Rex International narrows Q4 loss by 36% to US$10.3m

CATALIST-LISTED Rex International Holding on Monday posted a net loss of US$10.3 million for its fourth quarter, 36 per cent lower than the net loss in Q4 FY15, on impairments made.

For the three months ended Dec 31, 2016, revenue came in at US$104,000, 89 per cent lower than a year ago, mainly due to a significant portion of technical services in Q4 FY16 being rendered to the company's two subsidiaries, Lime Petroleum Norway AS (LPN) and Masirah Oil Ltd (MOL), which hold discovery assets in Norway and Oman.

Service revenue earned from these subsidiaries was eliminated in the group's consolidated results following a restructuring exercise in Q4 FY15, after LPN and MOL became subsidiaries of the group.

The group recorded exploration and evaluation expenditure of US$16.8 million in Q4 FY16. It had in the quarter further impaired five of its licences in Norway as a result of relinquishments, bringing to seven the number of licences in Norway for which impairment and relinquishment had been recognised in FY16.

Rex said it has been progressively relinquishing licences with low possibility of commercialisation, in line with its strategy to focus on the development of its discovery assets amid a challenging environment.

It added that it is "cautiously optimistic that oil prices will stabilise in the medium term and increase in the long term".

"The group remains in a healthy cash position with no long-term loans or borrowings, and will continue to focus on its key assets in Oman and Norway," Rex said, adding that having obtained in 2016 a three-year extension to the exploration and production sharing agreement for Block 50 Oman up until March 2020, the group has embarked on a farm-out campaign in Oman. Preparations are also underway for a new drilling in Oman.