Oceaneering’s Manufactured Products Segment Secures Large Umbilical Contract
Oceaneering International (NYSE:OII) has secured a $50 million contract with a domestic energy company for an electro-hydraulic, steel tube dynamic umbilical system. The project, located in the Gulf of Mexico, will involve manufacturing a 27-kilometer umbilical at Oceaneering's Panama City, Florida facility. Production is set to begin in 2025, with a final delivery in the second quarter of 2026. Senior VP Shaun R. Roedel highlighted customer confidence in Oceaneering's timely and safe delivery of manufactured products.
- Secured a $50 million contract.
- 27-kilometer umbilical project in the Gulf of Mexico.
- Manufacturing scheduled to start in 2025.
- Final delivery expected in Q2 2026.
- Revenue from the contract is not immediate; manufacturing starts in 2025.
Securing a $50 million contract is a substantial deal for Oceaneering’s Manufactured Products segment. This agreement will boost the company's revenue in the upcoming years, particularly when manufacturing begins in 2025 with delivery expected in 2026. Investors should note that this contract enhances the segment's revenue visibility and pipeline stability.
From a financial perspective, the contract offers a solid mid-term revenue stream, which is important for cash flow planning and possibly debt management. However, potential delays in the project or cost overruns could impact the anticipated benefits. Investors should monitor progress closely and assess whether the company maintains adherence to projected timelines and costs.
This contract highlights Oceaneering's competitive positioning in the oil and gas sector, particularly in the Gulf of Mexico, which remains a critical area for offshore exploration and production. The demand for advanced umbilical systems is indicative of ongoing investments in offshore infrastructure, signaling a positive market trend for similar future contracts.
For retail investors, understanding the strategic fit of this contract within Oceaneering’s broader business strategy is essential. The company’s ability to secure such contracts suggests a robust market presence and competence in delivering complex projects. This could potentially lead to additional contracts, boosting long-term revenue growth and market share.
The project involves supplying an electro-hydraulic steel tube dynamic umbilical, which is critical in subsea production systems for power transmission and fluid control. This type of technology is at the heart of modern offshore projects, enhancing efficiency and reliability of operations.
The technical complexity and length of the umbilical indicate a high level of engineering expertise and manufacturing capability. Successfully completing this project could position Oceaneering as a preferred supplier for future technologically demanding contracts, which could bolster its reputation and open doors to more high-value projects.
Oceaneering is contracted to supply an electro-hydraulic, steel tube dynamic umbilical totaling approximately 27 kilometers (17 miles) in length for a project in the Gulf of
Shaun R. Roedel, Senior Vice President of Manufactured Products, stated, “This contract award reflects the confidence that our customers have in Oceaneering’s ability to deliver manufactured products in a safe and timely manner. We value the trust our customers place in our abilities and we look forward to supporting this exciting project.”
Statements in this press release that express a belief, expectation, or intention, as well as those that are not historical fact, are forward-looking. The forward-looking statements in this press release include the statements concerning Oceaneering's: anticipated revenue from the contract; work scope, production location, and delivery of contracted products; and expected start and completion dates. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on current information and expectations of Oceaneering that involve a number of risks, uncertainties, and assumptions, including risks and uncertainties related to counterparty performance under contracts and market conditions and other economic factors affecting Oceaneering's business. Should one or more of these risks or uncertainties materialize or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated. These and other risks are more fully described in Oceaneering's latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission.
Oceaneering is a global technology company delivering engineered services and products and robotic solutions to the offshore energy, defense, aerospace, manufacturing, and entertainment industries.
For more information on Oceaneering, please visit www.oceaneering.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240620726667/en/
Hilary Frisbie
Senior Director, Investor Relations
Oceaneering International, Inc.
713-329-4755
investorrelations@oceaneering.com
Source: Oceaneering International, Inc.
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