Plexus Regulatory News (POS)

4 Sep 2006 07:01

Plexus Holdings Plc04 September 2006 Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil equipment & services 4 September 2006 Plexus Holdings PLC ('Plexus' or 'the Company') Five-Year Framework Contract for the Development and Rental of 20,000psi X-HP/HT Wellhead Equipment with BG International Limited Plexus Holdings PLC, the AIM-traded oil and gas engineering services business,has agreed with BG International Ltd ('BG'), a wholly owned subsidiary of BGGroup plc, to develop and supply 20,000 psi ultra or extreme high pressure andhigh temperature (X-HP/HT) exploration wellhead equipment, using the Company'sproprietary POS-GRIPTM technology. The contract, which will see BG fund the costof product development and qualification testing for the new metal to metalsealing wellhead system, which contains a tubing hanger designed for 20,000 psiservice, is initially for two wells, with a value of £2.3 million. Thisagreement, which is subject to completion of relevant contract terms, is part ofa five (5) year framework contract under which Plexus anticipates that furtherequipment will be supplied to BG for X-HP/HT, HP/HT, and standard 10,000 psiwells. The Directors estimate that the total revenues generated throughout theduration of the contract may exceed £5.0 million. BG Group plc, is a global natural gas business. Active on five continents inover 20 countries, it operates four business segments - Exploration andProduction, LNG, Transmission and Distribution and Power. The initial two-welldrilling programme is in the Norwegian and UK sectors of the North Sea and isdue to commence mid 2007 and complete in circa 12 months Plexus has been steadily building the reputation of its POS-GRIP technology,which is a new method of engineering for wellheads. In HP/HT applications thetechnology combines various operational benefits, which result in safetyimprovements and installation time cost savings. The POS-GRIP proprietary adjustable wellhead system is specifically designed forjack-up rigs, where it eliminates the need to remove the well control equipment(the blow out preventer or BOP), when landing and sealing casing, and where itaccurately manages the casing load applied at the top of the conductor casing.The potential installation time savings derived from 'through the BOP'technology, provides, at current rig rates, operating cost savings that canexceed the rental cost of the system provided. The Directors are not aware of an existing alternative technology which canmatch the safety and cost saving advantages of POS-GRIP technology, andanticipate that over time more operators will come to recognize the potential ofthese systems across the pressure spectrum. Plexus CEO Ben van Bilderbeek said: "We are excited about the opportunity tomove Plexus' POS-GRIP technology from its current HP/HT capability into theextreme high pressure field. The development of qualified 20,000 psi POS-GRIPwellhead equipment, which can be safely installed without having to remove theBOP's to set the casing, represents a significant milestone for the industry,and will further strengthen the reputation of this unique method of engineeringin the global oil and gas market. I believe that in the years to come friction grip and direct sealing technologywill play an important part in the search for solutions needed to successfullydrill and complete wells in extreme high pressure gas formations, such as existin the North Sea and the Gulf of Mexico and in many other areas of the world." * * ENDS * * For further information visit www.posgrip.co.uk or contact: Ben van Bilderbeek Plexus Holdings Plc Tel: 020 7589 8555 Graham Stevens Plexus Holdings Plc Tel: 020 7589 8555 Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7242 4477 Notes Plexus is an established oil and gas engineering and service business based inAberdeen with offices in London, and Houston, and operational representation inEgypt, Malaysia and Trinidad. Plexus has developed and patented a method ofengineering for oil and gas field wellheads and connectors, named POS-GRIPTM,which involves deforming one tubular member against another within the elasticrange to effect gripping and sealing. Plexus was admitted to trading on AIM inDecember 2005 when it raised approximately £10m of new funds. POS-GRIP wellhead systems have been used in more than 85 oil and gas wells todate by international customers and end users including, BG Egypt; BP Egypt, BPExploration,, Brunei Shell Petroleum,, Maersk Oil North Sea, ConocoPhillips, BHPBilliton, Talisman Energy, Global Santa Fe, Gaz de France and Wintershall. InFebruary 2004, BP contracted to purchase POS-GRIP wellheads for the US $4.1billion Shah Deniz, gas platform development, a major gas fields in the CaspianSea. Between 2005 and the end of 2008, the Directors estimate that thisrelationship will generate revenues in excess of £6.5 million for the Company. The Company's central aim on flotation was to accelerate the roll out ofPOS-GRIP technology as a superior alternative to existing wellhead engineering.The first phase was to focus on the establishment of "HG" metal to metal sealtechnology as a new standard for the industry. It was anticipated that othermanufactures, encouraged by the operators, would choose to adopt POS-GRIPengineer principals for application in their own designs. To date good progress has been made qualifying POS-GRIP 'HG" seals to astandard, which the Directors believe to be unattainable with conventionaltechnology. The over-heated market conditions however, which cause manufacturesto produce above capacity, are not conducive to new product development, and asa result the anticipated licensing opportunities, particularly for the lowerpressure applications, will take more time to develop. To address these changed market conditions the Company is to increase focus onthe burgeoning growth of its extreme service capability, while at the same timepursuing alliance discussions for mainstream market applications with a numberof key manufactures who are in a position to view the longer term potential ofits unique technology as a means to increase market share. This information is provided by RNS The company news service from the London Stock Exchange