TIDMPOS
RNS Number : 5004I
Plexus Holdings Plc
26 March 2015
Plexus Holdings plc ('Plexus' or 'the Company')
Framework Agreement Signed in Beijing with Yantai Jereh Oilfield
Services Group Co., Ltd.
Plexus Holdings plc, the AIM quoted oil and gas engineering
services business and owner of the proprietary POS-GRIP(R) method
of wellhead engineering, is pleased to announce that it has entered
into a Framework Agreement ('the Agreement') with Yantai Jereh
Oilfield Services Group Co., Ltd. ('Jereh'), the major Chinese oil
services provider of integrated solutions of oilfield equipment and
services, and the two parties will now work together to formalise a
binding license agreement to enable Jereh to manufacture and sell
Plexus' wellhead equipment to the Chinese and wider Asian oil and
gas markets. Jereh is a public company listed on the Shenzhen stock
exchange with a market capitalisation of over US $5.8bn and 5,000
employees.
The Agreement remains subject to legally binding agreements
("Binding Agreements") being finalised and signed. It is envisaged
that the Binding Agreements will include the following terms:
-- Plexus will grant to Jereh an exclusive licence in China and
other designated Asian territories to enable Jereh to manufacture
and supply Plexus' products utilising Plexus' trademarks, patents,
technology, know-how, engineering, standards and other intellectual
property and technical services of Plexus.
-- Jereh (or a wholly-owned affiliate of Jereh) will subscribe
for new ordinary shares in the Company (the "Subscription"), such
that Jereh would be interested in 5 per cent. of the enlarged
issued share capital of Plexus, at a price of 180 pence per share
(this being a premium to the price at the time the parties
commenced discussions regarding the proposed licencing licensing
agreement); and for a period of twelve months from the date of
issue of the new ordinary shares pursuant to the Subscription, will
retain the right to subscribe for further new ordinary shares in
the Company such that Jereh would become interested in 10 per cent.
of the enlarged share capital of Plexus at a price the lower of:
(i) 200 pence per share (this being a premium to the price at the
time the parties commenced discussions regarding the proposed
licencing agreement); and (ii) the closing price on the date on
which Jereh notifies the Company of its intention to exercise the
option.
-- Jereh would have the right to appoint a non-executive
director to the board of Plexus, subject to regulatory
requirements.
Completion of the proposed transaction requires, inter alia,
additional due diligence to be carried out by both parties and
remains subject to further negotiation and final documentation
(including the subscription agreement and technology licence
agreement).
The signing ceremony and announcement was jointly made by
Kunxiao Wang, President and Co-founder of Jereh, and Ben van
Bilderbeek, the inventor of POS-GRIPtechnology, CEO and founder of
Plexus at the 15(th) China International Petroleum &
Petrochemical Technology & Equipment Exhibition 2015 ('CIPPE')
in Beijing, which runs from the 26(th) to 28(th) of March ('Beijing
Oil Show').Jereh is currently exhibiting at the Beijing Oil Show,
and as part of the initial collaboration between Jereh and Plexus,
the Plexus wellhead R&D Model 13 1/2 10M POS-GRIP Exploration
Wellhead System, with stand and tensioners, has been shipped from
Plexus Malaysia and is being jointly displayed on the Jereh stand.
The Beijing Oil Show extends over 90,000 sq. metres and attracts
1,800 exhibitors from 65 countries and regions, 16 international
pavilions and 65,000 professional visitors.
Plexus' CEO Ben Van Bilderbeek said, "I am delighted that Plexus
and Jereh have entered into the Agreement which we hope will enable
us to bring Plexus' POS-GRIP technology to the important and
growing Chinese market and other relevant Asian territories. We
view China and Asia as one of the key global market opportunities
for Plexus, and we believe that our POS-GRIP wellhead equipment
will deliver operational time savings and safety benefits to the
oil & gas companies operating in the region, many of whom will
be facing high pressure/high temperature ('HP/HT') conditions which
POS-GRIP technology is uniquely suitable for, and which has
resulted in Plexus supplying wellhead equipment for the majority of
HP/HT jack-up wells in the North Sea region.
"The progress we have made to date in our discussions with Jereh
is an example of how Plexus continues to extend its geographic
reach and we are continuing to see new enquiries from across the
globe from operators that are considering POS-GRIP technology. Such
progress, and the growing support of our existing and new customers
is centred around the principal that we can ensure long-term safety
over the lifetime of a production well and beyond. We offer the
only wellhead design that can provide a convenient releasable
engagement of the casing hanger to the wellhead bore, instantly
providing a metal interface seal, which is based on the same
principles and performance as those employed in premium couplings
design. This remotely delivered and calibrated force eradicates
destructive seal movement, and protects seal integrity.
"Plexus has already supplied Shell China with HP/HT POS-GRIP
wellhead equipment for an exploration well offshore Hainan Island
and we hope to increase our activity in this region. I would like
to extend my appreciation to Chairman Sun for the way Jereh and his
team have conducted these discussions, and I look forward to
finalising the definitive agreements, and working with Jereh over
the coming years."
Kunxiao Wang, President and Co-founder of Jereh said, "We are
pleased to announce this alliance with Plexus, which can be a
milestone for Jereh entering into the subsea market. Plexus
provides unique wellhead system technologies with a strong
commitment to make the oil and gas industry much safer and
efficient. We are glad to be able to work with such an outstanding
partner. By integrating Plexus patented technology and Jereh
manufacturing and marketing capabilities, we believe the alliance
will create significant influence in the offshore and subsea field
and create compelling benefits for customers around the world."
**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
Nick Tulloch Cenkos Securities PLC Tel: 0131 220
9772
Felicity Winkles St Brides Partners Tel: 020 7236
Ltd 1177
Frank Buhagiar St Brides Partners Tel: 020 7236
Ltd 1177
Notes to Editors:
Jereh Group
Jereh Group was incorporated in 1999 and is headquartered in
Yantai, China. The Jereh Group listed on the Shenzhen stock
exchange in 2010 and its current market capitalisation is
approximately US$5.8bn. In 2013 the Group generated revenue of
US$600 million and employed over 5,000 people.
The Jereh Group consists of 18 subsidiaries located worldwide.
To date the Group has built seven industrial parks, covering an
area of around 700 acres, with 18 service basements across the
globe and has established R&D centres in China, America and
Canada. Worldwide sales and service centres are well established in
Canada, South America, UAE, Kazakhstan, Russia, Australia, Africa,
Indonesia and Hong Kong to provide customer-focused solutions to
the energy industry.
Jereh is a worldwide leader in providing integrated solutions of
oilfield equipment and services for oil and gas drilling, well
stimulation and intervention, well completion, natural gas
transportation, natural gas liquefaction and environmental
management. The Group's product range include drill rigs,
cementers, frac spread, coiled tubing unit, nitrogen pumper,
intelligent pipe handling system, snubbing units, hot oilers,
coiled tubing injectors and blow out preventers (BOP), natural gas
compression package, natural gas equipment (including EPC, LNG
equipment and gas fuelling units), compressors, LNG equipment),
wellhead equipment, downhole motors and related equipment.
Plexus Holdings PLC
Plexus Holdings PLC, which began trading on AIM in December
2005, is an oil and gas engineering and services business, which
supplies wellhead and mudline suspension equipment together with
associated equipment and services for exploration and production
applications. Based in Aberdeen, with offices in London, Cairo,
Kuala Lumpur, Singapore and a presence in Houston, Texas, it has
developed and patented a friction-grip method of engineering for
oil and gas field wellheads and connectors, POS-GRIP(R), which
involves deforming one tubular member against another to effect
gripping and sealing.
The Company plans to accelerate the roll out of POS-GRIP
wellhead equipment as a superior alternative to current technology
and for it to become the future industry standard for wellhead
design. In particular, the technology has advantages in High
Pressure/High Temperature (HP/HT) and Extreme HP/HT (X-HP/HT) oil
and gas environments, for which there is growing global demand and
where Plexus is being increasingly recognised as the supplier of
choice.
To date, POS-GRIP wellhead systems have been used or selected to
be used in over 350 oil and gas wells by international companies
including ADTI, AGR, Apache Energy Australia, BHP Billiton, BG
International, Bowleven plc, BP, Brunei Shell Petroleum, Cairn
Energy, Centrica, ConocoPhillips, Dana Petroleum, Dubai Petroleum,
GDF SUEZ, Global Santa Fe,Maersk, Niko Resources, Petro-Canada
Trinidad & Tobago, Red Sea Petroleum Operating Company, Repsol,
RWE, Senergy Limited, Shell China, Shell Egypt, Statoil,
Silverstone Energy, Talisman Energy, Tullow Oil, and
Wintershall.
Importantly, the Company is focussed on extending its
proprietary POS-GRIP technology into an increasing number of subsea
applications. In line with this, in March 2011 the Company launched
a Joint Industry Project ('JIP') initiative to develop a new subsea
wellhead design, HGSS(TM), utilising its friction-grip technology
in collaboration with key oil and gas operators and service
companies. BG, Royal Dutch Shell, Wintershall, Maersk, TOTAL,
Tullow Oil, ENI, Senergy, ADTI and Oil States Industries Inc. The
JIP is nearing completion with final qualification testing of all
key features of the product under way, and the resultant HGSS
subsea wellhead design will include a combination of key features
never before seen in a subsea wellhead which include being rated to
15,000 psi, 4,000,000 pounds of 'instant' casing lockdown capacity,
and importantly rigid metal annular seal technology qualified to
match the performance of premium connectors. The building of a
single string HGSS prototype wellhead system commenced in February,
and is expected to be completed in readiness for display at the SPE
Offshore Europe Exhibition and Conference in Aberdeen ('OE2015') in
September.
Plexus is an innovative technology company always looking for
opportunities to apply its proprietary POS-GRIP friction grip
method of engineering to new products both within and outside the
oil and gas industry. For example Plexus have recently completed a
JIP in conjunction with Maersk to develop a downhole HPHT Tieback
connector which for the first time allows the reconnection of
production casing to HPHT exploration and production wells. In
addition the Company has developed and qualified a new product
called "POS-SET Connector(TM)" which is designed to re-establish a
connection onto rough conductor casing previously cut above the
seabed to facilitate tieback or abandonment operations. The market
for permanent plugging and abandonment of wells is increasing in
the North Sea and beyond, and could be an important new revenue
stream for the company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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