POS Plexus Holdings Plc

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

RNS REACH

26 February 2024

Plexus Holdings PLC ('Plexus' or 'the Company')

Development of a Replacement Tubing Hanger Neck Seal ("HG-R") for workover applications

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, known for its time and cost saving capabilities, is pleased to announce that it has successfully completed a customer sponsored R&D project to develop a bespoke lifetime leak-proof replacement tubing hanger neck seal assembly ('HG-R'), to upgrade and extend the field life of existing surface production wellheads.  

Plexus' HG-R technology has been designed to address a key challenge facing oil and gas production operators, namely, the systemic failure of conventional annular seals, as a result of pressure and temperature induced interface movement, known as fretting.

Particularly on natural gas applications, it can be statistically shown that most conventional wellhead annular and neck seals will at some point fail, causing integrity and safety concerns, which may result in environmental consequences, costly repairs, and lost production.

In the case of tubing hanger neck seals, maintenance intervention involves externally applied temporary injection procedures, or the substitution of leaking seal components and perhaps even the replacement of worn out tubing hangers and tubing heads.

It should be recognised that external seal injection services are generally provided by several international specialists and a host of local maintenance providers, who work with unregulated proprietary injection materials for which positive results are claimed, although the service invariably comes with warnings that integrity is temporary because injected seals are subject to the same dynamics that caused the original seals to fail.  

Plexus' bespoke HG-R maintenance intervention solutions are exclusively available from Plexus Ocean Systems Ltd and its licensees and are scientifically based on Hertzian Stress Theory, ​and which in respect of interface stress management features match what we believe to be the unrivalled capabilities of Plexus' "HG" lifetime guaranteed annular seals. 

Commenting on this new Plexus Product, Plexus' CEO Ben Van Bilderbeek said: "The HG-R R&D design project is in line with our long-standing ambition to supply the oil and gas industry with a portfolio of NetZero compliant sealing solutions, which, in addition to our lifetime guaranteed wellheads, can in certain instances be used to upgrade and make secure decade-old production systems. Importantly, this new bespoke solution allows permanent upgrades to be carried out as part of planned "workover" activities for existing wells, without having to remove tubing hangers. This means ageing wellheads can be safely and affordably repaired, to address future neck seal failures, which in turn lengthens their economic life, reduces the periodic cost of maintenance, and helps hydrocarbons maintain the role as a responsible transition fuel, until the world can rely on alternative energy sources. We will be actively marketing this new product and look forward to reporting further progress"

**ENDS**

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

Notes to Editors

Plexus Holdings plc (AIM: POS)

Plexus is an IP led company focussed on establishing its patented leak-proof POS-GRIP® wellhead and associated equipment as the go-to technology for energy markets whilst making a genuine contribution to the oil and gas ('O&G') industry's ESG and NetZero goals by championing "through the BOP" (Blow-out Preventer) designs, and lifetime leak-proof HG® metal-to-metal sealing systems. Having protected the environment for many years through these technological innovations, the Company was awarded the London Stock Exchange's Green Economy Mark in July 2021 and continues to place emphasis on its ability to reduce harmful methane emissions and unnecessary maintenance and intervention costs.

Headquartered in Aberdeen, the Company has provided leak-free wellhead performance in over 400 wells worldwide and worked with an array of blue-chip O&G company clients.  As well as generating direct revenues from securing orders for surface production wellheads in the UK and European North Sea regions, the Company has several licencing/collaboration agreements with major partners including SLB and TechnipFMC.

Notably, the agreement with SLB was expanded in December 2023 (see RNS 2.1.2024) for a cash consideration payable to Plexus of US$5.2m to enable SLB to use certain POS-GRIP technology including HG® seal technology for standard surface wellhead applications for all pressure and size ranges on a worldwide basis. The in-perpetuity royalty free licence scope includes O&G surface production and storage applications, as well as CO₂ storage ('CCS') and hydrogen storage, and water and cuttings injection. The Agreement also includes a non-exclusive licence to SLB for Adjustable Surface Production Wellheads, and HG Trees with the potential to generate royalties for Plexus from such special applications of the POS-GRIP technology.  Plexus may also quote customers for SLB Valves and Trees combined with Plexus wellheads on a project basis subject to SLB approval where a full package of equipment is required. Plexus retains the original IP, and the intention is that Plexus continues to operate in the surface production wellhead sector on a limited basis, as an innovative and specialised wellhead equipment supplier, whilst also pursuing opportunities in exploration rental wellheads from Jack-up rigs, subsea, connectors (such as metal sealing HP/HT Tie-Back applications), P&A, special applications, geothermal, hydrogen and all non-oil and gas applications.

The Company also has a separate exploration wellhead equipment related licensing arrangement with SLB subsidiary Cameron, which has enabled Plexus to re-enter the Jack-up Exploration (Adjustable) Rental Wellhead market, with Cameron providing manufacturing support and assisting in sales leads generation in return for a licence royalty fee.

Plexus' current suite of products include Exact-15 exploration rental wellheads, Adjustable HG surface production wellheads, which combine POS-GRIP technology with gas tight leak free metal-to-metal sealing; the Python® subsea wellhead, developed in a Joint Industry Project with several industry leaders; the POS-SET™ Connector for the de-commissioning and P&A market; and Tersus-PCT, an innovative HP/HT tie back connector product.

Having proved the superior uniquely enabling qualities of POS-GRIP Technology both organically and with licencees, Plexus is now focused on establishing its technology and related equipment in other markets and sectors both in the UKCS, ECS and around the world where the directors believe it can play an important role in reducing harmful fugitive methane emission risks as operators strive to deliver on ESG commitments and NetZero goals in a safe and cost-effective way.

For more information visit: https://www.plexusplc.com/