Rex International to divest interest in Barents Sea licence

SINGAPORE - A 90 per cent-owned unit of Rex International will divest its 20 per cent participating interest in the Barents Sea licence PL850 to an external third party, as part of a bid by the oilfield services firm to focus on its core assets and areas close to infrastructure in the Norwegian North Sea.

The sale, to be effective from Jan 1, 2018, is pending regulatory approval.

"We are pushing ahead to execute our strategy to focus on our core assets. This housekeeping in Norway is timely, following our divestment of our non-core interests in Trinidad & Tobago last week," said Dan Broström, executive chairman of Rex International Holding.

Rex International had announced last Monday it has completed its divestment of a 25.72 per cent indirect holdings in Steeldrum Oil Company Inc in Trinidad & Tobago.

The unit, oil and gas exploration company Lime Petroleum AS, will focus on its core assets in the North Sea that already have infrastructure for oil production that allow for fast-tracked potential commercialisation of discoveries, namely those located on or close to the Utsira High, adjacent to the giant Johan Sverdrup field and the producing Edvard Grieg and Ivar Aasen oil fields.

"Our key target remains to bring our discovery assets to production in Oman and Norway in 2019 and 2020 respectively," Mr Broström said.

The divestment is not expected to have any material financial impact on the group's earnings per share or net tangible assets per share for the current financial year ending Dec 31, 2018.

Separately, Rex International said on Monday that that the Kuala Lumpur High Court on Oct 11 ordered the winding-up of HiRex, a jointly controlled entitly between Rex SEA, OHSB, Triax Ventures Corp and Ainul Azhar bin Ainul Jamal.

But the court has reserved the decision on the appointment of a private liquidator to Oct 30 this year.

On Aug 28, its stock shot up 52.5 per cent, or up 2.1 cents at 6.1 cents at the close, the day after the company announced the drilling and production testing of the Rolvsnes well - in which Lime Petroleum AS holds a 30 per cent interest - was completed.

A test well drilled in the permit, PL338C, confirmed "sustainable commercial oil flow", with production rate of up to 7,000 barrels of oil per day (bopd), with a sustainable flow rate of nearly 4,500 bopd. Rex International said that the next step towards commercialisation is to tie the well to the adjacent producing Edvard Grieg platform.

Rex International last closed on Oct 12 at $0.107.