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Rex now plans to retain large stake in Oman concession after positive feasibility study
REX International Holding is now considering maintaining a high equity stake in its Block 50 Oman licence instead of farming out a substantial equity interest following encouraging results from a feasibility study, the oil and gas exploration company announced on Tuesday during the midday trading break.
After completing the feasibility study on its discovery well, GA South#1, Rex said it plans to achieve production in the second half of 2019.
Rex had previously said that it was in talks to farm out a percentage of the concession to reduce risks and obtain financing.
“The results of the feasibility study are very encouraging and we are of the view that the GA South#1 discovery well is a very valuable asset," Rex executive chairman Dan Broström said in a statement.
"Although we had previously planned to farm out a larger interest in the concession to reduce our holding risks, we believe that there are merits in maintaining a high equity stake in the block to reap potential benefits of more upside and cash flow when there is production. In the meantime, we are looking at other non-dilutive financing options to help fund oil production costs.”
Rex holds an indirect 92.65 per cent stake in Masirah Oil, which in turn holds a 100 per cent interest in the Block 50 Oman offshore concession. The concession occupies almost 17,000 square kilometres of territory.