Plexus CEO Ben van Bilderbeek is weighing fundraising choices to “prolong the runway” for the enterprise, which has been confronted with years of losses however might now be on the verge of success.
Based mostly in Aberdeen, Plexus struck a significant settlement in November to license out its Pos-Grip wellhead expertise to the US oilfield large Schlumberger.
“Shock, shock – I feel no one imagined that we’d handle to try this”, Bilderbeek mentioned of the deal. Nonetheless, as issues stand, a lot wanted progress has been “slowed down” resulting from Covid.
Schlumberger is doing a diligence examine to evaluate the complete worth of the expertise forward of any tasks and, though the Plexus crew is “divulging the secrets and techniques” over MS Groups, Zoom and nevertheless else, they’ll’t at the moment comply with up in individual.
So Bilderbeek, the CEO, founder and largest shareholder, is taking a look at his choices for Plexus, which, regardless of its revolutionary – and profitable – expertise, has seen “harrowing occasions”, reporting multi-million pound losses yearly since 2016.
In the meantime, a big “pipeline” of alternatives constructed up after promoting its rental “jack-up enterprise” to TechnipFMC in 2017 retains getting pushed to the best.
So Plexus is “engaged on methods to increase that runway so we’re there when the market returns”, Bilderbeek mentioned.
“Each a kind of is shifting to the best once more, once more, once more, delay, delay, delay.
“No choices are being made. Within the meantime, what we have to do is protect the provision of this expertise underneath my tutelage.
“We have now this taking place now, and it’s all very troublesome for us as a result of progress isn’t being made on the similar tempo as it might be.
“On the finish of the day, whenever you’re working adverse cashflow, progress is one thing you want immediately, you want now.
“In any other case you’ll want to elevate cash in several methods, both contribute your personal capital when you’ve got it, or to lift cash available in the market, which can trigger nice dilution. Or maybe hibernating a enterprise till the world turns.
“These are the issues we now have to consider.”
“Shake the tree”
The vast majority of Plexus’ work is within the UK North Sea, however worldwide sources of revenue equivalent to drilling in Russia, has been a “casualty” of Covid.
The Schlumberger deal – topic to their approvals – would see the US oilfield providers agency be licensee of Pos-Grip by way of to 2030, with royalties to Plexus.
With rather a lot driving on that, Bilderbeek, who prides himself on “with the ability to persuade folks of my viewpoint”, needs to comply with up in individual.
Chatting with EV from lockdown in Portugal, then, he’s discovering his idyllic settings removed from excellent.
“I used to be planning to step on a aircraft and lease an house in Houston and spend three months round my new buddies.
“Clearly I’m attempting to shake the tree, however I want I may very well be in Houston doing that.
“It is rather troublesome to make the switch of expertise work with out with the ability to deal with this in individual.”
It’s removed from radio silence although, with common conferences with the Schlumberger crew, and Plexus is assured its “superhuman” expertise will communicate for itself.
The agency is aiming for Pos-Grip to change into the brand new “business normal” for wellheads and steel sealing designs.
It’s a “friction-grip” tech utilizing integral steel seals, that are externally pre-loaded in opposition to everlasting wellhead fixtures, making certain the wells are “gas-tight” throughout their lifecycle.
In 2015, Complete drilled what was believed to be the best stress properly ever drilled within the North Sea, Solaris, with a Pos-Grip wellhead.
The Technip sale in 2017 then additional “validated” the expertise, Plexus mentioned. It at the moment within the technique of delivering a wellhead system to Spirit Power within the North Sea.
Pos-Grip additionally fights in opposition to CO2 and methane leaks – one thing Plexus hopes will play in its favour within the US because the local weather debate heats up, with Complete leaving the American Petroleum Institute (API) final month.
Nonetheless, corporations’ lack of urge for food to innovate in years amid current downturns is one thing Plexus has “suffered from” previously, Bilderbeek mentioned, and he’s conscious of the problem forward.
“Fairly often it’s greater than a job’s price to vary from one technique of engineering to the opposite.
“However that takes convincing, as a result of folks like to stay with what they know.”
Bilderbeek additionally cited the API permitting standardised wellheads to be inbuilt elements “at quantity”, which may value out Western producers.
Even then, although, Bilderbeek mentioned there’s no extra metal in Pos-Grip than standard techniques and it has a “fraction” of the variety of elements, so “it might comply with that when you make them on the similar quantity it must be price-competitive”.
He added: “I do know what Pos-Grip can do and the way it compares. I do know what they’re going to be seeing.
“At this stage, I’m very very optimistic.
“I additionally know that exercise ranges are choosing up in deepwater Gulf of Mexico.
“I’m a agency believer that this expertise has all the time spoken for itself and it’ll communicate for itself once more.”
