Josh James

Josh James inquired about the future of the IMDS segment and the potential to expand digital software offerings beyond energy, and Oceaneering's current stance on M&A, particularly in light of recent industry consolidation.

Answer

Rod Larson (President and CEO, Oceaneering International) highlighted the integration of machine vision, machine learning, and AI in IMDS, specifically mentioning laser scanning for 3D modeling and corrosion detection on offshore platforms, with potential for subsea application. Regarding M&A, he stated that while big industry consolidation isn't a focus, bolt-on technology acquisitions like GDi are attractive, and a strong balance sheet could encourage slightly larger deals. Mike Sumruld (SVP and CFO, Oceaneering International) added that balance sheet strength provides more flexibility for M&A.

Josh James inquired about the future of Oceaneering's Integrity Management and Digital Solutions (IMDS) segment, particularly the expansion of digital software offerings outside of energy, and the company's current stance on M&A given recent industry trends.

Answer

Rod Larson, President and CEO, explained that IMDS is leveraging machine vision, learning, and AI for laser scanning to create 3D models of rigs, detect corrosion, and predict failures, which improves topside inspection and has shown successful underwater applications, creating demand for ROVs and vessels. Regarding M&A, he stated that the company is not focused on large industry consolidation but finds bolt-on technology acquisitions, like GDi, attractive for expanding market participation or enhancing technology. Mike Sumruld, Senior Vice President and Chief Financial Officer, added that the company's strong balance sheet provides greater flexibility for future M&A opportunities.

Josh James from Daniel Energy Partners asked about the current pricing environment, specifically how tightening rig rates influence Expro's pricing discussions and the perceived value of its offerings by customers.

Answer

CEO Mike Jardon noted that the pricing climate has not experienced downward pressure, partly due to the discipline of rig companies in maintaining rates, which sets a positive tone for the sector. He explained that new technology rollouts, particularly those expanding wallet share, typically command a premium due to the value they create, such as significant rig time savings. Expro remains disciplined on pricing for technology adoption. James also inquired about the geopolitical calming in Venezuela and its potential to open up opportunities in neighboring regions like Colombia, Trinidad, and Guyana. Jardon expressed excitement for Venezuela's opportunities, especially for Expro's high-technology solutions in challenging environments, seeing it as a potential growth engine for the industry due to its close linkages with surrounding countries, with the key question being the timing of its materialization.

Josh James inquired about the potential for geopolitical stabilization in Venezuela to open up opportunities in neighboring regions like Colombia, Trinidad, and Guyana, given their geographical proximity.

Answer

CEO Mike Jardon expressed excitement about the potential opportunities in Venezuela, noting its diverse land, shallow water, and deepwater prospects, and the existing infrastructure linkages with Guyana and Suriname. He highlighted Expro's strength in high-technology, challenging environments, making it well-positioned. He believes this could be a significant growth engine for the industry, though the timing of materialization remains uncertain.