2021 looks to be an inflexion year -- the first full year of revenue from oil production in Oman -- for Singapore-listed Rex International.
In fact, with that technology, it made an oil discovery off Oman in 2014, the first offshore discovery east of Oman after 30 years of exploration activity in the area by various parties. That's 7 years ago, which has since led to milestones including first oil from the so-called Block 50 concession. The concession covers 17,000 sq km, equivalent to 23x the area of Singapore. |
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Masirah Oil (MOL) holds 100% of the Block 50 concession, and is the operator.
Rex holds an effective interest of 86.37% in MOL through its indirect wholly-owned subsidiary Rex Oman.
The Yumna Field is part of the Block 50 concession, and Rex has just announced that production has commenced from the second development well drilled in Yumna.
The well has been producing at a stabilised rate of 9,000 stock tank barrels /day of dry oil.
A third production well, Yumna 3, was "spudded" -- ie well-drilling started -- on 20 January 2021.
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YUMNA FIELD* |
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Yumna 1 |
Yumna 2 |
Yumna 3 |
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Well spudded |
Dec 2019 |
Dec 2020 |
Jan 2021 |
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Production starts |
Feb 2020 |
Jan 2021 |
To be announced |
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Production starting volume |
8,000 barrels/day |
9,000 barrels/day |
To be announced |
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* Yumna Field is located within Block 50 concession |
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 "When Yumna 1 resumes production and the new Yumna 3 is completed, we are looking forward to steady production from the three Yumna wells. We are therefore in the process of upgrading the present maximum liquid processing capacity to handle up to 30,000 barrels per day."-- Dan Broström, Executive Chairman of Rex International |
Yumna 1 is expected to resume production sometime in 1Q 2021.
According to a Qualified Person’s Report done by oil services company AkerGeo in 2011, the prospective resources found in Yumna could only represent 0.5% of the total prospective resources in Block 50 Oman.
In 1H2020, when oil prices sank during the initial outbreak of Covid-19, Rex reported US$14.6 million in revenue from the sale of oil.
The corresponding production and operating expenses amounted to US$15.86 million.
Other expenses increased to US$6.05 million (1H2019: US$0.01 million), mainly due to
| 1) a loss from Brent Crude Oil futures contract hedging of US$3.26 million; 2) unrealised loss in fair value of quoted investments of US$1.85 million; and 3) realised loss on disposal of quoted investments of US$0.76 million. |
Net loss attributable to shareholders in 1H2020 amounted to US$21.0 million.
| UOB Kay Hian, in a July 2020 report, had a 30-cent target for Rex stock. |
