Plexus Holdings Plc AGM Statement (2752K)

TIDMPOS

RNS Number : 2752K

Plexus Holdings Plc

13 December 2018

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

13 December 2018

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:

"I would like to take this opportunity to remind our existing and potential new investors why I believe that Plexus and its proprietary technology has reached a key point in time in its strategic development, and why I see an exciting future for our POS-GRIP(R) wellhead and connector applications in larger market sectors such as surface production, and subsea exploration and production.

"Our technology is proven to be superior to conventional solutions in terms of performance, reliability and safety, especially in high pressure high temperature environments. As a result, it is exactly the right technology at the right time as the global concerns about toxic methane gas leakage become increasingly urgent and where gas-proof metal sealing performance is essential as the oil and gas industry moves increasingly to gas production. These capabilities recently enabled Plexus to meet, without exception, a set of higher test and qualification standards set by a supermajor. As far as I am aware we have the only wellhead metal sealing design solution that can match the higher standards set and required for premium couplings which delivers long term gas-proof sealing that does not require maintenance to address leaks.

"It cannot be forgotten however that this places Plexus in the position of being a small company taking on the might and reach of established global service businesses which, alongside the operators themselves, have been used to doing things a certain way for many years. Such a situation has I believe conspired to hold back the widespread adoption of our technology and it stands to reason that any weakening of any such barriers to entry ought to go a long way towards removing the shackles that have prevented the wider take-up of our technology. Importantly, we believe that this situation has now begun to change with the sale of our niche wellhead exploration equipment services business for Jack-up applications earlier this year to top tier supplier TechnipFMC, providing industry recognition of our technology from one of the major global services companies.

"The pivot to natural gas by major operators due to gas being the cleanest fossil fuel when burnt, has the potential to displace oil from its dominant position in the hydrocarbon energy mix. This 'dash to gas' is I believe highly positive for Plexus, as our 'gas-proof' technology is best equipped to withstand the higher temperatures and pressures associated with gas exploration and production. Similarly, an increase in exploration activity for deeper accumulations in harsher operating environments could be interpreted as a signal that the days of going for the low hanging fruit in terms of shallow water targets in less challenging operating conditions are waning. Deeper exploration goes hand in hand with higher temperatures and pressures which plays to POS-GRIP's strengths, and where we have a history of success, such as Total selecting our equipment in 2015 for the drilling of what is believed to be the highest pressure well ever drilled in the North Sea. Finally, increased media coverage and industry recognition of the environmental threat posed by methane leaks across the gas chain from wellhead to distribution, in our view, can only lead to increased calls, either as best practice or regulatory driven, for the best equipment possible to be used at all stages of the gas chain.

"With the macro environment hopefully moving in Plexus' favour, it is imperative that at the micro level we are able to fully capitalise on the opportunities we see opening up for us, and position ourselves to do so. To this end, and following the sale of our Jack-up Business to TechnipFMC, we have a cash rich, debt free balance sheet, and furthermore we no longer have the considerable draw on our time and resources that came with having to manage our wellhead rental business. Instead, we can focus on R&D, IP development and exploitation and the roll out of our technology and equipment in other markets including surface production wellheads, subsea and decommissioning, whilst ensuring we are properly resourced and have put in place an appropriate cost base. Via our Collaboration Agreement with TechnipFMC, we have a top tier partner with whom we have the opportunity to design and develop additional applications for POS-GRIP for use in new markets. We have a licensing agreement with two established service providers in the huge Russian market where we retained our Jack-up wellhead exploration licencing rights, and who recently secured a first order for our gas wellhead equipment with Gazprom, the Russian supermajor.

"Furthermore, we have a suite of ongoing products and applications including "HG"(TM) Wellheads, which combine POS-GRIP Technology with Gas Tight metal sealing; the Python Subsea Wellhead; the POS-SET(TM) Connector for the growing decommissioning and abandonment market, and Tersus-PCT an innovative HP/HT Tie-Back connector product. We are already winning orders for products outside jack-up exploration having recently supplied Spirit Energy with a production wellhead in the North Sea, and Oceaneering with a POS-SET Connector for a well abandonment operation.

"Our long-term goal has always been to establish POS-GRIP as a new industry standard for wellhead and metal sealing designs and, at the same time, generate significant value for our shareholders. In our view, the prospects for Plexus, both at the corporate and trading level have never been better. We are ideally placed to deliver and with this in mind, I look forward to providing further updates on our progress over the course of the year ahead."

**ENDS**

For further information please visit www.posgrip.com or contact:

 
 Ben van Bilderbeek   Plexus Holdings PLC      Tel: [phone] 
 Graham Stevens       Plexus Holdings PLC      Tel: [phone] 
 Derrick Lee          Cenkos Securities PLC    Tel: [phone] 
 Frank Buhagiar       St Brides Partners Ltd   Tel: [phone] 
 Isabel de Salis      St Brides Partners Ltd   Tel: [phone] 
 

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"(TM) 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 JIP 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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December 13, 2018 02:00 ET (07:00 GMT)