Ocean Power Technologies Inc (NASDAQ: OPTT) is having an incredibly strong start to the trading session this morning after announcing that it has been awarded a contract by the Navy. Today, we’ll talk about:
- The contract award;
- what we’re seeing from OPTT stock as a result; and
- what we’ll be watching for ahead.
OPTT Announces Navy Contract Award
As mentioned above, Ocean Power Technologies is having a strong start to the trading session this mroning after announcing a new contract. In a press release issued early this morning, the company said that it has been awarded a contract from the United States Navy.
According to the release, the contract comes with a value of $125,000. Should all go well, there are three additional options that total $100,000. This brings the total potential value of the contract to $225,000.
As per the agreement, OPTT said that it plans on beginning the development of a buoy mooring system immediately. These systems incorporate fiber optics for the transmission of subsea sensor data to airplanes, ships, and satellites.
A key to this contract award has to do with the potential use of concepts developed. In fact, the company said that the fiber optic mooring concepts developed under the contract may be used with its PowerBuoy and Subsea Battery Module product lines.
OPT has submitted several proposals to the U.S. Navy and the Office of Naval Research under its Innovation and Support Services line on topics such as powering acoustic and non-acoustic sensors and improving the persistence of unmanned underwater vehicles through battery recharging and critical data transfer. Additionally, OPT has successfully advanced its anchorless PowerBuoy® design under a prior contract with the Office of Naval Research and is seeking to prototype the design for both defense and commercial applications.
The company also mentioned that it has submitted several proposals to the U.S. Navy and the Office of Naval Research under its Innovation and Support Services line. The company also reminded investors that it has successfully advanced its anchorless PowerBuoy design under a prior contract with the Office of Naval Research. The company is seeking to prototype the design for both defense and commercial applications.
In a statement, OPTT CEO George Kirby, had the following to offer:
We’re very excited for this Phase I award by the U.S. Navy to develop a fiber optic mooring line which may be used for both defense and commercial applications. We believe that this new contract award further validates our technical expertise and experience with ocean energy systems and could also lead to additional future contract awards where we might utilize OPT technologies which are already in advanced stages of development. To date, OPT has earned 28 U.S. Government awards, including eight Phase I awards, which led to five Phase II efforts and 15 Phase III efforts, all related to marine systems and applications. We welcome the opportunity that this new contract brings, and this award now allows us to immediately bid on a Phase II contract.
OPT has a long work history on Department of Defense projects. Our most recent government effort has been around advancing our anchorless PowerBuoy® design, and we’re nearing the prototype stage. The anchorless PowerBuoy® design is very encouraging to our customers due to its innovative and patented approach to power generation and also the need for a quick-deploy solution throughout markets such as defense and offshore oil and gas.
In addition, these markets are undergoing a radical transformation to cleaner and more efficient all electric, all digital, and all autonomous subsea operations. Rapid deployment of persistent power and real-time subsea data communications is the enabling technology. Thanks to our efforts over the past few years, OPT is positioned and ready to enable this transformation today. In fact, we currently have one PowerBuoy® deployed for a global oil and gas operator, another which is undergoing preparation for deployment, and we have two additional PowerBuoys® in various stages of production. We’re speaking with numerous customers about single and multiple PowerBuoy® leases and sales, as well as about studies for incorporating PowerBuoys® into their operations. We’ve also begun the development of our initial Subsea Battery Solution, as well as a quick-deploy liquid fueled PowerBuoy® for shorter duration deployments. We hope to have prototypes of these two products available for our launch customers by late summer of this year. It’s an incredibly exciting time at OPT, and we are laser focused on execution.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Ocean Power Technologies, the news proved to be overwhelmingy positive. After all, the contract award from the Navy not only opens the door to revenue, but also gives the company the potential to use developed technologies within its own product line, making its product offering stronger.
So, it’s not surprising that excited investors are pushing the stock up in the market this morning. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:51), OPTT is trading at $0.35 per share after a gain of $0.027 per share or 8.40% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on OPTT. In particular, we’re interested in following the potential success of this contract and how the company plans on using recently developed technologies as well as the coming developments to its advantage in its product line. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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