Plexus Holdings PLC (AIM:POS) said US oilfield services giant SLB, the former Schlumberger, has extended its non-exclusive licence agreement with the company for an additional six years starting 10 November 2023.
Ben van Bilderbeek, Plexus’ chief executive, welcomed the extension noting that SLB’s decision to increase the agreement beyond the initial three-year term was “a testament to our proprietary POS-GRIP technology”.
"SLB is finalising the development of its new application of POS-GRIP technology for oil and gas wellhead applications,” he added. “Upon completion, we anticipate receiving licensing income from SLB as it deploys these innovative wellheads worldwide."
Cameron International (NYSE:CAM), a subsidiary of SLB, signed the original licence with Plexus in 2020 to get access to the POS-GRIP friction grip method of engineering and the 'HG' metal-to-metal sealing system for oil and gas surface production wellheads.
As part of the deal, SLB agreed to pay a royalty based on the number of wellheads sold, leased and rented in each calendar year in the range of 3% to 6%.
In December 2021, the terms of the scope of the existing agreement were expanded to additional territories to make the licence worldwide where higher royalty rates apply.
SLB has now extended this agreement for an additional six years to 10 November 2029.
A second licensing deal with SLB was signed in August 2021 enabling Plexus to pursue opportunities in the Jack-up exploration wellhead business.