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

24 January 2024

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

  Update & Overview of New Licensing Deal

Plexus Holdings plc, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® method of wellhead engineering, is pleased to provide an overview of the Company's strategy following the signing of a new IP Licence Agreement with SLB (the "Licence Agreement") (see RNS 2.1.2024) and confirms receipt of the US$5.2m Licence Agreement payment.

Plexus was established in 1985 as an oil and gas ('O&G') services research and development ('R&D') led company, focused on the development of a unique proprietary and patented method of engineering for wellheads and well control applications, resulting in the introduction of uniquely safer technologies.

Plexus' strategy concentrates on the development of applications using the Company's POS-GRIP® technology suitable for high margin, low volume O&G markets where its ground-breaking, patented method of friction-grip engineering has been deployed in a wide range of applications, and where it is hoped that it will become a future industry standard for wellhead design and associated products. This means that Plexus, over the past decades, developed into a bespoke manufacturing company, which renders the standard volume service wellhead production sector, (the subject of the new licence) non-core to our future activities.   

Plexus focuses on "prevention", by developing and introducing specialised products that eliminate dangerous operating practices whilst addressing inferior conventional sealing solutions to maintain integrity throughout the lifecycle of surface and subsea production wells for all pressure and temperature ranges.  These long-term efforts are, as a result of changing attitudes in the O&G industry towards NetZero goals, starting to bear fruit, as evidenced by the License Agreement.

The Company believes that entering into the Licence Agreement clearly demonstrates the inherent value of Plexus' IP suite and marks a new level of recognition by SLB, which is one of the world's leading energy technology companies and will open up the global market for POS-GRIP surface production wellheads. Through this Licence Agreement, SLB has joined TechnipFMC in acquiring long-term rights to certain applications of POS-GRIP technology, which bodes well for Plexus in its "core" specialty application markets.

Importantly, the Licence Agreement enables Plexus to continue to operate in the licenced surface production wellhead market in a material way, which provides the Company with the opportunity to exceed its historical revenues from this category of wellhead business. The Licence Agreement fee provides Plexus with a US$5.2m cash lump sum, which will be used in part to build new inventory for the Company's historical core jack up exploration rental wellhead and associated mudline hanger sales business, which is a sector Plexus has re-entered in co-operation with SLB.

SLB's best-in-class reputation benefits Plexus on many levels. As well as validating the additional assurance derived from the preventive Leak-Free technology delivered by its integral "HG®" metal seal solution, Plexus believes the expansion of its relationship with SLB will help to grow its own special surface production wellhead potential, and a further agreement provides Plexus with the potential to supply SLB's valves and trees on a project basis, enabling Plexus to supply and maintain package solutions, thereby enhancing its capabilities to be more responsive to customer requirements.

Looking to the future, Plexus' focus will be on the continuing development of its POS-GRIP friction-grip method of engineering for O&G applications and beyond. Plexus' engineering team holds a 20-year lead in unique proprietary patented "preventative" metal-to-metal seal technologies and its associated knowhow, making Plexus well suited to exploit many additional applications. For example, Plexus retains the rights to POS-GRIP adjustable surface production wellheads, tensioned hanger systems, HP/HT metal-to-metal tie-back solutions, subsea wellheads, subsea intervention systems, hydrogen drilling equipment, geothermal wellheads, plug & abandonment ('P&A') technologies, POS-GRIP Trees, bespoke XHP/HT applications, and applications yet undefined.

With two major multi-national companies, SLB and TechnipFMC, championing Plexus' technology by incorporating the "Friction-Grip" method of wellhead engineering in their product mix, the Board believes that exploration & production ('E&P') operators will be encouraged to embrace Plexus' POS-GRIP technology in the future whilst the Company focuses its marketing efforts on the UK Continental Shelf ('UKCS'), the European Continental Shelf ('ECS'), and in additional growth regions including the Commonwealth of Independent States ('CIS'), the Far East, the Mexican Gulf of Mexico ('GOM'), and South America.

**ENDS**

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

NOTES

Plexus Holdings plc (AIM: POS) www.plexusplc.com

Plexus is an IP led company focussed on establishing its patented leak-proof POS-GRIP® wellhead and associated equipment as the go-to technology for energy markets whilst making a genuine contribution to the oil and gas ('O&G') industry's ESG and NetZero goals by championing "through the BOP" (Blow-out Preventer) designs, and lifetime leak-proof HG® metal-to-metal sealing systems. Having protected the environment for many years through these technological innovations, the Company was awarded the London Stock Exchange's Green Economy Mark in July 2021 and continues to place emphasis on its ability to reduce harmful methane emissions and unnecessary maintenance and intervention costs.

Headquartered in Aberdeen, the Company has provided leak-free wellhead performance in over 400 wells worldwide and worked with an array of blue-chip O&G company clients.  As well as generating revenues from orders for surface production wellheads, and various plug & abandonment ('P&A') projects particularly in the UK and European North Sea regions, the Company has several licencing/collaboration agreements with major partners including SLB and TechnipFMC.

Plexus' current suite of products and applications include HG wellheads, which combine POS-GRIP technology with gas tight leak free metal-to-metal sealing; the Python® subsea wellhead, developed in a Joint Industry Project with several industry leaders; the POS-SET™ Connector for the de-commissioning and P&A market; and Tersus-PCT, an innovative HP/HT tie back connector product.

Having proved the uniquely enabling qualities of POS-GRIP technology, Plexus is now focused on establishing its technology and related equipment in other markets and sectors both in the UKCS and around the world where the directors believe it can play an important role in reducing harmful fugitive methane emission risks as operators strive to deliver on ESG commitments and NetZero goals in a safe and cost-effective way. These opportunities include exploration rental wellheads from Jack-up rigs, subsea, connectors such as metal sealing HP/HT Tie-Back applications, P&A, special applications, geothermal, hydrogen and all non-oil and gas applications.