Deep Down Nets $30 Million in Flotation Orders
Deep Down has secured over $22 million in drilling riser flotation contracts for Matrix Asia Pacific Pty Ltd of Perth, Australia, and expects to close over $8 million in additional contracts within the next couple of weeks.
Deep Down has an exclusive agreement with Matrix to introduce their complete product line to the U.S. Market. These contracts establish Matrix as one of the world's premier suppliers of syntactic foam drilling riser flotation modules. These modules are used to provide buoyancy and reduce the weight of the riser string, thus allowing drilling in deeper depths with less tension.
Matrix is providing their proprietary syntactic foam formulation coupled with a practical, damage resistant module design. Deep Down is working closely with Matrix to optimize the mix of products and services that can be jointly offered to the marketplace. Deep Down is currently acting as an agent and expects to earn over $600,000 in commissions, after expenses, on these orders.
"Although Deep Down will not record the revenue on its financial statements, it is important to note that the $600,000 in commissions is essentially unencumbered by expense and falls to the bottom line as pretax profit. We expect these fees to be collected in various installments over the next 18 months," commented Eugene L. Butler, Deep Down's chief financial officer.
In addition to drilling riser flotation, Matrix offers buoyancy for ROVs, subsea deployment, distributed buoyancy modules and other subsea applications. Matrix also offers a complete range of molded polyurethane products including, bend restrictors, bend stiffeners, VIV suppression strakes, clamping systems, and cable and flowline protection.