The Cimic Group Ltd (ASX: CIM) share price is set to finish the week on a positive note. This comes after the global engineering company announced two oil and gas contract extensions.
At the time of writing, Cimic shares are edging 1.35% higher to $21.85. The company's shares last reached above the $22 mark in early February before plummeting thereafter.
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What did Cimic announce?
According to its release, Cimic advised that its subsidiary, UGL has secured two contract extensions for planning, maintenance and shutdown services in Western Australia.
UGL is a diversified engineering company in end-to-end asset solutions. The business delivers critical assets and essential services in power, water, resources, transport, defence and security, and social infrastructure.
The works will see the implementation services for a leading oil and gas company under a non-binding framework agreement. This will include planning and execution of mechanical, electrical, instrumentation, access, insulation, coatings and fire protection.
In addition, UGL will provide maintenance, projects and shutdown services for an oil and gas company with assets in the North-West of Western Australia. This consists of onshore and offshore operations.
Cimic expects the contract to generate revenue of roughly $160 million for its wholly-owned subsidiary.
The implementation services contract is valid until 2024, while the maintenance, projects and shutdown services contract expires in 2022.
What did management say?
Cimic group executive chair and CEO, Juan Santamaria commented:
UGL has the workforce and expertise to support the full spectrum of structural, mechanical, piping, electrical and instrumentation services for the resources sector. We're proud to contribute to some of the nation's most advanced gas production systems and the delivery of energy solution for all Australians on behalf of these leading oil and gas companies.
UGL managing director, Doug Moss added:
UGL is pleased to extend our relationship with our longstanding clients. We are one of Australia's leading service providers in the oil and gas industry and we look forward to continuing these operations in Western Australia.
About the Cimic share price
It has been an eventful 12 months for Cimic shares, rising to a 52-week high of $27.51 early this year. However, this was short-lived, with the company's share price freefalling after reporting its full year results.
Since then, Cimic shares have gradually trekked higher rebounding to late February levels.
Cimic commands a market capitalisation of roughly $6.8 billion, with approximately 311 million shares outstanding.
