Industrial waste water processing group MYCELX (LON:MYX) shot up 25% after it unveiled a new two-year deal with an existing customer for water treatment in the Middle East.
The AIM company, which has technology to remove hydrocarbons from water, said the deal was worth $5mln over the life of the contract.
It also noted that in light of the continued weakness in the oil and gas industry, customers have increasingly focussed on cost management and today’s fixed term contract highlights MYCELX’s value proposition.
MYCELX added that the contract underpins a proportion of its sales revenue for 2016, and, whilst highlighting a challenging environment said it estimated a conservative base-level recurring revenue forecast of $8mln for the year.
It also said it was actively pursuing its advanced stage sales pipeline, and noted that large scale customer trials are ongoing.
“The budgets and schedules for many projects remain uncertain and the whole oil and gas industry is observing significant delays in capital expenditure,” it said in a statement.
“However, the award of any further project work would materially improve the company's revenue expectations for FY 2016.”
The company added: “MYCELX has continued with its expense control measures and expects that the Company would be at least cash neutral from operations in 2016 at this level of revenue.”