Rex International shares up 52.5% on oil discovery

Singapore

A "SIGNIFICANT" oil reservoir discovery by a Norwegian oil drilling firm has helped lift Catalist-listed Rex International Holding's share price by 52.5 per cent at the close of trade on Tuesday.

Its shares were up 2.1 Singapore cents at 6.1 Singapore cents at the closing bell, with its 41.56 million shares traded putting it among the top five counters traded by volume.

The stock price reached a level last seen in early February, which was just below its highest year-to-date price of 6.9 Singapore cents topped in January.

An oilfield services firm, Rex International announced after Monday's market close that the drilling and production testing of the Rolvsnes well - in which Rex's subsidiary Lime Petroleum AS holds a 30 per cent interest - had been completed successfully by operator Lundin Norway.

A test well drilled in the permit, PL338C, confirmed "sustainable commercial oil flow", with production rate of up to 7,000 barrels of oil per day (bopd), with a sustainable flow rate of nearly 4,500 bopd.

"The test results show good reservoir productivity and connection to a significant oil volume that benefits from aquifer pressure support, which are positive factors towards demonstrating commercial recovery at Rolvsnes," Rex International said in a press statement.

The Rolvsnes discovery is located in the Utsira High area three kilometres to the south of the oil producing Edvard Grieg platform, operated by Lundin Norway.

According to Rex International, the discovery is proven with two earlier wells, with gross recoverable hydrocarbon volumes of up to 90 million barrels of oil equivalent (mmboe).

Rex International's executive chairman Dan Broström said the group is "one step closer to achieving a major milestone" in generating recurring revenue, amid more favourable macro-conditions compared to last year.