Rex International Holding Limited closed the year 2021 with the acquisition of a 33.84% stake in Brage Field operated by Wintershall Dea Norge AS. The acquisition was made by Rex International’s subsidiary Lime Petroleum AS (LPA), and was the group’s most significant transaction in 2021.
The acquisition also fulfilled LPA’s ambition to transition from pure-play exploration to a full cycle exploration and production company on the Norwegian Continental Shelf, and to establish recurring cash flow, as well as develop and drive further value in LPA’s existing portfolio.
The move tops off an eventful year marked by increased oil production in Oman amid rising oil prices.
In Oman, oil liftings doubled from three in the first half of 2020 to six in the first half of 2021. The average realised oil price sold also rose from an unprecedented low of US$23 ($31.02) per barrel in the first half of 2020 to US$62 per barrel in the first half of FY2021. A total of 12 liftings were done in 2021.
By Dec 31 2021, Brent oil prices had crept up to around US$80 per barrel.
The results of the three exploration wells drilled in 2021 confirmed the extent of the good quality Lower Aruma sandstone and will help to refine understanding of the trap mechanisms in the area and future development of the field.
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Moreover, in Norway, LPA successfully raised a 2.5-year senior secured bond of NOK 500 million (approximately $77.3 million). The bonds were oversubscribed by more than 100% and books were closed within three days after promotion to prospective investors was kicked off, a testament to the Brage Field’s production profile, cash flow generation and quality in the security package of the bond provided.
The security for the bonds is ring fenced at the LPA level and will not affect Rex International.
In addition, Rex was also awarded operatorship and 95% participating interest in two production sharing contracts for the development and production of the Rhu-Ara and the Diwangsa clusters located in offshore Peninsular Malaysia in 2021.
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“Rex’s goals are to increase production and reserves in the company's three operation areas: Oman, Norway and Malaysia. With Brent oil price presently above US$80 per barrel, we consider this our first priority,” says Dan Broström, Rex International’s executive chairman..
Business diversification
In July 2021, Rex also entered into an agreement to invest up to US$4 million for a 40% interest in commercial drone company, Xer Technologies Pte Ltd, as part of its business diversification. This investment will allow Rex to take a stake in the fast-growing global commercial drone market, which is anticipated to reach over US$500 billion by 2028.
Shares in Rex closed at 34 cents on Jan 13.
