Plexus Regulatory News (POS)

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

21 November 2011

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

Four major oil and gas companies join Plexus' Joint Industry Project for the development of the new POS-GRIP 'HGSS™' Subsea Wellhead

Plexus Holdings PLC, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® method of wellhead engineering, announces world leading oil and gas companies Maersk Oil North Sea UK Ltd; Shell International Exploration and Production B.V.; Wintershall Noordzee B.V.; and the UK entity of the world's largest offshore drilling company, and oil and gas technology solution consultancy SafeKick Ltd have signed up as consulting partners to Plexus' Joint Industry Project ('JIP') to develop and commercialise a new and safer subsea wellhead utilising Plexus' patented POS-GRIP technology. 

In addition Plexus is in advanced discussions with three further international oil and gas operators regarding joining the JIP project, and expects to provide an update on this in due course.

Overview

·; JIP initiated in October 2010 in response to oil and gas industry encouragement for Plexus to develop the application of its POS-GRIP surface and platform friction-grip wellhead technology subsea

·; New 'HGSS'™ subsea wellhead will be designed to address key technical issues and requirements highlightedfollowing the Gulf of Mexico incident in April 2010

·; Key industry members of the JIP will contribute to the design and engineering process for the new subsea wellhead - Plexus' intention is for relevant JIP partners to become end users of HGSS wellhead once fully built, tested and commercialised

·; 18-24 month development programme - total project cost over a two year period estimated at £1.5m to £2m of which a substantial part will classify as R&D

·; Recruiting a subsea development and engineering team for the JIP, located in a dedicated building in Aberdeen

·; Intellectual property ('IP') generated by the project will be owned by Plexus, adding to the extensive suite of IP associated with proprietary POS-GRIP technology

Plexus' CEO Ben Van Bilderbeek said, "Today's announcement is a major vote of confidence for our JIP subsea wellhead project, and confirms the strong support and encouragement we continue to receive from key industry players to further develop our friction grip wellhead technology in areas beyond our organic jack-up exploration activities. I believe that there is a growing recognition by the industry of POS-GRIP technology, which reinforces the significant commercial potential in new application areas such as subsea.

"Recent well control incidents around the world have raised awareness surrounding the critical function of a wellhead in subsea oil and gas operations, and have also highlighted the need for a step change in safety and performance standards. I believe that the advantages of our non-rotational friction-grip connector methodology are material, and we look forward to utilising our extensive experience with high pressure and high temperature drilling operations around the world to take safer and superior operational features of a subsea wellhead to a new level.

"Moving into the subsea market represents an exciting growth opportunity for Plexus. It has been estimated that US$225bn will be spent in the period 2011-2015, and that 30% of all goods and services supplied to the subsea sector will come from the UK. The size of this global subsea market and the commercial opportunities associated with it are in marked contrast to the significantly smaller global jack-up rig exploration market, which up until now has been our main area of operation.

"I am confident that the HGSS Subsea Wellhead will ultimately prove to be a superior subsea wellhead option in the years to come, and we look forward to working closely with all our new partners, as well as welcoming additional JIP members to the project in due course, as we continue to develop the POS-GRIP HGSS Subsea Wellhead project".

Further Information

Key features that Plexus is looking to incorporate into its new POS-GRIP HGSS Subsea Wellhead design include:

·; "18-3/4" full bore system, rated to 15,000 psi 350 deg F

·; Upgradeable to 20,000 psi, 450 deg F

·; 4,000,000 lbs 'instant' casing hanger lockdown capacity

·; Avoidance of problems associated with use of lock down rings

·; Annulus monitoring and bleed-off capability to address sustained casing pressure ('SCP') situations, with diagnostic and remedial capability

·; Ability to open and reseal the casing annulus to enable remedial cement job procedures

·; Rigid metal annular seal technology qualified to match the standards for premium casing couplings

·; Meeting the requirements of API 17D/ISO 13628-4, recently provided additional operator requirements, and Plexus 'life cycle' testing

**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. 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.