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CATALIST-LISTED Rex International Holding said on Thursday it is targeting substantially higher revenue from 2018 onwards from its discovery assets in Norway and Oman and proprietary Rex Virtual Drilling (RVD) technology.
In a filing to the Singapore Exchange, Rex said an appraisal well will be drilled in the Edvard Grieg South (Rolvsnes) prospect in Norway in the first half of 2018 and, if successful, would be tied back to the existing Edvard Grieg production platform for test production in 2020. Rex's 87.84 per cent subsidiary Lime Petroleum AS holds a 30 per cent stake in the well's licence.
Appraisal efforts are also underway in Oman. The evaluation of the development programme for the GA South#1 discovery in Oman is ongoing and will continue until the first quarter of 2018. Should the evaluation be positive, an appraisal well is targeted to be drilled before the end of 2018. To reduce its holding risks and to garner financing for the drilling of the appraisal well, Rex said it is in negotiations to farm out a percentage of the concession.
Said Rex executive chairman Dan Brostrom: "When we were first listed in mid-2013, our original business model was to focus on using the RVD technology on our own assets to increase the chance of success in finding oil and then to sell the oil-in-the-ground upon any discovery. With the collapse of oil prices since mid-2014, we have moderated our drilling plans to focus on getting our key assets to production."
Mr Brostrom added that the company is seeking operational partners for Oman so it can concentrate on its core competence in the technology arena. In Norway, Rex is already working with highly experienced partners in the licences, in particular Lundin Petroleum Norway AS, which is also the operator of the licence PL338C (Edvard Grieg) discovery, he said.
Meanwhile, an improved version of its RVD technology, previously employed mainly on Rex's own assets, will be marketed as a service for oil exploration companies. It said a new client in Norway is already onboard. Rex said the RVD software analyses conventional seismic data to determine the presence of hydrocarbon liquids and is highly accurate in predicting dry wells.
Mr Brostrom said Rex has also been drastically cutting its costs for new exploration and for general and administration expenses in the past year. As at Sept 30, 2017, the group's cash, cash equivalents and quoted investments totalled US$46.62 million, he said.