Plexus Holdings Sells Wellhead Equipment To Russian Partner Gusar
Plexus Holdings PLC said Wednesday it has sold two POS-GRIP 18-3/4 inch rental wellhead sets and related mudline equipment and tooling to its partner and licensee in Russia LLC Gusar (OOO Gusar) Ltd.
The AIM-listed oil and gas engineering services company said that the value of the sale was about GBP1.4 million.
The wellheads will serve as the basis for Gusar’s POS-GRIP rental exploration wellhead inventory, and are planned to be used for gas exploration drilling within Russia under an exclusive licence agreement between Plexus and Gusar and CJSC Konar (ZAO Konar), two independent Russian oil and gas equipment manufacturers.
Plexus said that the sale represents a major milestone towards delivering on one of Plexus’ objectives to establish its POS-GRIP equipment in Russia and the Commonwealth of Independent States, one of the top three hydrocarbon producers in the world with significant gas reserves.
In January 2016, Plexus entered into an agreement, which conferred to Gusar and Konar the right to manufacture and rent Plexus’ proprietary jack-up exploration wellhead and associated equipment within Russia and the other CIS states.
Under the terms of the licence agreement, Plexus agreed to sell Gusar up to three suitably configured POS-GRIP wellhead systems to help facilitate wellhead rental’s in the Russian and CIS markets. It is anticipated that the sale will enable Gusar to secure its first rental order from a major local operator in the near future and may lead to the purchase of a third wellhead in due course.
As the anticipated pick-up in activity in Russia and elsewhere in the CIS region gains traction, Gusar can, as and when necessary, add to the initial rental inventory by manufacturing POS-GRIP wellhead systems under licence. Plexus will receive royalties based on the invoice value of any Plexus products rented or sold by Gusar or Konar. The two wellhead sets of equipment sold to Gusar are expected to be deployed on jack-up gas exploration wells, which is permissible under current EU trade sanctions.
“Russia and the wider region is a central area of focus, not only because it is a top three global hydrocarbon producer, but also due to the importance of gas in its energy mix. As evidenced by its successful deployment on numerous wells in the North Sea, our technology and HG metal sealing are ideally suited to the high pressures and temperatures – and hence environmental risks – associated with gas. As a result, Russia represents a major opportunity for the company and I am very pleased to see our belief in this market coming to fruition,” Plexus Chief Executive Ben Van Bilderbeek said.
Plexus shares were down 2.4% at 62.00 pence per share on Wednesday.
