Rex International Holding to enter into new E&P licences in Trinidad and Tobago with Pareto Staur
Rex International Holding Limited (“Rex International Holding”, the “Company”, and together with its subsidiaries, the “Group”), one of the largest companies listed on the Catalist Board of the Singapore Exchange Securities Trading Limited,has today signed a term-sheet with Norwegian private equity investor Pareto Staur SPV1 AS (“Pareto Staur”), providing the Company with access to three new onshore exploration & production (E&P) opportunities in the island nation of Trinidad and Tobago in the Caribbean.
Rex International Holding will invest USD 9 million for a 51.99 per cent stake in Rex Caribbean Oil Company Ltd (“Rex Caribbean Oil Company”) (“Investment”), while Pareto Staur will invest USD 6.5 million for a 34.76 per cent stake. Other institutional shareholders will hold 12.18 per cent and Mr Geoffrey Leid, CEO-designate of Rex Caribbean Oil Company, will hold 1.1 per cent in his personal capacity.
The transaction will involve the initial investment into three E&P licenses; namely, the Inniss- Trinity field, the South Erin Block and the Cory Moruga Block ‘E’. These assets already have producing discoveries and Rex Caribbean Oil Company will, after completion of the farm-inactivities, hold 100 per cent of the Inniss-Trinity field and working interest of 75 per cent in the South Erin Block and 51 per cent in the Cory Moruga Block ‘E’. The transaction is expected to be completed in the coming weeks and is subject to regulatory due diligence.
The Investment will be funded internally and is expected to be a positive contributor to the Group’s financial performance for the financial year ending 31 December 2014, and generate positive cash flow going forward. The Group believes that the Investment will add bookable reserves and contingent resources, which will be independently reported on in due course, to its existing portfolio.
Mr Måns Lidgren, CEO of Rex International Holding, said, “Trinidad and Tobago is a proven prolific hydrocarbon basin. Using the proprietary Rex Technologies, we see strong potential for discoveries in the three fields and expedient development of existing reserves. We are very pleased to partner with Pareto Staur, an established investor, in these opportunities. The Investment is in line with our business strategy to add on to the Group’s existing portfolio of reserves in regions with well-developed oil and gas infrastructures. The opportunities can be seized based on leverage provided by the Rex Technologies. We are also delivering on Our promise to increase Rex International Holding’s current portfolio from 10 opportunities to 20 opportunities over the next 12 months.”
Mr Stig Aune, CEO of Staur Holding AS and fund manager in Pareto Staur, said, “We are very pleased to partner with Rex International Holding in this venture. The Rex Technologies add tremendous value to the assets and show perfect overlap between existing discoveries and Rex Virtual Drilling oil predictions. We look forward to creating value together with Rex International Holding over the next years, through rapid build-up of production in Trinidad and Tobago.»
#About the three oil fields
Located in the south central part of Trinidad, within the Moruga district, the Antilles-Trinity Inniss field (now renamed Inniss-Trinity field) was initially developed as two neighbouring fields; the Innis field first drilled by Shell in 1946 and put on production in 1961 while the Antilles-Trinity field was drilled by Texaco in 1956. Both fields were taken over by Petrotrin in the early 1980s, and were part of several of Petrotrin’s onshore assets put up for bidding in the 2009 as a production service contract. The Inniss-Trinity field is currently producing an average of 45 bopd with no new wells being drilled since 2009. Cumulative oil production has exceeded 16.5 million barrels of oil.
The South Erin Block is located in south-west Trinidad, which is part of the highly productive Southern Basin that geologically represents the eastern prolongation of the Eastern Venezuelan Basin. The South Erin Block has a current production average of about 80 bopd from four shallow wells. The 1,350-acre block, reportedly under-explored, is estimated to have a large potential. The 1ER98 Area which constitutes only a small part of the South Erin Block, is estimated to hold more the 20 million barrels of Oil in Place and continuous exploration of the block will likely increase that number significantly. The South Erin Block liesadjacent to the producing Erin/Palo Seco oilfields. An ambitious drilling campaign is planned to start in December of this year.
TheCory Moruga Block ‘E’ field is located in the southern basin, onshore Trinidad. The 7,442-acre block (gross) had 15 wells drilled in the 1950s. The current operator spudded a new well in 2010, drilled to an approved depth of 8,600 feet. The well penetrated and encountered hydrocarbon bearing zones in both the primary and secondary objectives in the Herrera formation. The well produced 37 degree API gravity oil at a rate stabilising above 500 bopd.The well is currently locked in, but will be put on production soon.
Our Non-Executive Director, Mr Bernt Østhus, has an indirect interest of 24.9 per cent inPareto Staur. Save for the aforementioned, none of the other Directors or substantial shareholders of the Company has any interest, direct or indirect (other than through their shareholdings in the Company) in the Investment.
#Negotiations for more concessions in progress
Rex International Holding is in negotiations for more concessions in Norway, selected by Rex Virtual Drilling. The Group targets to have participation in at least 10 concessions on the Norwegian Continental Shelf (NCS) within the next six months. Rex International Holding is also evaluating three or more concessions in the Asia-Pacific through its subsidiary HiRex Petroleum Sdn Bhd. Further announcements will be made when there are material developments to these negotiations.