Rex unit to test production from North Sea oil well in 2019

CATALIST-LISTED Rex International Holding expects to start testing production from its Edvard Grieg South (Rolvsnes) oil well in 2019. The North Sea well may be able to yield 77.9 million barrels of oil and up to 78.7 billion standard cubic feet of natural gas.

Developmental feasibility studies are being carried out on the oil well, said the oil exploration and production firm in a filing to the Singapore Exchange on Monday morning before the market opened. Its 87.84 per cent subsidiary Lime Petroleum Norway AS holds a 30 per cent stake in the PL338C licence to carry out studies in Edvard Grieg South.

Rex said that the EGS discovery well was the first time that the group's Rex Virtual Drilling (RVD) technology was applied to an unconventional weathered and fractured basement reservoir. RVD has also been proven to be highly accurate in predicting dry wells.

"Over the past two years, Lime Norway has declined participation in more than 15 licences in Norway after RVD analyses. All the wells that were subsequently drilled in these licences came up dry, saving the group millions of dollars in futile capital expenditure."

Separately, Lime Norway secured a two-year extension of a credit facility of 400 million Norwegian kroner (about S$65 million) in December 2016.

Rex holds interests in six offshore assets in Norwegian waters, spanning the established oil fields of the North Sea and Norwegian Sea, as well as the less-developed Barents Sea.

Rex was trading at 6.3 Singapore cents as at 10.30am.