Chief executive officer Alan Campbell said the group’s improved outlook included more positive signs regarding final investment decisions for major coal seam gas-to-liquefied natural gas projects in Queensland and a return to significant activity in the mining sector.

“Requests for tenders remain very strong for such projects and we therefore expect final investment decisions to be made quite soon by several of the CSG proponents, with some decisions likely before the end of 2010,” he said.

The Australia Pacific LNG, Gladstone LNG and Queensland Curtis LNG projects are expected to make FID by the end of this year while Shell’s CS CSG project expects FID in 2012.

“Significantly, all of the major Queensland CSG projects now have major financial investors and continue to move towards final investment decision.

“While Lucas remains confident of winning work from these projects, they are however unlikely to make a material contribution to our financial performance this financial year.

“We have a strong backlog of work from the Southern SeaWater, Gorgon landfall and government schools program and a significant list of other short term prospects which will sustain the Lucas Group until the CSG export projects commence in earnest.”

Drilling demand from the coal sector

“Our drilling division is performing very strongly following the completion of the division’s restructuring and strengthening of senior management,” Campbell said.

“We took the pain last year and we are now seeing a significant recovery in margins.

“Demand for drilling services from the coal sector remained strong throughout the financial year and further significant growth is expected as coal rail and export capacity increases to accommodate export demand.”

FY 2010 results

The net loss of $7.1 million in FY10 compares to the $103 million profit after tax achieved in FY 2009. Total group revenue was also down, dropping 28.2% from $499.2 million in the previous financial year to $358.5 million.

Offsetting the downturn in operational earnings was the successful sale of ATP 651 for $98.5 million. This delivered the company a profit from investment of $93 million, which was partially offset by impairment costs of $39.2 million relating to other oil and gas investments.

Campbell said the sale of ATP 651 had substantially reduced the company’s borrowings, so apart from asset financing, the group now “has only modest borrowings”

Borrowings in FY10 dropped $57 million to $66 million.

Campbell added that the company was hoping to sell its investment at Monument prospect in East Texas in the near future which would further boost its financial resources and balance sheet.

“The prospect is located in the Austin Chalk between the Eagle Ford and Haynesville shale deposits and has attracted interest from a number of parties,” he said.