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.
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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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