TIDMPOS
RNS Number : 7145V
Plexus Holdings Plc
05 December 2019
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
equipment & services
Plexus Holdings PLC ('Plexus' or 'the Company')
AGM Statement
Plexus Holdings PLC, the AIM quoted oil and gas engineering
services business and owner of the proprietary POS-GRIP(R)
friction-grip method of wellhead engineering, known for its safety,
time and cost saving capabilities, will hold its Annual General
Meeting ('AGM') today. At the AGM, Jeff Thrall, Chairman, will make
the following statement:
"Annual Reports are forward as well as backward looking. Our
recently published 2019 report did not just summarise the financial
results for the year ended 30 June 2019 but also our strategic
vision to transform Plexus into an IP-led business based on
POS-GRIP, our proprietary method of friction grip engineering that
has raised the bar in terms of wellhead performance, reliability
and safety. The Chairman's Statement detailed the 'reset and
rebuild' strategy we are pursuing following the sale of our jack-up
exploration wellhead rental business to leading oil and gas
services company TechnipFMC in 2018. Meanwhile, the headline
financials, notably a ten-fold increase in revenues generated from
continuing operations to GBP3.6 million, showed the progress we are
making in rebuilding our revenues, although as was noted the lead
times associated with the sale of production wellheads, which we
are now targeting as opposed to the rental of exploration
wellheads, are much longer.
"Over the years, the jack-up business we sold to TechnipFMC in
2018 accounted for the vast majority of our revenues and earnings,
funded research and development for new applications for our
POS-GRIP technology, employed over 150 staff at its peak and,
enabled dividends to be regularly distributed to shareholders.
Selling the rental business was therefore always going to require a
reset and rebuild, not just of Plexus' financials, but also of the
Company's strategy and structure. However, having proved our
POS-GRIP technology around the world for a wide range of blue chip
international oil companies in the niche jack-up drilling
exploration market sector, we are now well positioned to address
the far larger surface production and subsea markets where we are
confident we can build over time a meaningful market position just
as we did in the jack-up exploration sector.
"One year on, an analysis of our GBP3.6 million sales revenue
for the 12 months ended 30 June 2019 compared to GBP318k the
previous year shows where we have come from, how far we have
travelled and a glimpse of where we are going. Thanks to orders for
a production wellhead (Spirit Energy - North Sea) and another for a
POS-SET Connector (Oceaneering A/S) for abandonment operations,
full year revenues were generated from a number of sources as
opposed to being mainly dependent on the jack-up exploration
business, as had been the case in previous years. It should not be
forgotten however that we retained our jack-up exploration wellhead
rights for Russia and the CIS through our licensee Gusar, and sold
two POS-GRIP wellhead systems to Gusar for an initial exploration
well contract with energy giant Gazprom. This is consistent with
our goal to re-establish Plexus' credentials as a profitable and
when appropriate dividend-paying, oil and gas engineering business.
Our means of achieving this is to build a portfolio of revenues
generated from a diverse range of products, territories and
licensing agreements. Although much work remains to be done to
regain and in due course surpass, previous revenue and profit
levels, and we have reported that revenues for the current
financial year to June 2020 are expected to be lower than last
year, we strongly believe that we have a solid foundation upon
which we can build a successful future:
"Products - Plexus has a growing suite of proprietary products
utilising our POS-GRIP technology, which includes certain patented
features such as our superior "HG" metal-to-metal seals. In
addition to our wellhead designs and POS-SET Connector, these
products include the Python Subsea Wellhead and Tersus-PCT, an
innovative HP/HT Tie-Back connector product, as well as new
products such as our recent patent applied for Crown Plugs. We
believe that all our products offer a range of superior performance
and operational cost benefits.
"For an example of just how ground-breaking our equipment is, I
would advise you to refer to the announcement we released on 22
November 2019, detailing how our POS-GRIP "HG" Sealing system
successfully completed, at the first attempt, an extreme
temperature test verification programme from -75 to +400 degF in
accordance with API 6A PR2F standards at 10,000 psi pressure. We
believe this is another industry first, as the entire programme was
performed within a single test as opposed to the standard practice
of qualifying wellhead seals to extreme temperatures separately,
which often requires multiple tests possibly using different test
fixtures or sealing elements. Furthermore, our test was carried out
with a sealing system previously used in a separate qualification
test programme, further proving the reusability of the technology.
The implications of this achievement are significant. Achieving the
full range in a single test demonstrates superior integrity and
importantly highlights POS-GRIP's capability in extreme Arctic
conditions. Meanwhile by delivering a leak-proof solution, our
one-design seal system can eliminate the need for remedial work and
maintenance, thereby generating material cost savings. It is this
combination of superior operational performance and significant
cost savings which lies behind our belief that POS-GRIP's is a
uniquely compelling solution for operators.
"Partners - Plexus has a growing list of partners at both the
product and geographic levels. In addition to our Russian partner
Gusar, we have a Collaboration Agreement in place with TechnipFMC
which establishes a framework for both parties to look to work
together on the development of existing POS-GRIP IP for
applications outside of jack-up exploration, as well as future new
technologies. A third partner was added in June 2019 following the
establishment of our majority owned Plexus Pressure Control Ltd
('PPC'). This company is a Joint Venture with UK-based BEL Valves
Ltd, which enables us for the first time to offer operators a
full-service package that includes valves and Xmas-trees, alongside
our POS-GRIP wellheads, for large scale production projects. PPC
helps to level the playing field for Plexus when tendering for
surface production contracts, which are typically awarded to those
suppliers who can offer operators package solutions.
"End-users - Plexus can point to a who's who of blue-chip
operators such as BP, Royal Dutch Shell, Statoil, Total, and ENI
who have successfully deployed POS-GRIP equipment in the field, in
many cases on multiple occasions. Importantly, the list of
operators which have experienced the benefits of POS-GRIP for
themselves continues to grow. In March 2019, we announced a
breakthrough order secured by Gusar with global energy giant
Gazprom to supply POS-GRIP rental wellhead gas exploration
equipment during the first of a five-year gas exploration drilling
programme. We are hopeful that further orders from Gazprom, and
from other operators in Russia and the CIS, will be secured through
our licensing agreement with Gusar.
"We continue to talk to other prospective partners about
existing and potentially new applications for our POS-GRIP
technology. Wherever metal-to-metal annulus sealing is required,
POS-GRIP can deliver a true, leak-proof solution, and importantly
one that can last for the 'Life of Field', thereby avoiding
expensive remedial and maintenance costs which often result in
significant production revenue losses for operators. As a result,
multiple markets, both inside and outside the energy sector, can
benefit from POS-GRIP technology-based equipment and solutions in
the same way as jack-up exploration has for many years. At a time
when there is increasing pressure on the oil & gas industry to
eradicate harmful gas and methane emissions from operations through
the use of advanced technologies across the supply chain from well
site to consumer, we believe that a major opportunity has opened up
for our leak proof technology, one we are focused on taking full
advantage of for the benefit of our customers, our shareholders and
the environment in which we operate. I look forward to announcing
further news on our progress over the coming months."
**S**
For further information please visit www.posgrip.com or
contact:
Ben van Bilderbeek Plexus Holdings PLC Tel: 020 7795 6890
Graham Stevens Plexus Holdings PLC Tel: 020 7795 6890
Derrick Lee Cenkos Securities PLC Tel: 0131 220 9100
Frank Buhagiar St Brides Partners Ltd Tel: 020 7236 1177
Isabel de Salis St Brides Partners Ltd Tel: 020 7236 1177
NOTES:
AIM-traded oil and gas engineering services company Plexus (AIM:
POS) is an IP-led company that has developed a range of products
and applications based on its patent-protected POS-GRIP
friction-grip technology. Having proved the superior qualities of
POS-GRIP within the jack-up wellhead exploration market through the
sale of this business to FMC Technologies Limited, a subsidiary of
TechnipFMC (Paris:FTI, NYSE:FTI) (jointly "TFMC"), in early 2018,
the Company is now focused on establishing its technology and
equipment in other markets including surface production wellheads,
subsea and de-commissioning.
Its suite of ongoing products and applications include: "HG"
wellheads, which combine POS-GRIP technology with gas tight metal
sealing; the Python(R) subsea wellhead (a new standard for subsea
wellheads - developed in a Joint Industry Project supported by
Royal Dutch Shell, BG (now owned by Shell), Wintershall, Total,
Maersk (now owned by Total), Tullow Oil, eni, Senergy (now Lloyds
register), and Oil States Industries Inc); the POS-SET(TM)
connector for the growing de-commissioning and abandonment market;
and Tersus-PCT, an innovative HP/HT tie back connector product.
Importantly, the Company also has a collaboration agreement with
TFMC, which provides a platform to further develop and
commercialise these and other applications based on its POS-GRIP
technology.
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END
AGMFSLFMLFUSEEE
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December 05, 2019 02:00 ET (07:00 GMT)
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