-term working relationship with Kestrel, where Lucas supplies six rigs operated by up to 100 staff.
“Kestrel is a highly valued customer of Lucas”
Lucas’ Drilling division chief executive officer Brett Tredinnick said: “Kestrel is a highly valued customer of Lucas and together we have developed a strong long-term working relationship.
“This new contract, combined with other a recent contract wins and extensions reinforces our leading position in the market and provides the business with a solid multi-year order book following two years of strong financial results.”
More than $200 million in revenues
AJ Lucas chairman Phil Arnall said: “This contract supports the decision made in March by the AJ Lucas board to continue supporting the drilling division in delivering on targeted growth opportunities identified in our strategic review.
“The drilling division now has an order book which is expected to deliver more than $200 million in revenues over the next two years subject to customer mine plans.
“This includes Kestrel contract as well as contracts with another five major coal mining companies that have been executed in the last 12 months.
“This goes a long way to supporting and underpinning the business for many years to come.”