Rex unit signs agreement for 15% stake in 2 Norwegian Sea drilling licences

OIL company Rex International said on Wednesday that its unit, Lime Petroleum AS, has signed an agreement with INEOS E&P Norge AS for a farm-in deal for a 15-per-cent stake (see amendment note) in two Norwegian Sea drilling licences, subject to regulatory approval.

A farm-in is an arrangement for an operator to acquire a stake in a lease where oil or gas has been discovered or is produced.

The farm-in for the two licences PL937 and PL937B was completed on March 20, 2020 and the group is expecting exploration drilling to begin early next year. It has plans to carry out drilling in Fat Canyon located in a Jurassic reservoir.

In 2019, it completed a farm-in deal for a 30 per cent stake in two Norwegian Sea drilling licences from DEA Norge, which Dan Broström, executive chairman of Rex International, said had served the group well.

Said Lars Hübert, chief executive officer of Lime Petroleum AS: "The farm-in fits in with our technology-led and near-field exploration strategy. The Njord field is located some 30 km to the north; the adjacent Fenja field will start production in 2021."

Rex International shares closed at S$0.09 on Wednesday, up 1.1 per cent.

Amendment note: An earlier version of this article incorrectly stated that Rex International had signed an agreement for a farm-in deal for a 30 per cent stake in two Norwegian Sea drilling licences. It is in fact 15 per cent for each of the licences.