Horizon North Logistics says it has been awarded a conditional contract to construct and operate two new workforce lodges with close to 1,200 combined beds in the North Montney region.
The deal also includes use of one the company’s existing 240-bed open camps north of Fort St. John. It will be executed in partnership with the nearby Halfway River First Nation.
The $63-million, 16-month contract is likely related to infrastructure development in the North Montney region, according to analysts with GMP FirstEnergy.
“The contract duration of 16 months is reflective of the type of projects available for bidding (e.g. infrastructure versus greenfield oilsands),” analyst Ian Gillies wrote in a research note on Tuesday.
Horizon North’s share price is up 49 percent year-to-date, while most oilfield service companies covered by GMP FirstEnergy are down in excess of 10 percent, Gillies noted.
This could be a result of cautious optimism that Shell and its partners may soon decide to proceed with the LNG Canada project.
“We believe that investors are beginning to take positions in the stock due to Horizon’s significant land ownership position in Kitimat, which provides the stock with some call option-like qualities in the event of a final investment decision for the LNG Canada project,” he wrote.
