Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil equipment & services
25 March 2015
Plexus Holdings PLC ('Plexus' or 'the Company')
New Plexus POS-GRIP® Product - First Order from Centrica for
POS-SET Connector™ for the Growing Abandonment Market
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 a purchase order ('PO') to supply and rent its new product POS-SET Connector™ utilising POS-GRIP friction grip engineering, which is to be used by Centrica Energy Exploration and Production ('Centrica') for abandonment operations on a gas well originally drilled 32 years ago in 1982 offshore Holland. This represents Plexus' first PO secured for the lucrative abandonment market, which the Directors believe has significant growth potential as a large number of ageing wells reach the end of their life in the North Sea and other regions and could become an important new revenue stream for the Company. The total value of the contract including engineering and testing work undertaken by Plexus is estimated at £0.8 million. Revenues are expected to commence in March 2015.
The proprietary POS-SET Connector has been developed and qualified to enable operators to re-establish a connection onto rough conductor casing that has been previously cut above the seabed to facilitate abandonment operations. Full scale testing has shown that the Plexus connector can achieve 80% of the bending and tensile strength of the parent pipe, which is significantly better than conventional alternatives. The POS-SET product can also be used on a number of applications in addition to abandonment including subsea completion operations using Subsea Tie Back Wellhead and Surface Wellhead Tie Back Platform Completion.
The POS-SET Connector was initially developed and successfully tested for Wintershall Holland. The PO with Centrica will be the first time the equipment will be installed out in the field in an abandonment application. Centrica will utilise a Plexus POS-SET Connector which has been designed specifically to be compatible with the 30 x 0.5" conductor originally used to drill the well and which has since been cut off above the sea bed. Plexus has a long standing relationship with Centrica having provided the operator with equipment for use on a number of exploration and appraisal wells in the North Sea, including the recent Grove Infill and Pegasus West wells.
Plexus CEO Ben van Bilderbeek said, "This latest order with Centrica represents another major milestone for Plexus, as it sees us enter a new and growing abandonment market where regulation is increasingly focused on the best available equipment solutions. According to the DECC, out of the plus 11,000 wells that have been drilled offshore UK, 5,000 remain active. These wells along with those in other parts of the North Sea, and around the world will have to be abandoned in a responsible manner once they have reached the end of their lives. With regulatory scrutiny on decommissioning and abandonment practices on the rise, we are confident that POS-SET offers operators similar performance, safety and cost benefits that our core POS-GRIP wellhead equipment has delivered on over 350 wells drilled worldwide. As a result, we believe this contract with Centrica has the potential to be the first of many and that POS-SET is well placed to secure a large share of this growing market.
"It has always been our strategy to first prove the superiority of our POS-GRIP friction grip method of engineering based equipment in the most extreme operating environments, and having established Plexus as the dominant supplier in the HP/HT market in the North Sea, we have done just that. Our next objective is to build on this proven capability and expand both geographically and in terms of applications for our game changing POS-GRIP technology. POS-SET is the latest member of the POS-GRIP family of equipment to enter the market but it will not be the last. With the Tie-Back Connector and the Subsea JIP both at advanced stages of development, this is an exciting time as we continue to pursue our strategy of building Plexus into a leading oil and gas engineering company offering best in class equipment and services around the world. In anticipation of further such exciting product developments over the coming years, and as we begin to utilise the significant design and development engineering skills that we have harvested as part of our HGSS subsea JIP, we have recently incorporated a new subsidiary - Plexus Applied Technologies Limited."
**ENDS**
For further information please visit www.plexusplc.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 PLC |
Tel: 0131 220 9100 |
Nick Tulloch |
Cenkos Securities PLC |
Tel: 0131 220 9772 |
Felicity Winkles |
St Brides Partners |
Tel: 020 7236 1177 |
Frank Buhagiar |
St Brides Partners |
Tel: 020 7236 1177 |
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 together with associated equipment and services for exploration and production applications. Based in Aberdeen, with offices in London, Cairo, Kuala Lumpur, Singapore 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.
To date, POS-GRIP wellhead systems have been used or selected to be used in over 350 oil and gas wells by international companies including ADTI, AGR, 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 China, Shell Egypt, Statoil, Silverstone Energy, Talisman Energy, Tullow Oil, and Wintershall.
Importantly, the Company is focussed on extending its proprietary POS-GRIP technology into an increasing number of subsea applications. In line with this, in March 2011 the Company launched a Joint Industry Project ('JIP') 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. BG, Royal Dutch Shell, Wintershall, Maersk, TOTAL, Tullow Oil, ENI, Senergy, ADTI and Oil States Industries Inc. The JIP is nearing completion with final qualification testing of all key features of the product under way, and the resultant 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, and importantly rigid metal annular seal technology qualified to match the performance of premium connectors. The building of a single string HGSS prototype wellhead system commenced in February, and is expected to be completed in readiness for display at the important SPE Offshore Europe Exhibition and Conference in Aberdeen ('OE2015') in September.
Plexus is an innovative technology company always looking for opportunities to apply its proprietary POS-GRIP friction grip method of engineering to new products both within and outside the oil and gas industry. For example Plexus have recently completed a JIP in conjunction with Maersk to develop a downhole HPHT Tieback connector which for the first time allows the reconnection of production casing to HPHT exploration and production wells. In addition the Company has developed and qualified a new product called "POS-SET Connector™" which is designed to re-establish a connection onto rough conductor casing previously cut above the seabed to facilitate tieback or abandonment operations. The market for permanent plugging and abandonment of wells is increasing in the North Sea and beyond, and could be an important new revenue stream for the Company.
