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NACG Wins $135M Oil Sands Services Contract, Bolsters Backlog
North American Construction Group adds $135 million to backlog with a five-year oil sands services contract. The deal improves revenue visibility. Earnings remain tied to crude demand.
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North American Construction Group's subsidiary ML Northern Services has picked up a five-year heavy equipment services contract from a major oil sands producer. The deal adds roughly $135 million to NACG's contractual backlog, the company said Monday.
ML Northern will supply mobile fuel services for the customer's fleet of ultra-class and other large mining equipment across multiple mine sites in the Fort McMurray region. The contract starts Sept. 30, 2026, with full operations expected by late in the fourth quarter. It expires July 5, 2031.
CEO Barry Palmer called the award the largest in ML Northern's history and the biggest fuel-services contract NACG has ever won. "The contract adds approximately $135 million of long-duration backlog with modest growth capital requirements," Palmer said. The company will spend about $5 million on 25 new on-highway units and other support equipment, leveraging existing fleet for the rest.
The math works out to a roughly 27x backlog-to-capital ratio. Most of NACG's revenue comes from project-based heavy civil and mining work. A five-year services agreement provides a more predictable income stream tied to equipment utilization, not the construction cycle. Oil sands producers run their fleets continuously, even when capital spending on new mines fluctuates.