Rex International: Subsidiary divests stake in Barents Sea asset

Rex International said on Monday that its 90 percent-owned subsidiary Lime Petroleum entered a deal to divest its 20 percent interest in the Barents Sea licence PL850, which it called a non-core asset, to a third party.

“We are pushing ahead to execute our strategy to focus on our core assets,” Dan Bromstrom, executive chairman of Rex International, said in the statement, which was filed to SGX before the market open on Monday.

He said the Norway divestment was “timely,” after last week’s divestment of non-core interests in Trinidad & Tobago. The PL850 divestment, which is awaiting regulatory approval, isn’t expected to have a material impact on earnings per share in the current financial year, Rex said.

“Going forward, Lime Petroleum AS will focus on its core assets in the North Sea 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, which already have infrastructure for oil production that allow for fast-tracked potential commercialization of discoveries,” he said.

The company remains targeting on bringing its discovery assets in Oman and Norway to production in 2019 and 2020 respectively, Bromstrom said.

The statement noted that in August, Rex announced it successfully completed a horizontal test production well of the Rolvsnes discovery in PL338C, in which Lime Petroleum holds a 30 percent participating interest.

The test results showed a production rate of up to 7,000 barrels of oil a day, with the next step for commericialization being to tie the well to the adjacent producing Edvard Grieg platform, Rex said.

In a separate filing, Rex International said that the Kuala Lumpur High Court in Malaysia last week ordered the winding up of HiRex, but reserved the decision on appointing a private liquidator to 30 October.

Rex’s carrying value of HiRex has been fully impaired since 2016 and the winding up isn’t expected to have a material impact on earnings per share or net tangible assets for the current financial year, it said.

HiRex is a 41:41:15:3 joint venture between Rex SEA, OHSB, Triax Ventures and Ainul Azhar bin Ainul Jamal respectively, it said.

Get the Shenton Wire morning briefing in your inbox