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Plexus Holdings PLC, the AIM quoted oil and gas engineering services business and owner of the proprietary POS-GRIP friction-grip method of wellhead engineering, has held its Annual General Meeting.
Jerome Jeffrey Thrall, Plexus’ Chairman, made the following statement at the AGM:
“For the twelve months ended 30 June 2013, for the third consecutive year, Plexus delivered a record set of results in terms of revenues and profits. During this period, revenues generated from the sale and rental of the Company’s POS-GRIP wellheads and support services rose 29.7% to £25.6m, while pre-tax profits jumped by 38.3% to £4.3m. This progress demonstrates the momentum behind the business founded on new and repeat orders secured for our rental exploration wellhead equipment, and the increasing recognition among leading oil and gas operators of the advantages our proprietary patented.
“Our business growth is being driven by what we believe is a fundamental change taking place within the industry aimed at ensuring that best practices and equipment are used at all stages of oil and gas exploration and production. This is increasingly becoming known as the use of best available and safest technology (‘BAST’), and in the case of wellheads this focuses on long term wellhead integrity, particularly seal life, monitoring, and annular pressure management. This call for higher standards came into sharp focus following the 2010 Gulf of Mexico incident which led to a heightened level of awareness among regulators and operators for the need to improve safety procedures and to select BAST equipment at all times. We believe a paradigm shift in attitudes to well safety is taking place, and although it will take time for the industry to fully adapt to this changing environment, we believe that we have the advantage of offering new and uniquely enabling technology, solutions, and equipment that can address a range of current wellhead issues and concerns. Thanks to our POS-GRIP wellheads having been successfully used in over 300 wells worldwide by leading operators, often in extremely challenging operating conditions, Plexus is ideally placed to become the first port of call for the supply of what we believe is best in class wellhead equipment, particularly for HP/HT applications.
“In tandem with our core rental activity, considerable progress is being made with regards to expanding Plexus’ suite of equipment based on our patented POS-GRIP technology. Our up to 20,000 psi HP/HT Tie-Back system Joint Industry Project (‘JIP’) which uniquely allows operators to pre-drill HP/HT production wells and tie-back to a platform has undergone final testing and we will be initiating marketing activity whilst looking for an opportunity to run a prototype with a suitable operating partner. The key attraction for operators with this product is the potential savings in terms of capital costs, and the ability to bring cash flow from a project on stream much earlier.
“In addition our new HGSS subsea wellhead JIP which we are developing alongside Total, 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, is making excellent progress with the design stage now well advanced. We, along with our JIP partners, believe our POS-GRIP wellhead technology when the project is completed will be able to address a number of key safety and operational challenges that conventional subsea wellhead equipment has failed to resolve to date and which have been exposed by incidents such as Macondo. These include long term metal to metal sealing, instant casing hanger lock-down, and solving the challenge of subsea annulus management in terms of monitoring and remedial capability.
“Having established the superior operating and safety credentials of our patented POS-GRIP technology out in the field many times over, particularly in extreme HP/HT operating conditions, we recognise we have a tremendous opportunity to position Plexus as a new standard and the supplier of choice for wellhead equipment and services. While this may appear a lofty ambition for a smaller company operating in a multi-billion dollar sector where five companies dominate the wellhead market, Plexus has developed a proven technology which addresses key issues that are known to the industry and where improved performance and safety functionality are key priorities.
“I believe our strategy is further underpinned by our recent successful placing which raised £6.83million, and saw major institutional investors bolstering their stake in the Company, and welcomed new funds onto the register.
“With all these developments in mind we believe that 2014 promises to be an exciting year for Plexus. Since the financial year end we have already secured a new customer in Eni Australia Limited; a further HP/HT contract with Statoil Petroleum AS and also with Glencore Exploration Cameroon Ltd; and further standard pressure contracts with Centrica Energy Norway, BG International Egypt, and Centrica North Sea Gas Ltd. We look forward to providing further updates on our progress in due course.
“Finally, as announced on 23 October 2013, I am pleased to confirm that the Board has recommended the payment of an increased final dividend of 0.55p per share, 10% higher than the previous final dividend for year ended 30 June 2012, and which will be submitted for formal approval at this AGM today.”
