Rex International unit to buy 33.8% of Norway oil field for US$42.6m

REX International's 90 per cent-owned subsidiary, Lime Petroleum, will acquire Repsol Norge's 33.8 per cent interest in the oil, gas and natural gas liquids-producing Brage field in Norway.

In addition, Lime Petroleum will buy the five licences on the Norwegian continental shelf over which the field straddles.

Lime Petroleum will pay a post-tax price of US$42.6 million in total, under a conditional sale and purchase agreement with oil and gas company Repsol, said Rex in a filing on Wednesday night.

This fulfils Lime Petroleum's ambition to transition from pure-play exploration, to a full-cycle exploration and production company.

The deal will also establish recurring cash flow, as well as develop and drive further value in Lime Petroleum's existing portfolio, Rex said.

It added that it believes the economics from the current production reserve based in the field are "robust". Rex expects further upside from future in-fill drilling for production and exploration drilling of high-value near-field prospects.

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Brage is located in the northern part of the North Sea, and production started in 1993. "Although the Brage field has been producing for a long time, work is still ongoing to find new ways of increasing recovery," Rex noted.

Lime Petroleum plans to commission a summary qualified person's report on the field, when the acquisition is completed.

The deal is in line with Rex's strategies to increase production now - with the oil price surpassing US$70 per barrel - and to get a second production unit to minimise production risk, said Rex executive chairman Dan Broström.

After the announcement, Rex lifted its trading halt, which started on Tuesday morning. Shares of Rex last traded at S$0.19 on Monday.