Capstone Turbine Corp (NASDAQ:CPST), the maker of clean-energy microturbines, announced Tuesday it has secured a long-term service contract with a large international oil and gas end-user operating in the Eagle Ford Shale Basin in South Texas.
Lone Star Power Solutions, Capstone’s exclusive distributor for Texas, Arizona and the Gulf States, signed the 3-megawatt factory-protection plan which will provide the unnamed customer with five years of service coverage, according to a statement.
The customer originally commissioned the Capstone microturbines in 2013-2014 and uses them 24-7 for prime power in its midstream central-gathering facilities, the company said.
The new service contract adds to Lone Star’s 12 new factory protection plan contracts previously secured in the same shale region in March, Capstone said.
“These types of long-term service contracts underpin Capstone’s stated goal of achieving 100% absorption of all of Capstone’s operating expenses from the aftermarket service business gross margin by providing a predictable recurring revenue stream,” said Capstone CEO Darren Jamison.
Capstone, based Van Nuys, California, offers a product lineup of microturbines that can produce anywhere from 30 kilowatts to 10 megawatts of power, operating on a variety of gaseous or liquid fuels. To date, Capstone has shipped over 9,000 units to 73 countries.
Capstone's stock recently rose to $0.87 a share, up 1.8%.
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