Ocean Power Technologies Inc. (NASDAQ:OPTT) saw its stock jump more than double Wednesday after announcing it has signed a contract with a leading oil and gas exploration company decommissioning subsea wells in the Gulf of Mexico.
After retreating from their intraday highs, shares of Ocean Power closed up 55% to $7.76.
Ocean Power, based in Pennington, NJ, will undertake a 12-week paid feasibility study on how the company could help the oil producer in the monitoring of subsea wells during the decommissioning process. The company also said it will study other technical issues -- such as consumer power demands and how that affects power generation, the company said.
Ocean Power did not name the oil producer nor the amount of the contract in its release.
“This study will evaluate the use of our PowerBuoys in monitoring multiple customer wells during oil field decommissioning activities in the very deep and challenging waters of the Gulf of Mexico,” said CEO George Kirby. “We believe our solutions will reduce the cost of our customer’s operations and will also increase safety and improve operational flexibility by providing an unmanned, autonomous power and communications platform.”
Wednesday's explosive increase in Ocean Power’s stock comes just weeks after it reported a wider fiscal 3Q loss. The company also reported revenue of just $300,000 in the three months ending January 21. Shares have been in a steady downward trend until news of the contract win broke.
Ocean Power provides power generation devices and services to extract energy from ocean waves.
--Patrick Graham contributed to this story--