Servelec secures deal with major gas supplier

Sheffield-based Servelec said t​he project is expected to contribute towards revenues in the current financial year.

Following installation on the first platform​, scheduled to take place by May next year, there are options to extend the system to cover additional platforms.

​Servelec's CEO ​Alan Stubbs​ said: "As a business focused on helping our customers to reduce their Opex whilst extending the life of ageing assets, we are proud to be working with our customer on this game-changing project. The remote operations and monitoring system provided by Servelec will extend the operational life and viability of the platform for years to come.

"This project marks a significant achievement for Servelec and further strengthens the ​g​roup's position with regards to winning additional contracts on this customer's other assets as well as with other OEMs; many of whom we are already in discussion with about future opportunities."

A​nalyst Julian Yates at Investec said: "Servelec has been in negotiations for a number of years with a​ ​major UK ​g​as supplier to install remote Control Systems on its offshore rigs.

​"​The delay to this contact earlier in the year was one of the factors behind our​ ​June 2016 forecast downgrade. It is pleasing to see that negotiations have​ ​now progressed to a stage where work has started and is now due to be​ ​completed by May 2017 for one platform. We expect the deal to be worth a​ ​decent six figures of revenue.​"

He said that​ th​e gas supplier​ is ​understood to be planning to install​ ​remote operation solutions on a number of its other off-shore platforms and ​he ​see​s​ it​ ​as highly likely the Controls System installation will go to Servelec.

​"​At current stock price, Servelec is one of our key sector​ ​picks levels​. We see it as materially undervalued​," he added.

In September, Servele cheered shareholders with the news it ha​d​ won a place on the National Grid Framework Agreement.

The contract was welcomed by investors following a profits warning in June, which wiped £71m off Servelec's value.