TIDMPOS
RNS Number : 2787W
Plexus Holdings Plc
26 April 2016
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
equipment & services
26 April 2016
Plexus Holdings PLC ('Plexus' or 'the Company')
Completion of a Subscription Agreement to Raise US$5 Million
& Accelerate Entry into the Major Russian Oil & Gas
Production Wellhead Equipment Market
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 that it has raised US$5 million through the issue of
6,764,893 new ordinary shares in the Company ('Subscription
Shares') at a price of 52.05 pence per share ("Subscription Price")
pursuant to a share subscription agreement (the 'Subscription
Agreement') with the Russian oil and gas equipment manufacturer,
LLC Gusar (OOO Gusar) ('Gusar').
The Subscription Agreement follows the Company's announcement in
January 2016 regarding a licence agreement with Gusar and CJSC
Konar (ZAO Konar) ('Konar') for the manufacture and supply of
Plexus' jack-up exploration wellhead equipment in the Russian
Federation and other CIS states (the 'Territories'). At the same
time as the Subscription, Plexus, Gusar and Konar have also entered
into a Commercial Agreement ("the Commercial Agreement") under
which Plexus will work with Gusar and Konar to finalise an
additional licence agreement to enter the Territories' larger and
more active surface land and platform production wellhead equipment
markets.
-- The Board expects that entry into the Subscription Agreement
will enable Plexus to fast track its entry into the Territories'
large and important oil and gas production sector, (which was
contemplated in the January 2016 jack-up exploration licence) and
further diversifies the Company's revenues away from its
traditional North Sea jack-up exploration market
-- The development and manufacture of POS-GRIP production
wellhead equipment in Russia by Gusar and Konar is expected to also
widen the product range that Plexus can then supply into other
territories around the world
-- Activity in the Russian land and platform production sector
remains buoyant as major operators in the region focus on drilling
production wells to maintain / increase output
-- The proceeds of the Subscription Agreement will be used to
support tailored research and product development and the Company's
sales and marketing efforts in Russia and other territories
worldwide as well as for general working capital requirements
-- The Subscription strengthens the relationship between Gusar
and Plexus, and is in line with Plexus' strategy to expand its
POS-GRIP wellhead equipment into major global markets by partnering
with established local manufacturers and oil service providers who
have existing relationships with key local operators, and in
particular national oil and gas companies
-- Under the terms of the Commercial Agreement, Gusar is
entitled to appoint a non-executive director to the Board of Plexus
for so long as it remains interested in no less than 6,764,893 new
ordinary shares in the Company
Plexus' CEO Ben Van Bilderbeek said, "We are pleased to have
secured additional funding for Plexus at a time when trading
conditions are clearly challenging, and welcome Gusar as a new
shareholder. We are also delighted to further strengthen our
licensing and commercial relationship with Gusar and Konar as we
advance our strategy to expand Plexus' geographic reach beyond the
North Sea, and look forward to developing with our Russian partners
a range of superior and locally manufactured wellhead equipment for
a variety of field applications.
"Russia has for some time been a key potential market for
Plexus. I am confident that our unique technology, which removes
the weak casing and tubing hanger link from the well chain, will
over the coming years play an important role in improving the
integrity of drilling and production systems in this important
market, particularly in potentially sensitive environmental areas
where drilling activities are likely to take place in the future.
The US Energy Information Administration ('EIA') in 2014 ranked
Russia the third largest producer of petroleum and other liquids
and estimated it holds almost a quarter of the world's proven
natural gas reserves. With gas forming the vast majority of the
Russian energy sector and our best in class wellhead equipment
being ideally suited for the most challenging gas service
conditions, this dynamic market offers considerable commercial
opportunities for Plexus, Gusar and Konar.
"Clearly the ultimate objective of our expanding partnership is
to enable our Russian partners to eventually be able to locally
supply and service a superior class of wellhead which currently is
imported. Our focus on Russia and the CIS is timely as we are
already in discussions with major Russian operators about a number
of relevant supply opportunities, and this expansion of our
relationship with Gusar and Konar is particularly exciting as it
has been recently reported that the oil and gas sector in Russia is
benefiting from increasing levels of capital investment and
activity. With this in mind, I look forward to updating
shareholders accordingly."
Further Information
The Subscription Price represents a 10% discount to the 5 day
average share price prior to the day before the signing of the
Subscription Agreement. The Company has now received the funds
pursuant to the Subscription Agreement and application has been
made for the admission of the Subscription Shares to trading on AIM
("Admission"), which is expected to occur at 8.00am on 29 April
2016.
Following Admission:
-- Plexus will have 96,155,469 Ordinary Shares in issue and each
share has the right to one vote. Therefore, for the purposes of the
Financial Conduct Authority ('FCA') Disclosure and Transparency
Rules, the total number of voting rights in the Company is
96,155,469. The above figure may be used by shareholders as the
denominator for the calculations by which they will determine
whether they are required to notify the Company of their interests
in, or change to their interests in, the Company under the FCA's
Disclosure and Transparency Rules; and
-- Gusar will be interested in a total of 6,764,893 ordinary
shares in the Company, representing approximately 7.0% of the
issued share capital of the Company.
**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
Nick Tulloch Cenkos Securities PLC Tel: 0131 220 9772
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:
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, BP, Brunei Shell Petroleum, Cairn Energy, Centrica,
ConocoPhillips, Dana Petroleum, Dubai Petroleum, ENI, GDF SUEZ,
Global Santa Fe, Maersk, Niko Resources, Petro-Canada Trinidad
& Tobago, Premier Oil Norge, Red Sea Petroleum Operating
Company, Repsol, RWE, Senergy Limited, Shell China, Shell Egypt,
Statoil, Silverstone Energy, Talisman Energy, Total, 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, the 'Python Subsea Wellhead' 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 Python 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 Python Subsea
Wellhead system prototype commenced in February, and was launched
at the SPE Offshore Europe Exhibition and Conference in Aberdeen
('OE2015') in September 2015.
(MORE TO FOLLOW) Dow Jones Newswires
April 26, 2016 02:00 ET (06:00 GMT)
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
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(END) Dow Jones Newswires
April 26, 2016 02:00 ET (06:00 GMT)