WDS emerged from a trading halt this morning with news of a deal which would see it acquire Delco from the Malaysian listed oil and gas company Wah Seong Corporation Berhad.

The move would see WDS expand into the coal seam gas market in the Bowen and Surat basins, in Queensland and New South Wales respectively.

WDS managing director Garry Ash labelled the move into the emerging industry as “exciting”.

“It supports our goal to grow operations around the key energy and resources markets in New South Wales and Queensland and will further diversify and expand WDS’s business,” Ash said.

“Delco is a highly complementary business, being one of WDS subsidiary Diversified Construction’s key competitors.

“Its business is a logical fit with WDS and the acquisition will allow WDS to establish itself as the clear market leader in the Queensland coal seam gas pipeline construction market.”

Delco provides engineering, procurement and construction management services to the coal seam gas market including compression stations and building pipelines.

Delco has a number of contracts with major Australian coal seam gas companies and would generate around $A100 million in revenue in the 2009 financial year.

The deal will also bring 100 employees to WDS.

Through the transaction Seong would become a shareholder, which WDS says will open it up to new markets in Asia and the Middle East.

The WDS deal will involve a share placement of about 5.3 million new shares to raise $10 million, a cash component and the issue of WDS shares to the vendor.

WDS shares closed yesterday at $2.20.