Plexus Holdings (AIM:POS) has announced that its HG-R wellhead integrity system has qualified with Abu Dhabi National Oil Company (ADNOC), one of the world's largest oil and gas operators, opening the door to supply opportunities across the United Arab Emirates and the wider region.
The AIM-quoted wellhead services business, based in Aberdeen, said ADNOC's approval process is stringent, and that clearing it can unlock access to other operators in the region who rely on the same licence qualification system.
Plexus estimates the target market in the UAE at £10m a year and will now work with ADNOC to identify a trial well opportunity over the coming months, with success potentially leading to orders for additional wells in the next financial year and beyond.
HG-R is a retrofit wellhead spool built on Plexus's POS-GRIP and "HG" sealing technology, designed to fix tubing hanger neck seal integrity problems in existing producing wells through a new metal-to-metal sealing solution, without needing to recover the tubing hanger.
The qualification comes months after Plexus signed a two-year engineering and qualification programme with Cactus Wellhead worth up to £2.5m, announced in July, under which the company is developing and testing new offshore wellhead products from its Aberdeen facility, backed by an initial £1m payment secured by a debenture over Plexus's assets.
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Chief executive Craig Hendrie said the recent regional conflict had created uncertainty in the Middle East and delayed projects the company had been targeting there.
"This qualification award shows that momentum is building again, both in our core Exact EX rental wellhead business and in this new direction of supplying the specialised HG-R repair system, which is built on our proven technology," he said, adding that qualification with an operator of ADNOC's calibre "is a strong endorsement of our products and company."
Plexus said it expects the region to become a key contributor to its growth as activity recovers and projects move forward.
