Plexus Regulatory News (POS)

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

28 November 2012

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

AGM Statement

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, will hold its Annual General Meeting ('AGM') today. Jerome Jeffrey Thrall, Chairman, will make the following statement at the AGM:

"Plexus recently delivered another set of record results for the financial year ended 30 June 2012. During the last twelve month period, revenues rose 27.8% to £19.72m, generating a 33% increase in EBITDA to £6.24m, and pre-tax profits of £3.09m, almost double that of the previous year. 

"Multiple contract wins over the period from new and existing customers including leading multinationals BG Group, Maersk and Centrica Oil lie behind the strong trading performance. Our POS-GRIP wellhead systems have now been used or selected to be used in over 250 oil and gas wells across the world, including, Asia Australia, Africa, Europe, Middle East, Russia, and North Africa. With many major oil and gas operators now customers of Plexus, we believe the industry is increasingly recognising our POS-GRIP® wellhead equipment as best in class in terms of quality, reliability and safety. This success to date underpins our decision to implement a growth strategy centred on the strong Asian market including Singapore, Malaysia, and Brunei.

"Winning both new and repeat business however provides the best proof of all that the momentum behind our wellhead rental business is gaining traction. Post period end, we announced a further four contract wins worth a total of £6.15m. Encouragingly, these were all secured as a result of satisfied customers either repeating orders or recommending Plexus' equipment to their peers. I believe Plexus is now in a virtuous circle, whereby new contract wins translate into higher earnings which in turn allow us to invest in further capacity and inventory, enabling us to win and service more contracts whilst maintaining the quality and standards of our offering. At the same time, the cashflow generated by the rental wellhead business enables us to fund the development of innovative projects such as the important 'HGSS' subsea wellhead design Joint Industry Project ('JIP') in conjunction with a number of international oil companies, with the aim of extending the family of POS-GRIP® products that we can offer our blue chip customer base.

"In the year ahead, we expect to report further significant progress across the range of our activities. In our core rental business, I believe we will build on the strong start to the year as demand for our POS-GRIP® proprietary friction-grip wellhead equipment, particularly for high pressure/high temperature ('HP/HT') exploration rental applications continues to grow. Exploration and production activities are moving to ever more complex and hostile environments, notably deepwater where equipment is required to function under extreme pressures and temperatures. By necessity, and in many instances encouraged by regulatory pressures, the industry is therefore turning to those companies that can provide proven, superior and reliable equipment which can also deliver innovative solutions to increasingly challenging drilling conditions. As an example, there is increasing coverage in the trade press of the need for wellhead equipment that can cope with pressures of up to 20,000 psi and beyond. Indeed certain recent merger and acquisition activity is directly aimed at helping to address the need for new solutions and features both for surface and subsea applications.

"The Board believe the achievements of Plexus to date mostly within the jack-up drilling exploration market merely scratch the surface of the opportunity available to us when looking at the wellhead equipment market as a whole. The addressable market for our POS-GRIP technology is already a multi-billion dollar one and is still growing, particularly in the subsea sector where new challenges such as Artic drilling are gaining momentum. Only recently in the Drilling Contractor publication article called 'HPHT research heats up' it was reported that "…today's technological advances won't be enough to sustain long-term production in fields where ever rising pressures and temperatures characterize virtually every reservoir."  I am confident therefore that we will continue to increase our market share in the years ahead both through organic growth as well as various strategic initiatives and, in the process, generate substantial value for all our shareholders.   

"Finally, as announced on 16 October 2012, I am pleased to confirm that the Board has recommended the payment of an increased final dividend of 0.5p per share, 16% higher than the previous year ended 30 June 2011, and which will be submitted for formal approval at this AGM today."

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

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. Development is expected to be completed by mid 2013 calendar year.

To date, POS-GRIP wellhead systems have been used or selected to be used in over 250 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.