Plexus Regulatory News (POS)

13 Feb 2006 07:00

Plexus Holdings Plc13 February 2006 FOR IMMEDIATE RELEASE 13 February 2006 Plexus Holdings plc (Plexus or "the Company") Trading Update Plexus Holdings plc, the owner of the proprietary POS-GRIP TM method of wellheadengineering today announces that it has noted recent reports of a significanttightening of exploration and appraisal well rig availability in the North Sea.This development has begun to result in delays in the commencement of certainrental projects. Although Plexus is increasingly focused on servicing the morespecialised High Pressure/High Temperature (HP/HT) applications, thisdevelopment is of particular relevance to Plexus at the current time as theintroduction of its wellhead technology to the rental market place over the lastfew years has mostly been through working with third party turnkey wellmanagement companies operating on behalf of smaller exploration and productioncompanies. It is these companies that are most affected by the resultingsignificant increases in rig rental day rates which together with the deploymentof rigs around the world that might have been available to the North Sea haslimited their ability to secure rigs. Although this development will impactPlexus in the current financial year, as more rigs become available forexploration drilling Plexus is confident that it should benefit accordingly. Despite the impact of industry wide rig shortages, Plexus' rental business inthe more specialised High Pressure/High Temperature (HP/HT) areas with thelarger international oil companies is continuing to grow with recent tender winsgenerating work for BP Egypt and ConocoPhilips. Most significantly the level ofinterest in Plexus' "HG" metal to metal seal production wellheads also continuesto gain momentum, and the directors expect Plexus to be awarded a contractimminently for the supply of wellhead equipment for 2 new production wells for amajor operator in the North Sea. Plexus is further encouraged by the continuing and increasing level ofexploration and production activity that is taking place around the world inever more technically challenging unconventional fields. The Directors areconfident that this trend and in particular the growing need for HP/HTapplications supports the Company's strategy of becoming over time a newwellhead standard, particularly as recent reports confirm that unconventionaloil and gas fields will become increasingly important in the drive to meetfuture global energy needs. Plexus' CEO, Ben van Bilderbeek, commented: "Our strategy of convincing the oil and gas industry over time of the technical,performance, and safety benefits of wellheads utilising POS-GRIP TM technologyremains firmly on track, and we now have our second and third "HG" wellheadprojects in the North Sea underway. "HG" is our high performance metal sealtechnology which is activated using POS-GRIP TM. It is particularly reassuring tonote that these latest wins are production wellheads of a lower pressure (6,500psi) variety, confirming our belief that the market for POS-GRIP technology willindeed span the pressure spectrum. In addition the recent tender win for HP/HT(15,000 psi) exploration wellheads with BP Egypt further broadens our marketreach and profile which we are seeking to build on through various marketinginitiatives currently underway in the Far East; Middle East; and North America(Gulf of Mexico)." For further details please contact: Plexus Holdings plc Tel: +44 (0)20 7589 8555Bernard van Bilderbeek, Chief Executive Graham Stevens, Finance Director Buchanan Communications Tel: +44 (0)20 7466 5000Tim Thompson / James Strong Notes to Editors The Plexus Group is an established oil and gas engineering, and service businessbased in Aberdeen, with an office in London and a presence in Houston, Texasthrough PDT. Plexus has developed and patented a method of engineering for oiland gas field wellheads and connectors, named POS GRIP TM, which involves deformingone tubular member against another to effect gripping and sealing. Plexus wasadmitted to trading on AIM in December 2005 when it raised approximately £10m ofnew funds for the Company. POS-GRIP TM wellhead systems have been used in more than 60 oil and gas wells todate by international customers and end users including, ConocoPhillips, BHPBilliton, Talisman Energy, Tullow Oil, Global Santa Fe, Gaz de France andWintershall. In February 2004, BP contracted to purchase POS-GRIP TM gas platformproduction wellhead systems for the US$4.1 billion Shah Deniz development, oneof the major gas fields in the Caspian Sea. Between 2005 and the end of 2008,the Directors estimate that this relationship has and will generate revenues inexcess of £6.5 million for the Group. The Directors believe that the raising of the Company's corporate profilefollowing its recent Admission to AIM in December will accelerate the roll outof POS-GRIP TM technology as a superior alternative to current wellhead technology,and which has particular advantages in High Pressure/High temperature (HP/HT)oil and gas environments for which there is increasing demand throughout theworld. The Company's long-term goal is to develop POS-GRIP TM technology as thefuture industry standard for wellhead design. This objective includes thedistribution of POS-GRIP TM technology through licensees to maximise marketpenetration. The Directors believe that the Plexus Group can over time become amember of the 'first tier' of global wellhead systems suppliers. This information is provided by RNS The company news service from the London Stock Exchange