SHARES in Plexus Holdings have surged around 30 per cent after the oil and gas engineering firm made a long-awaited breakthrough in the key Russian market.

Aberdeen-based Plexus said Russian oil and gas giant Gazprom had placed an order to use its wellhead equipment in an exploration campaign.

The order is the first secured under a licensing deal with LLC Gusar that Aim market-listed Plexus agreed in 2016 covering the Russian market.

It provides a notable boost for Plexus, which issued a profit warning last month citing pressure on margins and costs.

Plexus in in line to receive 40 per cent of the income from the contract between LLC Gusar and Gazprom but it expects the one-year deal to have much wider significance.

The contract provides a vote of confidence in Plexus’s technology from a major player in Russia. Plexus hopes the deal will be followed by LLC Gusar winning more orders from Gazprom and contracts from other firms operating in Russia.

Plexus Holdings’s chief executive Ben van Bilderbeek said: “This is the breakthrough rental wellhead order that both Gusar and Plexus have been working towards since we signed the Licensing Agreement in January 2016.”

Noting that Gazprom is the holder of the world’s largest natural gas reserves, he said Plexus anticipated the order would prove to be the first of many from companies operating in Russia and the wider Commonwealth of Independent States market.

Success in Russia would provide some validation for the strategic changes made by Plexus amid challenging times in the core North Sea market. The slump in exploration activity in the area amid the crude price fall since 2014 has hit demand for Plexus’s equipment and the services of other oil services firms.

Plexus shed about 70 jobs in total in two rounds completed after the downturn intensified in 2015.

In 2017 the company sold the division that specialised in supplying wellhead equipment for use with jackup exploration rigs to TechnipFMC for an initial £15m.

The licensing agreement with LLC Gusar remained in place.

Plexus sees big potential to win orders for the use of its equipment on production wells.

Shares in Plexus closed up 13.5p at 59p, leaving it with a stock market capitalisation of around £60m.

The shares had fallen sharply on February 18 when Plexus told investors it anticipated that earnings before interest, tax, depreciation and amortisation for the current year would be below market expectations due to a combination of lower than anticipated profit margins on sales and higher overheads.

However, the company said then that revenues were running broadly in line with expectations.

Plexus recently bought back £2.5m shares in the firm, at 50.5p each, from LLC Gusar. The Russian firm was expected to use the funds to finance the acquisition of equipment from Plexus to rent to clients.