Plexus inks new agreement with Schlumberger

Oil and gas engineering services company Plexus announced an agreement with Schlumberger (SLB) on Tuesday, superseding a prior surface production wellhead licence and replacing it with a broader arrangement.

The AIM-traded firm said the transaction involved a cash consideration of $5.2m.

Under the agreement, SLB gained a perpetual and royalty-free licence for Plexus's proprietary POS-GRIP technology, HG seal technology, and any potential future advancements, enhancements, or derivatives of the technologies.

The licence would extend to surface wellhead production applications, encompassing various pressure and size ranges.

Additionally, the scope included applications in oil and gas production and storage, carbon capture and storage (CCS), hydrogen storage, and water and cuttings reinjection.

The agreement also included a non-exclusive licence for SLB to employ adjustable surface production wellheads and HG trees, opening the possibility of royalties for Plexus from specialised applications of the POS-GRIP technology.

It said the collaboration with SLB aimed to capitalise on Plexus's technology and SLB's manufacturing quality, technical expertise, innovation, and global support infrastructure.

The partnership was expected to deliver enhanced value and efficiency to operators worldwide.

Plexus said it would retain the right to continue limited operations within the sector and maintain ownership of the original intellectual property (IP).

It could also propose the integration of SLB valves and trees alongside Plexus wellheads on a project-specific basis, subject to approval by SLB.

"This new licence agreement is a further validation of Plexus' IP by this leading energy technology company and recognises the contribution our leak-proof POS-GRIP wellhead equipment can make to the oil and gas industry's ESG and NetZero goals," said chief executive officer Ben van Bilderbeek.

"Not only does the agreement further reinforce our growing relationship with SLB, but it also enables Plexus to continue to operate in the surface production wellhead sector on a limited basis, whilst focusing on the 'preventative' aspects of POS-GRIP metal seal technology."

At 1525 GMT, shares in Plexus Holdings were down 17.86% at 17.25p.

Reporting by Josh White for Sharecast.com.