Plexus wins two-year contract extension from Brunei Shell Petroleum

Oil and gas engineering service provider Plexus Holdings’ existing contract to supply wellhead and mudline equipment to Brunei Shell Petroleum (BSP) has been extended by a further two years.

This is the fourth contract that AIM-listed Plexus has signed with BSP and is an extension of the current four-year agreement between the two companies, which started in late 2012.

The extension covers the supply of Plexus' high pressure/high temperature and standard pressured wellhead and mudline systems and services for three exploration wells in Brunei.

Plexus first supplied its wellhead equipment to BSP in 2006 and is said that it is committed to developing local business in Brunei by recruiting and training local employees.

Chief executive Ben van Bilderbeek said: "The extension of our framework agreement with BSP validates our confidence in our ability to maintain relationships with long term customers, and be ready to secure orders when there is business to be won.

"In addition to offering operators wellhead equipment that meets the toughest industry standards, and in particular for high pressure/high temperature application, the company has an inventory of wellhead sets in stock which enables us to fulfil orders at short notice.

"However, for our wellheads to be fully utilised we need to see a pick-up in exploration activity from current historic low levels. Encouragingly, with production set to fall following the recent OPEC meeting agreeing to cuts, demand for hydrocarbons predicted to continue to grow, and mature fields in decline, we believe the seeds are in place for the next cyclical upturn to take root.”

He said that thanks to a debt free balance sheet, and despite its recent trading update, Plexus is well placed for when sentiment recovers, while it sees the remainder of this financial year as challenging, it believes that the 2017/18 financial year will be a turning point for Plexus and the exploration industry.

The company’s wellheads have been used on over 400 exploration wells worldwide in both high pressure/high temperature and standard pressure environments by large oil companies including Shell, Centrica, Statoil and Total.

Shares in Plexus Holdings were up 7.46% to 89.19p at 1009 GMT.