REX International Holding restructures its holdings in US investments
and increases stake in licence-holding company in Trinidad & Tobago
Rex US’s 20 per cent direct interest in Fram’s Colorado and North Dakota concessions to be
exchanged for equity stake in Fram
Rex International Holding’s direct stake in Fram to be increased to 27.7 per cent
Stake in the licence-holding company Caribbean Rex to be increased to 64.17 per cent
SINGAPORE, 21 October 2013 – Rex International Holding Limited (“Rex International Holding” or
the “Company”, and together with its subsidiaries, the “Group”), one of the largest companies listed
on the Catalist of the Singapore Exchange Securities Trading Limited, refers to its collaboration with
Fram Exploration ASA (“Fram”) in relation to Rex International Holding’s US concessions and
onshore exploration & production opportunities in the island nation of Trinidad & Tobago in the
Caribbean (“Assets”) and is pleased to update that Rex International Holding and Fram have,
amongst others, agreed to restructure their shareholding arrangements in the Assets
(“Restructuring”) pursuant to the change in the working arrangements between Rex International
Holding and Fram and as part of Fram’s strategy of becoming a listed company in the future, as well
as to allow the Company to realise operational efficiencies and cost savings.
As the first part of the Restructuring, Rex International Holding’s wholly-owned subsidiary, Rex US
Ltd. (“Rex US”), has entered into an agreement (“Agreement”) with Fram to exchange Rex US’s 20
per cent direct interest in Fram’s Colorado and North Dakota concessions into shares in Fram (the
“Exchange”). The Exchange is conditional upon the obtaining of approvals from Fram’s
shareholders as well as other relevant regulatory authorities.
Rex US will convert the payment due for part of the work programme already fulfilled under the
farm-in agreement between Rex US, Loyz Energy Ltd (“Loyz”) and Fram (“Work Programme”),
together with a cash payment of USD 4.51 million to Fram, for new shares to be issued by Fram
(“New Fram Shares”). Pursuant to the Exchange, Fram and Loyz will continue with the remaining
Work Programme from which Rex US will exit. The New Fram Shares will be issued at the same price
per share as the share swap conducted between Fram and Rex International Holding in April 2013,
and in aggregate, is valued at approximately USD 7 million. The New Fram Shares constitute 3.7 per
cent of the issued share capital of Fram.
Prior to the completion of the Agreement and as at the date of this announcement, Rex
International Holding holds a direct 24 per cent interest in Fram, while Rex US holds a 20 per cent
direct interest in the Colorado and North Dakota concessions. After the completion of the Exchange,
Rex International Holding will hold approximately 27.7 per cent of the issued share capital of Fram
and no direct interest in the Colorado and North Dakota concessions.
Mr Måns Lidgren, CEO of Rex International Holding, said, “The Restructuring will streamline Rex
International Holding’s investments, previously held through various entities, under a single
investment holding entity, hence improving our effectiveness in administrative oversight and
resulting in operating efficiencies and cost savings. The Restructuring is envisaged to benefit the
Group in the long term and provide our shareholders with greater clarity on our investments in the
US and strengthen Fram’s strategy of becoming a listed company in its own right in the near future
which we also have a stake in.”
Fram is the operator of the Whitewater Federal Production Unit located in the Piceance Basin in
Mesa and Delta Counties of Colorado, USA and holds leases centred on 10,863 acres in Renville
County, North Dakota in the Williston Basin.
Pursuant to the Exchange, Loyz will remain partner to a Participation and Exploration Agreement
with Fram on similar terms as before. The operations will continue as previously communicated,
with the drilling campaign well underway.
Rex International Holding also refers to its press release dated 14 August 2013 (the “14 August
Press Release”), on its signing of a term-sheet for access to three onshore exploration & production
(E&P) licences in Trinidad & Tobago and is pleased to update that as the second part of the
Restructuring, the Group is acquiring a larger stake of 64.17 per cent in the licence-holding company
Caribbean Rex Limited (“Caribbean Rex”) (previously referred to as Rex Caribbean Oil Company Ltd
in the 14 August Press Release) instead of the initially stated stake of 51.99 per cent. Rex
International Holding will acquire the additional stake in Caribbean Rex from Fram for a
consideration of approximately USD 3 million, by way of the issuance of new ordinary shares in the
capital of Rex International Holding (“Shares”), which is pending regulatory approval.
Consideration for the initial stake in Caribbean Rex amounting to USD 9 million in cash has been
paid and the consideration for the additional stake in Caribbean Rex to be paid is USD 3 million
(equivalent to S$3.75 million) in shares, at an issue price of S$0.83 per Share (“Issue Price”). The
Issue Price represents the seven-day average closing price of the Shares prior to the date of the
signing of the agreement with Fram on 18 October 2013. The Shares are intended to be issued
pursuant to the general share issuance mandate obtained at the extraordinary general meeting of
the Company held on 24 June 2013. Upon completion of the transaction, the three shareholders of
Caribbean Rex will be Rex International Holding (64.17 per cent), Pareto Staur SPV I AS (34.76 per
cent) and Mr Geoffrey Leid, CEO-designate of Caribbean Rex, in his personal capacity (1.07 per
cent).
Mr Måns Lidgren said, “Trinidad & Tobago will be one of our core markets going forward. With our
acquisition of the additional stake in Caribbean Rex, which Fram previously held on behalf of its
minority shareholders, Caribbean Rex will have just two major shareholders. Our increased stake in
Caribbean Rex also means that we stand to recognise higher revenue and profit from Caribbean
Rex’s future growth. The Trinidad assets are in a proven prolific hydrocarbon basin and consists of a
mix of production and exploration assets. We stand to benefit from changes to the tax legislation for
oil and gas companies operating in the country effective from January 2014, where revenue
generated from oil production can be offset 100 per cent against exploration expenses, hence
attractively allowing us to reinvest in oil exploration activities. We expect our concessions in
Trinidad & Tobago to be self-sufficient in terms of capital expenditure by the end of next year.”
“We are firming up the drilling schedule for the Trinidad assets and intend to drill up to 10 wells in
2014, with the first drilling to be carried out in the first quarter of next year,” Mr Lidgren added.
As further phases of the Restructuring are still being discussed and have not yet been finalised, Rex International Holding will update shareholders as and when there are material developments to the Restructuring.
__________________
NextInsight
a hub for serious investors
