Plexus Holdings announced that its Russian licensee, Gusar has secured its first major contract to supply POS-GRIP rental wellhead gas exploration equipment for Gazprom.
Plexus Holdings is an AIM quoted oil and gas engineering services business and owns the advanced POS-GRIP friction-grip method of wellhead engineering.
The company said that the present contract covers the first year of a five-year jack-up gas exploration drilling program on the Kara Sea Shelf at shallow water depths of less than 150mts, and carries rental rates similar to the ones historically achieved in the UK Continental Shelf.
In 2016, Plexus made a license agreement with Gusar, under which, Plexus is now expected to receive a licensee royalty of 20% based on the invoice value of Plexus products rented or sold.
Additionally, under the terms of the additional royalty agreement signed with Gusar during the recent share buyback transaction, a further 20% royalty of the invoice values of the 2019-2020 contracts with Gazprom is applicable.
Plexus CEO Ben Van Bilderbeek said: “This is the breakthrough rental wellhead order that both Gusar and Plexus have been working towards since we signed the Licensing Agreement in January 2016.
“As the holder of the world’s largest natural gas reserves, Gazprom is the latest major operator set to join the likes of BP, Centrica, ConocoPhillips, eni, Royal Dutch Shell, and Total on the long list of operators that have used our proprietary POS-GRIP technology around the world.
“We are therefore anticipating that today’s order will prove to be the first of many, not just for Gazprom, but in time from other companies operating in the CIS market. This initial contract between Gusar and Gazprom will provide us with our first Gusar licence royalty revenue stream.”
The two POS-GRIP 18-3/4” rental wellhead sets, which are purchased by Gusar recently from Plexus for approximately £1.6m, are anticipated to be used on the first well of the program, which is due to spud in the second quarter of 2019.
Plexus claims that considering the importance of gas in its energy mix, Russia forms an important market for the company and its friction grip technology and HG metal sealing have been proven to be suited to the high pressures and temperatures associated with gas.
Gusar’s General Director Alexander Beryozkin said, “Gazprom has welcomed Plexus’ technology introduced by us as the local supplier. Working in Arctic conditions dictates the need for the highest standards of safety and reliability.
“Having carefully considered the existing conventional alternatives, Gazprom has ruled in favour of POS-GRIP technology that has been repeatedly chosen by industry leaders for complex jack-up exploration wellhead drilling programmes around the world due to the technical advantages that POS-GRIP avails.”