Plexus Holding Inks 5-Year Deal with BG Group

Plexus Holdings

Plexus Holdings has agreed with BG Group to develop and supply 20,000 psi ultra or extreme high pressure and high temperature (X-HP/HT) exploration wellhead equipment, using the Company's proprietary POS-GRIPTM technology. The contract, which will see BG fund the cost of product development and qualification testing for the new metal to metal sealing wellhead system, which contains a tubing hanger designed for 20,000 psi service, is initially for two wells, with a value of £2.3 million. This agreement, which is subject to completion of relevant contract terms, is part of a five (5) year framework contract under which Plexus anticipates that further equipment will be supplied to BG for X-HP/HT, HP/HT, and standard 10,000 psi wells. The Directors estimate that the total revenues generated throughout the duration of the contract may exceed £5.0 million.

BG Group plc, is a global natural gas business. Active on five continents in over 20 countries, it operates four business segments - Exploration and Production, LNG, Transmission and Distribution and Power. The initial two-well drilling program is in the Norwegian and UK sectors of the North Sea and is due to commence mid 2007 and complete in approximately 12 months.

Plexus has been steadily building the reputation of its POS-GRIP technology, which is a new method of engineering for wellheads. In HP/HT applications the technology combines various operational benefits, which result in safety improvements and installation time cost savings.

The POS-GRIP proprietary adjustable wellhead system is specifically designed for jack-up rigs, where it eliminates the need to remove the well control equipment (the blow out preventer or BOP), when landing and sealing casing, and where it accurately manages the casing load applied at the top of the conductor casing. The potential installation time savings derived from 'through the BOP' technology, provides, at current rig rates, operating cost savings that can exceed the rental cost of the system provided.

The Directors are not aware of an existing alternative technology which can match the safety and cost saving advantages of POS-GRIP technology, and anticipate that over time more operators will come to recognize the potential of these systems across the pressure spectrum.

Plexus CEO Ben van Bilderbeek said: "We are excited about the opportunity to move Plexus' POS-GRIP technology from its current HP/HT capability into the extreme high pressure field. The development of qualified 20,000 psi POS-GRIP wellhead equipment, which can be safely installed without having to remove the BOP's to set the casing, represents a significant milestone for the industry, and will further strengthen the reputation of this unique method of engineering in the global oil and gas market.

I believe that in the years to come friction grip and direct sealing technology will play an important part in the search for solutions needed to successfully drill and complete wells in extreme high pressure gas formations, such as exist in the North Sea and the Gulf of Mexico and in many other areas of the world."