ENGlobal Corp (NASDAQ: ENG) is making a run for the top in the market today, trading on gains of more than 30% early on. The gains come after the company announced that it has won a new contract that could be worth more than $20 million. Here’s what’s going on:
ENG Stock Climbs On Contract Award
In a press release issued early this morning, ENGlobal announced that it has signed a new contract. The company said that the agreement surrounds the supply of process modules that will be used to construct a complete hydrogen production facility.
ENG said that the total value of the contract could exceed the company’s total revenues of $25.8 million that it reported in the first half of 2019. This would be the case should the scope of work be increased to the total potential of the agreement over the next 18 months.
In the release, the company said that its compact plant will be a major component of a grass roots renewable diesel facility. It is expected that this facility will reach maximum production of 10,000 barrels of renewable diesel per day.
In the release, ENG said that services will include engineering, detailed design, procurement, module fabrication and automation. Other responsibilities, such as field construction, will be handled by others.
In a statmenet, William A. Coskey, P.E., Chairman and CEO at ENG, had the following to offer:
This agreement is a significant event in the history of ENGlobal. Not only does it introduce to the U.S. market an efficient and environmentally-friendly syngas process, it also validates our strategic shift toward providing higher-revenue modular process systems that utilize differentiated technology. We fully expect this win to greatly enhance our ability to secure additional modular systems business using this and other related technologies.
Why Investors Are So Excited
Ultimately, there are several reasons for the excitement that we’re seeing surrounding ENGlobal today. Here’s how I see it:
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