Plexus Holdings Plc Sale of Wellhead Equipment to Russian Partner (7994E)
February 14 2018 - 2:00AM
UK Regulatory
TIDMPOS
RNS Number : 7994E
Plexus Holdings Plc
14 February 2018
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
Equipment & Services
This announcement contains inside information
Plexus Holdings PLC ('Plexus' or 'the Company')
GBP1.4million Sale of Wellhead Equipment to Russian Partner
Plexus Holdings PLC, the AIM quoted oil and gas engineering
services business and owner of the proprietary POS-GRIP(R)
friction-grip method of wellhead engineering, is pleased to
announce the sale of two POS-GRIP 18-3/4" rental wellhead sets and
associated mudline equipment and tooling to LLC Gusar (OOO Gusar)
Ltd ('Gusar'), the Company's partner and licensee in Russia, for
circa GBP1.4m ('the Sale'). The wellheads will serve as the basis
for Gusar's POS-GRIP rental exploration wellhead inventory, and are
planned to be used for gas exploration drilling within the Russian
Federation under the exclusive licence agreement ('the Licence
Agreement') between Plexus and Gusar and CJSC Konar (ZAO Konar)
('Konar'), two independent Russian oil and gas equipment
manufacturers.
The Sale represents a major milestone towards delivering on one
of Plexus' objectives to establish its best in class POS-GRIP
equipment in Russia and the CIS, one of the top three hydrocarbon
producers in the world with significant gas reserves.
In January 2016, the Company entered into the Licence Agreement,
which conferred to Gusar and Konar the right to manufacture and
rent Plexus' proprietary jack-up exploration wellhead and
associated equipment within the Russian Federation and the other
CIS states. Under the terms of the Licence Agreement, Plexus agreed
to sell to Gusar up to three suitably configured POS-GRIP Wellhead
Systems as the basis of its own rental wellhead inventory and to
help facilitate Gusar's roll-out of rental POS-GRIP Wellhead
Systems in the Russian and CIS markets. It is anticipated that the
Sale will enable Gusar to secure its first rental order from a
major local operator in the near future and may lead to the
purchase of a third wellhead in due course.
As the anticipated pick-up in activity in Russia and elsewhere
in the region gains traction, Gusar can as and when necessary add
to this initial rental inventory by manufacturing POS-GRIP Wellhead
Systems under licence. Under the terms of the Licence Agreement
Plexus will receive royalties based on the invoice value of any
Plexus products rented or sold by Gusar or Konar. The two wellhead
sets of equipment sold to Gusar as part of the Sale are expected to
be deployed on jack-up gas exploration wells, which is permissible
under current EU trade sanctions.
The Sale follows an initial purchase order from Gusar for the
Company's Tersus(TM)- TRT Mudline Suspension System ('MLS')
equipment in April 2017. Gusar, assisted by Plexus, has been using
the MLS to demonstrate to Russian operators the environmental
benefits and operational advantages of Plexus' system, which is
proven to deliver excellent reliability, superior well integrity,
and significant time savings. In combination with POS-GRIP(R)
Adjustable Wellhead Systems, which have been used on over 350
jack-up exploration wells worldwide by major operators including
BP, Royal Dutch Shell, Statoil and Total, the Directors believe
that Plexus' system is the best technical solution.
Following the recent completion of the disposal of its wellhead
exploration equipment and services business for Jack-Up
applications (the "Jack-up Business") to FMC Technologies Limited
("FMCT") for up to GBP42.5million (the "Disposal"), Plexus retained
the right to pursue jack-up exploration related business in Russia
and the CIS via the Licence Agreement. FMCT is a subsidiary of
TechnipFMC (Paris:FTI)(NYSE:FTI), one of the leading oil and gas
service and equipment companies.
Plexus' CEO Ben Van Bilderbeek said, "The sale of these two
wellhead sets is a key step towards Gusar securing a landmark first
rental order from a local Russian gas operator for our POS-GRIP
wellhead equipment. Post the sale of our Jack-up Business to FMCT,
alongside the development and roll-out of POS-GRIP enabled products
in other areas of the energy industry such as subsea, production
and renewables, Russia and the wider region is a central area of
focus, not only because it is a top three global hydrocarbon
producer, but also due to the importance of gas in its energy mix.
As evidenced by its successful deployment on numerous wells in the
North Sea, our technology and HG(R) metal sealing are ideally
suited to the high pressures and temperatures - and hence
environmental risks - associated with gas. As a result, Russia
represents a major opportunity for the Company and I am very
pleased to see our belief in this market coming to fruition.
Gusar's General Director, Alexander Beryozkin said, "We are
delighted to kick-start the build-up of our POS-GRIP exploration
rental fleet with the purchase of these initial two wellhead sets.
This follows a period of active engagement with Russian operators,
which has resulted in highly encouraging feedback. The proven
safety and operational advantages of POS-GRIP technology, together
with the pickup in activity across the sector and the ongoing
import replacement programme where locally manufactured and safest
drilling technology is sought, give us grounds for optimism that we
will begin to make inroads in the important Russian gas drilling
market."
**ENDS**
For further information please visit www.posgrip.com or
contact:
Ben van Bilderbeek Plexus Holdings PLC Tel: 020 7795
6890
Graham Stevens Plexus Holdings PLC Tel: 020 7795
6890
Derrick Lee Cenkos Securities Tel: 0131 220
PLC 9100
Frank Buhagiar St Brides Partners Tel: 020 7236
Ltd 1177
Isabel de Salis St Brides Partners Tel: 020 7236
Ltd 1177
NOTES:
AIM-traded oil and gas engineering services company Plexus (AIM:
POS) is an IP-led company that has developed a range of products
and applications based on its patent-protected POS-GRIP
friction-grip technology. Having proved the superior qualities of
POS-GRIP within the jack-up wellhead exploration market through the
sale of this business to FMC Technologies Limited ("FMCT"), a
subsidiary of TechnipFMC (Paris:FTI, NYSE:FTI), in early 2018, the
Company is now focused on establishing its technology and equipment
in other markets including surface production, subsea and
de-commissioning.
Its suite of new products and applications includes: the
Python(TM) Subsea Wellhead (a new standard for subsea wellheads -
supported by BG, Royal Dutch Shell, Wintershall, Maersk, Total,
Tullow Oil, eni, Senergy, and Oil States Industries Inc); the
POS-SET(TM) Connector for the growing de-commissioning and
abandonment market; HP/HT dual marine barrier risers which provide
an efficient, safe and cost effective solution for use on jack-up
rigs; an innovative HP/HT Tie-Back connector product; and a new
Well Tree product. Importantly, the Company has a Collaboration
Agreement with TFMC, which provides a platform to further develop
and commercialise these and other applications based on its
POS-GRIP technology.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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