AusGroup has been informed by the Group's AGC subsidiary that it has received a formal notice of contract
The Group has been informed that the decision was made due to the adverse changes in the global economic outlook which has impacted a proposed foundation gas customer – as part of the wider Reindeer/Devils Creek Project development.
Consequently Apache Energy Limited has elected to terminate for convenience the AGC contract for the Reindeer Platform Fabrication. The contract value was A$43 million of which 14% had been invoiced and paid at the date of termination. The Group will work with the client to bring the work to an orderly halt. The Group expects all costs and commitments made under the contract will be reimbursed by the client.
The Group's order book currently stands at $241 million.
"This will have an impact on AusGroup's 2009 results and order book, as a significant portion of the contract was expected to be completed in the current financial year. The impact of this contract termination has been partially offset by project scope growth on other existing contracts. The Group is currently implementing contingency plans to limit the impact of the terminated contract to the company."
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