?6m Wellhead Agreement with Oil and Gas Major

RNS Number : 0921G

Plexus Holdings Plc

26 June 2012

 



Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil equipment & services

26 June 2012

Plexus Holdings PLC ('Plexus' or 'the Company')

Secures £6 million Wellhead Agreement for relief well standby and exploration drilling from major international oil and gas operator

Plexus Holdings PLC, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® friction-grip method of wellhead engineering, has secured a three year agreement with a leading global oil and gas producer for relief well standby wellhead equipment.  Plexus will provide High Pressure/ High Temperature POS-GRIP adjustable wellhead equipment and mudline casing support on a standby basis. This forms part of contingency planning in the event that a relief well is needed during the oil and gas development programme in the UK North Sea. Additionally, Plexus will supply wellhead equipment for the drilling of a high pressure/ high temperature ('HP/HT') well, also in the North Sea and optional sidetracks. Plexus estimates that the agreement, which is subject to finalisation of contract terms, is likely to be worth in excess of £6m with revenues starting in July 2012.

Due to increasing pressures for spill response and well control contingencies, both from regulators and from within the oil and gas industry, the operator has chosen to ensure that suitable HP/HT wellhead equipment is available should there be a need to drill a relief well in the event of an incident during the development of the HP/HT oil and gas field.  Plexus' 18-3/4" 15,000 psi wellhead equipment with mudline suspension casing support will be reserved on stand-by and maintained by Plexus in a ready to deploy state for the contract period.

Plexus CEO Ben van Bilderbeek said, "We are delighted to have been awarded this contract and believe it illustrates the increasing pressure faced by oil and gas operators to follow best practice in terms of response contingency planning capability.  This is the first contract of this kind for Plexus, where wellhead equipment will be on permanent stand-by for a customer in the event that a relief well is needed.  As a leading supplier of superior HP/HT wellhead equipment in the North Sea market, we believe that with safety standards and regulations set to become more stringent over the coming years, this could potentially be a significant new business area for Plexus to further develop and pursue."

**ENDS**

For further information please visit www.posgrip.com or contact:

Ben van Bilderbeek	Plexus Holdings PLC	Tel: [phone]
Graham Stevens	Plexus Holdings PLC	Tel: [phone]
Jon Fitzpatrick	Cenkos Securities PLC	Tel: [phone]
Ken Fleming	Cenkos Securities PLC	Tel: [phone]

Notes to Editors:

Plexus Holdings PLC, which began trading on AIM in December 2005, is an oil and gas engineering and services business, which supplies wellhead and mudline suspension equipment for exploration and production applications.  Based in Aberdeen, with offices in London, Cairo, Kuala Lumpur and a presence in Houston, Texas, it has developed and patented a friction-grip method of engineering for oil and gas field wellheads and connectors, POS-GRIP®, which involves deforming one tubular member against another to effect gripping and sealing.

The Company plans to accelerate the roll out of POS-GRIP wellhead equipment as a superior alternative to current technology and for it to become the future industry standard for wellhead design.  In particular, the technology has advantages in High Pressure/High Temperature (HP/HT) and Extreme HP/HT (X-HP/HT) oil and gas environments, for which there is growing global demand and where Plexus is being increasingly recognised as the supplier of choice.  Importantly, the Company is focussed on extending its proprietary technology into an increasing number of subsea applications.  In line with this, in March 2011 the Company launched an initiative to develop a new subsea wellhead design, HGSS™, utilising its friction-grip technology in collaboration with key oil and gas operators and service companies. Royal Dutch Shell, Wintershall, Maersk, Tullow Oil and the UK entity of the world's largest offshore drilling company have joined the initiative to date.

The HGSS subsea wellhead design will include a combination of key features never before seen in a subsea wellhead which include being rated to 15,000 psi, 4,000,000 pounds of 'instant' casing lockdown capacity, annulus pressure monitoring and access for 'bleed off' capability to address sustained casing pressure ('SCP') issues which are recognised by the API as a serious industry problem, and rigid metal annular seal technology qualified to match the performance of premium casing. Perhaps most importantly the POS-GRIP subsea wellhead design will be designed so that casing and tubing hangers match the standards required for casing and tubing couplings in the system which is currently not the case for conventional wellhead designs, both for subsea and platform/land. This design initiative will for the first time provide the industry with a truly 'premium' wellhead that would no longer be considered the 'weak link' in the well.  Development is expected to be completed by September 2013 calendar year in time for the Aberdeen Oil Show.

To date, POS-GRIP wellhead systems have been used or selected to be used in over 150 oil and gas wells by international companies including Apache Energy Australia, BHP Billiton, BG International, Bowleven plc, BP, Brunei Shell Petroleum, Cairn Energy, Centrica, ConocoPhillips, Dana Petroleum, Dubai Petroleum, GDF SUEZ, Global Santa Fe, Maersk, Niko Resources, Petro-Canada Trinidad & Tobago, Red Sea Petroleum Operating Company, Repsol, RWE, Senergy Limited, Shell Egypt, StatoilHydro, Silverstone Energy, Talisman Energy, Tullow Oil, and Wintershall.

 

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