Oman Oil Production a Game Changing Start for Rex in 1H FY2020

  • Aug 16, 2020
  • Gulf Oil & Gas

Rex International Holding Limited, a technology-driven oil

company, announced its financial results for the six-month period ended 30 June 2020 (“1H

FY2020”). Mr Dan Brostrom, Executive Chairman of Rex, said, “Our progress from oil exploration to

oil production is a game changing start for the Company. The Yumna 1 production facilities are now

permanent, with operating costs of about US$80,000 per day. Sale of the Masirah crude started in

April 2020 in the second quarter, when Brent oil price was at unprecedented lows due to the Covid-

19 pandemic. The oil price per barrel for sales between April and June was about half of the current

August 2020 price of US$45 a barrel. We are going into the rest of 2020 with improved contributing

factors, with Brent oil price at a more stable a range of about US$45 per barrel. We remain in a good

financial position and will now book recurrent income from production in the Yumna field in Oman.

This will enable us to develop Block 50 according to the Field Development Plan approved by the

Ministry of Oil and Gas in Oman. Within January 2021, the Yumna 2 well will be drilled and during

2021, there will be an exploration well from one of our already identified prospects.”

The Group recorded revenue of US$14.57 million in 1H FY2020, compared to nil revenue generated

by the Group in 1H FY2019, mainly due to oil sales in Oman in April, May and June 2020. The Group

recorded total loss after tax of US$23.03 million in 1H FY2020, as compared to total profit after tax of

US$25.23 million in 1H FY2019, due to high start-up costs, low realised oil prices and the depletion of

oil and gas properties.

As at 30 June 2020, the Group’s cash and cash equivalents and quoted investments totalled US$39.24

million (31 December 2019: US$61.93 million), with cash and cash equivalents at US$14.21 million

(31 December 2019: US$21.93 million); and quoted investments at US$25.03 million (31 December

2019: US$40.00 million). The Group remains long-term debt-free.

On 17 July 2020, Rex announced that the Ministry of Oil and Gas in Oman has on 12 July 2020

approved the Field Development Plan for the Yumna Field and awarded Declaration of Commerciality

(“DOC”), enabling Rex’s 86.37 per cent subsidiary Masirah Oil Ltd (“Masirah Oil”) to fully develop the

Yumna Field while continuing to explore the rest of Block 50 Oman. The Yumna 1 well has at that

time, produced more than one million barrels of oil and is currently producing over 8,000 barrels of

oil per day through a 1 inch choke with 440 psig flowing tubing-head pressure.

Rex’s 90 per cent subsidiary in Norway, Lime Petroleum AS (“Lime”), will participate (with 20 per cent

interest**) in the drilling of the Appolonia prospect in the PL263 D/E licence, now expected in late

August / early September 2020. The licence is located in the prolific Halten Terrace area, near existing

infrastructure. Operated by Equinor, the well targets conventional Jurassic sand prospects. A

successful well will pave the way for an expedient field development.

Rex’s development plans for the Shrek discovery of 6.4 mmboe* (Lime’s 30 per cent working interest)

in PL838 is proceeding according to plan. Besides doing active exploration work in licences in which

Lime has interests, Lime is also joining strong application groups for the bid submission for the 2020

Awards in Pre-defined Areas (APA) round and is actively looking for opportunities to farm into wells

scheduled for near-term drilling.