| Rex International, a technology-driven oil company, had never done a share buyback since its IPO in July 2013 -- until this month when it bought 2,297,000 shares on 13 Aug 2019 and 15 Aug 2019. The average price: 6.4 cents a share.  Dan Brostrom, executive chairman of Rex. NextInsight file photoDan Broström, Executive Chairman of Rex International Holding, said, “Recent global economic and political developments have affected oil prices and consequently, our stock price.
"The recent monetisation of the Group’s interests in several assets in Norway is testament to the inherent value of these assets. The Company had initiated a share buyback exercise in August 2019 as it is confident of its potential prospects in Norway and Oman.” Rex sold its interests in certain assets in Norway for US$45 million cash, which bumped up its liquid assets comprising cash, cash equivalents and quoted investments to a total of US$70.75 million (S$98.34 million, as at 30 June 2019. The Company remains long-term debt free as at 30 June 2019. |
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The asset sale in Norway enabled Rex to achieve a record profit net of tax of US$26.29 million (S$36.54 million) for the quarter ended 30 June 2019.
CEO Mans Lidgren.Måns Lidgren, CEO of Rex International Holding, said, “The Norway transaction is a fruition of our business strategy as set out in our initial public offering document; that is, to find oil using our liquid hydrocarbon indicator technology Rex Virtual Drilling, sell oil-in-the-ground and recycle capital.
"Although we achieved discoveries in Oman and Norway respectively, this monetisation strategy could not be executed during the oil price rout which started in 2014 until early this year when an opportunity to divest arose.
"While we will continue with this proven strategy for our operations in Norway, our plan for value creation in Oman remains to achieve first oil by end-2019.”
• In Norway: Rex’s 90 per cent subsidiary Lime Petroleum AS (“LPA”) announced in June 2019, the acquisition of 30 per cent interests in two licences in the Norwegian Sea which contain the Shrek prospect. The prospect is slated to be drilled in the second half of 2019. LPA remains a pre-qualified company and will continue to benefit from the Norwegian tax system with 78 per cent cash refunds of all exploration expenditures annually. • In Oman: The Company is looking to put the GA South asset into production at the end of 2019, which if successful, will generate revenue. The plan is to finance this mainly through off-balance sheet financing. The fiscal policy for exploration & production activities in Oman differs from Norway, where the cost pool spent in the Block 50 licence could be recouped upon production. Rex’s 92.65 per cent subsidiary Masirah Oil Ltd, which holds a 100 per cent interest in the Block 50 licence, has to date more than US$100 million (S$139 million) in its cost pool. |
REX's press release is here.
