Recon Technology, Ltd. (NASDAQ:RCON) shares are trading up big this afternoon after the company announced that they have agreed to a deal with PetroChina’s Qinghai Oilfield to sell them chemicals that will be used for wastewater treatment.
The deal is for chemicals which include water quality stabilizers and ion modifiers, and the agreement is worth approximately $600,000. It’s a large agreement which should certainly help Recon Technology, Ltd. (NASDAQ:RCON)’s revenue numbers once it is officially complete. The deal is expected to be completed by FY2016.
“We continue to grow our presence at PetroChina’s oilfield companies,” said Mr. Shenping Yin, Chairman and Chief Executive Officer. “Today’s announcement follows months of efforts by our BHD team and marks another breakthrough for us with PetroChina as we seek opportunities to expand our product and service offerings. The oilfield waste water treatment segment is a brand new market for Recon. Aside from the chemicals, we expect to provide more professional waste water treatment equipment to our oilfield client in the coming year, which we are in the process of developing now. We are optimistic that this consignment sale of third party chemicals has the potential to evolve into a new line of business on a recurring basis for Recon.”
The stock is up 35.53% or $0.43 following the news, hitting $1.64 per share. About 1.29M shares traded hands or up 1664.63% from the average. RCON has declined 30.06% since June 8, 2015 and is currently downtrending. It has underperformed the S&P500 by 22.57%.
Recon Technology, Ltd. is a provider of hardware, software and on-site services to companies in the petroleum mining and extraction industry in China . The company has a market cap of $5.89 million. The Firm provides services designed to automate and enhance the extraction of petroleum. It currently has negative earnings. It controls by contract the PRC companies of Beijing BHD Petroleum Technology Co., Ltd. and Nanjing Recon Technology Co., Ltd. (collectively Domestic Companies).