TIDMPOS
Plexus Holdings Plc
25 September 2018
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
Equipment & Services
Plexus Holdings PLC ('Plexus' or 'the Company')
Global methane leak concerns generate increased interest in
Plexus POS-GRIP(R) metal-to-metal HG(R) seal solutions
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, is pleased to report
that, in line with recent global press coverage surrounding the
growing issue of methane leaks in the energy sector, the Company is
experiencing an increasing level of interest in its POS-GRIP HG
metal-to-metal seal technology from both operators and various
industry safety and standards bodies. POS-GRIP equipment is proven
to be a "gas-proof" solution for natural gas wellheads, having been
successfully deployed on hundreds of gas wells, including the Total
operated Solaris well in 2015, which is believed to be the highest
pressure well ever drilled in the North Sea.
Methane is a principal component of natural gas, and a number of
recently published studies have highlighted the fact that gas leaks
from the wellhead to the consumer are far higher than had
previously been thought. The furore over the damaging nature of gas
leak toxic emissions, and in particular methane, in relation to
climate change reached a turning point at this year's World Gas
Conference in Washington in June, where tackling methane was viewed
as being "part of business as usual". A series of major IOC CEOs
stated at the conference that reducing gas leaks is now a major
priority, which is perhaps not surprising when one considers that
methane has a global warming potential of up to 86 times greater
than carbon dioxide over a twenty year period.
These gas leaks do not just occur from operating wells, they
also occur from abandoned wells of which there are estimated to be
three million across the USA. Such is the scale of the problem that
there is growing concern that methane leaks from gas infrastructure
even have the potential to reverse the perceived environmental
benefits of natural gas when compared to dirtier fossil fuels, such
as coal. The Environmental Defence Fund ('EDF') made the case that,
although gas fired power plants produce much lower carbon dioxide
emissions than coal-fired plants for the same electricity
generation, methane leaks could cut that advantage out completely
if just more than 2.7% of gas production escapes on its journey
from well to power plant. Above that level gas is actually worse
than burning coal.
A number of responses to this issue have been launched and
continue to be developed. For example in March the US Oil and Gas
Climate Initiative ('OGCI') organisation, which is an investment
vehicle formed by a number of international oil majors announced in
Houston a US$20m grant aiming to fund technologies that will help
reduce methane emissions. Then only this month the Independent
Energy Standards Corporation ('IES') announced the completion of
its first transaction in relation to the IES TrustWell(TM)
Responsible Gas Program. This looks at the ability to source gas
responsibly, and the TrustWell rating system for a producing well
evaluates a wide range of risks and impacts including emissions and
methane, leaks and spills, well integrity, water sourcing, and
others. This program enables IES to segment each well into a
Silver, Gold, and Platinum rating and is open to both natural gas
producers and purchasers. It would be a logical extension to begin
to certify equipment items for leak proof performance.
The industry's concern is that if left unchecked, methane
emissions could hold back or even prevent the wider adoption of
natural gas as a cleaner source of energy. The industry is taking
the issue extremely seriously as the stance taken at the World Gas
Conference confirmed. Indeed, only a few days ago Royal Dutch
Shell's Integrated Gas and New Energies Director, Maarten Wetselaar
was recently reported in the FT as saying: "The industry needs to
continue addressing methane emissions, which can diminish the
relative greenhouse gas emissions of natural gas." In response to
this important development, a number of major operators have
publicly set targets to limit methane emissions from their
operations, including Royal Dutch Shell which has pledged to limit
methane emissions to less than 0.2% of the total volume of natural
gas it extracts. In April 2018, BP set a similar target. Bob
Dudley, BP's CEO, was reported as saying, "Some people may not be
aware of the benefits of gas. Others see the benefits but are
genuinely concerned about methane emissions. That's a legitimate
concern and we share it - in fact, we're in action."
To hit their self-imposed targets, operators are taking a
dual-focused approach: deploy advanced equipment and technology to
detect and repair leaks; and importantly use gas-proof technologies
that help prevent leaks from occurring in the first place. These
are important as the time and inconvenience of solving leaks nearer
the well upstream, and in particular in the wellbore, can be far
more costly and disruptive than those leaks which occur further
downstream.
POS-GRIP is one such gas-proof technology. Designed by Plexus to
raise wellhead standards to the level of premium tubular couplings,
the Plexus POS-GRIP HG seals overcome the shortcomings associated
with conventional wellhead sealing technologies, which often lead
to expensive life-cycle maintenance fixes, such as injecting
wellhead seals with resilient materials, which are unable to
deliver permanent solutions. Prevention, as the answer, requires
designs based on aspects of Hertzian stress theory, to ensure that
interface stresses are maintained at the required level through-out
the life of a well. The Company has explained the gas proof nature
of its seal technology in a new paper titled "Gas-Proof by Design"
which can be found on Plexus' website: www.plexusplc.com.
Having supplied POS-GRIP wellheads for use on over 350 wells,
Plexus has long-standing relationships with operators around the
world. Following the sale of its niche jack-up exploration rental
business to TechnipFMC, the Company is focused on developing
POS-GRIP enabled applications for use in the broader energy sector
as well as rolling out its existing family of POS-GRIP products,
including surface production and subsea wellheads. It has become
clear in recent discussions with potential customers and partners,
that increased focus is being directed towards POS-GRIP's superior
capabilities in terms of long term performance, reliability and
safety within the context of gas and methane containment. The
Company is confident that these discussions will in due course lead
to additional commercial opportunities for its POS-GRIP product
range.
Plexus' CEO Ben Van Bilderbeek said, "If natural gas is going to
live up to its billing as the cleanest and most important fossil
fuel and go on to play a meaningful role in the ongoing transition
to a low carbon global economy, then 'gas-proof' equipment that is
proven to minimise the possibility of methane leaks, such as those
enabled by our POS-GRIP HG wellhead metal-to-metal seal technology,
will have to be deployed. Wherever metal-to-metal sealing is
required, we are confident POS-GRIP can provide the optimum
solution.
"I am confident that this important industry development
heightened by the world increasingly switching to gas consumption,
together with an uptick in sentiment and capital investment across
the energy industry, means that Plexus is well placed to deliver on
its objective to position POS-GRIP as an enabling technology for
the energy sector, one that not only raises industry standards, but
also generates significant value for our shareholders."
**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 niche jack-up wellhead exploration market
through the sale of this business to 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
designed as part of a JIP 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
entered into a Collaboration Agreement with FMCT, which provides a
platform to further develop and commercialise these and other
POS-GRIP based applications.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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