Rex unit seals deal to acquire 30% interest in two Norwegian Sea licences

REX International's 90 per cent-owned subsidiary Lime Petroleum AS inked an agreement on June 21 with DEA Norge to acquire 30 per cent interest each in two drilling licences, PL838 and PL838B, in the Norwegian Sea, the oilfield services firm said in a bourse filing on Monday.

The transfer of the interests is pending regulatory approval, with exploration drilling on the licences expected in Q4 2019.

The operator PGNiG has a 40 per cent interest, while AkerBP holds the remaining 30 per cent interest in the licences.

The licences are located in the Donna Terrace area of the Norwegian Sea. PL838 contains the Shrek prospect with the main target in the Middle Jurassic Garn Formation, a high quality oil reservoir at a depth of approximately 2,000 metres, said Rex.

Drilling in the Shrek prospect is expected to commence at the start of October 2019 and will take about 24 days.

The planned well targets multiple prospective horizons, and the group believes these potential drilling areas have positive assessments from its proprietary de-risking tool, Rex Virtual Drilling.

"The recent completion of Lime Petroleum's divestment of some of its assets, including the Rolvsnes discovery, is the first fruition of our initial business model to find oil, monetise and recycle capital," said Dan Broström, executive chairman of Rex International.

He added that the group is optimistic that Lime's latest agreement will be a repeat of its success in Rolvsnes.

Catalist-listed Rex International's shares closed up S$0.001 or 1.41 per cent at S$0.072 on Friday.