Rex now plans to retain large stake in Oman concession after positive feasibility study

SINGAPORE - Rex International Holding is now considering maintaining a high equity stake in its Block 50 Oman licence instead of farming out a substantial equity interest following encouraging results from a feasibility study, the oil and gas exploration company announced on Tuesday (Oct 2) during the midday trading break.

After completing the feasibility study on its discovery well, GA South#1, Rex said it plans to achieve production in the second half of 2019.

Rex had previously said that it was in talks to farm out a percentage of the concession to reduce risks and obtain financing.

"The results of the feasibility study are very encouraging and we are of the view that the GA South#1 discovery well is a very valuable asset," Rex executive chairman Dan Broström said in a statement.

"Although we had previously planned to farm out a larger interest in the concession to reduce our holding risks, we believe that there are merits in maintaining a high equity stake in the block to reap potential benefits of more upside and cash flow when there is production. In the meantime, we are looking at other non-dilutive financing options to help fund oil production costs."

Rex holds an indirect 92.65 per cent stake in Masirah Oil, which in turn holds a 100 per cent interest in the Block 50 Oman offshore concession. The concession occupies almost 17,000 sq km of territory.

Join ST's Telegram channel and get the latest breaking news delivered to you.