LONDON (ShareCast) - (Sharecast News) - Oil and gas engineering services company Plexus has entered into a licence agreement with Schlumberger subsidiary Cameron International, it announced on Tuesday, granting a non-exclusive licence to enable Cameron to use its 'POS-GRIP' and 'HG' metal-to-metal seal method of wellhead engineering for the development of conventional and unconventional oil and gas surface wellheads.
The AIM-traded firm said that under the agreement, Cameron would pay a royalty to Plexus based on the number of wellheads sold, leased, rented or otherwise supplied in each calendar year in the range of 3% to 6%, which would apply up to the end of the 2029 calendar year, subject to the terms of the deal.

It also provided for a modest minimum performance requirement around wellhead sales, in a market that historically had consumed "tens of thousands" of production wellheads per annum.

If Cameron did not reach the minimum performance requirement, it could choose to pay a 'top up' royalty fee.

In addition to royalty fees, Cameron would pay Plexus a capital licence fee payment of $0.5, in exchange for the non-exclusive licence rights.

Plexus said the agreement was for an initial term of three years, with the option for Cameron to extend the agreement for a further six years.

Plexus' CEO commented:

"The first of what we hope will be many joint development projects between our two companies, will be the design and development of competitive and technically differentiating surface production wellhead systems, which incorporate our proprietary POS-GRIP friction-grip technology," said chief executive officer Ben van Bilderbeek.

"The POS-GRIP method of wellhead engineering has over the years demonstrated that it delivers life-cycle integrity for critical seal systems, particularly for gas applications.

"The project will focus on the application of scientifically configured and actuated proprietary sealing methods, which can guarantee leak-proof and maintenance-free performance, throughout the life-cycle of a well."

Van Bilderbeek said such features were "particularly relevant" as the move towards net-zero emissions was demanded by more informed investors, and the environmental lobby.

"The resulting wellhead products will be marketed under the Cameron trademark, whilst in the meantime Plexus continues to offer its own proprietary wellhead technology, with focus on special applications and technically challenging projects, as well as innovations.

"Our joint aim is to demonstrate that with the right technology, our industry can achieve Totex savings, whilst at the same time addressing capex issues, which are generally associated with the provision of the higher standards needed, whilst helping to responsibly develop oil and gas reserves."

At 1507 GMT, shares in Plexus Holdings were up 9.04% at 19.9p.

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