Plexus Regulatory News (POS)

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

5 December 2011

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

Breakthrough Licensing, Manufacturing, Distribution, and Agency Agreement with Breda Energia S.p.A for the Supply and Servicing of POS-GRIP® Products to Italian Oil and Gas Company ENI S.p.A

Plexus Holdings PLC, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® method of friction-grip wellhead engineering, announces that it has entered into a licensing, manufacturing, distribution, and agency agreement with Breda Energia S.p.A ('Breda') ('the Agreement'), a provider of specialist products and services to the oil and gas sector worldwide. This Agreement, the first of its kind for Plexus, grants Breda exclusive rights to manufacture, sell, rent out and service POS-GRIP exploration and production wellheads and other related POS-GRIP products to ENI S.p.A ('ENI'), Italy's largest oil and gas company in any part of the world in which ENI conducts its business.

As well as building a strategic alliance to explore and pursue various sales opportunities, the collaboration between Plexus and Breda will identify how the innovative POS-GRIP friction-grip method of engineering can be applied and incorporated into existing and future Breda products, in particular for control equipment and Xmas-trees.

Breda has more than sixty years' experience in providing specialist products and services to the oil and gas industry producing wellheads, valves, packaged systems and services. It has an international presence, gained via local branches and joint-ventures in various strategic countries, and its customers include a number of major oil companies for both the onshore and offshore markets. Breda offers innovative solutions, making use of state of the art technology to produce customised products manufactured at Breda's high-tech facilities in Sesto San Giovanni, Milan to the highest stringent requirements.

If Breda wishes to supply major oil companies other than ENI with POS-GRIP equipment this would be considered on a project by project basis and a further and separate agreement would be drawn up between Plexus and Breda.

Related Plexus products under the Agreement include outlet valves, subsea wellhead equipment, mudline suspension hangers, casing support systems, drilling templates, speciality couplings, and subsea Xmas-trees.

The Agreement provides for either rental or sales royalties payments to be paid by Breda to Plexus (with a lower amount for standard pressure wellhead equipment rising to a higher amount for HP/HT wellhead equipment), or a margin share formula where Breda acts as principal, and conversely a sliding scale agency commission is to be paid by Plexus to Breda where the latter acts as agent.

Plexus' CEO Ben Van Bilderbeek said, "This is a highly exciting development for Plexus, and one which I believe will be commercially significant for the Company. Breda is an important and innovative manufacturer in the industry, and I am confident that its longstanding relationship with the largest Italian oil and gas operator will open up a number of additional sales opportunities for Plexus that have not been previously available, including in the subsea arena.

"The licensing of our POS-GRIP equipment is an important part of our growth strategy, and helps further raise the profile of POS-GRIP. Today's Agreement therefore represents another milestone towards achieving our goal of gaining industry-wide acceptance of the superior operational and safety qualities offered by POS-GRIP based equipment. The Agreement comes at a time when we are accelerating the application of POS-GRIP technology in areas outside of our traditional surface exploration rental business, in particular subsea. Importantly, Breda has expressed an interest in working with us to develop new applications for our friction grip technology which would further expand our growing product range in the coming years."

Breda's General Manager Marco Pasini said, "We consider the signing of this Agreement with Plexus to be an enhancing asset for the future growth of our company. I see this co-operation between our companies as an initial step towards more ambitious accomplishments in the growing high tech and high quality upstream oil and gas market. I believe that over time this will lead to the development of new and superior products for the oil and gas industry, which will be able to be engineered beyond our current American Petroleum Institute based standards."

**ENDS**

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 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.  Field trials of HGSS are targeted for deployment Q3 2012. 

To date, POS-GRIP wellhead systems have been used or selected to be used in over 150 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.