 CEO Mans Lidgren. NextInsight file photo.Mr Måns Lidgren, Chief Executive Officer of Rex International Holding, said: Even though our oil production operations are very small, Rex’s share price has been impacted by the volatility of oil prices, the potential supply of Iranian crude to the market, the Greek debt crisis, the meltdown of the China stock market and most recently, the effects of China’s devaluation of the yuan on Asian bourses. Rex International Holding remains in a good financial position as at the end of the first half of 2015, despite these macro-economic headwinds.“First, the Company has zero debt, giving us flexibility should we at a later date choose to tap into debt funding to fund potential development of discoveries. "Second, as at 30 June 2015, our liquid assets comprising cash and cash equivalents and quoted investments were US$96.0 million. We have ample funds to see us through our preliminary drilling plans at least up till 2017 and do not see any need to raise funds in the short term, especially in the current environment where access to capital raising has been greatly reduced for exploration and production companies. “Third, our portfolio of some 20 assets include yet-to-be-tapped discoveries, namely, in Block 50, Oman, in the Rolvsnes prospect in PL338C, Norway and in the northern part of PL616, Norway. Block 50 Oman has estimated unrisked prospective resources of 4,743 mmboe (Source: Hibiscus Petroleum Bhd; Aker Geo and Pareto Asia, 28 Feb 2012). "Rex is expected to have an eventual stake of approximately 30 per cent in the concession (after declaration of commerciality). At current oil price of about US$50 per barrel, the concession remains a viable asset. Needless to say, Rex also believes that with the use of Rex Virtual Drilling (“RVD”), it will be possible to achieve a much higher chance of success. “However, at today’s market value of the Company of about US$109 million and with US$96 million in liquid assets comprising cash and cash equivalents and quoted investments, the remaining Group’s assets are only valued by the market at US$13 million. "There are of course several risks involved in oil exploration but based on an asset potential alone, we believe that we have been undervalued by the market. And that is not taking into consideration our proprietary technology RVD, which may not have been ascribed much or any value by the market.” |
For the full content, see Rex's press release.
