Completes Sale of Jack-Up Business to TechnipFMC

RNS Number : 5534D

Plexus Holdings Plc

01 February 2018

 

Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil Equipment & Services

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.

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

Completion of Sale of Wellhead Exploration for Jack-up Applications Business and Signing of Collaboration Agreement with TechnipFMC

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, is pleased to announce the completion of the sale of its wellhead exploration equipment and services business for jack-up applications (the "Jack-up Business") and the licencing of certain intellectual property to FMC Technologies Limited ("TFMC"), (together, the "Disposal"), and the receipt of an initial net consideration of £14,164,344. An additional sum of up to £27,500,000 is payable dependent on the future performance of the Jack-up Business during a three-year earn-out period. TFMC is a subsidiary of TechnipFMC (Paris:FTI)(NYSE:FTI), one of the leading oil and gas service and equipment companies.

Completion of the Disposal follows the signing of a conditional Business Purchase Agreement ("BPA") by Plexus, Plexus' subsidiary Plexus Ocean Systems Limited ("POSL") and TFMC (as announced on 19 October 2017).  Shareholder approval of the Disposal was obtained on 6 November 2017.  

Collaboration Agreement

The Company is also pleased to announce that Plexus, POSL and TFMC have entered into a Collaboration Agreement which establishes a framework for the development of existing POS-GRIP IP for applications outside of the jack-up exploration wellhead application. The Collaboration Agreement provides for the formation of a joint Steering Committee who will be able to explore potential areas of future collaboration.

Strategy

The Disposal and Collaboration Agreement represent a strategic milestone for Plexus, and fits with Plexus' long-term objective to firmly establish the POS-GRIP method of engineering within the wider energy sector.

The Disposal is in line with Plexus' strategy of increasing industry awareness of its POS-GRIP friction grip technology by initially focusing on proving the superior qualities of its equipment within the niche jack-up wellhead exploration sector, before targeting other mainstream markets such as surface production wellheads, subsea wellheads and de-commissioning. 

To date, Plexus' equipment has been deployed on hundreds of jack-up exploration wells worldwide operated by a customer base which includes blue-chip customers such as BG, BP, Royal Dutch Shell, Maersk, Statoil and Total. Plexus has developed a strong market reputation in the UKCS and ECS, particularly for HP/HT applications: its equipment was used by Total on the Solaris well, which is believed to be the highest pressure well ever drilled in the North Sea.

The Disposal and Collaboration Agreement with a top tier oil and gas services provider marks the culmination of this first phase of Plexus' strategy; in the view of the Board, it provides industry recognition of the potential of its POS-GRIP technology to raise performance and safety standards for a range of additional applications in the energy sector. 

Plexus will also continue to work independently, and where appropriate with third parties, to further monetise its technology in other markets such as production and subsea, as demonstrated by the recently announced first production well order from Centrica North Sea Limited for a gas well in the UK Southern North Sea. In addition, new market sector applications such as geothermal will be pursued.

Plexus' CEO Ben Van Bilderbeek, said: "The Disposal and Collaboration Agreement is a win-win for both parties.  As well as achieving a sale value of up to £42,500,000 for the Jack-up Business, we gain industry recognition for our technology, which we have long claimed sets a new standard in terms of performance and safety. Furthermore, we have secured the opportunity to collaborate with a top tier company to explore potential development of additional products based on POS-GRIP.

"Encouragingly, we believe that the upward trend of the oil price in recent months, alongside indicated OPEC-led production cuts through 2018, could well be the catalyst for an uplift in oil & gas exploration activity during the three year earn-out period.

"While the Disposal and Collaboration Agreement is a major milestone for Plexus, we see this as merely marking the end of the first phase of the Company's development. Plexus is now entering what we believe will be a highly exciting and rewarding period, as we focus on developing and positioning new and existing POS-GRIP enabled products beyond wellheads for jack up exploration, both within the oil and gas sector, including production and subsea, and the wider energy industry, such as renewables and geothermal.  As the recent order from Centrica for a production wellhead and a previous contract for a POS-GRIP connector for abandonment operations from the same operator demonstrate, we already have additional products ready for roll-out.  In my view, Plexus has never been in a stronger position in terms of a combination of proprietary IP and cash resources to realise the full potential and value of POS-GRIP, and I look forward to providing further updates on our progress."

Richard Alabaster, President of TechnipFMC's Surface Technologies business, stated: "I am very pleased that we have finalized the transaction which supports our objective of extending and strengthening our position in exploration-drilling products and services while leveraging our global field presence. It also enhances TechnipFMC's capability in HPHT applications."

**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]
Derrick Lee	Cenkos Securities PLC	Tel: [phone]
Frank Buhagiar	St Brides Partners Ltd	Tel: [phone]
Isabel de Salis	St Brides Partners Ltd	Tel: [phone]

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 ('TFMC'), 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™ 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™ 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.

 

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