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Rex International to record 'significantly bigger' loss for 2014 from impairment
OIL exploration and production firm Rex International said it will record a "significantly bigger loss" for its financial year ended 2014, results which will be announced by March 1.
This was due to a lower implied valuation of Fram Exploration, a Norwegian company with rights to explore and develop oil in Colorado and North Dakota in the US.
The impairment decision was made "notwithstanding the potentially strong return" in Fram's US assets and took into account falling oil prices and increased difficulty in getting further investments in the short term, Rex said in a Wednesday press release.
Rex said that it will subscribe for about half of Fram's latest US$3.7 million fund-raising round, and its stake in Fram will increase to an estimated 30.3 per cent from 22.3 per cent previously.
Separately, Rex said that it has completed drilling three wells in Trinidad & Tobago and found two to be commercially viable. Drilling costs per well were below US$1 million, 40 per cent below what was budgeted.
Rex International shares last traded unchanged at 38 Singapore cents.