Plexus Holdings Plc (LON:POS) chief executive Ben van Bilderbeek told investors its financial performance, in the year ended June 30, has mirrored the challenging trading conditions faced by the oil and gas sector.
“This year it also marked what is likely to prove to be the low point for Brent Crude in 2017, which during the summer traded as low as US$46 per barrel compared to above US$60 today,” van Bilderbeek said in a statement ahead of the company’s AGM today.
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“As a supplier of proprietary best in class wellhead equipment to leading operators such as ENI, Maersk, Total, Royal Dutch Shell and Statoil, our financial performance for the 12 months to 30 June 2017 mirrored the challenging trading conditions faced by the oil and gas sector over the course of the year, specifically the jack-up exploration market where Plexus has in the past earned the bulk of its revenues.”
He added: “Conversely, however, the current financial year very much represents a new beginning for Plexus, not just in terms of the strengthening of the oil price which, thanks to improving sentiment, today trades above US$60 per barrel, but also in terms of corporate activity and a new strategic direction.”
Moreover, van Bilderbeek highlighted: “Our wellheads are superior in terms of performance, reliability and safety whilst at the same time offering significant cost savings to operators.
“They have been used on over 350 wells worldwide, but our equipment cannot combat a depressed exploration drilling market, particularly where we have been so dependent on the North Sea.”
In October, the company agreed to sell the jack-up business to tier-one engineer Technip, in a transaction it described as “game-changing”. The deal will deliver around £15mln in immediate cash and it also comes with an ongoing collaboration agreement with Technip.
That part of the transaction “provides industry recognition for our proprietary POS-GRIP friction based method of engineering,” van Bilderbeek noted.
“Importantly this milestone repositions Plexus as an IP-led research and development licensing business based around POS-GRIP, and one that will have the resources and focus to pursue applications based on POS-GRIP in other markets such as production and subsea wellheads either organically or through licensees, as we look to embed our technology across the energy sector,” he added.
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Looking ahead, the Plexus boss said: “Our goal has been and continues to be to build on our near 100% market share of the high pressure/high temperature market in the North Sea and establish POS-GRIP as the go-to technology for operators all over the world.
“Having won orders for wells in hydrocarbon jurisdictions as far afield as Asia, Africa and Australia, notable progress has been made. We believe the sale of our jack-up exploration rental business and the Collaboration Agreement with a global company with the market reach and expertise of Technip will accelerate the roll-out of our family of products, not just in jack-up exploration but across the wider energy sector.
“Together with an improving outlook for the industry that is founded on supply and demand moving closer towards equilibrium, Plexus is well placed to fully realise the potential of its ground-breaking technology and in the process generate significant value for all its shareholders."