Material tech company Matrix Composites & Engineering (ASX: MCE) has secured a significant contract with TransOcean, a leading offshore drilling company, to supply drilling riser buoyancy modules. 

This contract, valued at $4 million, is expected to further bolster Matrix’s position as a premier supplier in the industry. The buoyancy modules will be manufactured and delivered in the first quarter of FY24 and will be utilised for an upgrade to an existing TransOcean drilling rig.

With this latest addition, Matrix’s secured revenue for the next financial year (FY24) in the Subsea sector alone is approaching $50 million. This achievement builds on the positive momentum the Company has generated across its operations throughout FY23, including a successful equity raising of $20.2 million in March. As a result, its projected revenue for the current financial year is expected to reach between $45 million and $50 million, a significant increase from $28.6 million in FY22.

Matrix Chief Executive Officer Aaron Begley said the contract with TransOcean strengthens Matrix’s position as a premier supplier of drilling riser buoyancy modules. He noted, “This latest award further enhances our industry-leading position in providing subsea buoyancy solutions, at a time of resurgent activity among offshore drilling companies globally.” 

The contract is also in line with recent developments at TransOcean, a drilling contractor. The company announced on May 10, 2023, that a major operator in Australia had selected the Transocean Equinox rig, built in 2015, for a five-well contract. The deal is valued at approximately $137 million and is expected to start in Q1 2024, with a potential extension through Q1 2025.

With many of its rigs having sat idle in the previous quarter, TransOcean is making sure they’re in good condition, so as to boost its potential of turning its contracts into long-term deals. The Matrix contract is perhaps a step in that direction.

Matrix Composites & Engineering use advanced materials to create durable and efficient solutions for a wide range of industries. However, when the tumultuous winds of the supply chain crisis swept through following Covid, it found itself caught in an unwelcome storm.

The recent contract win comes at a crucial time for Matrix, as it reported a decline in revenue during the first half of FY23. H1 FY23 revenue amounted to $11.8 million, down from $13.7 million in H1 FY22. Additionally, the Company reported an underlying EBITDA loss of $2.3 million for the same period, compared to a $1.3 million loss in H1 FY22.

Giving a boost to its financial performance, Matrix has recently been awarded orders worth over $3 million for its Humidur Coatings solutions and LGS Pipeline Free Span correction equipment. These successes further reinforce the company’s position as a provider of innovative and varied solutions.

Begley said, “Pleasingly, we remain in the running for approximately $90 million of near term subsea buoyancy opportunities, and continue to actively pursue the significantly larger, longer term quotation pipeline.”

With this contract, both Matrix and TransOcean are set to benefit and bolster their financials for the coming year.