TIDMPOS
RNS Number : 5534D
Plexus Holdings Plc
01 February 2018
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
Equipment & Services
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
Plexus Holdings PLC ("Plexus" or "the Company")
Completion of Sale of Wellhead Exploration for Jack-up
Applications Business and Signing of Collaboration Agreement with
TechnipFMC
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, is pleased to
announce the completion of the sale of its wellhead exploration
equipment and services business for jack-up applications (the
"Jack-up Business") and the licencing of certain intellectual
property to FMC Technologies Limited ("TFMC"), (together, the
"Disposal"), and the receipt of an initial net consideration of
GBP14,164,344. An additional sum of up to GBP27,500,000 is payable
dependent on the future performance of the Jack-up Business during
a three-year earn-out period. TFMC is a subsidiary of TechnipFMC
(Paris:FTI)(NYSE:FTI), one of the leading oil and gas service and
equipment companies.
Completion of the Disposal follows the signing of a conditional
Business Purchase Agreement ("BPA") by Plexus, Plexus' subsidiary
Plexus Ocean Systems Limited ("POSL") and TFMC (as announced on 19
October 2017). Shareholder approval of the Disposal was obtained on
6 November 2017.
Collaboration Agreement
The Company is also pleased to announce that Plexus, POSL and
TFMC have entered into a Collaboration Agreement which establishes
a framework for the development of existing POS-GRIP IP for
applications outside of the jack-up exploration wellhead
application. The Collaboration Agreement provides for the formation
of a joint Steering Committee who will be able to explore potential
areas of future collaboration.
Strategy
The Disposal and Collaboration Agreement represent a strategic
milestone for Plexus, and fits with Plexus' long-term objective to
firmly establish the POS-GRIP method of engineering within the
wider energy sector.
The Disposal is in line with Plexus' strategy of increasing
industry awareness of its POS-GRIP friction grip technology by
initially focusing on proving the superior qualities of its
equipment within the niche jack-up wellhead exploration sector,
before targeting other mainstream markets such as surface
production wellheads, subsea wellheads and de-commissioning.
To date, Plexus' equipment has been deployed on hundreds of
jack-up exploration wells worldwide operated by a customer base
which includes blue-chip customers such as BG, BP, Royal Dutch
Shell, Maersk, Statoil and Total. Plexus has developed a strong
market reputation in the UKCS and ECS, particularly for HP/HT
applications: its equipment was used by Total on the Solaris well,
which is believed to be the highest pressure well ever drilled in
the North Sea.
The Disposal and Collaboration Agreement with a top tier oil and
gas services provider marks the culmination of this first phase of
Plexus' strategy; in the view of the Board, it provides industry
recognition of the potential of its POS-GRIP technology to raise
performance and safety standards for a range of additional
applications in the energy sector.
Plexus will also continue to work independently, and where
appropriate with third parties, to further monetise its technology
in other markets such as production and subsea, as demonstrated by
the recently announced first production well order from Centrica
North Sea Limited for a gas well in the UK Southern North Sea. In
addition, new market sector applications such as geothermal will be
pursued.
Plexus' CEO Ben Van Bilderbeek, said: "The Disposal and
Collaboration Agreement is a win-win for both parties. As well as
achieving a sale value of up to GBP42,500,000 for the Jack-up
Business, we gain industry recognition for our technology, which we
have long claimed sets a new standard in terms of performance and
safety. Furthermore, we have secured the opportunity to collaborate
with a top tier company to explore potential development of
additional products based on POS-GRIP.
"Encouragingly, we believe that the upward trend of the oil
price in recent months, alongside indicated OPEC-led production
cuts through 2018, could well be the catalyst for an uplift in oil
& gas exploration activity during the three year earn-out
period.
"While the Disposal and Collaboration Agreement is a major
milestone for Plexus, we see this as merely marking the end of the
first phase of the Company's development. Plexus is now entering
what we believe will be a highly exciting and rewarding period, as
we focus on developing and positioning new and existing POS-GRIP
enabled products beyond wellheads for jack up exploration, both
within the oil and gas sector, including production and subsea, and
the wider energy industry, such as renewables and geothermal. As
the recent order from Centrica for a production wellhead and a
previous contract for a POS-GRIP connector for abandonment
operations from the same operator demonstrate, we already have
additional products ready for roll-out. In my view, Plexus has
never been in a stronger position in terms of a combination of
proprietary IP and cash resources to realise the full potential and
value of POS-GRIP, and I look forward to providing further updates
on our progress."
Richard Alabaster, President of TechnipFMC's Surface
Technologies business, stated: "I am very pleased that we have
finalized the transaction which supports our objective of extending
and strengthening our position in exploration-drilling products and
services while leveraging our global field presence. It also
enhances TechnipFMC's capability in HPHT applications."
**ENDS**
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 ('TFMC'), a
subsidiary of TechnipFMC (Paris:FTI)(NYSE:FTI), in early 2018, the
Company is now focused on establishing its technology and equipment
in other markets including surface production, subsea and
de-commissioning.
Its suite of new products and applications includes: the
Python(TM) Subsea Wellhead (a new standard for subsea wellheads -
supported by BG, Royal Dutch Shell, Wintershall, Maersk, Total,
Tullow Oil, eni, Senergy, and Oil States Industries Inc); the
POS-SET(TM) Connector for the growing de-commissioning and
abandonment market; HP/HT dual marine barrier risers which provide
an efficient, safe and cost effective solution for use on jack-up
rigs; an innovative HP/HT Tie-Back connector product; and a new
Well Tree product. Importantly, the Company 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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