Plexus awarded purchase order for wellhead system in North Sea

(Sharecast News) - Oil and gas engineering services company Plexus has been awarded a purchase order for a 'POS-GRIP' surface production wellhead system, it announced on Thursday, for a "leading" unnamed North Sea operator.
The AIM-traded firm said the order included its 10,000-psi leak-proof 'HG' metal-to-metal sealing surface production wellhead, together with associated spares and valve equipment for a new gas well in the North Sea.

Under the contract, Plexus would receive milestone payments following the signing of the purchase order, through to completion.

The wellhead equipment was scheduled for delivery in the second quarter of 2022, with the contract expected to last around 120 days, with most of the revenue to be booked during the company's current financial year.

Plexus said the purchase order was in line with its intellectual property-led strategy to continue to gain market share within the production wellhead marketplace, in conjunction with its recent cooperation agreement with Schlumberger Group company Cameron for the supply of jack-up exploration wellhead and mudline equipment, together with its intention to move into other areas of the energy sector, including potentially geothermal, carbon-capture and hydrogen storage.

"Following our recent cooperation agreement with Cameron in relation to the supply of jack-up exploration wellheads, this latest order shows we in addition continue to progress our strategy of direct sales in the surface production wellhead marketplace with our 'HG' metal sealing technology," said chief executive officer Ben Van Bilderbeek.

"Securing an order for POS-GRIP wellheads in the current challenging climate is positive, particularly when one considers the long lead times associated with the award of such contracts, the ongoing Covid-19 pandemic and the continued volatility in global oil and gas markets.

"For many years POS-GRIP wellheads have not only delivered a superior sealing solution but also one that is cost-effective, and maintenance free."

Van Bilderbeek said the company's equipment had proven to be "superior" in terms of total expenditure performance, reliability and safety over a number of years in the field.

"Furthermore, our technology has generated considerable operational cost savings via reduced installation times and reduced non-productive time by not having to shut down production to carry out maintenance.

"With a growing pipeline of opportunities, we are hopeful that this latest order will prove to be a bellwether, as we start to emerge from the global Covid-19 pandemic induced malaise that has impacted our industry.

"Importantly, this production well order is for gas, and as the cleanest hydrocarbon to combust in terms of carbon dioxide emissions, natural gas is increasingly viewed as a key transitional fuel, as the world moves towards net zero emissions, and operators strive to deliver on environmental, social and governance commitments."

Plexus believed it had an "important role" to play in the transition process, Ben Van Bilderbeek explained, as pressure grew to eradicate harmful fugitive methane emissions from the entirety of the natural gas consumption chain wherever possible.

"At the well-site, POS-GRIP's leak-proof wellheads can achieve such goals in a way that conventional wellheads cannot, and as a result, we believe our production wellhead technology delivers a compelling economic and environmental proposition for the surface production operations we are actively targeting."

At 1101 GMT, shares in Plexus Holdings were up 6.67% at 8p.