Expro Group Poised to Capitalize on Mexico's Deepwater Boom with Technical Mastery and Secure Contracts

The Gulf of Mexico is about to witness a historic milestone: Mexico's first ultra-deepwater oil production facility, the Trion project, is on track to begin output in 2028. At its core is Expro Group, a specialist in well construction and subsea solutions, which has secured a pivotal three-year contract with Woodside Energy to deliver advanced tubular running (TRS) and cementing services. This marks a critical step for Expro to capitalize on the underdeveloped deepwater reserves of Mexico—a market brimming with potential—and underscores its role as a technical leader in one of the industry's most complex frontiers.

Technical Edge in a High-Stakes Environment

The Trion project, located in 2,500 meters of water approximately 180 kilometers off Mexico's coast, demands cutting-edge technology to navigate the dual challenges of extreme depth and corrosive subsea conditions. Expro's TRS systems—such as its Skyhook® technology and corrosion-resistant alloy (CRA) tubulars—are central to ensuring well integrity. These tools allow seamless well construction from top drive to target depth, reducing operational risks and costs. The company's cementing solutions, which are critical for sealing off reservoirs and protecting equipment, further cement its reputation in harsh environments. Notably, Expro's TRS technology has already proven its worth in the Netherlands' carbon capture and storage (CCS) projects, demonstrating its adaptability across energy sectors.

Contract Stability and Recurring Revenue Streams

Expro's three-year deal with Woodside, operator of the Trion field with a 60% stake, offers more than short-term gains. The contract's duration aligns precisely with the project's 2028 first oil target, ensuring steady revenue while de-risking execution delays. Moreover, the Trion development is part of a broader 24-well program—18 initial wells (including producers, water injectors, and gas injectors) and six additional wells over the project's lifecycle—where Expro's role in well construction and completion could translate into follow-on opportunities. This recurring work stream positions Expro to benefit from the full lifecycle of the project, a rarity in an industry often dominated by one-off contracts.

Leveraging the PEMEX-Woodside Partnership and Local Ties

The Trion project is a joint venture between Woodside and Mexico's state-owned PEMEX, which holds 40% of the venture. Expro's collaboration with Woodside builds on an existing partnership that supported exploration activities, enhancing trust and operational continuity. Simultaneously, Expro's establishment of a new local hub in Mexico's Tampico region signals a strategic bet on the country's energy evolution. This move not only secures a talent pipeline but also aligns with Mexico's push to boost domestic energy production while creating jobs—a win-win for both Expro and the local economy.

ESG Credentials and the Energy Transition

The Trion project's projected carbon intensity of 11.8 kgCO2-e per barrel of oil equivalent (BOE) is significantly lower than the global deepwater oil average, thanks to advanced drilling techniques and efficient infrastructure. Expro's technologies, which reduce rig time and minimize environmental impact through corrosion-resistant materials, directly support these ESG goals. As investors increasingly favor companies with strong sustainability profiles, Expro's ability to deliver both profitability and environmental stewardship could amplify its appeal.

Investment Case: A Buy Ahead of 2028's Milestone

Expro's strategic positioning in the Trion project offers multiple catalysts for shareholder value:
1. Recurring Revenue: The three-year contract and potential follow-up work from the 24-well program provide visibility through 2029 and beyond.
2. Market Leadership: Its technical expertise in ultra-deepwater environments positions it to win further contracts in Mexico's emerging deepwater sector, where untapped reserves are estimated at 479 million barrels of oil equivalent (MMboe).
3. ESG Alignment: Lower-carbon projects like Trion are increasingly favored by institutional investors, boosting Expro's valuation multiples.

The stock's performance relative to peers will hinge on execution risks, including regulatory delays or oil price volatility. However, with Woodside's proven track record in large-scale projects and Mexico's need to boost energy output, Expro's role as a critical enabler makes it a compelling buy ahead of the 2028 first oil milestone.

Conclusion

Expro Group's expertise in TRS and cementing technologies, paired with its long-term contract stability in Mexico's Trion project, positions it as a key beneficiary of the country's deepwater oil renaissance. With recurring revenue streams, a strategic local foothold, and ESG-aligned operations, Expro is well-equipped to deliver outsized returns as Mexico's energy sector evolves. For investors seeking exposure to a high-potential market with clear technical differentiation, XPRO deserves a closer look—and a buy rating ahead of the 2028 milestone.