The Ion Geophysical Corp (NYSE: IO) stock soared 100%+ after winning a 5-year contract with Brunei Shell Petroleum Co. (BSP), a joint venture between Shell Plc and the Brunei government.
Investors cheered the news, as evidenced by the rally in IO shares despite the two companies not revealing the deal’s financial details.
The markets assumed that the deal could be highly lucrative, given that Brunei had oil reserves of over 1 billion barrels of crude oil in 2016, with 2022 estimates warning that its oil reserves would run out in 27 years.
Therefore, there is a significant possibility that the contract will be extended once it expires in 2027. The deal will see Ion Geophysical provide digital solutions for managing marine logistics. The services will be delivered via the Marlin marine optimization software suite, including berth management, vessel monitoring, and visual reporting tools to help manage supply workflows.
In a statement, ION Geophysical said: “The solution will digitize a number of manual processes and will also interface with existing tools, enhancing BSP’s ability to make informed decisions whilst managing its fleet of more than 70 vessels servicing over 200 offshore structures,”
“Through the ability to share and visualize information for the entire operating area in a single system across teams, QHSE and operational efficiencies are improved, which can lead to reductions in fuel consumption, emissions, and BSP’s overall carbon footprint,”
Investors cheered the moe driving ION Geophysical shares over 100% higher, leaving many feeling left out of the latest rally. However, chasing stock or another asset higher is never a good idea.
Today’s rally in IO stock is parabolic, which is always followed by a significant pullback once the move runs out of steam. The rally might extend higher for several days but will come back to earth soon, giving investors who missed the initial rally a chance to get in at a reasonable price.
*This is not investment advice. Always do your due diligence before making investment decisions.
ION Geophysical stock price.
The ION Geophysical stock price soared 135.4% premarket to trade at $0.8593, rising from Tuesday’s closing price of $0.3650.
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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading