Plexus Regulatory News (POS)

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

20 December 2012

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

Total becomes the seventh major oil and gas company to join the new POS-GRIP® 'HGSS™' Subsea Wellhead design development project

Plexus Holdings PLC, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP® method of wellhead engineering, announces that the major worldwide French oil and gas operator has through Total E&P Recherche Developpement SAS ('Total') signed up as an additional consulting partner to Plexus' Joint Industry Project ('JIP') to develop and commercialise a new and safer subsea wellhead, utilising Plexus' patented POS-GRIP technology. 

This follows previous news releases dated 19 June 2012, 6 January 2012 and 21 November 2011 announcing that Maersk Oil North Sea UK Ltd, Shell International Exploration and Production B.V., Wintershall Noordzee B.V., Tullow Oil, Eni S.p.A, Oil States Industries Inc., and the UK entity of the world's largest offshore drilling company, have all signed up as consulting partners to the JIP.

The JIP is focussed on developing a new subsea wellhead, HGSS, to address key technical issues and requirements highlighted by regulators following the Gulf of Mexico incident in April 2010. All members of the JIP have been contributing to the design and engineering process and attending regular JIP meetings, and it is Plexus' goal that they will become end-users once the wellhead has been fully built, tested and commercialised. Importantly, all intellectual property generated by the JIP will be owned by Plexus, and will be added to the Company's extensive and unchallenged POS-GRIP patent suite.

The POS-GRIP HGSS™ subsea wellhead is currently being designed to be safer and have fewer parts in the well bore than any other competing system whilst also sealing and locking down hangers as soon as cementing of the well is complete.

In terms of progress made to date, the technical specification of the 'base product' has been finalised and detailed engineering design is now underway. The conceptual detail of the subsea hydraulics and interface with control systems is also complete and the design of qualification test fixtures has begun. It is expected that physical testing of various elements of the system will begin in Q1 2013. The next stage will be to complete formal performance verification testing, after which an opportunity to field test the system will be sought. Commercially, it is highly encouraging that, in addition to the range of safety and operational features that are being engineered, initial assessments of the HGSS system also show significant time savings on installation as being achievable which would mean that, as with our HP/HT surface wellhead systems, the installation time savings alone could be greater than the capital value of the equipment.

Plexus' CEO Ben Van Bilderbeek said, "This is yet another significant milestone and nod of industry approval for our subsea HGSS JIP initiative to develop and commercialise a new and safer subsea wellhead, utilising Plexus' patented POS-GRIP technology. Recent well control incidents around the world have highlighted the need for robust, high performance, subsea wellheads in oil and gas operations, particularly in extreme and hostile environments. Plexus, with its patented and proven POS-GRIP technology, is ideally suited to deliver a range of innovative features.

"This is the first time Plexus will be working alongside Total and we are delighted to welcome them on board this project. I believe at this point of the development of the new subsea wellhead, we have an exceptionally strong industry team working together with the common goal of designing and commercialising a new subsea wellhead design that has the potential of becoming a new standard. It is hoped that Total, alongside our other JIP partners, will become an end user of the HGSS wellhead.

"In addition to the JIP, Plexus is already the leading specialised wellhead services company within the HP/HT wellhead arena in the North Sea; we are actively expanding our geographic reach in the wider international arena to areas such as Africa, Asia, Australia, and Russia; and we are also designing a new 'Tieback wellhead system' which will utilise Plexus' metal-to-metal 'HG'® seals,  allowing for the first time HP/HT exploration wells and pre-drilled production wells to be converted into either subsea or platform producing wells. With all this in mind, I look forward to updating the market on our progress in due course."

Further Information

Key features that Plexus and the JIP partners are working towards incorporating into the 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 acknowledged 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. 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.