Plexus Regulatory News (POS)

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

6 July 2015

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

China Expansion - Collaboration Agreement with China Oilfield Services, Red Sea Technologies and Yantai Jereh Oilfield Services Group for Shallow Water Subsea and Crossover Wellhead Production Systems in China

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, announces a collaboration agreement with China Oilfield Services Limited ('COSL') a major integrated oilfield service solution provider which is majority owned by Chinese state owned company CNOOC Group (the largest producer of offshore crude oil and natural gas in China), Red Sea Technologies Ltd ('RST'), a leading oilfield design and services company in South East Asia, and Plexus' Chinese licensing partner Yantai Jereh Oilfield Services Group ('Jereh'), a US$6.9bn oil services provider (see announcement 2 July 2015). The collaboration agreement will explore commercial opportunities for shallow water subsea and crossover wellhead production systems for oil and gas field activities in China, and is in line with Plexus' global strategy to expand its best in class POS-GRIP wellhead equipment in markets which offer significant growth opportunities.

Plexus and Jereh will combine the POS-GRIP method of engineering known for its safety, performance and reliability capabilities and Jereh's first class manufacturing and sales and marketing skills, to work alongside COSL and RST to collaborate on the design, development, manufacture, supply, installation and provision of aftermarket services for the significant Chinese shallow subsea systems and crossover wellhead production systems market.

Plexus' CEO Ben Van Bilderbeek said, "We are delighted to have signed this significant collaboration agreement with COSL, RST and our new Chinese licensing partner Jereh, which will see us strengthen our reach in the Chinese oil and gas wellhead services market where we see exponential growth potential over the coming years. Demonstrating our commitment to building our presence in the exciting Chinese market, we are equally delighted to have announced the signing of our licence agreement with Jereh who are also part of this collaboration agreement.

"In addition to actively building on our existing position in the Asian region following the establishment of our Malaysian and Singaporean hubs and our major licence agreement with Jereh, we are pleased to continue to build upon our reputation of delivering a new standard of wellhead products with key global strategic partners. This latest collaboration agreement is another significant milestone in this journey, and Jereh and Plexus look forward to designing and manufacturing a range of innovative shallow water oil and gas equipment solutions for the Chinese market where COSL has the largest fleet of offshore oilfield services facilities in China. Whilst we predominantly supply into the jack-up exploration arena we remain committed to POS-GRIP product innovation and as such are focused on making significant inroads into the volume production and subsea markets. We look forward to working with COSL, RST and Jereh on this newly formed collaboration relationship and further look forward to updating shareholders on our progress."

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Plexus Holdings PLC

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, Premier Oil Norge, 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, the 'Python Subsea Wellhead' 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 Python 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 Python Subsea Wellhead system prototype commenced in February, and will be ready for display at the 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.