Plexus Holdings, the AIM-quoted oil and gas engineering services firm that owns the proprietary POS-GRIP method of wellhead engineering, said Monday it would suspend its activities with Russian license partner Gusar due to the war in Ukraine.
The company said it "continues to monitor the tragic war in Ukraine, and our thoughts are with the Ukrainian people, as well as with ordinary Russians who are suffering consequences."
"Plexus has a licence agreement with its Russian licencee partner, LLC Gusar ("Gusar") under which, Gusar is able to supply the Russian and CIS markets with Plexus' POG-GRIP rental exploration wellhead equipment used from Jack-up rigs. As a result of the ongoing situation in Ukraine, Plexus has decided to suspend activities with Gusar until further notice," the company said.
The company said that the suspension of activities with Gusar was not expected to materially impact its financial trading performance in the year ending 30 June 2022 ("FY22"), which the Board anticipates will remain in line with market expectations.
"The company believes it will, however, incur Gusar related negative cash flow impact of circa £650,000 in FY22 related to a combination of pending royalties and planned advance stage payments for wellhead equipment which as a result of the situation are now currently uncertain. As the company had been performing well, it is currently anticipated that despite this situation, the year-end cash position will be broadly in line with expectations, Plexus said.
"On a more positive note, apart from the positive progress with Cameron in relation to the surface production wellhead licence, Plexus is actively pursuing opportunities in its main target markets outside of Russia, in particular the UK and European Continental Shelfs.
"These include production wellhead sales, a number of Plexus Product developments utilising proprietary POS-GRIP technology, and importantly our newly re-entered exploration rental wellhead market activities following the recent signing of a Collaboration Agreement with Cameron International Corporation, a Schlumberger company. These ongoing initiatives are expected to gain momentum in the next financial year 2022/23.
"The company will continue to monitor the situation in Ukraine and the impact on Russian commercial activities and will provide further updates as required," Plexus said.
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