Easternwell update

Transfield Services’ well services and well construction business, Easternwell, announced today that it has secured a new A$80 million contract with QGC. The contract is for the provision of well completion and ongoing well servicing activities as part of QGC’s coal seam gas operations in Queensland.

The three-year contract commences in October 2011 and includes two one-year extension options.

Easternwell will acquire two new rigs, adding to an existing rig from current operations with QGC.

Transfield Services Managing Director and CEO, Peter Goode, today said: “This is a significant win in one of Australia’s key oil and gas growth markets. This contract together with previously announced contracts associated with the Silver City Drilling acquisition secures a significant proportion of Easternwell’s $30 million of EBITDA growth targets as identified at the time we acquired the business.”

Transfield Services also advises that the continuing adverse weather conditions across northern Australia have impacted on the timing of work volumes, particularly in Easternwell's Minerals division. As a result, some of the work will be deferred to the next financial year. The anticipated effect of that deferral on Easternwell’s contribution to the FY11 second half is circa $8 million. Transfield Services previously indicated an expected EBITDA contribution from Easternwell of $40 million.

Transfield Services reiterates its Group guidance of mid-single digit growth of operational NPAT (based on FY10 operational NPAT of $96 million).

Transfield Services acquired Easternwell in December 2010 as part of its strategic objective to deepen its exposure to growth opportunities and higher value work within Australia’s expanding resources sector, such as in iron ore, conventional oil & gas and coal seam gas.

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Transfield Services employs over 19,000 people across 18 industries and 10 countries. We are a global provider of operations, maintenance and construction services to the Resources, Energy, Industrial, Infrastructure, Property and Defence sectors.
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